8-KMaterial AgreementsRegulation FD

CARPENTER TECHNOLOGY CORP 8-K Report, Agreement Terminated (Feb 28, 2006)

Filed February 28, 2006For Securities:CRS

Summary

Carpenter Technology Corporation (CRS) has filed an 8-K report on February 28, 2006, to disclose a significant change related to its prior merger agreement with Dynamet Incorporated (DI). Specifically, the DI Shareholders have fallen below the 5% ownership threshold of Carpenter's common stock, thereby terminating their rights to designate a director to Carpenter's board and releasing them from the standstill provisions of the original merger agreement. This termination has implications for both Carpenter and the DI Shareholders. Carpenter will no longer be obligated to nominate a director designated by the DI Shareholders, and the DI Shareholders are now free from restrictions on share transfers, acquisitions, and participation in certain corporate actions or solicitations. This event effectively concludes the outstanding provisions of the 1997 Agreement and Plan of Merger.

Key Highlights

  • 1DI Shareholders' ownership of Carpenter Technology stock has fallen below the 5% threshold, as reported on February 22, 2006.
  • 2Consequently, the DI Shareholders are no longer entitled to designate a director for nomination to Carpenter's board.
  • 3The standstill provisions outlined in the 1997 Agreement and Plan of Merger are no longer binding on the DI Shareholders.
  • 4These provisions previously restricted DI Shareholders from certain share transfers, acquisitions, and involvement in corporate actions.
  • 5The expiration of these provisions marks the conclusion of all outstanding obligations under the merger agreement.
  • 6Peter Stephans, the current board member designated by DI Shareholders, will not be replaced by a DI designee upon his term's expiration in 2007.
  • 7No other outstanding provisions of the merger agreement remain active.

Frequently Asked Questions

The DI Shareholders' ownership of Carpenter Technology Corporation's common stock fell below 5%. This reduction in ownership automatically terminated their right to designate a director and released them from the standstill provisions of the merger agreement.

Carpenter Technology is no longer obligated to nominate a director designated by the DI Shareholders. The current designee, Peter Stephans, will complete his term ending in 2007, but there will be no future nominations from the DI Shareholders.

The standstill provisions were restrictions from the 1997 merger agreement that limited the DI Shareholders. These included restrictions on selling large blocks of shares without offering them to Carpenter first, acquiring more Carpenter stock, and participating in certain solicitations or business combinations involving Carpenter. These restrictions have now been lifted.

The filing indicates that the specific provisions related to director designation and standstill obligations have concluded due to the ownership threshold being met. It does not necessarily mean the entire merger agreement is terminated, but that the outstanding obligations under those specific clauses are no longer active.