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As filed with the Securities and Exchange
Commission on January 31, 2011
Registration
No. 333-171426
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
Amendment No. 1
to
Form S-4
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
ALLEGHENY TECHNOLOGIES
INCORPORATED
(Exact Name of Registrant as
Specified in its Charter)
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Delaware
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3317
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25-1792394
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(State or Other Jurisdiction
of
Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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1000 Six PPG Place
Pittsburgh, Pennsylvania
15222
(412) 394-2800
(Address, including zip code,
and telephone number, including area code, of registrants
principal executive offices)
Jon D. Walton
Executive Vice President, Human
Resources,
Chief Legal and Compliance
Officer and Corporate Secretary
Allegheny Technologies
Incorporated
1000 Six PPG Place
Pittsburgh, Pennsylvania
15222
(412) 394-2800
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copies to:
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Ronald D. West
K&L Gates LLP
K&L Gates Center
210 Sixth Avenue
Pittsburgh, Pennsylvania 15222
(412) 355-6500
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Wayne E. Larsen
Vice President Law/Finance &
Secretary
Ladish Co., Inc.
5481 S. Packard Avenue
Cudahy, Wisconsin 53110
(414) 747-2611
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Mark T. Plichta
Foley & Lardner LLP
777 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 271-2400
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Approximate date of commencement of proposed sale to the
public: As soon as practicable after the
effective date of this registration statement and the effective
time of the merger referred to herein.
If the securities being registered on this form are to be
offered in connection with the formation of a holding company
and there is compliance with General Instruction G, check
the following
box. o
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. o
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. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2 of the
Exchange Act. (Check one):
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Large accelerated
filer þ
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller reporting
company o
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(Do not check if a smaller reporting company)
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If applicable, place an x in the box to designate the
appropriate rule provision relied upon in conducting this
transaction:
Exchange Act
Rule 13e-4(1)
(Cross-Border Issuer Tender
Offer) o
Exchange Act
Rule 14d-1(d)
(Cross Border Third-Party Tender
Offer) o
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 of 1933, as amended, or until the
Registration Statement shall become effective on such date as
the Commission, acting pursuant to said Section 8(a), may
determine.
The
information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the U.S. Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This proxy statement/prospectus does not constitute
an offer to sell these securities, nor a solicitation of any
offer to buy nor shall there be any sale of these securities in
any jurisdiction in which such offer, solicitation or sale is
not permitted.
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PRELIMINARY SUBJECT
TO COMPLETION DATED JANUARY 31, 2011
PROPOSED MERGER YOUR VOTE IS VERY IMPORTANT
Dear Shareholder:
You are invited to attend a Special Meeting of Shareholders of
Ladish Co., Inc., referred to as Ladish, which will be held
at :00 a.m., local time,
on ,
2011
at .
At the special meeting, you will be asked to adopt the Agreement
and Plan of Merger, referred to as the merger agreement, entered
into by Ladish, Allegheny Technologies Incorporated, referred to
as ATI, LPAD Co., a wholly owned subsidiary of ATI, referred to
as LPAD, and PADL LLC, a wholly owned subsidiary of ATI,
referred to as PADL, on November 16, 2010. Under the merger
agreement, ATI will acquire Ladish through a merger of LPAD with
and into Ladish. Following the merger, Ladish will cease to be a
separate public company and will be a wholly owned subsidiary of
ATI. The merger agreement is attached as Annex A to this
proxy statement/prospectus.
At the effective time and as a result of the merger, each
outstanding share of Ladish common stock will be converted into
the right to receive the sum of 0.4556 of a share of ATI common
stock and $24.00 in cash. Assuming that 15,707,552 shares
of Ladish common stock, which is the number of shares of Ladish
common stock outstanding
on ,
2011, the record date for the special meeting, are outstanding
immediately prior to the merger, ATI would issue an aggregate of
approximately 7,384,160 shares of ATI common stock in the
merger.
Common stock of Ladish is listed on the Nasdaq Global Select
Market under the symbol LDSH. Common stock of ATI is
listed on the New York Stock Exchange under the symbol
ATI. Upon completion of the merger, we expect that
Ladish common stock will be delisted.
This proxy statement/prospectus describes the merger agreement,
the merger and the transactions contemplated by the merger
agreement and provides information concerning the special
meeting of Ladish shareholders. Before we can complete the
merger, Ladishs shareholders must adopt the merger
agreement. We urge you to take the time to read this proxy
statement/prospectus, and the documents incorporated into this
proxy statement/prospectus by reference, carefully. Please pay
particular attention to the section titled Risk
Factors beginning on page 13. You also can obtain
information about Ladish and ATI from documents that we or ATI
have filed or will file with the Securities and Exchange
Commission prior to the special meeting.
After careful consideration, the Ladish board of directors
has approved and adopted the merger agreement and the
transactions contemplated thereby, including the merger, and
determined that the merger agreement and the merger are fair to
and otherwise in the best interests of Ladish shareholders and
recommends that you vote FOR the adoption of the
merger agreement and FOR the proposal to approve the
adjournment or postponement of the special meeting for the
solicitation of additional proxies in the event there are
insufficient votes present, in person or represented by proxy,
at the time of the special meeting to adopt the merger
agreement. Certain of Ladishs directors and executive
officers have interests in the merger that are different from,
or in addition to, their interests solely as shareholders of
Ladish.
Your vote is very important. Whether or not you plan to
attend the special meeting, we urge you to submit your proxy as
promptly as possible. Please refer to the instructions on the
enclosed proxy card.
Gary J. Vroman
President and Chief Executive Officer
Ladish Co., Inc.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE
DISCLOSURES IN THIS PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This proxy statement/prospectus is
dated ,
2011 and is first being mailed or otherwise delivered to Ladish
shareholders on or
about ,
2011.
SOURCES
OF ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates by reference
important business and financial information about ATI and
Ladish from documents that each company has filed with the
Securities and Exchange Commission, referred to as the SEC, but
which have not been included in or delivered with this proxy
statement/prospectus. For a list of documents incorporated by
reference into this proxy statement/prospectus and how you may
obtain them, see Where You Can Find More Information
beginning on page 92.
This information is available to you without charge upon your
written or oral request. You can also obtain the documents
incorporated by reference into this proxy statement/prospectus
by accessing the SECs website maintained at
http://www.sec.gov.
In addition, Ladishs filings with the SEC are available to
the public on Ladishs website, www.ladishco.com, and
ATIs filings with the SEC are available to the public on
ATIs website, www.atimetals.com. Information contained on
Ladishs website, ATIs website or the website of any
other person is not incorporated by reference into this proxy
statement/prospectus, and you should not consider information
contained on those websites as part of this proxy
statement/prospectus.
ATI and Ladish will provide you with copies of their respective
documents incorporated by reference into this proxy
statement/prospectus, without charge, if you so request from:
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Allegheny Technologies Incorporated
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Ladish Co., Inc.
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1000 Six PPG Place
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5481 South Packard Avenue
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Pittsburgh, Pennsylvania
15222-5479
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Cudahy, Wisconsin 53110
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Attention: Investor Relations
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Attention: Investor Relations
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Telephone Number:
(412) 394-2800
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Telephone Number: (414) 747-2611
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If you wish to obtain any of these documents from ATI or
Ladish, you should make your request no later
than ,
2011, which is five business days before Ladish shareholders
will vote to adopt the merger agreement at the special meeting,
to ensure timely delivery before the special meeting.
Information contained in this proxy statement/prospectus
regarding ATI has been provided by, and is the responsibility
of, ATI and information contained in this proxy
statement/prospectus regarding Ladish has been provided by, and
is the responsibility of, Ladish. No one has been authorized to
give you any other information, and neither ATI nor Ladish take
responsibility for any information that others may give you.
This proxy
statement/prospectus
is
dated ,
2011. You should not assume that the information contained in,
or incorporated by reference into, this proxy
statement/prospectus is accurate as of any date other than that
date. Neither Ladishs mailing of this proxy
statement/prospectus to Ladish shareholders nor the issuance by
ATI of common stock in connection with the merger will create
any implication to the contrary.
This proxy statement/prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, any securities, or
the solicitation of a proxy, in any jurisdiction to or from any
person to whom it is unlawful to make any such offer or
solicitation in such jurisdiction.
NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS
TO THE SHAREHOLDERS OF LADISH CO., INC.:
NOTICE IS HEREBY GIVEN that a special meeting of holders of
common stock of Ladish Co., Inc., referred to as Ladish, will be
held at :00 a.m., local time,
on ,
2011
at ,
for the following purposes:
1. To consider and vote upon the proposal to adopt
the Agreement and Plan of Merger, dated as of November 16,
2010, by and among Allegheny Technologies Incorporated, referred
to as ATI, LPAD Co., a wholly owned subsidiary of ATI, referred
to as LPAD, PADL LLC, a wholly owned subsidiary of ATI, and
Ladish, as amended from time to time, pursuant to which ATI will
acquire Ladish through a merger of LPAD with and into Ladish; and
2. To consider and vote upon a proposal to approve
the adjournment of the meeting, if necessary, to solicit
additional proxies if there are insufficient votes to adopt the
merger agreement at the time of the special meeting.
Only shareholders of record at the close of business
on ,
2011 are entitled to notice of, and to vote at, the special
meeting or postponements or adjournments thereof (unless the
board of directors fixes a new record date for any such
postponed or adjourned meeting).
Your vote is important. Whether or not you plan to attend the
special meeting, please vote now by proxy in order to ensure the
presence of a quorum. You may vote by telephone or via the
Internet, as described on the enclosed proxy card, or by
marking, signing and dating the enclosed proxy card on the
reverse side and returning it promptly in the accompanying
postage-paid envelope. A proxy may be revoked at any time prior
to its exercise at the meeting, and your return of the enclosed
proxy will not affect your right to vote your shares if you
attend the meeting in person. Please review this proxy
statement/prospectus for more complete information regarding the
merger and the special meeting. If you do not return or submit
your proxy or vote your shares by telephone or over the Internet
or vote in person at the special meeting, the effect will be the
same as a vote against the proposal to adopt the merger
agreement.
The board of directors of Ladish has approved and adopted the
merger agreement and the transactions contemplated thereby,
including the merger, and determined that the merger agreement
and the merger are fair to and otherwise in the best interests
of Ladish shareholders and recommends that you vote
FOR the adoption of the merger agreement and
FOR the proposal to approve the adjournment or
postponement of the special meeting for the solicitation of
additional proxies in the event there are insufficient votes
present, in person or represented by proxy, at the time of the
special meeting to adopt the merger agreement. Certain of
Ladishs directors and executive officers have interests in
the merger that are different from, or are in addition to, their
interests solely as shareholders of Ladish.
Whether or not you plan to attend the special meeting in
person, please vote your proxy by telephone or through the
Internet, as described on the enclosed proxy card, or complete,
date, sign and return the enclosed proxy card in the enclosed
envelope. The enclosed envelope requires no postage if mailed in
the United States. If you attend the special meeting, you may
vote in person if you wish, even if you have previously returned
your proxy card or voted by telephone or through the
Internet.
By Order of the Board of Directors,
Wayne E. Larsen
Vice President Law/Finance and Secretary
,
2011
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING
The following questions and answers are intended to address
briefly some questions that you, as a shareholder of Ladish, may
have regarding the merger, the other transactions contemplated
by the merger agreement and the special meeting. These questions
and answers may not address all questions that may be important
to you as a shareholder. To better understand these matters, and
for a description of the legal terms governing the merger and
other transactions contemplated by the merger agreement, you
should carefully read this entire proxy statement/prospectus,
including the Annexes, as well as the documents that have been
incorporated by reference into this proxy statement/prospectus.
See Where You Can Find More Information for the
location of information incorporated by reference into this
proxy statement/prospectus. All references in this proxy
statement/prospectus to ATI refer to Allegheny Technologies
Incorporated, a Delaware corporation; all references in this
proxy statement/prospectus to Ladish refer to Ladish Co., Inc.,
a Wisconsin corporation; all references in this proxy
statement/prospectus to LPAD refer to LPAD Co., a Wisconsin
corporation and a wholly owned subsidiary of ATI; all references
in this proxy statement/prospectus to PADL refer to PADL LLC, a
Wisconsin limited liability company and a wholly owned
subsidiary of ATI; all references in this proxy
statement/prospectus to the merger agreement refer to the
Agreement and Plan of Merger, dated as of November 16,
2010, by and among ATI, LPAD, PADL and Ladish, a copy of which
is included as Annex A to this proxy statement/prospectus;
and all references in this proxy statement/prospectus to the
merger refer to the merger of LPAD with and into Ladish, with
LPAD continuing as the surviving entity and a wholly owned
subsidiary of ATI.
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Why am I receiving this document? |
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Under the terms of the merger agreement, LPAD will be merged
with and into Ladish, with Ladish continuing as the surviving
entity and a wholly owned subsidiary of ATI. Following the
merger, Ladish will no longer be a separate publicly held
corporation. Immediately following the merger, Ladish will be
merged with and into PADL, with PADL continuing as the surviving
entity and a wholly owned subsidiary of ATI. Following the
merger and other transactions contemplated by the merger, ATI
expects to continue to operate the Ladish businesses under the
name Ladish Co. See The Merger and
The Merger Agreement. A copy of the merger agreement
is included in this proxy statement/prospectus as Annex A. |
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This document is both a proxy statement of Ladish and a
prospectus of ATI. It is a proxy statement of Ladish because the
Ladish board of directors is soliciting proxies from its
shareholders to vote on the adoption of the merger agreement at
the special meeting of its shareholders described in this proxy
statement/prospectus, referred to as the special meeting, as
well as the other matters set forth in the notice of the special
meeting and described in this proxy statement/prospectus, and
your proxy will be used at the special meeting or at any
adjournment or postponement of the special meeting. It is a
prospectus because ATI will issue ATI common stock to the
holders of Ladish common stock as a portion of the consideration
to be paid in the merger. This document contains important
information about the merger agreement, the merger and the
special meeting. You should read this document carefully. |
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Your vote is very important. ATI and Ladish encourage you to
vote as soon as possible. The enclosed proxy card allows you to
vote your Ladish shares without attending the special meeting.
If you are a registered shareholder, you may vote by proxy
either by telephone, via the Internet or by completing, signing,
dating and returning the enclosed proxy card by mail. For more
specific information on how to vote, please see the questions
and answers below and The Special Meeting. |
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On what am I being asked to vote? |
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At the special meeting, Ladish common shareholders will be asked
(1) to adopt the merger agreement and (2) to approve
the adjournment of the special meeting for the solicitation of
additional proxies in the event there are insufficient votes
present, in person or represented by proxy, at the time of the
special meeting to adopt the merger agreement. See The
Special Meeting Purposes of the Special
Meeting. |
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When do the parties expect to complete the merger? |
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ATI and Ladish are working to complete the merger as quickly as
possible and anticipate that it will be completed during the
spring of 2011. However, the merger is subject to approval by
Ladishs shareholders, |
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various regulatory approvals and other conditions, and it is
possible that factors outside the control of both companies
could result in the merger being completed at a later time, or
not at all. Unless ATI and Ladish otherwise agree, the merger
will be completed no later than the second business day after
all of the closing conditions in the merger agreement are
satisfied or waived in accordance with their terms. |
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How does Ladishs board of directors recommend that I
vote on the proposals? |
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The board of directors of Ladish recommends that you vote
FOR the adoption of the merger agreement and
FOR the adjournment, if necessary, of the
special meeting to solicit additional proxies in favor of
adoption of the merger agreement. See The
Merger Ladishs Reasons for the Merger;
Recommendation of the Ladish Board of Directors. |
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Certain of Ladishs directors and executive officers have
interests in the merger that are different from, or in addition
to, their interests solely as shareholders of Ladish. See
The Merger Interests of Certain Persons in the
Merger. |
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Are there risks that I should consider in deciding whether to
vote for the merger? |
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Yes. In evaluating the merger, you should consider carefully the
factors discussed in the section titled Risk Factors. |
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What will happen if the merger is not completed? |
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If the merger agreement is not adopted by Ladish shareholders or
if the merger is not completed for any other reason, you will
not receive any payment for your shares of Ladish common stock
in connection with the merger. Instead, Ladish will remain an
independent public company, and its common stock will continue
to be listed and traded on the Nasdaq Global Select Market. If
the merger agreement is terminated under specified
circumstances, Ladish will be required to pay ATI a termination
fee of $31.0 million as described under The Merger
Agreement Termination Fee. |
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Are there any other matters to be addressed at the special
meeting? |
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Ladish is not aware of any other business to be acted upon at
the special meeting. If, however, other matters are properly
brought before the special meeting, your proxies will have
discretion to vote or act on those matters according to their
best judgment, and they intend to vote the shares as the Ladish
board of directors may recommend. |
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When is this proxy statement/prospectus being mailed? |
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This proxy statement/prospectus and the related proxy card are
first being sent to Ladish shareholders on or
about ,
2011. |
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When and where will the special meeting be held? |
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The special meeting will take place
on ,
2011, at the time and location specified on the cover page of
this proxy statement/prospectus. See The Special
Meeting Date, Time and Place of the Special
Meeting. |
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Who is entitled to vote at the special meeting? |
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All holders of Ladish common stock who held shares at the close
of business
on ,
2011, which is the record date for the special meeting, are
entitled to receive notice of and to vote at the special
meeting. If the special meeting is postponed or adjourned the
Ladish board of directors may fix a new record date for any such
postponed or adjourned meeting under certain circumstances. If a
bank, broker or other nominee holds your shares, then you are
not the holder of record and you must ask your bank, broker or
other nominee how you can vote in person at the special meeting.
See The Special Meeting Record Date;
Outstanding Shares; Shares Entitled to Vote. |
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Who may attend the special meeting? |
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Ladish shareholders (or their authorized representatives) and
Ladishs invited guests may attend the special meeting.
Shareholders may call Ladishs secretary at
(414) 747-2611
to obtain directions to the location of the special meeting. |
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How do I vote my shares at the special meeting? |
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If you are entitled to vote at the special meeting and hold your
shares in your own name, you can submit a proxy or vote in
person by completing a ballot at the special meeting. However,
Ladish encourages you to submit a proxy before the special
meeting even if you plan to attend the special meeting. A proxy
is a legal designation of another person to vote your shares of
Ladish common stock on your behalf. If you hold shares in your
name, you may submit a proxy for your shares by: |
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calling the toll-free number specified on the
enclosed proxy card and following the instructions when prompted;
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accessing the Internet web site specified on the
enclosed proxy card and following the instructions provided to
you; or
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filling out, signing and dating the enclosed proxy
card and mailing it in the prepaid envelope included with these
proxy materials.
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If you submit a proxy by telephone or the Internet web site,
please do not return your proxy card by mail. |
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See the response to the next question for how to vote shares
held through a broker or other nominee. |
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If my shares are held in street name by my
broker, will my broker automatically vote my shares for me? |
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No. If your shares are held in an account at a broker or
through another nominee, you must instruct the broker or other
nominee on how to vote your shares by following the instructions
that the broker or other nominee provides to you with these
materials. Most brokers offer the ability for shareholders to
submit voting instructions by mail by completing a voting
instruction card, by telephone or via the Internet. |
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If you do not provide voting instructions to your broker, your
shares will not be voted on any proposal on which your broker
does not have discretionary authority to vote. This is called a
broker non-vote. In these cases, the broker can register your
shares as being present at the special meeting for purposes of
determining a quorum but will not be able to vote on those
matters for which specific authorization is required. Brokers
will not have discretionary authority to vote on the proposal to
adopt the merger agreement. A broker non-vote will have the same
effect as a vote AGAINST the adoption of the
merger agreement. |
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If you hold shares through a broker or other nominee and wish to
vote your shares in person at the special meeting, you must
obtain a proxy from your broker or other nominee and present it
to the inspector of election with your ballot when you vote at
the special meeting. |
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See The Special Meeting How to Vote. |
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Why is my vote important? |
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If you do not return your proxy card, submit your proxy by
telephone or through the Internet or vote in person at the
special meeting, it will be more difficult for Ladish to obtain
the necessary quorum to hold its special meeting and the
shareholder approval necessary to consummate the merger. In
addition, your failure to return your proxy card, submit your
proxy by telephone or through the Internet or vote in person at
the special meeting will have the same effect as a vote against
the adoption of the merger agreement. |
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What constitutes a quorum for the meeting? |
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A majority of the shares of Ladish common stock issued and
outstanding and entitled to vote at the special meeting must be
present or represented by proxy to constitute a quorum for
action on the matters to be voted upon at the special meeting.
All shares of Ladish common stock represented at the special
meeting, including abstentions and broker non-votes, will be
treated as present for purposes of determining the presence or
absence of a quorum for all matters voted on at the special
meeting. See The Special Meeting Quorum; Vote
Required; Abstentions and Broker Non-Votes. |
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How many votes are required for the approval of each item? |
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Adoption of the merger agreement requires the affirmative vote
of a majority of all the votes entitled to be cast by holders of
outstanding shares of Ladish common stock. Any adjournment of
the special meeting by vote of Ladish shareholders for the
purpose of soliciting additional proxies or for any other
purpose must be approved by the affirmative vote of a majority
of the shares of Ladish common stock represented at the special
meeting. See The Special Meeting Quorum; Vote
Required; Abstentions and Broker Non-Votes. |
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As
of ,
2011, the record date for the special meeting,
15,707,552 shares of Ladish common stock were outstanding.
As a result, 7,853,777 shares must be voted in favor of the
adoption of the merger agreement in order for the merger
agreement to be adopted by the Ladish shareholders. As
of ,
2011 Ladishs directors and executive officers had the
right to vote
approximately shares of
Ladish common stock at the special meeting, representing
approximately % of Ladish common
stock outstanding and entitled to vote at the general meeting.
See The Special Meeting Stock Ownership and
Voting by Ladishs Directors and Executive Officers. |
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How will abstentions and broker non-votes be counted? |
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Abstentions and broker non-votes are counted as present and
entitled to vote for purposes of determining a quorum. Because
the affirmative vote of a majority of all the votes entitled to
be cast by the holders of Ladish common stock is needed for us
to proceed with the merger, abstentions and broker non-votes
will have the same effect as a vote against the adoption of the
merger agreement. See The Special Meeting
Quorum; Vote Required; Abstentions and Broker Non-Votes. |
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What happens if I sell my shares after the record date but
before the special meeting? |
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A: |
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The record date for the special meeting is earlier than the date
of the special meeting and the date that the merger is expected
to be completed. If you transfer your Ladish shares after the
record date but before the date of the special meeting, you will
retain your right to vote at the special meeting (provided that
such shares remain outstanding on the date of the special
meeting), but you will not have the right to receive the merger
consideration. In order to receive the merger consideration, you
must hold your Ladish shares through completion of the merger. |
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Q: |
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What do I do if I receive more than one proxy
statement/prospectus or set of voting instructions? |
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A: |
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You may receive more than one set of voting materials for the
special meeting, including multiple copies of this proxy
statement/prospectus and/or voting instruction forms. This can
occur if you hold shares in more than one brokerage account, if
you hold shares directly as a record holder and also in
street name, or otherwise through a nominee, and in
certain other circumstances. If you receive more than one set of
voting materials, each should be voted and/or returned
separately in order to ensure that all of your shares are voted.
See Where You Can Find More Information
Householding Information. |
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Q: |
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Can I change my vote? |
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Yes. If you are a holder of record as of the record date, you
can change your proxy instructions after you have submitted your
proxy card, or submitted your proxy by telephone or through the
Internet, by: |
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submitting a new proxy with a later date, by using
the telephone or Internet voting procedures described above, or
by completing, signing, dating and returning a new proxy card by
mail to Ladish;
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attending the special meeting and voting in person;
or
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sending written notice of revocation to
Ladishs secretary.
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For more detailed procedures on revoking a proxy, see the
description under The Special Meeting Revoking
Your Proxy. |
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If you own your shares through a broker, you must follow the
directions you receive from your broker in order to change or
revoke your vote. If you have shares credited to you through the
Ladish Savings and Deferral Investment Plan as of the record
date, you must provide new directions to the trustee for that
plan at any time prior to the reply date in order to change or
revoke your vote. You are not limited as to the number of
changes of voting directions you may give the trustee prior to
the reply date. |
v
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Q: |
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Should I send in my Ladish stock certificates now? |
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A: |
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No. You should not send in your stock certificates at this
time. Ladish shareholders who hold their shares in certificated
form will need to exchange their Ladish stock certificates for
the cash and ATI common stock provided for in the merger
agreement upon completion of the transaction. ATI will send
Ladish shareholders instructions for exchanging Ladish stock
certificates at that time. Ladish shareholders who hold their
shares in book-entry form will also receive instructions for
exchanging their shares after the transaction is completed. |
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Am I entitled to dissenters rights? |
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A: |
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No. Under Wisconsin law, the holders of Ladish common stock
are not entitled to dissenters rights in connection with
the merger. See The Merger Dissenters
Rights. |
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Will the shareholder vote to approve the merger occur before
regulatory approval of the merger? |
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A: |
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The shareholder vote to approve the merger is scheduled to occur
on ,
2011. The merger is subject to review by U.S. antitrust
authorities under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, referred to as the HSR Act.
On December 1, 2010, ATI and Ladish filed the requisite
notification and report forms under the HSR Act with the Federal
Trade Commission, referred to as the FTC, and the Antitrust
Division of the Department of Justice, referred to as the DOJ.
The applicable waiting period under the HSR Act expired on
December 31, 2010 without a request for additional
information. In addition, the required approvals have been
obtained under other applicable antitrust laws, and no
additional regulatory approvals are anticipated to be required
in order to complete the merger. |
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Q: |
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When do you expect to complete the merger? |
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A: |
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Ladish and ATI are working towards completing the merger
promptly. Ladish and ATI currently expect to complete the merger
in the spring of 2011, subject to receipt of Ladishs
shareholder approval, governmental and regulatory approvals and
other usual and customary closing conditions. However, no
assurance can be given as to when, or if, the merger will occur. |
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Q: |
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What do I need to do now? |
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A: |
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After you have carefully read this entire document, please vote
your shares of Ladish common stock. You may do this either by
signing, dating and mailing the enclosed proxy card or by
submitting your proxy by telephone or through the Internet, as
explained in the voting instructions attached to your proxy
card. This will enable your shares to be represented and voted
at the special meeting. If you submit a valid proxy and do not
indicate how you want to vote, Ladish will count your proxy as a
vote in favor of the proposals described in this document and
submitted at the special meeting. |
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The Ladish board of directors recommends that Ladish
shareholders vote FOR the adoption of the merger
agreement and FOR the adjournment of the special
meeting, if necessary, to permit solicitation of additional
proxies in favor of the proposal to adopt the merger
agreement. |
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Q: |
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Whom should I call with questions? |
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A: |
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Ladish shareholders with any questions about the transaction
should call Ladishs Investor Relations Department at
(414) 747-2611. |
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Q: |
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Where can I find more information about ATI and Ladish? |
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A: |
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You can find more information about ATI and Ladish from various
sources as described under Where You Can Find More
Information. |
vi
SUMMARY
This brief summary highlights selected information from this
proxy statement/prospectus and may not contain all of the
information that may be important to you. Accordingly, ATI and
Ladish urge you to read carefully this entire proxy
statement/prospectus, the Annexes and the other documents to
which ATI and Ladish refer you for a more complete understanding
of the merger and the other transactions contemplated by the
merger agreement. In addition, ATI and Ladish incorporate by
reference into this proxy statement/prospectus important
business and financial information about ATI and Ladish. You may
obtain the information incorporated by reference into this proxy
statement/prospectus without charge by following the
instructions in the section entitled Where You Can Find
More Information. Each item in this summary includes a
page reference directing you to a more complete description of
that item.
ATI and
Ladish Propose That ATI Acquire Ladish (Page 25)
ATI and Ladish propose that ATI acquire Ladish by merging LPAD
with and into Ladish, with Ladish continuing as the surviving
entity and a wholly owned subsidiary of ATI. Upon the completion
of the merger, the separate corporate existence of LPAD will
cease, and Ladish will continue as the surviving entity in the
merger and become a wholly owned subsidiary of ATI. Immediately
following the merger, Ladish will be merged with and into PADL,
with PADL continuing as the surviving entity and a wholly owned
subsidiary of ATI. Following the merger, ATI expects to continue
to operate the Ladish businesses under the name Ladish
Co. ATIs common stock will continue to trade on the
NYSE under the symbol ATI.
For Each
Share of Ladish Common Stock, Ladish Shareholders Will Receive
in the Merger 0.4556 of a Share of ATI Common Stock and $24.00
in Cash (Page 52)
Upon completion of the merger, each of your shares of Ladish
common stock will be converted into the right to receive 0.4556
of a share of ATI common stock and $24.00 in cash. ATI will not
issue fractional shares in the merger. Instead, it will pay cash
for fractional shares of common stock based on the arithmetic
average of the average of the daily high and low sales prices
per share of ATI common stock as reported on the NYSE on each of
the 10 trading days immediately preceding the date on which the
merger is consummated.
If the merger were completed
on ,
2011, and you owned 100 shares of Ladish common stock
immediately prior to the effective time of the merger, you would
have received at the effective time of the merger:
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$2,400.00 in cash from ATI;
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45 shares of ATI common stock; and
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Assuming that the arithmetic average of the average of the daily
high and low sales prices per share of ATI common stock as
reported on the NYSE on each of the 10 trading days immediately
preceding ,
2011 was $ ,
$ in cash for the fractional
shares of ATI common stock (calculated by multiplying 0.5600
(the remaining fractional interest in an ATI common share) by
$ ).
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The
Number of Shares of ATI Common Stock to Be Issued in the Merger
Is Fixed, and Therefore the Value of the Merger Consideration
Will Fluctuate with Market Prices (Page 52)
The number of shares of ATI common stock and cash to be issued
in the merger for each Ladish common share is fixed and will not
be adjusted for changes in the market price of either ATI common
stock or Ladish common stock. Accordingly, any change in the
price of ATI common stock prior to the merger will affect the
market value of the merger consideration that Ladish
shareholders will receive as a result of the merger.
You should obtain current stock price quotations for ATI common
stock and Ladish common stock. ATI common stock is listed on the
NYSE under the symbols ATI, and Ladish common stock
is listed on the Nasdaq Global Select Market under the symbol
LDSH. The following table shows the closing prices
for ATI common stock and Ladish common stock and the implied per
share value in the merger to Ladish shareholders on
1
November 16, 2010, the last trading day completed before
ATI and Ladish announced the execution of the merger agreement
and
on ,
2011, the last practicable day before the date of this proxy
statement/prospectus:
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Implied Value of
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ATI
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Ladish
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One Share of Ladish
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Common Stock
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Common Stock
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Common Stock
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November 16, 2010
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$
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49.94
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$
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29.33
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$
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46.75
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,
2011
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$
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$
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$
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The
Merger Will Be Accounted for as an Acquisition
(Page 51)
The merger will be treated as an acquisition by ATI of Ladish in
conformity with accounting principles generally accepted in the
United States, referred to as GAAP.
Material
United States Federal Income Tax Consequences
(Page 65)
It is a condition to the obligations of each of ATI and Ladish
to complete the merger that each party will receive an opinion
of counsel to the effect that the mergers, together, will
qualify as a reorganization within the meaning of
Section 368(a) of the Code. Assuming that the mergers,
together, qualify as a reorganization within the
meaning of Section 368(a) of the Code, K&L Gates LLP,
as counsel to ATI, and Foley & Lardner LLP, as counsel
to Ladish, are of the opinion that you will recognize gain, but
not loss, equal to the lesser of: (1) the amount of cash
you receive in the merger or (2) the excess, if any, of
(a) the sum of the amount of the cash and the fair market
value of ATI common stock that you receive in the merger,
determined as of the closing date of the merger, over
(b) your tax basis in the Ladish common stock surrendered
in the merger. You should read Material U.S. Federal
Income Tax Consequences for a more complete discussion of
the U.S. federal income tax consequences of the
transaction, including the limitations, exceptions, assumptions
and conditions set forth therein. Tax matters can be
complicated, and the tax consequences of the transaction to you
will depend on your particular tax situation. Accordingly, you
are urged to consult your own tax advisors to determine the
particular federal, state, local or foreign income, reporting or
other tax consequences of the merger to you.
Opinion
of Ladishs Financial Advisor (Page 34 and
Annex B)
Robert W. Baird & Co. Incorporated, referred to as
Baird, has provided an opinion to Ladishs board of
directors, dated as of November 16, 2010, to the effect
that, subject to the contents of such opinion, including the
various assumptions and limitations set forth therein, the
merger consideration to be received by the holders of Ladish
common stock (other than ATI and its affiliates) in the merger
was fair, from a financial point of view, to the holders of
Ladish common stock (other than ATI and its affiliates).
Bairds opinion did not constitute a recommendation to any
Ladish shareholder as to how such shareholder should vote with
respect to the adoption of the merger agreement. Baird expressed
no opinion about the fairness of the amount or nature of the
merger consideration to any of Ladishs creditors,
officers, directors or employees, or any class of such persons,
relative to the merger consideration to be received by
Ladishs shareholders. The full text of Bairds
written opinion, which sets forth the assumptions made, general
procedures followed, matters considered and limitations on the
scope of review undertaken by Baird in rendering its opinion, is
attached as Annex B to this proxy statement/prospectus. You
are urged to read the opinion in its entirety.
Ladish paid Baird a fee of $300,000 which was payable upon
delivery of its opinion, regardless of the conclusions reached
in such opinion. Baird will not receive any payment of
compensation contingent upon completion of the merger, other
than a transaction fee of approximately $4.9 million,
against which the $300,000 paid to Baird upon delivery of its
opinion is creditable.
Interests
of Ladishs Directors and Officers in the Merger
(Page 47)
Certain of Ladishs directors and executive officers have
interests in the merger that are different from, or are in
addition to, their interests solely as shareholders of Ladish.
The Ladish board of directors knew about these additional
interests and considered them when it approved the merger
agreement. These interests include:
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the possible employment of certain of Ladishs executive
officers by ATI after the merger, although no agreements have
been proposed or entered into;
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2
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the full vesting of any unvested deferred compensation held in
investment accounts under the 2006 Plan or the Deferred
Compensation Plan;
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the beneficial ownership of restricted stock units which will
vest in full as of the effective date of the merger and
potential to receive unissued shares eligible for issuance under
the 2010 Plan on the effective date of the merger;
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the eligibility of each of Ladishs executive officers to
receive payments from a retention pool to be established by ATI;
and
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the receipt of indemnification and liability insurance benefits
by directors and executive officers of Ladish from ATI.
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ATI and
Ladish Have Agreed When and How Ladish Can Consider Third-Party
Acquisition Proposals (Page 57)
In the merger agreement, Ladish has agreed not to, and to cause
its subsidiaries and representatives not to, directly or
indirectly, solicit, initiate, cause, facilitate or encourage
(including by way of furnishing information) any inquiries or
proposals from any third party that constitute, or may
reasonably be expected to lead to, a takeover proposal to
acquire Ladish or its businesses. In addition, Ladish has agreed
not to participate in discussions or negotiations with any third
party regarding such a takeover proposal, accept such a takeover
proposal or enter into any agreement related to such a takeover
proposal or enter into any agreement that would require Ladish
to abandon the merger or terminate the merger agreement.
However, if Ladish (i) receives an unsolicited, bona fide
written acquisition proposal from a third party prior to the
adoption of the merger agreement by Ladishs shareholders
in circumstances not involving a breach of the merger agreement
and (ii) provides ATI with not less than 24 hours
written notice of its intention to take such action, Ladish may
participate in discussions and negotiations with and furnish
confidential information to the third party provided that, among
other requirements, the Ladish board of directors reasonably
determines in good faith (after receiving the advice of a
financial advisor of nationally recognized reputation) that the
takeover proposal is a superior proposal and (after considering
applicable provisions of state law and after consulting with and
receiving the advice of outside counsel) that the failure to
take such action is reasonably likely to constitute a breach by
the Ladish board of directors of its fiduciary duties to Ladish
shareholders under applicable law. After the adoption of the
merger agreement by Ladishs shareholders, Ladish may not
participate in discussions or negotiations with or provide
confidential information to a third party, and Ladish may not
terminate the merger agreement to accept a superior proposal.
Treatment
of Outstanding Equity and Deferred Compensation Awards
(Page 46)
Restricted
Stock Units.
Under the 2010 Plan, all restricted stock units outstanding as
of the date of the merger will vest in full, and shares
deliverable under vested restricted stock units will be issued
to participants in the 2010 Plan in a single lump sum on the
date of the merger. In addition, any shares remaining unissued
under the 2010 Plan as of the date of the merger will be issued
to participants in the 2010 Plan who are employees or affiliates
of Ladish immediately prior to the merger on a pro rata basis
based on the number of restricted stock units then held by the
participant.
Deferred
Compensation.
All awards of deferred compensation under Ladishs
Long-Term Incentive Award Plan, referred to as the 2006 Plan,
will become immediately and fully vested upon completion of the
merger if the participant is employed by Ladish or an affiliate
of Ladish immediate prior to the date on which the merger is
completed. Under Ladishs Elective Deferred Compensation
Plan, referred to as the Deferred Compensation Plan, amounts
that have been deferred and any earnings on those amounts will
be paid to participants in a single lump sum within seven days
of the consummation of the merger.
Retention
Pool (Page 47)
Pursuant to the terms of the merger agreement, ATI has agreed to
establish a retention pool in an amount of approximately
$7.0 million to make payments to each of the executive
officers of Ladish and certain other Ladish employees who remain
employees of PADL or any of its affiliates for a period of no
less than six months following the
3
effective date of the merger, referred to as the retention
period. One half of the amounts awarded under the retention pool
will be paid promptly after the effective time of the merger,
and one half of the amounts awarded under the retention pool
will be paid at the end of the retention period to eligible
individuals, subject to the requirement that an eligible
individual who ceases to be an employee of PADL or any affiliate
of PADL during the retention period, except if terminated or
caused to be terminated by ATI without cause, will no longer be
eligible to receive the payment due at the end of the retention
period and will repay ATI a portion of the initial amount paid
on a pro rata basis. An eligible individual terminated by or
caused to be terminated by PADL or any affiliate of PADL without
cause during the retention period will be eligible to retain the
initial payment and receive the subsequent payment from the
retention pool. ATI, in consultation with Ladish management,
will determine the allocation of the retention pool shortly
before, or at, the closing of the merger.
ATI and
Ladish Must Meet Several Conditions to Complete the Merger
(Page 60)
ATIs and Ladishs obligations to complete the merger
depend on a number of conditions being met. These conditions
include:
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the adoption of the merger agreement by the Ladish shareholders;
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the expiration or termination of the applicable waiting period
under the HSR Act and any other applicable antitrust law, and
the taking of all actions required by, and the making of all
filings required to be made with, any governmental authority
under any antitrust law that are necessary to permit the
consummation of the merger;
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the absence of any law, injunction, judgment or ruling enacted,
promulgated, issued, entered, amended or enforced by any
governmental authority in effect enjoining, restraining,
preventing or prohibiting consummation of the merger or making
the consummation of the merger illegal;
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the effectiveness under the Securities Act of 1933, as amended,
referred to as the Securities Act, of the registration statement
of which this proxy statement/prospectus forms a part and the
absence of any stop order or proceedings seeking a stop order
with respect to such registration statement;
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the approval for listing of the shares of ATI common stock to be
issued in the merger on the NYSE, subject to official notice of
the issuance; and
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subject to certain exceptions and limitations, the accuracy of
the others representations and warranties and the
performance in all material respects of its covenants.
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Where permitted by applicable law, either of ATI or Ladish could
choose to waive a condition to its respective obligations to
complete the merger even when that condition has not been
satisfied. ATI and Ladish cannot be certain when, or if, the
conditions to the merger will be satisfied or waived, or that
the merger will be completed.
ATI and
Ladish Must Obtain Regulatory Approvals to Complete the Merger
(Page 59)
ATI and Ladish cannot complete the merger unless they receive
approvals or waivers of approval from applicable regulatory
authorities. The merger is subject to review by
U.S. antitrust authorities under the HSR Act. On
December 1, 2010, ATI and Ladish filed the requisite
notification and report forms under the HSR Act with the FTC and
the Antitrust Division of the DOJ. The merger can be completed
only after expiration or termination of the applicable waiting
periods required under the HSR Act and any other applicable
antitrust law. The applicable waiting period under the
HSR Act expired on December 31, 2010 without a request
for additional information. In addition, the required approvals
have been obtained under other applicable antitrust laws, and no
additional regulatory approvals are anticipated to be required
in order to complete the merger. ATI and Ladish have agreed to
use their respective reasonable best efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with each other in doing, all things
necessary, proper or advisable to obtain all approvals,
consents, registrations, permits, authorizations and other
confirmations from any governmental authority or third party
necessary, proper or advisable to consummation the merger.
4
ATI and
Ladish May Terminate the Merger Agreement in Certain
Circumstances (Page 62)
The merger agreement may be terminated at any time prior to the
effective time of the merger, notwithstanding the adoption of
the merger agreement by Ladishs shareholders in certain
circumstances, including:
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by mutual written consent of ATI and Ladish;
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by either ATI or Ladish, if:
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the merger is not consummated on or before June 30, 2011;
provided that a party may not terminate the merger agreement if
the failure to consummate the merger was primarily due to a
failure by that party to perform any of its obligations under
the merger agreement;
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any final, non-appealable law, injunction, judgment or ruling
enacted, promulgated, issued, entered, amended or enforced by
any governmental authority is in effect that enjoins, restrains,
prevents or prohibits consummation of the merger or makes the
consummation of the merger illegal; or
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the Ladish shareholders do not vote to adopt the merger
agreement at the special meeting; provided that Ladish may not
terminate the merger agreement if it has failed to comply in all
material respects with its covenants related to the registration
statement of which this proxy statement/prospectus forms a part,
holding the special meeting and the non-solicitation of takeover
proposals.
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Ladish has breached or failed to perform any of its
representations, warranties, covenants or agreements set forth
in the merger agreement, or if any of the representations or
warranties of Ladish set forth in the merger agreement fails to
be true, which breach or failure, if it occurred or was
continuing as of the closing date of the merger, would give rise
to the failure of a condition to ATIs obligation to close
the merger and is incapable of being cured or is not cured by
Ladish prior to the earlier of the
30th
calendar day following Ladishs receipt of written notice
of such breach or failure from ATI and June 30, 2011;
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(i) Ladishs board of directors (A) withdraws or
modifies, in a manner adverse to ATI, its recommendation that
the Ladish shareholders adopt the merger agreement or
(B) fails to reaffirm its recommendation that the Ladish
shareholders adopt the merger agreement within seven days after
a takeover proposal is made public and receipt of a written
request to so reaffirm from ATI or (ii) prior to the
adoption of the merger agreement by Ladishs shareholders,
Ladish willfully and materially breaches its covenants in the
merger agreement related to the non-solicitation of takeover
proposals or its covenant to hold the special meeting; or
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there have occurred any events or changes that, individually or
in the aggregate, have had or would reasonably be expected to
have a material adverse effect on Ladish; or
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ATI has breached or failed to perform any of its
representations, warranties, covenants or agreements set forth
in the merger agreement, or if any of the representations or
warranties of ATI set forth in the merger agreement fails to be
true, which breach or failure, if it occurred or was continuing
as of the closing date of the merger, would give rise to the
failure of a condition to Ladishs obligation to close the
merger and is incapable of being cured or is not cured by ATI
prior to the earlier of the
30th
calendar day following ATIs receipt of written notice of
such breach or failure from Ladish and June 30,
2011; or
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at any time prior to the adoption of the merger agreement by
Ladishs shareholders while Ladish and its board of
directors have complied with the provisions of the merger
agreement with respect to a withdrawal or modification of its
recommendation that Ladishs shareholders adopt the merger
agreement, Ladish is simultaneously entering into a definitive
agreement to effect an unsolicited superior proposal.
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Ladish
May Be Obligated to Pay ATI a Termination Fee
(Page 62)
In certain circumstances involving a termination of the merger
agreement, Ladish has agreed promptly to pay ATI a termination
fee of $31.0 million in cash. Circumstances under which
this termination fee must be paid include the following:
5
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(i) A takeover proposal has been made known to Ladish or
has been made directly to Ladish shareholders generally, or any
person has publicly announced an intention (whether or not
conditional or withdrawn) to make a takeover proposal,
(ii) either ATI or Ladish thereafter terminates the merger
agreement because the merger has not been consummated on or
before June 30, 2011 or because Ladishs shareholders
do not adopt the merger agreement at the special meeting and
(iii) within 12 months after the termination of the
merger agreement, Ladish enters into a definitive agreement with
respect to, or consummates, a transaction contemplated by any
takeover proposal;
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ATI terminates the merger agreement due to a material and
willful breach by Ladish of, or failure by Ladish to perform,
Ladishs obligations with respect to (i) the
preparation of the registration statement of which this proxy
statement/prospectus forms a part and this proxy
statement/prospectus and the special meeting or (ii) the
non-solicitation of takeover proposals;
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(i) A takeover proposal has been made known to Ladish or
has been made directly to Ladish shareholders generally, or any
person has publicly announced an intention (whether or not
conditional or withdrawn) to make a takeover proposal,
(ii) ATI terminates the merger agreement due to a willful
breach or failure by Ladish to perform any of its
representations, warranties, covenants or agreements set forth
in the merger agreement in circumstances not covered by the
immediately preceding bullet and (iii) within
12 months after the termination of the merger agreement,
Ladish enters into a definitive agreement with respect to, or
consummates, a transaction contemplated by any takeover proposal;
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ATI terminates the merger agreement due to
(i) Ladishs board of directors (A) withdrawing
or modifying, in a manner adverse to ATI, its recommendation
that the Ladish shareholders adopt the merger agreement or
(B) failing to reaffirm its recommendation that the Ladish
shareholders adopt the merger agreement within seven days after
a takeover proposal is made public (or any person has publicly
announced a bona fide intention, whether or not conditioned, to
make a takeover proposal or material amendment thereto) and
receipt of a written request to so reaffirm from ATI or
(ii) prior to the adoption of the merger agreement by
Ladishs shareholders, Ladish willfully and materially
breaching its covenants in the merger agreement related to the
non-solicitation of takeover proposals or its covenant to hold
the special meeting; or
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Ladish terminates the merger agreement at any time prior to the
adoption of the merger agreement by Ladishs shareholders,
Ladish and its board of directors have complied with the
provisions of the merger agreement with respect to a withdrawal
or modification of its recommendation that Ladishs
shareholders adopt the merger agreement and Ladish
simultaneously enters into a definitive agreement to effect an
unsolicited superior proposal.
|
The merger agreement provides that all expenses incurred by ATI
or Ladish in connection with the merger or the merger agreement
will be borne by the party that has incurred such expenses.
Litigation
Relating to the Merger (Page 51)
Following announcement of the merger on November 17, 2010,
Ladish, its directors and ATI were named as defendants in
lawsuits brought by and on behalf of Ladish shareholders in
Wisconsin state court and in the United States District
Court for the Eastern District of Wisconsin, each challenging
ATIs acquisition of Ladish pursuant to the merger
agreement. The respective plaintiffs generally allege that the
consideration that Ladish shareholders will receive in
connection with the merger is inadequate and that Ladishs
directors breached their fiduciary duties to Ladish shareholders
in negotiating and approving the merger agreement. Generally,
the respective plaintiffs further allege that Ladish and ATI
aided and abetted the alleged breaches by Ladishs
directors. The plaintiff in the case brought in the Eastern
District of Wisconsin also is alleging violations of Sections
14(a) and 20(a) of the Securities Exchange Act of 1934, as
amended, which is referred to as the Exchange Act, in connection
with the registration statement of which this proxy statement
prospectus forms a part. The complaints seek various forms of
relief, including injunctive relief that would, if granted,
prevent the merger from being consummated in accordance with the
agreed-upon
terms. Ladish and ATI believe that the claims stated in the
complaints against them (and, in Ladishs case, also its
directors) are all without merit and intend to defend the
actions vigorously. The termination fee described above under
Ladish May Be Obligated to Pay a Termination
Fee would not be payable in the event that the merger does
not occur as a result of this litigation.
6
The
Rights of Ladish Shareholders Following the Merger Will Be
Different (Page 73)
ATI is a Delaware corporation, and Ladish is a Wisconsin
corporation. As a result, the rights of ATI stockholders are
governed by Delaware law, and the rights of Ladish shareholders
are governed by Wisconsin law. The rights of ATI stockholders
also are governed by ATIs restated certificate of
incorporation, as amended, referred to as ATIs certificate
of incorporation, and ATIs amended and restated bylaws,
referred to as ATIs bylaws, whereas the rights of Ladish
shareholders are governed by Ladishs restated articles of
incorporation, referred to as Ladishs articles of
incorporation, and Ladishs amended and restated by-laws,
referred to as Ladishs bylaws. Ladishs articles of
incorporation and bylaws differ from ATIs certificate of
incorporation and ATIs by-laws in certain respects.
Important differences between the rights of shareholders in a
Wisconsin corporation and the rights of stockholders in a
Delaware corporation include differences with respect to the
fiduciary duties of directors, anti-takeover provisions, rights
to call stockholder meetings, ability to take stockholder action
without a meeting, the stockholder vote required for certain
mergers, dividends that may be declared, dissenters
rights, indemnification of officers and directors and
limitations on directors liability. Ladish shareholders
should be aware of these differences when they vote at the
special meeting because, upon completion of the merger, they
will own shares of ATI common stock and therefore their rights
will be governed by ATIs certificate of incorporation,
ATIs bylaws and Delaware law.
Information
About the Companies (Page 69)
Allegheny
Technologies Incorporated
ATI is one of the largest and most diversified specialty metals
producers in the world. ATI uses innovative technologies to
offer growing global markets a wide range of specialty metals
solutions. ATIs products include titanium and titanium
alloys, nickel-based alloys and superalloys, zirconium, hafnium
and niobium, advanced powder alloys, stainless and specialty
steel alloys, grain-oriented electrical steel, tungsten-based
materials and cutting tools, carbon alloy impression die
forgings, and large grey and ductile iron castings. ATIs
specialty metals are produced in a wide range of alloys and
product forms and are selected for use in applications that
demand metals having exceptional hardness, toughness, strength,
resistance to heat, corrosion or abrasion, or a combination of
these characteristics. ATIs principal executive offices
are located at 1000 Six PPG Place, Pittsburgh,
Pennsylvania 15222-5479,
and the telephone number of ATIs principal executive
offices is
(412) 394-2800.
LPAD
Co.
LPAD is a newly formed Wisconsin corporation and a wholly owned
subsidiary of ATI. LPAD was formed solely for the purpose of
effecting the transactions contemplated by the merger agreement
and has not carried on any activities other than in connection
with the merger. The address and telephone number for
LPADs principal executive offices are the same as for ATI.
PADL
LLC
PADL is a newly formed Wisconsin limited liability company and a
wholly owned subsidiary of ATI. PADL was formed solely for the
purpose of effecting the transactions contemplated by the merger
agreement and has not carried on any activities other than in
connection with the merger. The address and telephone number for
PADLs principal executive offices are the same as for ATI.
Ladish
Co., Inc.
Ladish engineers, produces and markets high-strength,
high-technology forged and cast metal components for a wide
variety of load-bearing and fatigue-resisting applications in
the jet engine, aerospace and industrial markets. Approximately
88% of Ladishs 2009 revenues were derived from the sale of
jet engine parts, missile components, landing gear, helicopter
rotors and other aerospace products. Approximately 44% of
Ladishs 2009 revenues were derived from sales, directly or
through prime contractors, under U.S. government contracts
or under contracts with allies of the U.S. government,
primarily covering defense equipment. Ladishs principal
executive offices are located at 5481 South Packard Avenue,
Cudahy, Wisconsin 53110, and the telephone number of
Ladishs principal executive offices is
(414) 747-2611.
7
Risk
Factors (Page 13)
In evaluating the merger and the merger agreement, you should
read carefully this proxy statement/ prospectus and especially
consider the factors discussed in the section titled Risk
Factors beginning on page 12.
Listing
of Shares of ATI Common Stock Issued to Ladish Shareholders on
the New York Stock Exchange (Page 51)
If the merger is completed, Ladish shareholders will be able to
trade the shares of ATI common stock that they receive in the
merger on the NYSE, subject to restrictions on affiliates of ATI
described in the section entitled The Merger
Restrictions on Resales by Affiliates. If the merger is
completed, it is expected that Ladish common stock will be
delisted from and will no longer be traded on the Nasdaq Global
Select Market.
8
SELECTED
HISTORICAL CONSOLIDATED FINANCIAL DATA OF ATI
Set forth below is certain selected historical consolidated
financial information relating to ATI. The selected financial
information of ATI for each of the fiscal years ended
December 31, 2009, 2008 and 2007 and as of
December 31, 2009 and 2008 are derived from ATIs
audited financial statements filed as part of ATIs Annual
Report on
Form 10-K
for its fiscal year ended December 31, 2009, referred to as
the ATI
Form 10-K,
which is incorporated by reference into this proxy
statement/prospectus. The selected financial information of ATI
for each of the fiscal years ended December 31, 2006 and
2005, and as of December 31, 2007 and 2006 have been
derived from ATIs audited consolidated financial
statements for such periods, which have not been incorporated
into this proxy statement/prospectus by reference. The selected
financial information of ATI as of and for the nine months ended
September 30, 2010 and September 30, 2009 are derived
from ATIs unaudited consolidated financial statements
filed as part of ATIs Quarterly Report on
Form 10-Q
for its fiscal quarter ended September 30, 2010, referred
to as the ATI
Form 10-Q,
which is incorporated by reference into this proxy
statement/prospectus. This financial information should be read
in conjunction with the financial statements and the related
notes and other financial information contained in the ATI
Form 10-K
and the ATI
Form 10-Q.
More comprehensive financial information, including
managements discussion and analysis of ATIs
financial condition and results of operations, is contained in
the ATI
Form 10-K,
the ATI
Form 10-Q
and other reports filed by ATI with the SEC. The following
selected historical consolidated financial data is qualified in
its entirety by reference to such other documents and all of the
financial information and notes contained in those documents.
See Where You Can Find More Information for the
location of information incorporated by reference into this
proxy statement/prospectus. The information set forth below is
not necessarily indicative of the results of future operations
of ATI.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
Year Ended December 31,
|
|
|
September 30,
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2009
|
|
|
2010
|
|
|
|
(Dollars in millions, except operating data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
Statement of income data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Performance Metals
|
|
$
|
1,246.0
|
|
|
$
|
1,806.6
|
|
|
$
|
2,067.6
|
|
|
$
|
1,944.9
|
|
|
$
|
1,300.0
|
|
|
$
|
987.6
|
|
|
$
|
988.5
|
|
Flat-Rolled Products
|
|
|
1,900.5
|
|
|
|
2,697.3
|
|
|
|
2,951.9
|
|
|
|
2,909.1
|
|
|
|
1,516.1
|
|
|
|
1,077.6
|
|
|
|
1,751.1
|
|
Engineered Products
|
|
|
393.4
|
|
|
|
432.7
|
|
|
|
433.0
|
|
|
|
455.7
|
|
|
|
238.8
|
|
|
|
174.0
|
|
|
|
270.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total sales
|
|
|
3,539.9
|
|
|
|
4,936.6
|
|
|
|
5,452.5
|
|
|
|
5,309.7
|
|
|
|
3,054.9
|
|
|
|
2,239.2
|
|
|
|
3,010.2
|
|
Operating profit (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Performance Metals
|
|
|
335.1
|
|
|
|
657.2
|
|
|
|
729.1
|
|
|
|
539.0
|
|
|
|
234.7
|
|
|
|
146.6
|
|
|
|
194.3
|
|
Flat-Rolled Products
|
|
|
159.0
|
|
|
|
356.1
|
|
|
|
512.0
|
|
|
|
385.0
|
|
|
|
71.3
|
|
|
|
41.3
|
|
|
|
61.7
|
|
Engineered Products
|
|
|
47.5
|
|
|
|
56.7
|
|
|
|
32.1
|
|
|
|
20.9
|
|
|
|
(23.8
|
)
|
|
|
(24.1
|
)
|
|
|
12.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating profit
|
|
|
541.6
|
|
|
|
1,070.0
|
|
|
|
1,273.2
|
|
|
|
944.9
|
|
|
|
282.2
|
|
|
|
163.8
|
|
|
|
268.5
|
|
Income before income taxes and cumulative effect of change in
accounting principle
|
|
|
316.0
|
|
|
|
880.7
|
|
|
|
1,154.1
|
|
|
|
867.7
|
|
|
|
64.9
|
|
|
|
2.9
|
|
|
|
103.1
|
|
Net income (loss) attributable to ATI
|
|
|
362.4
|
|
|
|
574.1
|
|
|
|
747.1
|
|
|
|
565.9
|
|
|
|
31.7
|
|
|
|
(6.1
|
)
|
|
|
55.6
|
|
Balance sheet data (at end of period):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital
|
|
$
|
926.1
|
|
|
$
|
1,344.8
|
|
|
$
|
1,544.7
|
|
|
$
|
1,235.5
|
|
|
$
|
1,373.0
|
|
|
$
|
1,465.0
|
|
|
$
|
1,450.3
|
|
Total assets
|
|
|
2,729.9
|
|
|
|
3,280.5
|
|
|
|
4,095.6
|
|
|
|
4,170.4
|
|
|
|
4,346.0
|
|
|
|
4,380.0
|
|
|
|
4,489.7
|
|
Long-term debt
|
|
|
547.0
|
|
|
|
529.9
|
|
|
|
507.3
|
|
|
|
494.6
|
|
|
|
1,037.6
|
|
|
|
1,050.4
|
|
|
|
1,039.2
|
|
Total debt
|
|
|
560.4
|
|
|
|
553.6
|
|
|
|
528.2
|
|
|
|
509.8
|
|
|
|
1,071.1
|
|
|
|
1,070.6
|
|
|
|
1,061.1
|
|
Cash and cash equivalents
|
|
|
362.7
|
|
|
|
502.3
|
|
|
|
623.3
|
|
|
|
469.9
|
|
|
|
708.8
|
|
|
|
826.3
|
|
|
|
443.3
|
|
Stockholders equity
|
|
|
828.3
|
|
|
|
1,540.4
|
|
|
|
2,279.2
|
|
|
|
2,029.0
|
|
|
|
2,089.6
|
|
|
|
2,153.5
|
|
|
|
2,132.7
|
|
Cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow provided by (used in) operating activities
|
|
$
|
224.2
|
|
|
$
|
303.3
|
|
|
$
|
701.5
|
|
|
$
|
754.5
|
|
|
$
|
218.5
|
|
|
$
|
149.4
|
|
|
$
|
(63.9
|
)
|
Cash flow used in investing activities
|
|
|
(110.4
|
)
|
|
|
(235.8
|
)
|
|
|
(451.7
|
)
|
|
|
(513.9
|
)
|
|
|
(453.7
|
)
|
|
|
(302.6
|
)
|
|
|
(132.4
|
)
|
Cash flow provided by (used in) financing activities
|
|
|
(1.9
|
)
|
|
|
72.1
|
|
|
|
(128.8
|
)
|
|
|
(394.0
|
)
|
|
|
474.1
|
|
|
|
509.6
|
|
|
|
(69.2
|
)
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
Year Ended December 31,
|
|
|
September 30,
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2009
|
|
|
2010
|
|
|
|
(Dollars in millions, except operating data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
Operating data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (000s lbs.):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Performance Metals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium mill products
|
|
|
24,882
|
|
|
|
27,361
|
|
|
|
30,689
|
|
|
|
32,530
|
|
|
|
23,588
|
|
|
|
18,386
|
|
|
|
19,750
|
|
Nickel-based and specialty alloys
|
|
|
39,939
|
|
|
|
42,873
|
|
|
|
44,688
|
|
|
|
42,525
|
|
|
|
32,562
|
|
|
|
24,652
|
|
|
|
26,819
|
|
Exotic alloys
|
|
|
4,018
|
|
|
|
4,304
|
|
|
|
5,169
|
|
|
|
5,473
|
|
|
|
5,067
|
|
|
|
3,674
|
|
|
|
3,305
|
|
Flat-Rolled Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High value
|
|
|
495,868
|
|
|
|
502,524
|
|
|
|
491,891
|
|
|
|
500,375
|
|
|
|
367,195
|
|
|
|
268,720
|
|
|
|
337,212
|
|
Standard
|
|
|
652,870
|
|
|
|
889,105
|
|
|
|
557,016
|
|
|
|
584,389
|
|
|
|
474,950
|
|
|
|
346,696
|
|
|
|
500,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flat-Rolled Products total
|
|
|
1,148,738
|
|
|
|
1,391,629
|
|
|
|
1,048,907
|
|
|
|
1,084,764
|
|
|
|
842,145
|
|
|
|
615,416
|
|
|
|
837,895
|
|
Average Prices (per lb.):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Performance Metals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium mill products
|
|
$
|
22.75
|
|
|
$
|
33.83
|
|
|
$
|
30.14
|
|
|
$
|
25.60
|
|
|
$
|
20.92
|
|
|
$
|
21.38
|
|
|
$
|
19.00
|
|
Nickel-based and specialty alloys
|
|
|
11.25
|
|
|
|
14.35
|
|
|
|
19.16
|
|
|
|
18.14
|
|
|
|
14.43
|
|
|
|
14.21
|
|
|
|
13.96
|
|
Exotic alloys
|
|
|
40.38
|
|
|
|
40.39
|
|
|
|
41.85
|
|
|
|
48.53
|
|
|
|
57.79
|
|
|
|
58.85
|
|
|
|
59.78
|
|
Flat-Rolled Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High value
|
|
|
2.15
|
|
|
|
2.50
|
|
|
|
3.22
|
|
|
|
3.26
|
|
|
|
2.49
|
|
|
|
2.46
|
|
|
|
2.80
|
|
Standard
|
|
|
1.26
|
|
|
|
1.61
|
|
|
|
2.40
|
|
|
|
2.13
|
|
|
|
1.22
|
|
|
|
1.14
|
|
|
|
1.59
|
|
Flat-Rolled Products combined average
|
|
|
1.64
|
|
|
|
1.93
|
|
|
|
2.79
|
|
|
|
2.65
|
|
|
|
1.77
|
|
|
|
1.71
|
|
|
|
2.08
|
|
10
SELECTED
HISTORICAL CONSOLIDATED FINANCIAL DATA OF LADISH
Set forth below is certain selected historical consolidated
financial information relating to Ladish. The selected financial
information of Ladish for each of the fiscal years ended
December 31, 2009, 2008 and 2007 and as of
December 31, 2009 and 2008 are derived from Ladishs
audited financial statements filed as part of Ladishs
Annual Report on
Form 10-K
for its fiscal year ended December 31, 2009, referred to as
the Ladish
Form 10-K,
which is incorporated by reference into this proxy
statement/prospectus. The selected financial information of
Ladish for each of the fiscal years ended December 31, 2006
and 2005, and as of December 31, 2007 and 2006 have been
derived from Ladishs audited consolidated financial
statements for such periods, which have not been incorporated
into this proxy statement/prospectus by reference. The selected
financial information of Ladish as of and for the nine months
ended September 30, 2010 and September 30, 2009 are
derived from Ladishs unaudited consolidated financial
statements filed as part of Ladishs Quarterly Report on
Form 10-Q
for its fiscal quarter ended September 30, 2010, referred
to as the Ladish
Form 10-Q,
which is incorporated by reference into this proxy
statement/prospectus. This financial information should be read
in conjunction with the financial statements and the related
notes and other financial information contained in the Ladish
Form 10-K
and the Ladish
Form 10-Q.
More comprehensive financial information, including
managements discussion and analysis of Ladishs
financial condition and results of operations, is contained in
the Ladish
Form 10-K,
the Ladish
Form 10-Q
and other reports filed by Ladish with the SEC. The following
selected historical consolidated financial data is qualified in
its entirety by reference to such other documents and all of the
financial information and notes contained in those documents.
See Where You Can Find More Information for the
location of information incorporated by reference into this
proxy statement/prospectus. The information set forth below is
not necessarily indicative of the results of future operations
of Ladish.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
|
|
|
Year Ended December 31,
|
|
Ended September 30,
|
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
2005
|
|
2010
|
|
2009
|
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
349,832
|
|
|
$
|
469,466
|
|
|
$
|
424,631
|
|
|
$
|
369,290
|
|
|
$
|
266,841
|
|
|
$
|
298,635
|
|
|
$
|
266,616
|
|
Income from operations
|
|
|
9,248
|
|
|
|
39,538
|
|
|
|
52,319
|
|
|
|
48,960
|
|
|
|
23,847
|
|
|
|
33,862
|
|
|
|
4,376
|
|
Interest expense
|
|
|
5,050
|
|
|
|
1,971
|
|
|
|
2,528
|
|
|
|
3,548
|
|
|
|
2,072
|
|
|
|
4,257
|
|
|
|
3,594
|
|
Net income (loss)
|
|
|
6,094
|
|
|
|
32,205
|
|
|
|
32,288
|
|
|
|
28,481
|
|
|
|
13,715
|
|
|
|
19,126
|
|
|
|
(411
|
)
|
Basic earnings (loss) per share
|
|
|
0.38
|
|
|
|
2.15
|
|
|
|
2.22
|
|
|
|
2.01
|
|
|
|
1.00
|
|
|
|
1.21
|
|
|
|
(0.02
|
)
|
Diluted earnings (loss) per share
|
|
|
0.38
|
|
|
|
2.15
|
|
|
|
2.22
|
|
|
|
2.00
|
|
|
|
0.98
|
|
|
|
1.21
|
|
|
|
(0.02
|
)
|
Dividends paid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
15,901,833
|
|
|
|
14,998,437
|
|
|
|
14,516,120
|
|
|
|
14,136,946
|
|
|
|
13,781,586
|
|
|
|
15,754,554
|
|
|
|
15,901,439
|
|
Diluted
|
|
|
15,902,246
|
|
|
|
15,000,844
|
|
|
|
14,550,258
|
|
|
|
14,205,641
|
|
|
|
13,931,539
|
|
|
|
15,755,826
|
|
|
|
15,901,439
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
469,514
|
|
|
$
|
509,466
|
|
|
$
|
381,833
|
|
|
$
|
329,060
|
|
|
$
|
296,556
|
|
|
$
|
490,426
|
|
|
$
|
463,777
|
|
Net working capital
|
|
|
137,515
|
|
|
|
138,910
|
|
|
|
130,855
|
|
|
|
123,764
|
|
|
|
71,116
|
|
|
|
141,171
|
|
|
|
133,658
|
|
Total debt
|
|
|
90,000
|
|
|
|
118,900
|
|
|
|
53,500
|
|
|
|
54,100
|
|
|
|
45,000
|
|
|
|
84,285
|
|
|
|
90,000
|
|
Stockholders equity
|
|
|
225,582
|
|
|
|
223,411
|
|
|
|
201,554
|
|
|
|
152,670
|
|
|
|
117,469
|
|
|
|
241,082
|
|
|
|
224,939
|
|
11
MARKET
PRICE AND DIVIDEND INFORMATION
ATI common stock is listed on the NYSE and traded under the
symbol ATI, and Ladish common stock is listed on the
Nasdaq Global Select Market and traded under the symbol
LDSH. The following table shows the high and low
reported sales prices per share of, and dividends declared with
respect to, ATI and Ladish common stock for the periods
indicated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATI
|
|
|
Ladish
|
|
|
|
High
|
|
|
Low
|
|
|
Dividend
|
|
|
High
|
|
|
Low
|
|
|
Dividend
|
|
|
Year Ending December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter (through January 28, 2011)
|
|
$
|
65.91
|
|
|
$
|
53.73
|
|
|
|
|
|
|
$
|
53.78
|
|
|
$
|
48.18
|
|
|
|
|
|
Year Ending December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
$
|
59.41
|
|
|
$
|
45.19
|
|
|
$
|
0.18
|
|
|
$
|
50.69
|
|
|
$
|
28.64
|
|
|
|
|
|
Third Quarter
|
|
|
53.41
|
|
|
|
39.35
|
|
|
|
0.18
|
|
|
|
32.37
|
|
|
|
21.64
|
|
|
|
|
|
Second Quarter
|
|
|
58.25
|
|
|
|
44.01
|
|
|
|
0.18
|
|
|
|
29.28
|
|
|
|
20.16
|
|
|
|
|
|
First Quarter
|
|
|
56.23
|
|
|
|
39.00
|
|
|
|
0.18
|
|
|
|
21.74
|
|
|
|
14.91
|
|
|
|
|
|
Year Ended December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
$
|
46.31
|
|
|
$
|
29.62
|
|
|
$
|
0.18
|
|
|
$
|
16.43
|
|
|
$
|
11.72
|
|
|
|
|
|
Third Quarter
|
|
|
36.95
|
|
|
|
25.80
|
|
|
|
0.18
|
|
|
|
16.90
|
|
|
|
10.05
|
|
|
|
|
|
Second Quarter
|
|
|
44.09
|
|
|
|
21.22
|
|
|
|
0.18
|
|
|
|
15.19
|
|
|
|
6.95
|
|
|
|
|
|
First Quarter
|
|
|
31.83
|
|
|
|
16.92
|
|
|
|
0.18
|
|
|
|
15.47
|
|
|
|
5.21
|
|
|
|
|
|
Year Ended December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
$
|
29.74
|
|
|
$
|
15.00
|
|
|
$
|
0.18
|
|
|
$
|
20.48
|
|
|
$
|
10.85
|
|
|
|
|
|
Third Quarter
|
|
|
58.85
|
|
|
|
26.60
|
|
|
|
0.18
|
|
|
|
28.05
|
|
|
|
18.07
|
|
|
|
|
|
Second Quarter
|
|
|
85.49
|
|
|
|
58.40
|
|
|
|
0.18
|
|
|
|
38.30
|
|
|
|
20.55
|
|
|
|
|
|
First Quarter
|
|
|
87.32
|
|
|
|
59.00
|
|
|
|
0.18
|
|
|
|
43.44
|
|
|
|
32.16
|
|
|
|
|
|
Past price performance is not necessarily indicative of likely
future performance. Because market prices of ATI and Ladish
common stock will fluctuate, you are urged to obtain current
market prices for shares of ATI and Ladish common stock.
The last reported sale price of ATIs common stock on the
NYSE
on ,
2011 was $ per share. As
of ,
2011, there
were shares
of ATIs common stock outstanding held by
approximately
registered holders.
The payment of dividends by ATI, if any, and the amount of such
dividends depends upon matters deemed relevant by ATIs
board of directors on a quarterly basis, such as its results of
operations, financial condition, cash requirements, future
prospects, any limitations imposed by law, credit agreements or
debt securities and other factors deemed relevant and
appropriate. While ATI has historically paid cash dividends on
its common stock on a quarterly basis, no assurance can be given
that it will continue to pay dividends on its common stock in a
manner and amount consistent with its historical practices, or
at all, in the future.
Ladish has not paid cash dividends and currently intends to
retain all of its earnings. Ladish does not expect to pay
dividends for the foreseeable future. Ladish has agreed in the
merger agreement that, through the effective time of the merger,
it will not declare, set aside for payment or pay any dividend
on, or otherwise make any payments to its shareholders in their
capacity as such.
12
RISK
FACTORS
In addition to the risks described in Part I,
Item 1A in each of the ATI
Form 10-K
and the Ladish
Form 10-K
and the risks described in the other information contained in or
incorporated by reference into this proxy statement/prospectus,
including the matters addressed under the heading
Cautionary Note Regarding Forward-Looking
Statements, you should carefully consider the following
risk factors in deciding how to vote.
Because
the market value of the ATI common stock that Ladish
shareholders will receive in the merger may fluctuate, Ladish
shareholders cannot be sure of the market value of the ATI
common stock to be issued upon completion of the
merger.
At the effective time and as a result of the merger, each
outstanding share of Ladish common stock will be converted into
the right to receive 0.4556 of a share of ATI common stock and
$24.00 in cash. The number of shares of ATI common stock that
Ladish shareholders will be entitled to receive in the merger
will not be adjusted in the event of any increase or decrease in
the share price of either ATI common stock or Ladish common
stock. The market value of the shares of ATI common stock that
Ladish shareholders will be entitled to receive when the merger
is completed will depend on the market value of shares of ATI
common stock at that time and could vary significantly from the
market value of shares of ATI common stock on the date the
merger agreement was executed, the date of this proxy
statement/prospectus or the date of the special meeting.
Stock price changes may result from a variety of factors,
including general market and economic conditions, changes in
ATIs and Ladishs businesses, operations and
prospects, regulatory considerations and market reaction to the
merger and related developments. Many of these factors are
beyond either partys control. As a result, the value
represented by the merger consideration also will vary. For
example, based on the range of closing prices of ATI common
stock during the period from November 16, 2010, the last
trading day completed before ATI and Ladish announced the
execution of the merger agreement,
through ,
2011, the merger consideration represented a value ranging from
a high of approximately $ to a low
of approximately $ for each share
of Ladish common stock. Because the merger is not expected to be
consummated until the spring of 2011 and could be further
delayed, at the time of the special meeting you will not know
the market value of ATI common stock that Ladish shareholders
will receive upon completion of the merger, and the market value
of ATI common stock may continue to fluctuate following the
merger. ATI and Ladish recommend that you obtain current market
quotations for ATI common stock and Ladish common stock before
voting at the special meeting. See the section entitled
Market Price and Dividend Information.
Combining
the businesses of ATI and Ladish may be more difficult, costly
or time-consuming than expected, which may adversely affect
ATIs results and affect adversely the value of ATIs
stock following the merger.
ATI and Ladish have entered into the merger agreement because
they believe that the merger will be beneficial to the
respective companies and their respective security holders. The
success of the merger will depend, in part, on ATIs
ability to realize the anticipated benefits from combining the
businesses of ATI and Ladish. To realize these anticipated
benefits, ATI must successfully combine the businesses of ATI
and Ladish in an efficient and effective manner. If ATI and
Ladish are not able to achieve these objectives within the
anticipated time frame, or at all, the anticipated benefits and
cost savings of the merger may not be realized fully, or at all,
or may take longer to realize than expected, and the value of
ATIs common stock may be affected adversely.
ATI and Ladish have operated and, until the completion of the
merger, will continue to operate, independently. It is possible
that the integration process could result in the loss of key
employees, the disruption of each companys ongoing
business or inconsistencies in standards, controls, procedures
and policies that adversely affect ATIs ability to
maintain relationships with customers, employees, suppliers and
other business partners following the merger or to achieve the
anticipated benefits of the merger.
Specifically, issues that must be addressed in integrating the
operations of Ladish into ATIs operations in order to
realize the anticipated benefits of the merger include, among
other things:
|
|
|
|
|
integrating and optimizing the utilization of the properties and
equipment of ATI and Ladish;
|
13
|
|
|
|
|
integrating the sales and information technology systems of ATI
and Ladish; and
|
|
|
|
conforming standards, controls, procedures and policies,
business cultures and compensation structures between the
companies.
|
Integration efforts between the two companies will also divert
management attention and resources. An inability to realize the
full extent of the anticipated benefits of the merger, as well
as any delays encountered in the integration process, could have
an adverse effect upon the revenues, level of expenses and
operating results of ATI, which may affect adversely the value
of the ATI common stock after the completion of the merger.
In addition, the actual integration may result in additional and
unforeseen expenses, and the anticipated benefits of the
integration plan may not be realized. Actual synergies, if
achieved at all, may be lower than what ATI expects and may take
longer to achieve than anticipated. If ATI is not able to
adequately address these challenges, ATI may be unable to
successfully integrate Ladishs operations into its own, or
to realize the anticipated benefits of the integration of the
two companies.
Ladish
may not terminate the merger agreement to accept a superior
proposal to acquire Ladish after the Ladish shareholders have
adopted the merger agreement and, in certain circumstances, may
be required to pay a termination fee to ATI.
In the merger agreement, Ladish has agreed not to, and to cause
its subsidiaries and representatives not to, directly or
indirectly, solicit, initiate, cause, facilitate or encourage
(including by way of furnishing information) any inquiries or
proposals from any third party that constitute, or may
reasonably be expected to lead to, a takeover proposal to
acquire Ladish or its businesses. In addition, Ladish has agreed
not to participate in discussions or negotiations with any third
party regarding such a takeover proposal, accept such a takeover
proposal or enter into any agreement related to such a takeover
proposal or enter into any agreement that would require Ladish
to abandon the merger or terminate the merger agreement.
However, if Ladish (i) receives an unsolicited, bona fide
written acquisition proposal from a third party prior to the
adoption of the merger agreement by Ladishs shareholders
in circumstances not involving a breach of the merger agreement
and (ii) provides ATI with not less than 24 hours
written notice of its intention to take such action, Ladish may
participate in discussions and negotiations with and furnish
confidential information to the third party provided that, among
other requirements, the Ladish board of directors reasonably
determines in good faith (after receiving the advice of a
financial advisor of nationally recognized reputation) that the
takeover proposal is a superior proposal and (after considering
applicable provisions of state law and after consulting with and
receiving the advice of outside counsel) that the failure to
take such action is reasonably likely to constitute a breach by
the Ladish board of directors of its fiduciary duties to Ladish
shareholders under applicable law. At any time prior to the
adoption of the merger agreement by Ladishs shareholders
while Ladish and its board of directors have complied with the
provisions of the merger agreement with respect to a withdrawal
or modification of its recommendation that Ladishs
shareholders adopt the merger agreement, Ladish may terminate
the merger agreement to simultaneously enter into a definitive
agreement to effect an unsolicited superior proposal. After the
adoption of the merger agreement by Ladishs shareholders,
Ladish may not participate in discussions or negotiations with
or provide confidential information to a third party, and Ladish
may not terminate the merger agreement to accept a superior
proposal. In addition, under specified circumstances, Ladish is
required to pay a termination fee of $31.0 million to ATI,
including if (i) Ladish terminates the merger agreement at
any time prior to the adoption of the merger agreement by
Ladishs shareholders, (ii) Ladish and its board of
directors have complied with the provisions of the merger
agreement with respect to a withdrawal or modification of its
recommendation that Ladishs shareholders adopt the merger
agreement and (iii) Ladish simultaneously enters into a
definitive agreement to effect an unsolicited superior proposal.
See The Merger Agreement No Solicitation by
Ladish.
These provisions might discourage a potential competing acquiror
that might have an interest in acquiring all or a significant
part of Ladish from considering or proposing an acquisition even
if it were prepared to pay consideration with a higher value
than the consideration offered in connection with the merger, or
might result in a potential competing acquiror proposing to pay
a less valuable per share consideration to acquire Ladish than
it might otherwise have proposed to pay.
14
Any delay
in completing the merger may substantially reduce the benefits
that ATI expects to be obtained from the merger.
In addition to obtaining the required governmental clearances
and approvals, the merger is subject to a number of other
conditions beyond the control of ATI and Ladish that may
prevent, delay or otherwise materially adversely affect its
completion. See The Merger Agreement
Conditions to Completion of the Merger. ATI and Ladish
cannot predict whether or when the conditions required to
complete the merger will be satisfied. The requirements for
obtaining the required clearances and approvals could delay the
effective time of the merger for a significant period of time or
prevent it from occurring. Moreover, each of ATI and Ladish may
terminate the merger agreement if the merger is not consummated
by June 30, 2011. Any delay in completing the merger may
materially adversely affect the synergies and other benefits
that ATI expects to achieve if the merger and the integration of
the companies respective businesses are completed within
the expected timeframe.
Ladish
will be subject to business uncertainties and contractual
restrictions while the merger is pending.
Uncertainty about the effect of the merger on customers,
suppliers and other business partners may have an adverse effect
on Ladish and consequently on ATI following the merger. These
uncertainties could cause customers, suppliers, business
partners and others that deal with Ladish to defer entering into
contracts with Ladish or making other decisions concerning
Ladish or seek to change existing business relationships with
Ladish. In addition, except as expressly permitted by the merger
agreement or as required by applicable law, subject to certain
exceptions, until the effective time of the merger, the merger
agreement restricts Ladishs ability to take certain action
and engage in certain transactions, as described under The
Merger Agreement Conduct of Business Pending the
Merger.
Uncertainties
associated with the merger may cause a loss of employees and may
otherwise affect the future business and operations of ATI and
Ladish.
ATIs success after the merger will depend in part upon its
ability to retain key employees of ATI and Ladish. Prior to the
merger, employees of ATI or Ladish may experience uncertainty
about their roles with ATI following the merger. Employees of
Ladish whom are retained by ATI following the merger may also
experience similar uncertainty after the completion of the
merger. This may adversely affect the ability of each of ATI and
Ladish to attract or retain key management, sales, technical and
other personnel. In addition, Ladishs executive officers
are not subject to any non-compete agreement. Key employees may
depart because of issues relating to the uncertainty and
difficulty of integration or a desire not to remain with ATI
following the merger. As a result, ATI may not be able to
attract or retain key employees of ATI and Ladish following the
merger to the same extent that ATI and Ladish have been able to
attract or retain their own employees in the past, which could
have a negative impact on the business of ATI following the
merger. If key employees depart, the integration of the
companies may be more difficult, and ATIs business
following the merger could be materially harmed.
Some of
Ladishs officers and directors have interests in the
merger that are different from, and in addition to, your
interests.
Some of the directors of Ladish who recommend that you vote in
favor of the proposals to be considered at the special meeting
of Ladish shareholders, and the officers of Ladish who provided
information to Ladishs board of directors relating to the
merger and the other transactions contemplated by the merger
agreement, have rights to acceleration of the vesting of certain
equity-based awards and deferred compensation, may participate
in a retention pool to be established by ATI and have rights to
ongoing indemnification and insurance that provide them with
interests in the transaction that may differ from, or be in
addition to, yours. The receipt of compensation or other
benefits in the transaction might result in these directors and
officers being more likely to support and vote to adopt the
merger agreement than if they did not have these interests.
Ladish shareholders should consider whether their interests and
benefits may have influenced these directors and officers to
support or recommend adoption of the merger agreement. See the
section entitled The Merger Interests of
Certain Persons in the Merger for a further description of
these interests, including the aggregate cash payments that each
director and executive officer of Ladish is entitled to receive
in connection with the completion of the merger.
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The
market price of ATI common stock after the merger may be
affected by factors different from those affecting Ladish common
stock currently.
The businesses of ATI and Ladish differ in many respects
including product offerings and relationships with customers and
suppliers, and, accordingly, the results of operations of ATI
following the merger and the market price of shares of
ATIs common stock after the merger may be affected by
factors different from those currently affecting the independent
results of operations of Ladish. For a discussion of the
businesses of ATI and Ladish and of certain factors to consider
in connection with their respective businesses, see the
documents incorporated by reference into this proxy
statement/prospectus and referred to under Where You Can
Find More Information. See the section entitled
Market Price and Dividend Information for additional
information on the historical market value of shares of ATI
common stock and Ladish common stock.
ATI will
incur significant transaction and merger-related costs in
connection with the merger.
ATI expects to incur approximately $7 million of
out-of-pocket costs associated with the merger, consisting
primarily of financial, legal and accounting fees and expenses.
Similarly, Ladish expects to incur approximately $6 million
of out-of-pocket costs associated with the merger, consisting
primarily of financial, legal and accounting fees and expenses.
ATI also expects to incur non-recurring costs associated with
combining the operations of the two companies. Most of these
costs will be comprised of facilities and systems consolidation
costs and employment-related costs. ATI will also incur fees and
costs related to formulating integration plans. Additional
unanticipated costs may be incurred in the integration of the
two companies businesses. Although ATI expects that the
elimination of duplicative costs, as well as the realization of
other efficiencies related to the integration of the businesses,
should allow ATI to offset incremental transaction and
merger-related costs over time, this net benefit may not be
achieved in the near term, or at all.
The
merger may not be accretive and may cause dilution to ATIs
earnings per share, which may negatively affect the market price
of ATI common stock.
ATI currently anticipates that the merger will be accretive to
its earnings per share (on an adjusted earnings basis) within 18
to 24 months after the merger. This expectation is based on
preliminary estimates, which may change materially. ATI could
also encounter additional transaction-related costs or other
factors such as the failure to realize all of the benefits
anticipated in the merger. All of these factors could cause
dilution to ATIs earnings per share or decrease or delay
the expected accretive effect of the merger and cause a decrease
in the market price of ATI common stock.
The stock
prices and businesses of ATI and Ladish may be adversely
affected if the merger is not completed.
Completion of the merger is subject to certain closing
conditions, including, among others, obtaining requisite
regulatory approvals and the approval of Ladishs
shareholders. ATI and Ladish may be unable to obtain such
approvals on a timely basis or at all. If the merger is not
completed, the prices of ATI common stock and Ladish common
stock may decline to the extent that the current market prices
of ATI common stock and Ladish common stock reflect a market
assumption that the merger will be completed.
If the merger is not completed, the respective ongoing
businesses of ATI and Ladish may be adversely affected and ATI
and Ladish will be subject to several risks and consequences,
including the following:
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Ladish may be required, under certain circumstances, to pay ATI
a termination fee of $31.0 million under the merger
agreement;
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ATI and Ladish will be required to pay certain costs incurred by
each of them relating to the merger, whether or not the merger
is completed, such as fees and expenses of their respective
advisors, litigation related expenses and printing fees;
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under the merger agreement, Ladish is subject to certain
restrictions on the conduct of its business prior to completing
the merger which may adversely affect its ability to execute
certain of its business strategies; and
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matters relating to the merger may require substantial
commitments of time and resources by ATI and Ladish management,
which could otherwise have been devoted to other opportunities
that may have been beneficial to ATI and Ladish as independent
companies, as the case may be.
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In addition, there may be uncertainty surrounding the future
direction of the businesses and strategy of ATI or Ladish on a
standalone basis, and ATI or Ladish may experience negative
reactions from the financial markets and from their respective
employees, customers, suppliers and other business partners. ATI
and Ladish are subject to litigation related to the merger and
could be subject to additional litigation related to any failure
to complete the merger, or to enforcement proceedings commenced
against ATI or Ladish to perform their respective obligations
under the merger agreement. If the merger is not completed, ATI
and Ladish cannot assure their respective securityholders that
the risks described above will not materialize and will not
materially affect the business, financial results and stock
prices of ATI or Ladish.
Certain
existing indebtedness of Ladish, if not refinanced, amended or
repaid, may decrease ATIs financial or business
flexibility, reduce its ability to incur additional
indebtedness, affect its existing debt covenants, increase its
borrowing costs or result in repayment or collateralization
obligations.
Approximately $83.4 million of Ladishs existing
indebtedness is expected to be outstanding upon completion of
the merger. The agreements governing Ladishs indebtedness
differ from those governing ATIs indebtedness and in
certain respects could require waivers, amendments or
refinancing of the Ladish indebtedness. Although ATI and Ladish
will try to resolve any such conflicts prior to closing, and ATI
does not have any current plans to refinance, amend or repay
such indebtedness, there can be no assurance that such conflicts
will be resolved by that time or at the anticipated cost or that
any future refinancing may be obtained at favorable terms. In
addition, the failure to effect any such future refinancing, if
required, on favorable terms may, among other things, have the
effect of reducing ATIs liquidity or operational
flexibility and have a material adverse effect on ATI following
the merger, including its ability to obtain further financing,
take advantage of certain growth opportunities and respond to
comparatively better financed competitors.
Ladish
shareholders will have a significantly reduced ownership and
voting interest after the merger and will exercise less
influence over the management and policies of ATI than they do
over Ladish.
Ladish shareholders currently have the right to vote in the
election of the board of directors of Ladish and on other
matters affecting Ladish. When the merger occurs, each Ladish
shareholder that receives shares of ATI common stock will become
a stockholder of ATI with a percentage ownership of ATI that is
much smaller than the shareholders percentage ownership of
Ladish. For example, a Ladish shareholder owning 1,000 shares of
Ladish common stock as of the date of this proxy
statement/prospectus would have a percentage ownership of Ladish
of approximately 0.0064%. Such a Ladish shareholder would
receive 455 shares of ATI common stock in the merger,
representing a percentage ownership of ATI of approximately
0.0004% immediately following the merger. It is expected that
the former shareholders of Ladish as a group will own
approximately % of the outstanding
shares of ATI immediately after the merger. Because of this,
Ladish shareholders will have less influence over the management
and policies of ATI than they now have over the management and
policies of Ladish.
The
shares of ATI common stock to be received by Ladish shareholders
as a result of the merger will have different rights from the
shares of Ladish common stock.
Upon completion of the merger, Ladish shareholders will become
ATI stockholders and their rights as stockholders will be
governed by ATIs certificate of incorporation, ATIs
bylaws and Delaware law. Certain of the rights associated with
Ladish common stock are different from the rights associated
with ATI common stock. Important differences between the rights
of shareholders in a Wisconsin corporation and the rights of
stockholders in a Delaware corporation include differences with
respect to the fiduciary duties of directors, anti-takeover
provisions, rights to call stockholder meetings, ability to take
stockholder action without a meeting, the stockholder vote
required for certain mergers, dividends that may be declared,
dissenters rights, indemnification of officers and
directors and limitations on directors liability. See the
section entitled Comparison of Rights of Ladish
Shareholders and ATI Stockholders for a discussion of the
different rights associated with ATI common stock.
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Lawsuits
have been filed against Ladish, the members of the Ladish board
of directors and ATI challenging the merger, and an adverse
judgment in any lawsuit challenging the merger may prevent the
merger from being completed within the expected timeframe, or at
all.
Following announcement of the merger on November 17, 2010,
Ladish, its directors and ATI were named as defendants in
lawsuits brought by and on behalf of Ladish shareholders in
Wisconsin state court and in the United States District
Court for the Eastern District of Wisconsin, each challenging
ATIs acquisition of Ladish pursuant to the merger
agreement. The respective plaintiffs generally allege that the
consideration that Ladish shareholders will receive in
connection with the merger is inadequate and that Ladishs
directors breached their fiduciary duties to Ladish shareholders
in negotiating and approving the merger agreement. Generally,
the respective plaintiffs further allege that Ladish and ATI
aided and abetted the alleged breaches by Ladishs
directors. The complaints seek various forms of relief,
including injunctive relief that would, if granted, prevent the
merger from being consummated in accordance with the
agreed-upon
terms. Ladish and ATI believe that the claims stated in the
complaints against them (and, in Ladishs case, also its
directors) are all without merit and intend to defend the
actions vigorously. See The Merger Litigation
Relating to the Merger.
One of the conditions to the closing of the merger is the
absence of any law, injunction, judgment or ruling by any
governmental authority enjoining, restraining, preventing or
prohibiting the consummation of the merger or making the merger
illegal. As such, if the plaintiffs are successful in obtaining
an injunction prohibiting Ladish or ATI from consummating the
merger on the
agreed-upon
terms, then such injunction may prevent the merger from being
completed within the expected timeframe, or at all.
ATI may
pursue other strategic transactions in the future, which could
be difficult to implement, disrupt its business or change its
business profile significantly.
ATI will continue to consider opportunistic strategic
transactions, which could involve acquisitions or dispositions
of businesses or assets. Any future strategic transaction could
involve numerous risks, including:
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potential disruption of ATIs ongoing business and
distraction of management;
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difficulty integrating acquired businesses or segregating assets
to be disposed of;
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exposure to unknown
and/or
contingent or other liabilities, including litigation arising in
connection with the acquisition, disposition
and/or
against any businesses ATI may acquire; and
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changing ATIs business profile in ways that could have
unintended consequences.
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If ATI enters into significant strategic transactions in the
future, related accounting charges may affect its financial
condition and results of operations, particularly in the case of
any acquisitions. In addition, the financing of any significant
acquisition may result in changes in its capital structure,
including the incurrence of additional indebtedness. Conversely,
any material disposition could reduce its indebtedness or
require the amendment or refinancing of a portion of its
outstanding indebtedness. ATI may not be successful in
addressing these risks or any other problems encountered in
connection with any strategic transactions.
18
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus, and the documents incorporated
herein by reference, include certain forward-looking information
about ATI, Ladish and the combined company after completion of
the merger that is intended to be covered by the safe harbor for
forward-looking statements provided by the
U.S. Private Securities Litigation Reform Act of 1995. You
should not place undue reliance on these statements.
Representatives of ATI and Ladish may also make forward-looking
statements. Forward-looking statements include information
concerning ATIs and Ladishs possible or assumed
future results of operations, including descriptions of
ATIs and Ladishs business strategies. These
statements often include words such as believe,
expect, project, anticipate,
intend, plan, estimate,
seek, will, may,
would, should, could,
can, feel, forecasts,
to be or similar expressions. These statements are
based on ATIs and Ladishs expectations and beliefs
at the time such statements were made; however, any such
statement may be influenced by factors that could cause actual
outcomes and results to be materially different from those
projected or anticipated. As you read and consider this proxy
statement/prospectus, you should understand that these
statements are not guarantees of performance or results. These
forward-looking statements are subject to numerous risks and
uncertainties, including the risks described in this proxy
statement/prospectus under Risk Factors, that could
cause actual results to differ
Some other risks and uncertainties include, but are not limited
to:
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the risk that the respective businesses of ATI and Ladish will
not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected;
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the risk that expected synergies, operational efficiencies and
cost savings from the merger may not be fully realized or
realized within the expected time frame;
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the risk that ATIs revenues following the merger may be
lower than expected;
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the inability to obtain governmental approvals of the merger on
the proposed terms and schedule;
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the operational and profitability impact of divestitures that
may be required to be undertaken to secure regulatory approval;
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the risk of changes in applicable tax or other laws;
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the failure of Ladish shareholders to adopt the merger agreement;
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adverse response by Ladishs and ATIs employees,
customers, suppliers or other business partners;
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other risks to consummation of the merger;
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significant changes in the business environment, including as a
result of industry consolidation, and the effect of competition
in ATIs and Ladishs markets;
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unanticipated regulatory or judicial proceedings or rulings;
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potential or actual litigation;
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the risk that assumptions and estimates used in applying
critical accounting policies prove unreliable, inaccurate or not
predictive of actual results;
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the risk that the design of either companys disclosure
controls and procedures or internal controls prove inadequate,
or are circumvented, thereby causing losses or errors in
information or a delay in the detection of fraud; and
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the impact on ATIs or Ladishs respective businesses,
as well as on the risks set forth above, of various domestic or
international military or terrorist activities or conflicts.
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For additional information about factors that could cause actual
results to differ materially from those described in the
forward-looking statements, please see the factors described
under the headings Forward-Looking Statements in the
ATI
Form 10-K,
Forward-Looking and Other Statements in the ATI
Form 10-Q
and Forward Looking Statements in the Ladish
Form 10-K
and in Part I, Item 3, Quantitative and Qualitative
Disclosures About
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Market Risk, in the Ladish
Form 10-Q.
See Where You Can Find More Information for the
location of information incorporated by reference into this
proxy statement/prospectus.
Because these forward-looking statements are subject to
assumptions and uncertainties, actual results may differ
materially from those expressed or implied by these
forward-looking statements, and the factors that will determine
these results are beyond ATIs or Ladishs ability to
control or predict.
ATI and Ladish caution you not to place undue reliance on the
forward-looking statements, which speak only as of the date of
this proxy statement/prospectus, in the case of forward-looking
statements contained in this proxy statement/prospectus, or the
dates of the documents incorporated by reference in this proxy
statement/prospectus, in the case of forward-looking statements
made in those incorporated documents.
Except to the extent required by applicable law or regulation,
ATI and Ladish undertake no obligation to update these
forward-looking statements to reflect events or circumstances
after the date of this proxy statement/prospectus or to reflect
the occurrence of unanticipated events.
All subsequent written or oral forward-looking statements
concerning the merger or other matters addressed in this proxy
statement/prospectus and attributable to ATI or Ladish or any
person acting on their behalf are expressly qualified in their
entirety by the cautionary statements contained or referred to
in this section.
Neither ATIs nor Ladishs independent registered
public accounting firms have compiled, examined or otherwise
applied procedures to the prospective financial information
presented herein and, accordingly, do not express an opinion or
any other form of assurance on such information or its
achievability.
20
THE
SPECIAL MEETING
Overview
This proxy statement/prospectus is being provided to Ladish
shareholders as part of a solicitation of proxies by the Ladish
board of directors for use at the special meeting of Ladish
shareholders and at any adjournments or postponements thereof.
This proxy statement/prospectus is first being furnished to
shareholders of Ladish on or
about ,
2011. In addition, this proxy statement/prospectus constitutes a
prospectus of ATI in connection with the issuance by ATI of its
common stock in connection with the merger. This proxy
statement/prospectus provides Ladish shareholders with
information they need to know to be able to vote or instruct
their vote to be cast at the special meeting of Ladish
shareholders.
Date,
Time and Place of the Special Meeting
The special meeting of Ladish shareholders will be held
on ,
2011, at :00 a.m., local time,
at .
Purposes
of the Special Meeting
At the special meeting, Ladishs shareholders will be asked:
1. To consider and vote upon the proposal to adopt the
Agreement and Plan of Merger, dated as of November 16,
2010, by and among ATI, LPAD, PADL and Ladish, as amended from
time to time, pursuant to which ATI will acquire Ladish through
a merger of LPAD with and into Ladish; and
2. To consider and vote upon a proposal to approve the
adjournment of the meeting, if necessary, to solicit additional
proxies if there are insufficient votes to adopt the merger
agreement at the time of the special meeting.
Your properly signed and dated proxy card will be voted in
accordance with the boards recommendation unless you
specify otherwise.
Record
Date; Outstanding Shares; Shares Entitled to Vote
The record date for the special meeting of Ladish shareholders
is ,
2011. Only shareholders of record at the close of business
on ,
2011 are entitled to receive notice of, and to vote at, the
special meeting or postponements or adjournments thereof (unless
the board of directors fixes a new record date for any such
postponed or adjourned meeting). You are entitled to one vote
for each share of Ladish common stock you own. At the close of
business
on ,
2011, there were
approximately shares
of Ladish common stock outstanding and entitled to vote, held by
approximately
holders of record and, based on information available as of the
date of this proxy
statement/prospectus,
beneficial holders.
Quorum;
Vote Required; Abstentions and Broker Non-Votes
No business may be transacted at the special meeting unless a
quorum is present. Adoption of the merger agreement requires the
affirmative vote of a majority of all the votes entitled to be
cast by holders of outstanding shares of Ladish common stock. If
a quorum is not present, the affirmative vote of a majority of
the shares of Ladish common stock represented at the special
meeting will have the power to adjourn the special meeting in
accordance with Ladishs by-laws. In addition, if fewer
shares of Ladish common stock are voted in favor of the adoption
of the merger agreement than the number required for its
adoption, the special meeting may be adjourned or postponed to
allow additional time for obtaining additional proxies or votes.
At any subsequent reconvening of the special meeting, all
proxies will be voted in the same manner as they would have been
voted at the original convening of the special meeting, except
for any proxies that have been effectively revoked or withdrawn
prior to the subsequent meeting. All shares of Ladish common
stock represented at the special meeting, including abstentions
and broker non-votes, will be included in the calculation of the
number of shares of Ladish common stock represented at the
special meeting for purposes of determining whether a quorum has
been achieved.
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Adoption of the merger agreement requires the affirmative vote
of a majority of all the votes entitled to be cast by holders of
outstanding shares of Ladish common stock. 7,853,777 shares
of Ladish common stock must be voted in favor of the adoption of
the merger agreement in order for the merger agreement to be
adopted by the Ladish shareholders, based upon the number of
shares of Ladish common stock outstanding
on ,
2011. Because the affirmative vote of all the votes entitled to
be cast by holders of outstanding shares of Ladish common stock
is needed to proceed with the merger, if you abstain from
voting, or fail to vote, with respect to the proposal to adopt
the merger agreement, it will have the same effect as a vote
AGAINST the adoption of the merger agreement.
Any adjournment of the special meeting by vote of Ladish
shareholders for the purpose of soliciting additional proxies or
for any other purpose must be approved by the affirmative vote
of a majority of the shares of Ladish common stock represented
at the special meeting.
In accordance with the rules of the NYSE, banks, brokers and
other nominees who hold shares of Ladish common stock in
street name for their customers but do not have
discretionary authority to vote the shares may not exercise
their voting discretion with respect to the adoption of the
merger agreement. Accordingly, if banks, brokers or other
nominees do not receive specific voting instructions from the
beneficial owner of such shares, they may not vote such shares
with respect to the adoption of the merger agreement or the
adjournment of the special meeting to solicit further proxies to
approve the proposal to adopt the merger agreement. For shares
of Ladish common stock held in street name, only
shares of Ladish common stock affirmatively voted
FOR adoption of the merger agreement or
FOR the adjournment of the special meeting to
solicit further proxies to approve the proposal to adopt the
merger agreement will be counted as a favorable vote for such
proposal. Failing to provide voting instructions to your bank,
broker or other nominee will have the same effect as a vote
AGAINST the proposal to adopt the merger
agreement.
Attendance
at the Special Meeting
All holders of shares of Ladish common stock as of the close of
business
on ,
2011, the record date for the special meeting, including
registered shareholders (shareholders holding shares in their
own name) and beneficial owners of stock registered in the
street name of a bank, broker or other nominee, and
Ladishs invited guests may attend the special meeting. If
you are a registered shareholder, please be prepared to provide
proper identification, such as a drivers license. If you
hold your shares in street name, you will need to
provide proof of ownership, such as a recent account statement
or letter from your bank, broker or other nominee, along with
proper identification.
How to
Vote
Voting
in Person
Registered shareholders will be able to vote in person at the
special meeting. If you are not a registered shareholder, but
instead hold your shares in street name through a
bank, broker or other nominee, you must provide a proxy executed
in your favor from your bank, broker or other nominee in order
to be able to vote in person at the special meeting.
Voting
by Proxy
To ensure that your shares are represented at the special
meeting, we recommended that you vote promptly by proxy, even if
you plan to attend the special meeting in person. If you attend
the special meeting and wish to vote in person or change your
vote, you can always revoke your proxy by voting at the meeting.
If you are a registered shareholder, you may vote by proxy using
one of the methods described below.
Vote by Telephone or via the Internet. This
proxy statement/prospectus is accompanied by a proxy card with
instructions for voting. You may vote by telephone by calling
the toll-free number or via the Internet by accessing the
Internet address as specified on the enclosed proxy card. Your
shares will be voted as you direct in the same manner as if you
had completed, signed, dated and returned your proxy card, as
described below.
Vote by Proxy Card. If you complete, sign,
date and return the enclosed proxy card by mail so that it is
received before the special meeting, your shares will be voted
in the manner directed by you on your proxy card. You may vote
FOR, vote AGAINST
or abstain from voting with respect to each of the proposal
to adopt the
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merger agreement and the proposal to adjourn the special meeting
to solicit further proxies to approve the proposal to adopt the
merger agreement.
If you return your signed proxy card, but do not specify how you
want to vote your shares, your shares will be voted
FOR the proposal to adopt the merger
agreement and the proposal to adjourn the special meeting. In
addition, your shares will be voted in the discretion of the
persons appointed as proxies in the proxy card as to any other
business that is properly brought before the special meeting or
any adjournment or postponement of the meeting. Proxy cards that
are returned without a signature will not be counted as present
at the special meeting and cannot be voted.
If your shares are held by a bank, broker or other nominee on
your behalf in street name, your bank, broker or
other nominee will send you instructions as to how to vote your
shares by proxy. Many banks and brokerage firms have a process
for their customers to provide voting instructions by telephone
or via the Internet. If your shares are held in an account at a
bank or brokerage firm that participates in such a program, you
may direct the vote of these shares by telephone or over the
Internet by following the voting instructions enclosed with the
proxy form from the bank or brokerage firm. The Internet and
telephone proxy procedures are designed to authenticate
shareholders identities, to allow shareholders to give
their proxy voting instructions and to confirm that those
instructions have been properly recorded. Votes directed by
telephone or over the Internet through such a program must be
received by :00 a.m., Central Time,
on ,
2011. Directing the voting of your shares will not affect your
right to vote in person if you decide to attend the special
meeting; however, you must first obtain a signed and properly
executed legal proxy from your bank, broker or other nominee to
vote your shares held in street name at the special
meeting. Requesting a legal proxy prior to the deadline
described above will automatically cancel any voting directions
you have previously given by telephone or over the Internet with
respect to your shares. If you do not provide your bank, broker
or other nominee with instructions as to how to vote your
shares, your bank, broker or other nominee will not be able to
vote your shares, which will have the same effect as a vote
AGAINST the proposal to adopt the merger
agreement.
Revoking
Your Proxy
Your proxy is revocable. If you are a registered shareholder,
you can revoke your proxy at any time before it is voted at the
special meeting by:
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submitting a new proxy with a later date, by using the telephone
or Internet voting procedures described above, or by completing,
signing, dating and returning a new proxy card by mail to Ladish;
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attending the special meeting and voting in person; or
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sending written notice of revocation to Ladishs secretary
at 5481 South Packard Avenue, Cudahy, Wisconsin 53110.
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Attending the special meeting without taking one of the actions
described above will not in itself revoke your proxy. Please
note that if you want to revoke your proxy by mailing a new
proxy card to Ladish or by sending a written notice of
revocation to Ladishs secretary, you should ensure that
you mail your new proxy card or written notice of revocation in
sufficient time for it to be received by Ladish before the day
of the special meeting.
If you hold your shares in street name through a
bank, broker or other nominee, you will need to follow the
instructions provided to you by your bank, broker or other
nominee in order to revoke your proxy or submit new voting
instructions.
Stock
Ownership and Voting by Ladishs Directors and Executive
Officers
At the close of business
on ,
2011, the record date for the special meeting, Ladishs
directors and executive officers and their respective affiliates
had the right to vote
approximately shares
of the then-outstanding Ladish voting stock at the special
meeting, representing
approximately % of Ladish common
stock outstanding and entitled to vote at the special meeting.
It is expected that Ladishs directors and executive
officers will vote their shares FOR the
adoption of the merger agreement, although none of them has
entered into any agreement requiring them to do so.
23
Proxy
Solicitations
Ladish is soliciting proxies for the special meeting from Ladish
shareholders. Ladish will bear the entire cost of soliciting
proxies from Ladish shareholders. In addition to this mailing,
Ladishs directors, officers and employees (who will not
receive any additional compensation for their services) may
solicit proxies personally, electronically or by telephone.
Ladish will also request that banks, brokerage houses and other
custodians, nominees and fiduciaries send proxy materials to the
beneficial owners of Ladish common stock and will, if requested,
reimburse them for their reasonable
out-of-pocket
expenses in doing so.
Shareholders should not submit any stock certificates with their
proxy cards. A transmittal form with instructions for the
surrender of certificates representing shares of Ladish common
stock will be mailed to Ladish shareholders if the merger is
completed.
Dissenters
Rights
Dissenters rights are statutory rights that enable
shareholders to dissent in certain circumstances from an
extraordinary transaction, such as a merger, and to demand that
a corporation pay the shareholders the fair value of their
shares as determined by a court in a judicial proceeding instead
of receiving the consideration offered to shareholders in
connection with the extraordinary transaction. Under Wisconsin
law, dissenters rights generally are not available to
holders of shares, such as shares of Ladish common stock, that
are listed on a national securities exchange, unless the
transaction is a business combination involving a significant
shareholder or the corporations articles of incorporation
provide otherwise. Ladishs articles of incorporation do
not otherwise provide for dissenters rights. Accordingly,
holders of Ladish common stock are not entitled to
dissenters rights in connection with the merger.
Other
Business
Ladish is not aware of any other business to be acted upon at
the special meeting. If, however, other matters are properly
brought before the special meeting, your proxies will have
discretion to vote or act on those matters according to their
best judgment and they intend to vote the shares as the Ladish
board of directors may recommend.
Adjournments
Adjournments of the special meeting may be made for the purpose
of, among other things, soliciting additional proxies from
Ladish shareholders. At the adjourned meeting, Ladish may
transact any business that it might have transacted at the
original meeting, provided that a quorum is present at such
adjourned meeting. Proxies submitted by Ladish shareholders for
use at the special meeting will be used at any adjournment or
postponement of the meeting. References to the special meeting
in this proxy statement/prospectus are to such special meeting
as so adjourned or postponed from time to time.
Assistance
If you need assistance in completing your proxy card or have
questions regarding the special meeting, please contact
Ladishs Investor Relations department at
(414) 747-2611.
24
THE
MERGER
The following discussion contains certain material information
about the merger. The discussion is subject, and qualified in
its entirety by reference, to the merger agreement and the
opinion of Baird included as Annexes A and B, respectively,
to this proxy statement/prospectus. ATI and Ladish urge you to
read carefully this entire document, including the merger
agreement, for a more complete understanding of the merger.
General
Under the terms of the merger agreement, LPAD will be merged
with and into Ladish, with Ladish continuing as the surviving
entity and a wholly owned subsidiary of ATI. Following the
merger, Ladish will no longer be a separate publicly held
corporation. Immediately following the merger, Ladish will be
merged with and into PADL, with PADL continuing as the surviving
entity and a wholly owned subsidiary of ATI. Following the
merger and other transactions contemplated by the merger, ATI
expects to continue to operate the Ladish businesses under the
name Ladish Co.
Each share of Ladish common stock will be converted in the
merger into the right to receive 0.4556 of a share of ATI common
stock and $24.00 in cash. ATI will not issue fractional shares
in the merger. Instead, it will pay cash for fractional shares
of common stock based on the arithmetic average of the daily
average of the high and low sales prices per share of ATI common
stock as reported on the NYSE during the 10 trading days
immediately preceding the date on which the merger is
consummated.
Shares of ATI common stock issued and outstanding at the
completion of the merger will remain outstanding, and rights
associated with those shares will be unaffected by the merger.
ATIs common stock will continue to trade on the NYSE
following the merger under the symbol ATI.
The merger agreement was the culmination of arms-length
negotiations between representatives of ATI and Ladish,
including their respective counsel. Because one-half of the
merger consideration is in the form of ATI common sock and the
other half in cash, the transaction was structured as a forward
triangular merger (with the merger subsidiary, LPAD, merging
with and into Ladish) to enable Ladish shareholders to receive
shares of ATI common stock in the merger in a tax-free
reorganization. ATI has informed Ladish that it would only agree
to a fixed exchange ratio with regard to the shares of ATI
common stock to be issued in the merger, and Ladish concurred.
In addition to certain representations and warranties of Ladish
and agreements of Ladish regarding the conduct of its business
pending the merger, the negotiations focused primarily on the
fiduciary duty standard under which Ladish could explore or
accept a superior proposal from a third party to acquire it, the
ability of ATI to make another proposal to acquire Ladish in
light of the superior proposal and within what time frame, the
scope of Ladishs obligation to call and hold a meeting of
its shareholders to adopt the merger agreement, the
circumstances under which ATI or Ladish could terminate the
merger agreement and Ladish would be obligated to pay ATI the
termination free, the amount of the termination fee (which the
parties agreed would be equal to approximately 4% of the merger
consideration), and the agreed upon venue for any litigation
between the parties concerning the merger agreement.
See The Merger Agreement for additional and more
detailed information regarding the merger agreement, which is
the legal document governing the merger, including information
about the conditions to the merger and the provisions for
terminating or amending the merger agreement.
Background
of the Merger
Each of Ladishs and ATIs board of directors has from
time to time separately engaged with the senior management of
their respective companies in reviews and discussions of
potential strategic alternatives and has considered ways to
enhance their respective performance and prospects in light of
competitive and other relevant developments. These reviews and
discussions have focused on, among other things, the business
environment facing their respective industries generally and
each respective company in particular, as well as conditions in
such industries and the capital and debt financing markets. For
each company, these reviews have also included periodic
discussions with respect to potential transactions that would
further its strategic objectives and enhance stockholder value
and the potential benefits and risks of those transactions.
25
ATI previously had given consideration to potential strategic
transactions to provide upstream integration opportunities,
particularly with regard to serving aerospace end markets,
including with companies having forging capabilities. By the end
of 2008, aerospace end markets for ATI products had grown
significantly and accounted for nearly 30% of ATI sales in 2008.
At a meeting of the ATI board of directors in May 2009,
management discussed with the ATI board of directors the
prospect of exploring a strategic transaction with Ladish, which
was one of very few remaining independent domestic forgers
capable of producing large, very specialized alloy components
used in aerospace applications. The ATI board of directors
authorized ATI management to initiate discussions with Ladish
regarding a strategic combination.
ATI and Ladish have had a long-standing customer/supplier
relationship pursuant to which Ladish has purchased specialty
metals from ATI. The commercial relationship between ATI and
Ladish has existed for over 25 years. For the years ended
December 31, 2008 and 2009, Ladish purchased ATI products
with aggregate purchase prices of approximately $73 million
and $44 million, respectively.
In May 2009, L. Patrick Hassey, ATIs Chairman and Chief
Executive Officer, contacted Kerry L. Woody, then Ladishs
Chief Executive Officer and a member of its board of directors,
and Wayne E. Larsen, Ladishs Vice President Law/Finance
and Secretary, to suggest that ATI and Ladish consider a
potential strategic combination. Mr. Hassey did not present
any specific proposal at that time. He did, however, point out
that (i) ATI would be willing to offer a significant
premium over recent market prices of Ladish common stock,
(ii) that the consideration would be shares of ATI common
stock in a tax-free transaction, enabling Ladish shareholders to
participate in the future of the combined company,
(iii) that the transaction would differentiate the combined
company in the markets it serves and (iv) that no
significant regulatory issues were anticipated. He also
expressed his belief that the combined company would have a
greater critical mass of technological, financial, operational
and marketing capabilities that would enable it to compete more
successfully in the increasingly more competitive and
consolidating global markets, and that the inherent synergies of
the combination would provide lower overall operating costs,
further enabling the combined company to more effectively
compete in the highly competitive global marketplace.
Mr. Woody responded that he would discuss the matter with
members of Ladishs board of directors and subsequently
reported on his conversation with Mr. Hassey to
Ladishs board of directors.
Mr. Hassey contacted Messrs. Woody and Larsen on
August 30, 2009 to further discuss the strategic reasons
for combining the companies and the potential benefits.
Mr. Hassey reiterated the strategic factors that he had
discussed with Messrs. Woody and Larsen in May 2009, as
well as the benefits to the combined company of the near
completion of several ATI strategic capital projects designed to
expand production capacity of various special metals and alloys
and ATIs view of the overall complementary fit of the two
companies. In September 2009, representatives of ATI and Ladish
began the process of negotiating the terms of a confidentiality
agreement. Mr. Larsen provided a draft of a confidentiality and
standstill agreement to Jon D. Walton, ATIs Executive Vice
President, Human Resources, Chief Legal and Compliance Officer
and Corporate Secretary, on September 4, 2009. ATIs
senior management, including Messrs. Hassey and Walton and
Richard J. Harshman, ATIs then Executive Vice President,
Finance and Chief Financial Officer and currently ATIs
President and Chief Operating Officer, reviewed and discussed
the draft confidentiality and standstill agreement over the
following days. At a meeting of ATIs board of directors on
September 10, 2009, ATIs senior management discussed
with ATIs board of directors the views of senior
management regarding a potential strategic combination with
Ladish and the draft confidentiality and standstill agreement
that had been provided by Mr. Larsen. Mr. Walton
provided a revised draft confidentiality and standstill
agreement to Mr. Larsen on September 14, 2009.
Mr. Larsen indicated to Mr. Walton on
September 15, 2009 that he would review the revised draft
confidentiality and standstill agreement with Ladishs
board of directors at its meeting on September 25, 2009.
On September 25, 2009, Ladish announced that Mr. Woody
had retired as Ladishs Chief Executive Officer and
resigned from Ladishs board of directors. At that time,
Ladishs board of directors appointed Gary J. Vroman as
Ladishs President and Chief Executive Officer and elected
Mr. Vroman as a member of Ladishs board of directors.
Mr. Larsen also then was elected as a member of
Ladishs board of directors. The Ladish board of directors
also concluded that, as a result of these management changes,
which had the potential in at least the short term to cause
customers, vendors or shareholders to question Ladishs
direction or stability, and the then current economic and
financial climate, which had resulted in Ladishs stock
price being far lower than its 2007 and 2008 highs, that it was
not an appropriate time to explore a strategic combination with
ATI. Mr. Larsen communicated to Mr. Walton on
26
September 28, 2009 that, as a result of the management
changes, Ladish did not intend to take actions in furtherance of
a potential strategic combination with ATI at that time.
On October 6, 2009, ATIs board of directors held a
meeting to further consider a potential strategic combination
with Ladish. ATIs board of directors received at that
meeting an update from ATIs senior management and
considered recent trends in Ladishs stock price, which,
like ATIs stock price, was recovering after having reached
very low levels during the financial crisis and recession.
Additional topics reviewed, which were presented by management,
included (i) publicly-available business and financial
information regarding Ladish, (ii) the merger and
acquisition environment for the specialty metals industry
generally, (iii) the strategic rationale for the merger,
which was to create a more vertically integrated supply chain
for customers, particularly in the aerospace industry,
(iv) potential synergies anticipated to result from the
proposed merger, which consisted largely of the elimination of
expenses associated with Ladish being a public company,
including legal and accounting expenses and expenses associated
with compliance with federal securities laws and securities
exchange rules, (v) the potential pro forma impact of the
merger on ATIs earnings per share, including the impact of
the range of potential merger consideration on whether the
transaction would be accretive or dilutive to ATIs pro
forma earnings per share and over what time periods,
(vi) the relative contributions of ATI and Ladish to
various financial metrics of the combined company, including
earnings before interest, taxes, depreciation and amortization,
or EBITDA, and free cash flows, and (vii) and the pro forma
ownership in the combined company of stockholders of ATI and
shareholders of Ladish. ATIs board of directors authorized
ATIs senior management to send a letter to Ladishs
board of directors in which ATIs interest in a potential
strategic combination with Ladish would be reiterated.
On October 13, 2009, Mr. Hassey sent a letter to
Mr. Vroman in which Mr. Hassey proposed a business
combination with Ladish in which Ladishs shareholders
would receive an unspecified premium over the current and
three-month trailing average market price. The letter indicated
that ATI contemplated that the form of consideration would be
shares of ATI common stock. The reason that ATI proposed an
all-stock transaction was that it was believed that the ability
of Ladish shareholders to continue to participate in the future
of the combined company, together with the tax-free nature of
the transaction, would be attractive to Ladish shareholders. ATI
also indicated in the letter that, as proposed, the potential
transaction would be subject to ordinary course due diligence,
execution of a mutually acceptable definitive agreement and
customary conditions.
At a meeting of Ladishs board of directors on
November 4, 2009, Mr. Hasseys October 13,
2009 letter was discussed extensively. The Ladish board of
directors concluded that Ladishs shareholders should
receive better value if management continued its long-term
strategic plan and reaped the benefits of the significant
capital investments Ladish had made in recent years, rather than
entertaining an offer from ATI near a market bottom. On
November 6, 2009, Mr. Vroman contacted Mr. Hassey
and stated that Ladishs board of directors and management
team were in the midst of executing a long-term strategic plan
for the growth and expansion of Ladish and that Ladishs
board of directors did not believe it to be an appropriate time
for Ladish to undertake a strategic combination with ATI.
On November 9, 2009, Mr. Hassey sent a letter to
Mr. Vroman, setting forth a non-binding proposal for a
strategic combination, subject to the negotiation and execution
of a definitive agreement. ATI proposed a merger transaction in
which each outstanding share of Ladish common stock would be
converted into 0.614 of a share of ATI common stock,
representing a price of approximately $20.00 per share of Ladish
common stock and a premium of approximately 35.7% over the
50-day
moving average price of $14.74 per share of Ladish common stock
and a 58.2% premium over the closing stock price for Ladish
common stock on November 6, 2009 of $12.64 per share.
On November 13, 2009, Mr. Vroman sent a letter to
Mr. Hassey in which Mr. Vroman acknowledged receipt of
Mr. Hasseys November 9, 2009 letter and the
communication of the contents of that letter to Ladishs
board of directors. Mr. Vroman further indicated that the
position of Ladishs board of directors and management team
conveyed to Mr. Hassey on November 6, 2009 remained
unchanged.
On November 13, 2009, Mr. Vroman suggested to
Mr. Hassey that the two of them meet during the week of
November 16, 2009 at an industry event in London that both
Mr. Vroman and Mr. Hassey would be attending.
Mr. Vroman and Mr. Hassey met in person in London on
November 19, 2009 and agreed to suspend discussions of a
potential strategic combination pending analysis of
Ladishs and ATIs respective results for the fourth
quarter of 2009.
27
On March 15, 2010, Mr. Walton sent by email to
Mr. Larsen a copy of a letter dated March 15, 2010
from Mr. Hassey to Ladishs board of directors. The
letter reiterated ATIs interest in pursuing a possible
strategic combination with Ladish. ATI proposed in the letter a
merger transaction in which each outstanding share of Ladish
common stock would be converted into 0.542 of a share of ATI
common stock, representing a price of approximately $27.50 per
share of Ladish common stock and a premium of approximately
77.5% over the
90-day
moving average price of $15.51 per share of Ladish common stock
and a 35% premium over the closing price for Ladish common stock
on March 12, 2010 of $20.39 per share.
Mr. Larsen spoke by telephone with Mr. Walton on
March 25, 2010 and acknowledged receipt of
Mr. Hasseys March 15, 2010 letter.
Mr. Larsen indicated that a meeting of Ladishs board
of directors was scheduled for March 29, 2010 and that the
March 15, 2010 letter would be discussed at that meeting.
On March 25, 2010, a representative of another bidder
(Bidder X) made an unsolicited contact with
Ladish and expressed Bidder Xs interest in a business
combination with Ladish.
On March 29, 2010, the Ladish board of directors held a
special meeting, at which a representative of Foley &
Lardner LLP, Ladishs outside counsel, was present for a
portion. At the meeting, the board of directors discussed the
ATI offer and the initial expression of interest from
Bidder X. The board also discussed with the representative
of Foley & Lardner the applicable fiduciary duties of
the board of directors in connection with the offer and
expression. The Ladish board of directors authorized management
to continue preliminary discussions with ATI and to share
limited due diligence information, subject to receipt of an
appropriate confidentiality and standstill agreement. Also on
March 29, 2010, Ladish retained Baird as its financial
advisor in connection with a potential strategic combination.
On March 31, 2010, Mr. Larsen sent a draft
confidentiality and standstill agreement to Mr. Walton. On
April 1, 2010, Ladish executed and delivered to ATI the
confidentiality and standstill agreement, which was dated as of
April 1, 2010. On April 12, 2010, ATI executed the
confidentiality agreement and delivered its signature page to
Ladish. In the confidentiality and standstill agreement, ATI and
Ladish agreed to a standstill provision providing
that, subject to certain exceptions, neither company would, for
a period of three years, engage in certain types of transactions
to acquire securities or assets of the other company or take
other actions seeking to control or influence the other company.
On April 15, 2010, Messrs. Vroman and Larsen met with
officers of Bidder X regarding a potential business
combination between Bidder X and Ladish. Bidder X did
not make any proposal or provide an indicative price range to
Ladish at or around that time, but asked that Ladish contact
Bidder X if Ladish decided that it was an appropriate time
for it to enter into a strategic business combination.
On April 19, 2010, Messrs. Hassey, Harshman, Walton,
Vroman and Larsen met at Ladishs offices in Cudahy,
Wisconsin to further discuss ATIs and Ladishs
respective interests in pursuing a strategic combination. Also
in April 2010, ATI retained Credit Suisse Securities (USA) LLC,
referred to as Credit Suisse, as its financial advisor in
connection with a potential strategic combination with Ladish.
On May 4, 2010, a special meeting of the Ladish board of
directors was held, with representatives of Baird and
Foley & Lardner. At the meeting, representatives of
Baird discussed with the Ladish board of directors Bairds
preliminary valuation analyses. In particular, Baird provided
its perspective on (i) Ladishs financial performance
on a stand-alone basis and relative to the selected public
companies, (ii) ATIs March 15, 2010 proposal,
(iii) process considerations and (iv) other potential
acquirers of Ladish. In addition, a representative of
Foley & Lardner summarized for the board of directors
the fiduciary duties of the board of directors in connection
with a business transaction.
Over the following weeks, representatives of ATI and Ladish,
including their respective financial advisors, continued to
engage in preliminary conversations regarding the structure of
various aspects of and amount of consideration that would be
involved in a proposed business combination, with the parties
being in agreement that such a business combination would be
structured as a merger, and review limited initial due
diligence information. During this time Baird continued to
advise Ladish on process considerations, and Credit Suisse
compiled data at the request of ATI and assisted with certain
aspects of the due diligence process. Also during this time, the
Ladish board
28
of directors met several times at which meetings the board of
directors was updated on the status of negotiations and gave
further instruction and advice to management, Baird and
Foley & Lardner as to the conduct of the negotiations.
On August 17, 2010, Mr. Hassey sent to Mr. Vroman
a letter from Mr. Hassey to the members of Ladishs
board of directors. The letter reiterated ATIs interest in
pursuing a possible strategic combination with Ladish. ATI
proposed in the letter a merger transaction in which Ladish
shareholders would receive $40.12 for each outstanding share of
Ladish common stock, consisting of $10.03 of cash and $30.09 in
ATI common stock. The letter noted that this proposed
consideration represented a premium of approximately 43.7% over
the 30-day
volume weighted average price of $27.92 per share of Ladish
common stock, 53.4% over the
60-day
volume weighted average price of $26.16 per share of Ladish
common stock, 54.0% over the
90-day
volume weighted average price of $26.05 per share of Ladish
common stock and 42.0% over the closing price for Ladish common
stock on August 16, 2010 of $28.25 per share.
The Ladish board of directors discussed ATIs letter of
August 17, 2010 and the negotiations with ATI generally at
special meetings of the board held on August 19 and 25, 2010. At
these meetings representatives of Baird discussed with the
Ladish board of directors Bairds updated preliminary
valuation analyses. The board of directors also discussed other
potential partners for a business combination involving Ladish.
The Ladish board of directors and the Baird representatives also
discussed the ability of other potential partners to complete
such a transaction. In addition, a representative of
Foley & Lardner reviewed the fiduciary duties of the
board of directors in connection with a business combination
transaction. The Ladish board of directors concluded that it was
not in the best interests of Ladish or its shareholders to
actively market Ladish to a large number of potential bidders
primarily because ATI had indicated that it was not interested
in participating in such an auction process and because of the
potentially destabilizing effects such an auction process can
have on a companys employees, customer and suppliers.
While the Ladish board of directors was willing to consider a
transaction with a compelling price and long-term strategic
benefits, such as the merger that ATI ultimately proposed, it
was not committed to selling the company.
In early September 2010, Mr. Vroman informed
Mr. Hassey that Ladishs board of directors intended
to contact one or more potential bidders that had indicated an
interest in a strategic transaction with Ladish before the board
would further pursue a business combination with ATI.
Mr. Hassey initially objected and indicated that ATI may
choose to cease further negotiations with Ladish. Several days
later, Mr. Hassey called Mr. Vroman and told him he
would not object to Ladish approaching at that time any person
the Ladish board of directors thought appropriate in light of
prior contacts and the directors fiduciary duties, but
that Ladish should make any such approach quickly and talk to
ATI after Ladish received a response to any such approach.
On September 9, 2010, Mr. Larsen contacted a
representative of Bidder X about Bidder Xs
interest in making an offer with respect to a business
combination with Ladish. Mr. Larsen communicated to
Bidder X that time was of the essence and that
Bidder X should make its best offer. Ladish did not contact
any other potential bidders.
On September 9, 2010, Bidder X and Ladish executed a
confidentiality and standstill agreement that was substantially
identical to the confidentiality and standstill agreement
between ATI and Ladish. During the following week Bidder X
conducted due diligence with respect to Ladish.
On September 20, 2010, Bidder X delivered to Ladish a
written offer with respect to a proposed strategic combination
with Ladish. Bidder Xs offer involved consideration
of $40.00 per share of Ladish common stock, with half of the
consideration being in cash and half of the consideration
consisting of Bidder Xs common stock.
On September 22, 2010, the Ladish board of directors met
with representatives of Baird and Foley & Lardner. At
the meeting, Mr. Vroman updated the board on Ladish
managements communications with ATI and Bidder X. The
board of directors then discussed the relative merits of the
current offers from ATI and Bidder X, including the amounts
and cash-stock mix of the offers and the perceived better
strategic fit, greater opportunities for synergies and lower
regulatory risk associated with the ATI offer. The board of
directors also considered that Bidder X had made an offer
that was essentially equal to the ATI offer in amount even
though it had been invited to make a best offer, leading the
Ladish board of directors to conclude that Bidder X was not
likely to significantly increase its offer. Based on the
foregoing and other factors the directors deemed relevant,
including the advice of Baird and Foley & Lardner, the
Ladish board of directors instructed management to attempt to
convince ATI to materially increase its offer to differentiate
it from other offers and make it compelling to the Ladish board
of directors.
29
On October 5, 2010, Mr. Vroman met with
Mr. Hassey in Pittsburgh, Pennsylvania. Mr. Vroman
indicated that Ladish had received an offer from a third party
with respect to a proposed strategic combination with Ladish.
On October 6, 2010, Mr. Hassey and Mr. Vroman spoke by phone.
Mr. Hassey proposed that Mr. Vroman ask the Ladish board of
directors whether they would view favorably an offer involving
merger consideration of $48.00 per share of Ladish common stock,
one half of which would be in shares of ATI common stock and one
half of which would be in cash. Mr. Hassey explained that he
believed such an offer was preemptive and that he would only ask
the ATI board of directors to authorize him to make an official
offer along those lines if he was confident that it would be
viewed favorably by the Ladish board of directors. The proposed
consideration represented premiums of 54.9%, 70.9%, 73.0%, 82.0%
and 125.5% over the average closing price for Ladish common
stock reported for the
one-day,
30-day,
90-day,
180-day and
one-year periods, respectively, prior to October 6, 2010.
On October 7, 2010, the Ladish board of directors met again
with representatives of Baird and Foley & Lardner to
discuss ATIs potential revised offer discussed on
October 6, 2010 and ATIs related demand for an
exclusivity agreement. Based on the significant premium the
potential offer represented and the considerations described in
Ladishs Reasons for the Merger; Recommendation of
the Ladish Board of Directors (other than the terms of the
merger agreement, which had not been drafted, and the Baird
fairness opinion, which had not been prepared or delivered) and
Bairds preliminary financial analyses that had been
presented at prior meetings of the Ladish board of directors,
the Ladish board of directors determined that it would authorize
Ladish to enter into exclusive negotiations with ATI based on
the proposed merger consideration of $48.00 per share of Ladish
common stock, one half of which would be in shares of ATI common
stock and one half of which would be in cash. Following the
meeting, Mr. Vroman informed Mr. Hassey that the Ladish board of
directors would view such an offer favorably.
ATIs board of directors considered the status of
ATIs offer to Ladish at a meeting on October 12,
2010. At that meeting, ATIs board of directors authorized
a revised offer to Ladish, which was conveyed to Ladish by a
letter from Mr. Hassey to Mr. Vroman dated
October 12, 2010. The revised offer involved merger
consideration of $48.00 per share of Ladish common stock, one
half of which would be in shares of ATI common stock and one
half of which would be in cash.
Also on October 12, 2010, Mr. Walton provided to
Mr. Larsen a draft of an exclusivity agreement. The
exclusivity agreement provided, among other things, that Ladish
would not solicit any third party proposals for competing
transactions, participate in negotiations with third parties
regarding such a competing transaction or enter into any
agreement regarding such a competing transaction. The
exclusivity period set forth in the exclusivity agreement
commenced on October 12, 2010 and continued through the
earliest of (i) the date, if any, on which ATI notified
Ladish that ATI has elected not to proceed with a business
combination with Ladish, (ii) the date a definitive
agreement between ATI and Ladish was executed and delivered and
(iii) November 30, 2010. Ladish and ATI agreed to move
forward with the negotiation of a business combination on an
exclusive basis and executed the exclusivity agreement on
October 12, 2010.
On October 15, 2010, Ladish made an electronic data room
available to ATI and additional due diligence commenced. In late
October 2010 and early November 2010, Messrs. Hassey,
Harshman and Walton toured Ladish facilities in Windsor,
Connecticut; Irvine, California; Albany, Oregon; Cudahy,
Wisconsin; and Stalowa Wola, Poland. Messrs. Vroman and
Larsen accompanied Messrs. Hassey, Harshman and Walton on
the tours of the domestic facilities.
On October 19, 2010, Mr. Walton sent an initial draft
of a merger agreement to Mr. Larsen via email. Through
Foley & Lardner LLP, Ladishs outside legal
counsel, comments to the initial merger agreement draft were
sent to K&L Gates LLP, ATIs outside legal counsel, on
October 26, 2010.
On October 28, 2010, ATIs board of directors met and
received an update on the status of the proposed business
combination with Ladish, including an update on the negotiation
of the merger agreement. Prior to the meeting the directors
received a packet that included the current draft of the merger
agreement, a summary of the agreement and other discussion
materials to facilitate their review and consideration of the
proposed merger, including financial analyses prepared by
ATIs senior management. During the meeting,
Mr. Hassey reviewed ATIs financial analyses with
ATIs board of directors. Following further discussion and
deliberation regarding the proposed merger, ATIs board of
directors authorized ATIs senior management to proceed
with the negotiation of the merger agreement and
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to execute and deliver the merger agreement if, in the judgment
of ATIs senior management, the merger could be
accomplished substantially on the terms discussed by ATIs
board of directors at that meeting.
K&L Gates sent a revised draft of the merger agreement to
Foley & Lardner on October 29, 2010. On
October 30, 2010 and continuing over the next two weeks,
representatives of ATI and Ladish, including K&L Gates and
Foley & Lardner, continued to communicate regularly
regarding due diligence items, negotiate and revise the draft
merger agreement and related disclosure schedules and otherwise
coordinate regarding relevant transaction matters.
On November 3, 2010, the Ladish board of directors held a
regular meeting, with representatives of Baird and
Foley & Lardner attending. At that meeting, management
and representatives of Baird reviewed with the board of
directors the status of negotiations with ATI, as well as the
financial due diligence on ATI being conducted by Baird.
Representatives of Baird also discussed with the board of
directors Bairds updated preliminary financial analyses.
The board of directors also discussed with representatives of
Baird the boards plans for its special meeting to be held
on November 4, 2010.
On November 4, 2010, the Ladish board of directors held a
special meeting, at which representatives of ATI, including
Messrs. Hassey, Harshman, Walton and Dale G. Reid,
ATIs Senior Vice President, Finance and Principal
Financial Officer, made a presentation to the Ladish board of
directors regarding ATIs plans for the combined company
after the proposed business combination. The presentation
summarized ATIs current operating groups, business units
and joint ventures and its manufacturing capabilities and market
sectors. Messrs. Hassey, Harshman, Walton and Reid also
discussed (i) ATIs views of the primary potential
strategic benefits involved in a business combination of ATI and
Ladish, including the enhancement of ATIs position with
aerospace customers, growth opportunities for mill products,
improvement of ATIs competitive position in light of
supply chain consolidation and increased profitability,
(ii) the proposed terms for a merger transaction, including
merger consideration equal to $48.00 per share, one-half of
which would be in cash and one-half of which would be in ATI
common stock, and (iii) a proposed working timeline to
complete the transaction. After the presentation, the Ladish
board of directors took the opportunity to ask further questions
regarding ATI and its plans for the combined company.
On November 11, 2010, the Ladish board of directors held a
special meeting at which a representative of Foley &
Lardner reviewed with the board the details of the merger
agreement, which had been distributed, together with draft
resolutions and a summary of the covenants regarding the
solicitation of competing takeover proposals and the payment of
termination fees. Messrs. Vroman and Larsen and the
Foley & Lardner representative summarized for the
board of directors the current status of negotiations and the
additional actions that would need to occur before the merger
agreement would be signed.
On November 15, 2010, the Ladish board of directors held a
special meeting with representatives of Baird and
Foley & Lardner in attendance. At that meeting,
Mr. Vroman updated the board regarding status of
negotiations. A representative of Foley & Lardner
reviewed with the board of directors in detail the draft
resolutions, which had been circulated to the board the prior
week.
On November 16, 2010, the Ladish board of directors held a
special meeting to consider the proposed business combination,
with representatives of Baird and Foley & Lardner
attending. The Ladish board of directors was provided in advance
of the meeting a substantially final draft of the merger
agreement and other materials related to the transaction. At the
meeting, Mr. Larsen and representatives of
Foley & Lardner reviewed with the board of directors
certain legal matters relating to its consideration of the
proposed merger and discussed certain material terms of the
merger agreement. Baird reviewed its financial analyses of the
merger consideration to be received by the holders of Ladish
common stock in the proposed merger and delivered its oral
opinion to the Ladish board of directors (which was subsequently
confirmed in writing by delivery of Bairds written opinion
dated November 16, 2010), to the effect that, as of
November 16, 2010 and subject to the assumptions,
qualifications and limitations set forth in its written opinion,
the merger consideration to be received by the holders of Ladish
common stock in the merger was fair, from a financial point of
view, to such holders. Following discussion, the Ladish board of
directors, taking into account various factors and potential
risks as described further below under
Ladishs Reasons for the Merger;
Recommendation of the Ladish Board of Directors and with
one director dissenting, determined that the proposed merger
agreement and the transactions contemplated by the proposed
merger agreement were advisable, fair to and in the best
interests of Ladish and its shareholders, and approved and
adopted the proposed merger
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agreement and the transactions contemplated thereby.
Mr. Larsen then contacted Mr. Walton to inform him
that the Ladish board meeting had concluded and that the board
of directors had approved the merger.
After the parties finalized the form of, and exchanged the final
versions of, the merger agreement and disclosure schedules, the
agreement was executed by ATI, LPAD, PADL and Ladish on
November 16, 2010, and ATI and Ladish each issued a press
release before the opening of trading on November 17, 2010
announcing the merger agreement.
Ladishs
Reasons for the Merger; Recommendation of the Ladish Board of
Directors
Ladishs board of directors consulted with Ladishs
management, as well as Ladishs outside legal counsel and
financial advisors, in its evaluation of the merger. In reaching
its conclusion to approve and adopt the merger agreement and in
determining that the merger was advisable and in the best
interests of Ladish and its shareholders, the Ladish board of
directors considered the potential benefits of the merger and
the risks of Ladish remaining as a stand-alone company,
including the following material factors, each of which the
Ladish board of directors believed supported its decision:
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the terms and conditions of the merger and the merger agreement,
which the majority of the Ladish board of directors thought were
on balance reasonable and typical for a transaction involving a
public company target, such as the merger;
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Ladishs current and historical financial condition,
results of operations, business and prospects, taking into
account the risks inherent in remaining independent, and
Ladishs prospects going forward as an independent entity,
including that:
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in the fall of 2010, Ladish and its industries were in midst of
a cyclical upswing resulting in improved operating results and
stock price for Ladish and the possibility that upswing could
last well into 2011 and even beyond;
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such a cyclical upswing has historically been eventually
followed by a cyclical downswing and corresponding deterioration
in results and stock price;
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the challenges of competing for certain customer contracts that
require a vertically-integrated source of supply; and
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the potential for larger, vertically-integrated competitors to
reduce the availability or increase the cost of key inputs;
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the Ladish board of directors recent evaluation of
Ladishs long-term strategic plan, which reflected
opportunities for growth as a result of Ladishs capital
investment in the last several years, but which was also subject
to significant risks, many of which are outside of the control
of Ladish management, and which did not support a valuation of
Ladish in excess of the merger consideration;
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consideration of the analyses of Ladish management and Baird of
the potential for other interested acquirers, the possibility
that such an acquirer would offer a price in excess of the value
of the merger consideration that Ladish shareholders will
receive as a result of the merger, which the Ladish board of
directors did not believe was likely, particularly in light of
the vertical integration benefits of the merger to the combined
company and the significant premium represented by the merger
consideration, and the execution risk associated with such an
offer, which execution risk the board of directors thought would
be higher for most strategic buyers that would be able to obtain
the most synergistic value from a merger with Ladish than for
ATI, primarily because of greater potential for antitrust or
competition regulatory issues;
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the presentation of Baird as to various financial matters and
Bairds opinion to Ladishs board of directors, dated
as of November 16, 2010, to the effect that, subject to the
contents of such opinion, including the various assumptions and
limitations set forth therein, the merger consideration to be
received by the holders of Ladish common stock (other than ATI
and its affiliates) in the merger was fair, from a financial
point of view, to the holders of Ladish common stock (other than
ATI and its affiliates). The full text of Bairds written
opinion, which sets forth the assumptions made, general
procedures followed, matters considered
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and limitations on the scope of review undertaken by Baird in
rendering its opinion, is attached as Annex B to this proxy
statement/prospectus. You are urged to read the opinion in its
entirety;
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the relationship of the merger consideration to be received by
the holders of Ladish common stock to the historical trading
prices of Ladishs common stock, including the fact that
the merger consideration represented premiums of 63.7%, 51.7%,
64.1%, 73.1% and 105.9% over the average closing price for
Ladish common stock reported for the
one-day,
30-day,
90-day,
180-day and
one-year periods, respectively, prior the first public
announcement of the merger;
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the cash and stock mix of consideration to be paid to holders of
Ladish common stock in the merger and the resulting effects,
including:
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the potential for ATI common stock price appreciation;
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the increased trading liquidity of ATI common stock compared to
Ladish common stock; and
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the certainty of value of the cash portion of the consideration;
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the fact that the merger is intended to be tax free to the
holders of Ladish common stock with respect to the stock portion
of the merger consideration, as described under Material
U.S. Federal Income Tax Consequences;
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the experience and expertise of ATIs management and the
potential vertical integration benefits, cost savings and other
synergies of the merger and the related impact on the combined
companys earnings;
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the belief of Ladishs board of directors that the merger
consideration represented the highest consideration that ATI was
willing to pay;
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the fact that the merger agreement permits Ladish to participate
in discussions and negotiations with and furnish confidential
information to the third party if Ladish (i) receives an
unsolicited, bona fide written acquisition proposal from a third
party prior to the adoption of the merger agreement by
Ladishs shareholders in circumstances not involving a
breach of the merger agreement and (ii) provides ATI with
not less than 24 hours written notice of its intention to
take such action, provided that, among other requirements, the
Ladish board of directors reasonably determines in good faith
(after receiving the advice of a financial advisor of nationally
recognized reputation) that the takeover proposal is a superior
proposal and (after considering applicable provisions of state
law and after consulting with and receiving the advice of
outside counsel) that the failure to take such action is
reasonably likely to constitute a breach by the Ladish board of
directors of its fiduciary duties to Ladish shareholders under
applicable law;
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Ladishs right to terminate the merger agreement to accept
a superior proposal, subject to certain conditions and, under
certain circumstances, payment of a $31 million termination
fee to ATI;
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the representation of ATI that it has sufficient cash or access
to cash to satisfy all of the obligations under the merger
agreement and the fact that the merger is not subject to a
financing condition; and
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the beliefs that there are relatively few regulatory approvals
required to consummate the merger and that the prospects for
receiving such approvals within a short time frame are good.
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The Ladish board of directors also considered a variety of risks
and other potentially negative factors concerning the merger and
the merger agreement, including the following:
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the challenges of integrating Ladishs businesses,
operations and workforce with those of ATI, and the risks
associated with achieving anticipated cost savings and other
synergies;
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the need to obtain regulatory approvals to complete the merger,
and the likelihood that such approvals will be obtained, and the
impact on Ladishs businesses if the merger does not close
as a result of a failure to obtain such regulatory approvals or
otherwise;
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the potential for the price of ATI common stock to fall,
including prior to the merger;
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the terms of the merger agreement, including the restrictions on
the ability of Ladish to participate in discussions and
negotiations with and furnish confidential information to a
third party in connection with a takeover proposal, the
termination fee of $31.0 million that Ladish would be
required to pay if the merger agreement were terminated under
certain circumstances, and the right of ATI to negotiate with
Ladish after a superior proposal is received by Ladish and
before the superior proposal is accepted by Ladish, and whether
these might limit the willingness of a third party to propose a
competing business combination transaction with Ladish;
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the fact that Ladishs directors and executive officers
have interests in the merger that are different from, or in
addition to, their interests solely as Ladish shareholders;
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the customary restrictions on the conduct of Ladishs
business prior to the consummation of the merger, requiring
Ladish to conduct its business in the ordinary course, subject
to specific limitations, which may delay or prevent Ladish from
undertaking certain business opportunities or actions; and
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the lack of any right of Ladishs shareholders to exercise
dissenters rights to assure that they receive a fair price
for their shares.
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The foregoing discussion of the information and factors
considered by the Ladish board of directors is not exhaustive,
but includes the material factors considered by the Ladish board
of directors. In view of the wide variety of factors considered
by the Ladish board of directors in connection with its
evaluation of the merger and the complexity of these matters,
the Ladish board of directors did not consider it practical to,
nor did it attempt to, quantify, rank or otherwise assign
relative weights to the specific factors that it considered in
reaching its decision. The Ladish board of directors evaluated
the factors described above and reached consensus that the
merger was advisable and in the best interests of Ladish and
Ladishs shareholders. In considering the factors described
above, individual members of the Ladish board of directors may
have given different weights to different factors.
The Ladish board of directors, with one director dissenting,
determined that the merger, the merger agreement and the other
transactions contemplated by the merger agreement are advisable
and in the best interests of Ladish and its shareholders.
Accordingly, the Ladish board of directors, with one director
dissenting, approved the merger and approved and adopted the
merger agreement and recommends that Ladish shareholders vote
FOR the proposal to adopt the merger
agreement.
John W. Splude, the Ladish director who dissented from the
Ladish board of directors decision, stated at the time of
his dissent that he supported the merger. However, he dissented
because he believed that the restrictions in the merger
agreement on the ability of Ladish to participate in discussions
and negotiations with and furnish confidential information to a
third party in connection with a takeover proposal should not be
in a merger agreement involving a company that has not conducted
a full auction and that these provisions might limit a third
partys ability to negotiate a competing business
combination transaction with Ladish.
Opinion
of Ladishs Financial Advisor Robert W.
Baird & Co. Incorporated
Ladishs board of directors retained Baird in connection
with the merger and to render an opinion as to the fairness,
from a financial point of view, to the holders of the common
stock of Ladish, other than ATI and its affiliates, of the
merger consideration to be received by the holders of Ladish
common stock (other than ATI and its affiliates) in the merger.
On November 16, 2010, Baird rendered its oral opinion
(which was subsequently confirmed in writing) to Ladishs
board of directors to the effect that, subject to the contents
of such opinion, including the various assumptions and
limitations set forth therein, as of such date, the merger
consideration to be received by the holders of Ladish common
stock (other than ATI and its affiliates) was fair, from a
financial point of view, to the holders of the Ladish common
stock (other than ATI and its affiliates).
As a matter of policy, Bairds opinion was approved by a
fairness committee, a majority of the members of which were not
involved in providing financial advisory services on behalf of
Baird to Ladish in connection with the merger.
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The full text of Bairds written opinion, dated
November 16, 2010, which sets forth the assumptions made,
general procedures followed, matters considered and limitations
on the scope of review undertaken by Baird in rendering its
opinion, is attached as Annex B to this proxy
statement/prospectus and is incorporated herein by reference.
Bairds opinion was directed only to the fairness, as of
the date of the opinion and from a financial point of view, to
the holders of Ladish common stock (other than ATI and its
affiliates) of the merger consideration and did not constitute a
recommendation to any shareholder as to how such shareholder
should vote with respect to the merger. Baird expressed no
opinion about the fairness of the amount or nature of the
compensation or consideration to any of Ladishs creditors,
officers, directors or employees, or any class of such persons,
relative to the merger consideration to be received by
Ladishs shareholders. The summary of Bairds opinion
set forth below is qualified in its entirety by reference to the
full text of such opinion attached as Annex B to this proxy
statement/prospectus. You are urged to read the opinion
carefully in its entirety.
In conducting its investigation and analyses and in arriving at
its opinion, Baird reviewed such information and took into
account such financial and economic factors, investment banking
procedures and considerations as it deemed relevant under the
circumstances. In that connection, and subject to the various
assumptions, qualifications and limitations set forth in its
opinion, Baird, among other things:
(i) reviewed certain internal information, primarily
financial in nature, including financial forecasts concerning
the business and operations of Ladish as prepared and furnished
to Baird for purposes of its analysis by Ladishs
management (referred to herein as the Forecasts) as well as the
contemplated synergies associated with the merger as prepared
and furnished to Baird for purposes of its analysis by
Ladishs management (referred to herein as the Expected
Synergies);
(ii) reviewed certain publicly available information,
including, but not limited to Ladishs and ATIs
recent filings with the SEC and equity analyst research reports
covering Ladish and ATI prepared by various investment banking
firms;
(iii) reviewed the principal financial terms of the merger
agreement, as they related to Bairds analysis;
(iv) compared the financial position and operating results
of Ladish and ATI with those of certain other publicly traded
companies Baird deemed relevant;
(v) compared the historical market prices, trading activity
and market trading multiples of Ladish common stock and ATI
common stock with those of certain other publicly traded
companies Baird deemed relevant;
(vi) compared the proposed valuation multiples implied in
the merger with the implied enterprise value multiples of
certain other business combinations Baird deemed relevant;
(vii) considered the present values of the forecasted cash
flows of Ladish reflected in the Forecasts; and
(viii) reviewed certain potential pro forma financial
effects of the merger furnished to Baird, and prepared, by
Ladishs management.
Baird held discussions with members of Ladishs and
ATIs respective senior managements concerning
Ladishs and ATIs historical and current financial
condition and operating results, as well as the future prospects
of Ladish and ATI. In connection with its engagement, Baird
evaluated potential interest from other parties and contacted
one party (Bidder X), other than ATI, as directed by
Ladishs board of directors. Baird also considered such
other information, financial studies, analyses and
investigations and financial, economic and market criteria which
it deemed relevant for the preparation of its opinion.
In arriving at its opinion, Baird assumed and relied upon,
without independent verification, the accuracy and completeness
of all of the financial and other information that was publicly
available or provided by Ladish or on Ladishs behalf.
Baird did not independently verify any information supplied to
it by Ladish concerning the parties to the merger that formed a
substantial basis for its opinion. Baird was not engaged to
independently verify, did not assume any responsibility to
verify, assumed no liability for, and expressed no opinion on,
any such information, and Baird assumed, without independent
verification, that Ladish was not aware of any information
prepared by it
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or its advisors that might be material to Bairds opinion
that has not been provided to Baird. Baird assumed, without
independent verification, that:
(i) all material assets and liabilities (contingent or
otherwise, known or unknown) of Ladish and ATI were as set forth
in their respective financial statements provided to Baird or
that were publicly available;
(ii) the financial statements of Ladish and ATI provided to
Baird or that were publicly available presented fairly the
results of operations, cash flows and financial condition of
Ladish and ATI, respectively, for the periods, and as of the
dates, indicated and were prepared in conformity with
U.S. generally accepted accounting principles consistently
applied;
(iii) the Forecasts and the Expected Synergies were
reasonably prepared on bases reflecting the best available
estimates and good faith judgments of Ladishs senior
management as to the future performance of Ladish, and Baird
relied, without independent verification, upon such Forecasts
and Expected Synergies in the preparation of its opinion, and
Baird assumed, without independent verification, that the
Forecasts and the Expected Synergies currently contemplated by
Ladishs management used in its analysis would be realized
in the amounts and on the time schedule contemplated;
(iv) in all respects material to Bairds analysis, the
merger would be consummated in accordance with the material
terms and conditions of the merger agreement without any
material amendment thereto and without waiver by any party of
any of the material conditions to their respective obligations
thereunder;
(v) in all respects material to Bairds analysis, the
representations and warranties contained in the merger agreement
were true and correct and that each party would perform all of
the material covenants and agreements required to be performed
by it under the merger agreement;
(vi) all material corporate, governmental, regulatory or
other consents and approvals (contractual or otherwise) required
to consummate the merger had been, or would be, obtained without
the need for any material changes to the merger consideration or
other material financial terms or conditions of the merger or
that would otherwise materially affect Ladish or ATI or
Bairds analysis; and
(vii) the merger would be treated as a tax-free
reorganization for federal income tax purposes.
Baird relied, without independent verification, as to all legal
matters regarding the merger on the advice of legal counsel to
Ladish.
In conducting its review, Baird did not undertake or obtain an
independent evaluation or appraisal of any of the assets or
liabilities (contingent or otherwise, known or unknown) or
solvency of Ladish or ATI nor did Baird make a physical
inspection of the properties or facilities of Ladish or ATI.
Baird did not consider any expenses or potential adjustments to
the merger consideration relating to the merger as part of its
analysis. In each case above, Baird made the assumptions and
took the actions or inactions described above with Ladishs
board of directors knowledge and consent. In reaching its
conclusions, Baird did not perform a discounted cash flow
analysis of ATI because the estimates in publicly available
equity analyst research reports for ATI were either incomplete
or did not extend over a sufficiently long period of time. ATI
did not provide Baird with financial forecasts concerning the
business and operations of ATI. With respect to the publicly
available research analyst estimates for ATI referred to above,
with Ladishs board of directors consent, Baird
reviewed and discussed such estimates with the management of
ATI. With respect to such estimates for the fourth quarter of
2010, Baird noted the broad earnings per share range, and with
respect to such estimates for 2011 and 2012, Baird was informed
by such management that such estimates represent reasonable
estimates and judgments of the future financial results and
conditions of ATI, and in each case, Baird expressed no opinion
with respect to such estimates or the assumptions on which they
are based.
Bairds opinion necessarily was based upon economic,
monetary and market conditions as they existed and could be
evaluated on the date of its opinion, and its opinion did not
predict or take into account any changes which may occur, or
information which may become available, after the date of its
opinion. Furthermore, Baird expressed no opinion as to the
prices or trading ranges at which any of Ladishs or
ATIs securities (including Ladish common stock and ATI
common stock) would trade following the date of its opinion or
as to the effect of the merger on such prices or trading range,
or any earnings or ownership dilutive impact that may result
from ATIs issuance of additional ATI common stock as part
of the merger consideration. Such prices and trading ranges may
be affected by
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a number of factors, including but not limited to
(i) dispositions of Ladish common stock and ATI common
stock by shareholders within a short period of time after, or
other market effects resulting from, the announcement
and/or
effective date of the merger; (ii) changes in prevailing
interest rates and other factors which generally influence the
price of securities; (iii) adverse changes in the current
capital markets; (iv) the occurrence of adverse changes in
the financial condition, business, assets, results of operations
or prospects of Ladish or ATI or in Ladishs or ATIs
industries; (v) any necessary actions by, or restrictions
of, federal, state or other governmental agencies or regulatory
authorities; and (vi) timely completion of the merger on
terms and conditions that are acceptable to all parties at
interest.
Bairds opinion was prepared at the request and for the
internal and confidential information of Ladishs board of
directors, and may not be relied upon, used for any other
purpose or disclosed to any other party without its prior
written consent. Bairds opinion should not be construed as
having created any fiduciary duty on Bairds part to any
party. Because Bairds opinion was solely provided to
Ladishs board of directors, it is Bairds belief that
shareholders cannot rely upon its opinion to support any claims
against Baird arising under applicable state law. Baird is
unaware of any applicable state law authority regarding the
availability of such a potential defense, and the availability
of such a defense would have to be resolved by a court of
competent jurisdiction. However, such a defense would have no
effect on the rights and responsibilities of the Ladish board of
directors under applicable state law. Further, such a state law
defense would have no effect on the rights and responsibilities
of either Baird or the Ladish board of directors under the
federal securities laws.
Bairds opinion is related only to the merger consideration
to be received by Ladish shareholders and is not intended to be
relied upon when evaluating other aspects of the merger. In
particular, other than with respect to the merger consideration
to be received by Ladish shareholders, Bairds opinion did
not address the relative merits or risks of: (i) the
merger, the merger agreement or any other agreements or other
matters provided for, or contemplated by, the merger agreement;
(ii) any other transactions that may be, or might have
been, available as an alternative to the merger; or
(iii) the merger compared to any other potential
alternative transactions or business strategies considered by
Ladishs board of directors and, accordingly, Baird relied
upon its discussions with the senior management of Ladish with
respect to the availability and consequences of any alternatives
to the merger.
The following is a summary of the material financial analyses
performed by Baird in connection with rendering its opinion,
which is qualified in its entirety by reference to the full text
of such opinion attached as Annex B and to the other
disclosures contained in this section. The order of analyses
described does not represent relative importance or weight given
to the analyses performed by Baird. Some of the summaries of the
financial analyses include information presented in a tabular
format. These tables must be read together with the full text of
each summary and alone are not a complete description of
Bairds financial analyses. Except as otherwise noted, the
following quantitative information is based on market and
financial data as it existed on or before November 16, 2010
and is not necessarily indicative of current market conditions.
Valuation
of Ladish
Implied Valuation, Transaction Multiples and Transaction
Premiums. Based on the cash consideration of
$24.00 net per share of Ladish common stock (such cash
amount is referred to herein as the Cash Consideration) and a
fraction of a share of ATI common stock worth $24.00 at the time
of the signing of the merger agreement based upon a fixed
exchange ratio (such number of shares is referred to herein as
the Stock Consideration and, together with the Cash
Consideration, as the Per Share Equity Purchase Price), Baird
calculated the implied equity purchase price
(defined as the Per Share Equity Purchase Price multiplied by
the total number of diluted common shares outstanding of Ladish,
including gross shares issuable upon the exercise of stock
options, less assumed option proceeds) to be $765 million.
In addition, Baird calculated the implied total purchase
price (defined as the equity purchase price plus the book
value of Ladishs total debt, preferred stock and minority
interests, less cash, cash equivalents and marketable
securities) to be $836 million.
Baird reviewed the historical price and trading activity of
Ladish common stock and noted that the high, low and average
closing prices for Ladish common stock were $33.48, $13.25 and
$23.31, respectively, over the last
37
twelve months and $46.07, $5.36 and $21.65, respectively, over
the last three years. Baird also noted that Ladish common stock
price rose 117.4% over the last twelve months and declined 27.6%
over the last three years.
Baird also calculated the premiums that the Per Share Equity
Purchase Price represented over the closing market price of
Ladish common stock for various time periods ranging from one
day to one year prior to November 17, 2010. These premiums
are summarized in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied
|
|
|
|
|
Transaction
|
Period
|
|
Stock Price
|
|
Premium
|
|
1-Day
|
|
$
|
29.33
|
|
|
|
63.7
|
%
|
Average
7-Days
|
|
|
31.25
|
|
|
|
53.6
|
%
|
Average
30-Days
|
|
|
31.64
|
|
|
|
51.7
|
%
|
Average
90-Days
|
|
|
29.24
|
|
|
|
64.1
|
%
|
Average
180-Days
|
|
|
27.72
|
|
|
|
73.1
|
%
|
Average
1-Year
|
|
|
23.31
|
|
|
|
105.9
|
%
|
LTM Low
|
|
|
13.25
|
|
|
|
262.3
|
%
|
LTM High
|
|
|
33.48
|
|
|
|
43.4
|
%
|
Note: LTM refers to the Latest Twelve Month Period ended
November 16, 2010.
Selected Publicly Traded Company
Analysis. Baird reviewed certain publicly
available financial information and stock market information for
certain publicly traded companies that Baird deemed relevant.
The group of selected publicly traded companies reviewed is
listed below.
|
|
|
|
|
Barnes Group Inc.
|
|
|
|
Carpenter Technology Corp.
|
|
|
|
Ducommun Inc.
|
|
|
|
Goodrich Corp.
|
|
|
|
HEICO Corp.
|
|
|
|
Hexcel Corp.
|
|
|
|
Precision Castparts Corp.
|
|
|
|
RTI International Metals, Inc.
|
|
|
|
Titanium Metals Corporation
|
|
|
|
Triumph Group, Inc.
|
|
|
|
Woodward Governor Co.
|
Baird chose these companies based on a review of publicly traded
companies that possessed general business, operating and
financial characteristics representative of companies in the
industry in which Ladish operates. In particular, the selected
publicly traded companies produce specialty metals and/or serve
the aerospace and general industrial market segments. Baird
noted that none of the companies reviewed is identical to Ladish
and that, accordingly, the analysis of such companies
necessarily involves complex considerations and judgments
concerning differences in the business, operating and financial
characteristics of each of the companies and other factors that
affect the public market values of such companies.
For each company, Baird calculated the equity market
value (defined as the market price per share of each
companys common stock multiplied by the total number of
diluted common shares outstanding of such company, including net
shares issuable upon the exercise of stock options). In
addition, Baird calculated the total market value
(defined as the equity market value plus the book value of each
companys total debt, preferred stock and minority
interests, less cash, cash equivalents and marketable
securities). Baird calculated the multiples of each
38
companys total market value to its estimated 2010,
projected 2011 and projected 2012 earnings before interest,
taxes, depreciation and amortization (referred to herein as
EBITDA); and earnings before interest and taxes (referred to
herein as EBIT). Baird also calculated multiples of each
companys price per share to projected 2010, projected 2011
and projected 2012 diluted earnings per share. Baird then
compared the transaction multiples implied in the merger with
the corresponding trading multiples for the selected companies.
Stock market and historical financial information for the
selected companies was based on publicly available information
as of November 16, 2010, and projected financial
information was based on publicly available research reports as
of such date. A summary of the implied multiples is provided in
the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied
|
|
|
|
|
|
|
|
|
|
|
Transaction
|
|
Selected Company Multiples
|
|
|
Multiple
|
|
Low
|
|
Median
|
|
Mean
|
|
High
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
|
14.1
|
x
|
|
|
5.3
|
x
|
|
|
9.8
|
x
|
|
|
11.1
|
x
|
|
|
16.9
|
x
|
2011P
|
|
|
12.0
|
|
|
|
4.9
|
|
|
|
8.4
|
|
|
|
9.6
|
|
|
|
17.1
|
|
2012P
|
|
|
10.1
|
|
|
|
5.6
|
|
|
|
6.5
|
|
|
|
6.8
|
|
|
|
8.6
|
|
EBIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
|
19.0
|
x
|
|
|
8.1
|
x
|
|
|
13.5
|
x
|
|
|
14.4
|
x
|
|
|
24.1
|
x
|
2011P
|
|
|
16.3
|
|
|
|
7.4
|
|
|
|
10.8
|
|
|
|
11.3
|
|
|
|
15.0
|
|
2012P
|
|
|
13.0
|
|
|
|
5.6
|
|
|
|
9.4
|
|
|
|
8.6
|
|
|
|
10.1
|
|
P/E
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
|
29.8
|
x
|
|
|
10.9
|
x
|
|
|
19.3
|
x
|
|
|
21.4
|
x
|
|
|
38.7
|
x
|
2011P
|
|
|
25.7
|
|
|
|
9.7
|
|
|
|
16.6
|
|
|
|
17.1
|
|
|
|
27.2
|
|
2012P
|
|
|
20.2
|
|
|
|
8.1
|
|
|
|
13.8
|
|
|
|
13.1
|
|
|
|
19.4
|
|
In addition, Baird calculated the implied per share equity
values of Ladish common stock based on the trading multiples of
the selected public companies and compared such values to the
Per Share Equity Purchase Price of $48.00 per share. The implied
per share equity values, based on the multiples that Baird
deemed relevant, are summarized in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ladish
|
|
Implied Equity Value per Share
|
|
|
Statistic
|
|
Low
|
|
Median
|
|
Mean
|
|
High
|
|
|
($ in millions, except per share data)
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
$
|
59.2
|
|
|
$
|
15.32
|
|
|
$
|
32.03
|
|
|
$
|
36.74
|
|
|
$
|
58.28
|
|
2011P
|
|
|
69.6
|
|
|
|
16.98
|
|
|
|
32.12
|
|
|
|
37.59
|
|
|
|
70.14
|
|
2012P
|
|
|
82.8
|
|
|
|
24.72
|
|
|
|
29.20
|
|
|
|
30.83
|
|
|
|
40.25
|
|
EBIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
$
|
44.0
|
|
|
$
|
17.95
|
|
|
$
|
32.74
|
|
|
$
|
35.31
|
|
|
$
|
61.99
|
|
2011P
|
|
|
51.3
|
|
|
|
19.29
|
|
|
|
30.45
|
|
|
|
32.02
|
|
|
|
43.84
|
|
2012P
|
|
|
64.2
|
|
|
|
18.02
|
|
|
|
33.64
|
|
|
|
30.09
|
|
|
|
36.20
|
|
P/E
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
$
|
1.61
|
|
|
$
|
17.60
|
|
|
$
|
31.00
|
|
|
$
|
34.46
|
|
|
$
|
62.36
|
|
2011P
|
|
|
1.87
|
|
|
|
18.10
|
|
|
|
31.09
|
|
|
|
32.02
|
|
|
|
50.83
|
|
2012P
|
|
|
2.38
|
|
|
|
19.37
|
|
|
|
32.79
|
|
|
|
31.27
|
|
|
|
46.16
|
|
Baird compared the implied per share equity values in the table
above with the Per Share Equity Purchase Price implied in the
merger in concluding that the merger consideration was fair to
Ladish from a financial point of view.
39
Selected Acquisition Analysis. Baird reviewed
certain publicly available financial information concerning
completed or pending acquisition transactions that Baird deemed
relevant. The group of selected acquisition transactions is
listed below.
|
|
|
|
|
|
|
Date of Transaction
|
|
Acquiror
|
|
Target
|
|
October 4, 2010
|
|
BE Aerospace Inc.
|
|
|
|
TSI Group, Inc.
|
September 25, 2010
|
|
TransDigm Inc.
|
|
|
|
McKechnie Aerospace DE, Inc.
|
November 11, 2007
|
|
Oak Hill Capital Partners
|
|
|
|
Firth Rixson Ltd.
|
September 17, 2007
|
|
Timken Co.
|
|
|
|
The Purdy Corporation
|
December 14, 2005
|
|
Dubai International Capital Private
Equity
|
|
|
|
Doncasters Group Limited
|
December 6, 2002
|
|
The Carlyle Group
|
|
|
|
Firth Rixson Ltd.
|
January 4, 2001
|
|
Precision Castparts Corp.
|
|
|
|
Drop Dies and Forgings Co.
|
May 17, 1999
|
|
Precision Castparts Corp.
|
|
|
|
Wyman-Gordon Forgings Co.
|
Baird chose these acquisition transactions based on a review of
completed and pending acquisition transactions involving target
companies that possessed general business, operating and
financial characteristics representative of companies in the
industry in which Ladish operates. In particular, the selected
acquisition transactions include targets that produced specialty
metals and/or served the aerospace and general industrial market
segments. Baird noted that none of the acquisition transactions
or subject target companies reviewed is identical to the merger
or Ladish, respectively, and that, accordingly, the analysis of
such acquisition transactions necessarily involves complex
considerations and judgments concerning differences in the
business, operating and financial characteristics of each
subject target company and each acquisition transaction and
other factors that affect the values implied in such acquisition
transactions.
For each transaction, Baird calculated the implied total
purchase price (defined as the equity purchase price plus
the book value of each target companys total debt,
preferred stock and minority interests, less cash, cash
equivalents and marketable securities). Baird calculated the
multiples of Ladishs and each selected target
companys implied total purchase price to its LTM revenues
and EBITDA. A summary of the implied multiples is provided in
the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied 2010E Transaction
|
|
LTM Selected Transaction Multiples
|
|
|
Multiples
|
|
Low
|
|
Median
|
|
Mean
|
|
High
|
|
Revenue
|
|
|
2.1
|
x
|
|
|
0.5
|
x
|
|
|
1.8
|
x
|
|
|
1.8
|
x
|
|
|
4.2
|
x
|
EBITDA
|
|
|
14.1
|
|
|
|
5.5
|
|
|
|
9.5
|
|
|
|
10.0
|
|
|
|
13.3
|
|
In addition, Baird calculated the implied per share equity
values of Ladish common stock based on the acquisition
transaction multiples of the selected acquisition transactions.
The implied per share equity values, based on the multiples that
Baird deemed relevant, are summarized in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ladish
|
|
Implied Equity Value per Share
|
|
|
Statistic
|
|
Low
|
|
Median
|
|
Mean
|
|
High
|
|
|
($ in millions, except per share data)
|
|
2010E Revenue
|
|
$
|
397.2
|
|
|
$
|
8.71
|
|
|
$
|
41.04
|
|
|
$
|
41.06
|
|
|
$
|
101.10
|
|
2011E EBITDA
|
|
|
59.2
|
|
|
|
15.92
|
|
|
|
30.85
|
|
|
|
32.65
|
|
|
|
44.84
|
|
Baird compared the implied per share equity values in the table
above with the Per Share Equity Purchase Price implied in the
merger in concluding that the merger consideration was fair to
Ladish from a financial point of view.
Discounted Cash Flow Analysis. Baird performed
a discounted cash flow analysis utilizing Ladishs
projected unlevered free cash flows (defined as net income
excluding after-tax net interest, plus depreciation and
amortization, less capital expenditures and increases in net
working capital, plus/minus changes in other operating and
investing cash flows) from 2011 to 2015, as provided by
Ladishs senior management. In such analysis, Baird
calculated the present values of the unlevered free cash flows
from 2011 to 2015 by discounting such amounts at rates ranging
from 13% to 17%. Baird calculated the present values of the free
cash flows beyond 2015 by assuming terminal values ranging from
7.5x to 9.5x forward EBITDA and discounting the resulting
terminal
40
values at discount rates, based on a weighted average cost of
capital calculation, ranging from 13% to 17%. The summation of
the present values of the unlevered free cash flows and the
present values of the terminal values produced equity values
ranging from $26.26 to $39.08 per share, as compared to the Per
Share Equity Purchase Price of $48.00 per share. Baird compared
these implied per share equity values with the Per Share Equity
Purchase Price implied in the merger in concluding that the
merger consideration was fair to Ladish from a financial point
of view.
Valuation
of ATI
Stock Price, Trading Activity and Public Equity
Research. In order to assess the relative public
market valuation of ATI common stock to be used as consideration
in the merger, Baird reviewed the historical stock prices,
historical trading activity and public equity research of ATI.
In considering the historical price and trading activity of ATI
common stock, Baird noted that the high, low and average closing
prices for ATI common stock were $57.52, $33.84 and $47.31,
respectively over the last twelve months and $97.75, $15.24 and
$46.20, respectively, over the last three years. Baird also
noted that ATI common stock price rose 42.8% over the last
twelve months and declined 44.8% over the last three years.
Baird also reviewed publicly available equity research covering
ATI and Baird noted that five research analysts had
outperform or similar ratings on ATIs stock,
four research analysts had neutral or similar
ratings on ATIs stock and one research analyst had
underperform or similar ratings on ATIs stock.
Selected Publicly Traded Company Analysis. In
order to assess the relative public market valuation of the ATI
common stock to be used as consideration in the merger, Baird
reviewed certain publicly available financial information for
certain publicly traded companies that Baird deemed relevant.
The group of selected publicly traded companies reviewed is
listed below.
|
|
|
|
|
AK Steel Holding Corporation
|
|
|
|
Carpenter Technology Corp.
|
|
|
|
Commercial Metals Company
|
|
|
|
Haynes International Inc.
|
|
|
|
Nucor Corporation
|
|
|
|
Precision Castparts Corp.
|
|
|
|
RTI International Metals, Inc.
|
|
|
|
Steel Dynamics Inc.
|
|
|
|
Titanium Metals Corporation
|
|
|
|
U.S. Steel Corp
|
Baird chose these companies based on a review of publicly traded
companies that possessed general business, operating and
financial characteristics representative of companies in the
industry in which ATI operates. In particular, the selected
publicly traded companies participate in the manufacturing and
production of specialty metals, including an assortment of
high performance specialty alloys and steels, and typically
serve industrial markets, including aerospace and defense,
automotive, oil and gas and general industrial. Baird noted that
none of the companies reviewed is identical to ATI and that,
accordingly, the analysis of such companies necessarily involves
complex considerations and judgments concerning differences in
the business, operating and financial characteristics of each
company and other factors that affect the public market values
of such companies.
For each company, Baird calculated the equity market
value (defined as the market price per share of each
companys common stock multiplied by the total number of
diluted common shares outstanding of such company, including net
shares issuable upon the exercise of stock options). In
addition, Baird calculated the total market value
(defined as the equity market value plus the book value of each
companys total debt, preferred stock and minority
interests, less cash, cash equivalents and marketable
securities). Baird calculated the multiples of each
companys total market value to its projected 2010,
projected 2011 and projected 2012 EBITDA and EBIT. Baird also
calculated multiples of each companys price per share to
projected 2010, projected 2011 and projected 2012
41
diluted earnings per share. Baird then compared ATIs
implied multiples with the corresponding trading multiples for
the selected companies. Stock market and historical financial
information for the selected companies was based on publicly
available information as of November 16, 2010, and
projected financial information was based on publicly available
research reports as of such date. A summary of the implied
multiples is provided in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
Selected Company Multiples
|
|
|
ATI Multiple(1)
|
|
Low
|
|
Median
|
|
Mean
|
|
High
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
|
15.0
|
x
|
|
|
8.9
|
x
|
|
|
13.7
|
x
|
|
|
13.8
|
x
|
|
|
16.9
|
x
|
2011P
|
|
|
8.4
|
|
|
|
5.6
|
|
|
|
7.5
|
|
|
|
8.5
|
|
|
|
17.1
|
|
2012P
|
|
|
6.5
|
|
|
|
3.8
|
|
|
|
5.6
|
|
|
|
5.5
|
|
|
|
8.6
|
|
EBIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
|
25.9
|
x
|
|
|
12.7
|
x
|
|
|
16.2
|
x
|
|
|
17.3
|
x
|
|
|
24.1
|
x
|
2011P
|
|
|
11.1
|
|
|
|
8.1
|
|
|
|
10.9
|
|
|
|
12.4
|
|
|
|
21.5
|
|
2012P
|
|
|
8.2
|
|
|
|
6.6
|
|
|
|
7.6
|
|
|
|
7.9
|
|
|
|
9.6
|
|
P/E
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
|
54.3
|
x
|
|
|
19.0
|
x
|
|
|
29.1
|
x
|
|
|
29.0
|
x
|
|
|
38.7
|
x
|
2011P
|
|
|
17.6
|
|
|
|
11.2
|
|
|
|
17.3
|
|
|
|
17.7
|
|
|
|
25.7
|
|
2012P
|
|
|
12.8
|
|
|
|
7.3
|
|
|
|
11.4
|
|
|
|
12.0
|
|
|
|
19.4
|
|
|
|
|
(1) |
|
Based on consensus estimates as of November 16, 2010. |
In addition, Baird calculated the implied per share equity
values of ATI common stock based on the trading multiples of the
selected public companies. The implied per share equity values,
based on the multiples that Baird deemed relevant, are
summarized in the table below. The selected valuation multiples
included the low, median, mean and high multiples by year for
the selected publicly traded companies. EBITDA multiples and
Price-to- Earnings multiples of greater than 20x and 40x,
respectively, were excluded from Bairds analysis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATI
|
|
Implied Equity Value per Share
|
|
|
Statistic(1)
|
|
Low
|
|
Median
|
|
Mean
|
|
High
|
|
|
($ in millions, except per share data)
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
$
|
377.0
|
|
|
$
|
26.85
|
|
|
$
|
45.00
|
|
|
$
|
45.36
|
|
|
$
|
57.10
|
|
2011P
|
|
|
673.8
|
|
|
|
31.28
|
|
|
|
43.58
|
|
|
|
50.93
|
|
|
|
108.93
|
|
2012P
|
|
|
864.6
|
|
|
|
25.68
|
|
|
|
41.49
|
|
|
|
40.79
|
|
|
|
67.91
|
|
EBIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
$
|
218.6
|
|
|
$
|
20.94
|
|
|
$
|
28.68
|
|
|
$
|
31.06
|
|
|
$
|
45.95
|
|
2011P
|
|
|
508.0
|
|
|
|
34.50
|
|
|
|
48.53
|
|
|
|
56.21
|
|
|
|
103.25
|
|
2012P
|
|
|
693.0
|
|
|
|
39.24
|
|
|
|
45.81
|
|
|
|
48.39
|
|
|
|
59.83
|
|
P/E
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010E
|
|
$
|
0.92
|
|
|
$
|
17.48
|
|
|
$
|
26.78
|
|
|
$
|
26.67
|
|
|
$
|
35.64
|
|
2011P
|
|
|
2.83
|
|
|
|
31.71
|
|
|
|
48.91
|
|
|
|
50.05
|
|
|
|
72.88
|
|
2012P
|
|
|
3.91
|
|
|
|
28.59
|
|
|
|
44.62
|
|
|
|
46.72
|
|
|
|
75.76
|
|
|
|
|
(1) |
|
Per consensus estimates. |
Baird compared the implied per share equity values to ATI common
stock price as of November 16, 2010 in concluding that the
merger consideration was fair to Ladish from a financial point
of view.
Pro Forma Merger Analysis. Baird prepared an
analysis of certain pro forma financial impacts of the merger on
ATI. In conducting its analysis, Baird relied upon several
assumptions, including financial projections for ATI
42
based on equity analyst research reports. Baird compared the
diluted earnings per share of ATI common stock, on a stand-alone
basis, to the pro forma diluted earnings per share of the
combined companies. This analysis indicated that the proposed
transaction would be dilutive to the combined companys
diluted earnings per share in fiscal 2011. The results of this
pro forma merger analysis are not necessarily indicative of
future operating results or financial position.
Historical Exchange Ratio Analysis. Baird
performed an analysis of the historical exchange ratio between
Ladish common stock and ATI common stock based on the closing
market prices of such shares for each trading day over the last
five years. This analysis indicated a historical exchange ratio
ranging from a low of 0.2313x to a high of 0.8546x, with an
average exchange ratio of 0.4714x during this period. The
average historical exchange ratios and associated implied
exchange ratio premiums are summarized in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Offer
|
|
|
Average Historical
|
|
Exchange Ratio
|
|
|
Exchange Ratio
|
|
Premium
|
|
1-Day
|
|
|
0.5873
|
x
|
|
|
55.1
|
%
|
10-Days
|
|
|
0.6039
|
x
|
|
|
50.9
|
%
|
1-Year
|
|
|
0.4911
|
x
|
|
|
85.5
|
%
|
3-Years
|
|
|
0.4710
|
x
|
|
|
93.5
|
%
|
The preparation of financial analyses and a fairness opinion is
a complex process and is not necessarily susceptible to partial
analyses or summary description. Baird believes that its
analyses (and the summary set forth above) must be considered as
a whole and that selecting portions of such analyses and factors
considered by Baird, without considering all of such analyses
and factors, could create an incomplete view of the processes
and judgments underlying the analyses performed and conclusions
reached by Baird and its opinion. Baird did not attempt to
assign specific weights to particular analyses. Any estimates
contained in Bairds analyses are not necessarily
indicative of actual values, which may be significantly more or
less favorable than as set forth therein. Estimates of values of
companies do not purport to be appraisals or necessarily to
reflect the prices at which companies may actually be sold.
Because such estimates are inherently subject to uncertainty,
Baird does not assume responsibility for their accuracy.
As part of its investment banking business, Baird is engaged in
the evaluation of businesses and their securities in connection
with mergers and acquisitions, negotiated underwritings,
competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for
estate, corporate and other purposes. Pursuant to an engagement
letter dated March 29, 2010, Baird will receive a customary
transaction fee of approximately $4.9 million for its
services, approximately $4.6 million of which is contingent
upon the consummation of the merger. Pursuant to such engagement
letter, Ladish paid Baird a fee of $300,000 payable upon
delivery of its opinion, regardless of the conclusions reached
in such opinion (such fee to be creditable against the
transaction fee described above). In addition, Ladish has agreed
to indemnify Baird against certain liabilities that may arise
out of its engagement, including liabilities under the federal
securities laws. Baird will not receive any other significant
payment of compensation contingent upon the successful
completion of the merger. Baird maintains a longstanding
relationship with Ladish, spanning several years. Ladish
selected Baird as its advisor based on Bairds experience
and knowledge with similar merger transactions and Bairds
familiarity with Ladish. In the past, Baird has provided
financial advisory services to Ladish for which Baird received
customary compensation. During the prior two years, Baird
advised Ladishs board of directors on Ladishs
shareholder rights plan that was adopted on October 9,
2009. Baird received a $50,000 fee associated with that
engagement.
Baird is a full service securities firm. As such, in the
ordinary course of its business, Baird may from time to time
trade the securities of Ladish or ATI for its own account or the
accounts of its customers and, accordingly, may at any time hold
long or short positions or effect transactions in such
securities.
Certain
Projected Financial Information
Ladishs senior management prepared and provided to Baird
the following projected financial results for Ladish (without
regard to the impact on Ladish of the merger) in connection with
Bairds preparation of its fairness opinion and related
financial analysis.
43
Financial
Projections for the Six Years Ending December 31, 2015
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ending December 31,
|
|
|
|
Estimated
|
|
|
Projected
|
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
2014
|
|
|
2015
|
|
|
Net Sales
|
|
$
|
397.2
|
|
|
$
|
448.8
|
|
|
$
|
501.8
|
|
|
$
|
541.9
|
|
|
$
|
579.8
|
|
|
$
|
619.8
|
|
Growth
|
|
|
13.5
|
%
|
|
|
13.0
|
%
|
|
|
11.8
|
%
|
|
|
8.0
|
%
|
|
|
7.0
|
%
|
|
|
6.9
|
%
|
EBITDA
|
|
$
|
59.2
|
|
|
$
|
69.6
|
|
|
$
|
82.8
|
|
|
$
|
91.0
|
|
|
$
|
94.5
|
|
|
$
|
102.3
|
|
Margin
|
|
|
14.9
|
%
|
|
|
15.5
|
%
|
|
|
16.5
|
%
|
|
|
16.8
|
%
|
|
|
16.3
|
%
|
|
|
16.5
|
%
|
EBIT
|
|
$
|
44.0
|
|
|
$
|
51.3
|
|
|
$
|
64.2
|
|
|
$
|
72.6
|
|
|
$
|
76.0
|
|
|
$
|
84.3
|
|
Margin
|
|
|
11.1
|
%
|
|
|
11.4
|
%
|
|
|
12.8
|
%
|
|
|
13.4
|
%
|
|
|
13.1
|
%
|
|
|
13.6
|
%
|
EPS
|
|
$
|
1.61
|
|
|
$
|
1.87
|
|
|
$
|
2.38
|
|
|
$
|
2.72
|
|
|
$
|
2.85
|
|
|
$
|
3.19
|
|
Growth
|
|
|
317.5
|
%
|
|
|
16.1
|
%
|
|
|
27.4
|
%
|
|
|
14.1
|
%
|
|
|
4.9
|
%
|
|
|
11.7
|
%
|
Depreciation & Amortization
|
|
$
|
15.2
|
|
|
$
|
18.3
|
|
|
$
|
18.6
|
|
|
$
|
18.4
|
|
|
$
|
18.6
|
|
|
$
|
18.0
|
|
% of Net Sales
|
|
|
3.8
|
%
|
|
|
4.1
|
%
|
|
|
3.7
|
%
|
|
|
3.4
|
%
|
|
|
3.2
|
%
|
|
|
2.9
|
%
|
Capital Expenditures
|
|
$
|
13.2
|
|
|
$
|
14.5
|
|
|
$
|
15.1
|
|
|
$
|
15.7
|
|
|
$
|
16.2
|
|
|
$
|
16.7
|
|
% of Net Sales
|
|
|
3.3
|
%
|
|
|
3.2
|
%
|
|
|
3.0
|
%
|
|
|
2.9
|
%
|
|
|
2.8
|
%
|
|
|
2.7
|
%
|
Ladish does not as a matter of course make public forecasts or
projections as to future performance, earnings or other
financial metrics, and the information set forth above is
included in this proxy statement/prospectus only because this
information was provided to, and was relied upon by, Baird in
performing its financial analyses for the Ladish board of
directors. The projections above were not prepared with a view
to public disclosure or compliance with the rules and
regulations of the SEC or the guidelines established by the
American Institute of Certified Public Accountants for
preparation and presentation of prospective financial
information. The internal projections above do not purport to
present operations or financial condition in accordance with
GAAP. Ladishs independent registered public accounting
firm has not reviewed, examined, compiled or otherwise applied
procedures to these internal forecasts and, accordingly, does
not express an opinion or any other form of assurance with
respect to these forecasts. The projections above reflect
numerous assumptions made by the management of Ladish with
respect to industry performance, general business, economic,
market and financial conditions and other matters, all of which
are subject to inherent uncertainties and are difficult to
predict, many of which are beyond Ladishs control.
Accordingly, there can be no assurance that the assumptions made
in preparing these forecasts will prove accurate. It is expected
that there may be differences between actual and projected
results, and actual results may be materially greater or less
than those contained in the projections.
The inclusion of the financial projections contained herein
should not be regarded as an indication that any of ATI, LPAD,
PADL or Ladish or their respective affiliates or representatives
considered or consider this information to be a reliable
prediction of future events, and this information should not be
relied upon as such. None of ATI, LPAD, PADL or Ladish
undertakes any obligation to publicly update any forward-looking
statements, whether as a result of new information, past,
current or future events or circumstances or otherwise.
ATIs
Reasons for the Merger
On October 28, 2010, ATIs board of directors
unanimously authorized ATI management to complete the
negotiation of and enter into the merger agreement. In
evaluating the merger, the merger agreement and the other
transactions contemplated by the merger agreement, ATIs
board of directors consulted with ATIs management and
ATIs legal and financial advisors and, in making its
determination, ATIs board of directors considered numerous
factors, including the following:
ATI believes that the merger will make it a more efficient
provider of specialty metal products, will deliver several
significant strategic benefits to ATI and will create
sustainable long-term value for its stockholders. Key factors
considered by the ATI board of directors included the following:
44
|
|
|
|
|
Enhancement of position with aerospace
customers. Both ATI and Ladish have significant
relationships with aerospace customers. The merger provides an
opportunity for ATI to offer these customers a more integrated
supply chain and to grow its relationship with certain existing
aerospace customers.
|
|
|
|
Growth opportunities for mill products. ATI
believe that it will have opportunities to increase its sales of
mill products such as titanium, nickel and specialty alloys, as
well as cutting tools. ATI also anticipates that its acquisition
of Ladish will accelerate growth in sales of its new alloys and
powder metals.
|
|
|
|
Improvement of ATIs competitive position in light of
supply chain consolidation. ATIs
acquisition of Ladish is expected to provide value-added
engineered component capabilities to ATIs mill products,
as well as an ability to better meet customer demand for near
net shapes.
|
ATI expects additional annual sales for the combined company of
approximately $100 million, which would result in annual pre-tax
profits of approximately $25 million based upon historical
margins. In addition, ATI expects to reduce annual costs by $8
million to $10 million related to retirement benefit expenses
and duplicative expenses associated with being separate public
companies. As a result, ATI anticipates that the merger will be
accretive to its annual adjusted earnings per share of common
stock within 18 to 24 months after the completion of the merger.
In reaching its determination to approve the merger agreement
and the merger, the ATI board of directors also considered the
following positive factors:
|
|
|
|
|
a review by ATIs management, assisted by ATIs
advisors, of Ladishs financial condition, results of
operations, business, reputation, risks and prospects, including
the results of the business, financial, accounting and legal due
diligence investigations of Ladish, which, in the belief of
ATIs management, supported the potential strategic
benefits described above;
|
|
|
|
the fact that the exchange ratio of 0.4556 of a share of ATI
common stock for each share of Ladish common stock is fixed and
will not be adjusted for fluctuations in the market price of ATI
common stock or Ladish common stock, which provides certainty as
to the consideration to be paid for each outstanding share of
Ladish common stock, and the resulting percentage ownership
interests and voting power that current ATI stockholders would
have in ATI following the merger, which will represent a
substantial majority;
|
|
|
|
its belief in the likelihood of the satisfaction of all
conditions to the completion of the merger;
|
|
|
|
current industry, economic and market conditions and trends,
including Ladishs market position, which supported its
belief in the potential strategic benefits described
above; and
|
|
|
|
the strategic alternatives available to ATI, and the costs and
benefits of pursuing growth strategies on a stand-alone basis
rather than through acquisitions, none of which were viewed by
the ATI board of directors as being as beneficial to ATI
stockholders as the merger.
|
The ATI board of directors also considered a number of
potentially negative factors in its deliberations considering
the merger, including:
|
|
|
|
|
the possibility that the merger might not be completed as a
result of the failure to obtain the required approval from
Ladishs shareholders, and the potentially negative effect
the resulting termination of the merger agreement could have on
the trading price of ATI common stock and ATIs operating
results;
|
|
|
|
the risk that the closing may be delayed because regulatory
approvals required to consummate the merger are not received on
a timely basis;
|
|
|
|
the possible disruption to ATIs business that may result
from the merger, including the resulting distraction of the
attention of ATIs management, and the costs and expenses
associated with completing the merger;
|
|
|
|
the risks that the potential benefits, synergies and cost
savings sought in the merger may not be realized or may not be
realized within the expected time period, and that the cost of
achieving such benefits, synergies and savings may be
significantly higher than estimated; and
|
|
|
|
the risks described in the section entitled Risk
Factors.
|
45
In view of the wide variety of factors considered in connection
with its evaluation of the merger and the complexity of these
matters, the ATI board of directors did not find it useful and
did not attempt to assign any relative or specific weights to
the various factors that it considered in reaching its
determination to approve the merger and the merger agreement. In
addition, individual members of the ATI board of directors may
have given differing weights to different factors. The ATI board
of directors conducted an overall review of the factors
described above and consulted with ATIs management and
outside legal and financial advisors regarding certain of the
matters described above.
Treatment
of Outstanding Equity and Deferred Compensation Awards
Stock Options. Pursuant to the terms of the
merger agreement, at the effective time of the merger, each
outstanding option to purchase shares of Ladish common stock
will be converted into an option to purchase shares of ATI
common stock, on the same terms and conditions as are applicable
to the options to purchase shares of Ladish common stock, except
that the number of shares of ATI common stock and the exercise
price per share will be adjusted based on the merger
consideration and the closing price per share of ATI common
stock on the trading day date immediately preceding the date on
which the merger is consummated. As of the date of the proxy
statement/prospectus, no options to purchase shares of Ladish
common stock were outstanding under Ladish equity compensation
plans, and no additional grants are authorized under such plans.
Restricted Stock Units. Restricted stock units
awarded under the 2010 Plan are subject to forfeiture under
certain circumstances. However, under the terms of the 2010
Plan, if a change of control such as the merger occurs, each
restricted stock unit awarded under the 2010 Plan will vest in
full, and one share of Ladish common stock will be deliverable
to the holder of the restricted stock unit on the date of the
transaction. Those shares then would be converted into the right
to receive the merger consideration upon consummation of the
merger. If any shares authorized for issuance under the 2010
Plan remain unissued with respect to outstanding restricted
stock units on the date of the completion of the merger, the
unissued shares will be issued on that date to those
participants in the 2010 Plan who are employed by Ladish or an
affiliate of Ladish immediately prior to the completion of the
merger, which are referred to as the eligible group. In such an
event, each member of the eligible group would receive a number
of shares equal to (i) the ratio of the aggregate number of
restricted stock units then held by the participant to the total
number of restricted stock units then held by the members of the
eligible group, multiplied by (ii) the number of shares
then remaining available for issuance under the 2010 Plan.
Under the 2010 Plan, the aggregate number of shares of Ladish
common stock that may be issued may not exceed
500,000 shares. Because the 2010 Plan provides for the
allocation to the eligible group of shares that are authorized
for issuance under the 2010 Plan but which remain unissued with
respect to outstanding restricted stock units on the date of the
completion of the merger, 500,000 shares will be issued under
the 2010 Plan on the date of the completion of the merger
regardless of the number of restricted stock units then
outstanding. As of the date of this proxy statement/prospectus,
500,000 restricted stock units have been awarded under the 2010
Plan, all of which were awarded to certain employees and
directors of Ladish. As a result, as of the date of this proxy
statement/prospectus, no additional restricted stock units may
be awarded under the 2010 Plan unless currently outstanding
restricted stock units are forfeited in accordance with the
terms of the 2010 Plan. In the event that any forfeited
restricted stock units are not re-granted prior to the
completion of the merger, the unissued shares of Ladish common
stock underlying these restricted stock units would be allocated
to members of the eligible group immediately prior to the
completion of the merger, as described above, which may result
in Ladish directors or executive officers receiving a portion of
such shares.
Deferred Compensation. Under the terms of the
2006 Plan, each award of deferred compensation will become
immediately and fully vested on the date of a change of control
such as the merger if the participant is employed by Ladish or
an affiliate of Ladish immediately prior to the date of the
change of control. As of December 31, 2010, an aggregate of
approximately $411,000 of deferred compensation was held in
investment accounts under the 2006 Plan, approximately $296,000
of which was fully vested.
Pursuant to the Deferred Compensation Plan, upon the
consummation of the merger, all amounts deferred under the
Deferred Compensation Plan and any earnings on such amounts will
be paid to participants in a single lump sum within seven days
of the consummation of the merger. As of December 31, 2010,
an aggregate of
46
approximately $1.4 million of deferred compensation was
held in investment accounts under the Deferred Compensation
Plan, all of which was fully vested.
Establishment
of Retention Pool
Pursuant to the terms of the merger agreement, ATI has agreed to
establish a retention pool in an amount of approximately
$7.0 million to make payments to each of the executive
officers and certain other Ladish employees who remain employees
of PADL or any of its affiliates for a period of no less than
six months following the effective date of the merger, referred
to as the retention period. One half of the amounts awarded
under the retention pool will be paid promptly after the
effective time of the merger, and one half of the amounts
awarded under the retention pool will be paid at the end of the
retention period to eligible individuals, subject to the
requirement that an eligible individual who ceases to be an
employee of PADL or any affiliate of PADL during the retention
period, except if terminated or caused to be terminated by ATI
without cause, will no longer be eligible to receive the payment
due at the end of the retention period and will repay ATI a
portion of the initial amount paid, determined by multiplying
the payment that the eligible individual received from the
retention pool at the effective time of the merger by a
fraction, the numerator of which is 182 minus the number of days
the eligible employee remained an employee of PADL or any
affiliate of PADL and the denominator of which is 182. An
eligible individual terminated by or caused to be terminated by
PADL or any affiliate of PADL without cause during the retention
period will be eligible to retain the initial payment and
receive the subsequent payment from the retention pool. ATI, in
consultation with Ladish management, will determine the
allocation of the retention pool shortly before, or at, the
closing of the merger.
Interests
of Certain Persons in the Merger
Members of the Ladish board of directors and the executive
officers of Ladish (and individuals who served in such roles
during the last fiscal year) have interests in the merger that
are different from, or are in addition to, the interests of
Ladishs shareholders generally. The Ladish board of
directors was aware of these interests and considered them,
among other matters, in adopting and approving the merger
agreement and in determining to recommend that Ladish
shareholders adopt the merger agreement. These interests include:
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the possible employment of certain of Ladishs executive
officers by ATI after the merger, although no agreements have
been proposed or entered into;
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the full vesting of any unvested deferred compensation held in
investment accounts under the 2006 Plan or the Deferred
Compensation Plan;
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the beneficial ownership of restricted stock units which will
vest in full as of the effective date of the merger and
potential to receive unissued shares eligible for issuance under
the 2010 Plan on the effective date of the merger;
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the eligibility of each of Ladishs executive officers to
receive payments from a retention pool to be established by
ATI; and
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the receipt of indemnification and liability insurance benefits
by directors and executive officers of Ladish from ATI, as
described below under Indemnification of
Executive Officers and Directors.
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Restricted Stock Units. Certain of
Ladishs directors and executive officers beneficially own
restricted stock units under the 2010 Plan. As a result, such
directors and executive officers will receive the merger
consideration with respect to the shares of Ladish common stock
deliverable to those persons on the date of the consummation of
the merger. In addition, Ladishs directors and executive
officers will receive a portion of any shares authorized for
issuance under the 2010 Plan that remain unissued on the date of
the completion of the merger, assuming that the individual
remains employed by, or affiliated with, Ladish immediately
prior to the completion of the merger, based on (i) the
ratio of the aggregate number of restricted stock units then
held by each individual to the total number of restricted stock
units then held by the members of the eligible group under the
2010 Plan, multiplied by (ii) the number of shares then
remaining available for issuance under the 2010 Plan. The
following table indicates, as of the date of this proxy
statements/prospectus, (i) the number of restricted stock
units beneficially owned by each of
47
Ladishs directors and executive officers and (ii) the
aggregate amount of merger consideration that each of
Ladishs directors and executive officers would receive in
respect of all shares received by such person under the 2010
Plan:
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Aggregate Merger Consideration
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Restricted Stock
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Shares of
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Units Beneficially
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ATI
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Owned Under the
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Common
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2010 Plan
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Stock
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Cash
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Gary J. Vroman
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122,500
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55,811
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$
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2,940,000
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Lawrence W. Bianchi
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12,250
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5,581
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294,000
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James C. Hill
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12,250
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5,581
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294,000
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Leon A. Kranz
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12,250
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5,581
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294,000
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Wayne E. Larsen
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91,875
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41,858
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2,205,000
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J. Robert Peart
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12,250
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5,581
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294,000
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John W. Splude
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12,250
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5,581
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294,000
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John Delaney
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36,750
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16,743
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882,000
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Lawrence C. Hammond
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36,750
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16,743
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882,000
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Randy B. Turner
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36,750
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16,743
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882,000
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Deferred Compensation. As of December 31,
2010, an aggregate of approximately $411,000 of deferred
compensation was held in investment accounts under the 2006 Plan
on behalf of Ladishs executive officers, approximately
$296,000 of which was fully vested. The following table
indicates the value of each of Ladishs executive
officers unvested awards under the 2006 Plan, which will
become immediately and fully vested on the date of the
consummation of the merger:
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Value of Awards
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to Vest
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Gary J. Vroman
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$
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34,418
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Wayne E. Larsen
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32,554
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John Delaney
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22,521
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Lawrence C. Hammond
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Randy B. Turner
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23,285
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As of December 31, 2010, an aggregate of approximately
$1.4 million of deferred compensation was held in
investment accounts under the Deferred Compensation Plan on
behalf of Ladishs executive officers. The following table
indicates the amounts that will be paid to Ladishs
executive officers under the Deferred Compensation Plan in lump
sums within seven days of the consummation of the merger in
respect of such deferred compensation:
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Amount
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to be Paid
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Gary J. Vroman
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$
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Wayne E. Larsen
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894,212
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John Delaney
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Lawrence C. Hammond
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549,778
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Randy B. Turner
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Retention Pool. Pursuant to the terms of the
merger agreement, ATI has agreed to establish a retention pool
in an amount of approximately $7.0 million to make payments
to each of the executive officers of Ladish and certain other
Ladish employees who remain employees of PADL or any of its
affiliates for a period of no less than six months following the
effective date of the merger, referred to as the retention
period. ATI, in consultation with Ladish management, will
determine the allocation of the retention pool shortly before,
or at, the closing of the merger. Accordingly, it is not
possible to determine the amount that any executive officer will
receive, if any, from the retention pool.
48
Indemnification
of Executive Officers and Directors
The merger agreement provides that, from and after the effective
time of the merger, ATI, LPAD and PADL will indemnify each
present and former director or officer of Ladish or any of its
subsidiaries with respect to all acts or omissions by them in
their respective capacities as such at any time prior to the
effective time of the merger, to the fullest extent
(i) required by Ladishs articles of incorporation and
Ladishs by-laws as in effect on the date of the merger
agreement and (ii) permitted under applicable law.
The merger agreement also provides that ATI will use its
reasonable best efforts to cause the individuals serving as
officers and directors of Ladish or any of its subsidiaries
immediately prior to the effective time of the merger who are
then covered by the directors and officers liability
insurance policy currently maintained by Ladish to be covered
for a period of six years from the effective time of the merger
by such policy (or one or more policies of at least the same
coverage and amounts in the aggregate and containing terms and
conditions that are not less advantageous in any material
respect) with respect to acts or omissions occurring prior to
the effective time of the merger that were committed by such
officers and directors in their respective capacities as such.
However, ATI is not required to pay for an annual premium in
excess of 300% of the annual premiums paid by Ladish on the date
of the merger agreement for such coverage. If ATI is unable to
maintain or obtain such insurance, ATI will obtain as much
comparable insurance as available for an amount equal to 300% of
the annual premiums paid by Ladish on the date of the merger
agreement for such coverage.
Board of
Directors and Executive Officers of ATI Following the
Merger
Upon completion of the merger, the ATI board of directors is
expected to continue to be composed of nine members, consisting
of the nine members of the ATI board of directors immediately
prior to the completion of the merger. Each executive officer of
ATI immediately prior to the completion of the merger is
expected to continue as an executive of ATI upon completion of
the merger, with the expected addition of Gary J. Vroman as an
executive officer of ATI upon completion of the merger. It is
expected that Mr. Vroman will be the President of the
Ladish business unit of ATI following the completion of the
merger. Information about the current ATI directors and
executive officers and Mr. Vroman can be found in the
documents listed under the heading Where You Can Find More
Information.
Regulatory
Approvals
ATI and Ladish have agreed to cooperate with each other and use,
and cause their respective subsidiaries to use, their respective
reasonable best efforts to promptly take, or cause to be taken,
all actions, and do, or cause to be done, all things necessary,
proper or advisable to cause the conditions to the closing of
the merger to be satisfied as promptly as practicable, including
preparing and filing promptly and fully all documentation to
effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and
other documents (including any required or recommended filings
under applicable antitrust laws). ATI and Ladish also have
agreed to use their respective reasonable best efforts to obtain
all approvals, consents, registrations, permits, authorizations
and other confirmations from any governmental authority or third
party necessary, proper or advisable to consummate the merger,
including under the HSR Act and any other applicable antitrust
laws. If any objections are asserted by a governmental authority
or other person with respect to the merger, each of ATI and
Ladish has agreed to use its reasonable best efforts to resolve
such objections. Ladish may not commit to any divestiture
transaction or agree to any restriction on its business without
ATIs prior written consent. ATI is not required to offer,
accept or agree to (i) dispose or hold separate any part of
its or Ladishs businesses, operations, assets or product
lines (or a combination of ATIs and Ladishs
respective businesses, operations, assets or product lines);
(ii) refrain from competing in any geographic area or line
of business; or (iii) restrict the manner in which, or
whether, ATI, Ladish or any of their respective affiliates may
carry on business in any part of the world. Neither ATI nor
Ladish is required to contest or otherwise resist any
administrative or judicial action or proceeding, including any
proceeding by a private party, challenging the merger as being
violative of any antitrust law.
The transactions contemplated by the merger agreement are
subject to the HSR Act. The HSR Act and related rules prohibit
the completion of transactions such as the merger unless the
parties notify the FTC and the Antitrust Division of the DOJ in
advance. The HSR Act further provides that a transaction
notifiable under the HSR Act, such
49
as the merger, may not be completed until the expiration of a 30
calendar day waiting period, or the early termination of that
waiting period, following the parties filing of their
respective HSR Act notification forms. On December 1, 2010,
ATI and Ladish filed the requisite notification and report forms
under the HSR Act with the FTC, and the Antitrust Division of
the DOJ. The applicable waiting period under the HSR Act expired
on December 31, 2010 without a request for additional
information.
At any time before or after the merger is completed, either the
DOJ or FTC, or any other antitrust authority having jurisdiction
over ATI or Ladish, could take action under applicable antitrust
laws in opposition to the merger, including seeking to enjoin
the transaction or seeking divestiture of substantial assets of
ATI, Ladish or their subsidiaries. Private parties also may seek
to take legal action under antitrust laws under some
circumstances.
Based upon an examination of information available relating to
the businesses in which the companies are engaged, ATI and
Ladish believe that the merger has received the necessary
regulatory clearance. However, ATI and Ladish can give no
assurance that a challenge to the merger on antitrust grounds
will not be made, or, if such a challenge is made, that ATI and
Ladish will prevail.
In addition, the merger may be reviewed by the attorneys general
in the various states in which ATI and Ladish operate. There can
be no assurance that one or more state attorneys general will
not attempt to file an antitrust action to challenge the merger.
These authorities may claim that they have authority, under the
applicable state and federal antitrust laws and regulations, to
investigate or disapprove of the merger under the circumstances
and based upon the review set forth in applicable state laws and
regulations.
ATI and Ladish cannot assure you as to the absence of any
litigation challenging the regulatory approval of the merger
under the HSR Act or any other applicable antitrust law. ATI and
Ladish also cannot assure you that the DOJ, the FTC or any state
attorney general, any other governmental entity or any private
party will not attempt to challenge the merger on antitrust
grounds, and, if such a challenge is made, ATI and Ladish cannot
assure you as to its result.
ATI and Ladish are not aware of any material governmental or
regulatory approvals or actions that are required for completion
of the merger other than as described above. It is presently
contemplated that if any such additional material governmental
approvals or actions are required, those approvals or actions
will be sought. There can be no assurance, however, that any
additional approvals or actions will be obtained.
See Risk Factors ATI and Ladish may be unable
to obtain in the anticipated timeframe, or at all, the
regulatory approvals required to complete the merger or, in
order to do so, ATI and Ladish may be required to comply with
material restrictions or conditions.
Source of
Funds for Cash Consideration
In January 2011, ATI completed a public offering and sale of
$500.0 million aggregate principal amount of its 5.950%
Senior Notes due 2021. ATI received net proceeds of
approximately $495.8 million from the public offering,
after deducting underwriting discounts and commissions and
estimated offering expenses. ATI will use the net proceeds of
the public offering to finance the cash portion of the merger
consideration and pay related fees and expenses, with any
additional net proceeds being used for general corporate
purposes.
Merger
Expenses, Fees and Costs
All fees and expenses incurred in connection with the merger
agreement and the merger will be paid by the party incurring
those fees and expenses, whether or not the merger is
consummated. For additional information, see The Merger
Agreement Termination Fee and Expenses.
Restrictions
on Resales by Affiliates
The shares of ATI common stock to be issued in connection with
the merger will be freely transferable under the Securities Act,
except for shares issued to any shareholder who may be deemed to
be an affiliate of ATI for
50
purposes of Rule 144 under the Securities Act. Persons who
may be deemed to be affiliates include individuals or entities
that control, are controlled by, or are under common control
with, ATI and may include the executive officers, directors and
significant stockholders of ATI.
Dissenters
Rights
Dissenters rights are statutory rights that enable
shareholders to dissent from an extraordinary transaction, such
as a merger, and to demand that the corporation pay the fair
value for their shares as determined by a court in a judicial
proceeding instead of receiving the consideration offered to
shareholders in connection with the extraordinary transaction.
Under Wisconsin law, dissenters rights generally are not
available to holders of shares, such as shares of Ladish common
stock, that are listed on a national securities exchange, unless
the transaction is a business combination involving a
significant shareholder or the corporations articles of
incorporation provide otherwise. Ladishs articles of
incorporation do not otherwise provide for dissenters
rights. Accordingly, holders of Ladish common stock are not
entitled to dissenters rights in connection with the
merger.
Stock
Exchange Listing of ATI Common Stock
ATI will use all reasonable best efforts to cause the shares of
ATI common stock issuable pursuant to the merger agreement to be
approved for listing on the NYSE at or prior to the completion
of the merger, subject to official notice of issuance. Approval
of the listing on the NYSE of the shares of ATI common stock
issuable pursuant to the merger, subject to official notice of
issuance, is a condition to each partys obligation to
complete the merger.
Delisting
and Deregistration of Ladish Stock
If the merger is completed, it is expected that Ladish common
stock will be delisted from and will no longer be traded on the
Nasdaq Global Select Market. It also is expected that Ladish
common stock will be deregistered under the Exchange Act.
Accounting
Treatment
The merger will be accounted for under the acquisition method of
accounting in conformity with GAAP. Under the acquisition
method, the assets acquired and liabilities assumed are measured
at fair values.
Litigation
Relating to the Merger
Following announcement of the merger on November 17, 2010,
Ladish, its directors and ATI were named as defendants in
lawsuits brought by and on behalf of Ladish shareholders in
Wisconsin state court and in the United States District
Court for the Eastern District of Wisconsin, each challenging
ATIs acquisition of Ladish pursuant to the merger
agreement. The respective plaintiffs generally allege that the
consideration that Ladish shareholders will receive in
connection with the merger is inadequate and that Ladishs
directors breached their fiduciary duties to Ladish shareholders
in negotiating and approving the merger agreement. Generally,
the respective plaintiffs further allege that Ladish and ATI
aided and abetted the alleged breaches by Ladishs
directors. The plaintiff in the case brought in the Eastern
District of Wisconsin also is alleging violations of Sections
14(a) and 20(a) of the Exchange Act in connection with the
registration statement of which this proxy statement/prospectus
forms a part. The complaints seek various forms of relief,
including injunctive relief that would, if granted, prevent the
merger from being consummated in accordance with the
agreed-upon
terms. Ladish and ATI believe that the claims stated in the
complaints against them (and, in Ladishs case, also its
directors) are all without merit and intend to defend the
actions vigorously. The termination fee described under
The Merger Agreement Termination Fee and
Expenses would not be payable in the event that the merger
does not occur as a result of this litigation.
51
THE
MERGER AGREEMENT
The following summary describes the material provisions of the
merger agreement. This summary may not contain all of the
information about the merger agreement that is important to you.
This summary is subject to, and qualified in its entirety by
reference to, the merger agreement, which is included in this
proxy statement/prospectus as Annex A. You are urged to
read the merger agreement carefully and in its entirety, as it
is the legal document governing the merger.
The merger agreement summary below is included in this proxy
statement/prospectus only to provide you with information
regarding the terms and conditions of the merger agreement, and
not to provide any other factual information regarding ATI,
Ladish or their respective businesses. Accordingly, the
representations and warranties and other provisions of the
merger agreement should not be read alone, but instead should be
read only in conjunction with the information provided elsewhere
in this proxy statement/prospectus and in the documents
incorporated by reference into this proxy statement/prospectus.
See Where You Can Find More Information for the
location of information incorporated by reference into this
proxy statement/prospectus.
The representations, warranties and covenants contained in the
merger agreement and described in this proxy
statement/prospectus (i) were made only for purposes of the
merger agreement and as of specific dates and may be subject to
more recent developments; (ii) may be subject to
limitations agreed upon by the contracting parties, including
being qualified by reference to disclosure schedules relating to
topics such as Ladishs subsidiaries, outstanding options,
tax matters, employee benefits and labor matters, environmental
matters, contracts, title to properties, intellectual property
and insurance, for the purposes of allocating risk between
parties to the merger agreement instead of establishing these
matters as facts; and (iii) may apply standards of
materiality in a way that is different from what may be viewed
as material by you or by other investors. Accordingly, these
representations and warranties alone may not describe the actual
state of affairs as of the date they were made or at any other
time. The representations and warranties contained in the merger
agreement do not survive the effective time of the merger. The
representations, warranties and covenants in the merger
agreement or any description thereof may not characterize the
actual state of facts or condition of ATI, LPAD, PADL or Ladish
or any of their respective subsidiaries or affiliates. Moreover,
information concerning the subject matter of the
representations, warranties and covenants may change after the
date of the merger agreement, which subsequent information may
or may not be fully reflected in public disclosures by ATI and
Ladish.
Structure;
Merger Consideration
Upon the terms and subject to the conditions set forth in the
merger agreement, LPAD will merge with and into Ladish, with
Ladish continuing as the surviving entity and a wholly owned
subsidiary of ATI. At the effective time and as a result of the
merger, each outstanding share of Ladish common stock will be
converted into the right to receive the merger consideration,
which is (i) 0.4556 of a share of ATI common stock and
(ii) a cash payment by ATI equal to $24.00. Immediately
following the merger, Ladish will be merged with and into PADL,
with PADL continuing as the surviving entity and a wholly owned
subsidiary of ATI.
Effective
Time; Closing
Unless another date is agreed upon by ATI and Ladish, the
closing of the merger will occur no later than the second
business day following satisfaction or waiver, of the conditions
to completion of the merger (other than those conditions that by
their nature are to be satisfied at the closing, but subject to
the satisfaction or waiver of such conditions at the time of
closing), as described under Conditions to the
Closing of the Merger. As soon as practicable on the
closing date, ATI and Ladish will cause the merger to be
consummated by filing articles of merger with the Department of
Financial Institutions of the State of Wisconsin. The merger
will become effective at the time specified in the articles of
merger. ATI will cause the merger of Ladish with and into PADL,
with PADL continuing as the surviving entity and a wholly owned
subsidiary of ATI, to be consummated on the same business day as
the articles of merger related to the merger are filed with the
Department of Financial Institutions of the State of Wisconsin.
There will be no condition to the completion of the merger of
Ladish with and into PADL other than the completion of the
merger. The merger of Ladish with and into PADL will become
effective immediately following the effective time of the merger.
52
No
Issuance of Fractional Shares
ATI will not issue fractional shares in the merger. Each holder
of Ladish common stock exchanged pursuant to the merger who
otherwise would have been entitled to receive a fraction of a
share of ATI common stock will receive, in lieu of the
fractional share, cash (without interest) in an amount equal to
the fractional part of a share of ATI common stock multiplied by
the arithmetic average of the average daily high and low sales
prices per share of ATI common stock as reported on the NYSE
during the 10 trading days immediately preceding the effective
date of the merger, less any applicable withholding taxes.
Procedures
for Surrendering Stock Certificates and Book-Entry
Shares
The conversion of Ladish common stock into the right to receive
the merger consideration will occur automatically at the
effective time of the merger. Prior to the effective time of the
merger, ATI will engage an exchange agent to handle the exchange
of shares of Ladish common stock (whether in certificated or
book-entry form) for shares of ATI common stock and the payment
of the cash portion of the merger consideration and cash for any
fractional shares. At or promptly following the effective time
of the merger, ATI will deposit the aggregate merger
consideration with the exchange agent. Promptly after the
effective time of the merger, the exchange agent will send a
letter of transmittal to each person who is a record holder of
Ladish common stock at the effective time of the merger for use
in the exchange and instructions explaining how to surrender
Ladish common stock certificates or book-entry shares to the
exchange agent.
Ladish shareholders who surrender their stock certificates with
a properly completed letter of transmittal or properly surrender
their book-entry shares as described in the provided
instructions will receive the applicable number of shares of ATI
common stock into which the shares of Ladish common stock were
converted in the merger, the applicable cash portion of the
merger consideration with respect to the surrendered shares of
Ladish common stock and any applicable cash in lieu of
fractional shares. Shares of ATI common stock will be delivered
to Ladish shareholders in book-entry form through the Direct
Registration System maintained by ATIs transfer agent,
unless a Ladish shareholder specifically requests a physical
certificate. After the effective date of the merger, each
certificate that previously represented shares of Ladish common
stock will only represent the right to receive the applicable
merger consideration into which those shares of Ladish common
stock have been converted.
Neither ATI nor Ladish will be responsible for transfer or other
similar taxes and fees incurred by holders of Ladish common
stock in connection with the merger and thus such taxes and
fees, if any, will be the sole responsibility of such holder. In
addition, if there is a transfer of ownership of Ladish common
stock that is not registered in Ladishs transfer
agents records, payment of the merger consideration as
described above will be made to a person other than the person
in whose name the certificate so surrendered is registered only
if the certificate is properly endorsed or otherwise is in
proper form for transfer; and the person requesting the exchange
must satisfy the exchange agent that any such transfer or other
taxes required by reason of the payment of the merger
consideration to such other person have been paid or that no
payment of such taxes is necessary.
After the completion of the merger, ATI will neither pay
dividends with a record date after the effective time of the
merger nor make any cash payment in lieu of fractional shares to
any holder of any Ladish common stock certificates until the
holder surrenders the Ladish stock certificates. However, once
those certificates have been surrendered, ATI will pay to the
holder, without interest, any dividends that have been declared
after the effective date of the merger on the shares into which
those Ladish shares have been converted.
Termination
of Exchange Fund
180 days after the effective time of the merger, ATI may
require the exchange agent to deliver to ATI all undistributed
cash and shares of ATI common stock remaining in the exchange
fund. Thereafter, Ladish shareholders must look only to ATI for
payment of the merger consideration with respect to their shares
of Ladish common stock. In addition, under the merger agreement,
any amounts remaining unclaimed by holders of shares of Ladish
common stock immediately prior to the time when the amounts
would otherwise escheat to or become property of any
governmental authority will become, to the extent permitted by
applicable law, the property of ATI, free and clear of any claim
or interest of any person previously entitled to the unclaimed
amounts.
53
Treatment
of Stock Options
At the effective time of the merger, each outstanding option to
purchase shares of Ladish common stock, whether or not then
exercisable, will be converted into and become a right with
respect to ATI common stock. From and after the effective time
of the merger, each such Ladish option assumed by ATI may be
exercised solely for ATI common stock. The number of shares of
ATI common stock (rounded down to the nearest whole share)
subject to each such Ladish option will be equal to the product
of (i) the number of shares of Ladish common stock
previously subject to such option and (ii) the amount
determined by adding (A) 0.4556 and (B) the quotient
obtained by dividing $24.00 by the closing price per share of
ATI common stock on the NYSE on the trading day preceding the
closing date of the merger, rounded up to the nearest whole
cent. The per share exercise price for each such Ladish option
will be equal to the exercise price per share for the shares of
Ladish common stock previously purchasable pursuant to such
option divided by the amount obtained by adding 0.4556 and the
quotient obtained by dividing $24.00 by the closing price per
share of ATI common stock on the NYSE on the trading day
preceding the closing date of the merger, rounded up to the
nearest whole cent. Such Ladish options will be subject to the
same terms and conditions (including expiration date and
exercise provisions) as were applicable to the corresponding
options with respect to Ladish common stock immediately prior to
the effective time of the merger. As of the date of this proxy
statement/prospectus, no options to purchase shares of Ladish
common stock were outstanding under Ladish equity compensation
plans, and no additional grants are authorized under such plans.
Representations
and Warranties
The merger agreement contains representations and warranties
made by Ladish relating to, among other topics, the following:
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corporate organization;
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capitalization;
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authority to enter into and perform the merger agreement;
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enforceability of the merger agreement;
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absence of conflicts between the merger agreement and
Ladishs organizational documents, material agreements and
instruments or applicable laws;
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approval and recommendation to Ladish shareholders of the merger
agreement and the merger by its board of directors;
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governmental approvals;
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Ladishs filings with the SEC;
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absence of any undisclosed liabilities;
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absence of certain changes or events since December 31,
2009;
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absence of material legal proceedings;
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compliance with laws and permits;
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information supplied by Ladish for inclusion or incorporation by
reference in this proxy statement/prospectus and the
registration statement of which this proxy statement/prospectus
forms a part;
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tax matters;
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employee benefits and labor matters;
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environmental matters;
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material contracts of Ladish;
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Ladishs title to properties and assets;
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intellectual property;
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insurance;
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receipt of the opinion of Baird;
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broker and other similar fees or commissions in connection with
the merger;
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inapplicability of the rights agreement to the merger agreement
and the merger
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compliance with state takeover laws
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absence of any action that could reasonably be expected to
prevent the merger from qualifying as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code,
referred to as the Code; and
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lack of beneficial ownership by Ladish and its subsidiaries of
ATI common stock.
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The representations and warranties of ATI, LPAD and PADL are
more limited and relate to, among other topics, the following:
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corporate organization;
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capitalization;
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authority to enter into and perform the merger agreement;
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enforceability of the merger agreement;
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absence of conflicts between the merger agreement and ATIs
organizational documents, material agreements and instruments or
applicable laws;
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governmental approvals;
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ATIs filings with the SEC;
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absence of any undisclosed liabilities;
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absence of certain changes or events since December 31,
2009;
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broker and other similar fees or commissions in connection with
the merger;
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absence of any action that could reasonably be expected to
prevent the merger from qualifying as a reorganization within
the meaning of Section 368(a) of the Code; and
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availability of sufficient cash to pay the cash portion of the
merger consideration.
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The representations and warranties in the merger agreement do
not survive the closing of the merger.
Many of the representations and warranties of ATI and Ladish are
qualified by disclosure schedules and as to
materiality or material adverse effect.
In addition, there are separate standalone conditions to
completion of the merger relating to the absence of any material
adverse effect. For purposes of the merger agreement,
material adverse effect means, with respect to ATI
or Ladish, as the case may be, any material adverse effect on,
or change, event, occurrence or state of facts materially
adverse to, (i) the business, properties, assets,
liabilities (contingent or otherwise), results of operations or
financial condition of such party and its subsidiaries taken as
a whole, other than any effect, change, event, occurrence or
state of facts (A) relating to the economy in general,
(B) relating to the industry or industries in which such
party and its subsidiaries operate specifically or
(C) resulting from actions taken pursuant to such
partys obligations under the merger agreement to cooperate
with the other parties and use its reasonable best efforts to
cause the conditions to closing of the merger to be satisfied as
promptly as practicable and to obtain all approvals from any
governmental authority or third party necessary to consummate
the merger, and, in each case under clauses (A) and (B),
not specifically relating to (or disproportionately affecting)
such party; or (ii) such partys ability to, in a
timely manner, perform its obligations under the merger
agreement or consummate the merger.
55
Conduct
of Business Pending the Merger
In general, except as expressly permitted by the merger
agreement or as required by applicable law, until the effective
time of the merger, Ladish and each of its subsidiaries are
required to, among other things:
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conduct its business in the ordinary course consistent with past
practice in all material respects;
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comply in all material respects with applicable laws and the
requirements of all material contracts;
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use commercially reasonable efforts to maintain and preserve
intact its business organization and the goodwill of those
having business relationships with it and retain the services of
its present officers and key employees, in each case, to the end
that its goodwill and ongoing business will not be materially
impaired at the effective time of the merger; and
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keep in full force and effect all material insurance policies,
other than changes to such policies made in the ordinary course
of business.
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In addition, except as expressly permitted by the merger
agreement or as required by applicable law, subject to certain
exceptions, until the effective time of the merger, Ladish will
not, and will not permit any of its subsidiaries to, among other
things:
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issue, sell, grant, dispose of, pledge or otherwise encumber any
shares of its capital stock;
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purchase any of its outstanding capital stock;
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declare or pay any dividend on any shares of Ladishs
capital stock;
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incur, assume or guarantee any indebtedness or issue or sell any
debt securities;
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sell, transfer, lease, mortgage, encumber or otherwise dispose
of or subject to any lien any of its properties or assets with a
fair market value in excess of $250,000 individually or $500,000
in the aggregate;
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make any capital expenditure or expenditures which involves the
purchase of real property or is in excess of $1,000,000 in the
aggregate in any month;
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directly or indirectly acquire any business or entity or assets
that, individually, have a purchase price in excess of $100,000
or, in the aggregate, have a purchase price in excess of
$500,000;
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make any investment in, or loan or advance to, any person or
entity;
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enter into, terminate or amend any material contract;
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increase the compensation of any of Ladishs directors,
officers or employees or enter into, establish, amend or
terminate any employment, consulting, retention, change in
control, collective bargaining, bonus or other compensation or
benefit plan;
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make or change any material election concerning taxes or tax
returns, file any amended tax return, enter into any closing
agreement with respect to taxes, settle any material tax claim
or assessment or surrender any right to claim a refund of taxes
or obtain any tax ruling;
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make any changes in financial or tax accounting methods,
principles or practices, or change an annual accounting period;
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amend the organizational documents of Ladish or any of its
subsidiaries;
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redeem Ladishs outstanding common share purchase rights or
terminate or otherwise take any action to render the rights
agreement inapplicable to any transaction other than the merger
or to any person or entity other than ATI and LPAD;
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adopt a plan or agreement of complete or partial liquidation,
dissolution, restructuring, recapitalization, merger,
consolidation or other reorganization;
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pay, discharge, settle or satisfy any claims, liabilities or
obligations;
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issue any broadly distributed communication of a general nature
to employees (including general communications relating to
benefits and compensation) or customers without the prior
approval of ATI;
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settle or compromise any material litigation, proceeding or
investigation;
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agree or consent to any agreement or modification of any
existing agreement with any governmental authority; or
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agree to take any of the foregoing actions or to take any action
which would cause any of the representations or warranties of
Ladish set forth in the merger agreement to be untrue or in any
material respect impede or delay the ability of the parties to
satisfy any of the conditions to the merger set forth in the
merger agreement.
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Except as expressly permitted by the merger agreement or as
required by applicable law, subject to certain exceptions, until
the effective time of the merger, ATI will not, and will not
permit any of its subsidiaries to take any action which would
cause any of the representations or warranties of ATI set forth
in the merger agreement to be untrue or in any material respect
impede or delay the ability of the parties to satisfy any of the
conditions to the merger set forth in the merger agreement.
Obligation
of Ladishs Board of Directors to Recommend the Merger
Agreement and Call a Shareholders Meeting
Ladish has agreed to duly call a meeting of its shareholders for
the purpose of obtaining the requisite vote of Ladish
shareholders necessary to adopt the merger agreement. As
discussed under The Merger Ladishs
Reasons for the Merger; Recommendation of the Ladish Board of
Directors, Ladishs board of directors has
recommended that Ladish shareholders vote FOR
the adoption of the merger agreement. Ladishs board of
directors, however, may withdraw or modify its recommendation in
a manner adverse to ATI, recommend a takeover proposal or enter
into an agreement related to a takeover proposal under certain
specified circumstances as discussed under No
Solicitation by Ladish and Changes in
Ladishs Board of Directors Recommendation.
No
Solicitation by Ladish
Under the terms of the merger agreement, subject to certain
exceptions, Ladish has agreed that it will not, and will cause
its subsidiaries and representatives not to, directly or
indirectly:
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solicit, initiate, cause, facilitate or encourage (including by
furnishing information) any inquiries or proposals that
constitute, or may reasonably be expected to lead to, a takeover
proposal (as described below);
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participate in any discussions or negotiations with any third
party regarding a takeover proposal;
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accept a takeover proposal or enter into any agreement related
to a takeover proposal; or
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enter into any agreement that would require Ladish to abandon
the merger or terminate the merger agreement.
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A takeover proposal is any inquiry, proposal or
offer from any person or group (as defined in Section 13(d)
of the Exchange Act), other than ATI and its subsidiaries,
relating to any of the following, other than the merger:
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the direct or indirect acquisition, in a single transaction or a
series of related transactions, of assets of Ladish (including
securities of subsidiaries) equal to 20% or more of the assets
of Ladish and its subsidiaries on a consolidated basis or to
which 20% or more of Ladishs revenues or earnings on a
consolidated basis are attributable;
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the direct or indirect acquisition, in a single transaction or a
series of related transactions, of beneficial ownership (within
the meaning of Section 13 under the Exchange Act) of 20% or
more of any class of equity securities of Ladish;
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a tender offer or exchange offer that if consummated would
result in any person or group beneficially owning 20% or more of
any class of equity securities of Ladish; or
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a merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar
transaction involving Ladish or any of its subsidiaries.
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If, prior to adoption of the merger agreement by Ladishs
shareholders, the board of directors of Ladish receives an
unsolicited, bona fide written takeover proposal made after the
date of the merger agreement in circumstances not involving a
breach of the merger agreement or any standstill agreement,
Ladishs board of directors reasonably determines in good
faith (after receiving the advice of a financial advisor of
nationally recognized reputation) that such proposal constitutes
a superior proposal (as described below) and Ladishs board
of directors determines in good faith (after considering
applicable state law and consulting with and receiving the
advice of outside legal counsel) that the failure to take such
action is reasonably likely to constitute a breach by
Ladishs board of directors of its fiduciary duties to
Ladishs shareholders under applicable law, then Ladish
may, after giving ATI not less than 24 hours written notice
of its intention to do so:
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furnish information about Ladish and its subsidiaries to the
person making the takeover proposal only after the person enters
into a customary confidentiality agreement (a copy of which will
be provided to ATI within 24 hours of its execution) which
is no less favorable to Ladish than Ladishs
confidentiality agreement with ATI, provided that (i) the
confidentiality agreement may not include any provision calling
for an exclusive right to negotiate with Ladish and may not
restrict Ladish from complying with its obligations under the
non-solicitation provisions of the merger agreement and
(ii) concurrently with its delivery of any non-public
information to such person, Ladish delivers any such information
to ATI if it has not previously provided to ATI; and
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participate in discussions and negotiations with such person
with respect to the takeover proposal.
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A superior proposal is a bona fide written offer,
obtained after the date of the merger agreement and not in
breach of the merger agreement or any standstill agreement, to
acquire, directly or indirectly, more than 70% of the
outstanding equity securities of Ladish or all or substantially
all of the assets of Ladish and its subsidiaries on a
consolidated basis:
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which is made by a third party;
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which is on terms and conditions which the board of directors of
Ladish determines in its good faith and reasonable judgment
(after considering applicable state law and after consultation
with outside counsel and a financial advisor of national
reputation) to be more favorable to Ladishs shareholders
from a financial point of view than the merger, taking into
account at the time of determination any changes to the terms of
the merger agreement that, as of that time, had been proposed by
ATI in writing;
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which is reasonably likely to be completed, taking into account
any approval requirements and all other financial, legal,
regulatory and other aspects of such proposal; and
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for which financing, if it is a cash transaction in whole or in
part, is then fully committed or reasonably determined to be
available by Ladishs board of directors.
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Ladish must notify ATI promptly, and within 24 hours after
receipt in any event, if any proposal, offer, inquiry or other
contact is received by, any information is requested from or any
discussions or negotiations are sought to be initiated or
continued with Ladish in respect of any takeover proposal,
including the identity of the person making the proposal, offer,
inquiry or other contact and the terms and conditions of any
proposals or offers or the nature of any inquiries or contacts,
as well as provide ATI with copies of any related written
materials received from or on behalf of such person relating to
the proposal, offer, inquiry or request. Additionally, Ladish is
required to promptly keep ATI fully informed of all material
developments affecting the status and terms of the proposal,
offer, inquiry or request and of the status of any such
discussions or negotiations.
After adoption of the merger agreement by Ladishs
shareholders, Ladishs board of directors may not
participate in negotiations with or provide confidential
information to a third party in connection with a takeover
proposal, and Ladish cannot terminate the merger agreement to
accept a superior proposal.
58
Changes
in Ladishs Board of Directors
Recommendation
On November 16, 2010, the Ladish board of directors adopted
a resolution recommending that the Ladish shareholders adopt the
merger agreement. Under the merger agreement, subject to certain
exceptions, Ladish agreed that it, through its board of
directors, would recommend adoption of the merger agreement to
its shareholders and would not (i) withdraw or modify (or
publicly propose to withdraw or modify) in a manner adverse to
ATI such recommendation or the approval and adoption of the
merger agreement and the merger by Ladishs board of
directors, (ii) approve or recommend (or publicly propose
to approve or recommend) any takeover proposal or
(iii) cause or authorize Ladish or any of its subsidiaries
to enter into any letter of intent, agreement in principal,
memorandum of understanding, merger, acquisition, purchase or
joint venture agreement or other agreement related to a takeover
proposal, other than a permitted confidentiality agreement.
If Ladishs board of directors determines in good faith
(after receiving the advice of a financial advisor of nationally
recognized reputation and of its outside counsel) that failure
to take such action would be reasonably likely to constitute a
breach by Ladishs board of directors of its fiduciary
duties to Ladish shareholders under applicable law,
Ladishs board of directors may, however, withdraw or
modify its recommendation that the Ladish shareholders adopt the
merger agreement if:
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Ladish has received a takeover proposal made after the date of
the merger agreement which the Ladish board of directors
determines in good faith (after receiving the advice of a
financial advisor of nationally recognized reputation and of its
outside counsel) constitutes a superior proposal; or
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there have occurred any events or changes that, individually or
in the aggregate, have had or would reasonably be expected to
have a material adverse effect on ATI.
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Any withdrawal or modification of the recommendation by
Ladishs board of directors that the Ladish shareholders
adopt the merger agreement must be made in response to a
superior proposal. Before withdrawing or modifying its
recommendation under these circumstances, Ladish also must first
give ATI written notice three business days in advance, advising
that it intends to take this action and specifying the terms and
conditions of the superior proposal. If at the time such notice
is otherwise required to be given there are less than three
business days prior to the special meeting, Ladish will provide
ATI as much notice as is reasonably practicable. Any amendment
to the financial terms or other material terms of the superior
proposal requires a new written notice from Ladish to ATI and
commences a new three business day period for ATI to respond,
subject to the same provision described above in the event that
there are less than three business days prior to the special
meeting at the time such notice is otherwise required to be
given.
In determining whether to withdraw or modify its recommendation,
the board of directors of Ladish will take into account any
changes to the terms of the merger agreement proposed by ATI in
determining whether the takeover proposal still constitutes a
superior proposal. Ladish also must negotiate in good faith with
ATI during the three business day period, to the extent that ATI
desires to negotiate, with respect to such changes to the terms
of the merger agreement proposed by ATI. Ladish will keep
confidential any such proposals made by ATI to revise the terms
of the merger agreement.
Regulatory
Approvals
ATI and Ladish have agreed to cooperate with each other and use
(and cause their respective subsidiaries to use) their
respective reasonable best efforts to promptly:
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take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable to cause the
conditions to the completion of the merger to be satisfied as
promptly as practicable and to consummate and make effective, in
the most expedition manner practicable, the merger, including
preparing and filing promptly and fully all documentation to
effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and
other documents, including any required or recommended filings
under applicable antitrust laws, including the HSR Act; and
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obtain all approvals, consents, registrations, permits,
authorizations and other confirmations from any governmental
authority or third party necessary, proper or advisable to
consummate the merger.
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59
ATI and Ladish also have agreed to use their respective
reasonable best efforts to:
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cooperate in all respects with each other in connection with any
filing or submission with a governmental authority in connection
with the merger and in connection with any investigation or
other inquiry by or before a governmental authority relating to
the merger, including any proceeding initiated by a private
party;
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keep the other party informed in all material respects on a
reasonably timely basis of any material communication received
by such party from, or given by such party to the FTC, the
Antitrust Division of the DOJ or any other governmental
authority and of any material communication received or given in
connection with any proceeding by a private party, in each case
regarding the merger; and
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resolve such objections, if any, as may be asserted by a
governmental authority or other person with respect to the
merger.
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In addition, Ladish will not, without ATIs prior written
consent, commit to any divestiture transaction or agree to any
restriction on its business. The merger agreement does not
require ATI to offer, accept or agree to (i) dispose or
hold separate any part of its or Ladishs respective
businesses, operations, assets or product lines (or a
combination of ATIs and Ladishs respective
businesses, operations, assets or product lines), (ii) not
compete in any geographic area or line of business or
(iii) restrict the manner in which, or whether, ATI, Ladish
or any of their respective affiliates may carry on business in
any part of the world. No party to the merger agreement is
required to contest or otherwise resist any administrative or
judicial action or proceeding, including any proceeding by a
private party, challenging the merger as violative of any
antitrust law.
Indemnification
and Insurance
The merger agreement provides that, from and after the effective
time of the merger, ATI, LPAD and PADL will indemnify each
present and former director or officer of Ladish or any of its
subsidiaries with respect to all acts or omissions by them in
their respective capacities as such at any time prior to the
effective time of the merger, to the fullest extent
(i) required by Ladishs articles of incorporation and
Ladishs by-laws as in effect on the date of the merger
agreement and (ii) permitted under applicable law.
The merger agreement also provides that ATI will use its
reasonable best efforts to cause the individuals serving as
officers and directors of Ladish or any of its subsidiaries
immediately prior to the effective time of the merger who are
then covered by the directors and officers liability
insurance policy currently maintained by Ladish to be covered
for a period of six years from the effective time of the merger
by such policy (or one or more policies of at least the same
coverage and amounts in the aggregate and containing terms and
conditions that are not less advantageous in any material
respect) with respect to acts or omissions occurring prior to
the effective time of the merger that were committed by such
officers and directors in their respective capacities as such.
However, ATI is not required to pay for an annual premium in
excess of 300% of the annual premiums paid by Ladish on the date
of the merger agreement for such coverage. If ATI is unable to
maintain or obtain such insurance, ATI will obtain as much
comparable insurance as available for an amount equal to 300% of
the annual premiums paid by Ladish on the date of the merger
agreement for such coverage.
Securityholder
Litigation
Ladish will give ATI the opportunity to participate in the
defense or settlement of any securityholder litigation against
Ladish or its directors relating to the merger. Ladish has also
agreed that it will not agree to settle any such litigation
without the prior written consent of ATI.
Conditions
to the Closing of the Merger
The respective obligations of each party to the merger agreement
to complete the merger are subject to the satisfaction (or,
where legally permissible, waiver) of the following conditions:
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the adoption of the merger agreement by the Ladish shareholders;
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the expiration or termination of the applicable waiting period
under the HSR Act and any other applicable antitrust law, and
the taking of all actions required by, and the making of all
filings required to be made with,
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any governmental authority under any antitrust law that are
necessary to permit the consummation of the merger;
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the absence of any law, injunction, judgment or ruling enacted,
promulgated, issued, entered, amended or enforced by any
governmental authority in effect enjoining, restraining,
preventing or prohibiting consummation of the merger or making
the consummation of the merger illegal;
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the effectiveness under the Securities Act of the registration
statement of which this proxy statement/prospectus forms a part
and the absence of any stop order or proceedings seeking a stop
order with respect to such registration statement;
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the approval for listing of the shares of ATI common stock to be
issued in the merger on the NYSE, subject to official notice of
the issuance; and
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subject to certain exceptions and limitations, the accuracy of
the others representations and warranties and the
performance in all material respects of its covenants.
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The respective obligations of ATI, LPAD and PADL to complete the
merger are subject to the satisfaction (or, where legally
permissible, waiver) of the following conditions:
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Ladishs representations and warranties being true as of
the date of the merger agreement and as of the date of the
closing of the merger, subject to certain
materiality and material adverse effect
qualifications, and the receipt of a certificate signed on
behalf of Ladish by an executive officer of Ladish to such
effect;
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Ladishs performance in all material respects of all
obligations required to be performed by it under the merger
agreement at or prior to the closing date of the merger and the
receipt of a certificate signed on behalf of Ladish by the chief
executive officer and the chief financial officer of Ladish to
such effect;
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the absence of any action, proceeding or litigation instituted,
commenced or pending by any governmental authority that would or
is reasonably likely to (i) restrain, enjoin, prevent,
prohibit or make illegal the acquisition by ATI or LPAD of any
shares of Ladish common stock or the consummation of the merger,
(ii) restrain, enjoin, prevent, prohibit or make illegal,
or impose material limitations on, ATIs or any of its
affiliates ownership or operation of all or any portion of
the businesses and assets of Ladish or its subsidiaries, or, as
a result of the merger, ATI or its subsidiaries, (iii) as a
result of the merger, compel ATI or any of its affiliates to
dispose of or hold separate any portion of the businesses or
assets of Ladish or its subsidiaries, or of ATI or its
subsidiaries, or (iv) impose liabilities or damages on ATI,
Ladish or any of their respective subsidiaries as a result of
the merger;
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the absence of any law, injunction, judgment or ruling by any
governmental authority that would reasonably be expected to
result, directly or indirectly, in any of the effects referred
to in the immediately preceding bullet;
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the obtainment of certain consents; and
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the receipt by ATI of an opinion of counsel from ATIs tax
counsel to the effect that the merger will qualify as a
reorganization within the meaning of Section 368(a) of the
Code and that Ladish and ATI will each be a party to the
reorganization within the meaning of Section 368(b)
of the Code.
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Ladishs obligation to complete the merger is subject to
the satisfaction (or, where legally permissible, waiver) of the
following conditions:
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ATIs representations and warranties being true as of the
date of the merger agreement and as of the date of the closing
of the merger, subject to certain materiality and
material adverse effect qualifications, and the
receipt of a certificate signed on behalf of ATI by an executive
officer of ATI to such effect;
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The performance in all material respects by ATI, LPAD and PADL
of all obligations required to be performed by them under the
merger agreement at or prior to the closing date of the merger
and the receipt of a certificate signed on behalf of ATI by an
executive officer of ATI to such; and
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the receipt by Ladish of an opinion of counsel from
Ladishs tax counsel to the effect that the merger will
qualify as a reorganization within the meaning of Section 368(a)
of the Code and that Ladish and ATI will each be a party
to the reorganization within the meaning of
Section 368(b) of the Code.
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ATI and Ladish cannot provide assurance as to when or if all of
the conditions to the merger can or will be satisfied (or, where
legally permissible, waived) by the appropriate party, or that
the merger will be completed. See Risk Factors. As
of the date of this proxy statement/prospectus, ATI and Ladish
have no reason to believe that any of these conditions will not
be satisfied.
Termination
of the Merger Agreement
Subject to the terms of the merger agreement, the merger
agreement may be terminated and the transactions contemplated
thereby abandoned at any time prior to the effective time of the
merger under the following circumstances:
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by mutual written consent of ATI and Ladish;
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by either ATI or Ladish, if:
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the merger is not consummated on or before June 30, 2011;
provided that a party may not terminate the merger agreement if
the failure to consummate the merger was primarily due to a
failure by that party to perform any of its obligations under
the merger agreement;
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any final, non-appealable law, injunction, judgment or ruling
enacted, promulgated, issued, entered, amended or enforced by
any governmental authority is in effect that enjoins, restrains,
prevents or prohibits consummation of the merger or makes the
consummation of the merger illegal; or
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the Ladish shareholders do not vote to adopt the merger
agreement at the special meeting; provided that Ladish may not
terminate the merger agreement if it has failed to comply in all
material respects with its covenants related to the registration
statement of which this proxy statement prospectus forms a part,
holding the special meeting and the non-solicitation of takeover
proposals;
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Ladish has breached or failed to perform any of its
representations, warranties, covenants or agreements set forth
in the merger agreement, or if any of the representations or
warranties of Ladish set forth in the merger agreement fails to
be true, which breach or failure, if it occurred or was
continuing as of the closing date of the merger, would give rise
to the failure of a condition to ATIs obligation to close
the merger and is incapable of being cured or is not cured by
Ladish prior to the earlier of the
30th
calendar day following Ladishs receipt of written notice
of such breach or failure from ATI and June 30, 2011;
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(i) Ladishs board of directors (A) withdraws or
modifies, in a manner adverse to ATI, its recommendation that
the Ladish shareholders adopt the merger agreement or
(B) fails to reaffirm its recommendation that the Ladish
shareholders adopt the merger agreement within seven days after
a takeover proposal is made public and receipt of a written
request to so reaffirm from ATI or (ii) prior to the
adoption of the merger agreement by Ladishs shareholders,
Ladish willfully and materially breaches its covenants in the
merger agreement related to the non-solicitation of takeover
proposals or its covenant to hold the special meeting; or
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there have occurred any events or changes that, individually or
in the aggregate, have had or would reasonably be expected to
have a material adverse effect on Ladish; or
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ATI has breached or failed to perform any of its
representations, warranties, covenants or agreements set forth
in the merger agreement, or if any of the representations or
warranties of ATI set forth in the merger agreement fails to be
true, which breach or failure, if it occurred or was continuing
as of the closing date of the merger, would give rise to the
failure of a condition to Ladishs obligation to close the
merger and is
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incapable of being cured or is not cured by ATI prior to the
earlier of the
30th
calendar day following ATIs receipt of written notice of
such breach or failure from Ladish and June 30,
2011; or
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at any time prior to the adoption of the merger agreement by
Ladishs shareholders while Ladish and its board of
directors have complied with the provisions of the merger
agreement with respect to a withdrawal or modification of its
recommendation that Ladishs shareholders adopt the merger
agreement, Ladish is simultaneously entering into a definitive
agreement to effect an unsolicited superior proposal.
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If the merger agreement is validly terminated, the merger
agreement will become null and void (other than certain
provisions of the merger agreement specified to survive its
termination, including those relating to confidentiality),
without any liability on the part of any party or their
respective directors, officers and affiliates, other than
(i) on the part of Ladish in connection with any
termination fee owed and (ii) for fraud or a willful breach
of the merger agreement.
Termination
Fee and Expenses
Ladish will be obligated to pay ATI a $31.0 million
termination fee under the following circumstances:
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(i) A takeover proposal has been made known to Ladish or
has been made directly to Ladish shareholders generally, or any
person has publicly announced an intention (whether or not
conditional or withdrawn) to make a takeover proposal,
(ii) either ATI or Ladish thereafter terminates the merger
agreement because the merger has not been consummated on or
before June 30, 2011 or because Ladishs shareholders
do not adopt the merger agreement at the special meeting and
(iii) within 12 months after the termination of the
merger agreement, Ladish enters into a definitive agreement with
respect to, or consummates, a transaction contemplated by any
takeover proposal;
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ATI terminates the merger agreement due to a material and
willful breach by Ladish of, or failure by Ladish to perform,
Ladishs obligations with respect to (i) the
preparation of the registration statement of which this proxy
statement/prospectus forms a part and this proxy
statement/prospectus and the special meeting or (ii) the
non-solicitation of takeover proposals;
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(i) A takeover proposal has been made known to Ladish or
has been made directly to Ladish shareholders generally, or any
person has publicly announced an intention (whether or not
conditional or withdrawn) to make a takeover proposal,
(ii) ATI terminates the merger agreement due to a willful
breach or failure by Ladish to perform any of its
representations, warranties, covenants or agreements set forth
in the merger agreement in circumstances not covered by the
immediately preceding bullet and (iii) within
12 months after the termination of the merger agreement,
Ladish enters into a definitive agreement with respect to, or
consummates, a transaction contemplated by any takeover proposal;
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ATI terminates the merger agreement due to
(i) Ladishs board of directors (A) withdrawing
or modifying, in a manner adverse to ATI, its recommendation
that the Ladish shareholders adopt the merger agreement or
(B) failing to reaffirm its recommendation that the Ladish
shareholders adopt the merger agreement within seven days after
a takeover proposal is made public (or any person has publicly
announced a bona fide intention, whether or not conditioned, to
make a takeover proposal or material amendment thereto) and
receipt of a written request to so reaffirm from ATI or
(ii) prior to the adoption of the merger agreement by
Ladishs shareholders, Ladish willfully and materially
breaching its covenants in the merger agreement related to the
non-solicitation of takeover proposals or its covenant to hold
the special meeting; or
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Ladish terminates the merger agreement at any time prior to the
adoption of the merger agreement by Ladishs shareholders,
Ladish and its board of directors have complied with the
provisions of the merger agreement with respect to a withdrawal
or modification of its recommendation that Ladishs
shareholders adopt the merger agreement and Ladish
simultaneously enters into a definitive agreement to effect a
superior proposal.
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The merger agreement provides that each of ATI and Ladish will
pay its own fees and expenses in connection with the merger
agreement, whether or not the merger is consummated.
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Governing
Law
The merger agreement is governed by the laws of the State of
Delaware, except to the extent that the application of the
Wisconsin Business Corporation Law, referred to as the WBCL, or
federal securities laws is mandatory.
Amendments
and Waivers of the Merger Agreement
The merger agreement may be amended or supplemented in any and
all respects prior to the effective time of the merger, whether
before or after the adoption of the merger agreement by Ladish
shareholders, by written agreement of each party to the merger
agreement pursuant to action taken by their respective boards of
directors, except that, after adoption of the merger agreement
by Ladish shareholders, the parties may not amend or change any
provision of the merger agreement which by law would require
further approval of Ladish shareholders.
At any time prior to the effective time of the merger, any party
to the merger agreement may, subject to applicable law,
(i) waive any inaccuracy in the representations and
warranties of any other party, (ii) extend the time for the
performance of any of the obligations or acts of any other party
or (iii) waive compliance by the other party with any of
the agreements contained in the merger agreement or, except as
otherwise provided in the merger agreement, waive any of such
partys conditions.
Third
Party Beneficiaries
The merger agreement is not intended to and will not confer upon
any person other than the parties to the merger agreement any
rights or remedies, other than the rights to indemnification and
insurance described above.
Enforcement
The parties to the merger agreement have agreed that irreparable
damage would occur in the event that any of the provisions of
the merger agreement were not performed in accordance with their
specific terms or otherwise were breached. Accordingly, the
parties agreed that each party shall be entitled to injunctive
relief to prevent breaches of the merger agreement and to
enforce specifically its terms and provisions in the Chancery
Court of State of Delaware or any federal court sitting in the
state of Delaware. These remedies are in addition to any other
remedy to which such party may be entitled at law or in equity.
64
MATERIAL
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion represents the opinion of K&L
Gates LLP, counsel to ATI, and Foley and Lardner LLP, counsel to
Ladish (collectively referred to in this discussion as
counsel), as to the material U.S. federal
income tax consequences of the mergers to certain
U.S. Holders (as defined below) of Ladish common stock.
Counsels opinions are subject to the limitations,
exceptions, assumptions and conditions set forth in this
discussion and in the tax opinions filed as exhibits to the
registration statement of which this proxy statement/prospectus
is a part. The discussion below is based upon the best judgment
of counsel regarding the application of the provisions of the
Code, applicable Treasury regulations, rulings, administrative
pronouncements and judicial decisions as of the date hereof, all
of which are subject to change or differing interpretations at
any time with possible retroactive effect. We have not sought
any rulings from the Internal Revenue Service (the
IRS) with respect to the statements and conclusions
reached in this summary. No assurance can be given that the IRS
will agree with the views expressed in this summary, or that a
court will not sustain any challenge by the IRS in the event of
litigation.
This discussion addresses only those Ladish shareholders that
hold their Ladish common stock as a capital asset (generally,
property held for investment) within the meaning of
Section 1221 of the Code. This discussion does not include
any description of the tax laws of any state, local or
non-U.S. government
that may be applicable to a particular holder, does not consider
any aspects of U.S. federal tax law other than income
taxation and does not address all the U.S. federal income
tax consequences that may be relevant to particular Ladish
shareholders in light of their individual circumstances or to
Ladish shareholders that are subject to special rules, such as:
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financial institutions or financial services entities;
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entities treated as partnerships or other pass-through entities
for U.S. federal income tax purposes or holders of Ladish
common stock that hold their shares through entities treated as
partnerships or other pass-through entities for
U.S. federal income tax purposes;
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insurance companies, banks, thrifts, and other financial
institutions;
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tax-exempt organizations;
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qualified retirement plans;
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individual retirement accounts;
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brokers or dealers in securities or currencies;
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traders in securities that elect to use a
mark-to-market
method of accounting;
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corporations subject to Section 7874 of the Code;
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persons that hold Ladish common stock as part of a straddle,
hedge, constructive sale or conversion transaction;
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regulated investment companies;
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real estate investment trusts;
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persons whose functional currency is not the
U.S. dollar;
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non-U.S. Holders;
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expatriates and certain former citizens or residents of the
United States; and
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shareholders who acquired their shares of Ladish common stock
through the exercise of an employee stock option, the settlement
of a restricted stock unit, or otherwise as compensation.
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Determining the actual tax consequences of the mergers to you
may be complex. They will depend on your specific situation and
on factors that are not within ATIs and Ladishs
control. ATI and Ladish urge you to consult your own tax
advisor concerning your particular U.S. federal, state,
local and
non-U.S. tax
consequences of the mergers.
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For purposes of this discussion, the term
U.S. Holder is used to mean a beneficial owner
of Ladish common stock that is, for U.S. federal income tax
purposes:
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an individual who is a citizen or resident of the United States;
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a corporation, or other business entity treated as a corporation
for U.S. federal income tax purposes, created or organized
under the laws of the United States or any state or any of its
political subdivisions;
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a trust that (1) is subject to the primary supervision of a
court within the United States over its administration and one
or more U.S. persons have the authority to control all of
the substantial decisions of that trust, or (2) validly
elected to be treated as a United States person for
U.S. federal income tax purposes; or
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an estate the income of which is subject to U.S. federal
income tax on its income regardless of its source.
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The merger of LPAD with and into Ladish and the merger of Ladish
with and into PADL, are, together, intended to qualify as a
reorganization within the meaning of Section 368(a) of the
Code. It is a condition to the completion of the mergers that
the board of directors of Ladish receive a written opinion of
Foley & Lardner LLP, counsel to Ladish, dated as of
the closing date of the mergers, to the effect that the merger
of LPAD with and into Ladish and the merger of Ladish with and
into PADL will be treated for U.S. federal income tax
purposes as a reorganization within the meaning of
Section 368(a) of the Code. In addition, it is a condition
to the completion of the mergers that ATI receive a written
opinion of K&L Gates LLP, counsel to ATI, dated as of the
closing date of the mergers, to the effect that the merger of
LPAD with and into Ladish and the merger of Ladish with and into
PADL will be treated for U.S. federal income tax purposes
as a reorganization within the meaning of Section 368(a) of
the Code. The opinions will be based on certain factual
representations set forth in letters provided by Ladish and ATI,
as applicable, to be delivered at the time of closing and on
specified assumptions including (i) that the statements and
facts concerning the mergers set forth in the merger agreement,
including representations, are true and accurate in all respects
and (ii) that the mergers will be completed in accordance
with the merger agreement. If any of these assumptions and
representations is inaccurate, Ladishs and ATIs
respective counsels may not be able to provide the required
opinions, and the tax consequences of the mergers could be
adversely affected and differ from those described in this
discussion.
An opinion of counsel is not binding on the IRS or any court.
Accordingly, there can be no assurance that the IRS will not
disagree with or challenge any of the conclusions described
herein.
Material
U.S. Federal Income Tax Consequences to U.S. Holders of Ladish
Stock
The following discussion summarizes the material
U.S. federal income tax consequences of the mergers to you
if you are a U.S. Holder of Ladish common stock, assuming
the mergers, together, qualify as a reorganization
within the meaning of Section 368(a) of the Code.
Gain or Loss on the Mergers. You will
recognize gain, but not loss, equal to the lesser of:
(1) the amount of cash you receive in the merger (not
including any cash received in lieu of a fractional share of ATI
common stock) and (2) the excess, if any, of (a) the
sum of the amount of the cash you receive in the merger (not
including any cash received in lieu of a fractional share of ATI
common stock) plus the fair market value of ATI stock (including
the fair market value of any fractional share) you receive in
the merger, determined as of the closing date of the mergers,
over (b) your tax basis in the Ladish common stock
surrendered in the merger. If you acquired different blocks of
Ladish common stock at different times or at different prices,
you should consult your tax advisor regarding the manner in
which gain or loss should be determined.
Any gain recognized will be capital gain, and such capital gain
will constitute long-term capital gain if you held your Ladish
shares for more than one year as of the closing date of the
mergers. In some cases, if you actually or constructively own
ATI shares of common stock other than the ATI shares received in
the merger, the recognized gain may be treated as having the
effect of the distribution of a dividend. See
Possible Treatment of Cash as Dividend
below.
Tax Basis and Holding Period. The aggregate
tax basis in the shares of ATI common stock received pursuant to
the merger (including any fractional share deemed received and
exchanged for cash) will equal the aggregate tax basis in the
shares of Ladish common stock surrendered in the merger,
decreased by the amount of cash received
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(excluding any cash received in lieu of a fractional share of
ATI common stock), and increased by the amount of gain, if any,
recognized (excluding any gain recognized with respect to cash
received in lieu of a fractional share of ATI common stock or
any amount treated as a dividend). The holding period of the ATI
common stock received in the merger (including any fractional
share deemed received and exchanged for cash) will include the
holding period of the shares of Ladish common stock surrendered
in the merger. If you have differing tax bases
and/or
holding periods with respect to the Ladish common stock
exchanged, you should consult with a tax advisor in order to
identify the tax bases
and/or
holding periods of the ATI common stock received pursuant to the
merger.
Cash in Lieu of a Fractional Share. If you
receive cash in lieu of a fractional share of ATI common stock,
you will be treated as having received such fractional share in
the merger, and then as having sold such fractional share for
cash to ATI. The amount of any gain or loss recognized as a
result of such sale will be equal to the difference between the
cash received in lieu of such fractional share and the ratable
portion of the tax basis of Ladish common stock exchanged in the
merger that is allocated to such fractional share, and will
constitute long-term capital gain or loss if the shares of
Ladish common stock exchanged have been held by you for more
than one year at the time of the exchange.
Possible Treatment of Cash as Dividend. There
are certain circumstances in which all or part of the cash
received by you will be treated as a dividend rather than as
capital gain. In general, the determination of whether the gain
recognized on the merger or on the sale of a fractional share
will be treated as capital gain or dividend income depends upon
whether and to what extent the exchange in the merger reduces
your deemed percentage share ownership interest in ATI. For
purposes of this determination, you will be treated as if you
first exchanged all of your Ladish common stock solely for ATI
common stock and then ATI immediately redeemed a portion of
those shares in exchange for the cash that you actually
received. In determining whether the receipt of cash has the
effect of a distribution of a dividend, the constructive
ownership rules of Section 318(a) of the Code must be taken
into account. The IRS has indicated in a published ruling that
any reduction in the interest of a minority stockholder that
owns a small number of shares in a publicly and widely-held
corporation and that exercises no control over corporate affairs
will result in capital gain as opposed to dividend treatment.
You are urged to consult your tax advisors about the possibility
that all or a portion of the cash received in exchange for
Ladish common stock will be treated as a dividend, based on your
specific circumstances (e.g., holders that are corporations
should consult their tax advisors regarding the potential
applicability of the extraordinary dividend
provisions of the Code).
Federal Income Tax Consequences if the Mergers Do Not Qualify
as a Reorganization. If the mergers fail to
qualify as a reorganization, the merger will be a fully taxable
transaction to you. In such case, you will recognize gain or
loss measured by the difference between the total consideration
received in the merger and your tax basis in the shares of
Ladish common stock surrendered in the merger. The aggregate tax
basis in the shares of ATI common stock received pursuant to the
merger will be equal to the fair market value of such ATI common
stock as of the closing date of the merger. The holding period
of such shares of ATI common stock will begin on the date
immediately following the closing date of the merger.
Reporting Requirements. Ladish shareholders
receiving shares of ATI common stock in the merger must file a
statement with their U.S. federal income tax returns
setting forth their tax basis in the Ladish common stock
exchanged in the merger and the fair market value of the ATI
common stock and the amount of cash received in the merger. In
addition, holders will be required to retain permanent records
of these facts relating to the merger.
Material
Tax Consequences of the Mergers to ATI, ATI Stockholders and
Ladish
Neither ATI, ATIs stockholders (who are not also Ladish
shareholders) nor Ladish will recognize any gain or loss as a
result of the mergers.
Information
Reporting and Backup Withholding
Certain U.S. Holders may be subject to information
reporting with respect to the cash received in exchange for
shares of Ladish common stock. U.S. Holders who are subject
to information reporting and who do not provide appropriate
information when requested may also be subject to backup
withholding (currently at a rate of 28%) with respect to cash
received in the merger (including in exchange for fractional
shares of ATI common stock). Backup withholding will not apply,
however, to a U.S. Holder that (1) furnishes a correct
taxpayer identification number and
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(as applicable) certifies under penalties of perjury
(a) that the taxpayer identification number is correct and
(b) that such U.S. Holder is not subject to backup
withholding due to notified payee underreporting (such
certification can be made on the
Form W-9
or substitute
Form W-9
or successor form included in the letter of transmittal that
will be sent to Ladish shareholders following the consummation
of the merger), or (2) is otherwise exempt from backup
withholding, and when required, establishes its exemption.
In addition to being subject to backup withholding, if you do
not provide ATI (or the exchange agent) with your correct
taxpayer identification number, you may be subject to penalties
imposed by the IRS.
Backup withholding is not an additional tax, and any amount
withheld under the backup withholding rules is not refundable by
ATI (or the exchange agent) but may be credited against such a
U.S. Holders federal income tax liability. If backup
withholding results in an overpayment of U.S. federal
income taxes, a refund may be obtained from the IRS, provided
that the required information is properly furnished in a timely
manner to the IRS.
This discussion of material U.S. federal income tax
consequences of the mergers set forth above does not address tax
consequences that may vary with, or are contingent on,
individual circumstances. Moreover, the summary does not address
any
non-U.S. federal
income tax or any foreign, state, local, or other tax
consequences of the mergers. Accordingly, Ladish shareholders
are urged to consult their own tax advisors to determine the
particular federal, state, local or foreign income, reporting or
other tax consequences of the mergers to that shareholder.
68
INFORMATION
ABOUT THE COMPANIES
Allegheny
Technologies Incorporated
ATI is one of the largest and most diversified specialty metals
producers in the world. ATI uses innovative technologies to
offer growing global markets a wide range of specialty metals
solutions. ATIs products include titanium and titanium
alloys, nickel-based alloys and superalloys, zirconium, hafnium
and niobium, advanced powder alloys, stainless and specialty
steel alloys, grain-oriented electrical steel, tungsten-based
materials and cutting tools, carbon alloy impression die
forgings, and large grey and ductile iron castings. ATIs
specialty metals are produced in a wide range of alloys and
product forms and are selected for use in applications that
demand metals having exceptional hardness, toughness, strength,
resistance to heat, corrosion or abrasion, or a combination of
these characteristics.
ATIs common stock is listed on the NYSE, under the symbol
ATI. ATIs principal executive offices are
located at 1000 Six PPG Place, Pittsburgh, Pennsylvania
15222-5479,
and its telephone number is
(412) 394-2800.
Additional information about ATI and its subsidiaries is
included in documents incorporated by reference into this proxy
statement/prospectus. See Where You Can Find More
Information for the location of information incorporated
by reference into this proxy statement/prospectus.
LPAD
Co.
LPAD is a newly formed Wisconsin corporation and a wholly owned
subsidiary of ATI. LPAD was formed solely for the purpose of
effecting the transactions contemplated by the merger agreement
and has not carried on any activities other than in connection
with the merger. The address and telephone number for
LPADs principal executive offices are the same as for ATI.
PADL
LLC
PADL is a newly formed Wisconsin limited liability company and a
wholly owned subsidiary of ATI. PADL was formed solely for the
purpose of effecting the transactions contemplated by the merger
agreement and has not carried on any activities other than in
connection with the merger. The address and telephone number for
PADLs principal executive offices are the same as for ATI.
Ladish
Co., Inc.
Ladish engineers, produces and markets high-strength,
high-technology forged and cast metal components for a wide
variety of load-bearing and fatigue-resisting applications in
the jet engine, aerospace and industrial markets. Approximately
88% of Ladishs 2009 revenues were derived from the sale of
jet engine parts, missile components, landing gear, helicopter
rotors and other aerospace products. Approximately 44% of
Ladishs 2009 revenues were derived from sales, directly or
through prime contractors, under U.S. government contracts
or under contracts with allies of the U.S. government,
primarily covering defense equipment.
Ladishs common stock is listed on the Nasdaq Global Select
Market under the symbol LDSH. Ladishs
principal executive offices are located at 5481 South Packard
Avenue, Cudahy, Wisconsin 53110, and its telephone number is
(414) 747-2611.
Additional information about Ladish and its subsidiaries is
included in documents incorporated by reference into this proxy
statement/prospectus. See Where You Can Find More
Information for the location of information incorporated
by reference into this proxy statement/prospectus.
69
DESCRIPTION
OF ATI CAPITAL STOCK
The following discussion is a summary of the terms of the
capital stock of ATI and should be read in conjunction with the
section entitled Comparison of Rights of Ladish
shareholders and ATI Stockholders. This summary is not
meant to be complete and is qualified by reference to the
relevant provisions of the Delaware General Corporation Law (the
DGCL) and ATIs certificate of incorporation
and ATIs bylaws. You are urged to read those documents
carefully. Copies of ATIs certificate of incorporation and
ATIs bylaws are incorporated by reference as exhibits to
the reports ATI files with the SEC, which are incorporated by
reference in this proxy statement/prospectus. See Where
You Can Find More Information for the location of
information incorporated by reference into this proxy
statement/prospectus.
Common
Stock
Under ATIs certificate of incorporation, ATI is authorized
to issue up to 500,000,000 shares of its common stock. As
of January 20, 2011, ATI had 98,601,228 shares of
common stock issued and outstanding and has reserved 2,871,305
additional shares of common stock for issuance under our stock
compensation plans.
The following summary is not complete and is not intended to
give full effect to provisions of statutory or common law. You
should refer to the applicable provisions of the following:
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the DGCL, as it may be amended from time to time;
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ATIs certificate of incorporation, as it may be amended or
restated from time to time; and
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ATIs bylaws, as they may be amended or restated from time
to time.
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Dividends. The holders of ATIs common
stock are entitled to receive dividends when, as and if declared
by its board of directors, out of funds legally available for
their payment subject to the rights of holders of its preferred
stock.
Voting Rights. The holders of ATIs
common stock are entitled to one vote per share on all matters
submitted to a vote of stockholders.
Rights upon Liquidation. In the event of
ATIs voluntary or involuntary liquidation, dissolution or
winding up, the holders of common stock will be entitled to
share equally in any of ATIs assets available for
distribution after the payment in full of all debts and
distributions and after the holders of all series of ATIs
outstanding preferred stock have received their liquidation
preferences in full.
Miscellaneous. The outstanding shares of
common stock are fully paid and nonassessable. The holders of
common stock are not entitled to preemptive or redemption
rights. Shares of common stock are not convertible into shares
of any other class of capital stock. Mellon Investor Services
LLC is the transfer agent and registrar for the common stock.
Preferred
Stock
ATI may elect to issue shares of ATIs preferred stock from
time to time. ATI may issue shares of preferred stock separately
or as a part of units, and any such shares issued as part of
units may be attached to or separate from any other securities
part of those units. Shares of ATIs preferred stock may
have dividend, redemption, voting and liquidation rights taking
priority over ATIs common stock, and shares of ATIs
preferred stock may be convertible into ATIs common stock.
ATIs board of directors is authorized, subject to any
limitations prescribed by law, to provide for the issuance of
shares of preferred stock in one or more series. In addition,
ATIs board of directors is authorized to establish from
time to time the number of shares to be included in each series
of preferred stock and to fix the designation, powers (including
but not limited to voting powers, if any), preferences and
rights of the shares of each series of preferred stock and any
qualifications, limitations or restrictions of each series of
preferred stock. The number of authorized shares of preferred
stock may be increased or decreased (but not below the number of
shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the outstanding common stock, without a
vote of
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the holders of the preferred stock, or of any series of
preferred stock, unless a vote of any such holders is required
pursuant to the terms of any preferred stock.
ATIs certificate of incorporation authorizes ATIs
board of directors without further stockholder action, to
provide for the issuance of up to 50,000,000 shares of
preferred stock, in one or more series. As of the date of this
proxy statement/prospectus, no shares of preferred stock have
been issued. ATI has 6,000,000 shares of preferred
designated as Series A Junior Participating Preferred Stock
in connection with ATIs prior rights agreement, leaving
44,000,000 shares of preferred stock remaining available
for designation and issuance.
Dividend Rights. The preferred stock will be
preferred over ATIs common stock as to payment of
dividends. Before any dividends or distributions (other than
dividends or distributions payable in common stock) on
ATIs common stock will be declared and set apart for
payment or paid, the holders of shares of each series of
preferred stock will be entitled to receive dividends when, as
and if declared by ATIs board of directors. ATI will pay
those dividends either in cash, shares of common stock or
preferred stock or otherwise, at the rate and on the date or
dates set forth in the applicable prospectus supplement. With
respect to each series of preferred stock, the dividends on each
share of the series will be cumulative from the date of issue of
the share unless another date is set forth in the applicable
prospectus supplement relating to the series. Accruals of
dividends will not bear interest.
Rights upon Liquidation. The preferred stock
will be preferred over ATIs common stock as to assets so
that the holders of each series of preferred stock will be
entitled to be paid, upon ATIs voluntary or involuntary
liquidation, dissolution or winding up and before any
distribution is made to the holders of common stock, the amount
set forth in the applicable prospectus supplement. However, in
this case the holders of preferred stock will not be entitled to
any other or further payment. If upon any liquidation,
dissolution or winding up ATIs net assets are insufficient
to permit the payment in full of the respective amounts to which
the holders of all outstanding preferred stock are entitled,
ATIs entire remaining net assets will be distributed among
the holders of each series of preferred stock in amounts
proportional to the full amounts to which the holders of each
series are entitled.
Additional Series of Preferred Stock. In the
event of a proposed merger or tender offer, proxy contest or
other attempt to gain control of us and not approved by
ATIs board of directors, it would be possible for the
board to authorize the issuance of one or more series of
preferred stock with voting rights or other rights and
preferences which would impede the success of the proposed
merger, tender offer, proxy contest or other attempt to gain
control of ATI. This authority may be limited by applicable law,
ATIs certificate of incorporation, as it may amended or
restated from time to time, and the applicable rules of the
stock exchanges upon which the common stock is listed. The
consent of ATIs stockholders would not be required for any
such issuance of preferred stock.
Special Charter Provisions. ATIs
certificate of incorporate provides that:
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ATIs board of directors is classified into three classes;
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in addition to the requirements of law and the other provisions
of ATIs certificate of incorporation, the affirmative vote
of at least two-thirds of the outstanding shares of ATIs
common stock is required for the adoption or authorization of
any of the following events unless the event has been approved
at a meeting of ATIs board of directors by the vote of
more than two-thirds of the incumbent members of ATIs
board of directors:
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any merger or consolidation of us with or into any other
corporation;
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any sale, lease, exchange, transfer or other disposition, but
excluding a mortgage or any other security device, of all or
substantially all of ATIs assets;
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any merger or consolidation of a Significant Stockholder (as
defined in ATIs certificate of incorporation) with or into
us or a direct or indirect subsidiary of ATIs;
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any sale, lease, exchange, transfer or other disposition to us
or to a direct or indirect subsidiary of ATIs of any of
ATIs common stock held by a Significant Stockholder or any
other assets of a Significant Stockholder which, if included
with all other dispositions consummated during the same fiscal
year of ATIs by the same Significant Stockholder, would
result in dispositions of assets having an aggregate fair
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value in excess of five percent of ATIs total consolidated
assets as shown on ATIs certified balance sheet as of the
end of the fiscal year preceding the proposed disposition;
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any reclassification of ATIs common stock, or any
re-capitalization involving ATIs common stock, consummated
within five years after a Significant Stockholder becomes a
Significant Stockholder, whereby the number of outstanding
shares of common stock is reduced or any of those shares are
converted into or exchanged for cash or other securities;
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any dissolution; and
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any agreement, contract or other arrangement providing for any
of these transactions but, notwithstanding anything to the
contrary in ATIs certificate of incorporation, not
including any merger pursuant to the DGCL, as amended from time
to time, which does not require a vote of ATIs
stockholders for approval;
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ATIs stockholders may not adopt, amend or repeal
ATIs bylaws other than by the affirmative vote of 75% of
the combined voting power of all of ATIs outstanding
voting securities entitled to vote generally in an election of
directors, voting together as a single class;
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any action required or permitted to be taken by ATIs
stockholders must be effected at a duly called annual or special
meeting of stockholders and may not be effected by the written
consent of the stockholders; and
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special meetings of the stockholders may be called at any time
by a majority of ATIs directors and may not be called by
any other person or persons or in any other manner.
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COMPARISON
OF RIGHTS OF ATI STOCKHOLDERS AND LADISH SHAREHOLDERS
ATI is incorporated under the laws of the State of Delaware and,
accordingly, the rights of the stockholders of ATI are currently
governed by the DGCL. Ladish is incorporated under the laws of
the State of Wisconsin and, accordingly, the rights of the
shareholders of Ladish are currently governed by the WBCL. Upon
the completion of the merger, all outstanding shares of Ladish
stock will be converted into the right to receive the merger
consideration, which will include shares of ATI common stock,
see The Merger Agreement Structure; Merger
Consideration. Therefore, upon the completion of the
merger, the rights of the former Ladish shareholders will be
governed by Delaware law, ATIs certificate of
incorporation and ATIs bylaws.
The following discussion is a summary of the current rights of
Ladish shareholders and the rights of ATI stockholders under
ATIs certificate of incorporation and ATIs bylaws as
they are expected to be in effect upon closing of the merger.
While this summary includes the material differences, this
summary may not contain all of the information that is important
to you. You should read carefully this entire proxy
statement/prospectus, the relevant provisions of the DGCL and
the WBCL and the other governing documents which are referenced
in this proxy statement/prospectus for a more complete
understanding of the differences between being a shareholder of
Ladish and a stockholder of ATI. ATI and Ladish have filed with
the SEC their respective governing documents as currently in
effect and will send copies of these documents to you, without
charge, upon your request. See the section entitled Where
You Can Find More Information for the location of
information incorporated by reference into this proxy
statement/prospectus.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Authorized and Outstanding Capital Stock
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Ladishs articles of incorporation authorizes
100,000,000 shares of common stock, $.01 par value. As
of January 20, 2011, there were 15,707,552 shares of
Ladish common stock issued and outstanding (excluding
200,000 shares of Ladish common stock held in treasury).
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ATIs certificate of incorporation authorizes
500,000,000 shares of common stock, par value $0.10. As of
January 20, 2011, ATI had 98,601,228 shares of common
stock issued and outstanding (excluding 3,803,028 shares of
ATI common stock held in treasury). In addition, ATIs
certificate of incorporation authorizes 50,000,000 shares
of preferred stock, par value $0.10, none of which has been
issued or is outstanding.
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Size of Board of Directors
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The WBCL provides that the board of directors shall consist of
one or more natural persons, with the number specified or fixed
in accordance with the articles of incorporation or by-laws.
Ladishs articles of incorporation provide that the number
of directors constituting its board of directors is fixed by
Ladishs by-laws. Ladishs
by-laws
provide that the number of directors shall be one or more, as
fixed from time to time by resolution of the board of directors.
By resolution of Ladishs board of directors, there are
currently seven members of Ladishs board of directors.
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The DGCL provides that the board of directors shall consist of
one or more members, each of whom shall be a natural person, and
that the number of directors shall be fixed by, or in the manner
provided in, the bylaws, unless the certificate of incorporation
fixes the number of directors, in which case a change shall be
made only by amendment to the certificate of incorporation.
ATIs certificate of incorporation does not fix the number
of directors. ATIs bylaws provide that ATIs board of
directors shall consist of one or more members. Under ATIs
bylaws, the number of directors shall be fixed and may be
changed from time to time by resolution of a majority of
directors then in office, except as otherwise provided by law or
ATIs certificate of incorporation. By resolution of
ATIs board of directors, there are currently nine members
of ATIs board of directors.
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Cumulative Voting
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The WBCL provides that shareholders do not have the right to
cumulate their votes for directors, unless the articles of
incorporation provide for cumulative voting.
Ladishs articles of incorporation do not provide for
cumulative voting.
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The DGCL provides that a certificate of incorporation may
provide for cumulative voting.
ATIs certificate of incorporation states that ATI
stockholders shall not have the right to cumulate their shares.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Class of Directors
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The WBCL provides that directors may be divided into two or
three classes if provided in the articles of incorporation.
Ladishs articles of incorporation do not provide for
classes of directors. Ladishs by-laws provide that
Ladishs directors shall be elected at the annual meeting
of Ladishs shareholders and shall serve until the next
succeeding annual meeting and until their successors shall have
been elected and qualified.
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The DGCL provides that, pursuant to a certificate of
incorporation, an initial bylaw or a bylaw adopted by the
corporations stockholders, a classified board of directors
with staggered terms can be created. A maximum of three classes
of directors is allowed, with expiring terms in one-year
intervals. There is no statutory requirement as to the number of
directors in each class or that the number in each class be
equal.
ATIs certificate of incorporation provides that ATIs
board of directors is divided into three classes, with each
class consisting of three directors. Each director serves for a
term expiring at the third annual meeting of stockholders after
his or her election, or until his or her successor is duly
elected and qualified.
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Qualifications of Directors
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Under the WBCL, a director is not required to be a resident of
the State of Wisconsin or a shareholder of the corporation.
Ladishs by-laws provide that directors need not be
residents of the State of Wisconsin or shareholders of Ladish.
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Under the DGCL, unless otherwise restricted in a
corporations bylaws, a director is not required to be a
stockholder of the corporation, and other qualifications of
directors may be prescribed in the corporations bylaws.
ATIs bylaws provide that a director is not required to be
a stockholder of ATI. ATIs bylaws do not set forth
additional qualifications of directors.
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Voting for Directors
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Under the WBCL, unless otherwise provided in the companys
articles of incorporation, directors are elected by a plurality
of the votes cast by shares entitled to vote at a meeting.
Ladishs articles of incorporation have no contrary
applicable provision.
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Under the DGCL, unless otherwise provided in the certificate of
incorporation or bylaws, directors shall be elected by a
plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the
election of directors.
ATIs certificate of incorporation and bylaws have no
contrary applicable provisions.
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Filling Vacancies on the Board of Directors
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The WBCL provides that unless the articles of incorporation
provide otherwise, if a vacancy occurs on the board of directors
it may filled by (i) the shareholders; (ii) the board of
directors; or (iii) if the directors remaining in office
constitute fewer than a quorum of the board, the affirmative
vote of a majority of all directors remaining in office. If the
vacant office was held by a director elected by a voting group
of shareholders, only the holders of shares of that voting group
may vote to fill the vacancy if it is filled by shareholders,
and only the remaining directors elected by that voting group
may vote to fill the vacancy if it is filled by the directors. A
vacancy that will occur at a specific later date may be filled
before the vacancy occurs, but the new director may not take
office until the vacancy occurs.
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The DGCL provides that, unless the certificate of incorporation
or bylaws provide otherwise, the board of directors may fill any
vacancy on the board of directors, including newly created
directorships resulting from an increase in the number of
directors.
ATIs certificate of incorporation and ATIs bylaws
have no contrary applicable provisions.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Ladishs by-laws provide that vacancies and newly created
directorships resulting from any increase in the number of
directors may be filled by a majority of the directors then in
office, though less than a quorum, and the directors so chosen
shall hold office until the next annual election and until their
respective successors are duly elected and qualified.
A vacancy created by the removal of a director by
Ladishs shareholders may be filled by Ladishs
shareholders.
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Removal of Directors
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Under the WBCL, shareholders may remove a director with or
without cause, unless the articles of incorporation or by-laws
provide that a director may only be removed for cause.
Ladishs articles of incorporation and by-laws do not
provide that a director may only be removed for cause.
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Under the DGCL, directors may be removed, with or without cause,
by the holders of a majority of the shares entitled to vote on
their election. In the case of a corporation with a classified
board, unless the certificate of incorporation provides
otherwise, stockholders may only remove a director for cause.
ATIs certificate of incorporation provides that, except as
otherwise fixed pursuant to rights of holders of any class or
series of stock having a preference over ATIs common stock
as to dividends or upon liquidation to elect directors, any
director may be removed only for cause and only by the
affirmative vote of 75% of the combined voting power of all
outstanding voting securities of ATI entitled to vote generally
in the election of directors voting together as a single class.
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Nomination of Directors for Election
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Ladishs articles of incorporation and by-laws do not
provide for nominations of persons for election to the board of
directors by shareholders. Pursuant to the terms of the charter
of the Independent/Nominating Committee of Ladishs board
of directors, the Independent/Nominating Committee will evaluate
all prospective director nominees, including those nominated by
Ladishs shareholders. Shareholders who wish to submit a
nominee for director may direct that request to Ladishs
president or secretary, who then will forward the nomination to
the Independent/Nominating Committee.
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ATIs certificate of incorporation provides that
nominations of persons for election to ATIs board of
directors may be made at an annual meeting of ATIs
stockholders (i) pursuant to ATIs notice of meeting; (ii)
by or at the direction of ATIs board of directors; or
(iii) by any stockholder of ATI who was a stockholder of record
at the time of giving of the required notice, is entitled to
vote at the meeting and complies with the notice procedures set
forth in ATIs certificate of incorporation.
For a nomination to be properly brought before an annual meeting
by a stockholder, the stockholder must give timely notice in
writing to the secretary of ATI. To be timely, the notice must
be delivered to the secretary at the principal executive offices
of ATI not less than 75 days nor more than 90 days
prior to the first anniversary of the preceding years
annual meeting. In the event that the date of the annual meeting
is advanced by more than 30 days or delayed by more than
60 days from such anniversary date, the notice is timely if
delivered not earlier than the
90th day
prior to such annual meeting and not later than the close of
business on the later of the
60th day
prior to such annual meeting or the
10th day
following the day on which public announcement of the date of
such annual meeting is first made.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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The notice must set forth all information relating to the
nominee that is required to be disclosed regarding nominees
pursuant to Regulation 14A under the Exchange Act (including
such persons written consent to being named in the proxy
statement as a nominee and to serving as a director if elected).
The notice also must set forth, as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the
nomination is made, the name and address of such stockholder and
beneficial owner as they appear on ATIs books and the
class and number of shares which are owned beneficially and of
record by such stockholder and beneficial owner.
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Fiduciary Duty of Directors
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Under the WBCL, a director or officer, in discharging his or her
duties to the corporation and determining what he or she
believes to be in the best interests of the corporation may, in
addition to considering the effects of any action on
shareholders, consider:
the effects of the action on employees,
suppliers and customers of the corporation;
the effects of the action on the
communities in which the corporation operates; and
any other factors that the director or
officer considers pertinent.
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Directors of corporations incorporated or organized under
Delaware law have fiduciary obligations to the corporation and
its stockholders. Pursuant to these fiduciary obligations, the
directors must act in accordance with the so-called duties of
due care and loyalty. Under Delaware
law, the duty of care requires that the directors act in an
informed and deliberative manner and to inform themselves, prior
to making a business decision, of all material information
reasonably available to them. The duty of loyalty may be
summarized as the duty to act in good faith, not out of
self-interest and in a manner that the directors reasonably
believe to be in the best interests of the corporation.
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Anti-Takeover Provisions
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The WBCL protects Wisconsin corporations from hostile takeovers
and abusive take over tactics by preventing a person from
engaging in specified transactions with the corporation or from
taking specific actions after that person has acquired a
significant portion of the corporations shares. These
protections fall into three categories:
the business combination statute, which
regulates specified types of transactions with interested
shareholders;
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Section 203 of the DGCL generally prohibits certain Delaware
corporations from engaging in any business
combination with any interested stockholder
for a period of three years following the time that the
stockholder became an interested stockholder unless:
before that time, the board of directors
of the corporation approved either the business combination or
the transaction which resulted in the stockholder becoming an
interested stockholder;
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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the fair price statute, which regulates
the price at which significant shareholders may acquire the
remaining shares of the corporation; and
the control share statute, which
regulates the voting power of shares held by specified large
shareholders.
The following section summarizes each of these statutes.
Business combination statute. The WBCL
prohibits business combinations between Wisconsin corporations
and a person who is an interested shareholder. This prohibition
lasts for three years after the date on which that person became
an interested shareholder. Business combinations include
mergers, consolidations, share exchanges, sales of assets,
liquidations, dissolutions, and specified types of stock
transactions and stock issuances. An interested shareholder is a
person who is the beneficial owner of at least 10% of the voting
power of the outstanding voting stock or who is an affiliate or
associate of the corporation and is the beneficial owner of at
least 10% of the voting power of the outstanding voting stock at
any time within the prior three-year period. The prohibition on
business combinations does not apply if the corporations
board of directors has approved, before the interested
shareholders stock acquisition date, that business
combination or the purchase of stock made by the interested
shareholder on that stock acquisition date.
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upon completion of the transaction which
resulted in the stockholder becoming an interested stockholder,
the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the voting
stock outstanding (but not the outstanding voting stock owned by
the interested stockholder) those shares owned by persons who
are directors or officers and by employee stock plans in which
employee participants do not have the right to determine
confidentiality whether shares held subject to the plan will be
tendered in a tender or exchange offer; or
at or subsequent to such time the
business combination is approved by the board of directors and
authorized at an annual meeting of stockholders, and not by
written consent, by the affirmative vote of at least two-thirds
of the outstanding voting stock which is not owned by the
interested stockholder.
The DGCL generally defines business combination
as:
any merger or consolidation of the
corporation with the interested stockholder;
any sale, lease, exchange, mortgage,
pledge, transfer or other disposition of 10 percent or more
of the assets of the corporation involving the interested
stockholder;
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The prohibition on business combinations continues after the
initial three-year period unless:
the corporations board of
directors has approved, before the interested shareholders
stock acquisition date, the purchase of stock made by the
interested shareholder on that stock acquisition date;
the business combination is approved by
the affirmative vote of the holders of a majority of the voting
stock not beneficially owned by the interested shareholder at a
meeting called for that purpose;
the interested shareholder pays a fair
price, as defined in the statute, for the shares it acquires in
the business combination; or
the business combination is a business
combination specifically excluded from the prohibition on
business combinations by the WBCL.
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subject to specified exceptions, any
transaction that results in the issuance or transfer by the
corporation of any stock of the corporation to the interested
stockholder;
any transaction involving the
corporation that increases the proportionate share of the stock
of any class or series of the corporation owned by the
interested stockholder; or
any receipt by the interested
stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the
corporation.
Generally, the DGCL defines and interested
stockholder as any entity or person owning 15% or more of
the outstanding voting stock of the corporation or any entity or
person affiliated with or controlling or controlled by that
entity or person.
A corporation may elect not to be governed by Section 203 of the
DGCL. Neither ATIs certificate of incorporation nor its
bylaws contains the election not to be governed by Section 203
of the DGCL.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Fair price statute. The WBCL provides that a
business combination must be approved by the affirmative vote of
at least all of the following: (i) 80% of the votes entitled to
be cast by outstanding voting shares of the corporation, voting
together as a single voting group; and (ii) two-thirds of the
votes entitled to be cast by holders of voting shares other than
voting shares beneficially owned by a significant shareholder
who is a party to the business combination or an affiliate or
associate of a significant shareholder who is a party to the
business combination, voting together as a single voting group.
This voting requirement does not apply to a business combination
if the corporations shareholders receive a fair price, as
defined in the statute, for their shares from the significant
shareholder in the business combination. A significant
shareholder is a person who is the beneficial owner of at least
10% of the voting power of the outstanding voting stock or who
is an affiliate of the corporation and is the beneficial owner
of at least 10% of the voting power of the outstanding voting
stock at any time within the prior three-year period.
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Control share statute. Under the WBCL, unless
otherwise provided in a corporations articles of
incorporation, the voting power of shares of a corporation held
by any person, including shares issuable upon conversion of
convertible securities or upon exercise of options or warrants,
in excess of 20% of the voting power in the election of
directors shall be limited to 10% of the full voting power of
those shares. The full voting power of the excess shares may be
restored by a vote of a majority of the corporations
shares. The person seeking restoration of full voting power may
vote on this resolution.
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The Wisconsin anti-takeover provisions are not applicable to the
merger.
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Stockholder Rights Plan
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On October 9, 2009, Ladishs board of directors declared a
dividend of one common share purchase right for each outstanding
share of Ladish common stock. Each right entitles the registered
holder to purchase from Ladish one share of common stock at a
price of $75.00 per share, subject to adjustment.
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ATI does not have a stockholder rights plan.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Until the earlier to occur of (1) 10 days following a
public announcement that a person has become an acquiring person
or (2) 10 business days (or such later date as may be determined
by action of the Ladish board of directors prior to such time as
any person becomes an acquiring person) following the
commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would
result in a person becoming an acquiring person (the earlier of
such dates being called the distribution date), the
rights will be evidenced by common stock certificates. An
acquiring person is any person that becomes a
beneficial owner of 15% or more of Ladishs common stock.
The rights are not exercisable until the distribution date.
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If there is a distribution date, then each right, subject to
certain limitations, will entitle its holder to purchase, at the
rights then-current purchase price, a number of shares of
Ladish common stock (or if, after the share acquisition date,
Ladish is acquired in a business combination, common shares of
the acquiror) having a market value at the time equal to twice
the then-current purchase price of the rights. The rights will
expire on October 9, 2019, subject to extension.
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On November 16, 2010, immediately prior to its execution of the
merger agreement, Ladish amended the rights agreement for the
purpose of rendering the rights agreement inapplicable to the
merger agreement and the transactions contemplated thereby,
including the merger.
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Stockholder Meetings
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Annual Meetings. Under the WBCL, a corporation
shall hold a meeting of shareholders annually at a time stated
in or fixed in accordance with the by-laws.
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Annual Meetings. Under the DGCL, a corporation
shall hold a meeting of stockholders either within or without
Delaware, as may be designated by the bylaws or certificate of
incorporation.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Ladishs by-laws provide for an annual meeting to be held
each anniversary of the beginning of Ladishs existence, or
at such other time as Ladishs board of directors may
designate.
Special Meeting. Under the WBCL, the board of
directors, any person authorized by the articles of
incorporation or by-laws and holders of at least 10% of all
votes entitled to be cast on any issue proposed to be considered
at the proposed special meeting, may call or demand a special
meeting of shareholders.
Ladishs by-laws provide that special meetings of
shareholders of Ladish may only be called by the president, the
board of directors or the holders of not less than 1/10 of all
of the shares entitled to vote at the special meeting.
Place of Meeting. The WBCL provides that a
corporation may hold the annual shareholders meeting or special
shareholders meeting in or outside Wisconsin at the place stated
in or fixed in accordance with the by-laws, or, if no place is
stated or fixed in accordance with the by-laws, the corporation
shall hold the annual meeting at the principal office.
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ATIs bylaws provide that each annual meeting of
stockholders shall be held on such date and at such time as
shall be designated from time to time by ATIs board of
directors may determine and stated in the notice of meeting.
Special Meeting. Under the DGCL, a special
meeting may be called by the board of directors or such person
or persons as may be authorized by the bylaws.
ATIs bylaws provide that special meetings of stockholders
may be called only as provided in ATIs certificate of
incorporation. ATIs certificate of incorporation provides
that special meetings of stockholders may be called only by the
board of directors pursuant to a resolution approved by a
majority of the directors then in office, the chairman of the
board or the chief executive officer.
Place of Meeting. The DGCL provides that
meetings of stockholders may be held at such geographic location
within or without Delaware as may be provided in or fixed
pursuant to the certificate of incorporation or the bylaws, or,
if no place is designated as determined by the board of
directors.
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Ladishs by-laws provide that special meetings of Ladish
shareholders may be held at such place within or without the
Wisconsin as shall be stated in the notice of the meeting.
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ATIs bylaws provide that meetings of stockholders shall be
held at such place, either within or without Delaware, as shall
be designated from time to time by the board of directors or the
officer of ATI calling the meeting and stated in the notice of
the meeting.
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Attendance and Voting. The WBCL provides that
a shareholder may vote his or her shares in person or by proxy.
A shareholder may appoint a proxy in writing or by transmitting
or authorizing the transmission of an electronic transmission of
the appointment. The WBCL provides that unless the articles of
incorporation provides otherwise, each outstanding share,
regardless of class, is entitled to one vote on each matter
voted on at a shareholders meeting.
Ladishs by-laws provide that each outstanding share of
stock having voting power shall be entitled to one vote on each
matter submitted to a vote at a meeting of shareholders.
Ladishs by-laws also provide that a shareholder may vote
either in person or by proxy executed in writing by the
shareholder or by his or her duly authorized attorney-in-fact.
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Attendance and Voting. The DGCL provides that
every stockholder entitled to vote at a meeting of stockholders
or to express consent or dissent to corporate action in writing
without a meeting may authorize another person to act for him by
proxy. Every proxy shall be executed or authenticated by the
stockholder or by his duly authorized attorney-in-fact and filed
with or transmitted to the secretary of the corporation or its
designated agent. A stockholder may execute or authenticate a
writing or transmit an electronic message authorizing another
person to act for the stockholder by proxy. The DGCL provides
that, unless otherwise provided in the certificate of
incorporation, every stockholder of a business corporation shall
be entitled to one vote for every share of capital stock held by
such stockholder.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Quorum. The WBCL provides that unless the articles of incorporation or by-laws provide otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of the voting group for action on that matter.
Under Ladishs by-laws, the holders of a majority of the shares of stock issued and outstanding and entitled to vote, represented in person or by proxy, shall constitute a quorum at all meetings of shareholders for the transaction of business.
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ATIs bylaws provide that each stockholder shall have one
vote for every share of stock entitled to vote which is
registered in the stockholders name on the record date for
the meeting, except as otherwise required by law or under
ATIs certificate of incorporation. ATIs board of
directors is authorized, subject to any limitations prescribed
by law, to provide for the issuance of shares of preferred stock
and to establish the voting powers, if any, associated with the
preferred stock.
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Quorum. The DGCL provides that unless the
certificate of incorporation or bylaws provide otherwise, a
majority of the shares entitled to vote, present in person or
represented by proxy, shall constitute a quorum at all meetings
for the transaction of business except as otherwise provided by
law.
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ATIs bylaws provide that, the holders of a majority of all
of the shares of the stock entitled to vote at a meeting,
present in person or by proxy, constitutes a quorum for all
purposes, unless or except to the extent that the presence of a
larger number may be required by law or ATIs certificate
of incorporation.
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Stockholder Action Without a Meeting
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Under the WBCL, action required or permitted to be taken at a
meeting of shareholders may be taken without a meeting: (i)
without action by the board of directors, by all shareholders
entitled to vote on the action or (ii) if the articles of
incorporation so provide, by shareholders who would be entitled
to vote at a meeting those shares with voting power to cast not
less than the minimum number or, in the case of voting by voting
groups, numbers of votes that would be necessary to authorize or
take the action at a meeting at which all shares entitled to
vote were present and voted.
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Unless prohibited by the certificate of incorporation, the DGCL
provides that stockholders may take action by written consent in
lieu of a stockholders meeting if signed by the holders of
outstanding stock having not less than the minimum number of
votes that would have been required to be taken at a meeting of
stockholders.
ATIs certificate of incorporation provides that any action
required or permitted to be taken by ATIs stockholders
must be effected at a duly called annual or special meeting and
may not be effected by the written consent of such stockholders.
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Ladishs by-laws provide that any action required to be
taken at a meeting of shareholders may be taken without a
meeting if a consent in writing, setting forth the action so
taken, is provided to all shareholders and is signed by a
majority of the shareholders entitled to vote with respect to
the subject matter thereof.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Submission of Stockholder Proposals
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Ladishs articles of incorporation and by-laws do not
contain advance notice provisions.
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ATIs certificate of incorporation provides that proposals
of business to be considered by the stockholders may be made at
an annual meeting of ATIs stockholders (i) pursuant to
ATIs notice of meeting, (ii) by or at the direction of
ATIs board of directors or (iii) by any stockholder of ATI
who was a stockholder of record at the time of giving of the
required notice, is entitled to vote at the meeting and complies
with the notice procedures set forth in ATIs certificate
of incorporation.
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For a proposal of business to be properly brought before an
annual meeting by a stockholder, the stockholder must give
timely notice in writing to the secretary of ATI. To be timely,
the notice must be delivered to the secretary at the principal
executive offices of ATI not less than 75 days nor more
than 90 days prior to the first anniversary of the
preceding years annual meeting. In the event that the date
of the annual meeting is advanced by more than 30 days or
delayed by more than 60 days from such anniversary date,
the notice is timely if delivered not earlier than the
90th day
prior to such annual meeting and not later than the close of
business on the later of the
60th day
prior to such annual meeting or the
10th day
following the day on which public announcement of the date of
such annual meeting is first made.
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The notice must set forth a brief description of the business
desired to be brought before the meeting. The notice also must
set forth, as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the proposal is made,
the name and address of such stockholder and beneficial owner as
they appear on ATIs books and the class and number of
shares which are owned beneficially and of record by such
stockholder and beneficial owner.
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Notice of Stockholder Meetings
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Under the WBCL, a corporation shall notify shareholders of the
date, time and place of each annual and special
shareholders meeting not less than 10 days nor more
than 60 days before the meeting date, unless a different
time is provided by the articles of incorporation or the
by-laws.
Ladishs by-laws provide that written or printed notice of
each annual or special meeting stating the place, day and hour
of the meeting shall be delivered to each shareholder of record
entitled to vote at the meeting not less than 10 nor more than
50 days before the date of the meeting.
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Under the DGCL, written notice of any stockholders meeting
must be given not less than 10 nor more than 60 days before
the date of the meeting to each stockholder entitled to vote at
such meeting, subject to other provisions in the DGCL setting
forth specific notice requirements for actions on particular
matters.
ATIs bylaws provide that written notice of the place, date
and time of all meetings of stockholders shall be given not less
than 10 nor more than 60 days before the date on which the
meeting is to be held.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Stockholder Vote Required for Mergers
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The WBCL provides that, unless a corporations articles of
incorporation, by-laws or other provisions of the WBCL provide
otherwise, a merger to which a Wisconsin corporation is a party
must be approved by the affirmative vote of the holders of a
majority of the shares entitled to vote on the merger and the
affirmative vote of the holders of a majority of the shares of
each class or series entitled to vote separately on the merger,
if any. Ladishs articles of incorporation and by-laws do
not provide otherwise. Under the WBCL, subject to certain
exceptions, a business combination described above under
Anti-Takeover Provisions must be
approved by the affirmative vote of at least (i) 80% of the
votes entitled to be cast by outstanding voting shares of the
corporation, voting together as a single voting group and (ii)
two-thirds of the votes entitled to be cast by holders of voting
shares beneficially owned by a significant shareholder who is a
party to the business combination or an affiliate or associate
of such a significant shareholder, voting together as a single
class.
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The DGCL generally requires that a merger or consolidation or
sale, lease or exchange of all or substantially all of a
corporations property and assets be approved by the
directors and by a majority of the outstanding stock entitled to
vote thereon. Under the DGCL, a surviving corporation need not
obtain stockholder approval for a merger if:
the merger agreement does not amend the
certificate of incorporation of the surviving corporation;
each share of the surviving
corporations stock outstanding prior to the merger remains
outstanding in identical form after the merger; or
either no shares of common stock of the
surviving corporation are to be issued or delivered in the
merger, or, if common stock will be issued or delivered, it will
not increase the number of shares of common stock outstanding
prior to the merger by more than 20%.
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Approval of a plan of merger by the shareholders of the
surviving corporation is not required if: (i) the articles of
incorporation of the surviving corporation will not differ,
except for limited changes; (ii) the number of shares and the
rights and preferences of the shares held by the surviving
corporations shareholders prior to the merger will not
change immediately after the merger; (iii) the number of shares
of stock of the surviving corporation outstanding immediately
after the merger plus the number of voting shares issuable as a
result of the merger will not be greater than 20% of the total
number of voting shares of stock of the surviving corporation
outstanding immediately before the merger; and (iv) the number
of shares that entitle their holders to participate in
distributions of stock of the surviving corporation
(participating shares) outstanding immediately after
the merger plus the number of participating shares issuable as a
result of the merger will not be greater than 20% of the total
number of participating shares of stock of the surviving
corporation outstanding immediately before the merger.
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In addition, the DGCL permits the merger of one corporation, of
which at least 90% of the outstanding shares of each class is
owned by another corporation, with or into the other
corporation, without shareholder approval of either
corporation.
Under ATIs certificate of incorporation, the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of ATIs common stock entitled to vote shall be
required for the adoption or authorization of a
fundamental change unless the fundamental change has
been approved at a meeting of ATIs board of directors by
the vote of more than two-thirds of the incumbent members of
ATIs board of directors. The term fundamental
change includes several types of transactions, including
any merger or consolidation of ATI with or into any other
corporation and a sale of all or substantially all of ATIs
assets.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Dividends
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Under the WBCL, a corporation may issue share dividends unless
the articles of incorporation provide otherwise. The board of
directors may authorize and the corporation may make
distributions to its shareholders, including in connection with
the repurchase of the corporations shares, in amounts
determined by the board, unless: (i) after the distribution the
corporation would not be able to pay its debts as they become
due in the usual course of business; or (ii) the
corporations total assets after the distribution would be
less than the sum of its total liabilities, plus, unless the
articles of incorporation provide otherwise, the amount that
would be needed to satisfy the preferential rights upon
dissolution of shareholders whose preferential rights are
superior to those receiving the distribution, if the corporation
were to be dissolved at the time of distribution.
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The DGCL allows the board of directors to authorize a
corporation to declare and pay dividends and other distributions
to its stockholders, subject to any restrictions contained in
the certificate of incorporation, either out of surplus, or, if
there is no surplus, out of net profits for the current or
preceding fiscal year in which the dividend is declared.
However, a distribution out of net profits is not permitted if a
corporations capital is less than the amount of capital
represented by the issued and outstanding stock of all classes
having a preference upon the distribution of assets, until the
deficiency has been repaired.
Holders of ATI common stock, subject to the rights of holders of
ATI preferred stock, are entitled to receive such dividends as
may be declared thereon from time to time by the board of
directors, in its discretion, out of any funds of the
corporation at the time legally available for dividends on
common stock. Holders of ATI preferred stock would be entitled
to receive, when, as and if declared by the board of directors,
out of funds legally available therefor, dividends at the annual
rate fixed by the board of directors with respect to each series
of shares and no more. Such dividends would be paid or declared
and set apart for payment for each dividend period before any
dividend for the same period would be paid or set apart for
payment on the common stock. The holders of preferred stock
would not, however, be entitled to participate in any other or
additional earnings or profits of the corporation, except for
such premiums, if any, as may be payable in case of redemption,
liquidation, dissolution or winding up.
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Dissenters Rights
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Under the WBCL, a shareholder may dissent from, and obtain
payment of the fair value of his or her shares in the event of
specified mergers, share exchanges and transactions involving
the sale of all or substantially all of the corporations
property other than in the usual and regular course of
business.
However, dissenters rights generally are not available to
holders of shares, such as shares of Ladish common stock, that
are listed on a national securities exchange, unless the
transaction is a business combination involving a significant
shareholder or the corporations articles of incorporation
provide otherwise.
Ladishs articles of incorporation do not otherwise provide
for dissenters rights.
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Under the DGCL, stockholders have dissenters rights in
connection with mergers and consolidations, provided the
stockholder complies with certain procedural requirements of the
DGCL. However, this right to demand appraisal does not apply for
shares of any class or series of stock, which stock or
depository receipt in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and
to vote at the meeting of stockholders to act upon the agreement
of merger or consolidation, if:
the shares are listed on a national
securities exchange; or
the shares are held of record by more
than 2,000 stockholders.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Further, no dissenters rights shall be available for any
shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote
of the stockholders of the surviving corporation.
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Notwithstanding the above, dissenters rights are available
for the shares of any class or series of stock if the holders
are required by the terms of an agreement of merger or
consolidation to accept for their stock anything except:
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shares of stock of the corporation
surviving or resulting from the merger or consolidation;
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shares of stock of any other corporation
which, at the effective date of the merger or consolidation,
will be listed on a national securities exchange, designated as
a national market system security on an interdealer quotation
system by the National Association of Securities Dealers or held
of record by more than 2,000 stockholders;
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cash in lieu of fractional shares of the
corporations described in either of the above; or
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any combination of the shares of stock
and cash in lieu of fractional shares described in any of the
three above.
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A Delaware corporation may provide in its certificate of
incorporation that dissenters rights shall be available
for the shares of any class or series of its stock as the result
of an amendment to its certificate of incorporation, any merger
or consolidation to which the corporation is a party, or the
sale of all or substantially all of the assets of the
corporation.
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ATIs certificate of incorporation and bylaws do not
address dissenters rights.
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Stockholder Preemptive Rights
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Under the WBCL, subject to specified limitations, holders of
shares of a class authorized before January 1, 1991 have
preemptive rights to acquire a corporations unissued
shares or other securities convertible into unissued shares,
unless the articles of incorporation provide otherwise. Subject
to specified limitations, holders of shares of a class
authorized after January 1, 1991 do not have a preemptive right
to acquire the corporations unissued shares or other
securities except to the extent provided in the articles of
incorporation.
Ladishs articles of incorporation do not address
preemptive rights.
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The DGCL provides that no stockholder shall have any preemptive
rights to purchase additional securities of the corporation
unless the certificate of incorporation expressly grants these
rights.
ATIs certificate of incorporation does not address
preemptive rights.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Indemnification
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The WBCL requires a corporation to indemnify a director or
officer, to the extent that he or she has been successful on the
merits or otherwise in the defense of a proceeding, for all
reasonable expenses incurred in the proceeding if the director
or officer was a party because he or she is or was a director or
officer of the corporation. Indemnification is also required in
other instances, unless the director or officer is personally
liable because the director or officer breached or failed to
perform a duty that he or she owes to the corporation and the
breach or failure to perform constitutes any of the
following:
a willful failure to deal fairly with
the corporation or its shareholders in connection with a matter
in which the director or officer has a material conflict of
interest;
a violation of the criminal law, unless
the director or officer had reasonable cause to believe that his
or her conduct was lawful or no reasonable cause to believe that
his or her conduct was unlawful;
a transaction from which the director or
officer derived an improper personal benefit; or
willful misconduct.
The WBCL provides that reasonable expenses incurred by a
director or officer who is a party to a proceeding may be paid
or reimbursed by a corporation at such time as the director or
officer furnishes to the corporation a written affirmation of
his or her good faith belief that he or she has not breached or
failed to perform his or her duties to the corporation and a
written undertaking to repay any amounts advanced if it is
determined that indemnification by the corporation is not
required.
The indemnification provisions of the WBCL are not exclusive. A
corporation may provide directors and officers additional rights
to indemnification, except for conduct described above, in (i)
the articles of incorporation or by-laws; (ii) by a written
agreement between the director or officer and the corporation;
(iii) by a resolution adopted by the board of directors; or (iv)
by a resolution that is adopted, after notice, by a majority
vote of all of the corporations voting shares then issued
and outstanding.
Ladishs by-laws provide that Ladish shall indemnify any of
its directors or officers to the maximum extent allowed or
mandated by Wisconsin law.
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A Delaware corporation is required to indemnify a present or
former director or officer against expenses actually and
reasonably incurred in an action that such person successfully
defended on the merits or otherwise.
Under the DGCL, in non-derivative third-party proceedings, a
corporation may indemnify any director, officer, employee or
agent who is or is threatened to be made a party to the
proceeding against expenses, judgments and settlements actually
and reasonably incurred in connection with a civil proceeding,
provided such person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best
interests of the corporation and, in the case of a criminal
proceeding, had no reasonable cause to believe the conduct was
unlawful. Further, in actions brought on behalf of the
corporation, any director, officer, employee or agent who is or
is threatened to be made a party can be indemnified for expenses
actually and reasonably incurred in connection with the defense
or settlement of the action if the person acted in good faith
and in a manner reasonably believed to be in or not opposed to
the best interests of the corporation; however, indemnification
is not permitted with respect to any claims in which such person
has been adjudged liable to the corporation unless the
appropriate court determines such person is entitled to
indemnity for expenses.
Any permissive indemnification of a present or former director,
officer, employee or agent, unless ordered by a court, shall be
made by the corporation upon a determination by: (i) a majority
vote of the disinterested directors even though less than a
quorum; (ii) a committee of disinterested directors, designated
by a majority vote of such directors even though less than a
quorum; (iii) independent legal counsel in a written opinion; or
(iv) the stockholders. The statutory rights regarding
indemnification are not exclusive.
ATIs certificate of incorporation provides that the rights
to indemnification conferred in ATIs bylaws shall not be
exclusive of any other right which any person may have or
acquire.
The certificate of incorporation of ATI provides for
indemnification of ATIs directors and officers to the
fullest extent permitted by law.
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The indemnification provided under Ladishs by-laws is not
deemed exclusive of any other right to which an indemnified
person may be entitled as a matter of law.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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The WBCL allows a corporation to limit its obligation to
indemnify directors and officers. Neither Ladishs articles
of incorporation nor its by-laws provide for such a limit.
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Limitations on Directors Liability
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Under the WBCL, a director is not liable to the corporation, its
shareholders, or any person asserting rights on behalf of the
corporation or its shareholders for damages, settlements, fees,
fines, penalties or other monetary liabilities arising from a
breach of, or failure to perform, any duty resulting solely from
his or her status as a director, unless the person asserting
liability proves that the breach or failure to perform
constitutes:
a willful failure to deal fairly with
the corporation or its shareholders in connection with a matter
in which the director has a material conflict of interest;
a violation of criminal law, unless the
director had reasonable cause to believe that his or her conduct
was lawful or no reasonable cause to believe that his or her
conduct was unlawful;
a transaction from which the director
derived an improper personal profit; or
willful misconduct.
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Under the DGCL, a Delaware corporations certificate of
incorporation may eliminate director liability for all acts
except:
an act or omission not in good faith or
that involves intentional misconduct or knowing violation of the
law;
a breach of the duty of loyalty;
improper personal benefits; or
certain unlawful distributions.
ATIs certificate of incorporation provides that a director
of ATI shall not be personally liable to ATI or its stockholders
for monetary damages for any breach of fiduciary duty as a
director, except for liability:
for any breach of the directors
duty of loyalty to ATI or its stockholders;
for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation
of law;
under Section 174 of the DGCL; or
for any transaction from which such
director derived any improper personal benefit.
No amendment or repeal of this provision of ATIs
certificate of incorporation shall apply to or have any effect
on the liability or alleged liability of any director of ATI for
or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal. If the DGCL is
amended to authorize corporate action further eliminating the
personal liability of directors, then the liability of a
director of ATI shall be eliminated or limited to the fullest
extent permitted by the DGCL.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Amendment of Certificate or Articles of Incorporation
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Under the WBCL, a corporations board of directors may
adopt one or more amendments to the corporations articles
of incorporation without shareholder action in a limited number
of specified circumstances. The WBCL also provides that the
board of directors of a corporation may propose one or more
amendments to the articles of incorporation for submission to
shareholders. The board of directors may condition its
submission of the proposed amendment on any basis. Unless the
articles of incorporation or by-laws require a greater vote or a
vote by voting groups, the amendment is adopted if approved by
(i) a majority of the votes entitled to be cast on the amendment
by each voting group with respect to which the amendment would
create dissenters rights and (ii) the votes required by
every other voting group entitled to vote on the amendment.
Ladishs articles of incorporation provide that the
articles of incorporation may be amended in the manner
authorized by law at the time of the amendment.
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Under the DGCL, under the following circumstances, a class of
stockholders has the right to vote separately on an amendment to
a Delaware corporations certificate of incorporation even
if the certificate does not include such a right: (i) increasing
or decreasing the aggregate number of authorized shares of the
class (the right to a class vote under this circumstance may be
eliminated by a provision in the certificate of incorporation);
(ii) increasing or decreasing the par value of the shares of the
class; or (iii) changing the powers, preferences, or special
rights of the shares of the class in a way that would affect
them adversely. Approval by a majority of outstanding shares
entitled to vote is also required. Further, a separate series
vote is not required unless a series is adversely affected by an
amendment in a manner different from other shares in the same
class. Under the DGCL, a corporations certificate of
incorporation also may require, for action by the board of
directors or by the holders of any class or series of voting
securities, the vote of a greater number or proportion than is
required by the DGCL, and the provision of the certificate of
incorporation requiring such greater vote cannot be altered,
amended or repealed except by such greater vote.
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ATIs certificate of incorporation provides that ATI
reserves the right to amend and repeal any provision contained
in its certificate of incorporation in the manner from time to
time prescribed by Delaware law. Notwithstanding any other
provisions of ATIs certificate of incorporation, or any
provision of law which might otherwise permit a lesser vote or
no vote, but in addition to any affirmative vote of the holders
of any particular class or series of voting stock required by
law or the certificate of incorporation, the affirmative vote of
the holders of at least 75% of the outstanding voting power,
voting together as a single class, shall be required to alter or
repeal any provision inconsistent with the provisions of the
certificate of incorporation relating to:
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amendment of ATIs bylaws;
limitation on liability of directors;
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actions taken by ATI stockholders at
annual or special meetings;
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classification of ATIs board of
directors, board vacancies and removal of directors;
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matters that may be considered by the
ATI board of directors;
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approval of certain fundamental change
transactions; and
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amendment of certain provisions of
ATIs certificate of incorporation.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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Amendment of Bylaws
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Under the WBCL, a corporations board of directors may amend or repeal the corporations by-laws or adopt new by-laws except to the extent that the articles of incorporation or the WBCL reserve that power exclusively to the shareholders or the shareholders in adopting, amending or repealing a particular by-law provide within the by-laws that the board of directors may not amend, repeal or adopt that by-law. A corporations shareholders may amend or repeal the corporations by-laws or adopt new by-laws even though the board of directors may also amend or repeal the corporations by-laws or adopt new by-laws.
Ladishs by-laws provide that the by-laws may be amended or repealed, and new by-laws may be adopted, (i) at any regular or special meeting of shareholders at which a quorum is present or represented, by the affirmative vote of a majority of the stock entitled to vote, provided notice of the proposed amendment or repeal be contained in the notice of such meeting, or (ii) by the affirmative vote of a majority of the board of directors at any regular or special meeting of the board of directors. Ladish shareholders shall have authority to change or repeal any bylaws adopted by the directors.
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Under the DGCL, stockholders entitled to vote have the power to
adopt, amend or repeal bylaws. In addition, a corporation may,
in its certificate of incorporation, confer such power upon the
board of directors. However, the stockholders always retain the
power to adopt, amend or repeal the bylaws, even though the
board of directors may also be delegated such power.
ATIs certificate of incorporation provides that the board
of directors may amend or repeal ATIs bylaws. ATIs
stockholders may amend or repeal the ATIs bylaws only upon
the affirmative vote of 75% of the combined voting power of all
outstanding voting securities of ATI entitled to vote generally
in the election of ATIs directors, voting together as a
single class.
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Stockholder Inspection Rights
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Under the WBCL, each shareholder and his or her agent or
attorney has the right to inspect and copy, subject to specified
requirements (including having a proper purpose), the list of
shareholders entitled to notice of a shareholders meeting.
The list shall be arranged by class or series of shares and show
the address of and number of shares held by each shareholder.
Inspections must be conducted during regular business hours at
the shareholders expense. This right of inspection begins
two business days after notice of the shareholders meeting
is given and continues through the meeting. This right of
inspection may be exercised upon written demand.
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Under the DGCL, every stockholder of record has the right to
inspect, upon written demand under oath stating the
stockholders purpose for inspection, in person or by agent
or attorney, the corporations stock ledger, stockholder
list, its other books and records and, subject to certain
restrictions, the books and records of a subsidiary of the
corporation.
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Rights of ATI Stockholders
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Current Rights of Ladish Shareholders
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Following the Merger
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The WBCL further provides that both shareholders of record and
beneficial shareholders of a corporation who satisfy specified
requirements, and their attorneys and agents, have the right to
inspect and copy the corporations by-laws and, subject to
the requirements discussed below, minutes of meetings and
consent actions of the board of directors and shareholders,
records of actions taken by a committee of the board of
directors on behalf of the corporation, accounting records and
the record of shareholders. Inspections must be conducted during
regular business hours and are conducted at the
shareholders expense. Notice of a demand must be given
five business days before the date on which the shareholder
wants to inspect and copy the records. For records other than
the by-laws, the demand must be made in good faith and for
proper purpose, and the person must have been a shareholder for
at least six months before his or her demand or hold at least
five percent of the outstanding shares of the corporation.
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The WBCL also requires corporation to mail a copy of its latest
financial statements to any shareholder who requests a copy in
writing.
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90
LEGAL
MATTERS
The validity of the ATI common stock to be issued in connection
with the merger has been passed upon for ATI by K&L Gates
LLP, Pittsburgh, Pennsylvania.
As a condition to the completion of the merger, ATI will have
received an opinion from K&L Gates LLP, and Ladish will
have received an opinion from Foley & Lardner LLP, in
each case, dated as of the effective time of the merger, to the
effect that, for U.S. federal income tax purposes, the
merger will constitute a reorganization within the meaning of
Section 368 of the Code.
EXPERTS
The consolidated financial statements of Allegheny Technologies
Incorporated (ATI) appearing in Allegheny Technologies
Incorporateds Annual Report
(Form 10-K)
for the year ended December 31, 2009 and ATIs
effectiveness of internal control over financial reporting as of
December 31, 2009 have been audited by Ernst &
Young LLP, independent registered public accounting firm, as set
forth in their reports thereon, included therein, and
incorporated herein by reference. Such consolidated financial
statements and ATIs effectiveness of internal control over
financial reporting as of December 31, 2009 are
incorporated herein by reference in reliance upon such reports
given on the authority of such firm as experts in accounting and
auditing.
The audited consolidated financial statements of Ladish and
subsidiaries as of December 31, 2009 and 2008, and for each
of the three years ended December 31, 2009, have been
incorporated by reference in the registration statement in
reliance upon the reports of Grant Thorn