AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 2003
REGISTRATION NO. 333-99569
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
POST-EFFECTIVE AMENDMENT NO. 1
ON FORM S-2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
METALDYNE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 3714 38-2513957
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
47659 HALYARD DRIVE
PLYMOUTH, MICHIGAN 48170
(734) 207-6200
(Address, including ZIP Code, and telephone number,
including area code, of registrant's principal executive offices)
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See Table of Additional Registrants
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R. JEFFREY POLLOCK, ESQ.
GENERAL COUNSEL
METALDYNE CORPORATION
47659 HALYARD DRIVE
PLYMOUTH, MICHIGAN 48170
(734) 207-6200
(Name, address, including ZIP Code, and telephone number,
including area code, of agent for service)
with a copy to:
JONATHAN A. SCHAFFZIN, ESQ.
LUIS R. PENALVER, ESQ.
CAHILL GORDON & REINDEL LLP
80 PINE STREET
NEW YORK, NEW YORK 10005
(212) 701-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME
TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [ ]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legal facsimile thereof, pursuant to Item 11(a)(1) of
this Form, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
================================================================================
ADDITIONAL REGISTRANTS
STATE OR OTHER PRIMARY STANDARD
JURISDICTION OF INDUSTRIAL
INCORPORATION OR CLASSIFICATION CODE I.R.S. EMPLOYER
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER ORGANIZATION NUMBER IDENTIFICATION NO.
- ------------------------------------------------------ ------------------ --------------------- -------------------
ER Acquisition Corp. Delaware 9995 38-3422614
GMTI Holding Company Delaware 551112 90-0044261
Halyard Aviation Services, Inc. Michigan 7380 90-0044260
MASG Disposition, Inc. Michigan 9995 38-2509882
MASX Energy Services Group, Inc. Delaware 9995 38-2248592
Metaldyne Accura Tool & Mold, Inc. Delaware 3714 36-4134012
Metaldyne Company LLC Delaware 3714 NONE
Metaldyne DuPage Die Casting Corporation Illinois 551112 36-2233897
Metaldyne Europe, Inc. Delaware 551112 38-2783435
Metaldyne Lester Precision Die Casting, Inc. Delaware 3714 36-4204422
Metaldyne Light Metals Company, Inc. Delaware 551112 36-4204419
Metaldyne Machining and Assembly Company, Inc. Michigan 3714 38-1225111
Metaldyne Precision Forming-Fort Wayne, Inc. Indiana 3714 35-1767542
Metaldyne Services, Inc. Delaware 7380 38-2523834
Metaldyne Sintered Components of Indiana, Inc. Delaware 3714 38-2977520
Metaldyne Sintered Components, Inc. Delaware 3714 25-1231600
Metaldyne Tubular Products, Inc. Michigan 3490 38-2126248
Metaldyne U.S. Holding Co. Michigan 551112 38-3355783
Precision Headed Products, Inc. Delaware 3714 38-3386091
Punchcraft Company Michigan 3460 38-3212117
Stahl International, Inc. Tennessee 3714 62-1411205
W.C. McCurdy & Co. Michigan 9995 38-1494328
Windfall Products, Inc. Pennsylvania 3714 25-1300079
Windfall Specialty Powders, Inc. Pennsylvania 3714 25-1602774
EXPLANATORY NOTE
This post-effective amendment to the registration statement contains a
form of prospectus that may be used by any Broker-Dealer Subsidiary of Credit
Suisse First Boston LLC in connection with offers and sales of the previously
issued securities described therein in market-making transactions.
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT CONSUMMATE THE EXCHANGE OFFER UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 25, 2003
PROSPECTUS
$250,000,000
METALDYNE CORPORATION
11% SENIOR SUBORDINATED NOTES DUE 2012
The 11% senior subordinated notes due 2012 offered hereby were issued on
or about November 21, 2002 in exchange for the 11% senior subordinated notes
due 2012 originally issued on June 20, 2002.
We will pay interest on the exchange notes on June 15 and December 15 of
each year. The first such payment will be made on December 15, 2002. We have
the option to redeem all or a portion of the exchange notes at any time at the
redemption prices set forth in this prospectus. Prior to June 15, 2005, we may
redeem up to 35% of the exchange notes at 111% of the principal amount, plus
accrued and unpaid interest, with the net proceeds of certain equity issuances,
provided at least 65% of the original aggregate principal amount of the
exchange notes remains outstanding immediately after such redemption. The
exchange notes will be issued only in denominations of $1,000 and integral
multiples of $1,000.
The notes will be guaranteed by each of our current and future domestic
subsidiaries that is a guarantor or direct borrower under our credit facility.
The exchange notes and the guarantees will rank junior to all of our and the
guarantors' existing and future senior indebtedness and secured indebtedness,
including any borrowings under our credit facility. The exchange notes and
guarantees will rank equally with any of our and the guarantors' future
unsecured senior subordinated indebtedness, including trade payables. The
exchange notes will rank senior to any of our and the guarantors' future
indebtedness that is expressly subordinated in right of payment to the exchange
notes. The exchange notes will rank effectively junior to all the liabilities
of our subsidiaries that have not guaranteed the exchange notes.
We do not intend to apply for listing of the notes on any securities
exchange or automated quotation system.
Private equity funds affiliated with CSFB own approximately 24% of the
common equity of the issuer and one of CSFB's funds has the right to appoint
one of the issuer's directors. In addition, affiliates of CSFB are investors in
Heartland Industrial Partners, L.P.
See "Risk Factors" beginning on page 3 to read about factors you should
consider before buying the exchange notes.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
This prospectus has been prepared for and will be used by CSFB in
connection with offers and sales of the exchange notes in market-making
transactions. These transactions may occur in the open market or may be
privately negotiated at prices related to prevailing market prices at the time
of sales or at negotiated prices. CSFB may act as principal or agent in these
transactions. We will not receive any of the proceeds of such sales.
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THE DATE OF THIS PROSPECTUS IS , 2003.
TABLE OF CONTENTS
PAGE
-----
WHERE YOU CAN FIND MORE INFORMATION ................................ ii
INCORPORATION OF DOCUMENTS BY REFERENCE ............................ ii
FORWARD-LOOKING STATEMENTS ......................................... iii
PROSPECTUS SUMMARY ................................................. 1
RISK FACTORS ....................................................... 3
USE OF PROCEEDS .................................................... 13
UNAUDITED PRO FORMA FINANCIAL INFORMATION .......................... 14
RATIO OF EARNINGS TO FIXED CHARGES ................................. 18
DESCRIPTION OF OTHER INDEBTEDNESS AND OUR PREFERRED STOCK .......... 19
DESCRIPTION OF NOTES ............................................... 28
PLAN OF DISTRIBUTION ............................................... 68
LEGAL MATTERS ...................................................... 68
INDEPENDENT ACCOUNTANTS; CHANGE IN ACCOUNTANTS ..................... 68
i
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended. The Exchange Act file number for our
Commission filings is 001-12068. You may read and copy any document we file at
the Commission public reference room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain information on the operation of the public reference
room by calling the Commission at 1-800-SEC-0330. We file information
electronically with the Commission. Our Commission filings are available from
the Commission's Internet site at http://www.sec.gov, which contains reports,
proxy and information statements and other information regarding issuers that
file electronically.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" certain documents
we file with it, which means that we can disclose important information to you
by referring you to those documents. We are incorporating by reference the
documents listed below and any future filings we will make with the Commission
under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act.
o Quarterly Report on Form 10-Q for the period ended June 29, 2003 filed
on August 13, 2003;
o Annual Report on Form 10-K for the year ended December 29, 2002, filed
on March 14, 2003;
o Proxy Statement on Schedule 14A for our annual meeting of shareholders
held on May 8, 2002 (other than the sections entitled "Executive
Compensation--Committee Report," "PricewaterhouseCoopers LLP Fees for
Fiscal 2002" and "Audit Committee Reports");
o Current Report on Form 8-K, filed on January 6, 2003;
o Current Report on Form 8-K/A, filed on March 31, 2003;
o Current Report on Form 8-K, filed on May 8, 2003;
o Current Report on Form 8-K, filed on June 26, 2003; and
o Current Report on Form 8-K, filed on August 22, 2003.
The information in the documents incorporated by reference is considered
to be part of this prospectus. A copy of the above-mentioned 10-K and 10-Q and
Current Report on Form 8-K, filed on August 22, 2003 are included with this
Prospectus.
Upon written or oral request, we will provide a copy of the documents we
incorporate by reference, at no cost, to any person who receives this
prospectus, including any beneficial owner of our common stock. To request a
copy of any or all of these documents, you should write or telephone us at the
following address and telephone number:
Metaldyne Corporation
47659 Halyard Drive
Plymouth, Michigan 48107
Attention: Investor Relations
(734) 207-6200
ii
FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking" statements, as that term is
defined by the federal securities laws, about our financial condition, results
of operations and business. You can find many of these statements by looking
for words such as "may," "will," "expect," "anticipate," "believe," "estimate"
and similar words used in this prospectus.
These forward-looking statements are subject to numerous assumptions,
risks and uncertainties. Because the statements are subject to risks and
uncertainties, actual results may differ materially from those expressed or
implied by the forward-looking statements. We caution readers not to place
undue reliance on the statements, which speak only as of the date of this
prospectus.
The cautionary statements set forth above should be considered in
connection with any subsequent written or oral forward-looking statements that
we or persons acting on our behalf may issue. We do not undertake any
obligation to review or confirm analysts' expectations or estimates or to
release publicly any revisions to any forward-looking statements to reflect
events or circumstances after the date of this prospectus or to reflect the
occurrence of unanticipated events.
Risks and uncertainties that could cause actual results to vary materially
from those anticipated in the forward-looking statements included in this
prospectus include general economic conditions in the markets in which we
operate and industry-based factors such as:
o declines in North American automobile and light truck builds;
o reductions in outsourcing by our automotive customers;
o increases in our raw material and energy costs;
o labor costs and strikes at our major direct and indirect customers and
at our facilities;
o dependence on significant automotive customers;
o the level of competition in the automotive supply industry and pricing
pressures from our customers;
o risks associated with our acquisition strategy and our ability to
successfully integrate acquisitions, including actions we have
identified as providing cost-saving opportunities;
o technological developments that could competitively disadvantage us;
and
o risks associated with conducting business in foreign countries.
In addition, factors more specific to us could cause actual results to
vary materially from those anticipated in the forward-looking statements
included in this prospectus such as substantial leverage, limitations imposed
by our debt instruments, our ability to identify attractive and other strategic
acquisition opportunities and to successfully integrate acquired businesses
including actions we have identified as providing cost-saving opportunities.
We disclose important factors that could cause our actual results to
differ materially from our expectations under "Risk Factors" and in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" sections in our Annual Report on Form 10-K and Quarterly Report on
Form 10-Q, which are incorporated by reference in this prospectus, and
elsewhere in this prospectus. These cautionary statements qualify all
forward-looking statements attributable to us or persons acting on our behalf.
When we indicate that an event, condition or circumstance could or would have
an adverse effect on us, we mean to include effects upon our business,
financial and other conditions, results of operations and ability to make
payments on the notes.
iii
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus. This summary does not contain all of the information you should
consider before investing in the notes. You should read this entire prospectus
carefully, including "Risk Factors" and our financial statements and the notes
to those financial statements included elsewhere in this prospectus and
contained in our Current Report on Form 8-K dated August 22, 2003 and Quarterly
Reports on Form 10-Q incorporated by reference into this prospectus. Unless the
context otherwise requires, all information in this prospectus which refers to
(i) the "Issuer" refers only to Metaldyne Corporation and (ii) "us" or "we" or
"our" refers to the Issuer and its subsidiaries. For purposes of this
prospectus, when we describe information on a pro forma basis, we are giving
effect only to those adjustments set forth under "Unaudited Pro Forma Financial
Information."
THE COMPANY
We are a leading supplier of highly engineered metal components for the
global light vehicle market. Through a combination of capabilities in design,
engineering, fabrication, machining and assembly, we supply components and
modular systems used in vehicle transmission, engine and chassis applications.
Our products are sold primarily to both North American and international light
vehicle original equipment manufacturers, or OEMs, and Tier I component
assemblers and provide content for approximately 95% of the top 40 NAFTA light
vehicles produced in 2001. Tier I component assemblers are direct suppliers to
OEMs of integrated modules, such as a complete engine assembly or drivetrain
assembly. Our metal forming processes include cold, warm and hot forging,
forged and conventional powder metal, tubular fabrications and
precision-aluminum die castings. In addition, we perform design, engineering,
machining, finishing and assembly functions. We have approximately 8,500
employees and more than 40 owned or leased manufacturing facilities worldwide.
In North America, we have leading market shares in several of our
products. We are the largest independent forging company, the second largest
independent "machining and assembly" supplier, and one of the largest powder
metal manufacturers for light vehicle applications. We believe our scale and
combined capabilities represent a significant competitive advantage over our
competitors, many of which are smaller and do not have the ability to combine
metal forming with machining and sub-assembly capabilities. We serve over 300
customers, including BMW, Dana, DaimlerChrysler, Ford, General Motors, Delphi,
Honda, New Venture Gear, Nissan, Renault, Toyota, TRW and Visteon.
RECENT DEVELOPMENTS
Livonia Fittings Sale. On May 9, 2003, we sold our fittings business,
which makes specialized automotive fasteners, to TriMas for $22.7 million in
cash and, in connection therewith, we subleased our Livonia, Michigan facility
to TriMas. The fittings business is a non-core asset that was part of our
Chassis segment and serves both automotive and industrial customers. Since it
had never been part of TriMas, it was not subject to the TriMas divestiture in
June 2002. Its products include specialty tube nuts, fittings, spacers and
locking nut systems. The Livonia facility is subject to a lease for which we
will remain responsible, but the sublease payments from TriMas will satisfy our
obligations under the lease arrangement. The fittings business had 2002 net
sales of $16.7 million. As of June 29, 2003, the net present value of our
obligations under the lease for which we remain liable to the extent not paid
by TriMas was approximately $1.3 million.
Additionally, TriMas assumed the assets and liabilities under our employee
benefit plans with the respect to the employees and former employees of our
specialized fittings business. Subject to certain exceptions, the acquisition
agreement provides that we will indemnify TriMas for any liabilities that it
faces as a result of the acquisition that are related to any of our lines of
business other than the specialized fittings business and that TriMas will
indemnify us for any liabilities that we may have as a
1
result of our historical operations of the specialized fittings business. We
used the proceeds to repay term debt, to reduce receivables balances and/or for
general corporate purposes. We received a fairness opinion in connection with
the foregoing disposition to TriMas since this was an affiliate transaction.
Acquisition of Dana Corporation's Greensboro, N.C. Operations. In May
2003, we acquired manufacturing operations of a subsidiary of Dana Corporation
that produce powertrain and suspension components, particularly knuckle
components. In 2002, these operations generated approximately $47 million in
sales. To acquire these operations, we paid approximately $7.6 million in cash
at closing and agreed to pay an additional $1.4 million in cash over a period
of time ending on December 31, 2004. We may also be obligated to pay up to an
additional $1.4 million in cash on December 31, 2004, depending upon the extent
of new business awards at the facility. In connection with the transaction,
Dana has sold the Greensboro plant to a third party for cash consideration of
approximately $10.0 million, and we have leased the facility from the new
owner.
In addition, in connection with the transaction, we signed a seven year
supply agreement with Dana covering all existing business at Greensboro,
including successor programs, with a right of last refusal and minimum volume
targets. Dana has also issued purchase orders, to be satisfied at other
Metaldyne facilities, for incremental other tube, gear and carrier business for
a number of platforms, including the DCC Jeep Liberty and Grand Cherokee, the
Land Rover and several Isuzu platforms. Dana has also agreed to resource other
annual business from Metaldyne's competitors to Metalydne.
Credit Facility Amendment. In July 2003, we amended our credit facility
to, among other things, modify certain negative and financial covenants and
permit us to complete the acquisition of DaimlerChrysler's common and preferred
interest in the New Castle joint venture under certain conditions. Under such
amendment, the applicable margins used to calculate our term debt interest
rates were increased. See "Description of Other Indebtedness and Our Preferred
Stock."
New Chief Financial Officer and Group President, Driveline. On July 16,
2003, we announced that Jeff Stafeil was named Executive Vice President and
Chief Financial Officer. Prior to this appointment and since 2001, Mr. Stafeil
served as our corporate controller, with responsibility for investor relations,
working capital management and financial reporting systems. Prior to joining
us, Mr. Stafeil worked for Heartland and was a consultant at Booz, Allen &
Hamilton. Mr. Stafeil is a Certified Public Accountant.
Bruce Swift has served as our Driveline President since June 2003. Prior
to joining Metaldyne, he served as Chairman and Chief Executive Officer of
Covisint, LLC. Prior to that, he served as Vice President for Ford Brands in
Europe and in various other capacities at Ford Motor Company and Honda of
America, Inc. He continues to serve as Chairman of the Board of Directors at
Covisint, LLC.
-----------------------------------
Metaldyne Corporation is a Delaware corporation. Our principal executive
offices are located at 47659 Halyard Drive, Plymouth, Michigan 48170. Our
telephone number is (734) 207-6200.
2
RISK FACTORS
You should carefully consider each of the risks described below, together
with all of the other information contained in this prospectus, before deciding
to invest in the notes.
RISKS RELATED TO OUR BUSINESS
THE INDUSTRIES IN WHICH WE OPERATE DEPEND UPON GENERAL ECONOMIC CONDITIONS AND
ARE HIGHLY CYCLICAL.
Our financial performance depends, in large part, on conditions in the
cyclical markets that we serve, such as the automotive and light-duty truck
industries, and on the U.S. and global economies generally. Our sales to OEMs
and Tier I and Tier II suppliers in the automotive and light- and heavy-duty
truck industries accounted for virtually all of our net sales in 2002. Tier II
suppliers are direct suppliers to both OEMs and Tier I suppliers of integrated
modules, such as engine and suspension modules and brake corner modules. Demand
for new vehicles fluctuates in response to overall economic conditions and is
particularly sensitive to changes in interest rate levels, consumer confidence
and fuel costs. In our largest market, the North American automotive market,
reported results from our customers in 2002 reflected lower sales volumes and
lower prices for vehicles than in 2001. This is reflected in our lower sales
and margins in 2002. This trend has continued through 2003 and we continue to
experience pricing and other pressures from our customers. In addition, to the
extent our production volumes have been positively impacted by OEM new vehicle
sales incentives, such as 0% financing, these sales incentives may not be
sustained or may cease to favorably impact our sales. The recent recession and
the decline in consumer confidence throughout the U.S. and much of the world
continue to create uncertainty in our markets and their future impact on us is
difficult to predict. Any sustained weakness in demand or continued downturn or
uncertainty in the economy generally would negatively impact our financial
results.
Our sales are also impacted by retail inventory levels and our customers'
production schedules. In 2002, our OEM customers significantly reduced their
production and inventory levels and reduced their orders from us due to the
uncertain economic environment. In this environment, we cannot predict future
production rates and inventory levels and the sustainability of any recovery.
In addition, we have experienced historical sales declines during OEMs'
scheduled shutdowns, which usually occur during the third calendar quarter.
Continued uncertainty and other unexpected fluctuations may have a material
adverse effect upon us.
OUR BASE OF CUSTOMERS IS CONCENTRATED AND THE LOSS OF BUSINESS FROM A MAJOR
CUSTOMER, THE DISCONTINUANCE OF PARTICULAR VEHICLE MODELS OR A CHANGE IN AUTO
CONSUMER PREFERENCES OR REGULATIONS COULD MATERIALLY ADVERSELY EFFECT US.
Because of the relative importance of our largest customers and the high
degree of concentration of OEMs in the North American automotive industry, our
business is exposed to a high degree of risk related to customer concentration.
While direct sales to our three largest OEM customers and New Venture Gear
accounted for approximately 53% of our pro forma net sales in 2002, our
customers include Tier I and Tier II suppliers, such as Delphi, Dana and
Visteon, that serve the large OEMs. Accordingly, while Ford, General Motors,
DaimlerChrysler and New Venture Gear directly accounted for approximately
17.5%, 12.0%, 11.5% and 12.0%, respectively, of our pro forma net sales in
2002, we have a material indirect exposure to these and other OEMs due to our
significant Tier I and Tier II supplier base. Our relationship with
DaimlerChrysler is expected to be more significant in the future by reason of
our New Castle joint venture and supply arrangements. If we acquire all the
equity interests of New Castle, our sales to DaimlerChrysler are expected to
account for more than 30% of our total net sales. A loss of significant
business from, or adverse performance by, any of these OEM customers would be
harmful to us and make it more difficult for us to meet our obligations in
respect of the notes. Further deterioration of the market share held by the
three largest domestic automakers could also impact our revenues. Production
cuts at these OEMs could also adversely impact our sales to Tier I and Tier II
suppliers. The contracts we have entered into with most of our customers
provide for supplying the customers' annual requirements against a blanket
purchase order for certain vehicle models, rather than for manufacturing a
specific quantity of products. Most of these purchase orders
3
are terminable at will by the customers. Therefore, the loss of a contract or a
significant decrease in demand for certain key models or group of related
models sold by any of our major customers could have a material adverse effect
on us.
In addition, our sales and performance are influenced by customer
preferences, regulatory changes and OEM new vehicle financing programs. A
significant portion of our sales have been derived from products used in sports
utility vehicles, or SUVs, and light trucks, which has been favorable due to
their high metal content. Until recently, these vehicles had experienced
positive sales trends for several years. There can be no assurance that sales
of these vehicles will not continue to decline. In addition, government
regulations, including those relating to fuel economy, could impact vehicle
content and volume and, accordingly, have a material adverse impact on us.
WE INTEND TO ACTIVELY PURSUE ACQUISITIONS AND/OR JOINT VENTURES BUT WE MAY NOT
BE ABLE TO IDENTIFY ATTRACTIVE ACQUISITION AND/OR JOINT VENTURE CANDIDATES,
SUCCESSFULLY INTEGRATE OUR ACQUIRED OPERATIONS OR REALIZE THE INTENDED BENEFITS
OF OUR ACQUISITIONS AND/OR JOINT VENTURES.
Our strategy is to become a full-service, integrated global provider of
engineered-metal products. This will necessitate further acquisition and/or
joint venture activity. We continually evaluate potential acquisitions and
joint ventures and are engaged in discussions with acquisition candidates. On
January 2, 2003, we acquired a 40% interest in a joint venture with
DaimlerChrysler. The joint venture owns the New Castle machining and forging
facility formerly owned by DaimlerChrysler in New Castle, Indiana. As described
elsewhere in this offering circular, we have the right to acquire the balance
of the equity interests in the joint venture. There can be no assurance that we
will acquire the balance of the New Castle joint venture on the assumed or
other terms or that our estimated cost savings or cost structure, including new
terms of the collective bargaining agreement, will reflect the terms assumed
elsewhere in this offering circular. All of our present discussions concerning
other transactions are preliminary or involve immaterial properties and there
can be no assurance that suitable acquisition candidates will be identified and
acquired in the future, that the financing or necessary consents for any such
acquisitions will be available on satisfactory terms or that we will be able to
accomplish our strategic objectives in making any such acquisition. Nor can we
assure you that our full metal services strategies will be successfully
received by customers or achieve their intended benefits. Acquisitions are
often undertaken to improve the operating results of either or both of the
acquirer and the acquired company, and we cannot assure you that we will be
successful in this regard or that the expenses that we may incur to implement
cost savings plans will not be excessive relative to the anticipated benefits.
We will encounter various risks in acquiring the balance of New Castle joint
venture and other companies, including the possible inability to integrate
successfully an acquired business into our operations and unanticipated
problems or liabilities, whether or not known at the time of acquisition, some
or all of which could materially and adversely affect us. We could incur
additional indebtedness in connection with our acquisition strategy and
increase our leverage. We expect to acquire companies and operations in
geographic markets in which we do not currently operate. Acquisitions outside
of North America will present unique structuring, integration, legal, operating
and cultural challenges and difficulties and will increase our exposure to
risks generally attendant to international operations.
IF WE ARE UNABLE TO MEET FUTURE CAPITAL REQUIREMENTS, OUR BUSINESS MAY BE
ADVERSELY AFFECTED.
We operate in a capital intensive industry. We have made substantial
capital investments from 1996 through 2002 to, among other things, maintain and
upgrade our facilities and enhance our production processes. This level of
capital expenditures was needed to:
o increase production capacity;
o improve productivity;
o satisfy customer requirements; and
o upgrade selected facilities to meet competitive requirements.
4
We have planned capital expenditures of approximately $130.0 million in
2003 (without giving effect to the New Castle joint venture if we acquire it).
In addition, as we expand our book of business, we may have to incur other
significant expenditures to prepare for and manufacture these products. We
believe that we will be able to fund these expenditures (and the acquisition of
the balance of the New Castle joint venture if we acquire it) through cash flow
from operations, borrowings under our credit facility and sales of receivables
under our receivables facility or other satisfactory arrangements. Our credit
facility contains limitations which could affect our ability to fund our
capital expenditures and other needs. These limitations will be adjusted in
accordance with our pending bank amendment, but we cannot at this time predict
the levels or impact upon us. We cannot assure you that we will have adequate
funds to make all capital expenditures, when required, or that the amount of
future capital expenditures will not be materially in excess of our anticipated
expenditures. If we are unable to make necessary capital expenditures, our
business will be adversely affected. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources" in our 10-Q for the period ended June 29, 2003 incorporated by
reference herein.
INCREASES IN OUR RAW MATERIAL OR ENERGY COSTS OR THE LOSS OF A SUBSTANTIAL
NUMBER OF OUR SUPPLIERS COULD AFFECT OUR FINANCIAL HEALTH.
Generally, our raw materials requirements are obtainable from various
sources and in the desired quantities. While we currently maintain alternative
sources for raw materials, our businesses are subject to the risk of price
fluctuations and periodic delays in the delivery of certain raw materials,
component parts and specialty fasteners. Under one-year supply contracts for
special bar quality steel, we have established the prices at which we will
purchase much of our steel requirements for the remainder of 2003. We may not
be able to renegotiate future prices under those contracts at prices favorable
to us, depending on industry conditions. The domestic steel industry has
experienced substantial financial instability due to numerous factors,
including energy costs and the effect of foreign competition. In response to
this instability, tariffs on imported steel were imposed by the U.S. government
in March 2002. As a result, steel prices have been rising and we expect the net
effect of the steel price increases to have an approximate $5.0 million
negative impact on our financial results in 2003. See "Business--Materials and
Supply Arrangements" in our annual report on Form 10-K incorporated by
reference herein. In addition, a failure by our suppliers to continue to supply
us with certain raw materials or component parts on commercially reasonable
terms, or at all, would have a material adverse effect on us. Our energy costs
are a substantial element of our cost structure. To the extent there are energy
supply disruptions or material fluctuations in energy costs, our margins could
be materially adversely impacted.
CONTINUING TRENDS AMONG OUR CUSTOMERS WILL INCREASE COMPETITIVE PRESSURES IN
OUR BUSINESSES.
The markets for our products are highly competitive. Our competitors
include driveline component manufacturing facilities of existing OEMs, as well
as independent domestic and international suppliers. Certain competitors of our
businesses are large companies that have greater financial resources than us.
At times, we may be in a position of competing with some of our own customers,
such as Tier I suppliers which could have adverse consequences. We believe that
the principal competitive factors for all of our businesses are product quality
and conformity to customer specifications, design and engineering capabilities,
product development, timeliness of delivery and price. In addition, our
competitors may develop products that are superior to our products or may adapt
more quickly than us to new technologies or evolving customer requirements.
Continuing trends by our customers in many of our markets to limit their number
of outside vendors have resulted in increased competition as many manufacturers
and distributors have reduced prices to compete more effectively. In addition,
financial and operating difficulties experienced by our major customers may
result in further pricing pressures. We expect competitive pressures in our
markets to remain strong. Such pressures arise from existing competitors, other
companies that may enter our existing or future
5
markets and, in certain cases, our customers, which may decide to internalize
production of certain items sold by us. There can be no assurance that we will
be able to compete successfully with our existing competitors or with new
competitors. Failure to compete successfully could have a material adverse
effect on us.
OUR PRODUCTS ARE SUBJECT TO CHANGING TECHNOLOGY, WHICH COULD PLACE US AT A
COMPETITIVE DISADVANTAGE RELATIVE TO ALTERNATIVE PRODUCTS INTRODUCED BY
COMPETITORS.
We believe that our customers rigorously evaluate their suppliers on the
basis of product quality, price competitiveness, technical expertise and
development capability, new product innovation, reliability and timeliness of
delivery, product design capability, manufacturing expertise, operational
flexibility, customer service and overall management. Our success will depend
on our ability to continue to meet our customers' changing specifications with
respect to these criteria. We may, therefore, require significant ongoing and
recurring additional capital expenditures and investment in research and
development, manufacturing and other areas to remain competitive. We cannot
assure you that we will be able to achieve the technological advances or
introduce new products that may be necessary to remain competitive within our
business. In addition, any decreasing demand by our customers in favor of
plastics could have a material adverse effect. Further, we cannot assure you
that any technology development by us can be adequately protected such that we
can maintain a sustainable competitive advantage.
WE DEPEND ON THE SERVICES OF KEY INDIVIDUALS AND RELATIONSHIPS, THE LOSS OF
WHICH WOULD MATERIALLY HARM US.
Our success will depend, in part, on the efforts of our executive officers
and other key employees. In addition, our future success will depend on, among
other factors, our ability to attract and retain other qualified personnel. The
loss of the services of any of our key employees or the failure to attract or
retain employees could have a material adverse effect on us. In addition, our
largest stockholder, Heartland, provides us with valuable strategic,
operational and financial support, the loss of which could materially adversely
affect us.
WE MAY BE SUBJECT TO WORK STOPPAGES AT OUR FACILITIES OR THOSE OF OUR PRINCIPAL
CUSTOMERS, WHICH COULD SERIOUSLY IMPACT THE PROFITABILITY OF OUR BUSINESS.
As of December 29, 2002, approximately 46% of our work force was
unionized, principally through the UAW. We experienced a labor strike at our
Fraser, Michigan plant which lasted from July 1997 to June 1998 and involved
approximately 140 employees. If our unionized workers were to engage in a
strike, work stoppage or other slowdown in the future, we could experience a
significant disruption of our operations, which could have a material adverse
effect on us. In addition, if a greater percentage of our work force becomes
unionized, our business and financial results could be materially adversely
affected. Recently, there has been an increase in labor organization at several
of our facilities that led to two of our facilities becoming certified by the
UAW in the past year.
Many of our direct or indirect customers have unionized work forces.
Strikes, work stoppages or slowdowns experienced by automotive OEMs or their
suppliers could result in slowdowns or closures of assembly plants where our
products are included in assembled vehicles. For example, over the past four
years, there have been a number of labor strikes against General Motors that
have resulted in work stoppages at General Motors. UAW contracts with many of
our customers are scheduled for renegotiation during the fourth quarter of 2003
and some of them will expire in the second quarter of 2004. In addition,
organizations responsible for shipping our customers' products may be impacted
by occasional strikes staged by the Teamsters Union. Any interruption in the
delivery of our customers' products would reduce demand for our products and
could have a material adverse effect on us.
OUR STRATEGY MAY NOT SUCCEED IF ANTICIPATED OUTSOURCING FAILS TO OCCUR DUE TO
UNION CONSIDERATIONS.
Because of the economic benefits inherent in outsourcing to suppliers and
the costs associated with reversing a decision to purchase products from an
outside supplier, automotive OEMs' commitment to purchasing modules from
outside suppliers, particularly on a "just-in-time" basis, are
6
expected to increase. However, under the contracts currently in effect in the
United States and Canada between each of Ford, General Motors and
DaimlerChrysler with the UAW and the Canadian Auto Workers ("CAW"), in order
for any of such automotive OEMs to obtain components from external sources that
it currently produces, it must first notify the UAW or the CAW of such
intention. If the UAW or the CAW objects to the proposed outsourcing, some
agreement will have to be reached between the UAW or the CAW and the automotive
OEM. Factors that will normally be taken into account by the UAW, the CAW and
the automotive OEM include:
o whether the proposed new supplier is technologically more advanced than
the automotive OEM;
o whether the new supplier is unionized;
o whether cost benefits exist; and
o whether the automotive OEM will be able to reassign union members whose
jobs are being displaced to other jobs within the same factories.
In the event that our predictions concerning such industry trends are not
accurate or automotive OEMs are unable to outsource to us, it may have a
material adverse effect on us.
A GROWING PORTION OF OUR REVENUE MAY BE DERIVED FROM INTERNATIONAL SOURCES,
WHICH EXPOSES US TO CERTAIN RISKS.
Approximately 21.9% of our pro forma sales in 2002 were derived from sales
by our subsidiaries located outside of the United States. As part of our
business strategy, we intend to expand our international operations through
internal growth and acquisitions. Significant market share has shifted to
foreign OEMs in the SUV and light truck platforms where we derive a significant
portion of our sales. Sales outside of the United States, particularly sales to
emerging markets, are subject to other various risks which are not present in
sales within U.S. markets, including governmental embargoes or foreign trade
restrictions such as antidumping duties, changes in U.S. and foreign
governmental regulations, the difficulty of enforcing agreements and collecting
receivables through certain foreign local systems, foreign customers may have
longer payment cycles than customers in the U.S., more expansive legal rights
of foreign unions, tariffs and other trade barriers, the potential for
nationalization of enterprises, foreign exchange risk and other political,
economic and social instability. In addition, there are tax inefficiencies in
repatriating cash flow from non-U.S. subsidiaries. To the extent such
repatriation is necessary for us to meet our debt service or other obligations,
this will adversely affect us.
WE MAY INCUR MATERIAL LOSSES AND COSTS AS A RESULT OF PRODUCT LIABILITY AND
WARRANTY CLAIMS THAT MAY BE BROUGHT AGAINST US.
We face an inherent business risk of exposure to product liability claims
in the event that the use of our current and formerly manufactured or sold
products results, or is alleged to result, in bodily injury and/or property
damage. We cannot assure you that we will not experience any material product
liability losses in the future or that we will not incur significant costs to
defend such claims. We cannot assure you that our product liability insurance
coverage will be adequate for any liabilities that may ultimately be incurred
or that it will continue to be available on terms acceptable to us. In
addition, if any of our products are or are alleged to be defective, we may be
required to participate in a government-required or manufacturer-instituted
recall involving such products. In the automotive industry, each vehicle
manufacturer has its own policy regarding product recalls and other product
liability actions relating to its suppliers. However, as suppliers become more
integrally involved in the vehicle design process and assume more of the
vehicle assembly functions, vehicle manufacturers are increasingly looking to
their suppliers for contribution when faced with product liability claims. A
successful claim brought against us in excess of our available insurance
coverage or a requirement to participate in a product recall may have a
materially adverse effect on our business. In the ordinary course of our
business, contractual disputes over warranties can also arise. In the past five
years or
7
more, we have not been required to make any material payments in respect of
warranty claims. In addition, we cannot assure you that claims will not be
asserted against us with respect to former businesses disposed of by us,
whether or not we are legally responsible or entitled to contractual
indemnification. For example, in June 2002, we divested our controlling
interest in TriMas. Certain of TriMas' subsidiaries have historical contingent
and other liabilities, including liabilities associated with their former
manufacture of asbestos-containing gaskets, for which we are indemnified. In
the event of financial difficulty at one of our former businesses or otherwise,
we cannot assure you that claims will not be made against us or that, to the
extent arising from a TriMas business, TriMas will be in a position to meet its
indemnification obligations.
OUR BUSINESS MAY BE MATERIALLY AND ADVERSELY AFFECTED BY COMPLIANCE OBLIGATIONS
AND LIABILITIES UNDER ENVIRONMENTAL LAWS AND REGULATIONS.
We are subject to numerous and frequently changing federal, state, local
and foreign environmental, and health and safety, laws and regulations that:
o affect ongoing operations and may increase capital costs and operating
expenses in order to maintain compliance with such requirements; and
o impose liability relating to contamination at our facilities, and at
other locations such as former facilities, facilities where we have
sent wastes for treatment or disposal, and other properties to which we
(or a company or business for which we are responsible) are linked.
Such liability may include, for example, investigation and clean-up of
the contamination, personal injury and property damage caused by the
contamination, and damages to natural resources. Some of these
liabilities may be imposed without regard to fault, and may also be
joint and several (which can result in a liable party being held
responsible for the entire obligation, even where other parties are
also liable).
We are legally or contractually responsible or alleged to be responsible
for the investigation and remediation of contamination at various sites, and
for personal injury or property damages, if any, associated with such
contamination. Our subsidiaries have been named as potentially responsible
parties under the Federal Superfund law or similar state laws in several sites
requiring cleanup related to disposal of wastes generated by them. These laws
generally impose liability for costs to investigate and remediate contamination
without regard to fault and under certain circumstances liability may be joint
and several resulting in one responsible party being held responsible for the
entire obligation. Liability may also include damages to natural resources. Our
businesses have incurred and likely will continue to incur expenses to
investigate and clean up existing and former company-owned or leased property.
Additional sites may be identified at which we are a potentially responsible
party under the federal Superfund law or similar state laws. We cannot assure
you that these or other liabilities will not have a material adverse effect
upon us. See "Business--Environmental Matters" in our Annual Report on Form
10-K incorporated by reference herein.
WE ARE CONTROLLED BY HEARTLAND, WHOSE INTERESTS IN OUR BUSINESS MAY BE
DIFFERENT THAN YOURS.
Heartland and its affiliates are able to control our affairs in all cases,
except for certain actions specified in a shareholders agreement among
Heartland, Credit Suisse First Boston Equity Partners, L.P. (including
affiliated funds, "CSFB Private Equity"), Masco Corporation, Richard Manoogian
and their various affiliates and certain other investors. Under the
shareholders agreement, holders of approximately 94% of our outstanding shares
of common stock have agreed to vote their shares for directors representing a
majority of our board that have been designated by Heartland. You should
consider that the interests of Heartland, as well as our other owners, will
likely differ from yours in material respects. See "Certain Relationships and
Related Party Transactions" in our Proxy Statement on Schedule 14A, a portion
of which is incorporated by reference herein.
PROVISIONS OF THE SHAREHOLDERS AGREEMENT IMPOSE SIGNIFICANT OPERATING AND
FINANCIAL RESTRICTIONS ON OUR BUSINESS.
Under the shareholders agreement referred to above, specified actions
require the approval of representatives of CSFB Private Equity, until such time
as we consummate a public common stock
8
offering for at least $100 million in gross proceeds to us. Such actions
include certain acquisitions by us, the selection of a chief executive officer,
certain debt restructurings and any liquidation or dissolution of us. You
should consider that we and our stockholders may be unable to agree with CSFB
Private Equity on the implementation of such fundamental transactions and other
matters. This sort of disagreement may materially and adversely affect us. In
addition, directors designated by Heartland could block actions even if other
directors deem them advisable.
RISKS RELATED TO THE NOTES
WE MAY NOT BE ABLE TO MANAGE OUR BUSINESS AS WE MIGHT OTHERWISE DO SO DUE TO
OUR HIGH DEGREE OF LEVERAGE.
We have debt that is substantial in relation to our stockholders' equity
and we expect to incur further debt in the future to finance acquisitions. As
of June 29, 2003, we had approximately $770.8 million of outstanding debt and
approximately $598.9 million of stockholders' equity. If we effect an
acquisition of the balance of the New Castle equity interests, we will incur
additional debt (including senior subordinated notes) and preferred stock to
finance the transaction. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our Quarterly Report on Form 10-Q
incorporated by reference herein. The degree to which we are leveraged will
have important consequences, including the following:
o our ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions, business development
efforts or general corporate purposes may be impaired;
o a substantial portion of our cash flow from operations will be
dedicated to the payment of interest and principal on our indebtedness,
thereby reducing the funds available to us for other purposes,
including our obligations to pay rent in respect of our significant
operating leases;
o our operations are restricted by our debt instruments, which contain
material financial and operating covenants, and those restrictions will
limit, among other things, our ability to borrow money in the future
for working capital, capital expenditures, acquisitions, rent expense
or other purposes;
o indebtedness under our credit facility and the financing cost
associated with our accounts receivable facility are at variable rates
of interest, which makes us vulnerable to increases in interest rates;
o our leverage may place us at a competitive disadvantage as compared
with our less leveraged competitors;
o our substantial degree of leverage will make us more vulnerable in the
event of a downturn in general economic conditions or in any of our
businesses; and
o our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate may be limited.
Our ability to service our debt and other obligations will depend on our
future operating performance, which will be affected by prevailing economic
conditions and financial, business and other factors, many of which are beyond
our control. See "Description of Other Indebtedness and Our Preferred Stock"
herein and "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources" in our Quarterly
Report on Form 10-Q incorporated by reference herein.
RESTRICTIONS IN OUR CREDIT FACILITY AND OTHER DEBT LIMIT OUR ABILITY TO TAKE
CERTAIN ACTIONS.
Our credit facility and the indenture governing the notes has, and other
debt we may incur may, contain covenants that restrict our ability to:
o pay dividends or redeem or repurchase capital stock;
o incur additional indebtedness and grant liens;
9
o make acquisitions and joint venture investments;
o sell assets; and
o make capital expenditures.
Our credit facility also requires us to comply with financial covenants
relating to, among other things, interest coverage and leverage. While we will
have significant unutilized capacity under our revolving credit facility and
receivables facility, our ability to utilize this liquidity depends upon
compliance with financial covenants. In addition, our accounts receivable
facility contains certain covenants similar to those in our credit facility and
include requirements regarding the purchase and sale of receivables. We cannot
assure you, however, that we will be able to satisfy any of these covenants in
the future or that we will be able to pursue our new business strategies within
the constraints of these or our revised covenants. If we cannot comply with the
covenants in our debt instruments, we will be in default and unable to access
required liquidity from our revolving credit and accounts receivable facilities
and unable to make payments in respect of our indebtedness, including the
notes. In addition, our accounts receivable facility contains concentration
limits with respect to the percentage of receivables we can sell from a
particular customer. If one or more of our customers were to merge with or be
acquired by another of our customers, the amount of receivables of the
surviving customer that we could sell may not be increased, resulting in a net
lowering of the total amount of receivables we could sell. If the total amount
of receivables we could sell were decreased, we could be materially adversely
affected. Further, the concentration limits are based on the credit ratings of
such particular customer. While we will implement credit hedging strategies to
offset this risk, if one or more of our customers were to have its credit
ratings downgraded and consequently the amount of receivables of such customer
that we could sell were decreased, our business could be materially adversely
affected.
Our ability to comply with our covenants may be affected by events beyond
our control, including prevailing economic, financial and industry conditions.
The breach of our covenants could result in an event of default under our
credit facility, the indenture governing the notes or other indebtedness, which
could cause an event of default under our accounts receivable facility and all
or a portion of our lease financing. Such breach would permit the lenders to
declare all amounts borrowed thereunder to be due and payable, together with
accrued interest, and the commitments of the lenders to make further extensions
of credit under our credit facility could be terminated. In addition, such
breach may cause a termination of our accounts receivable facility and of our
various sale-leaseback arrangements. If we were unable to secure a waiver from
our lenders or repay our credit facility indebtedness, our secured lenders
could proceed against their collateral and our lessors could prevent us from
using our valuable facilities and equipment that are under lease. We do not
presently expect that alternative sources of financing will be available to us
under these circumstances or available on attractive terms.
THE NOTES AND GUARANTEES ARE EFFECTIVELY JUNIOR TO ALL CLAIMS AGAINST OUR
NON-GUARANTOR SUBSIDIARIES.
Only our subsidiaries that also guarantee our obligations under the credit
facility are required to guarantee the notes. Initially, this includes all of
our domestic subsidiaries other than our receivables subsidiary and our special
purpose subsidiary that owns a minority investment in Saturn. However, we have
significant non-U.S. assets and operations. For the year ended December 29,
2002, our non-U.S. subsidiaries had sales of $320.6 million, total net
operating assets of $332.6 million and Adjusted EBITDA of $55.0 million.
Holders of notes will be structurally subordinate to claims against our
non-guarantor subsidiaries.
WE MAY BE PREVENTED FROM FINANCING, OR MAY NOT HAVE THE ABILITY TO RAISE FUNDS
NECESSARY TO FINANCE, THE CHANGE OF CONTROL OFFER REQUIRED BY THE INDENTURE AND
THE NOTES.
Upon certain change of control events, each holder of outstanding notes
may require us to purchase all or a portion of our notes at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase. Our ability to purchase the notes
upon a change of control event may be prohibited by the terms of our credit
facility or future
10
credit facilities. Future agreements may contain a similar provision. Certain
change of control events will constitute events of default under our credit
facility and termination events under our accounts receivable facility and,
absent a consent or waiver, we would be required to repay all amounts owed by
us under our credit facility and wind down our accounts receivable facility. We
cannot assure you that we would be able to repay amounts outstanding under our
credit facility or replace our accounts receivable facility. The source of
funds for any purchase of notes would be our available cash or cash generated
from other sources, including borrowings, sales of assets, sales of equity or
funds provided by an existing or new controlling person. This could also
adversely impact our leasing arrangements. We cannot assure you that any of
these sources will be available. Any requirement to offer to purchase any
outstanding notes may result in us having to refinance our outstanding debt or
obtain necessary consents under our other debt agreements to repurchase the
notes, which we may not be able to do. In such case, our failure to purchase
notes following a change of control would constitute an event of default under
the indenture which would, in turn, constitute a default under our credit
facility. In addition, even if we were able to refinance such debt, such
financing may be on terms unfavorable to us.
FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO VOID
GUARANTEES AND REQUIRE NOTEHOLDERS TO RETURN PAYMENTS RECEIVED FROM GUARANTORS.
Creditors of any business are protected by fraudulent conveyance laws
which differ among various jurisdictions, and these laws may apply to the
issuance of the guarantees by our subsidiaries and their grant of second
priority liens. A guarantee may be voided by a court, or subordinated to the
claims of other creditors, if
o that guarantee was incurred with actual intent to hinder, delay or
defraud any present or future creditor of the subsidiary, or
o that subsidiary did not receive fair consideration, or reasonably
equivalent value, for issuing its guarantee and the subsidiary
-- was insolvent or was rendered insolvent by reason of issuing the
guarantee,
-- was engaged or about to engage in a business or transaction for
which the remaining assets of the subsidiary constituted
unreasonably small capital, or
-- intended to incur, or believed that it would incur, debts beyond
its ability to pay as they matured.
We cannot be certain as to the standard that a court would use to
determine whether the guarantor subsidiaries were solvent upon issuance of the
guarantee or, regardless of the actual standard applied by the court, that the
issuance of the guarantee of the notes would not be voided. If a guarantee of a
subsidiary was voided as a fraudulent conveyance or held unenforceable for any
other reason, holders of the notes would be solely our creditors and creditors
of our other subsidiaries that have guaranteed the notes. The notes then would
be effectively subordinated to all obligations of that subsidiary. Since
Metaldyne is a holding company, if all guarantees were voided, that would
result in the holder of notes having claims that would not be paid prior to
substantially all of the other debt and liabilities of the consolidated group
of entities. To the extent that the claims of the holders of the notes against
any subsidiary were subordinated in favor of other creditors of such
subsidiary, such other creditors would be entitled to be paid in full before
any payment could be made on the notes. If one or more of the guarantees are
voided or subordinated, we cannot assure you that after providing for all prior
claims, there would be sufficient assets remaining to satisfy the claims of
holders of the notes.
Based upon financial and other information, we believe that the notes and
the guarantees are being incurred for proper purposes and in good faith and
that we are and each subsidiary is solvent and will continue to be solvent
after this offering is completed, will have sufficient capital for carrying on
its business after such issuance and will be able to pay its debts as they
mature. We cannot assure you, however, that a court reviewing these matters
would agree with us. A legal challenge to a guarantee on fraudulent conveyance
grounds may focus on the benefits, if any, realized by the subsidiary as a
result of our issuance of the notes.
11
YOU CANNOT BE SURE AN ACTIVE TRADING MARKET FOR THE NOTES WILL DEVELOP.
There has previously been only a limited secondary market for the notes.
We do not intend to list the notes on any national securities exchange or the
Nasdaq stock market or to seek the admission thereof to trading on any
automated quotation system. No assurance can be given that an active public or
other market will develop for the notes or as to the liquidity of or the
trading market for the notes. If a trading market does not develop or is not
maintained, holders of the notes may experience difficulty in reselling the
notes or may be unable to sell them at all. If a market for the notes develops,
any such market may be discontinued at any time. If a public trading market
develops for the notes, future trading prices of the notes will depend on many
factors, including, among other things, prevailing interest rates, our results
of operations and the market for similar securities, and the price at which the
holders of notes will be able to sell such notes is not assured and the notes
could trade at a premium or discount to their purchase price or face value.
Depending on prevailing interest rates, the market for similar securities and
other factors, including our financial condition, the exchange notes may trade
at a discount from their principal amount.
12
USE OF PROCEEDS
This prospectus is delivered in connection with the sale of notes by CSFB
in market-making transactions. We will not receive any of the proceeds from
such transactions.
13
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial information has
been derived from the audited historical financial statements and related notes
of Metaldyne in our Current Report on Form 8-K dated August 22, 2003 for the
fiscal year ended December 29, 2002 and unaudited historical financial
statements and related notes of Metaldyne in our Quarterly Report on Form 10-Q
for the quarter ended June 29, 2003 and incorporated by reference in this
prospectus, adjusted to give pro forma effect to the TriMas divestiture and
related financings.
The unaudited pro forma combined statements of operations for the year
ended December 29, 2002, give pro forma effect to the TriMas divestiture and
related financings as if they had occurred on January 1, 2002. On November 28,
2000, Metaldyne was acquired by an investor group led by Heartland Industrial
Partners, L.P. and Credit Suisse First Boston Equity Partners, L.P. We do not
expect to recognize any gain or loss as a result of the TriMas divestiture due
to the continuing contractual control of TriMas by Heartland.
Effective December 30, 2002, we adopted SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13 and Technical
Corrections." SFAS 145, among other things, requires us to reclassify the loss
on repurchase of debentures and early retirement of term loan of $68.9 million
(or $43.4 million, net of tax) originally recorded as an extraordinary loss in
the December 29, 2002 financial statements to other income/expense. As a
result, the historical Metaldyne financial information presented for all prior
periods gives effect to this reclassification. The 2002 financial statements
incorporated by reference do not give effect to this reclassification. This
adoption of this pronouncement does not impact net loss, operating profit or
Adjusted EBITDA. As we make our regular Exchange Act filings with quarterly
and/or annual financial data, prior period financial information contained
therein for comparative purposes will be updated to conform with the
requirements of SFAS 145.
The unaudited pro forma consolidated financial statements are presented
for informational purposes only and do not purport to represent what our
results of operations or financial position would actually have been had the
referenced TriMas divestiture and the offering occurred at such time or to
project our results of operations for any future period or date.
The pro forma adjustments are based upon available information and various
assumptions that we believe are reasonable. The pro forma adjustments and
certain assumptions are described in the accompanying notes. Other information
included under this heading has been presented to provide additional analysis.
The unaudited pro forma consolidated financial statements should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our historical financial statements and the
related notes to such financial statements included in our Current Report on
Form 8-K dated August 22, 2003 incorporated by reference in this prospectus.
14
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 29, 2002
(IN MILLIONS, EXCEPT PER SHARE DATA)
FOR THE FIVE
METALDYNE MONTHS ENDED PRO FORMA METALDYNE
HISTORICAL TRIMAS HISTORICAL ADJUSTMENTS PRO FORMA
------------------- ------------------- ------------------ ---------------
Net sales ..................................... $ 1,793.4 $ 328.6 $ -- $ 1,464.8
Cost of sales ................................. (1,494.3) (227.8) -- (1,266.5)
----------- --------- --------- -----------
Gross profits ................................ 299.1 100.8 -- 198.3
SG&A expenses ................................. (176.6) (54.4) -- (122.2)
Legacy restricted stock award expense ......... (4.9) (0.3) -- (4.6)
Restructuring charges ......................... (3.5) -- -- (3.5)
----------- --------- --------- -----------
Operating profit .............................. 114.1 46.1 -- 68.0
Other income (expense), net:
Interest expense ............................. (91.1) -- 17.1 (1) (74.0)
Equity (loss) from affiliates ................ (1.4) -- 5.2 (2) 3.8
Loss on interest rate arrangements upon
early retirement of term loans ............. (7.5) -- -- (7.5)
Loss on repurchase of debentures and
early retirement of term loans ............. (68.9)(5) -- -- (68.9)
Other, net ................................... (9.1) 1.9 1.6 (3) (9.4)
----------- --------- --------- -----------
Other income (expense), net .................. (178.0) 1.9 23.90 (156.0)
Income (loss) before taxes .................... (63.9) 48.0 (23.9) (88.0)
Income taxes .................................. 39.0 (5.0) (9.1) (4) 34.9
----------- --------- ---------- -----------
Income (loss) from continuing
operations ................................. (24.9) 43.0 14.8 (53.1)
Preferred stock dividends ..................... 9.1 -- -- 9.1
----------- --------- ---------- -----------
Earnings (loss) before change in
accounting principle attributable to
common stock ................................. $ (34.0) $ 43.0 $ 14.8 $ (62.2)
=========== ========= ========== ===========
Weighted average shares outstanding ........... 42,650 42,650
Basic and diluted earnings per share .......... $ (0.80) $ (1.46)
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Operations.
15
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the
year ended December 29, 2002 include adjustments necessary to reflect the
estimated effect of the TriMas divestiture and related financings as if they
had each occurred on January 1, 2002.
Certain amounts in the TriMas historical information have been adjusted as
compared to previous unaudited pro forma financial information to reflect
refined estimates based on actual results.
(1) Represents the pro forma adjustment to reduce Metaldyne's historical
interest expense for debt repayments from the proceeds of the TriMas
divestiture compared with the historical interest expense allocated to
TriMas. The pro forma interest savings are calculated using interest
rates in effect during the pro forma periods noted (varied from 8.75% to
5.75% for Tranche A and from 9.5% to 6.5% for Tranche B and C).
EFFECT OF DEBT
REPAYMENT ON
INTEREST EXPENSE
-----------------
FISCAL YEAR
AMOUNT OF ENDED
DEBT DECEMBER 29,
REPAYMENT 2002
----------- -----------------
Impact of use of proceeds from TriMas divestiture:
Tranche A term loan ........................................... $ (200.3) $ (5.1)
Tranche B term loan ........................................... (213.1) (6.0)
Tranche C term loan ........................................... (82.6) (2.4)
4.5% subordinated debentures (including accretion of bond
discount) .................................................... (206.5) (10.0)
Revolving credit facility interest (a) .................................... (0.2)
-------
Subtotal of interest decrease due to TriMas divesture .................. (23.7)
Impact of use of proceeds from financings related to TriMas
divestiture:
$250 million senior subordinated notes due 2012 issued......... $ 250.0 13.8
Tranche A term loan ........................................... (95.9) (2.7)
Tranche B term loan ........................................... (105.7) (3.3)
Tranche C term loan ........................................... (41.0) (1.2)
-------
Subtotal of interest increase due to financings related to TriMas
divestiture ........................................................... 6.6
Pro forma interest expense adjustment ................................. $ (17.1)
=======
----------
(a) Reflects the impact of reduced commitment fees as a result of
the reduced commitments under Metaldyne's revolving credit
facility.
(2) Represents the adjustment to reflect Metaldyne's 34% share of TriMas' pro
forma net income on the equity method of accounting.
FISCAL YEAR
ENDED DECEMBER 29,
2002
-------------------
TriMas pro forma net income (a) ....................................... $ 15.2
Metaldyne's ownership interest (b) .................................... 34%
------
Pro forma adjustment to equity and other income (loss) from affiliates $ 5.2
======
----------
(a) Represents TriMas historical net income adjusted for its pro
forma capital structure and standalone headquarter costs.
(b) Represents Metaldyne's remaining ownership percentage in TriMas
after the TriMas divestiture.
16
(3) Represents the adjustment to reflect the change in Other, net for
activity related to debt fee amortization and a decreased loss on sale of
receivables arising from the proceeds of the TriMas divestiture to the
reduction of the accounts receivable facility as provided for by the
Metaldyne credit agreement.
EFFECT OF DEBT
REPAYMENT AND
REDUCTION IN
ACCOUNTS RECEIVABLE
SECURITIZED
--------------------
FISCAL YEAR
ENDED DECEMBER 29,
2002
--------------------
Impact of the TriMas divestiture:
Reduction in debt fee amortization .......................... $ 0.9
Accounts receivable securitization .......................... 0.7
------
Total reduction to Other, net due to debt fee amortization and
accounts receivable securitization expense .................. $ 1.6
======
(4) To reflect the estimated tax effect of the above adjustments at our
marginal tax rate of 38%, with the exception of the adjustment shown in
this Note 4, which is recorded on an after-tax basis.
(5) Amount represents a one-time charge, including prepayment penalties,
write-offs of capitalized debt issuance costs and a write-off of the
unamortized discount on the 4.5% subordinated debenture related to the
early retirement and refinancing of a prior credit facility recorded in
fiscal 2002. Due to the adoption of SFAS No. 145, "Recission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections," in fiscal 2003, this charge has been reclassified
from an extraordinary item classification in the historical financial
statement to Other income (expense), net.
17
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the five years ended December 29, 2002 and the six months ended June 30, 2002
and June 29, 2003. In November 28, 2000, Metaldyne was acquired by an investor
group led by Heartland Industrial Partners, L.P. The pre-acquisition basis of
accounting for periods prior to November 28, 2000 is reflected on the
historical basis of accounting and all periods subsequent to November 28, 2000
are reflected on a purchase accounting basis and are therefore not comparable.
PRE-ACQUISITION BASIS
--------------------------------------
YEAR ENDED YEAR ENDED 1/1/2000-
12/31/1998 12/31/1999 11/27/2000
------------ ------------ ------------
Ratio of earnings to
fixed charges/
deficiency (1) ......... 2.5x 2.4x 2.7x
POST-ACQUISITION BASIS
-------------------------------------------------------------------
SIX MONTHS ENDED
--------------------
11/28/2000- YEAR ENDED YEAR ENDED JUNE 30, JUNE 29,
12/31/2000 12/31/2001 DECEMBER 29, 2002 2002 2003
------------- ------------ ------------------- ---------- ---------
Ratio of earnings to
fixed charges/
deficiency (1) ......... -- -- -- 1.2x --
- ----------
(1) For purposes of calculating the ratio of earnings to fixed charges,
earnings represent income or loss from continuing operations before
income taxes, exclusive of income or loss from equity method investments,
plus fixed charges, plus amortization of capitalized interest and income
distributions from equity method investments, less capitalized interest.
Fixed charges include interest expense (including amortization of
deferred financing costs), capitalized interest and the portion of
operating rental expense which management believes is representative of
the interest component of rent expense (assumed to be 33%). For the
period ended December 31, 2000, year ended December 31, 2001, year ended
December 29, 2002 and six months ended June 29, 2003, additional earnings
of $41.6 million, $56.9 million, $62.5 million and $9.4 million,
respectively, would have been required to make the ratio 1.0x.
18
DESCRIPTION OF OTHER INDEBTEDNESS AND OUR PREFERRED STOCK
CREDIT FACILITY
In July 2003, we amended our credit facility to, among other things,
modify certain financial and negative covenants and permit us to complete the
acquisition of DaimlerChrysler's common and preferred interest in the New
Castle joint venture under certain conditions. Under such amendment, the
applicable margins used to calculate our interest rates and our unutilized
revolving credit commitment fees have been increased. In addition, our
revolving credit commitments have been reduced by $50.0 million.
GENERAL
Metaldyne and Metaldyne Company LLC are party to a credit facility with
JPMorgan Chase Bank, as administrative agent and collateral agent, Credit
Suisse First Boston, as syndication agent, Comerica Bank, as documentation
agent, First Union National Bank, as documentation agent, National City Bank,
as documentation agent, Bank One, NA, as documentation agent, J.P. Morgan
Securities Inc. and Credit Suisse First Boston, as joint bookrunners and joint
lead arrangers, and the other lenders party thereto.
The credit facility presently consists of a senior revolving credit
facility that matures in December 2007 and the tranche D senior term loan
facility that matures in December 2009. The revolving credit facility is
comprised of a total principal amount commitment of $200 million. The tranche D
facility is comprised of loans in a total principal amount of $399.5 million as
of June 29, 2003. Up to $100 million of our revolving credit facility is
available for permitted acquisitions and we are required to reserve $100
million of our revolving credit facility availability, which is approximately
equal to the outstanding principal amount of our 4.5% subordinated debentures
for retirement of such remaining debentures (which will terminate once we have
retired all debentures with the proceeds of this offering). The revolving
credit facility matures on May 28, 2007 and the tranche D facility matures on
December 31, 2009.
The obligations under the credit facility are secured and are
unconditionally and irrevocably guaranteed jointly and severally by us and each
existing and subsequently acquired or organized domestic subsidiary of
Metaldyne, other than MTSPC, Inc. and Saturn Holdings (the holder of the equity
interest in Saturn), pursuant to the terms of a separate guarantee agreement.
Although no foreign subsidiaries are currently borrowers under the credit
facility, such entities may borrow under the facility in the future.
SECURITY INTERESTS
Our borrowings under the credit facility are secured by a first priority
perfected security interest in:
o the capital stock of Metaldyne Company LLC and all of the capital stock
held by Metaldyne, Metaldyne Company LLC or any domestic subsidiary of
Metaldyne and of each existing and subsequently acquired or organized
subsidiary of Metaldyne (which pledge, in the case of any foreign
subsidiary, shall be limited to 65% of the capital stock of such
foreign subsidiary to the extent the pledge of any greater percentage
would result in adverse tax consequences to Metaldyne or Metaldyne
Company LLC); and
o all tangible and intangible assets of Metaldyne, Metaldyne Company LLC
and each existing or subsequently acquired or organized domestic
subsidiary of Metaldyne, other than MTSPC, Inc. and Saturn Holdings,
with certain exceptions as set forth in the credit facility.
INTEREST RATES AND FEES
Borrowings under the credit facility will bear interest, at our option, at
either:
19
o a base rate used by JPMorgan Chase Bank, plus an applicable margin; or
o a eurocurrency rate on deposits for one, two, three or six month
periods (or nine or twelve month periods if, at the time of the
borrowing, all lenders agree to make such a duration available), plus
the applicable margin.
The applicable margin on loans is subject to change depending on the
leverage ratio. As of June 29, the applicable margins on our revolving loans
which are base rate loans was 2.75% and on eurocurrency loans was 3.75%; the
applicable margin on tranche D loans which are base rate loans was 1.75% and on
eurocurrency loans was 2.75%. These are expected to increase as a result of the
pending amendment.
We also pay the lenders a commitment fee on the unused commitments under
the credit facility equal to 0.75% per annum if less than 50% of the revolving
facility commitments are outstanding and 0.50% per annum is to be paid if 50%
or more of the revolving facility commitments are outstanding, in each case,
payable quarterly in arrears. The commitment fee is subject to reduction
depending on the leverage ratio. These are expected to increase as a result of
the pending amendment.
MANDATORY AND OPTIONAL REPAYMENT
Subject to exceptions for reinvestment of proceeds and other exceptions
and materiality thresholds, we are required to prepay outstanding loans under
the credit facility with excess cash flow, the net proceeds of certain asset
dispositions, casualty and condemnation recovery events and incurrences of
permitted debt.
We may voluntarily prepay loans under the credit facility without
prepayment premiums, in whole or in part, subject to minimum prepayments.
COVENANTS
The credit facility contains negative and affirmative covenants and
requirements affecting us and our subsidiaries. The credit facility contains
the following negative covenants and restrictions, among others: restrictions
on debt, liens, mergers, investments, loans, advances, guarantee obligations,
acquisitions, asset dispositions, sale-leaseback transactions, hedging
agreements, dividends and other restricted junior payments, stock repurchases,
transactions with affiliates, restrictive agreements, amendments to charter,
by-laws and other material documents. The credit facility also requires us and
our subsidiaries to meet certain financial covenants and ratios computed
quarterly. Our negative covenants are expected to be modified in connection
with this offering to permit this offering, to permit certain additional
sale-leasebacks if a portion of the proceeds is used to retain term debt and to
permit the New Castle acquisition if certain financial covenants are satisfied.
Our financial covenants are expected to be modified in connection with this
offering to provide for greater maximum total leverage and lower minimum
interest coverage ratios.
The credit facility contains the following affirmative covenants, among
others: mandatory reporting of financial and other information to the
administrative agent, notice to the administrative agent upon the occurrence of
certain events of default and other events, written notice of change of any
information affecting the identity of the record owner or the location of
collateral, preservation of existence and intellectual property, payment of
obligations, maintenance of properties and insurance, notice of casualty and
condemnation, access to properties and books by the lenders, compliance with
laws, use of proceeds and letters of credit, additional subsidiaries and
interest rate protection agreements.
EVENTS OF DEFAULT
The credit facility specifies certain customary events of default,
including, among others, nonpayment of principal, interest or fees, violation
of covenants, cross-defaults and cross-accelerations, inaccuracy of
representations and warranties in any material respect, bankruptcy and
insolvency
20
events, change of control, failure to maintain security interests, specified
ERISA events, one or more judgments for the payment of money in an aggregate
amount in excess of $15.0 million, the guarantees shall cease to be in full
force and effect or the subordination provisions of any of our subordinated
debt are found to be invalid.
SUBORDINATED DEBENTURES
As of June 29, 2003, we have $98.5 million principal amount of 4 1/2%
Subordinated Debentures due December 15, 2003 outstanding, all of which is
expected to be repaid with proceeds from this offering. See "Use of Proceeds."
Each $1,000 principal amount of convertible debentures was convertible prior to
the recapitalization into shares of our common stock at a conversion price of
$31.00 a share. As a result of the November 2000 acquisition, the debentures
are convertible into the right to receive the merger consideration paid to
common stockholders in the November 2000 acquisition at a conversion price of
$31.00 per the consideration payable with respect to a share of common stock
and, accordingly, are not expected to be converted.
Interest at a rate of 4 1/2% is paid semi-annually on the convertible
debentures on June 15 and December 15 to record holders of the convertible
debentures on the preceding June 1 or December 1, respectively. The debentures
mature on December 15, 2003. The debentures can be redeemed by us at any time,
in whole or in part, upon not less than thirty days' nor more than sixty days'
notice at a redemption price of 100.50% of the principal amount outstanding if
such redemption is prior to December 15, 2002; and at 100.00% of the principal
outstanding amount if such redemption is after December 15, 2002.
OTHER DEBT
As of December 29, 2002, we had approximately $29.0 million of other debt
consisting primarily of industrial revenue bonds and government loans.
SERIES A PREFERRED STOCK
In connection with the November 2000 acquisition, we issued 361,001 shares
of Series A Preferred Stock to Masco Corporation having an aggregate initial
liquidation preference of $36.1 million. The holders of Series A Preferred
Stock are entitled to receive, when, as and if declared by our board of
directors, out of legally available funds, cumulative dividends on each share
of Series A Preferred Stock for each quarterly dividend period at a rate of 13%
per annum for periods ending on or prior to December 31, 2005 and 15% per annum
for periods after December 31, 2005, plus, in either case, 2% per annum for any
period for which there are any accrued and unpaid dividends. Accrued and unpaid
dividends on the Series A Preferred Stock accrue additional dividends,
compounded quarterly, at the then applicable quarterly dividend rate.
All then outstanding shares of Series A Preferred Stock are mandatorily
redeemable by us, out of legally available funds, on December 31, 2012 at a
redemption price of 100% of their liquidation preference, equal to $100 for
each share of Series A Preferred Stock. Additionally, at any time after
December 31, 2005, or at any time before such date using the net proceeds from
issuances of shares of our capital stock, we may redeem the Series A Preferred
Stock, in whole or in part, out of legally available funds, at our option by a
resolution of our board of directors, at a redemption price of 101% of their
liquidation preference. Immediately prior to authorizing or making any such
redemption, by resolution of our board of directors, to the extent that funds
are legally available therefor, we are required to declare a dividend on the
Series A Preferred Stock payable on the redemption date in an amount equal to
any accrued and unpaid dividends (including additional dividends) on the Series
A Preferred Stock as of such date and, if we do not have sufficient legally
available funds to declare and pay all dividends (including additional
dividends) accrued at the time of such redemption, any remaining accrued and
unpaid dividends (including additional dividends) are to be added to the
redemption price.
If a change in control, as defined in our certificate of incorporation,
occurs at any time, each holder of Series A Preferred Stock has the right to
require us to purchase such holder's Series A
21
Preferred Stock, in whole or in part, out of legally available funds, at a cash
purchase price of 101% of their liquidation preference, plus accrued and unpaid
dividends to the purchase date. Additionally, in the event of an equity
offering triggering event, which is defined in our certificate of incorporation
and includes certain excess proceeds from certain equity offerings and an
initial public offering, each holder of Series A Preferred Stock has the right
to require us to purchase such holder's Series A Preferred Stock, in whole or
in part, out of legally available funds, at a cash purchase price of 101% of
their liquidation preference, plus accrued and unpaid dividends to the purchase
date, subject to certain limitations set forth in our certificate of
incorporation.
In the event of any liquidation, dissolution or winding-up of our affairs,
whether voluntary or otherwise, after payment or provision for payment of our
debts and other liabilities, the holders of Series A Preferred Stock are
entitled to receive, out of our remaining assets, $100 in cash for each share
of Series A Preferred Stock they hold, plus an amount equal to all dividends
(including additional dividends) accrued and unpaid on each share up to the
date fixed for distribution, before any distribution is made to the holders of
our common stock or any other stock ranking (as to any such distribution)
junior to the Series A Preferred Stock. With regard to rights to receive
dividends, mandatory redemption payments and distributions upon liquidation,
dissolution or winding-up of our affairs, the Series A Preferred Stock ranks
prior to all our other capital stock outstanding at the time it was issued.
Except as required by law or otherwise as set forth in our certificate of
incorporation, the holders of Series A Preferred Stock do not have any voting
rights or power to vote on any question or in any proceeding or to be
represented at, or to receive notice of, any stockholders meeting. The holders
of Series A Preferred Stock are entitled to one vote per share regarding
matters on which they are entitled to vote. The Series A Preferred Stock is not
convertible and has no preemptive rights.
In case at any time (i) the equivalent of six or more full quarterly
dividends on the Series A Preferred Stock out of any eight consecutive
quarterly dividend periods are in arrears or (ii) we fail to make a mandatory
redemption of shares of Series A Preferred Stock or (iii) we fail to comply in
any material respect with the provisions in our certificate of incorporation
relating to a change in control or an equity offering triggering event, the
exclusive remedy for such matters, until cured, is that the number of members
of our board of directors is automatically be increased by one and the holders
of a majority of the outstanding shares of Series A Preferred Stock are
entitled, as a class, to the exclusion of the holders of all other classes or
series of our capital stock, to elect one director to fill the directorship so
created.
Our certificate of incorporation provides that, so long as any shares of
the Series A Preferred Stock are outstanding, unless the vote or consent of the
holders of a greater number of shares is then required by law, except as
otherwise provided in our certificate of incorporation, the consent of the
holders of a majority of all of the outstanding shares of Series A Preferred
Stock is required for us to take certain actions which could adversely affect
holder of Series A Preferred Stock, including to allow any of our subsidiaries
to issue any preferred stock (other than to us or another one of our
subsidiaries) or to sell, lease or convey all or substantially all of our
assets or merge or consolidate with or into any other entity if as a result of
such transaction the Series A Preferred Stock would be cashed out for less than
100% (or, if the transaction would constitute a change of control, 101%) of
their liquidation preference, plus any accrued and unpaid dividends.
SERIES B PREFERRED STOCK
In connection with the acquisition of GMTI, we issued 184,153 shares of
Series B Preferred Stock to representatives for the original sellers of GMTI
having an aggregate initial liquidation preference of $18,415,300.
The holders of Series B Preferred Stock are entitled to receive, when, as
and if declared by our board of directors, out of legally available funds,
cumulative dividends on each share of Series B Preferred Stock for each
semi-annual dividend period equal to their liquidation preference, in effect as
of the end of the immediately preceding semi-annual dividend period, of such
share multiplied by a
22
rate equal to 5.75% (or the equivalent of 11.5% per annum). Any accrued
dividends not paid at the end of any semi-annual dividend period is added to
the liquidation preference of the Series B Preferred Shares and dividends
thereafter accrue on such amount so as to achieve semi-annual compounding.
All then outstanding shares of Series B Preferred Stock are mandatorily
redeemable by us, out of legally available funds, on June 15, 2013 at a
redemption price of 100% of their then liquidation preference, equal to $100
for each share of Series B Preferred Stock plus all amounts added at the end of
any semi-annual dividend period as provided in the immediately preceding
paragraph. Additionally, at any time, we may redeem the Series B Preferred
Stock, in whole or in part, out of legally available funds, at our option by a
resolution of our board of directors, at a redemption price of 100% of their
then liquidation preference. Immediately prior to authorizing or making any
such redemption, by resolution of our board of directors, to the extent that
funds are legally available therefor, we are required to declare a dividend on
the Series B Preferred Stock payable on the redemption date in an amount equal
to any accrued and unpaid dividends on the Series A Preferred Stock as of such
date and, if we do not have sufficient legally available funds to declare and
pay all dividends accrued at the time of such redemption, any remaining accrued
and unpaid dividends are to be added to the redemption price.
If a preferred stock change in control, as defined in the certificate of
designations governing the Series B Preferred Stock, occurs at any time, each
holder of Series B Preferred Stock has the right to require us to purchase such
holder's Series B Preferred Stock, in whole or in part, out of legally
available funds, at a cash purchase price of 100% of their then liquidation
preference, plus accrued and unpaid dividends to the purchase date.
Additionally, in the event of a preferred stock equity offering triggering
event, which is defined in the certificate of designations governing the Series
B Preferred Stock in a manner similar to that in the Series A preferred stock,
each holder of Series B Preferred Stock has the right to require us to purchase
such holder's Series B Preferred Stock, in whole or in part, out of legally
available funds, at a cash purchase price of 100% of their liquidation
preference, plus accrued and unpaid dividends to the purchase date, but only to
the extent of any preferred stock exceeds proceeds, as defined in the
certificate of designations governing the Series B Preferred Stock, received by
us from a preferred stock equity offering triggering event.
In the event of any liquidation, dissolution or winding-up of our affairs,
whether voluntary or otherwise, after payment or provision for payment of our
debts and other liabilities, the holders of Series B Preferred Stock are
entitled to receive, out of our remaining assets, an amount equal to $100, plus
all amounts added at the end of any semi-annual dividend period for each share
of Series B Preferred Stock they hold, plus all dividends accrued and unpaid on
such share up to the date fixed for distribution, before any distribution is
made to the holders of our common stock or any other stock ranking (as to any
such distribution) junior to the Series B Preferred Stock. With regard to
rights to receive dividends, mandatory redemption payments and distributions
upon liquidation, dissolution or winding-up of our affairs, the Series B
Preferred Stock ranks junior to all Series A Preferred Stock outstanding at the
time of issuance of the Series B Preferred Stock and prior to all our other
capital stock outstanding at the time it was issued.
Except as required by law or otherwise as set forth in the certificate of
designations governing the Series B Preferred Stock, the holders of Series B
Preferred Stock do not have any voting rights or power to vote on any question
or in any proceeding or to be represented at, or to receive notice of, any
stockholders meeting. The holders of Series B Preferred Stock are entitled to
one vote per share regarding matters on which they are entitled to vote. The
Series B Preferred Stock is not convertible and has no preemptive rights.
In case at any time (i) we fail to make a mandatory redemption of shares
of Series B Preferred Stock or (ii) we fail to comply in any material respect
with the provisions in the certificate of designations governing the Series B
Preferred Stock relating to a preferred stock change in control or a preferred
stock equity offering triggering event, the remedy for such matters, until
cured, is that the
23
number of members of our board of directors is automatically increased by one
and the holders of a majority of the outstanding shares of Series B Preferred
Stock are entitled, as a class, to the exclusion of the holders of all other
classes or series of our capital stock, to elect one director to fill the
directorship so created.
The certificate of designations governing the Series B Preferred Stock
provides that, so long as any shares of the Series B Preferred Stock are
outstanding, unless the vote or consent of the holders of a greater number of
shares is then required by law, except as otherwise provided in our certificate
of incorporation, the consent of the holders of a majority of all of the
outstanding shares of Series B Preferred Stock is required for us to take
certain actions which could adversely affect holders of Series B Preferred
Stock, including to allow for the issuance of senior stock or to sell, lease or
convey all or substantially all of our assets or merge or consolidate with or
into any other entity if as a result of such transaction the Series B Preferred
Stock would be cashed out for less than 100% of their then liquidation
preference, plus any accrued and unpaid dividends.
SECURITIES TO BE ISSUED TO DAIMLERCHRYSLER IN CONNECTION WITH THE NEW CASTLE
ACQUISITION
The following summarizes the terms of debt securities and preferred stock
we expect to issue to DaimlerChrysler in the event that we exercise our call
option to acquire the balance of the equity in the New Castle joint venture.
There is also a cash component to the purchase price, which we have not yet
determined how it will be financed. It is likely that it will be financed
through additional debt, use of our receivables financing and/or sale-leaseback
financings. The following securities will only be issued in connection with the
acquisition of the New Castle joint venture.
10% TEN YEAR SENIOR SUBORDINATED NOTES
In the event we exercise our call option with respect to the New Castle
joint venture, we have agreed to issue to DaimlerChrysler $31,746,000 aggregate
principal amount of 10% senior subordinated notes which mature on the 10th
anniversary of the 15th day of the month in which the notes are originally
issued. The 10% senior subordinated notes will rank pari passu in right of
payment with the 11% senior subordinated notes due 2012 and will be guaranteed
by each of our subsidiaries that guaranteed the 11% senior subordinated notes
due 2012. The terms of the 10% senior subordinated notes will be substantially
the same as the terms of the 11% senior subordinated notes due 2012.
The 10% senior subordinated notes will be redeemable, in whole part or in
part, at any time prior to the fifth anniversary of the 15th day of the month
in which the notes are originally issued, at our option, at a redemption price
equal to the sum of the present values of the remaining scheduled payments
discounted to the redemption date on a semi-annual basis at an adjusted
treasury rate, plus accrued and unpaid interest, if any, to the applicable date
of redemption.
At any time prior to the fifth anniversary of the 15th day of the month in
which the 10% senior subordinated notes are originally issued, we may on any
one or more occasions redeem up to 35% of the aggregate principal amount of the
10% senior subordinated notes at a redemption price of 110% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the redemption
date, with the net cash proceeds of one or more equity offerings, provided that
at least 65% of the aggregate principal amount of the 10% senior subordinated
notes remains outstanding immediately after the occurrence of such redemption
(excluding notes held by us and our subsidiaries) and the redemption must occur
within 120 days of the date of the closing of such equity offering.
After the fifth anniversary of the 15th day of the month in which the 10%
senior subordinated notes are originally issued, we may redeem all or a part of
the 10% senior subordinated notes at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest, if any, thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on the anniversary of the 15th day of the
month in which the notes are originally issued indicated below:
24
ANNIVERSARY REDEMPTION PRICE
- ----------- ----------------
Fifth ......................... 105.000%
Sixth ......................... 103.333%
Seventh ....................... 101.667%
Eighth and thereafter ......... 100.000%
Upon the occurrence of a change of control (to be defined in the same
manner as such term is defined in the indenture governing the 11% senior
subordinated notes due 2012), we will be required to make an offer to purchase
each holder's 10% senior subordinated notes at a price equal to 101% of their
principal amount, plus accrued and unpaid interest, if any, to the date of
purchase.
The indenture governing the 10% senior subordinated notes will contain
substantially the same restrictive covenants (including, among others,
limitations on indebtedness, restricted payments, liens, asset dispositions,
change of control and transactions with affiliates) which are contained in the
indenture governing the 11% senior subordinated notes due 2012. The
commencement date for calculation of the restricted payments basket contained
in the indenture governing the 10% senior subordinated notes will be June 30,
2002, which is the same date that is contained in the indenture governing the
11% senior subordinated notes due 2012.
The initial holders of the 10% senior subordinated notes will have the
right, at any time after they have sold at least $5 million in aggregate
principal amount of the 10% senior subordinated notes, to make a written demand
that we use our reasonable best efforts to file with the SEC and cause to
become effective a registration statement relating to an offer to exchange the
notes for SEC-registered notes with terms identical (except that the exchange
notes will not be subject to restrictions on transfer) or relating to a shelf
registration. We are subject to the payment of financial penalties if we do not
timely comply with these obligations.
SERIES A-1 PREFERRED STOCK
In the event we exercise our call option with respect to the New Castle
joint venture, we have agreed to issue to DaimlerChrysler 644,540 shares of
Series A-1 Preferred Stock having an aggregate initial liquidation preference
of $64.5 million. The holders of Series A-1 Preferred Stock will be entitled to
receive, when, as and if declared by our board of directors, out of legally
available funds, cumulative dividends on each share of Series A-1 Preferred
Stock for each quarterly dividend period at a rate of 11% per annum, plus 2%
per annum for any period for which there are any accrued and unpaid dividends.
Accrued and unpaid dividends on the Series A-1 Preferred Stock will accrue
additional dividends, compounded quarterly, at the then applicable quarterly
dividend rate.
All then outstanding shares of Series A-1 Preferred Stock will be
mandatorily redeemable by us, out of legally available funds, on the dividend
payment date immediately following the 10th anniversary of their issue date at
a redemption price of 100% of their liquidation preference, equal to $100 for
each share of Series A-1 Preferred Stock. Additionally, we may redeem the
Series A Preferred Stock, in whole or in part, out of legally available funds,
at our option at any time by a resolution of our board of directors, for a cash
redemption price of 100% of their liquidation preference. Immediately prior to
authorizing or making any such redemption, by resolution of our board of
directors, to the extent that funds are legally available therefor, we will be
required to declare a dividend on the Series A-1 Preferred Stock payable on the
redemption date in an amount equal to any accrued and unpaid dividends
(including additional dividends) on the Series A-1 Preferred Stock as of such
date and, if we do not have sufficient legally available funds to declare and
pay all dividends (including additional dividends) accrued at the time of such
redemption, any remaining accrued and unpaid dividends (including additional
dividends) will be added to the redemption price.
If a change in control, as will be defined in our certificate of
incorporation, occurs at any time, each holder of Series A-1 Preferred Stock
will have the right to require us to purchase such holder's Series A-1
Preferred Stock, in whole or in part, out of legally available funds, at a cash
purchase price of 101% of their liquidation preference, plus accrued and unpaid
dividends (including additional
25
dividends) to the purchase date. Additionally, in the event of an equity
offering triggering event, which will be defined in our certificate of
incorporation and will include certain excess proceeds from certain equity
offerings and an initial public offering, each holder of Series A-1 Preferred
Stock will have the right to require us to purchase such holder's Series A-1
Preferred Stock, in whole or in part, out of legally available funds, at a cash
purchase price of 101% of their liquidation preference, plus accrued and unpaid
dividends to the purchase date, subject to certain limitations to be set forth
in our certificate of incorporation.
In the event of any liquidation, dissolution or winding up of our affairs,
whether voluntary or otherwise, after payment or provision for payment of our
debts, the liquidation preference on the Series A Preferred Stock and other
liabilities, the holders of Series A-1 Preferred Stock will be entitled to
receive, out of our remaining assets, $100 in cash for each share of Series A-1
Preferred Stock they hold, plus an amount equal to all dividends (including
additional dividends) accrued and unpaid on each share up to the date fixed for
distribution, before any distribution is made to the holders of our common
stock or any other stock ranking (as to any such distribution) junior to the
Series A-1 Preferred Stock. With regard to rights to receive dividends,
mandatory redemption payments and distributions upon liquidation, dissolution
or winding up of our affairs, the Series A-1 Preferred Stock will rank junior
to the Series A Preferred Stock and prior to the Series B Preferred Stock, all
of our common stock and any other stock ranking (as to any such distribution)
junior to the Series A-1 Preferred Stock.
Except as required by law or otherwise as set forth in our certificate of
incorporation, the holders of Series A-1 Preferred Stock will not have any
voting rights or power to vote on any question or in any proceeding or to be
represented at, or to receive notice of, any stockholders meeting. The holders
of Series A-1 Preferred Stock will be entitled to one vote per share regarding
matters on which they are entitled to vote. The Series A-1 Preferred Stock will
not convertible and will have no preemptive rights.
In case at any time (i) the equivalent of six or more full quarterly
dividends on the Series A-1 Preferred Stock out of any eight consecutive
quarterly dividend periods are in arrears (if during such six or more quarterly
periods the terms of our debt instruments and the terms of any senior
securities would have permitted the payment of such dividends in cash) or (ii)
we fail to make a mandatory redemption of shares of Series A-1 Preferred Stock
or (iii) we fail to comply in any material respect with the provisions in our
certificate of incorporation relating to a change in control or an equity
offering triggering event, the exclusive remedy for such matters, until cured,
will be that the number of members of our board of directors is automatically
increased by one and the holders of a majority of the outstanding shares of
Series A-1 Preferred Stock are entitled (but not obligated), in their
discretion, as a class, to the exclusion of the holders of all other classes or
series of our capital stock, to elect one director to fill the directorship so
created.
Our certificate of incorporation will provide that, so long as any shares
of the Series A-1 Preferred Stock are outstanding, unless the vote or consent
of the holders of a greater number of shares is then required by law, except as
otherwise provided in our certificate of incorporation, the consent of the
holders of at least two-thirds of all of the outstanding shares of Series A-1
Preferred Stock will be required for us to take certain actions which could
adversely affect holders of Series A-1 Preferred Stock, including to allow for
the issuance of capital stock ranking on a parity with or prior to the Series
A-1 Preferred Stock in right of payment as to dividends or upon liquidation,
dissolution or winding-up of our affairs, or to sell, lease or convey all or
substantially all of our assets or merge or consolidate with or into any other
entity if as a result of such transaction the Series A-1 Preferred Stock would
be cashed out for less than 100% (or, if the transaction would constitute a
change of control, 101%) of their liquidation preference, plus any accrued and
unpaid dividends (including additional dividends).
We will have the right, at our option by resolution of our board of
directors, to exchange in whole, but not in part, the then outstanding shares
of Series A-1 Preferred Stock for 11% Subordinated Notes with a principal
amount equal to the liquidation preference (plus, without
26
duplication, any Additional Dividends) of the Series A-1 Preferred Stock so
exchanged and which mature on the 10th anniversary of the issue date of the
Series A-1 Preferred Stock. In the event the Series A-1 Preferred Stock have
been exchanged for Series A-2 Preferred Stock pursuant to a registered exchange
offer as described below, our option to effect the exchange for 11%
Subordinated Notes will apply to the Series A-2 Preferred Stock. The terms of
the 11% Subordinated Notes will be substantially the same as the terms of the
10% senior subordinated notes described above, except that the 11% Subordinated
Notes will be subordinated to the 10% senior subordinated notes and will not be
guaranteed by any of our subsidiaries. Our option to effect the exchange will
be subject to certain conditions to be described in our certificate of
incorporation.
The initial holders of the Series A-1 Preferred Stock will have the right,
at any time after they have sold at least 25% of the outstanding Series A-1
Preferred Stock, to make a written demand that we use our reasonable best
efforts to file with the SEC and cause to become effective a registration
statement relating to an offer to exchange the Series A-1 Preferred Stock for
SEC-registered Series A-2 Preferred Stock with terms identical to the Series
A-1 Preferred Stock (except that the Series A-2 Preferred Stock will not be
subject to restrictions on transfer) or for a shelf registration.
For so long as the initial holders and their affiliates beneficially own
at least $5 million in initial aggregate liquidation preference of Series A-1
Preferred Stock or Series A-2 Preferred Stock, the initial holders will have
certain board observer and information rights. If we effect the exchange of the
preferred stock for 11% Subordinated Notes, these board observer and
information rights will terminate. We are subject to the payment of financial
penalties if we do not timely comply with these obligations.
27
DESCRIPTION OF NOTES
You can find the definitions of certain terms used in this description
under the subheading "Certain Definitions." In this description, the word
"Metaldyne" refers only to Metaldyne Corporation and not to any of its
subsidiaries.
Metaldyne issued the notes under an indenture among itself, the Guarantors
and The Bank of New York, as trustee, in a private transaction that was not
subject to the registration requirements of the Securities Act. See "Notice to
Investors." The terms of the notes include those stated in the indenture and
those made part of the indenture by reference to the Trust Indenture Act of
1939, as amended.
The following description is a summary of the material provisions of the
indenture and the registration rights agreement. It does not restate those
agreements in their entirety. We urge you to read the indenture and the
registration rights agreement because they, and not this description, define
your rights as holders of the notes. Copies of the indenture and the
registration rights agreement will be available as set forth below under
"--Additional Information." Certain defined terms used in this description but
not defined below under "--Certain Definitions" have the meanings assigned to
them in the indenture.
The registered Holder of a note will be treated as the owner of it for all
purposes. Only registered Holders will have rights under the indenture.
BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES
The Notes
The notes:
o are general unsecured obligations of Metaldyne;
o are subordinated in right of payment to all existing and future Senior
Debt of Metaldyne, including under the Credit Agreement;
o are pari passu in right of payment with all existing and future
unsecured senior subordinated Indebtedness of Metaldyne; and
o are unconditionally guaranteed by the Guarantors.
The Guarantees
The notes are guaranteed by all of Metaldyne's Domestic Subsidiaries that
guarantee Metaldyne's Obligations under or are direct borrowers under the
Credit Agreement.
Each guarantee of the notes:
o is a general unsecured obligation of the Guarantor;
o is subordinated in right of payment to all existing and future Senior
Debt of that Guarantor;
o is pari passu in right of payment with all existing and future senior
subordinated Indebtedness of that Guarantor; and
o is senior in right of payment with all existing and future Indebtedness
of that Guarantor that is expressly subordinated in right of payment to
the notes.
Metaldyne and the Guarantors have total Senior Debt of approximately $418
million. As indicated above and as discussed in detail below under the caption
"--Subordination," payments on the notes and under these guarantees will be
subordinated to the payment of Senior Debt. The indenture will permit us and
the Guarantors to incur additional Senior Debt.
Not all of our subsidiaries guarantee the notes. In the event of a
bankruptcy, liquidation or reorganization of any of these Non-Guarantor
Subsidiaries, the Non-Guarantor Subsidiaries will pay the holders of their debt
and their trade creditors before they will be able to distribute any of their
28
assets to us. Disregarding our receivables subsidiary, the Non-Guarantor
Subsidiaries generated approximately 19% of our consolidated net sales for the
year ended December 31, 2001. See "Risk Factors--Your right to receive payment
on the notes is junior to the right of the holders of all of our existing
senior indebtedness and possibly to all of our future borrowings."
As of the date of the indenture, all of our Domestic Subsidiaries (other
than our receivables subsidiary) are "Restricted Subsidiaries." However, under
the circumstances described below under the subheading "--Certain
Covenants--Designation of Restricted and Unrestricted Subsidiaries," we will be
permitted to designate certain of our subsidiaries as "Unrestricted
Subsidiaries." Our Unrestricted Subsidiaries will not be subject to many of the
restrictive covenants in the indenture. Our Unrestricted Subsidiaries will not
guarantee the notes.
PRINCIPAL, MATURITY AND INTEREST
Metaldyne issued $250,000,000 in aggregate principal amount of notes in
the offering. The indenture provides that Metaldyne may issue additional notes
thereunder from time to time after this offering. Any offering of additional
notes is subject to the covenant described below under the caption "--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock." The
notes and any additional notes subsequently issued under the indenture may be
treated as a single class for all purposes under the indenture, including,
without limitation, waivers, amendments, redemptions and offers to purchase.
Metaldyne will issue notes in denominations of $1,000 and integral multiples of
$1,000. The notes will mature on June 15, 2012.
Interest on the notes will accrue at the rate of 11% per annum and will be
payable semi-annually in arrears on June 15 and December 15, commencing on
December 15, 2002. Metaldyne will make each interest payment to the Holders of
record on the immediately preceding June 1 and December 1.
Interest on the notes will accrue from the date of original issuance or,
if interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
All payments on notes will be made at the office or agency of the paying
agent and registrar within the City and State of New York unless Metaldyne
elects to make interest payments by check mailed to the Holders at their
address set forth in the register of Holders. If a Holder has given wire
transfer instructions to Metaldyne, Metaldyne will pay all principal, interest
and premium and Liquidated Damages, if any, on that Holder's notes in
accordance with those instructions.
PAYING AGENT AND REGISTRAR FOR THE NOTES
The trustee will initially act as paying agent and registrar. Metaldyne
may change the paying agent or registrar without prior notice to the Holders of
the notes, and Metaldyne or any of its Subsidiaries may act as paying agent or
registrar.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange notes in accordance with the indenture.
The registrar and the trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents in connection with a
transfer of notes. Holders will be required to pay all taxes due on transfer.
Metaldyne is not required to transfer or exchange any note selected for
redemption. Also, Metaldyne is not required to transfer or exchange any note
for a period of 15 days before a selection of notes to be redeemed.
SUBSIDIARY GUARANTEES
The notes are guaranteed by each of Metaldyne's current and future
Domestic Subsidiaries that are guarantors or borrowers in respect of the Credit
Agreement. These Subsidiary Guarantees are
29
joint and several obligations of the Guarantors. Each Subsidiary Guarantee is
subordinated to the prior payment in full of all Senior Debt of that Guarantor.
The obligations of each Guarantor under its Subsidiary Guarantee are limited as
necessary to prevent that Subsidiary Guarantee from constituting a fraudulent
conveyance under applicable law. See "Risk Factors--Federal and state statutes
allow courts, under specific circumstances, to void guarantees and require
noteholders to return payments received from guarantors."
A Guarantor may not sell or otherwise dispose of all or substantially all
of its assets to, or consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person), another Person, other than Metaldyne
or another Guarantor, unless:
(1) immediately after giving effect to that transaction, no Default or
Event of Default exists; and
(2) except when a release of a Subsidiary Guarantee is obtained under the
provisions below, if, immediately after giving effect to such
transaction, the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation
or merger is a Domestic Subsidiary, such Person assumes all the
obligations of that Guarantor under the indenture, its Subsidiary
Guarantee and the registration rights agreement pursuant to a
supplemental indenture satisfactory to the trustee.
Notwithstanding the foregoing, the Subsidiary Guarantee of a Guarantor
will be released:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or
after giving effect to such transaction) a Restricted Subsidiary of
Metaldyne, if the sale or other disposition is not in violation with
the applicable provisions of the indenture;
(2) in connection with any sale or other disposition of all or a majority
of the Capital Stock of a Guarantor to a Person that is not Metaldyne
or a Restricted Subsidiary of Metaldyne, if the sale is not in
violation with the applicable provisions of the indenture; or
(3) if Metaldyne designates any Restricted Subsidiary that is a Guarantor
as an Unrestricted Subsidiary in accordance with the applicable
provisions of the indenture.
See "--Repurchase at the Option of Holders--Asset Sales."
SUBORDINATION
The payment of principal, interest and premium and Liquidated Damages, if
any, on the notes will be subordinated to the prior payment in full of all
Senior Debt of Metaldyne, including Senior Debt incurred after the date of the
indenture.
The holders of Senior Debt will be entitled to receive payment in full of
all Obligations due in respect of Senior Debt (including interest after the
commencement of any bankruptcy proceeding at the rate specified in the
applicable Senior Debt) before the Holders of notes will be entitled to receive
any payment with respect to the notes (except that Holders of notes may receive
and retain Permitted Junior Securities and payments made from the trust
described under "--Legal Defeasance and Covenant Defeasance"), in the event of
any distribution to creditors of Metaldyne:
(1) in a liquidation or dissolution of Metaldyne;
(2) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to Metaldyne or its property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshaling of Metaldyne's assets and liabilities.
Metaldyne also may not make any payment in respect of the notes (except in
Permitted Junior Securities or from the trust described under "--Legal
Defeasance and Covenant Defeasance") if:
(1) a payment default on Designated Senior Debt occurs and is continuing;
or
30
(2) any other default occurs and is continuing on any series of Designated
Senior Debt that permits holders of that series of Designated Senior
Debt to accelerate its maturity and the trustee receives a notice of
such default (a "Payment Blockage Notice") from Metaldyne or the
holders of any Designated Senior Debt.
Payments on the notes may and will be resumed:
(1) in the case of a payment default, upon the date on which such default
is cured or waived; and
(2) in the case of a nonpayment default, upon the earlier of the date on
which such nonpayment default is cured or waived or 179 days after the
date on which the applicable Payment Blockage Notice is received,
unless the maturity of any Designated Senior Debt has been accelerated.
No new Payment Blockage Notice may be delivered unless and until:
(1) 360 days have elapsed since the delivery of the immediately prior
Payment Blockage Notice; and
(2) all scheduled payments of principal, interest and premium and
Liquidated Damages, if any, on the notes that have come due have been
paid in full in cash.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the trustee will be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default has been
cured or waived for a period of not less than 90 days.
If the trustee or any Holder of the notes receives a payment in respect of
the notes (except in Permitted Junior Securities or from the trust described
under "--Legal Defeasance and Covenant Defeasance") when:
(1) the payment is prohibited by these subordination provisions; and
(2) the trustee or the Holder has actual knowledge that the payment is
prohibited;
the trustee or the Holder, as the case may be, will hold the payment in trust
for the benefit of the holders of Senior Debt. Upon the proper written request
of the holders of Senior Debt, the trustee or the Holder, as the case may be,
will deliver the amounts in trust to the holders of Senior Debt or their proper
representative.
Metaldyne must promptly notify holders of Senior Debt if payment of the
notes is accelerated because of an Event of Default.
As a result of the subordination provisions described above, in the event
of a bankruptcy, liquidation or reorganization of Metaldyne, Holders of notes
may recover less ratably than creditors of Metaldyne who are holders of Senior
Debt. See "Risk Factors--Your right to receive payment on the notes is junior
to the right of the holders of all of our existing senior indebtedness and
possibly to all of our future borrowings."
OPTIONAL REDEMPTION
The notes will not be subject to any redemption at the option of Metaldyne
except as set forth in the following paragraphs.
The notes may be redeemed, in whole part or in part, at any time prior to
June 15, 2007 at the option of Metaldyne upon not less than 30 nor more than 60
days' prior notice mailed by first-class mail to each Holder's registered
address, at a redemption price equal to, as determined by the Reference
Treasury Dealer, the sum of the present values of the Remaining Scheduled
Payments discounted to the redemption date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate,
plus accrued and unpaid interest and Liquidated Damages, if any, to the
applicable date of redemption.
31
At any time prior to June 15, 2005, Metaldyne may on any one or more
occasions redeem up to 35% of the aggregate principal amount of notes issued
under the indenture at a redemption price of 111% of the principal amount, plus
accrued and unpaid interest and Liquidated Damages, if any, to the redemption
date, with the net cash proceeds of one or more Equity Offerings; provided
that:
(1) at least 65% of the aggregate principal amount of notes issued under
the indenture remains outstanding immediately after the occurrence of
such redemption (excluding notes held by Metaldyne and its
Subsidiaries); and
(2) the redemption occurs within 120 days of the date of the closing of
such Equity Offering.
After June 15, 2007, Metaldyne may redeem all or a part of the notes upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, on the notes redeemed, to the
applicable redemption date, if redeemed during the twelve-month period
beginning on June 15 of the years indicated below:
YEAR PERCENTAGE
- ------------------------------------------------
2007 ......................... 105.500%
2008 ......................... 103.667%
2009 ......................... 101.833%
2010 and thereafter .......... 100.000%
MANDATORY REDEMPTION
Metaldyne is not required to make mandatory redemption or sinking fund
payments with respect to the notes.
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control
If a Change of Control occurs, each Holder of notes will have the right to
require Metaldyne to repurchase all or any part (equal to $1,000 or an integral
multiple of $1,000) of that Holder's notes pursuant to a Change of Control
Offer on the terms set forth in the indenture. In the Change of Control Offer,
Metaldyne will offer a Change of Control Payment in cash equal to 101% of the
aggregate principal amount of notes repurchased plus accrued and unpaid
interest and Liquidated Damages, if any, on the notes repurchased, to the date
of purchase. Within 15 days following any Change of Control, Metaldyne will
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase notes on the Change
of Control Payment Date specified in the notice, which date will be no earlier
than 30 days and no later than 60 days from the date such notice is mailed,
pursuant to the procedures required by the indenture and described in such
notice. Metaldyne will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the Change
of Control provisions of the indenture, Metaldyne will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Change of Control provisions of the
indenture by virtue of such conflict.
On the Change of Control Payment Date, Metaldyne will, to the extent
lawful:
(1) accept for payment all notes or portions of notes properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the paying agent an amount equal to the Change of Control
Payment in respect of all notes or portions of notes properly tendered;
and
32
(3) deliver or cause to be delivered to the trustee the notes properly
accepted together with an officers' certificate stating the aggregate
principal amount of notes or portions of notes being purchased by
Metaldyne.
The paying agent will promptly mail to each Holder of notes properly
tendered the Change of Control Payment for such notes, and the trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new note equal in principal amount to any unpurchased portion of
the notes surrendered, if any; provided that each new note will be in a
principal amount of $1,000 or an integral multiple of $1,000.
Prior to complying with any of the provisions of this "Change of Control"
covenant, but in any event within 90 days following a Change of Control,
Metaldyne will either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of notes required by this covenant. Metaldyne will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The provisions described above that require Metaldyne to make a Change of
Control Offer following a Change of Control will be applicable whether or not
any other provisions of the indenture are applicable. Except as described above
with respect to a Change of Control, the indenture does not contain provisions
that permit the Holders of the notes to require that Metaldyne repurchase or
redeem the notes in the event of a takeover, recapitalization or similar
transaction.
Metaldyne will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in the indenture applicable to a Change of Control Offer made by
Metaldyne and purchases all notes properly tendered and not withdrawn under the
Change of Control Offer. Alternatively, Metaldyne may assign all or part of its
obligations to purchase all notes validly tendered and not properly withdrawn
under a Change of Control Offer to a third party. In the event of such an
assignment, Metaldyne shall be released from its obligations to purchase the
notes as to which the assignment relates subject to the third party purchasing
such notes. A Change of Control Offer may be made in advance of a Change of
Control, and conditioned upon such Change of Control if a definitive agreement
is in place for the Change of Control at the time of making of the Change of
Control Offer. Notes repurchased by Metaldyne pursuant to a Change of Control
Offer will have the status of notes issued but not outstanding or will be
retired and canceled, at the option of Metaldyne. Notes purchased by a third
party upon assignment will have the status of note issued and outstanding.
The Credit Agreement provides that certain change of control events with
respect to Metaldyne constitute an event of default thereunder. In the event
that at the time of such Change of Control the terms of the Credit Agreement
restrict or prohibit the repurchase of notes pursuant to this covenant, then
prior to the mailing of the Change of Control Offer but in any event within 30
days following any Change of Control, Metaldyne would need to (i) repay in full
all Indebtedness under the Credit Agreement or (ii) obtain the requisite
consent under the Credit Facilities to permit the repurchase of the notes as
provided for in this covenant.
Future Indebtedness of Metaldyne and the Restricted Subsidiaries may
contain prohibitions of certain events that would constitute a Change of
Control or require such Indebtedness to be repurchased upon a Change of
Control. A Change of Control would also constitute a termination event in
respect of our receivables facility. Moreover, the exercise by the Holders of
notes of their right to require Metaldyne to repurchase the notes could cause a
default under such Indebtedness, even if the Change of Control itself does not,
due to the financial effect of such repurchase. Finally, Metaldyne's ability to
pay cash to the Holders of notes upon a repurchase may be limited by
Metaldyne's then existing financial resources. There can be no assurance that
sufficient funds will be available when necessary to make any required
repurchases. See "Risk Factors--We may be prevented from financing, or may be
unable to raise funds necessary to finance, the change of control offer
required by the indenture."
33
The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of Metaldyne and its
Subsidiaries taken as a whole. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
Holder of notes to require Metaldyne to repurchase its notes as a result of a
sale, lease, transfer, conveyance or other disposition of less than all of the
assets of Metaldyne and its Subsidiaries taken as a whole to another Person or
group may be uncertain.
Asset Sales
Metaldyne will not, and will not permit any of the Restricted Subsidiaries
to, consummate an Asset Sale unless:
(1) Metaldyne (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) the fair market value is determined by Metaldyne's Board of Directors
and evidenced by a resolution of the Board of Directors set forth in an
officers' certificate delivered to the trustee; and
(3) either (a) at least 75% of the consideration received in the Asset Sale
by Metaldyne or such Restricted Subsidiary is in the form of cash or
(b) the aggregate non-cash consideration for all Asset Sales not
meeting the criteria set forth in the preceding clause (a) does not
exceed a fair market value in excess of $20.0 million. For purposes of
this provision, each of the following will be deemed to be cash:
(a) any liabilities, as shown on Metaldyne's or such Restricted
Subsidiary's most recent consolidated balance sheet, of Metaldyne
or any Restricted Subsidiary (other than contingent liabilities
and liabilities that are by their terms subordinated to the notes
or any Subsidiary Guarantee) that are assumed by the transferee
of any such assets pursuant to a customary novation agreement
that releases Metaldyne or such Restricted Subsidiary from
further liability; and
(b) any securities, notes or other obligations received by Metaldyne
or any such Restricted Subsidiary from such transferee to the
extent within 60 days, subject to ordinary settlement periods,
they are converted by Metaldyne or such Restricted Subsidiary
into cash.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
Metaldyne may apply those Net Proceeds at its option:
(1) to permanently repay Indebtedness (other than Indebtedness that is by
its terms subordinated to, or pari passu with, the notes or any
Subsidiary Guarantee) of Metaldyne or any Restricted Subsidiary,
including any Obligations under a Credit Facility and, if the
Indebtedness repaid is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto or to reduce
receivables advances and reduce commitments in respect of a Receivables
Facility;
(2) to acquire assets of, or a majority of the Voting Stock of, any person
owning assets used or usable in a business of Metaldyne and the
Restricted Subsidiaries; or
(3) to make a capital expenditure.
Pending the final application of any Net Proceeds, Metaldyne may
temporarily reduce revolving credit borrowings or otherwise invest or use the
Net Proceeds in any manner that is not prohibited by the indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph (other than Net Proceeds from the sale of
the common stock of TriMas after the date of
34
the indenture) will constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $25.0 million, Metaldyne will make an Asset Sale Offer
to all Holders of notes and all holders of other Indebtedness that is pari
passu with the notes containing provisions similar to those set forth in the
indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets to purchase the maximum principal amount of notes and such
other pari passu Indebtedness that may be purchased out of the Excess Proceeds.
The offer price in any Asset Sale Offer will be equal to 100% of principal
amount plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of purchase, and will be payable in cash. If any Excess Proceeds remain
after consummation of an Asset Sale Offer, Metaldyne may use those Excess
Proceeds for any purpose not otherwise prohibited by the indenture. If the
aggregate principal amount of notes and other pari passu Indebtedness tendered
into such Asset Sale Offer exceeds the amount of Excess Proceeds, the trustee
will select the notes and such other pari passu Indebtedness to be purchased on
a pro rata basis. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds will be reset at zero.
Metaldyne will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of the indenture, Metaldyne will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of the indenture by virtue of such
conflict.
The agreements governing Metaldyne's outstanding Senior Debt currently
prohibit Metaldyne from purchasing any notes, and also provides that certain
change of control or asset sale events with respect to Metaldyne would
constitute a default under these agreements. Any future credit agreements or
other agreements relating to Senior Debt to which Metaldyne becomes a party may
contain similar restrictions and provisions. In the event a Change of Control
or Asset Sale occurs at a time when Metaldyne is prohibited from purchasing
notes, Metaldyne could seek the consent of its senior lenders to the purchase
of notes or could attempt to refinance the borrowings that contain such
prohibition. If Metaldyne does not obtain such a consent or repay such
borrowings, Metaldyne will remain prohibited from purchasing notes. In such
case, Metaldyne's failure to purchase tendered notes would constitute an Event
of Default under the indenture which would, in turn, constitute a default under
such Senior Debt. In such circumstances, the subordination provisions in the
indenture would likely restrict payments to the Holders of notes.
Selection and Notice
If less than all of the notes are to be redeemed at any time, the trustee
will select notes for redemption as follows:
(1) if the notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the notes are listed; or
(2) if the notes are not listed on any national securities exchange, on a
pro rata basis, by lot or by such method as the trustee deems fair and
appropriate.
No notes of $1,000 or less can be redeemed in part. Notices of redemption
will be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of notes to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior
to a redemption date if the notice is issued in connection with a defeasance of
the notes or a satisfaction and discharge of the indenture. Notices of
redemption may not be conditional.
If any note is to be redeemed in part only, the notice of redemption that
relates to that note will state the portion of the principal amount of that
note that is to be redeemed. A new note in principal amount equal to the
unredeemed portion of the original note will be issued in the name of the
Holder of notes upon cancellation of the original note. Notes called for
redemption become due on the date fixed for redemption. On and after the
redemption date, interest ceases to accrue on notes or portions of them called
for redemption.
35
CERTAIN COVENANTS
Restricted Payments
Metaldyne will not, and will not permit any of the Restricted Subsidiaries
to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution
on account of Metaldyne's Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation
involving Metaldyne or any of its Restricted Subsidiaries) or to the
direct or indirect holders of Metaldyne's Equity Interests in their
capacity as such (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of Metaldyne or to
Metaldyne or a Restricted Subsidiary of Metaldyne);
(2) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation
involving Metaldyne) any Equity Interests of Metaldyne;
(3) purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the notes or the Subsidiary
Guarantees, except a purchase, redemption, defeasance or other
acquisition or retirement for value in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in
each case due within one year of the date of such acquisition or
retirement; or
(4) make any Restricted Investment
(all such payments and other actions set forth in these clauses (1) through (4)
above being collectively referred to as "Restricted Payments"), unless, at the
time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would
occur as a consequence of such Restricted Payment;
(2) Metaldyne would, after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of the covenant described below
under the caption "--Incurrence of Indebtedness and Issuance of
Preferred Stock"; and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by Metaldyne and the Restricted
Subsidiaries after the date of the indenture (excluding Restricted
Payments permitted by clauses (2), (3), (4), (8), (9) and, to the
extent reducing Consolidated Net Income, (10) of the next succeeding
paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of Metaldyne for the period
(taken as one accounting period) from June 30, 2002 to the end of
Metaldyne's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net proceeds received by Metaldyne since
the date of the indenture, including the fair market value of
property other than cash (determined in good faith by the Board
of Directors), as a contribution to its common equity capital or
from the issue or sale of Equity Interests of Metaldyne (other
than Disqualified Stock) or from the issue or sale of convertible
or exchangeable Disqualified Stock or convertible or exchangeable
debt securities of Metaldyne that have been converted into or
exchanged for such Equity Interests (other than Equity Interests
(or Disqualified Stock or debt securities) sold to a Subsidiary
of Metaldyne), provided, that (1) any such net proceeds received,
directly or indirectly, by Metaldyne from an employee stock
36
ownership plan financed by loans from Metaldyne or a Subsidiary
of Metaldyne shall be included only to the extent such loans have
been repaid with cash on or prior to the date of determination
and (2) any net proceeds received in a form other than cash
(other than on conversion or in exchange for a security issued
for cash to the extent of the cash received) from a person that
is an Affiliate of Metaldyne prior to such receipt shall be
excluded from this clause (3)(b); plus
(c) the amount by which Indebtedness of Metaldyne or any Restricted
Subsidiary is reduced on Metaldyne's balance sheet upon the
conversion or exchange (other than by a Restricted Subsidiary)
subsequent to the date of the indenture of any Indebtedness of
Metaldyne or any Restricted Subsidiary into Capital Stock (other
than Redeemable Stock) of Metaldyne (less the amount of any cash
or other property (other than such Capital Stock) distributed by
Metaldyne or any Restricted Subsidiary upon such conversion or
exchange); plus
(d) to the extent that any Restricted Investment that was made after
the date of the indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the cash return
of capital with respect to such Restricted Investment (less the
cost of disposition, if any) and (ii) the initial amount of such
Restricted Investment; plus
(e) to the extent that any Unrestricted Subsidiary of Metaldyne is
redesignated as a Restricted Subsidiary after the date of the
indenture, the lesser of (i) the fair market value of Metaldyne's
Investment in such Subsidiary as of the date of such
redesignation or (ii) such fair market value as of the date on
which such Subsidiary was originally designated as an
Unrestricted Subsidiary.
So long as no Default has occurred and is continuing or would be caused
thereby (except as to clauses (1) through (4), (6), (9), (10), (11) and (12)
below), the preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of the indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition
of any subordinated Indebtedness of Metaldyne or any Guarantor or of
any Equity Interests of Metaldyne in exchange for, or out of the net
cash proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary) of, Equity Interests (other than Disqualified
Stock) of Metaldyne or a substantially concurrent capital contribution
to Metaldyne; provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition will be excluded from clause (3)(b) of
the preceding paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of Metaldyne or any Guarantor in exchange
for, or with the net cash proceeds from, an incurrence of Permitted
Refinancing Indebtedness or other Indebtedness Incurred under the first
paragraph of the covenant "Incurrence of Indebtedness and Issuance of
Preferred Stock";
(4) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness from Net Proceeds to the extent not
prohibited under "--Asset Sales," provided, that such purchase or
redemption shall be excluded from the calculation of the amount
available for Restricted Payments pursuant to the preceding paragraph;
(5) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness or Disqualified Stock of Metaldyne or any
Guarantor following a Change of Control after Metaldyne shall have
complied with the provisions under "--Change of Control," including
payment of the applicable Change of Control Payment;
37
(6) the repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of Metaldyne held by any member of Metaldyne's
(or any of its Subsidiaries') management pursuant to any management
equity subscription agreement, stock option agreement or other equity
incentive agreement or plan or held by any former owners of a business
acquired by Metaldyne or former employees of Metaldyne or any of its
Subsidiaries and, in either case, acquired in connection with a sale of
a business to Metaldyne; provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests may
not exceed $7.5 million in any twelve-month period plus any unutilized
portion of such amount in any prior fiscal year;
(7) any Investment made by the exchange for, or out of the proceeds of, a
capital contribution in respect of or the substantially concurrent sale
of, Capital Stock (other than Disqualified Stock) of Metaldyne to the
extent the net cash proceeds thereof are received by Metaldyne,
provided, that the amount of such capital contribution or proceeds used
to make such Investment shall be excluded from the calculation of the
amount available for Restricted Payments pursuant to the preceding
paragraph;
(8) other Restricted Payments in an aggregate amount not to exceed $30.0
million;
(9) payments required or contemplated by the terms of the Recapitalization
Agreement and related documentation as in effect on the date of
issuance of the notes, including in respect of restricted stock awards
of Metaldyne;
(10) the repurchase, redemption or other acquisition or retirement of
Existing Preferred Stock; provided, that the aggregate amount of such
payments under this clause (10) shall not exceed $15.0 million since
the date of the indenture;
(11) Restricted Investments in an aggregate amount not to exceed the net
cash proceeds received by the Company and its Restricted Subsidiaries
(calculated on an after-tax basis) from the sale of common stock of
TriMas owned by the Company and its Restricted Subsidiaries after the
date of the indenture (after giving effect to the consummation of the
transactions contemplated by the Stock Purchase Agreement); and
(12) the payment of the Saturn Proceeds under the Recapitalization
Agreement.
The amount of all Restricted Payments (other than cash) will be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by Metaldyne or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant will be determined by the Board of Directors acting in good faith
whose resolution with respect thereto will be conclusive. Any payments
hereunder shall be calculated net of amounts for which Metaldyne or any
Restricted Subsidiary is reimbursed under the Stock Purchase Agreement.
Incurrence of Indebtedness and Issuance of Preferred Stock
Metaldyne will not, and will not permit any of the Restricted Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise, with
respect to (collectively, "incur") any Indebtedness (including Acquired Debt),
and Metaldyne will not issue any Disqualified Stock and will not permit any
Restricted Subsidiary that is not a Guarantor to issue any shares of preferred
stock; provided, however, that Metaldyne may incur Indebtedness (including
Acquired Debt) or issue Disqualified Stock, and the Restricted Subsidiaries may
incur Indebtedness or Restricted Subsidiaries that are not Guarantors may issue
preferred stock, if the Fixed Charge Coverage Ratio for Metaldyne's most
recently ended four full fiscal quarters for which financial statements are
available immediately preceding the date on which such additional Indebtedness
is incurred or such Disqualified Stock or preferred stock is issued would have
been at least 2.25 to 1.0, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the preferred stock or Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter period.
38
The first paragraph of this covenant will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) (a) the incurrence by Metaldyne and any Restricted Subsidiary of
Indebtedness and letters of credit under the revolving facility
component of the Credit Facilities in an aggregate principal
amount at any one time outstanding under this clause (1)(a) (with
letters of credit being deemed to have a principal amount equal
to the maximum potential liability of Metaldyne and its
Subsidiaries thereunder) not to exceed $250.0 million; and
(b) the incurrence by Metaldyne and any Restricted Subsidiary of
Indebtedness under the term loan components of the Credit
Facilities in an aggregate principal amount at any one time
outstanding under this clause (1)(b) not to exceed the amount
outstanding on the date of issuance of the notes (it being
understood that the $400.0 million replacement term loans
anticipated on the issuance date are permitted), after giving
effect to the actual use of proceeds from the issuance of the
notes, less the aggregate amount of all Net Proceeds of Asset
Sales applied by Metaldyne or any of the Restricted Subsidiaries
to repay the principal of any term Indebtedness under a Credit
Facility since the date of the indenture; and
(c) the incurrence of Indebtedness of Metaldyne or any Restricted
Subsidiary under one or more receivables financing facilities
pursuant to which Metaldyne or any Restricted Subsidiary pledges
or otherwise borrows against its Receivables in an aggregate
principal amount which, when taken together with all other
Indebtedness Incurred pursuant to this clause (c) and then
outstanding, does not exceed 85% of the consolidated book value
of the Receivables of Metaldyne and the Restricted Subsidiaries
(to the extent such Receivables or any other Receivables of
Metaldyne or such Restricted Subsidiary, as the case may be, are
not then being financed pursuant to a Qualified Receivables
Transaction or as a basis for Indebtedness Incurred pursuant to
clause (10) of this paragraph);
(2) the incurrence by Metaldyne and the Restricted Subsidiaries of the
Existing Indebtedness;
(3) the incurrence by Metaldyne and the Guarantors of Indebtedness
represented by the notes and the related Subsidiary Guarantees to be
issued on the date of the indenture and the exchange notes and the
related Subsidiary Guarantees to be issued pursuant to the registration
rights agreement;
(4) the incurrence by Metaldyne or any of its Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case, incurred for the purpose of
financing all or any part of the purchase price or cost of construction
or improvement of property, plant or equipment used in the business of
Metaldyne or such Restricted Subsidiary ("Capital Spending") and
incurred no later than 270 days after the date of such acquisition or
the date of completion of such construction or improvement, provided,
that the principal amount of any Indebtedness incurred pursuant to this
clause (4) (other than Permitted Refinancing Indebtedness) at any time
during a single fiscal year shall not exceed 30% of the total Capital
Spending of Metaldyne and the Restricted Subsidiaries made during the
period of the most recently completed four consecutive fiscal quarters
prior to the date of such incurrence;
(5) the incurrence by Metaldyne or any of the Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted by the indenture to
be incurred under the first paragraph of this covenant or clauses (2),
(3), (4), (5), (8), (9) or (15) of this paragraph;
(6) the incurrence by Metaldyne or any of the Restricted Subsidiaries of
intercompany Indebtedness between or among Metaldyne and any of the
Restricted Subsidiaries; provided, however, that:
39
(a) if Metaldyne or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be (i) unsecured and (ii) if
the obligee is neither Metaldyne nor a Guarantor, expressly
subordinated to the prior payment in full in cash of all
Obligations with respect to the notes (in the case of Metaldyne)
(or the Subsidiary Guarantee, in the case of a Guarantor); and
(b) (i) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other
than Metaldyne or a Restricted Subsidiary of Metaldyne and (ii)
any sale or other transfer of any such Indebtedness to a Person
that is not either Metaldyne or a Restricted Subsidiary of
Metaldyne will be deemed, in each case, to constitute an
incurrence of such Indebtedness by Metaldyne or such Restricted
Subsidiary, as the case may be, that was not permitted by this
clause (6);
(7) the incurrence by Metaldyne or any of the Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of hedging (i)
interest rate risk or the impact of interest rate fluctuations on
Metaldyne or any of the Restricted Subsidiaries and (ii) in the case of
currency or commodity protection agreements, against currency exchange
rate or commodity price fluctuations in the ordinary course of
Metaldyne and the Restricted Subsidiaries' respective businesses and,
in the case of both (i) and (ii), not for purposes of speculation;
(8) the guarantee by Metaldyne or any of the Guarantors of Indebtedness of
Metaldyne or a Restricted Subsidiary that was permitted to be incurred
by another provision of this covenant;
(9) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form
of additional Indebtedness with the same terms, and the payment of
dividends on Disqualified Stock in the form of additional shares of
similar Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this
covenant; provided, in each such case, that the amount thereof is
included in Fixed Charges of Metaldyne as accrued;
(10) Indebtedness of Foreign Subsidiaries incurred for working capital
purposes if, at the time of incurrence of such Indebtedness, and after
giving effect thereto, the aggregate principal amount of all
Indebtedness of the Foreign Subsidiaries incurred pursuant to this
clause (10) and then outstanding does not exceed the amount equal to
the sum of (x) 80% of the consolidated book value of the accounts
receivable of the Foreign Subsidiaries and (y) 60% of the consolidated
book value of the inventories of the Foreign Subsidiaries;
(11) Indebtedness incurred in respect of (a) workers' compensation claims,
self-insurance obligations, bankers' acceptances, performance, surety
and similar bonds and completion guarantees provided by Metaldyne or a
Restricted Subsidiary in the ordinary course of business, (b) in
respect of performance bonds or similar obligations of Metaldyne or any
of the Restricted Subsidiaries for or in connection with pledges,
deposits or payments made or given in the ordinary course of business
and not for money borrowed in connection with or to secure statutory,
regulatory or similar obligations, including obligations under health,
safety or environmental obligations, and (c) arising from guarantees to
suppliers, lessors, licensees, contractors, franchises or customers of
obligations incurred in the ordinary course of business and not for
money borrowed;
(12) Indebtedness arising from agreements of Metaldyne or a Restricted
Subsidiary providing for indemnification, adjustment of purchase price
or similar obligations, in each case, incurred or assumed in connection
with the disposition of any business, assets or Capital Stock of a
Restricted Subsidiary, provided, that the maximum aggregate liability
in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by Metaldyne and the Restricted Subsidiaries
in connection with such disposition;
40
(13) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument (except in the case
of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business, provided, however, that such Indebtedness
is extinguished within five Business Days of incurrence;
(14) the incurrence by a Receivables Subsidiary of Indebtedness in a
Qualified Receivables Transaction that is without recourse to Metaldyne
or to any other Subsidiary of Metaldyne or their assets (other than
such Receivables Subsidiary and its assets and, as to Metaldyne or any
Subsidiary of Metaldyne, other than pursuant to representations,
warranties, covenants and indemnities customary for such transactions)
and is not guaranteed by any such Person;
(15) the issuance and sale of preferred stock (a) by a Foreign Subsidiary in
lieu of the issuance of non-voting common stock if (i) the laws of the
jurisdiction of incorporation of such Subsidiary precludes the issuance
of non-voting common stock and (ii) the preferential rights afforded to
the holders of such preferred stock are limited to those customarily
provided for in such jurisdiction in respect of the issuance of
non-voting stock, (b) by a Restricted Subsidiary which is a joint
venture with a third party which is not an Affiliate of the Company or
a Restricted Subsidiary, and (c) by a Restricted Subsidiary pursuant to
obligations with respect to the issuance or sale of Preferred Stock
which exist at the time such Person becomes a Restricted Subsidiary and
which were not created in connection with or in contemplation of such
Person becoming a Restricted Subsidiary; and
(16) the incurrence by Metaldyne or any of the Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness, incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (16), not to exceed $35.0
million.
For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (16) above, or is
entitled to be incurred pursuant to the first paragraph of this covenant,
Metaldyne will be permitted to classify such item of Indebtedness on the date
of its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this covenant. Indebtedness
under Credit Facilities outstanding on the date on which notes are first issued
and authenticated under the indenture will be deemed to have been incurred on
such date in reliance on the exception provided by clauses (1) and (2) of the
definition of Permitted Debt.
For purposes of determining compliance with any U.S. dollar-denominated
restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent
principal amount of Indebtedness denominated in a foreign currency shall be
calculated based on the relevant currency exchange rate in effect on the date
such Indebtedness was incurred, in the case of term Indebtedness, or first
committed, in the case of revolving credit Indebtedness; provided, that if such
Indebtedness is incurred to Refinance other Indebtedness denominated in a
foreign currency, and such Refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such Refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded so
long as the principal amount of such Refinancing Indebtedness does not exceed
the principal amount of such Indebtedness being Refinanced. Notwithstanding any
other provision of this covenant, the maximum amount of Indebtedness that
Metaldyne may incur pursuant to this covenant shall not be deemed to be
exceeded solely as a result of fluctuations in the exchange rate of currencies.
The principal amount of any Indebtedness incurred to Refinance other
Indebtedness, if incurred in a different currency from the Indebtedness being
Refinanced, shall be calculated based on the currency exchange rate applicable
to the currencies in which such Refinancing Indebtedness is denominated that is
in effect on the date of such Refinancing.
Anti-Layering
Metaldyne will not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt of Metaldyne and
41
senior in any respect in right of payment to the notes. No Guarantor will
incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to the Senior
Debt of such Guarantor and senior in any respect in right of payment to such
Guarantor's Subsidiary Guarantee. The foregoing shall not affect the
Subordinated Debentures outstanding on the date of the indenture.
Liens
Metaldyne will not and will not permit any of the Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or otherwise cause or suffer
to exist or become effective any Lien of any kind securing Indebtedness (other
than Permitted Liens) upon any of their property or assets, now owned or
hereafter acquired to secure any Indebtedness without making, or causing such
Subsidiary to make, effective provision for securing the notes or, in respect
of Liens on any Guarantor's property or assets, any Guarantee of such
Guarantor, (x) equally and ratably with such Indebtedness as to such property
or assets for so long as such Indebtedness will be so secured or (y) in the
event such Indebtedness is subordinated Indebtedness, prior to such
Indebtedness as to such property or assets for so long as such Indebtedness
will be so secured.
Dividend and Other Payment Restrictions Affecting Subsidiaries
Metaldyne will not, and will not permit any of the Restricted Subsidiaries
to, directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to
Metaldyne or any of the Restricted Subsidiaries, or with respect to any
other interest or participation in, or measured by, its profits, or pay
any indebtedness owed to Metaldyne or any of the Restricted
Subsidiaries;
(2) make loans or advances to Metaldyne or any of the Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to Metaldyne or any of the
Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities as in
effect on the date of the indenture and any amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements, provided that the
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in those agreements on the
date of the indenture;
(2) the indenture, the notes and the Subsidiary Guarantees;
(3) applicable law;
(4) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(5) purchase money obligations for property acquired in the ordinary course
of business that impose restrictions on that property of the nature
described in clause (3) of the preceding paragraph;
(6) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition;
(7) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being
Refinanced;
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(8) Liens securing Indebtedness otherwise permitted to be incurred under
the provisions of the covenant described above under the caption
"--Liens" that limit the right of the debtor to dispose of the assets
subject to such Liens;
(9) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements, assets sale agreements, stock
sale agreements and other similar agreements entered into in the
ordinary course of business;
(10) any agreement relating to any Indebtedness or Liens incurred by a
Person (other than a Subsidiary of Metaldyne that is a Subsidiary of
Metaldyne on the date of the indenture or any Subsidiary carrying on
any of the businesses of any such Subsidiary) prior to the date on
which such Person became a Subsidiary of Metaldyne and outstanding on
such date and not incurred in anticipation of becoming a Subsidiary and
not incurred to provide all or any portion of the funds utilized to
consummate such acquisition, which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person,
other than the Person so acquired;
(11) any encumbrance or restriction with respect to a Foreign Subsidiary
pursuant to an agreement relating to Indebtedness which is permitted
under the "Incurrence of Indebtedness and Issuance of Preferred Stock"
covenant or Liens incurred by such Foreign Subsidiary;
(12) Indebtedness or other contractual requirements of a Receivables
Subsidiary in connection with a Qualified Receivables Transaction,
provided that such restrictions apply only to such Receivables
Subsidiary; and
(13) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business.
Merger, Consolidation or Sale of Assets
Metaldyne may not, directly or indirectly: (1) consolidate or merge with
or into another Person (whether or not Metaldyne is the surviving corporation);
or (2) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of Metaldyne and the Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person; unless:
(1) either: (a) Metaldyne is the surviving corporation; or (b) the Person
formed by or surviving any such consolidation or merger (if other than
Metaldyne) or to which such sale, assignment, transfer, conveyance or
other disposition has been made is a corporation organized or existing
under the laws of the United States, any state of the United States or
the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger (if
other than Metaldyne) or the Person to which such sale, assignment,
transfer, conveyance or other disposition has been made assumes all the
obligations of Metaldyne under the notes, the indenture and the
registration rights agreement pursuant to agreements reasonably
satisfactory to the trustee;
(3) immediately after such transaction, no Default or Event of Default
exists; and
(4) Metaldyne or the Person formed by or surviving any such consolidation
or merger (if other than Metaldyne), or to which such sale, assignment,
transfer, conveyance or other disposition has been made will, on the
date of such transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur
at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of the covenant
described above under the caption "--Incurrence of Indebtedness and
Issuance of Preferred Stock."
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In addition, Metaldyne may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Merger, Consolidation or Sale of
Assets" covenant will not apply to a sale, assignment, transfer, conveyance or
other disposition of assets between or among Metaldyne and any of the
Guarantors.
Notwithstanding anything in the indenture:
(a) a Restricted Subsidiary may consolidate with, merge into or convey,
lease, sell, assign, transfer or otherwise dispose of all or part of
its properties and assets to Metaldyne or a Restricted Subsidiary; and
(b) Metaldyne may merge with an Affiliate incorporated solely for the
purpose of reincorporating Metaldyne in another jurisdiction in the
United States to realize tax or other benefits.
Transactions with Affiliates
Metaldyne will not, and will not permit any of the Restricted Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or purchase any property or assets from, or
enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are not materially less
favorable, taken as a whole, to Metaldyne or the relevant Restricted
Subsidiary than those that would have been obtained at the time in a
comparable transaction by Metaldyne or such Restricted Subsidiary with
an unaffiliated Person; and
(2) Metaldyne delivers to the trustee:
(a) except when the opinion referred to in the following clause (b)
is delivered, with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million, a resolution of the
Board of Directors set forth in an officers' certificate
certifying that such Affiliate Transaction complies with this
covenant and that such Affiliate Transaction has been approved by
a majority of the disinterested members of the Board of
Directors; and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in
excess of $25.0 million, an opinion as to the fairness to
Metaldyne of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking
firm of national standing.
The following items will not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
(1) loans or advances to employees, indemnification agreements with and the
payment of fees and indemnities to directors, officers and full-time
employees of Metaldyne and the Restricted Subsidiaries and employment,
non-competition or confidentiality agreements entered into with any
such person in the ordinary course of business;
(2) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of,
employment, compensation or indemnification arrangements, stock options
and stock ownership plans in the ordinary course of business to or with
officers, directors or employees of Metaldyne and the Restricted
Subsidiaries, or approved by the Board of Directors;
(3) transactions between or among Metaldyne and/or the Restricted
Subsidiaries;
(4) transactions with a Person that is an Affiliate of Metaldyne solely
because Metaldyne owns an Equity Interest in, or controls, such Person;
44
(5) transactions pursuant to agreements existing on the date of the
indenture, including, without limitation, the Stock Purchase Agreement,
the Shareholders Agreement, the TriMas Shareholders Agreement and the
TriMas Corporate Services Agreement, and, in each case, any amendment
or supplement thereto that, taken in its entirety, is no less favorable
to Metaldyne than such agreement as in effect on the date of the
indenture;
(6) sales of Equity Interests (other than Disqualified Stock) of Metaldyne
to Affiliates of Metaldyne or the receipt of capital contributions by
Metaldyne;
(7) payment of certain fees under the Advisory Agreement;
(8) transactions (in connection with a Qualified Receivables Transaction)
between or among Metaldyne and/or its Restricted Subsidiaries or
transactions between a Receivables Subsidiary and any Person in which
the Receivables Subsidiary has an Investment;
(9) any management, service, purchase, lease, supply or similar agreement
entered into in the ordinary course of Metaldyne's business between
Metaldyne or any Restricted Subsidiary and any Unrestricted Subsidiary
or any Affiliate, so long as Metaldyne determines in good faith (which
determination shall be conclusive) that any such agreement is on terms
no less favorable to Metaldyne or such Restricted Subsidiary than those
that could be obtained in a comparable arm's-length transaction with an
entity that is not an Affiliate; and
(10) Restricted Payments and Permitted Investments that are permitted by the
provisions of the indenture described above under the caption
"--Restricted Payments."
Additional Subsidiary Guarantees
After the Issue Date, Metaldyne will cause each Restricted Subsidiary,
other than a Subsidiary which is a Subsidiary Guarantor, that becomes a
guarantor or other obligor with respect to the obligations of Metaldyne or a
Domestic Restricted Subsidiary under the Credit Agreement to execute and
deliver to the trustee a Guarantee pursuant to which such Guarantor will
unconditionally Guarantee, on a joint and several basis, the full and prompt
payment of the principal of, premium, if any, and interest on the notes on a
senior subordinated basis.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate fair market value of all outstanding Investments owned by Metaldyne
and the Restricted Subsidiaries in the Subsidiary properly designated will be
deemed to be an Investment made as of the time of the designation and will
reduce the amount available for Restricted Payments under the first paragraph
of the covenant described above under the caption "--Restricted Payments" or
Permitted Investments, as determined by Metaldyne. That designation will only
be permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
Reports
Whether or not required by the rules and regulations of the SEC, so long
as any notes are outstanding, Metaldyne will furnish to the Holders of notes,
within the time periods specified in the SEC's rules and regulations:
(1) all quarterly and annual financial information that would be required
to be contained in a filing with the SEC on Forms 10-Q and 10-K if
Metaldyne were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report
on the annual financial statements by Metaldyne's certified independent
accountants; and
45
(2) all current reports that would be required to be filed with the SEC on
Form 8-K if Metaldyne were required to file such reports.
In addition, whether or not required by the SEC, Metaldyne will file a
copy of all of the information and reports referred to in clauses (1) and (2)
above with the SEC for public availability within the time periods specified in
the SEC's rules and regulations (unless the SEC will not accept such a filing)
and make such information available to securities analysts and prospective
investors upon request. In addition, Metaldyne and the Guarantors have agreed
that, for so long as any notes remain outstanding, they will furnish to the
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the notes whether or not prohibited
by the subordination provisions of the indenture;
(2) default in payment when due of the principal of, or premium, if any, on
the notes whether or not prohibited by the subordination provisions of
the indenture;
(3) failure by Metaldyne or any of its Subsidiaries to comply with the
provisions described under the captions "--Repurchase at the Option of
Holders--Change of Control" or "--Certain Covenants--Merger,
Consolidation or Sale of Assets" after written notice to Metaldyne by
the Trustee or the holders of at least 25% in aggregate principal
amount of the outstanding Notes;
(4) failure by Metaldyne or any of its Subsidiaries to comply with any of
the other agreements in the indenture continued for 60 days after
written notice to Metaldyne by the Trustee or the holders of at least
25% in aggregate principal amount of the outstanding Notes;
(5) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by Metaldyne or any of the Restricted
Subsidiaries (or the payment of which is guaranteed by Metaldyne or any
of the Restricted Subsidiaries) whether such Indebtedness or guarantee
now exists, or is created after the date of the indenture, if that
default:
(a) is caused by a failure to pay principal of such Indebtedness at
the final maturity thereof (a "Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has
been so accelerated, aggregates $20.0 million or more;
(6) failure by Metaldyne or any of the Restricted Subsidiaries to pay final
judgments aggregating in excess of $20.0 million (net of any insurance
proceeds available to pay such judgment), which judgments are not paid,
discharged or stayed for a period of 60 days;
(7) except as permitted by the indenture, any Subsidiary Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee; and
(8) certain events of bankruptcy or insolvency described in the indenture
with respect to Metaldyne or any of the Significant Subsidiaries
thereof.
46
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to Metaldyne, all outstanding notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the trustee or the Holders of
at least 25% in principal amount of the then outstanding notes may declare all
the notes to be due and payable immediately by giving notice in writing to us
and the trustee specifying the respective Event of Default (the "Acceleration
Notice") or if there are any amounts outstanding under the Credit Agreement, it
shall become immediately due and payable upon the first to occur of an
acceleration under the Credit Agreement or five business days after receipt by
us and the administrative agent under the Credit Agreement of such Acceleration
Notice (but only if such Event of Default is then continuing).
Holders of the notes may not enforce the indenture or the notes except as
provided in the indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding notes may direct the
trustee in its exercise of any trust or power. The trustee may withhold from
Holders of the notes notice of any continuing Default or Event of Default if it
determines that withholding notes is in their interest, except a Default or
Event of Default relating to the payment of principal or interest or Liquidated
Damages.
The Holders of a majority in aggregate principal amount of the notes then
outstanding by notice to the trustee may on behalf of the Holders of all of the
notes waive any existing Default or Event of Default and its consequences under
the indenture except a continuing Default or Event of Default in the payment of
interest or Liquidated Damages on, or the principal of, the notes.
In the event of a declaration of acceleration of the notes because an
Event of Default described in clause (5) under "Events of Default" has occurred
and is continuing, the declaration of acceleration of the notes shall be
automatically annulled if the event of default or payment default triggering
such Event of Default pursuant to clause (5) shall be remedied or cured by
Metaldyne or a Restricted Subsidiary or waived by the holders of the relevant
Indebtedness within 60 days after the declaration of acceleration with respect
thereto and if (a) the annulment of the acceleration of the notes would not
conflict with any judgment or decree of a court of competent jurisdiction and
(b) all existing Events of Default, except nonpayment of principal, premium or
interest on the notes that became due solely because of the acceleration of the
notes, have been cured or waived.
Metaldyne is required to deliver to the trustee annually a statement
regarding compliance with the indenture. Upon becoming aware of any Default or
Event of Default, Metaldyne is required to deliver to the trustee a statement
specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of Metaldyne
or any Guarantor, as such, will have any liability for any obligations of
Metaldyne or the Guarantors under the notes, the indenture, the Subsidiary
Guarantees, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of notes by accepting a note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Metaldyne may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding notes and all
obligations of the Guarantors discharged with respect to their Subsidiary
Guarantees ("Legal Defeasance") except for:
(1) the rights of Holders of outstanding notes to receive payments in
respect of the principal of, or interest or premium and Liquidated
Damages, if any, on such notes when such payments are due from the
trust referred to below;
(2) Metaldyne's obligations with respect to the notes concerning issuing
temporary notes, registration of notes, mutilated, destroyed, lost or
stolen notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
47
(3) the rights, powers, trusts, duties and immunities of the trustee, and
Metaldyne's and the Guarantor's obligations in connection therewith;
and
(4) the Legal Defeasance provisions of the indenture.
In addition, Metaldyne may, at its option and at any time, elect to have
the obligations of Metaldyne and the Guarantors released with respect to
certain covenants that are described in the indenture ("Covenant Defeasance")
and thereafter any omission to comply with those covenants will not constitute
a Default or Event of Default with respect to the notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "--Events
of Default and Remedies" will no longer constitute an Event of Default with
respect to the notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) Metaldyne must irrevocably deposit with the trustee, in trust, for the
benefit of the Holders of the notes, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient,
in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, or interest and premium and
Liquidated Damages, if any, on the outstanding notes on the stated
maturity or on the applicable redemption date, as the case may be, and
Metaldyne must specify whether the notes are being defeased to maturity
or to a particular redemption date;
(2) in the case of Legal Defeasance, Metaldyne has delivered to the trustee
an opinion of counsel reasonably acceptable to the trustee confirming
that (a) Metaldyne has received from, or there has been published by,
the Internal Revenue Service a ruling or (b) since the date of the
indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion
of counsel will confirm that, the Holders of the outstanding notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, Metaldyne has delivered to the
trustee an opinion of counsel reasonably acceptable to the trustee
confirming that the Holders of the outstanding notes will not recognize
income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default has occurred and is continuing on the
date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the indenture) to which Metaldyne
or any of its Subsidiaries is a party or by which Metaldyne or any of
its Subsidiaries is bound;
(6) Metaldyne must deliver to the trustee an officers' certificate stating
that the deposit was not made by Metaldyne with the intent of
preferring the Holders of notes over the other creditors of Metaldyne
with the intent of defeating, hindering, delaying or defrauding
creditors of Metaldyne or others; and
(7) Metaldyne must deliver to the trustee an officers' certificate and an
opinion of counsel, each stating that all conditions precedent relating
to the Legal Defeasance or the Covenant Defeasance have been complied
with.
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In the event that Metaldyne exercises its legal defeasance option or
covenant defeasance option, each of the Guarantors will be released from all of
its obligations with respect to its guarantee. Metaldyne may exercise its legal
defeasance option notwithstanding its prior exercise of the covenant defeasance
option.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the indenture or
the notes may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the notes then outstanding (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, notes), and any existing default or
compliance with any provision of the indenture or the notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, notes).
Without the consent of each Holder affected, an amendment or waiver may
not (with respect to any notes held by a non-consenting Holder):
(1) reduce the principal amount of notes whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any note or
alter the provisions with respect to the redemption of the notes (other
than provisions relating to the covenants described above under the
caption "--Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest on any
note;
(4) waive a Default or Event of Default in the payment of principal of, or
interest or premium, or Liquidated Damages, if any, on the notes
(except a rescission of acceleration of the notes by the Holders of at
least a majority in aggregate principal amount of the notes and a
waiver of the payment default that resulted from such acceleration);
(5) make any note payable in money other than that stated in the notes;
(6) make any change in the provisions of the indenture relating to waivers
of past Defaults or the rights of Holders of notes to receive payments
of principal of, or interest or premium or Liquidated Damages, if any,
on the notes;
(7) waive a redemption payment with respect to any note (other than a
payment required by one of the covenants described above under the
caption "--Repurchase at the Option of Holders"); or
(8) make any change in the preceding amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of the
indenture relating to subordination that adversely affects the rights of the
Holders of the notes will require the consent of the Holders of at least 75% in
aggregate principal amount of notes then outstanding.
Notwithstanding the preceding, without the consent of any Holder of notes,
Metaldyne, the Guarantors and the trustee may amend or supplement the indenture
or the notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated notes in addition to or in place of
certificated notes;
(3) to provide for the assumption of Metaldyne's obligations to Holders of
notes in the case of a merger or consolidation or sale of all or
substantially all of Metaldyne's assets;
(4) to make any change that would provide any additional rights or benefits
to the Holders of notes or that does not adversely affect the legal
rights under the indenture of any such Holder; or
49
(5) to comply with requirements of the SEC in order to effect or maintain
the qualification of the indenture under the Trust Indenture Act.
SATISFACTION AND DISCHARGE
The indenture will be discharged and will cease to be of further effect as
to all notes issued thereunder, when:
(1) either:
(a) all notes that have been authenticated, except lost, stolen or
destroyed notes that have been replaced or paid and notes for
whose payment money has been deposited in trust and thereafter
repaid to Metaldyne, have been delivered to the trustee for
cancellation; or
(b) all notes that have not been delivered to the trustee for
cancellation have become due and payable by reason of the mailing
of a notice of redemption or otherwise or will become due and
payable within one year and Metaldyne or any Guarantor has
irrevocably deposited or caused to be deposited with the trustee
as trust funds in trust solely for the benefit of the Holders,
cash in U.S. dollars, non-callable Government Securities, or a
combination of cash in U.S. dollars and non-callable Government
Securities, in amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and
discharge the entire indebtedness on the notes not delivered to
the trustee for cancellation for principal, premium and
Liquidated Damages, if any, and accrued interest to the date of
maturity or redemption;
(2) no Default or Event of Default has occurred and is continuing on the
date of the deposit or will occur as a result of the deposit and the
deposit will not result in a breach or violation of, or constitute a
default under, any other instrument to which Metaldyne or any Guarantor
is a party or by which Metaldyne or any Guarantor is bound;
(3) Metaldyne or any Guarantor has paid or caused to be paid all sums
payable by it under the indenture; and
(4) Metaldyne has delivered irrevocable instructions to the trustee under
the indenture to apply the deposited money toward the payment of the
notes at maturity or a redemption date, as the case may be.
In addition, Metaldyne must deliver an officers' certificate and an
opinion of counsel to the trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
CONCERNING THE TRUSTEE
If the trustee becomes a creditor of Metaldyne or any Guarantor, the
indenture limits its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security
or otherwise. The trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue or resign.
The Holders of a majority in principal amount of the then outstanding
notes will have the right to direct the time, method and place of conducting
any proceeding for exercising any remedy available to the trustee, subject to
certain exceptions. The indenture provides that in case an Event of Default
occurs and is continuing, the trustee will be required, in the exercise of its
power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request of any
Holder of notes, unless such Holder has offered to the trustee security and
indemnity satisfactory to it against any loss, liability or expense.
50
ADDITIONAL INFORMATION
Anyone who receives this prospectus may obtain a copy of the indenture and
registration rights agreement without charge by writing to Metaldyne
Corporation, 47659 Halyard Drive, Plymouth, Michigan 48170, Attention:
Corporate Secretary.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the indenture. Reference
is made to the indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person
is merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 50 basis points.
"Advisory Agreement" means that certain monitoring agreement between
Metaldyne and Heartland, as in effect on the date of the indenture, or any
amendment or supplement thereto that, taken in its entirety, is no less
favorable to Metaldyne than such agreement as in effect on the date of the
indenture.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings. No Person (other than Metaldyne or any Subsidiary of Metaldyne) in
whom a Receivables Subsidiary makes an Investment in connection with a
Qualified Receivables Transaction will be deemed to be an Affiliate of
Metaldyne or any of its Subsidiaries solely by reason of such Investment.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than dispositions in the ordinary course of business;
provided that the sale, conveyance or other disposition of all or
substantially all of the assets of Metaldyne and the Restricted
Subsidiaries taken as a whole will be governed by the provisions of the
indenture described above under the caption "--Repurchase at the Option
of Holders--Change of Control" and/or the provisions described above
under the caption "--Certain Covenants--Merger, Consolidation or Sale
of Assets" and not by the provisions of the Asset Sale covenant; and
(2) the issuance of Equity Interests in any of the Restricted Subsidiaries
or the sale of Equity Interests in any of the Restricted Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed
to be an Asset Sale:
(1) any single transaction or series of related transactions that involves
assets having a fair market value of less than $2.5 million;
(2) a transfer of assets between or among Metaldyne and the Restricted
Subsidiaries;
51
(3) an issuance of Equity Interests by a Subsidiary to Metaldyne or to
another Restricted Subsidiary or any issuance of directors' qualifying
shares;
(4) the sale or other disposition of cash or Cash Equivalents;
(5) sales of accounts receivable and related assets of the type specified
in the definition of "Qualified Receivables Transaction" to a
Receivables Subsidiary or sales of accounts receivable by any Foreign
Subsidiary in the ordinary course for financing purposes;
(6) the surrender or waiver of contract rights or the settlement, release
or surrender of contract, tort or other claims of any kind;
(7) the grant in the ordinary course of business of licenses of patents,
trademarks and similar intellectual property;
(8) a disposition of obsolete or worn out equipment or equipment that is no
longer useful in the conduct of the business of Metaldyne and the
Restricted Subsidiaries and that is disposed of in each case in the
ordinary course of business;
(9) a Restricted Payment or Permitted Investment that is permitted by the
covenant described above under the caption "--Certain
Covenants--Restricted Payments"; and
(10) any issuance or sale of Equity Interests of any Unrestricted
Subsidiary.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the board of directors of the general
partner of the partnership; and
(3) with respect to any other Person, the board or committee of such Person
serving a similar function.
"Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership
or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) cash;
52
(2) securities issued or directly and fully guaranteed or insured by the
United States, British or European Union government or any agency or
instrumentality of the United States, British or European Union
government (provided that the full faith and credit of the United
States, British or European Union is pledged in support of those
securities) having maturities of not more than six months from the date
of acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities of
six months or less from the date of acquisition, bankers' acceptances
with maturities not exceeding six months and overnight bank deposits,
in each case, with any lender party to the Credit Agreement or with any
domestic, British or European Union commercial bank having capital and
surplus in excess of $150.0 million;
(4) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper with a maturity of 365 days or less from the date of
acquisition issued by a corporation organized under the laws of any
state of the United States of America or the District of Columbia or
any foreign country recognized by the United States of America whose
debt rating, at the time as of which such investment is made, is at
least "A-1" by Standard & Poor's Corporation or at least "P-1" by
Moody's Investors Service, Inc. or rated at least an equivalent rating
category of another nationally recognized securities rating agency;
(6) any security, maturing not more than 365 days after the date of
acquisition, backed by standby or direct pay letters of credit issued
by a bank meeting the qualifications described in clause (3) above;
(7) any security, maturing not more than 365 days after the date of
acquisition, issued or fully guaranteed by any state, commonwealth, or
territory of the United States of America, or by any political
subdivision thereof, and rated at least "A" by Standard & Poor's
Corporation or at least "A" by Moody's Investors Service, Inc. or rated
at least an equivalent rating category of another nationally recognized
securities rating agency; and
(8) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (7) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the properties or
assets of Metaldyne and the Restricted Subsidiaries, taken as a whole,
to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act) other than a Principal;
(2) the adoption of a plan relating to the liquidation or dissolution of
Metaldyne;
(3) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
defined above), other than the Principals or a Permitted Group, becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of Metaldyne, measured by voting power rather than number
of shares; or
(4) the first day on which a majority of the members of the Board of
Directors of Metaldyne are not Continuing Directors.
"Comparable Treasury Issue" means the United States Treasury Security
selected by the Reference Treasury Dealer as having a maturity comparable to
the remaining term of the notes that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining
term of the notes.
53
"Comparable Treasury Price" means with respect to any redemption date:
(1) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount)
on the third Business Day preceding such redemption date, as set forth
in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities"; or
(2) if such release (or any successor release) is not published or does not
contain such prices on such Business Day, (A) the average of the
Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest of such Reference Treasury Dealer
Quotations or (B) if the trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such
Quotations.
"Consolidated Assets" of any Person as of any date of determination means
the total assets of such Person as reflected on the most recently prepared
balance sheet of such Person, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss realized by
such Person or any of its Restricted Subsidiaries in connection with an
Asset Sale, to the extent such losses were deducted in computing such
Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income; plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers' acceptance financings, and
net of the effect of all payments made or received pursuant to Hedging
Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; plus
(4) the loss on Qualified Receivables Transactions; plus
(5) dividends on preferred stock or accretion of discount on preferred
stock to the extent reducing Consolidated Net Income; plus
(6) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period) and other non-cash items (excluding
any such non-cash expense to the extent that it represents an accrual
of or reserve for cash expenses in any future period or amortization of
a prepaid cash expense that was paid in a prior period) of such Person
and its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash items were deducted in
computing such Consolidated Net Income; minus
(7) non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business;
plus
(8) non-cash gains or losses resulting from fluctuations in currency
exchange rates will be excluded; plus
(9) the disposition of any securities or the extinguishment of any
Indebtedness will be excluded;
in each case, on a consolidated basis and determined in accordance with GAAP;
provided, however, that the provision for taxes based on the income or profits
of, the consolidated depreciation and
54
amortization expense and such items of expense or income attributable to, a
Restricted Subsidiary shall be added to or subtracted from Consolidated Net
Income to compute Fixed Charge Coverage Ratio only to the extent (and in the
same proportion) that the net income of such Restricted Subsidiary was included
in calculating Consolidated Net Income.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting will be
included only to the extent of the amount of dividends or distributions
paid in cash to the specified Person or a Restricted Subsidiary of the
Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to the
extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not
at the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders; provided,
that if the Net Income of a Foreign Subsidiary for any period would be
excluded from the Consolidated Net Income of the Company for such
period under this clause (2) solely due to the effect of a restriction
on the payment of dividends or similar distributions by such Foreign
Subsidiary under the terms of Indebtedness of such Foreign Subsidiary
incurred in accordance with the terms of the indenture (including if
such Indebtedness incurrence is being tested), such Net Income shall
not be excluded from such Consolidated Net Income if (x) the ratio of
Consolidated Cash Flow of such Foreign Subsidiary to the Fixed Charges
of such Foreign Subsidiary, determined at the time of the incurrence of
such Indebtedness, was at least 2.0 to 1.0, and (y) the Consolidated
Cash Flow of such Foreign Subsidiary for the period under determination
exceeds the Fixed Charges of such Foreign Subsidiary for such period;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition will
be excluded; and
(4) the cumulative effect of a change in accounting principles will be
excluded.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of Metaldyne who:
(1) was a member of such Board of Directors on the date of the indenture;
or
(2) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members
of such Board at the time of such nomination or election or designated
as a Director under the Shareholders Agreement.
"Credit Agreement" means that certain Credit Agreement, dated as of
November 28, 2000, by and among Metaldyne, certain of its subsidiaries and The
Chase Manhattan Bank, as administrative agent and collateral agent, Credit
Suisse First Boston Corporation, as syndication agent, Comerica Bank, as
documentation agent, National City Bank, as documentation agent, Bank One,
N.A., as documentation agent, and the other lenders party thereto, as amended,
modified, renewed, refunded, replaced or refinanced from time to time.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.
55
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Credit Facilities and all
Hedging Obligations with respect thereto; and
(2) after payment in full of all Obligations under the Credit Facilities,
any other Senior Debt permitted under the indenture the principal
amount of which is $25.0 million or more and that has been designated
by Metaldyne as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the
date on which the notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require Metaldyne to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
will not constitute Disqualified Stock if the terms of such Capital Stock
provide that Metaldyne may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with
the covenant described above under the caption "--Certain Covenants--Restricted
Payments." Disqualified Stock shall not include the existing restricted stock
obligations of Metaldyne and the Existing Preferred Stock.
"Domestic Subsidiary" means any Restricted Subsidiary of Metaldyne that
was formed under the laws of the United States or any state of the United
States or the District of Columbia or that guarantees or otherwise provides
direct credit support for any Indebtedness of Metaldyne.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means a primary sale of Capital Stock of Metaldyne or,
to the extent the net cash proceeds thereof are paid to Metaldyne as a capital
contribution, Capital Stock for cash to a Person or Persons other than a
Subsidiary of Metaldyne.
"Existing Indebtedness" means the Indebtedness of Metaldyne and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date of the indenture, until such amounts are repaid.
"Existing Preferred Stock" means the issued and outstanding series of
preferred stock of Metaldyne as of the date of the indenture.
"Fixed Charge Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the specified
Person or any of its Restricted Subsidiaries incurs, repays, repurchases,
redeems, defeases or otherwise retires any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated and on or prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, repayment, repurchase, redemption,
defeasance or other retirement of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
56
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions of a business or operations that have been made by the
specified Person or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to
such reference period and on or prior to the Calculation Date will be
given pro forma effect as if they had occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such
reference period will be calculated on a pro forma basis determined in
good faith by a responsible financial or accounting officer of
Metaldyne (and such calculations may include such pro forma adjustments
for non-recurring items that Metaldyne considers reasonable in order to
reflect the ongoing impact of any such transaction on Metaldyne's
results of operations), but without giving effect to clause (3) of the
proviso set forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges
will not be obligations of the specified Person or any of its
Restricted Subsidiaries following the Calculation Date.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations, to the
extent deducted in computing Consolidated Net Income; provided,
however, that with respect to any Restricted Subsidiary that is not a
Wholly-Owned Subsidiary, if the Consolidated Cash Flow of such
Restricted Subsidiary for such period is greater than or equal to such
consolidated interest expense of such Restricted Subsidiary for such
period, then such Person shall only include the consolidated interest
expense of such Restricted Subsidiary to the extent of the equity
ownership of such Person in such Restricted Subsidiary (calculated in
accordance with Section 13(d) of the Exchange Act); plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period, to the extent
deducted in computing Consolidated Net Income; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon;
plus
(4) the loss on Qualified Receivables Transactions; plus
(5) all dividends, whether paid in cash, assets or securities on any series
of preferred stock of Metaldyne or any Restricted Subsidiary, other
than dividends on Equity Interests payable solely in Equity Interests
of Metaldyne or a Guarantor (other than Disqualified Stock) or to
Metaldyne or a Restricted Subsidiary;
excluding, to the extent included in such consolidated interest expense, any of
the foregoing items of any Person acquired by Metaldyne or a Subsidiary of
Metaldyne in a pooling-of-interests transaction for any period prior to the
date of such transaction.
57
"Foreign Subsidiary" means a Restricted Subsidiary that is organized under
the laws of any country other than the United States and substantially all the
assets of which are located outside the United States.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) the Domestic Subsidiaries of Metaldyne as of the date of the indenture,
other than the Receivables Subsidiary; and
(2) any other subsidiary that executes a Subsidiary Guarantee in accordance
with the provisions of the indenture;
and their respective successors and assigns.
"Heartland" means Heartland Industrial Partners, L.P., a Delaware limited
partnership, and its successors.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates, commodity prices or currency
risks incurred in the ordinary course of business.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of
any property, except any such balance that constitutes an accrued
expense or trade payable or non-competition or trade name licensing
arrangements on customary terms entered into in connection with an
acquisition; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of
the specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
58
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness
issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any interest on
the Indebtedness that is more than 30 days past due, in the case of any
other Indebtedness.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If Metaldyne
or any Subsidiary of Metaldyne sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of Metaldyne such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of Metaldyne, Metaldyne will be deemed to have made an Investment on
the date of any such sale or disposition equal to the fair market value of
Metaldyne's Investments in such Subsidiary that were not sold or disposed of in
an amount determined as provided in the final paragraph of the covenant
described above under the caption "--Certain Covenants--Restricted Payments."
The acquisition by Metaldyne or any Subsidiary of Metaldyne of a Person that
holds an Investment in a third Person will be deemed to be an Investment by
Metaldyne or such Subsidiary in such third Person in an amount equal to the
fair market value of the Investments held by the acquired Person in such third
Person in an amount determined as provided in the final paragraph of the
covenant described above under the caption "--Certain Covenants-- Restricted
Payments."
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and, except in connection with any Qualified Receivables
Transaction, any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on such
gain or loss, realized in connection with: (a) any Asset Sale; or (b)
the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related provision for
taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by Metaldyne or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, taxes paid or payable as a result of
the Asset Sale, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, and amounts required to
be applied to the repayment of Indebtedness, other than Indebtedness under a
Credit Facility, secured by a Lien on the asset or assets that were the subject
of such Asset Sale and any reserve for adjustment in respect of the sale price
of such asset or assets established in accordance with GAAP.
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"Non-Guarantor Subsidiaries" means MTSPC, Inc. and any other Receivables
Subsidiary, each non-Domestic Subsidiary and Domestic Subsidiary not required
to provide Guarantees under the Credit Agreement.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither Metaldyne nor any of the Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is
directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(2) no default with respect to which (including any rights that the holders
of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or
both any holder of any other Indebtedness (other than the notes) of
Metaldyne or any of the Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of Metaldyne or any of the
Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Acquired Investment" means any Investment by any Person (the
"Subject Person") in another Person made prior to the time:
(1) the Subject Person became a Restricted Subsidiary,
(2) the Subject Person merged into or consolidated with a Restricted
Subsidiary, or
(3) another Restricted Subsidiary merged into or was consolidated with the
Subject Person (in a transaction in which the Subject Person became a
Restricted Subsidiary),
provided, that such Investment was not made in anticipation of any such
transaction and was outstanding prior to such transaction; provided, further,
that the book value of such Investments (excluding all Permitted Investments
(other than those referred to in clause (14) of the definition thereof)) does
not exceed 5% of the Consolidated Assets of the Subject Person immediately
prior to the Subject Person becoming a Restricted Subsidiary.
"Permitted Group" means any group of investors that is deemed to be a
"person" (as that term is used in Section 13(d)(3) of the Exchange Act) at any
time prior to an underwritten initial public offering of common stock of
Metaldyne, by virtue of the Stockholders Agreement, as the same may be amended,
modified or supplemented from time to time, provided that no single Person
(other than the Principals) Beneficially Owns (together with its Affiliates)
more of the Voting Stock of Metaldyne that is Beneficially Owned by such group
of investors than is then collectively Beneficially Owned by the Principals in
the aggregate.
"Permitted Investments" means:
(1) any Investment in Metaldyne or in a Restricted Subsidiary of Metaldyne;
(2) any Investment in Cash Equivalents;
(3) any Investment by Metaldyne or any Subsidiary of Metaldyne in a Person,
if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of Metaldyne; or
(b) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is
liquidated into, Metaldyne or a Restricted Subsidiary of
Metaldyne;
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(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"--Repurchase at the Option of Holders--Asset Sales";
(5) any acquisition of assets to the extent in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of Metaldyne;
(6) any Investments received in compromise of obligations of such persons
incurred in the ordinary course of trade creditors or customers that
were incurred in the ordinary course of business, including pursuant to
any plan of reorganization or similar arrangement upon the bankruptcy
or insolvency of any trade creditor or customer;
(7) Hedging Obligations;
(8) lease, utility and other similar deposits in the ordinary course of
business;
(9) Investments existing on the date of the indenture;
(10) loans or advances to employees for purposes of purchasing Capital Stock
of Metaldyne in an aggregate amount outstanding at any one time not to
exceed $7.5 million and other loans and advances to employees of
Metaldyne and its Subsidiaries in the ordinary course of business and
on terms consistent with practices in effect prior to the date of the
indenture, including travel, moving and other like advances;
(11) loans or advances to vendors or contractors of Metaldyne in the
ordinary course of business and consistent with past practices;
(12) Investments in Unrestricted Subsidiaries, partnerships or joint
ventures involving Metaldyne or its Restricted Subsidiaries, if the
amount of such Investment (after taking into account the amount of all
other Investments made pursuant to this clause (12), less any return of
capital realized or any repayment of principal received on such
Permitted Investments, or any release or other cancellation of any
Guarantee constituting such Permitted Investment, which has not at such
time been reinvested in Permitted Investments made pursuant to this
clause (12) does not exceed 2.5% of Metaldyne's Consolidated Assets);
(13) the acquisition by a Receivables Subsidiary in connection with a
Qualified Receivables Transaction of Equity Interests of a trust or
other Person established by such Receivables Subsidiary to effect such
Qualified Receivables Transaction; and any other Investment by
Metaldyne or a Subsidiary of Metaldyne in a Receivables Subsidiary or
any Investment by a Receivables Subsidiary in any other Person in
connection with a Qualified Receivables Transaction; and
(14) Permitted Acquired Investments.
"Permitted Junior Securities" means:
(1) Equity Interests in Metaldyne or any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt and any debt
securities issued in exchange for Senior Debt to substantially the same
extent as, or to a greater extent than, the notes and the Subsidiary
Guarantees are subordinated to Senior Debt under the indenture.
"Permitted Liens" means:
(1) Liens to secure Senior Debt of Metaldyne and any Guarantor or to secure
Indebtedness of a Restricted Subsidiary that is not a Guarantor,
including, without limitation, Indebtedness and other Obligations under
Credit Facilities;
(2) Liens in favor of Metaldyne or the Guarantors;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with Metaldyne or any Subsidiary of
Metaldyne; provided that such Liens were
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in existence prior to the contemplation of such merger or consolidation
and do not extend to any assets other than those of the Person merged
into or consolidated with Metaldyne or the Subsidiary;
(4) Liens on property existing at the time of acquisition of the property
by Metaldyne or any Subsidiary of Metaldyne, provided that such Liens
were in existence prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (4) of the second paragraph of the covenant
entitled "--Certain Covenants--Incurrence of Indebtedness and Issuance
of Preferred Stock" covering only the assets acquired with such
Indebtedness;
(7) Liens existing on the date of the indenture;
(8) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as is required
in conformity with GAAP has been made therefor;
(9) Liens on assets of Metaldyne or a Receivables Subsidiary incurred in
connection with a Qualified Receivables Transaction;
(10) Liens replacing any of the items set forth in clauses (1), (3), (4) and
(7) above, provided, that (A) the principal amount of the Indebtedness
secured by such Liens shall not be increased (except with respect to
premiums or other payments paid in connection with a concurrent
Refinancing of such Indebtedness and the expenses incurred in
connection therewith), (B) the principal amount of the Indebtedness
secured by such Liens, determined as of the date of incurrence, has a
Weighted Average Life to Maturity at least equal to the remaining
Weighted Average Life to Maturity of the Indebtedness being Refinanced
or repaid, (C) the maturity of the Indebtedness secured by such Liens
is not earlier than that of the Indebtedness to be Refinanced, (D) such
Liens have the same or a lower ranking and priority as the Liens being
replaced, and (E) such Liens shall be limited to the property or assets
encumbered by the Lien so replaced;
(11) Liens encumbering cash proceeds (or securities purchased therewith)
from Indebtedness permitted to be incurred pursuant to the "Incurrence
of Indebtedness and Issuance of Preferred Stock" covenant which are set
aside at the time of such incurrence in order to secure an escrow
arrangement pursuant to which such cash proceeds (or securities
purchased therewith) are contemplated to ultimately be released to
Metaldyne or a Restricted Subsidiary or returned to the lenders of such
Indebtedness, provided, that such Liens are automatically released
concurrently with the release of such cash proceeds (or securities
purchased therewith) from such escrow arrangement;
(12) Liens (including extensions, renewals and replacements thereof) upon
property or assets created for the purpose of securing Indebtedness
incurred to finance or Refinance the cost (including the cost of
construction) of such property or assets, provided, that (A) the
principal amount of the Indebtedness secured by such Lien does not
exceed 100% of the cost of such property or assets, (B) such Lien does
not extend to or cover any property or assets other than the property
or assets being financed or Refinanced by such Indebtedness and any
improvements thereon, and (C) the incurrence of such Indebtedness is
permitted by the "Incurrence of Indebtedness and Issuance of Preferred
Stock" covenant;
(13) Liens securing Indebtedness of Foreign Subsidiaries permitted to be
incurred under the "Incurrence of Indebtedness and Issuance of
Preferred Stock" covenant;
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(14) Liens (other than Liens securing subordinated Indebtedness) which, when
the Indebtedness relating to those Liens is added to all other then
outstanding Indebtedness of Metaldyne and its Restricted Subsidiaries
secured by Liens and not listed in clauses (1) through (13) above or
(15) through (26) below, does not exceed 5% of the Consolidated Assets
of Metaldyne;
(15) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security or similar obligations, including any Lien
securing letters of credit issued in the ordinary course of business
consistent with past practice in connection therewith, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(16) judgment Liens not accompanied by an Event of Default of the type
described in clause (6) under "Events of Default" arising from such
judgment;
(17) easements, rights-of-way, zoning restrictions, minor defects or
irregularities in title and other similar charges or encumbrances in
respect of real property not interfering in any material respect with
the ordinary conduct of business of Metaldyne or any of its Restricted
Subsidiaries;
(18) any interest or title of a lessor under any lease, whether or not
characterized as capital or operating; provided, that such Liens do not
extend to any property or assets which is not leased property subject
to such lease;
(19) Liens upon specific items of inventory or other goods and proceeds of
any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(20) Liens securing reimbursement obligations with respect to letters of
credit which encumber documents and other property relating to such
letters of credit and products and proceeds thereof;
(21) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of
Metaldyne or any of the Restricted Subsidiaries, including rights of
offset and set-off;
(22) leases or subleases granted to others not interfering in any material
respect with the business of Metaldyne or the Restricted Subsidiaries;
(23) Liens securing Hedging Obligations;
(24) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of custom duties in connection with
importation of goods;
(25) Liens encumbering initial deposits and margin deposits, and other Liens
incurred in the ordinary course of business and that are within the
general parameters customary in the industry; and
(26) Liens arising from filing Uniform Commercial Code financing statements
regarding leases.
"Permitted Refinancing Indebtedness" means any Indebtedness of Metaldyne
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of Metaldyne or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest on the Indebtedness and the amount of all expenses and
premiums incurred in connection therewith);
63
(2) such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the notes,
such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and is subordinated in right of
payment to, the notes on terms at least as favorable to the Holders of
notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such Indebtedness is incurred either by Metaldyne, a Guarantor or by
the Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Principals" means Heartland and any of its Affiliates.
"Qualified Receivables Transaction" means any transaction or series of
transactions entered into by Metaldyne or any of its Subsidiaries pursuant to
which Metaldyne or any of its Subsidiaries sells, conveys or otherwise
transfers to (i) a Receivables Subsidiary (in the case of a transfer by
Metaldyne or any of its Subsidiaries) and (ii) any other Person (in the case of
a transfer by a Receivables Subsidiary), or grants a security interest in, any
accounts receivable (whether now existing or arising in the future) of
Metaldyne or any of its Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such accounts receivable, all
contracts and all guarantees or other obligations in respect of such accounts
receivable, proceeds of such accounts receivable and other assets which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"Recapitalization Agreement" means that certain recapitalization agreement
dated August 1, 2000 between MascoTech, Inc. (now known as Metaldyne) and
Riverside Company LLC, as amended.
"Receivables" means receivables, chattel paper, instruments, documents or
intangibles evidencing or relating to the right to payment of money.
"Receivables" shall include the indebtedness and payment obligations of any
Person to Metaldyne or a Subsidiary arising from a sale of merchandise or
services by Metaldyne or such Subsidiary in the ordinary course of its
business, including any right to payment for goods sold or for services
rendered, and including the right to payment of any interest, finance charges,
returned check or late charges and other obligations of such Person with
respect thereto. Receivables shall also include (a) all of Metaldyne's or such
Subsidiary's interest in the merchandise (including returned merchandise), if
any, relating to the sale which gave rise to such Receivable, (b) all other
security interests or Liens and property subject thereto from time to time
purporting to secure payment of such Receivable, whether pursuant to the
contract related to such Receivable or otherwise, together with all financing
statements signed by an Obligor describing any collateral securing such
Receivable, and (c) all guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time to time supporting
or securing payment of such Receivable whether pursuant to the contract related
to such Receivable or otherwise.
"Receivables Subsidiary" means a Subsidiary of Metaldyne which engages in
no activities other than in connection with the financing of accounts
receivable and which is designated by the Board of Directors of Metaldyne (as
provided below) as a Receivables Subsidiary (a) no portion of the Indebtedness
or any other Obligations (contingent or otherwise) of which (i) is guaranteed
by Metaldyne or any Subsidiary of Metaldyne (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness)
pursuant to representations, warranties, covenants and indemnities entered into
in the ordinary course of business in connection with a Qualified Receivables
Transaction), (ii) is recourse to or obligates Metaldyne or any Subsidiary of
Metaldyne in any way
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other than pursuant to representations, warranties, covenants and indemnities
entered into in the ordinary course of business in connection with a Qualified
Receivables Transaction or (iii) subjects any property or asset of Metaldyne or
any Subsidiary of Metaldyne (other than accounts receivable and related assets
as provided in the definition of "Qualified Receivables Transaction"), directly
or indirectly, contingently or otherwise, to the satisfaction thereof, other
than pursuant to representations, warranties, covenants, limited repurchase
obligations and indemnities entered into in the ordinary course of business in
connection with a Qualified Receivables Transaction, (b) with which neither
Metaldyne nor any Subsidiary of Metaldyne has any material contract, agreement,
arrangement or understanding other than on terms no less favorable to Metaldyne
or such Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of Metaldyne, other than fees payable in the ordinary
course of business in connection with servicing accounts receivable and (c)
with which neither Metaldyne nor any Subsidiary of Metaldyne has any obligation
to maintain or preserve such Subsidiary's financial condition or cause such
Subsidiary to achieve certain levels of operating results. Any such designation
by the Board of Directors of Metaldyne will be evidenced to the Trustee by
filing with the Trustee a certified copy of the resolution of the Board of
Directors (which resolution shall be conclusive) of Metaldyne giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"Reference Treasury Dealer" means Credit Suisse First Boston Corporation
and its successors; provided, however, that if Credit Suisse First Boston
Corporation shall cease to be a primary U.S. government securities dealer in
New York City (a "Primary Treasury Dealer"), Metaldyne shall substitute
therefor another primary U.S. government securities dealer to be the Primary
Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to any
redemption date, the average as determined by the trustee, of the bid and asked
prices of the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the trustee by the Reference
Treasury Dealer at 9:00 a.m. on the third Business Day preceding such
redemption date.
"Refinance" means, with respect to any Indebtedness, a renewal, extension,
refinancing, replacement, amendment, restatement or refunding of such
Indebtedness, and shall include any successive Refinancing of any of the
foregoing.
"Remaining Scheduled Payments" means, with respect to each note to be
redeemed, the sum of (a) the redemption price of such note on June 15, 2007 and
(b) the remaining scheduled payments of interest thereon that would be due on
or prior to June 15, 2007 (but after the related redemption date but for such
redemption); provided, however, that, if such redemption date is not an
interest payment date on the notes, the amount of the next succeeding scheduled
interest payment on the notes to be redeemed will be reduced by the amount of
interest accrued on those notes to such redemption date.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Senior Debt" means:
(1) all Indebtedness of Metaldyne or any Guarantor outstanding under Credit
Facilities and all Hedging Obligations with respect thereto;
(2) any other Indebtedness of Metaldyne or any Guarantor permitted to be
incurred under the terms of the indenture, unless the instrument under
which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the notes or any
Subsidiary Guarantee; and
(3) all Obligations with respect to the items listed in the preceding
clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt
will not include:
(1) any liability for federal, state, local or other taxes owed or owing by
Metaldyne;
65
(2) any intercompany Indebtedness of Metaldyne or any of its Subsidiaries
to Metaldyne or any of its Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in violation of the
indenture; provided that such Indebtedness shall be deemed not to have
been incurred in violation of the indenture for purposes of this clause
(4) if such Indebtedness consists of Indebtedness under any Credit
Facility and holders of such Indebtedness or their agent or
representative (i) had no actual knowledge at the time of the
incurrence that the incurrence of such Indebtedness violated the
indenture and (ii) shall have received an officers' certificate to the
effect that the incurrence of such Indebtedness does not violate the
provisions of the indenture.
"Shareholders Agreement" means that certain shareholders agreement by and
among Heartland, Credit Suisse First Boston Equity Partners, L.P., Masco
Corporation, Richard Manoogian, their various affiliates and certain other
stockholders of the Company relating to their ownership in the Company.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Stock Purchase Agreement" means that certain stock purchase agreement,
dated May 17, 2002, by and among Metaldyne, TriMas Corporation and Heartland
under which Heartland and other investors will acquire a majority of the common
stock of Metaldyne.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees of the corporation,
association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"TriMas" means TriMas Corporation, a Delaware corporation.
"TriMas Corporate Services Agreement" means that certain corporate
services agreement by and between Metaldyne and TriMas Corporation pursuant to
which Metaldyne and its subsidiaries will provide management information
systems, legal, tax, accounting, human resources and other support services to
TriMas.
"TriMas Shareholders Agreement" means that certain shareholders agreement
by and among TriMas, Heartland, Metaldyne Company LLC and other investors party
thereto relating to their ownership in TriMas.
"Unrestricted Subsidiary" means any Subsidiary of Metaldyne that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to
a Board Resolution, but only to the extent that such Subsidiary is not party to
any agreement, contract, arrangement or understanding with Metaldyne or any
Restricted Subsidiary of Metaldyne unless the terms of all such agreements,
contracts, arrangements or understandings are no less favorable to Metaldyne or
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of Metaldyne.
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Any designation of a Subsidiary of Metaldyne as an Unrestricted Subsidiary
will be evidenced to the trustee by filing with the trustee a certified copy of
the Board Resolution giving effect to such designation and an officers'
certificate certifying that such designation complied with the preceding
conditions and was permitted by the covenant described above under the caption
"--Certain Covenants--Restricted Payments." If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for
purposes of the indenture and any Indebtedness of such Subsidiary will be
deemed to be incurred by a Restricted Subsidiary of Metaldyne as of such date
and, if such Indebtedness is not permitted to be incurred as of such date under
the covenant described under the caption "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock," Metaldyne will be in default of
such covenant. The Board of Directors of Metaldyne may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of Metaldyne of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (1) such Indebtedness
is permitted under the covenant described under the caption "--Certain
Covenants-- Incurrence of Indebtedness and Issuance of Preferred Stock,"
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the
making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly-Owned Subsidiary" of any specified Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests
of which (other than directors' qualifying shares) will at the time be owned by
such Person or by one or more Wholly-Owned Subsidiaries of such Person and one
or more Wholly-Owned Subsidiaries of such Person.
67
PLAN OF DISTRIBUTION
This prospectus is to be used by CSFB in connection with offers and sales
of the exchange notes in market-making transactions effected from time to time.
CSFB may act as principal or agent in such transactions, including as agent for
the counterparty when acting as principal or as agent for both counterparties,
and may receive compensation in the form of discounts and commissions,
including from both counterparties, when it acts as agent for both. Such sales
will be made at prevailing market prices at the time of sale, at prices related
thereto or at negotiated prices.
As of the date of this prospectus, private equity funds affiliated with
CSFB owned approximately 24% of the issuer's common stock and one of its funds
has the right to appoint one of the issuer's directors. In addition, affiliates
of CSFB are investors in Heartland Industrial Partners, L.P. CSFB has informed
us that it does not intend to confirm sales of the exchange notes to any
accounts over which it exercises discretionary authority without the prior
specific written approval of such transactions by the customer.
We have been advised by CSFB that, subject to applicable laws and
regulations, CSFB currently intends to make a market in the notes following the
completion of the exchange offer. However, CSFB is not obligated to do so, and
any such market-making may be interrupted or discontinued at any time without
notice. In addition, such market-making activity will be subject to limits
imposed by the Securities Act and the Exchange Act. There can be no assurance
that an active trading market will develop or be sustained. See "Risk
Factors--Risks Related to the Exchange Notes--You cannot be sure an active
trading market for the exchange notes will develop."
CSFB and its affiliates have provided us with financial advisory,
investment banking and commercial banking services in the past, for which
customary compensation has been received, and may do so in the future. CSFB
acted as an initial purchaser in the original notes offering and its affiliate
is an agent and lender under our credit facility.
We and CSFB have entered into a registration rights agreement with respect
to the use by CSFB of this prospectus. Pursuant to such agreement, we agreed to
indemnify CSFB against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the validity of the notes have been
passed upon for us by Cahill Gordon & Reindel LLP, New York, New York.
INDEPENDENT ACCOUNTANTS; CHANGE IN ACCOUNTANTS
The consolidated financial statements of Metaldyne Corporation (formerly
known as MascoTech, Inc.) for the year ended December 29, 2002, December 31,
2001, the period from November 28, 2000 to December 31, 2000 and the period
from January 1, 2000 to November 27, 2000 incorporated by reference in this
prospectus have been audited by PricewaterhouseCoopers, independent
accountants, as stated in their report appearing therein.
On June 20, 2003, the Audit Committee of the Board of Directors of
Metaldyne Corporation approved the appointment of KPMG LLP as Metaldyne's
independent accountants, and the dismissal of PricewaterhouseCoopers LLP, which
had previously served in this capacity.
During the years ended December 31, 2002 and 2001 and through June 20,
2003, KPMG LLP has not been engaged as an independent accountant to audit
either the financial statements of Metaldyne or any of its subsidiaries, nor
has it been consulted regarding the application of accounting principles to any
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on Metaldyne's financial statements, or any
matter that was the subject of a disagreement or reportable event. KPMG is the
auditor of the New Castle joint venture with DCX.
During the years ended December 31, 2002 and 2001 and through June 20,
2003, there were no disagreements with PricewaterhouseCoopers LLP on any matter
of accounting principles or practices,
68
financial statement disclosure, or auditing scope or procedure which, if not
resolved to the satisfaction of PricewaterhouseCoopers LLP, would have caused
it to make reference to the subject matter of such disagreement in their
reports on the financial statements for such years. The reports of
PricewaterhouseCoopers LLP on the financial statements for the years ended
December 31, 2002 and 2001, did not include any adverse opinion or disclaimer
of opinion, or any qualification or modification as to uncertainty, audit scope
or accounting principles. During the years ended December 31, 2002 and 2001 and
through June 20, 2003, PricewaterhouseCoopers LLP reported no material
weaknesses in Metaldyne's internal control systems and no other reportable
events as defined in Regulation S-K Item 304(a)(1)(v).
69
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON
ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS AN OFFER TO
SELL ONLY THE NOTES OFFERED HEREBY, BUT ONLY UNDER CIRCUMSTANCES AND IN
JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.
-----------------------
TABLE OF CONTENTS
PAGE
----
Where You Can Find More Information .................................... ii
Incorporation of Document by Reference ................................. ii
Forward-looking Statements ............................................. iii
Prospectus Summary ..................................................... 1
Risk Factors ........................................................... 3
Use of Proceeds ........................................................ 13
Unaudited Pro Forma Financial
Information ......................................................... 14
Description of Other Indebtedness and
Our Preferred Stock ................................................. 19
Description of Notes ................................................... 28
Plan of Distribution ................................................... 68
Legal Matters .......................................................... 68
Independent Accountants; Change in
Accountants ......................................................... 68
METALDYNE CORPORATION
11% SENIOR SUBORDINATED
NOTES DUE 2012
-----------------------
[METALDYNE LOGO]
-----------------------
PROSPECTUS
-----------------------
, 2003
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware empowers us to
indemnify, subject to the standards therein prescribed, any person in
connection with any action, suit or proceeding brought or threatened by reason
of the fact that such person is or was a director, officer, employee or agent
of Metaldyne (formerly known as MascoTech, Inc.) or is or was serving as such
with respect to another corporation or other entity at our request. Article 12
of our certificate of incorporation provides that each person who was or is
made a party to (or is threatened to be made a party to) or is otherwise
involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such person is or was one of our directors or officers shall be
indemnified and held harmless by us to the fullest extent authorized by the
General Corporation Law of Delaware against all expenses, liability and loss
(including without limitation attorneys' fees, judgments, fines and amounts
paid in settlement) reasonably incurred by such person in connection therewith.
The rights conferred by Article 12 are contractual rights and include the right
to be paid by us the expenses incurred in defending such action, suit or
proceeding in advance of the final disposition thereof.
Article 11 of our certificate of incorporation provides that our directors
will not be personally liable to us or our stockholders for monetary damages
resulting from breaches of their fiduciary duty as directors except (a) for any
breach of the duty of loyalty to us or our stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the General Corporation Law
of Delaware, which makes directors liable for unlawful dividends or unlawful
stock repurchases or redemptions, or (d) for transactions from which a director
derives improper personal benefit.
Our directors and officers are covered by insurance policies indemnifying
them against certain civil liabilities, including liabilities under the federal
securities laws (other than liability under Section 16(b) of the 1934 Act),
which might be incurred by them in such capacities.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
See Exhibit Index immediately preceding the Exhibits.
ITEM 22. UNDERTAKINGS
The undersigned Registrants hereby undertake that:
(a) For purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(b) To deliver or cause to be delivered with the prospectus, to each person
to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus
and furnished pursuant to and meeting the requirements of Rule 14a-3 or
Rule 14c-3 under the Securities Exchange Act of 1934; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to deliver, or cause
to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information.
II-1
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(d) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of
this Form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other equally
prompt means. This undertaking includes information contained in
documents filed subsequent to the effective date of this registration
statement through the date of responding to the request.
(e) To supply by means of a post-effective amendment all information
concerning a transaction and the company being acquired involved
therein that was not the subject of and included in this registration
statement when it became effective.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE CORPORATION
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette Chief Executive Officer and August 25, 2003
----------------------------- Chairman of the Board of Directors
Timothy D. Leuliette (Principal Executive Officer)
/s/ Jeffrey M. Stafeil Executive Vice President and Chief August 25, 2003
----------------------------- Financial Officer (Principal Financial
Jeffrey M. Stafeil Officer/Principal Accounting Officer)
/s/ Gary M. Banks* Director August 25, 2003
-----------------------------
Gary M. Banks
/s/ Charles E. Becker* Director August 25, 2003
-----------------------------
Charles E. Becker
/s/ Marshall Cohen* Director August 25, 2003
-----------------------------
Marshall Cohen
/s/ Cynthia L. Hess* Director August 25, 2003
-----------------------------
Cynthia L. Hess
/s/ J. Michael Losh* Director August 25, 2003
-----------------------------
J. Michael Losh
/s/ Richard A. Manoogian* Director August 25, 2003
-----------------------------
Richard A. Manoogian
/s/ Thomas T. Stallkamp* Director August 25, 2003
-----------------------------
Thomas T. Stallkamp
/s/ David A. Stockman* Director August 25, 2003
-----------------------------
David A. Stockman
S-1
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Daniel P. Tredwell Director August 25, 2003
--------------------------------
Daniel P. Tredwell
/s/ Samuel Valenti III* Director August 25, 2003
--------------------------------
Samuel Valenti III
*By: /s/ Daniel P. Tredwell August 25, 2003
------------------------------
Attorney-in-fact
S-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
ER ACQUISITION CORP.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
GMTI HOLDING COMPANY
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
------------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Executive Vice President and August 25, 2003
------------------------------ Director
Jeffrey M. Stafeil
/s/ Daniel P. Tredwell* Director August 25, 2003
------------------------------
Daniel P. Tredwell
*By: /s/ Timothy D. Leuliette August 25, 2003
------------------------------
Timothy D. Leuliette,
as Attorney-in-fact
S-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
HALYARD AVIATION SERVICES, INC.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
-----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
-----------------------------
Jeffrey M. Stafeil
S-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Post-Effective Amendment No. 1 to the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
MASG DISPOSITION, INC.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
MASX ENERGY SERVICES GROUP, INC.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE ACCURA TOOL & MOLD, INC.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE COMPANY LLC
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Manager August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Manager August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE DUPAGE DIE CASTING CORPORATION
By: /s/ Jeffrey M. Stafeil
--------------------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE EUROPE, INC.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE LESTER PRECISION DIE CASTING
By: /s/ Jeffrey M. Stafeil
----------------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President August 25, 2003
----------------------------
Jeffrey M. Stafeil
/s/ Daniel P. Tredwell* Director August 25, 2003
----------------------------
Daniel P. Tredwell
*By: /s/ Timothy D. Leuliette
----------------------------
Timothy D. Leuliette,
as Attorney-in-fact
S-12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE LIGHT METALS COMPANY
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President August 25, 2003
----------------------------
Jeffrey M. Stafeil
/s/ Daniel P. Tredwell* Director August 25, 2003
----------------------------
Daniel P. Tredwell
*By: /s/ Timothy D. Leuliette
----------------------------
Timothy D. Leuliette,
as Attorney-in-fact
S-13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE MACHINING AND ASSEMBLY COMPANY
By: /s/ Jeffrey M. Stafeil
----------------------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President August 25, 2003
----------------------------
Jeffrey M. Stafeil
/s/ Daniel P. Tredwell* Director August 25, 2003
----------------------------
Daniel P. Tredwell
*By: /s/ Timothy D. Leuliette
---------------------------
Timothy D. Leuliette,
as Attorney-in-fact
S-14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE PRECISION FORMING-FORT WAYNE, INC.
By: /s/ Jeffrey M. Stafeil
----------------------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE SERVICES, INC.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE SINTERED COMPONENTS OF INDIANA, INC.
By: /s/ Jeffrey M. Stafeil
-------------------------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE SINTERED COMPONENTS, INC.
By: /s/ Jeffrey M. Stafeil
-------------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
/s/ Daniel P. Tredwell* Director August 25, 2003
----------------------------
Daniel P. Tredwell
*By: /s/ Timothy D. Leuliette
----------------------------
Timothy D. Leuliette,
as Attorney-in-fact
S-18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE TUBULAR PRODUCTS
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
/s/ Joseph Nowak* President August 25, 2003
----------------------------
Joseph Nowak
*By: /s/ Timothy D. Leuliette
---------------------------
Timothy D. Leuliette,
as Attorney-in-fact
S-19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
METALDYNE U.S. HOLDING CO.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
/s/ Karen A. Radtke* Director August 25, 2003
----------------------------
Karen A. Radtke
*By: /s/ Timothy D. Leuliette
---------------------------
Timothy D. Leuliette,
as Attorney-in-fact
S-20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
PRECISION HEADED PRODUCTS, INC.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
PUNCHCRAFT COMPANY
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
STAHL INTERNATIONAL, INC.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
/s/ George P. Thanopoulos* President August 25, 2003
----------------------------
George P. Thanopoulos
*By: /s/ Timothy D. Leuliette
---------------------------
Timothy D. Leuliette,
as Attorney-in-fact
S-23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
W.C. McCURDY & CO.
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette President and Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
S-24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
WINDFALL PRODUCTS
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
/s/ George P. Thanopoulos* President August 25, 2003
----------------------------
George Thanopoulos
*By: /s/ Timothy D. Leuliette
---------------------------
Timothy D. Leuliette,
as Attorney-in-fact
S-25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 25th day of
August, 2003.
WINDFALL SPECIALTY POWDERS
By: /s/ Jeffrey M. Stafeil
-----------------------------------
Name: Jeffrey M. Stafeil
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Timothy D. Leuliette Director August 25, 2003
----------------------------
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil Vice President and Director August 25, 2003
----------------------------
Jeffrey M. Stafeil
/s/ George P. Thanopoulos* President August 25, 2003
----------------------------
George Thanopoulos
*By: /s/ Timothy D. Leuliette
---------------------------
Timothy D. Leuliette,
as Attorney-in-fact
S-26
EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
2.1 Recapitalization Agreement dated as of August 1, 2000 between
MascoTech, Inc. (now known as Metaldyne Corporation) and Riverside
Company LLC, as amended.(7) Amendment No. 1 to the Recapitalization
Agreement, dated October 23, 2000(7), and Amendment No. 2 to the
Recapitalization Agreement, dated November 28, 2000.(7)
2.2 Stock Purchase Agreement dated as of May 17, 2002 among Heartland
Industrial Partners, L.P., TriMas Corporation and Metaldyne
Corporation.(11)
4.1 Indenture relating to the notes, dated as of June 20, 2002, by and
among Metaldyne Corporation, each of the Guarantors named therein
and The Bank of New York, as trustee.(13)
4.2 Form of note (included in Exhibit 4.5)(13)
4.3 Registration Rights Agreement relating to the notes dated as of
June 20, 2002 by and among Metaldyne Corporation and the parties
named therein.(13)
5.1 Opinion of Cahill Gordon & Reindel regarding the legality of the
securities being registered.(13)
10.1 Credit Agreement dated as of November 28, 2000 among MascoTech,
Inc. (now known as Metaldyne Corporation), Metalync Company LLC
(now known as Metaldyne Company LLC), the subsidiary term borrowers
party thereto, the foreign subsidiary borrowers party thereto, the
lenders party thereto and Chase Manhattan Bank, as administrative
agent.(7)
10.2 Assumption and Indemnification Agreement dated as of May 1, 1984
between Masco Corporation and Masco Industries, Inc. (now know as
Metaldyne Corporation).(8)
10.3 Receivables Purchase Agreement dated as of November 28, 2000 among
MascoTech, Inc. (now know as Metaldyne Corporation), the Sellers
named therein and MTSPC, Inc. as Purchaser.(7)
10.4 Receivables Transfer Agreement dated as of November 28, 2000 by and
among MTSPC, Inc., MascoTech, Inc. (now know as Metaldyne
Corporation), The Chase Manhattan Bank and the the parties named
therein.(7)
10.5 Amendment No. 1 to Receivables Transfer Agreement dated as of
December 15, 2000 to the Receivables Transfer Agreement.(8)
10.6 Master Lease Agreement dated as of December 21, 2000 between
General Electric Capital Corporation and Simpson Industries,
Inc.(8)
10.7 MascoTech, Inc. (now known as Metaldyne Corporation) 1991 Long Term
Stock Incentive Plan (Restated July 15, 1998).(3)
10.8 MascoTech, Inc. (now known as Metaldyne Corporation) Supplemental
Executive Retirement and Disability Plan.(4)
10.9 Description of the MascoTech, Inc. (now known as Metaldyne
Corporation) program for Estate, Financial Planning and Tax
Assistance.(2)
10.10 Corporate Services Agreement and Annex dated as of January 1, 1987
between Masco Industries, Inc. (now known as Metaldyne Corporation)
and Masco Corporation, Amendment No. 1 dated as of October 31, 1996
and related letter agreements dated January 22, 1998 and June 17,
1998.(4) Amendment No. 2 to the Corporate Opportunities Agreement
dated November 28, 2000.(7)
EXHIBIT
NUMBER DESCRIPTION
------ -----------
10.11 Corporate Opportunities Agreement dated as of May 1, 1984 between
Masco Corporation and Masco Industries, Inc. (now know as
Metaldyne Corporation) and Amendment No. 1 dated as of October
31, 1996(1). Amendment No. 2 to the Corporate Services Agreement
dated November 28, 2000.(7)
10.12 Metaldyne Corporation 2001 Long Term Incentive and Share Award
Plan. (10)
10.13 Amendment 2 to the Receivables Transfer Agreement.(9)
10.14 Amendment 3 to the Receivables Transfer Agreement.(9)
10.15 Amendment 4 to the Receivables Transfer Agreement.(9)
10.16 Amendment 1 to the November 28, 2000 Credit Agreement.(9)
10.17 Amendment 2 to the November 28, 2000 Credit Agreement.(9)
10.18 Amended and restated November 28, 2000 Credit Agreement.(12)
10.19 Employment Agreement between Metaldyne Corporation and William M.
Lowe, Jr. dated as of June 18, 2001.(13)
10.20 Form of Indenture relating to the 10% Senior Subordinated Notes
due 201 , dated as of , by and among Metaldyne
Corporation, the Guarantors named therein and [ ], as
Trustee.(15)
10.21 Joint Venture Formation Agreement by and among NC-M Chassis
Systems, LLC, DaimlerChrysler Corporation and Metaldyne
Corporation, dated as of December 8, 2002.(14)
10.22 Form of Amended and Restated Operating Agreement of NC-M Chassis
Systems, LLC, dated as of , 200 .(14)
10.23 Metaldyne Corporation Terms of Preferred Stock Investor Rights
Agreement.(14)
10.24 Form of Investor Rights Agreement.(14)
10.25 Joint Venture Formation Agreement dated as of December 8, 2002 by
and among NC-M Chassis Systems, LLC, DaimlerChrysler Corporation
and Metaldyne Corporation (with certain confidential information
omitted, which omitted information is the subject of a revised
confidential treatment request and has been filed separately with
the Securities and Exchange Commission)(16)
10.26 Amendment No. 1 to the Amended and Restated Credit Agreement.
10.27 Asset Purchase Agreement by and among TriMas Corporation,
Metaldyne Corporation and Metaldyne Company, LLC, dated May 9,
2003.
10.28 Fittings' Facility Sublease by and between Metaldyne Company LLC
and Fittings Products Co., LLC, dated May 9, 2003.
12.1 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.(13)
18.1 Letter re: change in accounting principle.(9)
23.1 Consent of PricewaterhouseCooper LLP.
23.2 Consent of Cahill Gordon & Reindel (included in Exhibit 5.1).
24.1 Power of Attorney (included in the signature pages to this
Registration Statement).
EXHIBIT
NUMBER DESCRIPTION
- ----------- ------------------------------------------------------------
25.1 Statement regarding eligibility of Trustee on Form T-1.(13)
99.1 Form of Letter of Transmittal.(13)
99.2 Form of Notice of Guaranteed Delivery.(13)
- ----------
(1) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s
(now known as Metaldyne Corporation) Current Report on Form 8-K filed
November 14, 1996.
(2) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s
(now known as Metaldyne Corporation) Annual Report on Form 10-K for the
year ended December 31, 1997.
(3) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s
(now known as Metaldyne Corporation) Annual Report on Form 10-K for the
year ended December 31, 1998.
(4) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s
(now known as Metaldyne Corporation) Annual Report on Form 10-K for the
year ended December 31, 1999.
(5) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s
(now known as Metaldyne Corporation) Current Report on Form 8-K filed
August 7, 2000
(6) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s
(now known as Metaldyne Corporation) Quarterly Report on Form 10-Q for
the period ended September 30, 2000.
(7) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s
(now known as Metaldyne Corporation) Registration Statement on Form S-1
filed December 27, 2000.
(8) Incorporated by reference to the Exhibits filed with Metaldyne
Corporation's Annual Report on Form 10-K for the year ended December 31,
2000.
(9) Incorporated by reference to the Exhibits filed with Metaldyne
Corporation's Annual Report on Form 10-K for the year ended December 31,
2002.
(10) Incorporated by reference to the Exhibits filed with Metaldyne
Corporation's Registration Statement on Form S-8 filed April 15, 2002.
(11) Incorporated by reference to the Exhibits filed with Metaldyne
Corporation's Current Report on Form 8-K filed June 11, 2002.
(12) Incorporated by reference to Exhibits filed with Metaldyne Corporation's
Quarterly Report on Form 10-Q filed August 14, 2002.
(13) Previously filed.
(14) Incorporated by reference to the Exhibits filed with Metaldyne
Corporation's Current Report on Form 8-K filed December 11, 2002.
(15) Incorporated by reference to the Exhibits filed with Metaldyne
Corporation's Current Report on Form 8-K filed January 6, 2003.
(16) Incorporated by reference to the Exhibits filed with Metaldyne
Corporation's Current Report on Form 8-K/A filed March 31, 2003.