UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 Commission file number 1-4416 - -------------------------------------------------------------------------------- SPS TECHNOLOGIES, INC. (Exact name of Registrant as specified in its Charter) PENNSYLVANIA 23-1116110 (State of incorporation) (I.R.S. Employer Identification No.) 101 Greenwood Avenue, Suite 470 19046 Jenkintown, Pennsylvania (Zip Code) (Address of principal executive offices) (215) 517-2000 (Registrant's telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE SECURITIES EXCHANGE ACT OF 1934: Title of Each Class Name of Each Exchange Common Stock, Par Value $0.50 on Which Registered Per Share New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ---- ---- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. /X/ The aggregate market value of the voting stock held by non-affiliates of the registrant at March 10, 1998, was approximately $562,400,000. The number of shares of registrant's common stock outstanding on March 10, 1998 was 12,371,357. DOCUMENTS INCORPORATED BY REFERENCE Exhibit 13, which contains portions of the 1997 Annual Report to Shareholders of the registrant is incorporated by reference in Parts I, II and IV of this Report. Portions of the Definitive Proxy Statement of registrant, if filed with the Securities and Exchange Commission within 120 days after December 31, 1997, are incorporated by reference in Part III of this report. To the extent not so filed, such information will be provided on a Form 10-K/A filed with the Securities and Exchange Commission. SPS TECHNOLOGIES, INC. AND SUBSIDIARIES PART I Item 1. BUSINESS SPS Technologies, Inc. and subsidiaries (the "Company") was incorporated in Pennsylvania in 1903. The Company is engaged in the design, manufacture and marketing of high-strength precision mechanical fasteners and precision components (fasteners); and superalloys in ingot form, ceramic cores and magnetic materials (materials). On July 29, 1997, the Company's Board of Directors approved a two-for-one split of its common stock. Additional information regarding the 1997 common stock split is provided in Note 2 to the financial statements included in Item 8, "Financial Statements and Supplementary Data." Capital expenditures in 1997 ($37.5 million) and 1996 ($28.2 million) were spent primarily to increase aerospace, superalloy and bonded magnet product capacity and to replace old equipment in the automotive and Unbrako manufacturing operations. In 1997, the Company spent $47.2 million on business acquisitions as it continued its strategy of acquiring relatively small companies that have operating synergies with the Company's existing businesses. Additional information regarding 1997 operations is provided in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations". The Company is multinational in operation. In addition to 14 manufacturing plants in the United States, it operates 12 manufacturing facilities in five different countries: England, Ireland, Canada, Brazil and Australia. The Company also has a 55% interest in a manufacturing operation in China and a minority interest in a manufacturing operation in India. Marketing and warehousing operations are carried on by subsidiaries in five other countries. The Company sells directly to original equipment manufacturers and industrial, commercial and governmental users, and also sells through independent stocking distributors and dealers. There were no changes in these methods of distribution during 1997. Principal fastener markets include aerospace, machine tool and industrial machinery, automotive, and off-highway equipment. Principal markets for materials include the precision investment casting, powdered metal, aerospace, medical equipment, automotive, computer and communications industries. Principal fastener products are SPS(R) aerospace fasteners, MULTIPHASE(R) alloy fasteners, and other aerospace fasteners; UNBRAKO(R) brand socket screws, hex keys, dowel pins, shaft collars, spring pins and pressure plugs; engineered fasteners for gasoline and diesel engines, other critical automotive applications, and off-highway equipment and HI-LIFE(R) thread roll dies and other metal-working tools. Principal materials products are air and vacuum-melted iron, cobalt, and nickel-based superalloys, including CMSX(R) single-crystal alloys; ceramic cores, metallic and ceramic permanent magnets, wound and pressed powder magnetic components and magnetic ultra-thin foil and strip products. The Company's business is highly competitive. Competition is based primarily on technology, price, service, product quality and performance. The Company believes that its favorable competitive position is based upon its high-quality product performance and service to its customers, supported by its commitment to technological developments. No material part of the Company's business is dependent upon a single customer. In 1997, the five largest customers accounted for 17% of the Company's reported consolidated net sales. The backlog of orders at December 31 which represent firm order delivery within twelve months was as follows (in thousands of dollars): 1997 1996 ----------- ----------- Fastener segment ........... $196,569 $144,703 Materials segment .......... 54,568 36,247 -------- -------- Total ................... $251,137 $180,950 ======== ======== No material portion of the Company's business in either segment is seasonal. The principal sources of raw materials for the fastener and materials segments include major and specialty steel producers, and non-ferrous metal producers, converters and distributors. The Company anticipates it will have no significant problem with respect to sources or availability of the raw materials essential to the conduct of its business. 2 The Company owns certain trademarks and patents that it considers to be of importance to its two industry segments. The principal trademarks of the Company include SPS(R), ARNOLD(R), FLEXLOC(R), MULTIPHASE(R), MP35N(R), MP159(R), UNBRAKO(R), U130(R), CMSX(R) and HI-LIFE(R). The trademarks have been registered in the United States and certain foreign countries. The Company also owns or is licensed under numerous patents which have been secured over a period of years. Patents covering the CMSX-4, CMSX-10 and CM247LC superalloys are of particular importance in protecting the proprietary superalloy technology of the Company's subsidiary, Cannon-Muskegon Corporation. However, the Company does not believe that its business as a whole is materially dependent on any one or more patents or trademarks or on patent or trademark protection generally. Total expenditures during 1997, 1996 and 1995 for Company-sponsored research and development were $5.3 million, $5.6 million and $5.2 million, respectively. In 1997, approximately 59% of the expenditures were for the Company's fastener segment. Capital expenditures for property, plant and equipment are planned at $30 million in 1998, exclusive of any business acquisition. There were approximately 3,696 and 1,270 persons employed by the Company at December 31, 1997 in the fastener and materials segments, respectively. Financial information concerning industry segments and the foreign and domestic operations is included in Note 19 to the Company's Consolidated Financial Statements on pages 31 and 32 in the 1997 Annual Report to Shareholders. Exhibit 13.1 contains the information and is incorporated herein by reference. Item 2. PROPERTIES The Company owns or leases the manufacturing properties described below. All properties are in good condition. Location Owned Square Feet ----- ----------- Jenkintown, Pennsylvania ........................... 664,000 (a) Cleveland, Ohio .................................... 365,000 (a) Santa Ana, California .............................. 305,000 (a)(n) Salt Lake City, Utah ............................... 86,000 (a) Marengo, Illinois .................................. 356,000 (b) Muskegon, Michigan ................................. 130,000 (b) Norfolk, Nebraska .................................. 112,000 (b) Marietta, Ohio ..................................... 77,000 (b) Sevierville, Tennessee ............................. 65,000 (b) Ogallala, Nebraska ................................. 22,000 (b) Sorocaba, Brazil ................................... 339,000 (a) Coventry, England .................................. 224,000 (a) Smethwick, England ................................. 137,000 (a) Leicester, England ................................. 123,000 (a) Melbourne, Australia ............................... 44,000 (a) Nuneaton, England .................................. 12,000 (a) Derbyshire, England ................................ 44,000 (b) Leased Lease Expires Square Feet - ---------------------------------------------- --------------- ------------ Pointe Claire, Quebec, Canada ......... (c) 35,000 (a) Leicester, England .................... (d) 38,000 (a) Shannon, Ireland ...................... (e) (f) (g) (h) 280,000 (a) Nashville, Tennessee .................. (i) 99,000 (a) Wickliffe, Ohio ....................... (j) (k) 76,000 (b) Rochester, New York ................... (l) 70,000 (b) Adelanto, California .................. (m) 45,000 (b) Rochester, England .................... (o) 8,350 (b) - ------------ (a) Fastener segment. (b) Materials segment. 3 (c) Lease for 35,000 square feet expires October 31, 2002. (d) Lease for 38,000 square feet expires January 12, 2002. (e) Lease for 75,000 square feet expires November 15, 2010. (f) Lease for 100,000 square feet expires November 13, 2010. (g) Lease for 57,000 square feet expires April 1, 2004. (h) Lease for 48,000 square feet expires January 1, 2112. (i) Lease for 99,000 square feet expires August 14, 2002. (j) Lease for 38,050 square feet expires May 1, 2009. (k) Lease for 38,050 square feet expires July 1, 2010. (l) Lease for 70,000 square feet expires October 31, 2006 (m) Lease for 45,000 square feet expires January 1, 2005. (n) Approximately 70,000 square feet used for manufacturing purposes, with remaining 235,000 square feet leased. (o) Lease for 8,350 square feet expires December 31, 1999. Industrial Development Revenue Bonds were issued to finance the acquisition and improvement of the Salt Lake City, Utah manufacturing facility. These bonds are collateralized by a first mortgage on the facility and a bank letter of credit. Item 3. LEGAL PROCEEDINGS A discussion of legal proceedings is included in Note 11 to the Company's Consolidated Financial Statements on page 25 in the 1997 Annual Report to Shareholders. Exhibit 13.1 contains the information and is incorporated herein by reference. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of security holders during the fourth quarter of 1997, through the solicitations of proxies or otherwise. EXECUTIVE OFFICERS OF THE REGISTRANT All executive officers of the Company are named below and are appointed by the Board of Directors. The date that each officer was first appointed to his present position is indicated. No officer listed was appointed as a result of any arrangement between him and any other person as that phrase is understood under the Securities Exchange Act regulations. No family relationship exists among the executive officers of the Company. Name Experience and Position Held Age - ---- ---------------------------- --- Charles W. Grigg Chairman, Chief Executive Officer and President since March 1997. 58 Previously, Chairman and Chief Executive Officer since December 1993. Previously, President and Chief Operating Officer, Watts Industries, Inc. since 1986. James D. Dee Vice President, General Counsel and Secretary since May 1997. Previously, 40 Vice President, Environmental and Legal Affairs since February 1996. Previously, Assistant Counsel and Patent Counsel since 1988. John M. Morrash Vice President, Treasurer and Assistant Secretary since July 1995. 43 Previously, Treasurer since February 1988. William M. Shockley Vice President, Chief Financial Officer and Controller since July 1995. 36 Previously, Corporate Controller since September 1992. Previously, Assistant Controller since November 1991. 4 PART II Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS Information regarding the principal markets on which SPS Technologies common stock is traded, the high and low sales price for the stock on the New York Stock Exchange for each quarterly period during the past 2 years, and the approximate number of holders of common stock at March 3, 1998 is included under the caption entitled "Common Stock Information" on page 34 in the 1997 Annual Report to Shareholders. Exhibit 13.4 contains this information and is incorporated herein by reference. Item 6. SELECTED FINANCIAL DATA A summary of selected financial data for SPS Technologies for the years and year ends specified is included under the caption entitled "Selected Financial Data" on page 39 in the 1997 Annual Report to Shareholders. Exhibit 13.3 contains this information and is incorporated herein by reference. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Information regarding SPS Technologies financial condition, changes in financial condition and results of operations is included under the caption entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 35 through 39 in the 1997 Annual Report to Shareholders. Exhibit 13.5 contains this information and is incorporated herein by reference. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements for SPS Technologies and the required supplementary data "Summary of Quarterly Results" are included on pages 16 through 32 and page 34, respectively, in the 1997 Annual Report to Shareholders. Exhibits 13.1 and 13.2 contain this information and are incorporated herein by reference. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) Identification of directors: Information regarding directors is incorporated by reference to the Definitive Proxy Statement, Election of Directors, if filed with the Securities and Exchange Commission (SEC) within 120 days after December 31, 1997. To the extent not so filed, such information will be provided on a Form 10-K/A filed with the SEC. (b) Identification of executive officers: Information regarding executive officers is contained in Part I of this report (page 4). Item 11. EXECUTIVE COMPENSATION Information regarding executive compensation is incorporated by reference to the Definitive Proxy Statement, Executive Compensation and Board Meetings, Committees and Compensation of Directors, if filed with the SEC within 120 days after December 31, 1997. To the extent not so filed, such information will be provided on a Form 10-K/A filed with the SEC. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information regarding security ownership of certain beneficial owners and management is incorporated by reference to the Definitive Proxy Statement, Ownership of Voting Securities, if filed with the SEC within 120 days after December 31, 1997. To the extent not so filed, such information will be provided on a Form 10-K/A filed with the SEC. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. 5 PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) Documents filed as part of this Report: 1. The Consolidated Financial Statements and related notes to consolidated financial statements are set forth on pages 16 through 32 of the 1997 Annual Report to Shareholders. Exhibit 13.1 contains this information and is incorporated by reference. The Report of Independent Accountants, which covers both the Consolidated Financial Statements and the financial statement schedule, appears on page 9 of this report. 2. Financial Statement Schedules: The following supplemental schedule is located in this Report on the page indicated. Page ---- II Valuation and Qualifying Accounts 10 Schedules other than those listed above are omitted for the reason that they are either not applicable or not required or because the information required is contained in the financial statements or notes thereto. 3. Exhibits: 3a Articles of Incorporation as amended. 3b By-Laws as amended, effective April 29, 1993. Exhibit 3 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 1993, is hereby incorporated by reference. 4a Rights Agreement dated November 11, 1988, is incorporated by reference to Form 8-K filed November 17, 1988. Amendment No. 1 to Rights Agreement dated January 22, 1991, is incorporated by reference to Form 8-K filed January 25, 1991. Form of Amendment No. 2 to Rights Agreement dated November 16, 1994, is incorporated by reference to Exhibit 4.8 of Form S-3 filed August 26, 1994. 4b Form of Registration Rights Agreement between the Company, the Purchasers and the Investors dated November 16, 1994. Exhibit 4.5 to the Form S-3 filed August 26, 1994, is hereby incorporated by reference. 10a SPS 1988 Long Term Incentive Stock Plan as amended, effective February 2, 1989. Exhibit 10a to the Annual Report on Form 10-K for the year ended December 31, 1988, is hereby incorporated by reference. 10b SPS Exempt Employees Savings and Investment Plan as Amended and Restated, effective November 1991. Exhibit 10b to the Annual Report on Form 10-K for the year ended December 31, 1991, is hereby incorporated by reference. 10c SPS Technologies, Inc. Non-Exempt Employees Savings and Investment Plan as Amended and Restated, effective November 1991. Exhibit 10c to the Annual Report on Form 10-K for the year ended December 31, 1991, is hereby incorporated by reference. 10d SPS Technologies, Inc. Management Incentive Plan as Amended and Restated, effective April 26, 1994. Exhibit 10d to the Annual Report on Form 10-K for the year ended December 31, 1995, is hereby incorporated by reference. 10e Form of standby Purchase Agreement dated November 16, 1994. Exhibit 10.1 to the Form S-3/A filed November 17, 1994, is hereby incorporated by reference. 10f Retirement Benefit Agreement, dated February 28, 1979. Exhibit 10f to the Annual Report on Form 10-K for the year ended December 31, 1991, is hereby incorporated by reference. 10g Fee Arrangement with Former Directors, effective November 29, 1984. Exhibit 10g to the Annual Report on Form 10-K for the year ended December 31, 1990, is hereby incorporated by reference. 10h Form of Employment Agreements between SPS Technologies, Inc. and certain employees, as amended and restated effective December 14, 1992. Exhibit 10h to the Annual Report on Form 10-K for the year ended December 31, 1992, is hereby incorporated by reference. 6 10i SPS Technologies, Inc. Executive Deferred Compensation Plan, as amended and restated, effective December 14, 1992. Exhibit 10i to the Annual Report on Form 10-K for the year ended December 31, 1992, is hereby incorporated by reference. 10j SPS Technologies, Inc. Executive Deferred Compensation Plan II, as amended and restated effective December 1, 1993. Exhibit 10j to the Annual Report on Form 10-K for the year ended December 31, 1993, is hereby incorporated by reference. 10k SPS Technologies, Inc. Supplemental Executive Retirement Plan, as amended and restated effective December 14, 1992. Exhibit 10k to the Annual Report on Form 10-K for the year ended December 31, 1992, is hereby incorporated by reference. 10l Employment Agreement between SPS Technologies, Inc. and Charles W. Grigg, Chairman and Chief Executive Officer, effective December 1, 1993. Exhibit 10l to the Annual Report on Form 10-K for the period ended December 31, 1993, is hereby incorporated by reference. 10m Form of Indemnification Agreements between SPS Technologies, Inc. and officers and directors dated February 2, 1987. Exhibit 10m to the Annual Report on Form 10-K for the period ended December 31, 1992, is hereby incorporated by reference. 10n Split Dollar Insurance Agreements regarding certain officers and directors effective April 2, 1990, and November 27, 1991. Exhibit 10n to the Annual Report on Form 10-K for the year ended December 31, 1991, is hereby incorporated by reference. 10o SPS Technologies, Inc. Senior Executive Severance Plan, effective December 14, 1992. Exhibit 10o to the Annual Report on Form 10-K for the year ended December 31, 1992, is hereby incorporated by reference. 10p Agreement with Retiring Executive, approved December 14, 1992. Exhibit 10p to the Annual Report on Form 10-K for the year ended December 31, 1992, is hereby incorporated by reference. 10q SPS Technologies, Inc. Benefit Equalization Plan, as amended and restated effective December 14, 1992. Exhibit 10 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 1993, is hereby incorporated by reference. 10r SPS Technologies, Inc. Long Range Incentive Plan, effective January 1, 1995. Exhibit 10r to the Annual Report on Form 10-K for the year ended December 31, 1995, is hereby incorporated by reference. 13.1 1997 Consolidated Financial Statements, Notes to Consolidated Financial Statements and Report of Independent Accountants. 13.2 Summary of Quarterly Results for 1997 and 1996. 13.3 Selected Financial Data for 1993 through 1997. 13.4 Common Stock Information for 1997 and 1996. 13.5 1997 Management's Discussion and Analysis of Financial Condition and Results of Operations. 21 Subsidiaries of the Registrant. 23 Consent of Independent Accountants. 27 Financial Data Schedule. (b) Reports on Form 8-K filed during the last quarter of 1997: Form 8-K dated October 14, 1997 reporting a sale of equity securities pursuant to Regulation S under Item 9. Form 8-K dated December 2, 1997 reported information under Item 5, "Other Events." 7 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SPS TECHNOLOGIES, INC. ------------------------- (Registrant) /s/ William M. Shockley ------------------------- William M. Shockley Vice President, Chief Financial Officer and Controller Date: March 23, 1998 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date - -------------------------------- ---------------------------------- --------------- /s/ CHARLES W. GRIGG Chairman, Chief Executive March 23, 1998 - ---------------------------- Officer, President and Director Charles W. Grigg (Principal Executive Officer) /s/ WILLIAM M. SHOCKLEY Vice President, Chief March 23, 1998 - ---------------------------- Financial Officer and Controller William M. Shockley (Principal Financial Officer) /s/ HOWARD T. HALLOWELL, III Director March 23, 1998 - ---------------------------- Howard T. Hallowell, III /s/ JAMES F. O'CONNOR Director March 23, 1998 - ---------------------------- James F. O'Connor /s/ ERIC M. RUTTENBERG Director March 23, 1998 - ---------------------------- Eric M. Ruttenberg /s/ HARRY J. WILKINSON Director March 23, 1998 - ---------------------------- Harry J. Wilkinson 8 REPORT OF INDEPENDENT ACCOUNTANTS The Shareholders and Board of Directors SPS Technologies, Inc.: We have audited the consolidated financial statements of SPS Technologies, Inc. and subsidiaries as of December 31, 1997 and 1996 and for each of the three years in the period ended December 31, 1997, which financial statements are included on pages 16 through 32 of the 1997 Annual Report to Shareholders of SPS Technologies, Inc. and subsidiaries and incorporated by reference herein. We have also audited the financial statement schedule as listed in Item 14(a)2 of this Form 10-K. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of SPS Technologies, Inc. and subsidiaries as of December 31, 1997 and 1996, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein. /s/COOPERS & LYBRAND L.L.P. - --------------------------- COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania 19103 February 2, 1998 9 SCHEDULE II SPS TECHNOLOGIES, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 1997, 1996 and 1995 (Thousands of dollars) Additions Additions charged charged (deductions (deductions Balance at credited) credited) Balance beginning of to costs and to other Deductions at end of Description year expenses accounts (a) year - ------------------------------------------ -------------- -------------- ------------------ ------------ ---------- Year ended December 31, 1997: $ (28)(b) Allowance for doubtful accounts ......... $ 1,668 $ 407 263 (c) $ (283) $ 2,027 ======== ========= ========= ====== ======= Deferred income tax valuation allowance ............................. $ 8,857 $ 150 $(1,716)(d) $ $ 7,291 ======== ========= ========= ====== ======== Year ended December 31, 1996: $ 26(b) Allowance for doubtful accounts ......... $ 1,292 $ 189 186(c) $ (25) $ 1,668 ======== ========= ========= ====== ======== Deferred income tax valuation allowance ............................. $ 10,349 $ (2,417) $ 925(c) $ $ 8,857 ======== ========= ========= ====== ======== Year ended December 31, 1995: Allowance for doubtful accounts ......... $ 1,299 $ 124 $ (12)(b) $ (119) $ 1,292 ======== ========= ========= ====== ======== Deferred income tax valuation allowance ............................. $ 11,462 $ (1,824) $ 711(c) $ $10,349 ======== ========= ========= ======= ======== - ------------ (a) Write off of uncollectible receivables, net of recoveries. (b) Translation adjustments. (c) Balance acquired in connection with acquisitions. (d) Release of valuation allowances related to prior year business acquisitions and credited to goodwill, net of balances acquired with 1997 business acquisitions. 10 EXHIBIT INDEX Page 3a Articles of Incorporation as amended. 3b By-Laws as amended, effective April 29, 1993. Exhibit 3 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 1993, is hereby incorporated by reference. 4a Rights Agreement dated November 11, 1988, is incorporated by reference to Form 8-K filed November 17, 1988. Amendment No. 1 to Rights Agreement dated January 22, 1991, is incorporated by reference to Form 8-K filed January 25, 1991. Form of Amendment No. 2 to Rights Agreement dated November 16, 1994, is incorporated by reference to Exhibit 4.8 of Form S-3 filed August 26, 1994. 4b Form of Registration Rights Agreement between the Company, the Purchasers and the Investors dated November 16, 1994. Exhibit 4.5 to the Form S-3 filed August 26, 1994, is hereby incorporated by reference. 10a SPS 1988 Long Term Incentive Stock Plan as amended, effective February 2, 1989. Exhibit 10a to the Annual Report on Form 10-K for the year ended December 31, 1988, is hereby incorporated by reference. 10b SPS Exempt Employees Savings and Investment Plan as Amended and Restated, effective November 1991. Exhibit 10b to the Annual Report on Form 10-K for the year ended December 31, 1991, is hereby incorporated by reference. 10c SPS Technologies, Inc. Non-Exempt Employees Savings and Investment Plan as Amended and Restated, effective November 1991. Exhibit 10c to the Annual Report on Form 10-K for the year ended December 31, 1991, is hereby incorporated by reference. 10d SPS Technologies, Inc. Management Incentive Plan as Amended and Restated, effective April 26, 1994. Exhibit 10d to the Annual Report on Form 10-K for the year ended December 31, 1995, is hereby incorporated by reference. 10e Form of standby Purchase Agreement dated November 16, 1994. Exhibit 10.1 to the Form S-3/A filed November 17, 1994, is hereby incorporated by reference. 10f Retirement Benefit Agreement, dated February 28, 1979. Exhibit 10f to the Annual Report on Form 10-K for the year ended December 31, 1991, is hereby incorporated by reference. 10g Fee Arrangement with Former Directors, effective November 29, 1984. Exhibit 10g to the Annual Report on Form 10-K for the year ended December 31, 1990, is hereby incorporated by reference. 10h Form of Employment Agreements between SPS Technologies, Inc. and certain employees, as amended and restated effective December 14, 1992. Exhibit 10h to the Annual Report on Form 10-K for the year ended December 31, 1992, is hereby incorporated by reference. 10i SPS Technologies, Inc. Executive Deferred Compensation Plan, as amended and restated, effective December 14, 1992. Exhibit 10i to the Annual Report on Form 10-K for the year ended December 31, 1992, is hereby incorporated by reference. 10j SPS Technologies, Inc. Executive Deferred Compensation Plan II, as amended and restated effective December 1, 1993. Exhibit 10j to the Annual Report on Form 10-K for the year ended December 31, 1993, is hereby incorporated by reference. 10k SPS Technologies, Inc. Supplemental Executive Retirement Plan, as amended and restated effective December 14, 1992. Exhibit 10k to the Annual Report on Form 10-K for the year ended December 31, 1992, is hereby incorporated by reference. 10l Employment Agreement between SPS Technologies, Inc. and Charles W. Grigg, Chairman and Chief Executive Officer, effective December 1, 1993. Exhibit 10l to the Annual Report on Form 10-K for the period ended December 31, 1993, is hereby incorporated by reference. 10m Form of Indemnification Agreements between SPS Technologies, Inc. and officers and directors dated February 2, 1987. Exhibit 10m to the Annual Report on Form 10-K for the period ended December 31, 1992, is hereby incorporated by reference. 10n Split Dollar Insurance Agreements regarding certain officers and directors effective April 2, 1990, and November 27, 1991. Exhibit 10n to the Annual Report on Form 10-K for the year ended December 31, 1991, is hereby incorporated by reference. 10o SPS Technologies, Inc. Senior Executive Severance Plan, effective December 14, 1992. Exhibit 10o to the Annual Report on Form 10-K for the year ended December 31, 1992, is hereby incorporated by reference. 10p Agreement with Retiring Executive, approved December 14, 1992. Exhibit 10p to the Annual Report on Form 10-K for the year ended December 31, 1992, is hereby incorporated by reference. 10q SPS Technologies, Inc. Benefit Equalization Plan, as amended and restated effective December 14, 1992. Exhibit 10 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 1993, is hereby incorporated by reference. 10r SPS Technologies, Inc. Long Range Incentive Plan, effective January 1, 1995. Exhibit 10r to the Annual Report on Form 10-K for the year ended December 31, 1995, is hereby incorporated by reference. 13.1 1997 Consolidated Financial Statements, Notes to Consolidated Financial Statements and Report of Independent Accountants. 13.2 Summary of Quarterly Results for 1997 and 1996. 13.3 Selected Financial Data for 1993 through 1997. 13.4 Common Stock Information for 1997 and 1996. 13.5 1997 Management's Discussion and Analysis of Financial Condition and Results of Operations. 21 Subsidiaries of the Registrant. 23 Consent of Independent Accountants. 27 Financial Data Schedules.