Agreement Reached on Settlement of Government Investigation of MPC
October 15 2009 - 1:22PM
Marketwired
Woodward Governor Company (NASDAQ: WGOV) announced today that MPC
Products Corporation (now doing business as Woodward MPC), a wholly
owned subsidiary acquired by Woodward in October 2008 ("MPC"), has
reached an agreement with the U.S. Department of Justice ("DOJ") to
resolve the criminal and civil claims related to the previously
announced investigation of MPC's pre-June 2005 government contract
pricing practices.
"I am pleased that the DOJ has approved this agreement, which is
consistent with the previously disclosed settlement in principle
that was reached by MPC before Woodward acquired MPC last October,"
said Chairman and Chief Executive Officer Thomas A. Gendron. "The
misconduct at issue occurred several years prior to Woodward's
acquisition of MPC, and involved individuals who are no longer
employees of MPC. Woodward is firmly committed to a culture of
integrity. Through our strong ethics and compliance programs, we
will continue to drive this culture into all aspects of our
business and our entire membership to ensure compliance with
government contracting rules."
In settlement of the criminal and civil cases, MPC is to pay
approximately $25 million in restitution and fines, which was
previously accrued by Woodward as part of the acquisition; the
purchase price for MPC was also reduced by this amount. As part of
the negotiated settlement, MPC will also plead guilty to one count
of mail fraud related to its pre-June 2005 government contract
pricing practices and has agreed to conditions of a two-year
probation.
The civil settlement was approved by the United States District
Court in the Northern District of Illinois (the "District Court")
on October 7, 2009. The criminal case plea agreement, including
sentencing, remains subject to approval by the District Court. If
the Court approves the plea agreement, all matters related to the
DOJ investigation will be concluded.
About Woodward
Woodward is an independent designer, manufacturer, and service
provider of energy control and optimization solutions used in
global infrastructure equipment. We serve the aerospace, power
generation and distribution, and transportation markets. Our
systems and components optimize the performance of commercial
aircraft; military aircraft, ground vehicles and other equipment;
gas and steam turbines; wind turbines; reciprocating engines; and
electrical power systems. The company's innovative fluid energy,
combustion control, electrical energy, and motion control systems
help customers offer cleaner, more reliable and more cost-effective
equipment. Our customers include leading original equipment
manufacturers and end users of their products. Woodward is
headquartered in Fort Collins, Colo., USA. Visit our website at
www.woodward.com.
Information in this press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve risks and uncertainties, including,
but not limited to, statements regarding the receipt of approval by
the District Court and the ability of Woodward's ethics and
compliance programs to prevent and detect future violations.
Readers are cautioned that these forward-looking statements are
only predictions and are subject to risks, uncertainties, and
assumptions that are difficult to predict. Factors that could cause
actual results and the timing of certain events to differ
materially from the forward-looking statements include, but are not
limited to, risks related to Woodward's dependence on continued
business with the U.S. government, contract termination or
non-renewal risks, the receipt of approval by the District Court,
Woodward's ability to comply with the terms of the civil and
criminal settlement and related administrative agreement,
Woodward's ability to implement ethics and compliance programs that
prevent or detect noncompliance with applicable laws and other risk
factors described in Woodward's Annual Report on Form 10-K for the
year ended September 30, 2008 and subsequently filed Quarterly
Reports on Form 10-Q.
CONTACT: Rose Briani-Burden Business Communications 815-639-6282
Woodward Governor Company 1000 East Drake Road Fort Collins,
Colorado 80525, USA Tel: 970-482-5811 Fax: 970-498-3058
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