##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-K

ANNUAL REPORT PURSUANT TO THE

SECURITIES EXCHANGE ACT OF 1934




|                                           |                              
|------------------------------------------ | -----------------------------
|For the Fiscal Year Ended October 26, 2002 | Commission File No. 333-38223

ARGO-TECH CORPORATION

(Exact Name of Registrant as Specified in Its
Charter)


|                                                                             |  |                                                   
|---------------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware(State or Other Jurisdiction of
    Incorporation or Organization)   |  | 31-1521125(I.R.S. Employer
    Identification No.)
|                                                                            
|23555 Euclid Avenue, Cleveland, Ohio(Address of Principal Executive Offices) |  | 44117(Zip Code)                                   

Registrants Telephone Number, Including
Area Code: (216) 692-6000

Securities Registered Pursuant to
Section 12(b) of The Act: None

Securities Registered Pursuant to
Section 12(g) of The Act: None

Indicate by checkmark whether the registrant:
(1) has filed all reports to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has
been subject to such filing requirement for the past
90 days.   Yes x     Noo

Indicate by checkmark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein and will not be contained, to the best of
registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Annual Report on Form 10-K or any amendment to this
Form 10-K.     x

All of the outstanding capital stock of the
registrant is held by AT Holdings Corporation.

As of January 23, 2003, one share of the
Registrants Common Stock, $.01 par value per share, was
outstanding.

Documents incorporated by reference: None



---

TABLE OF CONTENTS



|                                           |                                                                                                |  |  |  |  |  |  | 
|------------------------------------------ | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                    
|                                           | Item 1. Business.                                                                             
|                                           | Item 2. Properties.                                                                           
|                                           | Item 3. Legal Proceedings.                                                                    
|                                           | Item 4. Submission of Matters to a Vote of Security Holders.                                  
|PART II                                   
|                                           | Item 5. Market for Our Common Equity and Related Stockholder Matters.                         
|                                           | Item 6. Selected Financial Data.                                                              
|                                           | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                                           | Item 7A. Quantitative and Qualitative Disclosures About Market Risk.                          
|                                           | Item 8. Financial Statements and Supplementary Data.                                          
|                                           | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 
|PART III                                  
|                                           | Item 10. Directors and Executive Officers of Argo-Tech.                                       
|                                           | Item 11. Executive Compensation.                                                              
|                                           | Item 12. Security Ownership of Certain Beneficial Owners and Management.                      
|                                           | Item 13. Certain Relationships and Related Transactions.                                      
|PART IV                                   
|                                           | Item 14. Controls and Procedures                                                              
|                                           | Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.                    
|SIGNATURES                                
|INDEX TO FINANCIAL STATEMENTS             
|                                           | INDEPENDENT AUDITORS REPORT                                                                  
|                                           | CONSOLIDATED BALANCE SHEETS                                                                   
|                                           | October 26, 2002 and October 27, 2001                                                         
|                                           | CONSOLIDATED STATEMENTS OF NET INCOME                                                         
|                                           | For the Fiscal Years Ended October 26, 2002, October 27, 2001 and October 28, 2000            
|                                           | CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY/(DEFICIENCY)                                  
|                                           | For the Fiscal Years Ended October 26, 2002, October 27, 2001 and October 28, 2000            
|                                           | CONSOLIDATED STATEMENTS OF CASH FLOWS                                                         
|                                           | For the Fiscal Years Ended October 26, 2002, October 27, 2001 and October 28, 2000            
|                                           | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    
|                                           | For the Fiscal Years Ended October 26, 2002, October 27, 2001 and October 28, 2000            
|EXHIBIT INDEX                             
|Exhibit 10.35 Amendment to Credit Facility
|Exhibit 10.36 Amendment to Trust Agreement
|Exhibit 12 Computation of Ratios          
|Exhibit 99 Section 906 Cert.              



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##### Table of Contents






PART I






Item 1.     Business.


We design, manufacture, sell and service high
performance fuel flow devices and systems for both aerospace and
general industrial applications. Argo-Tech operates in two
business segments, Aerospace and Industrial. The Aerospace
segment includes the design, manufacture, distribution, repair
and overhaul of aviation products throughout the world
consisting of aircraft engine fuel pumps, fuel flow related
products and systems found on a planes airframe, and
aerial refueling pumps and related equipment. The Industrial
segment includes the design, manufacture and distribution of
industrial pumps, ground fueling valves and related components,
industrial marine cryogenic pumps and nozzles for transferring
liquefied natural gas and operation of a business park in
Cleveland, Ohio. Argo-Tech is a Delaware corporation formed in
1986.

In the Aerospace segment, we are the worlds
leading supplier of main engine fuel pumps to the commercial
aircraft industry and a leading supplier of military main engine
fuel pumps and commercial and military airframe products and
systems, including airframe pumps, valves and accessories. We
are the worlds leading supplier of military aerial
refueling pumps and related equipment. Our Aerospace customers
include substantially all commercial and domestic military
engine and airframe manufacturers, airlines worldwide and the
U.S. and certain foreign militaries.

In the Industrial segment, we are the
worlds leading supplier of ground fueling components and a
fuel management system used at airports throughout the world,
and a leading supplier of cryogenic pumps and nozzles and
specialty industrial hose for aerospace, chemical transfer and
marine applications. In addition, we supply industrial and
marine gas turbine products. We also operate an aerospace
certified materials laboratory and a business park in Cleveland,
Ohio, where we maintain our headquarters and primary production
facilities.

Products



| |          
| | ---------
| | Aerospace

Main Engine Fuel
Pumps.Main engine fuel pumps are
precision mechanical pumps, mounted to the aircrafts
engines that maintain the flow of fuel to the engine at a
precise rate and pressure. These pumps consist of an aluminum
body which is cast by certified subcontractors. We then machine
the casting, manufacture a variety of other components, assemble
the final product, and perform rigorous testing at our Cleveland
facility.

We are the sole source supplier of main engine
fuel pumps for all CFM56 series engines, one of the most popular
series of large commercial aircraft engines used today. The
CFM56 series engines power the Airbus A-318, A-319, A-320,
A-321 and A-340 and the Boeing 737 aircraft. We are also
the sole source supplier of main engine fuel pumps for all
engines used on the Boeing 777 aircraft, including the new
longer range Boeing 777.

Our products also include large regional and
business jet applications, including the main engine fuel pumps
used on the BR700 series engine, which is used on the high-end
Bombardier Global Express, the Gulfstream Aerospace Corp. V
aircraft and the Boeing 717. We supply main engine fuel
pumps for the GE CF34-8 engine, which is used on the
Bombardier CRJ700 and CRJ900 regional and business aircraft and
the Embraer ERJ-170 70 passenger regional jet. We also
supply main engine fuel pumps for the GE CF34-10 engine
which is used on the Embraer ERJ-190 and the new ARJ 21
regional jet to be manufactured by AVIC I Commercial
Aircraft Co. Ltd. (ACAC) in China.

Airframe
Products.Fuel pumps and other
airframe fuel transfer control systems in the airframe are
necessary to transfer fuel to the engine systems and to maintain
aircraft balance by shifting fuel between tanks. We design and
manufacture complete fuel systems and fuel subsystems such as
refuel/defuel, engine feed and fuel level control. We also
design and manufacture a wide variety of fuel components
consisting of boost and transfer fuel pumps, fuel flow
proportioners, and airframe valves, adapters, nozzles and caps.
These systems and components are used for fueling, storing,
transferring and engine feed functions during ground and flight
operations. Argo-Tech is the fuel system supplier for the
Eclipse 500, a new generation of business jet manufactured
by Eclipse Aviation Corporation.

1



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Aerial Refueling
Systems.Aerial refueling systems
permit military aerial tankers to refuel fighter, bomber and
other military aircraft while in flight. We are a major supplier
of components for aerial refueling systems, which are produced
only for military applications. Aerial refueling components we
manufacture, including pumps, hose and couplers, are installed
in the refueling systems of 100% of U.S. designed military
aircraft equipped with such capability.



| |           
| | ----------
| | Industrial

Ground Fueling
Products.Ground fueling systems
are used to transfer fuel from underground fuel tanks and ground
fueling trucks to the fuel receptacle of the aircraft. We
manufacture various ground fueling hydrants, couplers and
nozzles for commercial and military airports around the world.
We also manufacture digital pressure control valves. These
valves incorporate a microprocessor to enhance fuel flow control
and allow for accurate measurement of pressure at the delivery
receptacle thereby optimizing the fuel flow and pressure.

We also sell fuel management systems. Argo-Tech
developed the AVR2000 Aviation Refueling Management System which
is used at over 200 sites worldwide. It is the leading
hardware and software system for customized fuel utilization
management, data collection and billing in the industry.

Cryogenic
Products.We have been widely
recognized as a leading designer and supplier of high
performance submerged motor pumps for cryogenic gases and
fluids. We recently introduced liquefied natural gas nozzles and
receptacles for use on alternative fuel vehicles. We believe
these products position us favorably in this emerging market.

Industrial Gas Turbine
Products.As a result of our
established record of performance with our Aerospace engine
products, we have gained entry into the Industrial &
Marine Gas Turbine (IMGT) market. Our current IMGT
products are utilized in all three IMGT market sectors (power
generation, mechanical drive, and marine), and include designed
to specification lubrication and scavenge pumps, liquid fuel
delivery pumps, and precision liquid fuel flow dividers.

Aftermarket Sales

Aftermarket sales comprise the largest component
of our business. Aftermarket sales consist primarily of spare
parts sales and overhaul, retrofit, repair and technical support
to commercial and military customers worldwide.

Customers



| |          
| | ---------
| | Aerospace

Original Equipment Manufacturer (OEM)
customers for our aerospace products include the worlds
major aircraft engine manufacturers: General Electric,
Honeywell, Pratt and Whitney (including Pratt and Whitney
Canada), Rolls-Royce (including Rolls-Royce Allison and
Rolls-Royce Deutschland), SNECMA and Williams International
Corp. Customers for our airframe pumps and valves include
Airbus, Boeing, Cessna, Gulfstream, Lockheed Martin, Raytheon
and various U.S. government agencies. Orders for military
components also come through customers such as Lockheed Martin,
Boeing, General Electric and Pratt and Whitney. Our aftermarket
customers include all major aircraft and engine repair
facilities and all major airlines worldwide. Currently, the
total number of airline and third party customers for our spare
parts, overhaul and repair exceeds 200. Upsilon International
Corporation, in its capacity as distributor of certain of our
products to foreign customers, accounted for approximately 14%
of our net revenues for the fiscal year ended October 26,
2002. No other customer accounted for more than 10% of our
revenues during this period.



| |           
| | ----------
| | Industrial

Most ground fueling products are sold to
customers through independent distributors. Customers in the
domestic markets include a variety of airlines, airports and
various fixed base operators. In international markets, our
ground fueling products are purchased by several oil companies,
including several state-run oil companies and airport
authorities.

2



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Our cryogenic pump customer base includes
shipping vessels operated by domestic and foreign carriers,
liquefied gas ship loading terminal owners, liquefied gas
receiving terminals, petrochemical plants, large architectural
and engineering companies worldwide, electric power generation
companies and alternate fuel vehicle fleet operators.

Our industrial gas turbine products are utilized
in three market sectors: power generation, mechanical drive and
marine. Customers for these products include Rolls Royce Power
Engineering, Rolls Royce Energy Systems, Siemens Westinghouse
and Pratt and Whitney Power Systems.

Sales and Marketing

OEM customers in both the Aerospace and
Industrial segments select suppliers primarily on the basis of
custom design capabilities, product quality and performance,
prompt delivery, price and aftermarket support. We believe that
we meet these requirements in a timely, responsive manner which
has resulted in an extensive installed base of components and
substantial aftermarket revenues.

We market and sell our OEM and aftermarket
products through a combination of direct marketing, internal
sales personnel, independent manufacturing representatives and
U.S. and international distributors. We supply main engine fuel
pump spare parts directly to domestic airlines and third-party
overhaul shops while foreign customers that purchase main engine
fuel pump products receive their spare parts through Upsilon
International, which operates a distribution facility in
Torrance, California.

Suppliers and Raw Materials

We use a certified supplier program that demands
a commitment to 100% quality and on-time deliveries. Supplier
performance is measured by our comprehensive supplier rating
system. Currently, our supplier base includes approximately
600 companies.

Our largest supplier expenditure relates to
outsourcing of component machining. We have derived significant
savings by taking advantage of advances in machining
technologies and by coordinating engineering with our suppliers.
Agreements are in place with our key long term suppliers who
provide most of the outside supplier component machining.

Aluminum castings used in the manufacture of main
engine fuel pumps are the highest volume raw material supplied
to us. Key long term certified suppliers provide the majority of
these castings. We also buy quantities of steel bar stock to
produce gears and shafts from multiple producers. However,
CPM-10V, a powdered metal essential for the manufacture of
certain of our main engine fuel pumps, is a proprietary product
available only from Crucible Specialty Metals. We do not have a
contractual arrangement with Crucible Specialty Metals; we
purchase CPM-10V pursuant to standard purchase orders. Another
material has been identified as an alternative to CPM-10V, but
that material has not yet been certified by our customers.

Manufacturing, Repair and Overhaul

Argo-Tech has five manufacturing and repair and
overhaul facilities:



| |   |                                                              
| | - | -------------------------------------------------------------
| |  | A 150 acre business park in Cleveland, Ohio                  
|
| |  | A 9.2 acre facility in Costa Mesa, California                
|
| |  | An 85,000 square foot facility in Tucson,
    Arizona        
|
| |  | A 6,000 square foot facility in Inglewood,
    California    
|
| |  | A 4,500 square foot facility in
    Henley-on-Thames, England

In the Aerospace segment, main engine fuel pumps
and some models of our airframe fuel pumps are manufactured,
repaired and overhauled at our Cleveland, Ohio facility. The
remaining Aerospace segment products are manufactured, repaired
and overhauled in our Costa Mesa facility. The Inglewood,
California facility is exclusively an overhaul and repair shop
for our main engine fuel pump products.

3



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In the Industrial segment, all products are
manufactured in the Costa Mesa facility with three exceptions:
first, industrial hose products which are manufactured in our
Tucson facility; second, the airport fuel management system
which is produced at our Henley-on-Thames, England facility;
and, third, industrial and marine gas turbine products which are
manufactured at our Cleveland facility. Repair and overhaul of
Industrial segment products is conducted in our Cleveland and
Costa Mesa facilities.

Most of the products at our Cleveland facility
are manufactured internally. This facility houses our senior
management and the majority of our Aerospace engineering and
design staff, sales team, and production and main distribution
facilities. This facility is organized around manufacturing
cells that produce, bearings, gears, housings and
shafts for assembly. By creating cells, the necessary people,
machinery, materials and methods are focused on distinct
products and processes. Each manufacturing cell includes members
from each of the Manufacturing, Quality, Production Control,
Statistical Process Control, and Manufacturing Engineering
disciplines. Our design engineering staff is also organized into
cells which correspond to and complement the manufacturing
cells. The manufacturing and engineering cells work together to
meet our integrated operating plan and to ensure timely design
and production of our products.

In contrast to our substantial reliance on
internal manufacturing of products in Cleveland, we outsource
most of the machining and pre-assembly production of products in
Costa Mesa to external providers. However, we do maintain
internal equipment capacity at our Costa Mesa facility, which
enables us to produce small quantity, quick turn components to
reduce setup/breakdown times on smaller jobs and for the
manufacturing control of key parts. We have lowered the cost of
products manufactured in Costa Mesa by outsourcing capital
intensive tasks such as casting and machining, while completing
final assembly and testing on the premises.

All of the industrial hose products manufactured
at our Tucson facility are processed internally. The software
relating to the ground fueling airport fuel management system is
written internally at our Henley-on-Thames facility, while the
hardware relating to the system is sourced from a third party.

In addition to our manufacturing facilities, we
maintain sophisticated testing facilities at our Ohio and
California locations. These testing facilities allow for
simulation of typical conditions and stresses that will be
experienced by our products during use. Our products are also
thoroughly tested for design compliance, performance and
durability. To facilitate quality control and product
development, we maintain a sophisticated chemistry and
metallurgy laboratory at our Cleveland facility.

We have obtained and preserved our quality
management system certifications. ISO-9001:2000 and AS 9100
Revision A certifications are recognized by most of our
customers, as well as by the FAA and U.S. government supply
organizations.

Patents and Trademarks

We have a number of patents and trademarks and
pending patent applications related to our products. While in
the aggregate our patents and trademarks are of material
importance to our business, we believe no single patent or
trademark or group of patents or trademarks is of material
importance to our business as a whole.

Government Regulations

The commercial aerospace industry is highly
regulated by the Federal Aviation Administration
(FAA) in the United States, the Joint Aviation
Authorities in Europe and the Civil Aviation Authority in
England, while the military aerospace industry is governed by
military quality (MIL or ISO-9000) specifications. We are
required to be certified by one or more of these entities, and,
in some cases, by individual OEMs, in order to engineer and
service parts and components used in specific aircraft models.
We must also satisfy the requirements of our customers,
including OEMs and airlines, that are subject to FAA
regulations, and provide these customers with products that
comply with the government regulations applicable to commercial
flight operations. In addition, the FAA requires that various
maintenance routines be performed on aircraft components. We
currently satisfy or exceed these maintenance standards in our
repair and overhaul activities. We maintain FAA-approved repair
stations at our Cleveland, Ohio, Costa Mesa, California and
Inglewood, California facilities.

4



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Our aviation and metals operations are also
subject to a variety of worker and community safety laws. The
Occupational Safety and Health Act of 1970 (OSHA)
mandates general requirements for safe workplaces for all
employees. In addition, OSHA provides special procedures and
measures for the handling of certain hazardous and toxic
substances. We believe that our operations are in material
compliance with OSHAs health and safety requirements.

Competition

Competition among aerospace component
manufacturers is based on engineered solutions, product quality,
customer support, pricing and on-time delivery. Competitors in
the Aerospace segment are primarily divisions of large
corporations. Virtually all of Argo-Techs competitors have
significantly greater financial resources than does Argo-Tech.
To our knowledge, no other company manufactures and sells a
broader line of fuel related aerospace components.

In the Industrial segment, competition varies by
product, but is typically based on engineered solutions, price,
product quality and on-time delivery.

Backlog

We believe that unfilled orders are not
necessarily an indicator of future shipment levels of our
products. As customers demand shorter lead times and flexibility
in delivery schedules, they have also revised their purchasing
practices. As a result, notification of firm orders may occur
only within thirty to sixty days of delivery. In addition, due
to the government funding process, backlog can vary on a period
to period basis depending on the stage of completion of the
contracts represented by such backlog. Therefore, we believe
that the backlog of unfilled orders at fiscal year end cannot be
relied upon as a valid indication of our sales or profitability
in a subsequent year.

Development Expense Trends

In connection with new aerospace product
development programs, we incur significant research and
development expenditures to design, test and qualify main engine
fuel pumps and accessories for engine and airframe OEMs.
Research and development expenditures are expensed as incurred,
and such expenses are expected to continue at historical levels.
Research and development expense was $11.7 million,
$10.3 million and $9.6 million for the fiscal years
ended October 26, 2002, October 27, 2001 and
October 28, 2000, respectively.

Employees

As of October 26, 2002, we had 664 full-time
employees of which 413 are salaried and 251 are hourly. The 166
hourly employees located at our Cleveland facility are
represented by the UAW under a collective bargaining agreement
expiring on March 31, 2004.

Environmental Matters

Our operations are subject to federal, state and
local environmental laws and to regulation by government
agencies, including the U.S. Environmental Protection Agency.
Among other matters, these regulatory authorities impose
requirements that regulate the emission, discharge, generation,
management, transportation and disposal of pollutants and
hazardous substances. These authorities govern response actions
to hazardous substances which may be or have been released to
the environment, and require us to obtain and maintain permits
in connection with our operations. This extensive regulatory
framework imposes significant compliance burdens and risks.

Although we believe that our operations and
facilities are currently in compliance in all material respects
with applicable environmental laws, there can be no assurance
that future changes in such laws, regulations or interpretations
of such laws or the nature of our operations will not require us
to make significant additional expenditures to ensure compliance
in the future. Currently, we do not believe that we will have to
make material capital expenditures for environmental remediation
for the 2003 fiscal year.

5



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Our Cleveland facility is currently the subject
of environmental remediation activities. The cost of these
activities is the responsibility of TRW, now a subsidiary of
Northrop Grumman, under the terms of the purchase agreement by
which we acquired TRWs Power Accessories Division in 1986.
Remediation has been underway since 1989 and is expected to
continue for the foreseeable future. We have not paid for any
material portion of the cost of the remediation and do not
expect to do so in the future. TRW has funded all necessary
remediation costs and we expect that TRW will continue to do so
in the future. We estimate that TRW has spent in excess of
$15 million for environmental remediation at our Cleveland
facility.

The TRW purchase agreement also requires TRW, for
a period of 20 years from the date of the 1986 purchase
agreement, to indemnify us for:



| |   |                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | costs associated with third party environmental
    claims relating to environmental conditions arising from
    activities conducted by TRW during its operation of its Power
    Accessories Division that have not been conducted by us after
    our purchase of the assets of the division in 1986, and
|
| |  | a portion of the costs associated with third
    party environmental claims arising from activities conducted by
    TRW and us, the portion of the costs to be paid by each party
    being determined based on the length of time each party
    conducted the activity giving rise to the claim.         

To date, there have been no third party
environmental claims relating to us or to the Cleveland facility.

In March 1986, a two thousand gallon spent
underground storage tank was removed from our Costa Mesa
facility. Petroleum hydrocarbon soil contamination was
discovered during the removal of the tank, prompting the Orange
County Health Care Agency to require a site assessment.
Subsequent site investigations revealed that groundwater
underlying the site is impacted by trichloroethene and
perchloroethylene. In 1990, the Regional Water Quality Control
Board issued a Cleanup and Abatement Order to J.C. Carter
Company, Inc. (which we acquired in 1997 and now operate as a
wholly owned subsidiary named Argo-Tech Corporation Costa Mesa)
relating to the investigation and remediation of groundwater
contamination. To date, the full extent of the groundwater
contamination has not been ascertained. By virtue of our
acquisition of Carter, we have assumed responsibility for
satisfying the cleanup order. However, we have obtained
indemnification from Carters selling stockholders for,
among other things, all costs and expenses related to
satisfaction of the order. However, there can be no assurance
that such indemnification obligations with respect to the
cleanup order will be satisfied by the selling stockholders. See
Risk Factors  Potential Exposure to
Environmental Liabilities.






|        |            
|------- | -----------
|Item 2. | Properties.

We own and operate a 150-acre business park in
Cleveland, Ohio, which includes 1.8 million square feet of
engineering, manufacturing and office space. We occupy
approximately 475,000 square feet for our main engine fuel pump,
airframe fuel pump and industrial gas turbine businesses and
lease almost one million square feet of the facility to third
parties. We believe that this facilitys machinery, plants
and offices are in satisfactory operating condition. We also
believe that it has sufficient capacity to meet our foreseeable
future needs without significant additional capital expenditures.

We also own a 9.2-acre facility in Costa Mesa,
California, which encompasses 165,000 covered square feet. We
manufacture certain of our Aerospace airframe and aerial
refueling products and accessories, and Industrial ground
fueling and cryogenic products equipment at this facility. We
believe that our Costa Mesa facility has sufficient capacity to
permit further growth in those product lines without significant
additional capital expenditures.

Our leased facility in Tucson, Arizona
encompasses 85,000 square feet and includes available space for
expansion. We manufacture specialty industrial hose for
aerospace, chemical transfer and marine applications at this
facility. We believe this facility has sufficient capital and
capacity to permit further growth in those product lines without
significant additional capital expenditures.

Our Inglewood, California leased facility
occupies approximately 6,000 square feet. Its primary purpose is
to repair and overhaul main engine fuel pumps owned by airline
customers. Inglewoods assets include test stands for
testing fuel pumps after overhaul and a small machine shop for
simple rework of pump components.

6



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##### Table of Contents



A leased facility at Henley-on-Thames, England
occupies approximately 4,500 square feet. The current lease
expires October 31, 2003. Its primary activities are the
design, development and support of aviation refueling management
systems. We believe it may be necessary to relocate this
facility at the conclusion of the current lease to accommodate
anticipated further growth.






|        |                   
|------- | ------------------
|Item 3. | Legal Proceedings.

While we are not presently involved in any
material legal proceedings, during the ordinary course of
business, we are, from time to time, threatened with, or may
become a party to, legal actions and other proceedings.






|        |                                                         
|------- | --------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders.

No matter was submitted during the fourth quarter
of the fiscal year covered by this report to a vote of our
security holders.

7



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##### Table of Contents






PART II






|        |                                                                  
|------- | -----------------------------------------------------------------
|Item 5. | Market for Our Common Equity and Related
    Stockholder Matters.

We are a wholly owned subsidiary of AT Holdings
Corporation. We have no equity securities that trade.






|        |                         
|------- | ------------------------
|Item 6. | Selected Financial Data.

Selected Historical Financial and Other Data
of Argo-Tech Corporation

The following table sets forth selected
historical financial and other data of Argo-Tech for the fiscal
years 1998 through 2002, which have been derived from our
audited consolidated financial statements for those years. Our
fiscal year ends on the last Saturday in October and is
identified according to the calendar year in which it ends. For
example, the fiscal year ended October 26, 2002 is referred
to as fiscal 2002. The fiscal year ended
October 26, 2002 consisted of 52 weeks, the fiscal
year ended October 31, 1998 consisted of 53 weeks and
the remaining fiscal years presented consisted of 52 weeks.
The information presented below should be read together with
Managements Discussion and Analysis of Financial
Condition and Results of Operations and the consolidated
financial statements and related notes included elsewhere herein.

|                                           |                                                 |                   |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |         |  
|------------------------------------------ | ----------------------------------------------- | ----------------- | - | ----------- | - | ----------- | - | ----------- | - | ----------- | - | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                           |                                                 |                  
|                                           |                                                 | Fiscal Year Ended
|                                           |                                                 |                  
|                                           |                                                 | October 26,       |   | October 27, |   | October 28, |   | October 30, |   | October 31,
|                                           |                                                 | 2002              |   | 2001        |   | 2000        |   | 1999        |   | 1998       
|                                           |                                                 |                   |   |             |   |             |   |             |   |            
|Statement of Operations Data:              |                                                 |                   |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |        
|                                           | Net revenues                                    |                   | $ | 155,303     |   |             | $ | 173,208     |   |             | $ | 159,353 |   |  | $ | 176,178 |   |  | $ | 174,035 |  
|                                           |                                                 |                   |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |        
|                                           | Gross profit                                    |                   |   | 66,634      |   |             |   | 79,033      |   |             |   | 66,870  |   |  |   | 79,396  |   |  |   | 66,832  |  
|                                           | Operating Expenses                              |                   |   | 38,802      |   |             |   | 40,874      |   |             |   | 41,518  |   |  |   | 45,550  |   |  |   | 38,773  |  
|                                           |                                                 |                   |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |        
|                                           | Income from operations                          |                   |   | 27,832      |   |             |   | 38,159      |   |             |   | 25,352  |   |  |   | 33,846  |   |  |   | 28,059  |  
|                                           | Interest expense                                |                   |   | 21,434      |   |             |   | 24,534      |   |             |   | 25,644  |   |  |   | 25,003  |   |  |   | 21,030  |  
|                                           | Other, net                                      |                   |   | (97         | ) |             |   | (51         | ) |             |   | (402    | ) |  |   | (516    | ) |  |   | (268    | )
|                                           | Income tax provision (benefit)                  |                   |   | 569         |   |             |   | 2,876       |   |             |   | (642    | ) |  |   | 4,021   |   |  |   | 3,400   |  
|                                           |                                                 |                   |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |        
|                                           | Net income                                      |                   | $ | 5,926       |   |             | $ | 10,800      |   |             | $ | 752     |   |  | $ | 5,338   |   |  | $ | 3,897   |  
|                                           |                                                 |                   |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |        
|Balance Sheet Data
    (at end of period): |                                                 |                   |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |        
|                                           | Total assets                                    |                   | $ | 260,333     |   |             | $ | 273,574     |   |             | $ | 277,334 |   |  | $ | 294,745 |   |  | $ | 288,195 |  
|                                           | Working capital                                 |                   |   | 28,420      |   |             |   | 35,904      |   |             |   | 33,277  |   |  |   | 35,378  |   |  |   | 36,917  |  
|                                           | Long-term debt (including current maturities)   |                   |   | 235,045     |   |             |   | 253,380     |   |             |   | 264,762 |   |  |   | 276,987 |   |  |   | 227,386 |  
|                                           | Redeemable common stock                         |                   |   |            |   |             |   |            |   |             |   |        |   |  |   |        |   |  |   | 6,713   |  
|                                           | Redeemable ESOP stock, net                      |                   |   | 8,835       |   |             |   | 13,994      |   |             |   | 20,983  |   |  |   | 43,212  |   |  |   | 32,235  |  
|                                           | Shareholders equity/(deficiency)(a)            |                   |   | (31,633     | ) |             |   | (42,119     | ) |             |   | (58,842 | ) |  |   | (78,955 | ) |  |   | (36,286 | )
|Other Data:                                |                                                 |                   |   |             |   |             |   |             |   |             |   |         |   |  |   |         |   |  |   |        
|                                           | Gross margin                                    |                   |   | 42.9        | % |             |   | 45.6        | % |             |   | 42.0    | % |  |   | 45.1    | % |  |   | 38.4    | %
|                                           | Adjusted EBITDA(b)                              |                   | $ | 37,505      |   |             | $ | 53,324      |   |             | $ | 41,973  |   |  | $ | 52,284  |   |  | $ | 56,940  |  
|                                           | Adjusted EBITDA margin(c)                       |                   |   | 24.1        | % |             |   | 30.8        | % |             |   | 26.3    | % |  |   | 29.7    | % |  |   | 32.7    | %
|                                           | Net cash flows provided by operating activities |                   | $ | 30,724      |   |             | $ | 18,063      |   |             | $ | 22,427  |   |  | $ | 15,298  |   |  | $ | 29,771  |  
|                                           | Net cash flows used in investing activities     |                   |   | (1,785      | ) |             |   | (1,885      | ) |             |   | (3,025  | ) |  |   | (8,637  | ) |  |   | (5,610  | )
|                                           | Net cash flows used in financing activities     |                   |   | (19,227     | ) |             |   | (13,295     | ) |             |   | (18,101 | ) |  |   | (14,366 | ) |  |   | (21,994 | )

8



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##### Table of Contents



|                                                                                            |  |                   |        |             |  |             |        |             |  |             |        |  |  |  |        |  |  |  |        | 
|------------------------------------------------------------------------------------------- |  | ----------------- | ------ | ----------- |  | ----------- | ------ | ----------- |  | ----------- | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                                                                            |  |                  
|                                                                                            |  | Fiscal Year Ended
|                                                                                            |  |                  
|                                                                                            |  | October 26,       |        | October 27, |  | October 28, |        | October 30, |  | October 31,
|                                                                                            |  | 2002              |        | 2001        |  | 2000        |        | 1999        |  | 1998       
|                                                                                            |  |                   |        |             |  |             |        |             |  |            
|Depreciation, goodwill, identified intangibles,
    and deferred financing fee amortization |  |                   | 10,387 |             |  |             | 15,214 |             |  |             | 15,635 |  |  |  | 15,973 |  |  |  | 15,279 | 
|Capital expenditures                                                                        |  |                   | 1,785  |             |  |             | 1,885  |             |  |             | 3,025  |  |  |  | 6,050  |  |  |  | 5,610  | 
|Cash interest expense(d)                                                                    |  |                   | 19,376 |             |  |             | 22,394 |             |  |             | 23,503 |  |  |  | 23,069 |  |  |  | 20,040 | 
|Ratio of Adjusted EBITDA to cash interest expense                                           |  |                   | 1.9x   |             |  |             | 2.4x   |             |  |             | 1.8x   |  |  |  | 2.3x   |  |  |  | 2.8x   | 
|Ratio of earnings to fixed charges(e)                                                       |  |                   | 1.3x   |             |  |             | 1.6x   |             |  |             | 1.0x   |  |  |  | 1.4x   |  |  |  | 1.3x   | 



---



|    |                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Includes a dividend of $50.0 million to AT
    Holdings in fiscal 1999. These funds came from the issuance of
    $55.0 million in principal amount of 8 5/8% senior
    subordinate notes, issued at a 5% discount, due 2007.



|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(b) | Adjusted EBITDA represents income from operations
    plus non-cash charges as follows:

|                                                   |  |                   |        |             |  |             |        |             |  |             |        |  |  |   |        |  |  |   |        | 
|-------------------------------------------------- |  | ----------------- | ------ | ----------- |  | ----------- | ------ | ----------- |  | ----------- | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                                   |  |                  
|                                                   |  | Fiscal Year Ended
|                                                   |  |                  
|                                                   |  | October 26,       |        | October 27, |  | October 28, |        | October 30, |  | October 31,
|                                                   |  | 2002              |        | 2001        |  | 2000        |        | 1999        |  | 1998       
|                                                   |  |                   |        |             |  |             |        |             |  |            
|Income from operations                             |  | $                 | 27,832 |             |  | $           | 38,159 |             |  | $           | 25,352 |  |  | $ | 33,846 |  |  | $ | 28,059 | 
|Depreciation, goodwill and intangible amortization |  |                   | 8,329  |             |  |             | 13,074 |             |  |             | 13,494 |  |  |   | 14,039 |  |  |   | 14,289 | 
|Compensation expense  ESOP                        |  |                   | 1,344  |             |  |             | 2,091  |             |  |             | 2,972  |  |  |   | 4,322  |  |  |   | 3,911  | 
|Write-off of inventory acquisition
    step-up     |  |                   |       |             |  |             |       |             |  |             | 155    |  |  |   | 77     |  |  |   | 10,681 | 
|                                                   |  |                   |        |             |  |             |        |             |  |             |        |  |  |   |        |  |  |   |        | 
|Adjusted EBITDA                                    |  | $                 | 37,505 |             |  | $           | 53,324 |             |  | $           | 41,973 |  |  | $ | 52,284 |  |  | $ | 56,940 | 
|                                                   |  |                   |        |             |  |             |        |             |  |             |        |  |  |   |        |  |  |   |        | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Our Adjusted EBITDA is not intended to represent
    cash flow from operations as defined by generally accepted
    accounting principles and should not be considered as an
    alternative to net income as an indicator of operating
    performance or to cash flow as a measure of liquidity. We have
    included information concerning Adjusted EBITDA because we
    understand that it is used by certain investors as one measure
    of a borrowers historical ability to service its debt.
    Adjusted EBITDA, as presented, may not be comparable to
    similarly titled measures reported by other companies, since not
    all companies necessarily calculate Adjusted EBITDA in an
    identical manner, and therefore is not necessarily an accurate
    means of comparison between companies.
|   
|(c) | Adjusted EBITDA margin is computed as Adjusted
    EBITDA as a percentage of net revenues.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           



|    |                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) | Cash interest expense represents interest expense
    less amortization of deferred financing fees of $2,058,000,
    $2,140,000, $2,141,000, $1,934,000 and $990,000, in the fiscal
    years ended October 26, 2002, October 27, 2001,
    October 28, 2000, October 30, 1999 and
    October 31, 1998, respectively.



|    |                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(e) | For purposes of determining the ratio of earnings
    available to cover fixed charges, earnings consist of income
    before taxes plus fixed charges. Fixed charges consist of
    interest on indebtedness including amortization of deferred
    financing fees and fixed loan guarantee fees.

9



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##### Table of Contents








|        |                                                                                           
|------- | ------------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of
    Financial Condition and Results of Operations.

Overview

We design, manufacture, sell and service high
performance fuel flow devices and systems for both aerospace and
general industrial applications. Argo-Tech operates in two
business segments, Aerospace and Industrial. The Aerospace
segment includes the design, manufacture, distribution, repair
and overhaul of aviation products throughout the world
consisting of aircraft engine fuel pumps, fuel flow related
products and systems found on a planes airframe, and
aerial refueling pumps and related equipment. The Industrial
segment includes the design, manufacture and distribution of
industrial pumps, ground fueling valves and related components,
industrial marine cryogenic pumps and nozzles for transferring
liquefied natural gas and operation of a business park in
Cleveland, Ohio where we maintain our headquarters and one of
our production facilities. Financial information by business
segment can be found in Note 12 to the consolidated
financial statements included elsewhere in this report.

In fiscal 2002, the Aerospace segment generated
approximately 78% of our net revenues and the Industrial segment
generated approximately 22% of our net revenues. Approximately
71% of the aerospace revenues were derived from sales to
commercial OEMs and commercial aftermarket customers, while
military revenues represented approximately 29% of our aerospace
revenues. Approximately 70% of the industrial revenues were
derived from sales to commercial customers, while military
customers represented approximately 30% of our industrial
revenues.

In fiscal 2002, sales to commercial OEMs
represented approximately 24% of our commercial aerospace
revenues. As is customary in the commercial aerospace industry,
we incur substantial costs, for which we are generally not
reimbursed, to design, test and qualify original equipment for
OEMs. Once qualified, OEM products generally are sold at or
below cost of production in anticipation of receiving orders for
commercial spare parts and overhaul activities at significantly
higher margins. Most of our OEM sales are on a sole source
basis; therefore, in most cases, we are the only OEM certified
provider of these parts in the aftermarket. Over the
approximately 30 year life cycle of an aircraft program,
commercial spare parts and overhaul activities for products we
manufacture often generate six or more times the aggregate net
revenues of the OEM program. We have over 50 years of
experience in most of our product lines which allows us to
benefit from a large and growing installed base.

In contrast to the practice in the commercial
aerospace industry, we are generally reimbursed for the design,
test and qualification costs of equipment used on military
aircraft. Military original equipment shipments generally are
sold at cost plus a reasonable profit. Due to lower aircraft
utilization, military aftermarket sales are less significant
than commercial aftermarket sales. Aftermarket margins for
military products are at a level higher than original equipment
shipments.

General

The following should be read together with
Selected Historical Financial and Other Data of Argo-Tech
Corporation and our Financial Statements and the related
notes included elsewhere in this report. Our fiscal year ends on
the last Saturday of October and is identified according to the
calendar year in which it ends. For example, the fiscal year
ended October 26, 2002 is referred to as fiscal
2002. The fiscal years ended October 26, 2002,
October 27, 2001 and October 28, 2000 consisted of
52 weeks.

ESOP

We established our Employee Stock Ownership Plan
(ESOP) in 1994 by purchasing 420,000 shares of common stock of
our parent company, AT Holdings Corporation, with the proceeds
of a $16.8 million ten-year loan funded through a credit
facility that was refinanced on July 18, 1997. The ESOP,
which includes approximately 240 of our salaried employees,
represents an ownership interest in AT Holdings of approximately
55%. GAAP requires that non-cash ESOP compensation expense and a
corresponding increase in stockholders equity be recorded
annually as shares held by the ESOP are allocated to
participants and the loan made to the ESOP is repaid. GAAP also
requires that this non-cash ESOP compensation expense be added
back to net income

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##### Table of Contents



in the determination of cash flow from
operations. The aggregate amount of such non-cash ESOP
compensation expense was $1.3 million, $2.1 million
and $3.0 million for the fiscal years ended
October 26, 2002, October 27, 2001 and
October 28, 2000, respectively.


Export Sales

Substantially all of our export sales are
denominated in U.S. dollars. Export sales for fiscal years 2002,
2001 and 2000 were $68.6 million, $80.8 million and
$70.5 million, respectively. Sales to Europe were
$28.0 million, $35.0 million and $31.1 million.
Export sales to all other regions, individually less than 10%,
were $40.6 million, $45.8 million and
$39.4 million for fiscal years 2002, 2001 and 2000,
respectively.

Critical Accounting Policies

Argo-Techs consolidated financial
statements reflect the selection and application of accounting
policies that require management to make significant estimates
and assumptions. These estimates and assumptions are an integral
part of our consolidated financial statements and are based on
our knowledge and experience about past and current events.
Accounting policies that we believe are most critical to our
financial condition and operating results pertain to the
valuation of accounts receivable, inventory, valuation of excess
and obsolete inventory, goodwill, intangible assets and revenue
recognition. Argo-Techs significant accounting policies
are described in Note 2 to the consolidated financial
statements included elsewhere in this report.

Subsequent Event

On January 24, 2003 Argo-Tech amended and
restated its credit facility to allow for the re-amortization of
the outstanding balance of the Term Loans, amending the
Consolidated Interest Coverage Ratio for the remainder of the
agreement, adjusting the supplemental percentage of interest
applied to an Alternate Base Rate (ABR) or LIBOR, changing
the commitment fee rate, increasing the Letter of Credit
sublimit in the revolving credit facility to an amount not to
exceed $5,000,000 and establishing a borrowing base covenant on
revolving credit borrowings in excess of $10.0 million and
a fixed charge coverage ratio. The maturities of
Argo-Techs term loans are now as follows:
$16.0 million, $12.0 million and $13.9 million
for fiscal years 2003, 2004 and 2005, respectively. Pursuant to
the agreement, Argo-Tech has the right to choose an ABR or LIBOR
loan. The supplemental percentage of interest applied to our ABR
or LIBOR loan is based on the Leverage ratio, as defined by the
ratio of total debt to EBITDA. The supplemental percentage of
interest is now:

|                                                  |  |             |      |                    |  |                      |      |  |  |  |      | 
|------------------------------------------------- |  | ----------- | ---- | ------------------ |  | -------------------- | ---- |  |  |  | ---- | 
|Leverage ratio:                                   |  | ABR spread: |      | Eurodollar Spread: |  | Commitment Fee Rate:
|                                                  |  |             |      |                    |  |                     
|Greater than or Equal to 6.00                     |  |             | 2.50 |                    |  |                      | 3.50 |  |  |  | 0.75 | 
|Greater than or Equal to 4.00, but Less than 6.00 |  |             | 2.25 |                    |  |                      | 3.25 |  |  |  | 0.50 | 
|Less than 4.00                                    |  |             | 1.75 |                    |  |                      | 2.75 |  |  |  | 0.50 | 

Recent Developments

Following the September 11, 2001 terrorist
attacks, the aerospace industry experienced a significant
downturn in both the OEM and aftermarket sectors. The major
commercial airlines have reduced their flying capacity up to 20%
by retiring older aircraft in their fleet, parking underutilized
aircraft and canceling or delaying the delivery of new aircraft.
The OEM build rates of new commercial aircraft have been reduced
due to the airlines cancellation or delay of delivery of
new aircraft. The reduction of flying capacity and the
retirement of older aircraft has reduced the need for
aftermarket services. It is anticipated that OEM build rates
will continue to decline into 2004 before increasing, which is
estimated to occur in 2005. We anticipate aftermarket activities
will begin to recover in the latter part of 2003. We anticipate
increased Industrial revenues in 2003 primarily due to increased
demand for our ground fueling and cryogenic products.

Our fiscal year 2003 revenues and cash flows are
forecasted to be higher than fiscal year 2002 and Management
believes that we will be able to maintain our liquidity and
remain in compliance with our debt covenants.

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##### Table of Contents



This section includes forward-looking statements
within the meaning of Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act of 1934, as
amended. There can be no assurances that the Companys
current outlook will prove to be correct.

Results of Operations

The following table presents, for the periods
indicated, selected items in our consolidated statements of
income as a percentage of net revenues.

|                               |  |                   |       |                  |  |                  |       |   |  |  |       |   
|------------------------------ |  | ----------------- | ----- | ---------------- |  | ---------------- | ----- | - |  |  | ----- | --
|                               |  |                  
|                               |  | Fiscal Year Ended
|                               |  |                  
|                               |  | October 26, 2002  |       | October 27, 2001 |  | October 28, 2000
|                               |  |                   |       |                  |  |                 
|Net revenues                   |  |                   | 100.0 | %                |  |                  | 100.0 | % |  |  | 100.0 | % 
|Gross profit                   |  |                   | 42.9  | %                |  |                  | 45.6  | % |  |  | 42.0  | % 
|Operating expenses             |  |                   | 25.0  | %                |  |                  | 23.6  | % |  |  | 26.1  | % 
|Income from operations         |  |                   | 17.9  | %                |  |                  | 22.0  | % |  |  | 15.9  | % 
|Interest expense               |  |                   | 13.7  | %                |  |                  | 14.1  | % |  |  | 16.1  | % 
|Other, net                     |  |                   | 0.0   | %                |  |                  | 0.0   | % |  |  | (0.3  | )%
|Income before income taxes     |  |                   | 4.2   | %                |  |                  | 7.9   | % |  |  | 0.1   | % 
|Income tax provision (benefit) |  |                   | 0.4   | %                |  |                  | 1.7   | % |  |  | (0.3  | )%
|Net income                     |  |                   | 3.8   | %                |  |                  | 6.2   | % |  |  | 0.4   | % 

Fiscal 2002 Compared with Fiscal
2001

Net revenues for fiscal 2002 decreased
$17.9 million, or 10.3%, to $155.3 million from
$173.2 million for fiscal 2001. This change was due to a
decrease in aerospace revenues of $21.1 million and a
$3.2 million increase in industrial and other revenues. The
decrease in aerospace revenues was attributable to a decrease of
$29.9 million in commercial revenues and an increase of
$8.8 million in military revenues. Commercial
OEM revenues decreased $10.0 million, or 32.6%, to
$20.8 million and commercial aftermarket revenues decreased
$19.9 million, or 23.3%, to $65.2 million. Commercial
OEM revenues declined as a result of lower overall engine
requirements from our customers in response to decreasing
aircraft build rates. Commercial aftermarket revenues were lower
primarily due to a decrease in the demand for spare part sales
and repair and overhaul activities. The lower demand for
aftermarket sales and activities is a result of the reduced
flying by commercial airlines, the availability of spare parts
taken from parked aircraft and deferral of maintenance. Military
revenues increased 33.8% primarily due to revenue related to
increased sales of KC-135 aerial refueling pumps, F-16 and F-22
airframe components, F-18E/ F 480 gallon fuel tank
components and higher sales of aftermarket parts and overhaul
activities on a variety of aerial refueling and airframe
programs. Industrial revenues increased $3.2 million,
primarily due to an increase in ground fueling and cryogenic
pump and nozzle revenues offset by a decrease in industrial gas
turbine revenues. Approximately 44.2% of fiscal 2002 net
revenues were attributable to export sales to foreign customers
compared to 46.6% in fiscal 2001. Substantially all such sales
were denominated in U.S. dollars.

Aerospace gross profit for fiscal 2002 decreased
$14.4 million, or 20.8%, to $54.9 million from
$69.3 million for fiscal 2001. Gross margin decreased to
45.4% for fiscal 2002 from 48.8% for fiscal 2001. The decrease
in gross profit and gross margin is primarily attributable to
the decreased sales of higher margin commercial aerospace
aftermarket revenues, a $0.6 million provision for
potential losses for inventory on hand and termination claims
relating to the bankruptcy of a former airframe customer, and
lower absorption of fixed manufacturing overhead. Industrial
gross profit for fiscal 2002 increased $2.8 million, or
29.2%, to $12.4 million from $9.6 million for fiscal
2001. Gross margin increased to 36.1% from 30.9% for fiscal
2001. The increase in gross profit and gross margin is primarily
attributable to the favorable mix of higher margin ground
fueling revenues.

Operating expenses for fiscal 2002 decreased
$2.1 million, or 5.1% to $38.8 million from
$40.9 million in fiscal 2001. This decrease is primarily
attributable to the cessation of goodwill and workforce in place
amortization of $3.8 million as a result of adopting SFAS
No. 142 on October 28, 2001, offset by an increase in

12



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##### Table of Contents



research and development expenses of
$1.4 million and selling, general and administrative
expenses of $0.3, which includes a non-cash expense of
$0.6 million related to a salaried employee early
retirement program. Operating expenses as a percent of revenues
increased to 25.0% for fiscal 2002 from 23.6% in fiscal 2001.


Income from operations for fiscal 2002 decreased
$10.3 million, or 27.0%, to $27.8 million from
$38.1 million for fiscal 2001 and decreased as a percentage
of net revenues to 17.9% in fiscal 2002 from 22.0% in fiscal
2001. These decreases were due to the decrease in higher margin
commercial aerospace aftermarket revenues, a $0.6 million
provision for potential losses for inventory on hand and
termination claims relating to the bankruptcy of a former
airframe customer, and lower absorption of fixed manufacturing
overhead offset by an increase in industrial revenues and lower
operating expenses discussed above.

Interest expense for fiscal 2002 decreased
$3.1 million, or 12.7%, to $21.4 million from
$24.5 million for fiscal 2001 due to lower outstanding
borrowings and lower interest rates on the term loans.

The income tax provision for fiscal 2002
decreased $2.3 million, or 79.3%, to $0.6 million from
$2.9 million in fiscal 2001. This decrease is primarily due
to a lower pre-tax income of $6.5 million for fiscal 2002
as compared to $13.7 million for fiscal 2001. A
reconciliation of the income tax provision can be found in
Note 10 to the consolidated financial statements included
elsewhere in this report.

Net income for fiscal 2002 decreased
$4.9 million to $5.9 million from $10.8 million
for fiscal 2001 primarily due to the revenue and expense factors
discussed above.

Fiscal 2001 Compared with Fiscal
2000

Net revenues for fiscal 2001 increased
$13.9 million, or 8.7%, to $173.2 million from
$159.3 million for fiscal 2000. This change was due to an
increase in aerospace revenues of $12.6 million and a
$1.3 million increase in industrial and other revenues. The
increase in aerospace revenues was attributable to an increase
of $10.9 million in commercial revenue and an increase of
$1.7 million in military revenues. Commercial OEM revenues
decreased $0.8 million, or 2.5%, to $30.7 million and
commercial aftermarket revenues increased $11.7 million, or
15.9%, to $85.2 million. Commercial OEM revenues
declined as a result of lower overall engine requirements from
our customers, while commercial aftermarket revenues were higher
primarily due to an increase in spare parts and overhaul
activities for the JT8, JT9 and CFM56 engine programs. Military
revenues increased primarily due to revenue related to increased
sales of F-15, F-16 and F-22 airframe components. Industrial
revenues increased $1.3 million, primarily due to increased
industrial gas turbine revenues offset by a decrease in
cryogenic pump revenues. Approximately 46.6% of fiscal 2001 net
revenues were attributable to export sales to foreign customers
compared to 44.2% in fiscal 2000. Substantially all such sales
were denominated in U.S. dollars.

Aerospace gross profit for fiscal 2001 increased
$9.1 million, or 15.1%, to $69.2 million from
$60.1 million for fiscal 2000. Gross margin increased to
48.8% for fiscal 2001 from 46.4% for fiscal 2000. The increase
in gross profit and gross margin is primarily attributable to
the increased sales of higher margin commercial aftermarket
aerospace products. Industrial gross profit for fiscal 2001
increased $1.1 million, or 12.9%, to $9.6 million from
$8.5 million for fiscal 2000. Gross margin increased to
30.9% for fiscal 2001 from 28.4% in fiscal 2000. The increase in
gross profit and gross margin is primarily attributable to the
increase in industrial gas turbine revenues and the decrease in
cryogenic pump revenues.

Operating expenses for fiscal 2001 decreased
$0.6 million, or 1.4% to $40.9 million from
$41.5 million in fiscal 2000. This decrease is primarily
attributable to the non-recurrence of $2.0 million in new
business development investments which were made in fiscal 2000
offset by a non-cash charge to compensation expense of
$0.5 million resulting from an extension of the termination
date for certain stock option plans and an increase of
$0.7 million in research and development expense. Operating
expenses as a percent of revenues decreased to 23.6% for fiscal
2001 from 26.1% in fiscal 2000.

Income from operations for fiscal 2001 increased
$12.8 million, or 50.6%, to $38.1 million from
$25.3 million for fiscal 2000 and increased as a percentage
of net revenues to 22.0% in fiscal 2001 from 15.9% in fiscal
2000. These increases were due to the increased sales of higher
margin aerospace products and the decrease in operating expenses
discussed above.

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Interest expense for fiscal 2001 decreased
$1.1 million, or 4.3%, to $24.5 million from
$25.6 million for fiscal 2000 due to lower outstanding
borrowings and slightly lower interest rates on the term loans.

The income tax provision for fiscal 2001
increased $3.5 million to an expense of $2.9 million
from a benefit of $0.6 million in fiscal 2000. This
increase is due to a higher pre-tax income of $13.7 million
for fiscal 2001 as compared to $0.1 million for fiscal 2000
and the non-recurrence of a favorable adjustment of prior years
tax accrual primarily due to an increased benefit of the foreign
sales corporation offset by the recognition of the benefit
realized in the current year of research and development tax
credit claims related to prior years.

Net income for fiscal 2001 increased
$10.1 million to $10.8 million from $0.7 million
for fiscal 2000 primarily due to the revenue and expense factors
discussed above.

Liquidity and Capital Resources

We are a holding company and receive all of our
operating income from our subsidiaries. As a result, our primary
source of liquidity for conducting business activities and
servicing our indebtedness has been cash flows from our
subsidiaries operating activities.

In September 1997, we amended our credit facility
to allow for the acquisition of Argo-Tech Corporation Costa Mesa
and the issuance of $140.0 million of 8 5/8% senior
subordinated notes. The amended credit facility consists of a
seven-year $115.0 million term loan and a seven-year
$20.0 million revolving credit facility. As of
October 26, 2002, we have $41.8 million principal
amount of term loans outstanding under this amended credit
facility. We also have available, after $0.5 million of
letters of credit, $19.5 million of the seven-year
$20.0 million revolving credit facility. The unused balance
of the revolving credit facility is subject to a .50% commitment
fee. Our credit facility contains a number of covenants that,
among other things, limit our ability to incur additional
indebtedness, pay dividends, prepay subordinate indebtedness,
dispose of certain assets, create liens, make capital
expenditures, make certain investments or acquisitions and
otherwise restrict corporate activities. It also requires us to
comply with certain financial ratios and tests, under which we
will be required to achieve certain financial and operating
results. On October 26, 2002, the consolidated interest
coverage ratio for the fiscal quarter ending October 26,
2002 in the credit facility was amended, primarily to adjust for
the decrease in consolidated earnings before interest, taxes,
depreciation and amortization. In addition, the supplemental
percentage of interest applied to an Alternate Base Rate or
LIBOR, as chosen by the Company, was increased .25%. The credit
facility contains no restrictions on the ability of our
subsidiaries to make distributions to us. Interest is
calculated, at our choice, using an Alternate Base Rate
(ABR) or LIBOR, plus a supplemental percentage
determined by the ratio of total debt to EBITDA. The interest
rate for fiscal year 2002 ranged from 0.75% to 1.50% plus ABR or
1.75% to 2.50% plus LIBOR. Our credit agreement was amended on
January 24, 2003. See Subsequent Event for more
information.

In September 1997 we issued $140 million of
senior subordinated notes, together with a portion of the
borrowings under our credit facility, to finance the acquisition
of Argo-Tech Corporation Costa Mesa, repay in full
$46.1 million in notes payable and subordinated notes, and
to pay related fees and expenses. The senior subordinated notes
bear interest at a rate of 8 5/8% per year, payable on each
April 1 and October 1. Interest payments commenced on
April 1, 1998. These notes have been jointly, severally,
fully and unconditionally guaranteed by all of our wholly owned
subsidiaries. The indenture under which these senior
subordinated notes were issued contains certain optional and
mandatory redemption features and other customary financial
covenants and restrictions.

On December 17, 1998, we issued
$55.0 million in principal amount of 8 5/8% senior
subordinated notes, issued at a 5% discount, due 2007,
$50.0 million of which was dividended to AT Holdings. The
proceeds from the offering, along with the proceeds of the
issuance by AT Holdings of 30,000 shares of its preferred
stock to Chase Venture Capital Associates, L.P. and cash on
hand, were used to repurchase 639,510 shares of stock from
AT Holdings, LLC, the Companys largest shareholder,
for $79.4 million plus transaction expenses. At
October 26, 2002 the accreted value of this offering was
$53.2 million.

Argo-Tech does not enter into derivative
contracts for trading or speculative purposes. We have no other
derivative financial instruments.

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Cash Flows from Operating Activities.Cash provided by operating activities
for fiscal 2002 increased $12.6 million to
$30.7 million primarily as a result of a decrease in
receivables and inventory. Cash provided by operating activities
for fiscal 2001 decreased $4.3 million to
$18.1 million primarily as a result of an increase in
receivables offset by improved operating results. The increase
in receivables includes a $3.9 million income tax
receivable as a result of amending previous years tax
returns for additional research and development tax credits.
Cash provided by operating activities for fiscal 2000 increased
$7.1 million to $22.4 million primarily as a result of
a decrease in accounts receivable and inventory offset by a
decrease in operating results and accounts payable.

Cash Flows from Investing Activities.Net cash used in investing activities
was $1.8 million, $1.9 million and $3.0 million
for fiscal years 2002, 2001 and 2000, respectively, for
expenditures for the purchase of property, plant and equipment.
These expenditures reflect a normal amount of capital
investments necessary to maintain our efficiency and
manufacturing capabilities.

Cash Flows from Financing Activities.Cash used in financing activities for
fiscal 2002 was $19.2 million, which was primarily used to
make scheduled repayments of long-term debt and for
AT Holdings repurchase of common stock from various
former employees. Cash used in financing activities for fiscal
2001 was $13.3 million, which was primarily used to make
scheduled repayments of long-term debt and for
AT Holdings repurchase of common stock from various
former employees. Cash used in financing activities for fiscal
2000 was $18.1 million, which was primarily used to make
scheduled and voluntary repayments of long-term debt and for
AT Holdings repurchase of common stock from various
former employees.

Capital Expenditures.Our capital expenditures for fiscal
2002 totaled $1.8 million, which were related to
maintaining existing facilities and equipment and systems to
support current operating activities. For fiscal 2003, we
estimate that capital expenditures will total $4.4 million.
The majority of these projects will be for continued maintenance
of facilities and equipment in support of our current operating
activities. Capital expenditures are financed with cash
generated from operations. We currently have no material
commitments for capital expenditures.

Our expected future contractual cash obligations
and other commercial commitments for the next five years are as
follows:

|                                   |  |      |      |      |  |      |      |      |  |      |      |  |  |   |  |  |  |   |       | 
|---------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | ---- |  | ---- | ---- |  |  | - |  |  |  | - | ----- | 
|                                   |  | 2003 |      | 2004 |  | 2005 |      | 2006 |  | 2007
|                                   |  |      |      |      |  |      |      |      |  |     
|Contractual Obligations:           |  |      |      |      |  |      |      |      |  |      |      |  |  |   |  |  |  |   |       | 
|Long Term Debt                     |  | $    | 16.0 |      |  | $    | 12.0 |      |  | $    | 13.9 |  |  | $ |  |  |  | $ | 195.0 | 
|Operating Leases                   |  |      | 0.3  |      |  |      | 0.3  |      |  |      |      |  |  |   |  |  |  |   |       | 
|                                   |  |      |      |      |  |      |      |      |  |      |      |  |  |   |  |  |  |   |       | 
|Total Contractual Cash Obligations |  | $    | 16.3 |      |  | $    | 12.3 |      |  | $    | 13.9 |  |  | $ |  |  |  | $ | 195.0 | 
|                                   |  |      |      |      |  |      |      |      |  |      |      |  |  |   |  |  |  |   |       | 

We believe that cash flow from operations will
provide adequate funds for our working capital needs, planned
capital expenditures and debt service obligations. Our ability
to fund our operations, make planned capital expenditures, and
to make scheduled payments on our indebtedness depends on our
future operating performance and cash flow. We may need to
refinance all or a portion of its indebtedness on or before
maturity. There can be no assurance that Argo-Tech will be able
to refinance any of its indebtedness on commercially reasonable
terms or at all. These items are subject to prevailing
conditions and to financial, business, and other factors, some
of which are beyond our control.

New Accounting Standards

In June 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards
(SFAS) No. 143, Accounting for Asset Retirement
Obligations. This statement requires entities to record
the fair value of a liability for an asset retirement obligation
in the period in which it is incurred. The amount recorded as a
liability will be capitalized by increasing the carrying amount
of the related long-lived asset. Subsequent to initial
measurement, the liability is accreted to the ultimate amount
anticipated to be paid and is also adjusted for revisions to the
timing of the amount of estimated cash flows. The capitalized
cost is depreciated over the useful life of the related asset.
Upon settlement of the liability, an entity either settles the

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obligation for its recorded amount or incurs a
gain or loss upon settlement. The provisions of this statement
become effective for our fiscal year beginning October 27,
2002. Management has determined that this statement will not
have any impact on our consolidated financial statements upon
initial adoption.


In August 2001, the FASB issued SFAS 144,
Accounting for the Impairment or Disposal of Long Lived
Assets. This statement improves the financial reporting by
requiring that one accounting model be used for long-lived
assets to be disposed of by sale, whether previously held and
used or newly acquired, and by broadening the presentation of
discontinued operations to include more disposal transactions.
The provisions of this statement become effective for our fiscal
year beginning October 27, 2002. Management has determined
that this statement will not have any impact on our consolidated
financial statements upon initial adoption.

In June 2002, the FASB issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities. This statement requires that a liability for a
cost associated with an exit or disposal activity be recognized
when the liability is incurred. The provisions of this statement
are effective for exit or disposal activities that are initiated
after December 31, 2002. Management has not determined the
impact, if any, that this statement will have on our
consolidated financial statements.

In November 2002, the FASB issued FASB
Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of
Others. FIN 45 requires that a liability be recorded in
the guarantors balance sheet upon issuance of a guarantee.
In addition, FIN 45 requires disclosures about the
guarantees that an entity has issued, including a rollforward of
the entitys product warranty liabilities. Argo-Tech will
apply the recognition provisions of FIN 45 prospectively to
guarantees issued after December 31, 2002. The disclosure
provisions of FIN 45 are effective for financial statements
for the first quarter of our fiscal year 2003. We are currently
in the process of evaluating the potential impact that the
adoption of FIN 45 will have on our consolidated financial
statements.

Risk Factors

From time to time, information we provide,
statements by our employees or information included in our
filings with the Securities and Exchange Commission (including
those portions of the Managements Discussion and Analysis
that refer to the future) may contain forward-looking statements
that are not historical facts. Those statements are
forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements, and our future performance, operating results,
financial position and liquidity, are subject to a variety of
factors that could materially affect results, including:

The aerospace industry is a highly regulated,
highly competitive industry.

The following risk factors describe the risks
associated with the aerospace industry generally:



| |   |                                    
| | - | -----------------------------------
| |  | The aerospace industry is cyclical.

The majority of our fiscal 2002 gross profit and
operating income was derived from sales of products to the
aerospace industry. The commercial aerospace industry is
cyclical and has historically been subject to fluctuations due
to general economic conditions and incidents. On
September 11, 2001, the United States was subjected to
terrorist attacks which involved the hijacking of four
U.S. commercial aircraft. In the aftermath of the terrorist
attacks, passenger traffic on commercial flights has been
significantly lower than prior to the attacks. Most commercial
airlines reduced their operating schedules and lowered fares.
Consequently, fewer people are flying and those who are flying
are paying less to do so. The overall result has been large and
continuing financial losses in the airline industry. Major
carriers around the world have filed for bankruptcy. In
addition, there is a possibility that, in connection with the
War on Terrorism, the United States may go to war
with Iraq. This could result in further reductions in airline
travel.

The future impact of these events is impossible
to fully evaluate. Continuing losses in the airline industry
have resulted, and will continue to result, in reduced orders
and delivery delays of new commercial aircraft, retirement of
older aircraft (eliminating those aircraft from maintenance
needs and making spare parts from those aircraft available), and
delays in airlines purchases of aftermarket parts as
maintenance is deferred. This could

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continue to result in decreases in our Aerospace
segment sales of OEM and aftermarket components and negatively
affect our income and cash flow.




| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| |  | The aerospace industry is subject to
    government regulation and oversight.

The aerospace industry is highly regulated in the
United States and in other countries. We must be certified or
accepted by the Federal Aviation Administration, the
U.S. Department of Defense and similar agencies in foreign
countries and by individual OEMs in order to sell and service
parts and components used in specific aircraft models. If
material certifications, authorizations or approvals were
revoked or suspended, our operations would be adversely
affected. In the future, new and more demanding government
regulations may be adopted or industry oversight may be
increased, which may have an adverse effect on our profitability.



| |   |                                                  
| | - | -------------------------------------------------
| |  | The aerospace industry is highly
    competitive.

The aerospace industry is a highly competitive
global industry which has experienced significant consolidation
in recent years. Our competitors are typically divisions of
large corporations that have significantly greater financial
resources than we do.



| |   |                                                                  
| | - | -----------------------------------------------------------------
| |  | There are a limited number of customers for
    certain products.

Due to the relatively small number of customers
in the aerospace industry, customers, particularly OEM
customers, are often able to influence prices and other terms of
sale for certain of our products. This influence can have a
material adverse effect on our profitability, as would the loss
of one or more of these significant customers.



| |   |                                                                        
| | - | -----------------------------------------------------------------------
| |  | Government Contracts are subject to reductions
    in defense spending.

Approximately 30% of our sales in fiscal 2002
were related to U.S. designed military products. In addition,
foreign military sales are affected by U.S. government
regulations, regulations by the purchasing foreign government
and political uncertainties in the U.S. and abroad. The
U.S. defense budget has fluctuated in recent years.
Although we have experienced increased sales as a result of
military actions in Afghanistan, and could see increased sales
in the event of a war with Iraq, there can be no assurance that
the U.S. defense budget will not decline or that sales of
defense related items to foreign governments will continue at
present levels. In addition, the terms of defense contracts with
the U.S. government generally permit the government to
terminate contracts, with or without cause, at any time. Any
unexpected termination of a significant government contract
could have an adverse effect on our business and profitability.

Risks Associated with our
Operations.



| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| |  | Our substantial indebtedness could adversely
    affect our financial health.

We have a significant amount of indebtedness. Our
ability to generate cash in the future, is, to a certain extent,
subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond our
control. The balance between our ability to generate cash and
our substantial indebtedness could have important consequences.
For example, it could:



| |   |                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | increase our vulnerability to general adverse
    economic and industry conditions,                                                                                                                                                                                                    
|
| |  | limit our ability to fund future working capital,
    capital expenditures, research and development costs and other
    general corporate requirements,                                                                                                                               
|
| |  | require us to dedicate a substantial portion of
    our cash flow to payments on our indebtedness, thereby reducing
    the availability of our cash flow to fund working capital,
    capital expenditures, research and development efforts and other
    general corporate purposes,
|
| |  | limit our flexibility in planning for, or
    reacting to, changes in our business and the industry in which
    we operate,                                                                                                                                                           
|
| |  | place us at a competitive disadvantage compared
    to our competitors that have less debt, and                                                                                                                                                                                        
|
| |  | limit, along with the financial and other
    restrictive covenants in our indebtedness, among other things,
    our ability to borrow additional funds.                                                                                                                               

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Based upon the current level of operations and
absent any unanticipated disruptive events, we believe our cash
flow from operations and available cash, together with available
borrowings under our $20.0 million revolving credit
facility, will be fully adequate to meet our future liquidity
needs. This cannot be assured, however.



| |   |                                                                    
| | - | -------------------------------------------------------------------
| |  | We depend on the skill and experience of our
    senior executives.

Our success depends upon the efforts, abilities,
experience and expertise of the executive officers of our senior
management team. The loss of services of those individuals and
or other key employees could have a material adverse effect on
our company.



| |   |                                                              
| | - | -------------------------------------------------------------
| |  | Our operations depend on maintaining a skilled
    workforce.

Our operations are highly dependent on an
educated and trained workforce. All of our hourly employees at
the Cleveland facility are represented by the United Auto
Workers union. Because we maintain a relatively small inventory
of finished goods, and because the aerospace industry operates
on relatively long production lead times, any interruption of
the work force due to strikes, work stoppages, shortages of
appropriately skilled production and professional workers or
other interruption could have a material adverse effect on our
business and results of operations.



| |   |                                                                         
| | - | ------------------------------------------------------------------------
| |  | We depend on suppliers for essential materials
    used in our products.

Our profitability is affected by the price and
continuity of supply of raw materials and component parts. Like
all other aerospace fuel pump manufacturers, we rely on one
supplier for CPM-10V, a powdered metal used in the manufacture
of certain pump components. If that supply ceased to exist, our
ability to operate would be adversely affected. We could also be
adversely affected by factors affecting our suppliers, or by
increased costs associated with supplied materials or components
if we are unable to make corresponding increases in the prices
of our products. We maintain a relatively small inventory of raw
materials and component parts and could be adversely affected by
a reduction of supply from vendors. Although we believe that
alternative suppliers, or alternate materials or components,
could be identified, the lengthy and expensive FAA and OEM
certification process associated with aerospace products could
prevent efficient replacement of a material or supplier and
could have a material adverse effect on our business and
profitability.



| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | We depend on our Cleveland, Ohio and Costa
    Mesa, California facilities.

We believe that our success to date has been, and
future results of operations will be, dependent in large part
upon our ability to manufacture and deliver products promptly
upon receipt of orders and to provide prompt and efficient
service to our customers. As a result, any disruption of our
day-to-day operations could have a material adverse effect on
our business, customer relations and profitability. The
Cleveland, Ohio and Costa Mesa, California facilities are the
primary production, research and marketing facilities for our
products and the Cleveland facility also serves as our corporate
headquarters. A fire, flood, earthquake or other disaster or
condition affecting either of these facilities could disable
these functions which are critical to our business. Any such
damage to, or other condition interfering with the operation of,
these facilities would have a material adverse effect on our
business, financial position and results of operations.



| |   |                                                             
| | - | ------------------------------------------------------------
| |  | We have potential exposure to environmental
    liabilities.

Our business operations and facilities are
subject to a number of federal, state and local laws and
regulations, which govern the discharge of pollutants and
hazardous substances into the air and water as well as the
handling, storage and disposal of such materials. Under certain
environmental laws, as a current or previous owner or operator
of real property, we could be held liable for the costs of
removal or remediation of hazardous substances found on the
property. Environmental laws typically impose liability whether
or not the owner or operator knew of, or was responsible for,
the presence of such hazardous substances.

Our Cleveland and Costa Mesa facilities are
currently the subject of environmental remediation regarding
contamination resulting from the operations of our predecessors.
Those predecessors have indemnified us for substantially all
costs of remediation at each site. There can be no assurance,
however, that those parties will continue to satisfy their
indemnification obligations or that we would not be ultimately
responsible as owner

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##### Table of Contents



and/or operator of either or both of these sites
for potentially significant remediation costs. Moreover, there
can be no assurance that future changes in environmental laws or
the nature of our operations will not require us to make
significant additional expenditures to ensure future
environmental compliance.




| |   |                                                          
| | - | ---------------------------------------------------------
| |  | We have a potential risk of product liability
    claims.

While we have never been a defendant in a product
liability case involving our aerospace or ground fueling
products, our operations expose us to potential liabilities for
personal injury or death as a result of the failure of an
aircraft component that has been designed, manufactured or
serviced by us, or the irregularity of metal products we have
processed or distributed. We believe that our liability
insurance is adequate to protect us from future product
liability claims. However, there can be no assurance that if
claims were to arise, our insurance coverage will be adequate.






|         |                                                                
|-------- | ---------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About
    Market Risk.

In the ordinary course of operations,
Argo-Techs major market risk exposure is to changing
interest rates. Argo-Techs exposure to changes in interest
rates relates primarily to its long term debt obligations. At
October 26, 2002, Argo-Tech had fixed rate debt totaling
$195 million, including $2.9 million of accretion, at
8.625% and variable rate debt under its existing credit facility
of $41.9 million calculated at Argo-Techs choice
using an alternate base rate (ABR) or LIBOR, plus a supplemental
percentage determined by the ratio of debt to EBITDA. The
variable rate is not to exceed ABR plus 1.75% or LIBOR plus
2.75%. Argo-Tech does not enter into derivative contracts for
trading or speculative purposes. A 10% fluctuation in interest
rates would not materially affect Argo-Techs financial
condition, results of operations or cash flows. See
Subsequent Event found elsewhere in this report.






|        |                                                 
|------- | ------------------------------------------------
|Item 8. | Financial Statements and Supplementary
    Data.

The response to this item is submitted in a
separate section of this report following the signature page.






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants
    on Accounting and Financial Disclosure.

There were no changes in, or disagreements with,
accountants on accounting and financial disclosure.

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##### Table of Contents






PART III






|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of
    Argo-Tech.

Directors and Executive Officers.The following table sets forth certain
information concerning our directors and executive officers.
Directors serve until their successors are elected at each
annual meeting. Officers hold office until their successors are
elected and qualified.

|                     |  |     |    |          |  |                                                          
|-------------------- |  | --- | -- | -------- |  | ---------------------------------------------------------
|Name                 |  | Age |    | Position
|                     |  |     |    |         
|Michael S. Lipscomb  |  |     | 56 |          |  | Chairman, President & CEO, Director                      
|Paul R. Keen         |  |     | 53 |          |  | Vice President, General Counsel &
    Secretary, Director
|Frances S. St. Clair |  |     | 47 |          |  | Vice President and CFO, Director                         

Michael S. Lipscombhas been Chairman,
President & Chief Executive Officer since 1994.
Mr. Lipscomb joined TRWs corporate staff in February
1981 and was made Director of Operations for the Power
Accessories Division in 1985. Mr. Lipscomb was named Vice
President of Operations when Argo-Tech was formed in 1986,
becoming President in 1990 and Chairman in 1994.
Mr. Lipscomb has also served as a director of Argo-Tech and
AT Holdings Corporation since 1990.

Paul R. Keenhas been Vice President, General
Counsel and Secretary since 1990. Mr. Keen was named Vice
President and General Counsel in 1987, and became Secretary in
December 1990. Prior to 1987, he spent the majority of his
career with TRW as Senior Counsel, Securities and Finance and as
primary legal counsel to two operating groups. Mr. Keen
joined the Board of Directors of Argo-Tech in April 1999.

Frances S. St. Clairhas been Vice President and Chief
Financial Officer since 1992. Ms. St. Clair joined the
Company in 1991 as Controller and was promoted to Vice President
and Controller in November 1991. Ms. St. Clair received her
C.P.A. certification in 1984. Ms. St. Clair joined the
Board of Directors of Argo-Tech in April 1999 and joined the
Board of Directors of AT Holdings Corporation in September
2001.






|         |                        
|-------- | -----------------------
|Item 11. | Executive Compensation.

The following table sets forth, for the fiscal
years 2002, 2001 and 2000, certain information about the
compensation paid to the Chief Executive Officer and each of our
other executive officers (the Named Executives).

|                            |                                 |                     |      |           |      |       |         |                    |         |   |         |         |        |   |        |        |       | 
|--------------------------- | ------------------------------- | ------------------- | ---- | --------- | ---- | ----- | ------- | ------------------ | ------- | - | ------- | ------- | ------ | - | ------ | ------ | ----- | 
|                            |                                 |                     |      |          
|                            |                                 | Annual Compensation |      |          
|                            |                                 |                     |      | All Other
|Name and Principal Position |                                 | Fiscal Year         |      | Salary    |      | Bonus |         | Compensation(1)(2)
|                            |                                 |                     |      |           |      |       |         |                   
|Michael S. Lipscomb         |                                 |                     | 2002 |           |      | $     | 419,193 |                    |         | $ | 272,475 |         |        | $ | 46,458 |       
|                            | Chairman, President and CEO     |                     |      | 2001      |      |       | $       | 419,193            |         |   | $       | 194,625 |        |   | $      | 46,414 |      
|                            |                                 |                     | 2000 |           |      | $     | 397,777 |                    |         | $ | 209,306 |         |        | $ | 48,323 |       
|Paul R. Keen                |                                 |                     | 2002 |           |      | $     | 232,530 |                    |         | $ | 104,639 |         |        | $ | 5,759  |       
|                            | Vice President, General Counsel |                     |      | 2001      |      |       | $       | 232,530            |         |   | $       | 75,459  |        |   | $      | 6,013  |      
|                            |                                 | and Secretary       |      |           | 2000 |       |         | $                  | 222,768 |   |         | $       | 78,303 |   |        | $      | 6,073 | 
|Frances S. St. Clair        |                                 |                     | 2002 |           |      | $     | 200,016 |                    |         | $ | 90,007  |         |        | $ | 25,630 |       
|                            | Vice President and CFO          |                     |      | 2001      |      |       | $       | 200,016            |         |   | $       | 64,166  |        |   | $      | 9,277  |      
|                            |                                 |                     | 2000 |           |      | $     | 189,428 |                    |         | $ | 66,586  |         |        | $ | 3,824  |       



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Other annual compensation did not exceed the
    lesser of $50,000 or 10% of salary plus bonus of any of the
    Named Executives in 2000, 2001 or 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(2) | The amounts listed consist of the value of life
    insurance provided by us for the benefit of the Named Executives
    in excess of the value of life insurance provided by us for the
    benefit of all other salaried employees. For Mr. Lipscomb,
    the amounts listed also include $22,000 for each of the fiscal
    years 2002, 2001 and 2000, respectively, paid as
    AT Holdings Corporation directors fees. For
    Ms. St. Clair, the amounts listed also includes $22,000 and
    $5,500 for fiscal years 2002 and 2001, respectively, paid as
    AT Holdings Corporation directors fees.

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Management Retention Agreements

Stay Pay and Severance Agreements.We have entered into Stay Pay and
Severance Agreements with each of the Named Executives. Our
Board of Directors believes that these severance agreements
benefit us by securing the continued services of key management
personnel and by enabling management to perform their duties and
responsibilities without the distracting uncertainty generally
associated with a change in control.

The severance agreements provide that, if a
change in control (as defined in the agreements) occurs and the
executive remains employed by us on a full-time basis through
the effective date of the change in control, the executive will
receive a single lump sum stay payment equal to 25%
of the sum of the highest annual base salary and the highest
bonus amount received by the executive in the preceding five
years.

The severance agreements also provide that if an
executives full-time employment is terminated without
cause (as defined in the agreements), either before or after a
change in control has occurred, or upon a voluntary termination
of employment by an executive upon the reduction of his or her
base salary by 5% or more, if the reduction is not a result of a
company policy to reduce the salaries of a substantial number of
officers or employees, or if the executive ceases to be employed
in a position involving substantially the same level of
responsibility or duties as performed by the executive on the
date the severance agreement was executed (a Qualifying
Voluntary Termination), the executive will receive a basic
severance payment. The payment will consist of a single lump sum
equal to the sum of the highest annual base salary and the
highest bonus amount received by the executive in the preceding
five years.

Additional payments will be made to the executive
in the event that a change in control has occurred and the
executives employment is terminated without cause within
the six-month period following the effective date of such change
in control, or upon a Qualifying Voluntary Termination within
that period. The executive will receive additional severance
payments equal to the amount he or she would have received had
employment continued, at the same intervals and at the same rate
of base salary the executive was receiving during the month
preceding termination, until the six-month anniversary of the
effective date of the change in control. These additional
severance payments, if paid, would be in addition to the basic
severance payment and the stay payment described above.

Each executive is entitled to several other
benefits contained in the severance agreements, including

 life, health, medical/hospital,
dental, and vision insurance benefits for a period of
12 months in the event that an executives full-time
employment is terminated without cause or upon a Qualifying
Voluntary Termination, either before or after a change in
control has occurred and

 gross-up payments to cover any excise
tax imposed by Section 4999 of the Internal Revenue Code
upon any payment made to the executive under the severance
agreements, subject to certain limitations.

We have agreed to be solely responsible for any
and all attorneys fees and related expenses incurred by
the executive in the event that we fail to comply with our
obligations under the severance agreements.

Trust Agreement.In
connection with an additional stay pay agreement with
Mr. Lipscomb, we entered into a trust agreement, which
established an irrevocable grantor trust for the benefit of
Mr. Lipscomb as the beneficiary. This agreement provides
for payment of $315,600 on January 1, 2007, or earlier,
upon Mr. Lipscombs voluntary or involuntary
termination of full-time employment with us, with or without
cause (as defined in the agreement).

The assets to be held by the trust include the
original deposit of principal and any other contributions made
by us, at our option. These trust assets are to be disposed of
by the trustee when certain conditions in Mr. Lipscombs
stay pay agreement occur or when the trustee is directed by two
officers of Argo-Tech, other than Mr. Lipscomb, to dispose
of the assets.

If the amount disbursed by the trustee exceeds
the amount to which Mr. Lipscomb or his qualifying successor is
entitled under the stay pay agreement, Mr. Lipscomb or his
qualifying successor is entitled to retain such excess. The
trust assets and any income earned on those assets remain at all
times subject to the claims of our general creditors under state
and federal law.

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This agreement also provides for the payment of
attorneys expenses if enforcement of the contract becomes
necessary, and contains certain restrictions on certain types of
competitive activity by Mr. Lipscomb. The benefits provided
by the trust and this stay pay agreement and the Trust Agreement
are in addition to the benefits provided under the severance
agreements described above and Mr. Lipscombs
employment contract which is described below.

Employment Agreements.We have entered into employment
contracts with Mr. Lipscomb and Mr. Keen. These contracts
provide for the payment of severance benefits upon termination
of employment without cause (as defined in the contracts). In
the event of such a termination, Mr. Lipscomb will receive
all salary and bonuses for a period of twelve months from the
date of termination, in an amount equal to all salary and
bonuses received during the twelve month period immediately
preceding termination. Mr. Keen will receive, in the event
of such a termination, a single lump sum payment equal to
24 months of his base salary, in an amount calculated from
the base salary in effect for the full month immediately
preceding the date of termination. Both Mr. Lipscomb and
Mr. Keen will receive life, health, medical/ hospital,
dental and vision insurance benefits for a period of twelve
months. Mr. Keens contract also provides for the
payment of attorneys expenses if enforcement of the
contract becomes necessary, and contains restrictions on certain
competitive activities by Mr. Keen. The benefits provided
by these additional contracts are provided in addition to the
benefits provided under the severance agreements, and
Mr. Lipscombs trust agreement.

Compensation Pursuant to Employee Benefit
Plans of the Company

Retirement Plan

Salaried Pension Plan.Our Salaried Pension Plan was
established effective November 1, 1986. Prior to
July 1, 1994, our regular, permanent, salaried employees
were eligible to participate in this plan. Participation in the
plan was closed to any person who was not a participant on
June 30, 1994, and all benefit accruals ceased as of the
close of business on June 30, 1994. The benefits of
participants in the Salaried Pension Plan who were employees on
June 30, 1994, became vested (to the extent otherwise
non-vested) as of the close of business on June 30, 1994.
Employee contributions were neither required nor permitted.

The monthly normal retirement benefit under the
Salaried Pension Plan is 1.25% of a participants final
average monthly compensation multiplied by the
participants years of benefit service. Compensation earned
after June 30, 1994, and service performed after
June 30, 1994, are not taken into account in determining a
participants benefit under the Salaried Pension Plan.
Final average monthly compensation means the average monthly
compensation (computed before withholdings, deductions for taxes
or other purposes, and salary reduction amounts under the
Argo-Tech Employee Savings Plan) paid or payable to the
participant for the five calendar years which produce the
highest such average, determined as if the participants
employment terminated on June 30, 1994 (or, if earlier, the
date the participants employment actually terminated or
the participant ceased to be within the class of employees
eligible to participate in the Salaried Pension Plan). If a
participant ceased to be within the class of employees eligible
to participate or a participants employment terminated (or
is deemed to have terminated) prior to July 1 of a calendar
year, that calendar year is not taken into account for purposes
of determining final average monthly compensation. A
participants vested benefit cannot be less than the
participants vested benefit under the Salaried Pension
Plan, if any, as of October 31, 1989.

The Internal Revenue Code of 1986, limits the
maximum annual retirement benefit payable under the Salaried
Pension Plan and the maximum amount of annual compensation that
can be taken into account in calculating benefits under the
Salaried Pension Plan.

At retirement, based on benefits accrued as of
June 30, 1994, the monthly retirement benefits payable to
each of the individuals named in the Summary Compensation Table
are:

|                     |  |         |          | 
|-------------------- |  | ------- | -------- | 
|                     |  | Monthly
|Name                 |  | Benefit
|                     |  |        
|Michael S. Lipscomb  |  | $       | 1,799.32 | 
|Paul R. Keen         |  | $       | 1,188.83 | 
|Frances S. St. Clair |  | $       | 411.56   | 

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The benefits shown above are in the form of a
single life annuity commencing as of the first day of the month
after the participant attains age 65. Benefits may commence
at any time after age 55 if the participant had at least five
years of service when the participants employment
terminated. Actuarial reductions would apply for early
commencement and for payment in the form of a joint and survivor
annuity.

The normal form of payment under the Salaried
Pension Plan is a single life annuity. However, participants may
elect payment of retirement benefits under several joint and
survivor forms of payment, subject to the requirement that a
married participant receive benefits in the form of a joint and
survivor annuity with the spouse as contingent annuitant unless
the spouse consents to the participants election of
another form of payment, another contingent annuitant, or both,
as applicable.

Salaried Savings Plan

Our Salaried Savings Plan has been in place since
1987. Regular, permanent, salaried employees who have completed
at least 3 months of service are eligible to participate in
the plan. All assets of the plan are held in trust.

Participants may elect to have
tax-deferred (401(k) compensation reduction)
contributions made to the plan of up to 13% of their eligible
compensation. Participants may also elect to have after-tax
contributions made to the Plan of up to 10% of their eligible
compensation. Employer matching contributions to the plan ceased
on July 1, 1994. For periods before July 1, 1994, the
Salaried Savings Plan provided for employer matching
contributions as follows: Basic matching contributions of 25% of
each participants tax-deferred contributions not in excess
of 3% of compensation and discretionary additional matching
contributions of a percentage (within the range of 0% and 125%
established for each fiscal year (the plan year)) of
each participants tax-deferred contributions not in excess
of 3% of compensation. A participants benefit under the
plan is the balance of the participants accounts
attributable to after-tax contributions and the vested balance
of the participants accounts attributable to employer
matching contributions. Tax-deferred contributions and after-tax
contributions are always 100% vested. Participants (including
former employees) whose accounts attributable to employer
matching contributions had not been forfeited prior to
November 1, 1994, became, to the extent otherwise
non-vested, 100% vested. Benefits are payable in the form of a
single lump sum payment.

The Internal Revenue Code limits the maximum
annual contributions that can be made to the Salaried Savings
Plan and the maximum amount of annual compensation that can be
taken into account in calculating contributions to the Salaried
Savings Plan. Contributions for a plan year on behalf of certain
highly compensated individuals may also be limited to comply
with Internal Revenue Codes nondiscrimination requirements.

Benefits are generally payable after a
participant is separated from service. A participant who is an
employee may, however, apply for an in-service distribution of
all or a portion of the participants vested account
balance after attainment of age 59 1/2 or in the event of a
hardship (as defined in the Salaried Savings Plan). A
participant may apply for an in-service distribution of
after-tax contributions at any age and for any reason. A
participant who is a party in interest may apply for
a loan of up to 50% of the participants vested account
balance (subject to a $50,000 maximum) under the Salaried
Savings Plan.

Employee Stock Ownership
Plan

The Employee Stock Ownership Plan was established
in 1994 with the participation of Argo-Techs salaried
employees. State Street Bank and Trust Company serves as the
plans trustee, and holds all of its assets in trust.

On May 17, 1994, the trustee purchased
420,000 shares of common stock of AT Holdings Corporation with
the proceeds of a $16.8 million loan from us to the
Employee Stock Ownership Plan. The term of the loan, unless it
is prepaid or accelerated, ends on April 28, 2004. The
interest rate for the loan is fixed for the ten year term at
7.16% per year. The purchase price for the AT Holdings common
stock was $40 per share.

The shares of AT Holdings common stock
purchased by the Employee Stock Ownership Plan with the proceeds
of the loan are held in a suspense account and released to
eligible participants on a pro rata basis as loan principal
payments are made. Shares released from the plan for each plan
year are allocated to each eligible participants account
based on the ratio of each such participants eligible
compensation to the total eligible

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##### Table of Contents



compensation of all eligible participants.
Forfeitures of the accounts of non-vested participants are
reallocated among eligible participants in the same manner as
shares of AT Holdings common stock released from the
suspense account.


For each of the Plan Years ended October 31,
2000, October 31, 2001 and October 31, 2002,
42,000 shares of AT Holdings common stock were
released from the suspense account. Based on the loan payment
schedule, the number of shares of AT Holdings common stock
released from the suspense account each future plan year during
the loan period would be:

|                 |  |           |        | 
|---------------- |  | --------- | ------ | 
|                 |  | Number of
|                 |  | Shares   
|Plan Year Ending |  | Released 
|                 |  |          
|October 31, 2003 |  |           | 42,000 | 
|October 31, 2004 |  |           | 21,000 | 

If we make additional contributions to the
Employee Stock Ownership Plan, the plan would use the
contribution to prepay the loan, and shares would be
released from the suspense account more rapidly than shown
above. If, however, for any reason we do not make contributions
to the plan to pay the principal on the loan as described above,
the shares would not be released from the suspense account as
rapidly as shown above.

We may, for any plan year, make additional
discretionary contributions for the benefit of plan
participants. These contributions may be made in cash, shares of
qualifying employer securities, or other property.

Whether the Employee Stock Ownership Plan will
acquire additional shares of AT Holdings common stock or
other qualifying employer securities in the future depends upon
future business conditions. Such purchases, if made, would be
funded through additional borrowings by the plan or additional
contributions from us. The timing, amount and manner of future
contributions to the plan will be affected by various factors,
including prevailing regulatory policies, the requirements of
applicable laws and regulations, and market conditions.

Participants may elect to receive the shares of
qualifying employer securities credited to their accounts after
their termination of employment, and in specified instances,
after attaining age 55 with 10 or more years of
participation in the Employee Stock Ownership Plan. Participants
vest in their plan accounts 20% per year of service, and service
prior to the effective date of the plan counts for this purpose.
A participant can require us to purchase qualifying employer
securities received from the plan at the value the stock then
has, as determined for plan purposes (a put option).
Shares of qualifying employer securities distributed from the
plan are subject to a right of first refusal in
favor of us or the Employee Stock Ownership Plan at the value
the stock then has, as determined for purposes of the plan. The
put option and right of first refusal will no longer apply if
the qualifying employer securities become tradeable on an
established securities market.

Voting rights on and decisions whether to tender
or exchange shares of qualifying employer securities held in the
Employee Stock Ownership Plan are passed through to
participants. Each participant is entitled to direct the
plans trustee as to the voting of (1) shares of
qualifying employer securities credited to the
participants account; and (2) a proportionate part of
the unallocated shares of qualifying employer securities held in
the suspense account and shares of qualifying employer
securities allocated to participants accounts as to which
no direction is received by the plans trustee. In the
event of a tender or exchange offer for qualifying employer
securities held in the plan, each participant is entitled to
direct the plans Trustee whether to tender or exchange
shares of qualifying employer securities held in the plan in a
manner similar to the voting directions described above.

Because the employers contributions to the
Employee Stock Ownership Plan are not fixed, benefits payable
under the plan cannot be estimated.

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##### Table of Contents



For the plan year ended October 31, 2002,
the number of shares of AT Holdings common stock allocated
under the Employee Stock Ownership Plan to the accounts of the
individuals named in the Summary Compensation Table were:

|                     |  |                  |          |               |  |  |            | 
|-------------------- |  | ---------------- | -------- | ------------- |  |  | ---------- | 
|                     |  |                 
|                     |  | Shares Allocated
|                     |  |                 
|                     |  | Year Ended       |          | Cumulative to
|Name                 |  | Oct. 31, 2002    |          | Oct. 31, 2002
|                     |  |                  |          |              
|Michael S. Lipscomb  |  |                  | 434.3994 |               |  |  | 3,523.8833 | 
|Paul R. Keen         |  |                  | 434.3994 |               |  |  | 3,523.8833 | 
|Frances S. St. Clair |  |                  | 434.3994 |               |  |  | 3,474.9189 | 

Generally accepted accounting principles require
that any third party borrowing by the Employee Stock Ownership
Plan be reflected as a liability on our statement of financial
condition. Since the plan is borrowing from us, the obligation
is not treated as an asset of ours, but will be deducted from
shares of stock held by the Employee Stock Ownership Plan. If
the plan purchases newly issued shares of AT Holdings
common stock, total stockholders equity would neither
increase nor decrease.

The Internal Revenue Service has issued a
determination letter that the plan is qualified under
Section 401(a) of the Internal Revenue Code and is an
employee stock ownership plan under Section 4975(e)(7)
thereof. Contributions to the plan and allocations to the
accounts of eligible participants thereunder are subject to
applicable limitations imposed under the Internal Revenue Code.
The plan is subject to the requirements of the Employee
Retirement Income Security Act of 1974, as amended, and the
regulations thereunder.

Employee
Stock Ownership Plan Excess Benefit Plan

We maintain the Employee Stock Ownership Plan
Excess Benefit Plan, an unfunded plan that at all times will be
deemed invested in AT Holdings common stock. This plan is for
employees participating in the Employee Stock Ownership Plan in
respect of reduction to allocations to their accounts because of
limitations under the Internal Revenue Code applicable to
tax-qualified plans. Benefits under this plan vest in the same
manner as benefits under the Employee Stock Ownership Plan and
distributions from the plan will, subject to certain
restrictions, be made in whole or fractional shares of AT
Holdings common stock at the same time or times as benefits
under the Employee Stock Ownership Plan are distributable, or in
the case of benefits with respect to qualifying employer
securities subject to the put option under the Employee Stock
Ownership Plan at the time the plan participant exercises (or is
deemed to have exercised) a hypothetical put option
under the plan.

We maintain a bookkeeping account for amounts
credited to the accounts of plan participants. For the plan year
ended October 31, 2002, the amounts credited to the
accounts of the individuals named in the Summary Compensation
Table were:

|                     |  |                             |            |               |  |  |            | 
|-------------------- |  | --------------------------- | ---------- | ------------- |  |  | ---------- | 
|                     |  |                            
|                     |  | Equivalent Shares Allocated
|                     |  |                            
|                     |  | Year Ended                  |            | Cumulative to
|Name                 |  | Oct. 31, 2002               |            | Oct. 31, 2002
|                     |  |                             |            |              
|Michael S. Lipscomb  |  |                             | 1,235.0373 |               |  |  | 7,094.9180 | 
|Paul R. Keen         |  |                             | 379.4047   |               |  |  | 1,853.9923 | 
|Frances S. St. Clair |  |                             | 265.6113   |               |  |  | 1,186.2978 | 

Incentive
Stock Option Plans

1991 Performance Stock Option Plan.The 1991 Performance Stock Option Plan
provides for option grants for the purchase of AT Holdings
common stock. The exercise price of each option is $10.00 per
share. All of the options available under this plan were granted
and have been amended by the Compensation Committee of AT
Holdings, upon the recommendation of our compensation committee,
and with the consent of the optionees in June 2001. These
options expire on November 9, 2011. All of the options
under this plan became fully vested in January 1999.

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##### Table of Contents



Aggregate Option/ SAR Exercises in Last Fiscal
Year

and Fiscal Year End Option/ SAR
Values


|                     |  |          |        |             |  |             |   |                  |  |               |   |  |  |  |         |        |  |   |           |   
|-------------------- |  | -------- | ------ | ----------- |  | ----------- | - | ---------------- |  | ------------- | - |  |  |  | ------- | ------ |  | - | --------- | --
|                     |  |          |        |             |  |             |   | Number of        |  |              
|                     |  |          |        |             |  |             |   | Securities       |  | Value of     
|                     |  |          |        |             |  |             |   | Underlying       |  | Unexercised  
|                     |  |          |        |             |  |             |   | Unexercisable    |  | In-the-Money 
|                     |  |          |        |             |  |             |   | Options/SARs at |  | Options at   
|                     |  |          |        |             |  |             |   | FY-End           |  | FY-End($)    
|                     |  |          |        | Shares      |  |             |   |                  |  |              
|                     |  | Exercise |        | Acquired on |  | Value       |   | Exercisable/     |  | Exercisable/ 
|Name                 |  | Price($) |        | Exercise    |  | Realized($) |   | Unexercisable    |  | Unexercisable
|                     |  |          |        |             |  |             |   |                  |  |              
|Michael S. Lipscomb  |  | $        | 10.00  |             |  |             | 0 |                  |  | $             | 0 |  |  |  | 8,670 / |       |  | $ | 190,740 / | $
|                     |  |          | 40.00  |             |  |             | 0 |                  |  |               | 0 |  |  |  | 6,125 / |       |  |   |  /       |  
|                     |  |          | 100.00 |             |  |             | 0 |                  |  |               | 0 |  |  |  | 4,000 / |       |  |   |  /       |  
|                     |  |          | 49.79  |             |  |             | 0 |                  |  |               | 0 |  |  |  | 6,308 / | 12,618 |  |   |  /       |  
|Paul R. Keen         |  |          | 10.00  |             |  |             | 0 |                  |  |               | 0 |  |  |  | 1,990 / |       |  |   | 43,780 /  |  
|                     |  |          | 40.00  |             |  |             | 0 |                  |  |               | 0 |  |  |  | 2,760 / |       |  |   |  /       |  
|                     |  |          | 100.00 |             |  |             | 0 |                  |  |               | 0 |  |  |  | 1,400 / |       |  |   |  /       |  
|                     |  |          | 49.79  |             |  |             | 0 |                  |  |               | 0 |  |  |  | 2,231 / | 4,462  |  |   |  /       |  
|Frances S. St. Clair |  |          | 10.00  |             |  |             | 0 |                  |  |               | 0 |  |  |  | 2,990 / |       |  |   | 65,780 /  |  
|                     |  |          | 40.00  |             |  |             | 0 |                  |  |               | 0 |  |  |  | 2,760 / |       |  |   |  /       |  
|                     |  |          | 100.00 |             |  |             | 0 |                  |  |               | 0 |  |  |  | 1,400 / |       |  |   |  /       |  
|                     |  |          | 49.79  |             |  |             | 0 |                  |  |               | 0 |  |  |  | 2,231 / | 4,462  |  |   |  /       |  

1991 Management Incentive Stock Option Plan.The 1991 Management Incentive Stock
Option Plan provides for option grants for the purchase of AT
Holdings common stock. The exercise price of each option
is $10.00 per share. All of the options available under this
plan were granted and have been amended by the Compensation
Committee of AT Holdings, upon the recommendation of our
Compensation Committee, and with the consent of the optionees in
June 2001. These options expire on November 9, 2011. All of
the options under this plan became fully vested in January 1999.

1998 Equity Replacement Stock Option Plan.The 1998 Equity Replacement Stock
Option Plan (as amended June 12, 2001) was established to
provide for option grants for the purchase of AT Holdings
common stock. The exercise price of each option is $40.00 per
share. The options were granted to each person who was a
participant in the 1997 Stock Appreciation Rights Plan in
exchange for, and in cancellation of, all of the rights of each
such participant under the Stock Appreciation Rights Plan (See
Benefits Restructuring). These options, which were granted by
the Compensation Committee of AT Holdings upon the
recommendation of our compensation committee, expire on
January 2, 2005. All of the options under this plan were
fully vested upon issuance.

1998 Incentive Plan.The 1998 Incentive Plan was
established to provide option grants for the purchase of AT
Holdings common stock, at prices that may be more than,
less than, or equal to the fair market value of the shares, as
the Board or Compensation Committee of AT Holdings may determine
at the time of grant. Options are granted by the Compensation
Committee of AT Holdings upon the recommendation of our
compensation committee. There have been three option grants
under the 1998 Incentive Plan, the first in 1999 with an
exercise price of $100.11, the second in 2001 with an exercise
price of $69.18 and the third in 2002 with an exercise price of
$49.79. The option agreement governing the options granted in
1999 provides that such options vest in 20% increments over five
successive years. For any year in which the EBITDA of the
company exceeds 105% of the target EBITDA, an additional
13 1/3% of the optioned shares will vest. Effective
November 2, 2000 all holders of options granted in 1999
agreed to the cancellation of the portion of the 1999 options
which were not vested at such date. Pursuant to the plan, such
cancelled options are available for new grants. The option
agreement governing the options granted under the plan in
September 2001 and March 2002 provides for vesting as follows:
33.3% at the time of issuance and 33.3% on the anniversary date
of the grant over the next two years. All options granted under
the plan expire ten years from the date of grant. In the event
that AT Holdings common stock

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becomes registered or traded on a national
exchange or in the event of a change in control, all options
will become exercisable in full.


Option Grants in Last Fiscal Year

|                     |  |            |        |              |  |          |      |              |  |            |       |                               |  |       |       |        |  |  |          |  |  |  |   |  |  |         |  |          
|-------------------- |  | ---------- | ------ | ------------ |  | -------- | ---- | ------------ |  | ---------- | ----- | ----------------------------- |  | ----- | ----- | ------ |  |  | -------- |  |  |  | - |  |  | ------- |  | ---------
|                     |  |            |        |              |  |          |      |              |  |            |       |                              
|                     |  |            |        |              |  |          |      |              |  |            |       | Potential Realizable Value at
|                     |  | Number of  |        | % of Total   |  |          |      |              |  |            |       | Assumed Annual Rates of      
|                     |  | Securities |        | Options      |  | Exercise |      |              |  |            |       | Stock Price Appreciation for 
|                     |  | Underlying |        | Granted to   |  | or Base  |      | Market Price |  |            |       | Option Terms($)              
|                     |  | Options    |        | Employees in |  | Price    |      | on Date of   |  | Expiration |       |                              
|Name                 |  | Granted(#) |        | Fiscal Year  |  | ($/Sh)   |      | Grant        |  | Date       |       | 0%($)                         |  | 5%($) |       | 10%($)
|                     |  |            |        |              |  |          |      |              |  |            |       |                               |  |       |       |       
|Michael S. Lipscomb  |  |            | 18,926 |              |  |          | 34.0 | %            |  | $          | 49.79 |                               |  | $     | 49.79 |        |  |  | 03/12/12 |  |  |  | 0 |  |  | 592,573 |  | 1,501,778
|Paul R. Keen         |  |            | 6,693  |              |  |          | 12.0 | %            |  | $          | 49.79 |                               |  | $     | 49.79 |        |  |  | 03/12/12 |  |  |  | 0 |  |  | 209,558 |  | 531,090  
|Frances S. St. Clair |  |            | 6,693  |              |  |          | 12.0 | %            |  | $          | 49.79 |                               |  | $     | 49.79 |        |  |  | 03/12/12 |  |  |  | 0 |  |  | 209,558 |  | 531,090  

Executive
Life Insurance Plan

Our executive life insurance plan permits certain
officers and key employees to obtain life insurance benefits in
addition to those generally provided to salaried employees. The
level of coverage provided to such officers and key employees
consists of basic term and whole life insurance coverage equal
to 3 times the individuals salary.

Bonus
Plan

We have in effect a plan pursuant to which
officers and other key management employees may receive cash
bonuses paid upon (1) the achievement of specified cash
flow goals in the preceding fiscal year and (2) individual
performance. The amounts of such bonus awards are approved by
the AT Holdings Compensation Committee.

Compensation
of Directors

Since 1999, Argo-Tech has not compensated its
directors. AT Holdings Corporation pays its directors a
quarterly fee of $2,500 plus $3,000 and reasonable out-of-pocket
expenses for each board meeting attended. Fees paid to
Mr. Lipscomb and Ms. St. Clair for service on the
board of AT Holdings are included in the Summary Compensation
table. See Executive Compensation.

Benefits
Restructuring

On January 4, 1999, AT Holdings repurchased
639,510 shares of its common stock that were held by its
majority stockholder, AT Holdings, LLC. AT Holdings also issued
30,000 shares of its preferred stock on December 17,
1998. In connection with these transactions, we amended our
Employee Stock Ownership Plan Excess Benefit Plan and the Stock
Appreciation Rights (SAR) Plan. The amendment to the Employee
Stock Ownership Plan Excess Benefit Plan allowed for the
transfer of approximately 4,500 shares of AT Holdings
common stock in place of cash payments to members of management
who have been credited with Employee Stock Ownerships Plan
excess benefits as of October 31, 1998. The SAR plan
provided for grants of up to 34,450 SARs, 17,225 of which were
granted in fiscal years 1997 and 1998. The remaining SARs were
granted in the first quarter of fiscal 1999. Pursuant to the
amendment of the SAR plan, all SARs became fully vested and were
then converted into fully vested stock options under the 1998
Equity Replacement Stock Option Plan. In addition, all granted
options under the 1991 Performance Stock Option Plan and 1991
Management Incentive Stock Option Plan, to the extent not
vested, became fully vested upon completion of AT Holdings
repurchase of AT Holdings, LLCs common shares.

27



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|         |                                                                    
|-------- | -------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
    Owners and Management.

Principal Stockholders

Argo-Tech is a wholly owned subsidiary of
AT Holdings, which owns the only outstanding share of
Argo-Techs common stock, par value of $.01 per share. The
following table sets forth the ownership of
AT Holdings common stock as of October 26, 2002
by:



| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | each person known to Argo-Tech to be the
    beneficial owner of more than 5% of AT Holdings
    common stock,
|
| |  | each director of Argo-Tech and AT Holdings,
    and                                                            
|
| |  | all of Argo-Tech and AT Holdings
    directors and executive officers as a group.                             

On October 26, 2002, there were 645,293
shares of AT Holdings common stock outstanding,
exclusive of treasury shares. AT Holdings also has 30,000
shares of its preferred stock outstanding. All of these shares
are held by J.P. Morgan Partners, LLC. These preferred
shares have no voting rights.

|                                                            |                                                                    |                                        |         |             |  |                 |        |       |  |                  |        |  |  |  |         |     |  |  |      |  | 
|----------------------------------------------------------- | ------------------------------------------------------------------ | -------------------------------------- | ------- | ----------- |  | --------------- | ------ | ----- |  | ---------------- | ------ |  |  |  | ------- | --- |  |  | ---- |  | 
|                                                            |                                                                    |                                       
|                                                            |                                                                    | Ownership of AT Holdings common stock
|                                                            |                                                                    |                                       
|                                                            |                                                                    |                                        |         | Shares      |  |                
|                                                            |                                                                    |                                        |         | Number of   |  | Attributable to |        |      
|                                                            |                                                                    | Number                                 |         | Immediately |  | Employee Stock  |        |      
|Name of                                                     |                                                                    | Beneficially                           |         | Exercisable |  | Ownership       |        |      
|Beneficial Owner                                            |                                                                    | Owned                                  |         | Options     |  | Plan Account    |        | Total |  | Percent of Class
|                                                            |                                                                    |                                        |         |             |  |                 |        |       |  |                 
|State Street Bank and Trust Company                         |                                                                    |                                        | 354,849 |             |  |                 | 0      |       |  |                  | 0      |  |  |  | 354,849 |     |  |  | 55.0 | 
|                                                            | 200 Newport Avenue
    Quincy, MA 02171                            |                                        |         |             |  |                 |        |       |  |                  |        |  |  |  |         |     |  |  |      |  | 
|YC International, Inc.                                      |                                                                    |                                        | 39,000  |             |  |                 | 0      |       |  |                  | 0      |  |  |  | 39,000  | (2) |  |  | 6.0  | 
|                                                            | 725 South Figueroa Street
    Suite 3870
    Los Angeles, CA 90117 |                                        |         |             |  |                 |        |       |  |                  |        |  |  |  |         |     |  |  |      |  | 
|AT Holdings, LLC                                            |                                                                    |                                        | 187,452 |             |  |                 | 39,000 | (2)   |  |                  | 0      |  |  |  | 226,452 |     |  |  | 35.1 | 
|                                                            | 1390 Highway 50 East
    Suite 4
     Carson City, NV 89701        |                                        |         |             |  |                 |        |       |  |                  |        |  |  |  |         |     |  |  |      |  | 
|J.P. Morgan Partners, LLC                                   |                                                                    |                                        | 0       |             |  |                 | 46,025 |       |  |                  | 0      |  |  |  | 46,025  |     |  |  | 6.7  | 
|                                                            | 1221 Avenue of the Americas
    New York, NY 10020                 |                                        |         |             |  |                 |        |       |  |                  |        |  |  |  |         |     |  |  |      |  | 
|Confar, Thomas*                                             |                                                                    |                                        | 0       |             |  |                 | 0      |       |  |                  | 0      |  |  |  | 0       |     |  |  | **   | 
|de Chastenet, Remi*                                         |                                                                    |                                        | 0       |             |  |                 | 500    |       |  |                  | 0      |  |  |  | 500     |     |  |  | **   | 
|Dougherty, Thomas*                                          |                                                                    |                                        | 2,094   |             |  |                 | 0      |       |  |                  | 0      |  |  |  | 2,094   |     |  |  | **   | 
|Keen, Paul                                                 |                                                                    |                                        | 13,881  |             |  |                 | 8,381  |       |  |                  | 3,524  |  |  |  | 25,786  |     |  |  | 3.9  | 
|Lipscomb, Michael*                                         |                                                                    |                                        | 29,118  |             |  |                 | 25,103 |       |  |                  | 3,524  |  |  |  | 57,745  |     |  |  | 8.6  | 
|Nagata, Robert*                                             |                                                                    |                                        | 0       |             |  |                 | 500    |       |  |                  | 0      |  |  |  | 500     |     |  |  | **   | 
|St. Clair, Frances*                                        |                                                                    |                                        | 6,998   |             |  |                 | 9,381  |       |  |                  | 3,475  |  |  |  | 19,854  |     |  |  | 3.0  | 
|Storrie, Karl*                                              |                                                                    |                                        | 1,204   |             |  |                 | 450    |       |  |                  | 0      |  |  |  | 1,654   |     |  |  | **   | 
|Directors and Executive Officers as a Group
    (8 persons) |                                                                    |                                        | 53,295  |             |  |                 | 44,315 |       |  |                  | 10,523 |  |  |  | 108,133 |     |  |  | 15.4 | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | Director of AT Holdings Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|**  | Less than 1%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|   | Director of Argo-Tech                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(1) | State Street Bank and Trust Company is the
    trustee of the Employee Stock Ownership Plan. The Plan trustee
    holds shares of AT Holdings common stock in trust for
    the benefit of the plan. Under normal circumstances, the trustee
    votes all of the shares held by the plan in proportion to the
    actual voting directions of the plan participants. Under certain
    limited circumstances, the plan trustee may, in the exercise of
    its fiduciary duty, vote the shares held by the plan as a block.
    The share ownership numbers for officers do not include shares
    held through the plan, other than those shares directly
    attributed to the officers account.
|   
|(2) | AT Holdings, LLC has the option to purchase
    all of YC Internationals shares of AT Holdings
    common stock. AT Holdings, LLC disclaims all beneficial
    ownership of those shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

28



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|         |                                                    
|-------- | ---------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions.



| |                                                             
| | ------------------------------------------------------------
| | Upsilon International Corporation
    Distribution Agreement

Upsilon International Corporation
(UIC) was appointed the exclusive distributor of
Argo-Tech engine fuel pump and certain air frame products
manufactured at our Cleveland, Ohio facility, first in 1990 with
respect to the Japanese market, and in 1994 for the entire
international market under a long-term distribution agreement.
Effective December 15, 2000 UIC was also appointed an
Argo-Tech non-exclusive sales agent for engine overhaul and
repair and certain other product support agreements. UIC is
owned by YC International, Inc., which is under the control
of Mr. Masashi Yamada, a stockholder of AT Holdings
Corporation, the parent company of Argo-Tech, through his
control of YC International and AT Holdings, LLC. We
believe that this distribution agreement was entered into on
terms and conditions customary for the industry in all respects
with the exception of the contract term of 50 years with
respect to UICs distribution activities, and termination
provisions relating to such distribution activities which are
more favorable to UIC than industry norm. The agreement provides
for a 15% discount from Argo-Tech catalog prices on all
purchases of Argo-Tech products by UIC and a sales commission of
5% on international overhaul and repair business obtained by
Argo-Tech after December 15, 2000. For fiscal 2002, sales
by Upsilon International accounted for approximately 14% of our
net revenues.



| |              
| | -------------
| | Officer Loans

Each of the Named Executives have entered into
presently outstanding recourse loan agreements with
AT Holdings. The largest amount of indebtedness outstanding
since the beginning of fiscal 2002 for each such Named Executive
was: $526,582 (Mr. Lipscomb), $283,758 (Mr. Keen) and
$74,742 (Ms. St. Clair). Each loan is due
October 30, 2005 and accrues interest at 6.75% annually.
These loans, secured by a pledge of AT Holdings
common stock, were extended for the purchase of
AT Holdings common stock, or for the personal use of
the Named Executive. Each of the Named Executives having an
outstanding loan has entered into a pledge agreement and
promissory note with AT Holdings in connection with such
loans. We believe that the terms of these loans are no less
favorable to AT Holdings than would have been available
pursuant to arms length negotiations with unaffiliated
parties.



| |                                          
| | -----------------------------------------
| | Purchase of Senior Subordinated
    Notes

On November 22, 2002, Mr. Lipscomb,
Ms. St. Clair and eight other key management employees
purchased a total of $1,000,000 in principal amount of our
8 5/8% senior subordinated notes. These notes were
purchased in an open market transaction arranged by Deutsche
Bank Securities for a total purchase price of $700,000 plus
accrued interest from October 1, 2002 through
November 22, 2002. Mr. Lipscomb purchased $652,000 in
principal amount of notes through the Argo-Tech Corporation
Trust Agreement, dated October 28, 1994, which was amended
effective November 22, 2002, to permit this purchase of
notes. Ms. St. Clair purchased $130,000 in principal
amount of notes.




PART IV






|         |                        
|-------- | -----------------------
|Item 14. | Controls and Procedures



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Evaluation of disclosure controls and procedures.
    The term disclosure controls and procedures is
    defined in Rules 13a-14(c) and 15d-14(c) of the Securities
    Exchange Act of 1934 (Exchange Act). These rules
    refer to the controls and other procedures of a company that are
    designed to ensure that information required to be disclosed by
    the company in the reports that it files under the Exchange Act
    is recorded, processed, summarized and reported within the
    required time periods. Argo-Techs Chief Executive Officer
    and Chief Financial Officer have evaluated the effectiveness of
    Argo-Techs disclosure controls and procedures as of a date
    within 90 days before the filing of this annual report (the
    Evaluation Date), and have concluded that, as of the
    Evaluation Date, such controls and procedures were effective at
    ensuring that required information will be disclosed in
    Argo-Techs reports filed under the Exchange Act.



|    |                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Changes in internal controls. There were no
    significant changes in Argo-Techs internal controls or in
    other factors that could significantly affect these controls
    subsequent to the Evaluation Date.

29



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|         |                                                                      
|-------- | ---------------------------------------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules, and
    Reports on Form 8-K.



|       |                     
|------ | --------------------
|(a)(1) | Financial Statements

The following consolidated financial statements
of the Company are included in a separate section of this report
following the signature page:



| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | Consolidated Balance Sheets 
    October 27, 2001 and October 26, 2002                                                                    
|
| | Consolidated Statements of Net
    Income  Years ended October 28, 2000,
    October 27, 2001 and October 26, 2002                        
|
| | Consolidated Statements of Cash
    Flows  Years ended October 28, 2000,
    October 27, 2001 and October 26, 2002                        
|
| | Consolidated Statements of Shareholders
    Equity/ (Deficiency)  Years ended October 28,
    2000, October 27, 2001 and October 26, 2002
|
| | Notes to Consolidated Financial
    Statements  October 26, 2002                                                                          
|
| | Report of Independent Auditors                                                                                                             



|       |                              
|------ | -----------------------------
|(a)(2) | Financial Statement Schedules

No schedule or schedules for which provision is
made in the applicable accounting regulations of the Securities
and Exchange Commission are required, or such schedules are not
applicable, and therefore, have been omitted.



|       |         
|------ | --------
|(a)(3) | Exhibits

|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- | ----- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 3.1   |                         |  | Restated Certificate of Incorporation of the
    Company, dated April 16, 1999 (incorporated herein by
    reference to Exhibit 3.1 of the Companys registration
    statement on form S-4/A filed April 22, 1999, SEC File
    No. 333-73179).                                                                                                                                                                                                  
|       
|        | 3.2   |                         |  | Restated By-Laws of the Company dated
    April 16, 1999 (incorporated herein by reference to
    Exhibit 3.2 of the Companys registration statement on
    form S-4/A filed April 22, 1999, SEC File
    No. 333-73179).                                                                                                                                                                                                                        
|       
|        | 4.1   |                         |  | Indenture dated September 26, 1997, between
    the Company, the Subsidiary Guarantors signatory thereto and
    Harris Trust and Savings Bank, as Trustee, relating to the
    8 5/8% Senior Subordinated Notes due 2007 (the form of
    which is included in such Indenture) (incorporated herein by
    reference to Exhibit 4.1 of the Companys Registration
    Statement on form S-1, filed October 17, 1997, SEC
    File No. 333-38223).
|       
|        | 4.2   |                         |  | First Supplemental Indenture, dated
    December 17, 1998 between the Company, the Subsidiary
    Guarantors signatory thereto and Harris Trust and Savings Bank,
    related to the Indenture dated September 26, 1997
    (incorporated by reference to Exhibit 4.4 of the
    Companys Current Report on Form 8-K, filed
    January 14, 1999).                                                                                               
|       
|        | 4.3   |                         |  | Indenture dated December 17, 1998 between
    the Company, the Subsidiary Guarantors signatory thereto and
    Harris Trust and Savings Bank, as Trustee, related to the
    8 5/8% Senior Subordinated Notes due 2007 (a form of which
    is included in such Indenture) (incorporated by reference to
    Exhibit 4.5 of the Companys Current Report on
    Form 8-K, filed January 14, 1999).                                                
|       
|        | 10.1* |                         |  | Form of Stay Pay and Severance Agreement dated
    June 6, 1996, between the Company and certain Executive
    Officers of the Company (Michael S. Lipscomb,
    Frances S. St. Clair, and Paul R. Keen)
    (incorporated herein by reference to Exhibit 10.1 of the
    Companys Registration Statement on form S-1, filed
    October 17, 1997, SEC File No. 333-38223).                                                                      
|       
|        | 10.2* |                         |  | Employment Agreement dated February 13, 1989
    between the Company and Paul R. Keen (incorporated herein
    by reference to Exhibit 10.2 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                                                                         

30



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##### Table of Contents



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|------- | ----- | ----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10.3* |                         |  | Employment Agreement dated October 15, 1986
    between the Company and Michael S. Lipscomb (incorporated
    herein by reference to Exhibit 10.3 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                                
|       
|        | 10.4* |                         |  | Argo-Tech Corporation Trust Agreement dated
    October 28, 1994 between the Company and Society National
    Bank, as Trustee, relating to the Employment Agreement dated
    October 15, 1986 between the Company and Michael S.
    Lipscomb (incorporated herein by reference to Exhibit 10.4
    of the Companys Registration Statement on form S-1,
    filed October 17, 1997, SEC File No. 333-38223).
|       
|        | 10.5* |                         |  | Argo-Tech Corporation Salaried Pension Plan,
    dated November 1, 1995 (incorporated herein by reference to
    Exhibit 10.5 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333- 38223).                                                                                                                                                                   
|       
|        | 10.6* |                         |  | First Amendment to Argo-Tech Corporation Salaried
    Pension Plan (incorporated herein by reference to
    Exhibit 10.6 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333- 38223).                                                                                                                                                                        
|       
|        | 10.7* |                         |  | Argo-Tech Corporation Employee Stock Ownership
    Plan and Trust Agreement, dated May 17, 1994 (incorporated
    herein by reference to Exhibit 10.7 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                            
|       
|        | 10.8* |                         |  | First Amendment to the Argo-Tech Corporation
    Employee Stock Ownership Plan and Trust Agreement, dated
    October 26, 1994 (incorporated herein by reference to
    Exhibit 10.8 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                                             
|       
|        | 10.9* |                         |  | Second Amendment to the Argo-Tech Corporation
    Employee Stock Ownership Plan and Trust Agreement, dated
    May 9, 1996 (incorporated herein by reference to
    Exhibit 10.9 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                                                 
|       
|        | 10.10 | *                       |  | Third Amendment to the Argo-Tech Corporation
    Employee Stock Ownership Plan and Trust Agreement, dated
    July 18, 1997 (incorporated herein by reference to
    Exhibit 10.10 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                                               
|       
|        | 10.11 | *                       |  | Argo-Tech Corporation Employee Stock Ownership
    Plan Excess Benefit Plan, dated May 17, 1994 (incorporated
    herein by reference to Exhibit 10.11 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                           
|       
|        | 10.12 |                         |  | AT Holdings Corporation Stockholders
    Agreement, dated December 17, 1998 (incorporated herein by
    reference to Exhibit 10.12 of the Companys Annual
    Report on form 10-K for the year ended October 30,
    1999, SEC File No. 333-38223).                                                                                                                                                          
|       
|        | 10.13 |                         |  | AT Holdings Corporation 1998 Supplemental
    Stockholders Agreement, dated December 17, 1998
    (incorporated herein by reference to Exhibit 10.13 of the
    Companys Annual Report on form 10-K for the year
    ended October 30, 1999, SEC File No. 333-38223).                                                                                                                                        
|       
|        | 10.14 | *                       |  | Form of Management Incentive Compensation Plan
    for key employees of Argo-Tech (incorporated herein by reference
    to Exhibit 10.19 of the Companys Registration
    Statement on form S-1, filed October 17, 1997, SEC
    File No. 333-38223).                                                                                                                                                         
|       
|        | 10.15 | *                       |  | 1991 Management Incentive Stock Option Plan, as
    amended, dated May 16, 1994 (incorporated herein by
    reference to Exhibit 10.20 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                                           
|       
|        | 10.16 | *                       |  | Amendment to the 1991 Management Incentive Stock
    Option Plan, as amended, dated June 12, 2001 (incorporated
    herein by reference to Exhibit 10.3 of the Companys
    Quarterly Report on form 10-Q for the quarter ended
    July 28, 2001).                                                                                                                                                           
|       
|        | 10.17 | *                       |  | Form of Stock Option Agreement in connection with
    the Management Incentive Stock Option Plan, as amended, between
    Argo-Tech and each member of Argo-Techs Executive Staff
    (incorporated herein by reference to Exhibit 10.21 of the
    Companys Registration Statement on form S-1, filed
    October 17, 1997, SEC File No. 333-38223).                                                        

31



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##### Table of Contents



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | ----- | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10.18 | *                       |  | 1991 Performance Stock Option Plan, as amended,
    dated May 16, 1997 (incorporated herein by reference to
    Exhibit 10.22 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333- 38223).                                                                                                                                                                                                                                                                                                                
|       
|        | 10.19 | *                       |  | Amendment to the 1991 Performance Stock Option
    Plan, as amended, June 12, 2001 (incorporated herein by
    reference to Exhibit 10.1 of the Companys Quarterly
    Report on form 10-Q for the quarter ended July 28,
    2001).                                                                                                                                                                                                                                                                                                                       
|       
|        | 10.20 | *                       |  | Form of Stock Option Agreement in connection with
    the 1991 Performance Stock Option Plan, as amended, between
    Argo-Tech and certain key employees (incorporated herein by
    reference to Exhibit 10.23 of the Companys Registration
    Statement on form S-1, filed October 17, 1997, SEC
    File No. 333-38223).                                                                                                                                                                                                                              
|       
|        | 10.21 |                         |  | Credit Facility, dated July 18, 1997, as
    amended and restated on September 26, 1997, between
    Argo-Tech, AT Holdings, the lenders party thereto and the Chase
    Manhattan Bank, as Administrative Agent (incorporated herein by
    reference to Exhibit 10.24 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                                                       
|       
|        | 10.22 |                         |  | Distributorship Agreement, dated
    December 24, 1990, between Argo-Tech, Yamada Corporation
    and Vestar Capital Partners, Inc. (incorporated herein by
    reference to Exhibit 10.25 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                                                                                                                                    
|       
|        | 10.23 |                         |  | Japan Distributorship Agreement, dated
    December 24, 1990, between Argo-Tech, Aerotech World Trade
    Corporation, Yamada Corporation, Yamada International
    Corporation and Vestar Capital Partners, Inc. (incorporated
    herein by reference to Exhibit 10.26 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                                                      
|       
|        | 10.24 |                         |  | Stock Purchase Agreement, dated August 1,
    1997, between Argo-Tech, J.C. Carter Company, Inc.,
    Robert L. Veloz, Individually and as Trustee,
    Marlene J. Veloz, Individually and as Trustee,
    Edith T. Derbyshire, Individually and as Trustee,
    Harry S. Derbyshire, Individually and as Trustee, Michael
    Veloz, Katherine Canfield and Maureen Partch, as Trustee
    (incorporated herein by reference to Exhibit 10.27 of the
    Companys Registration Statement on form S-1, filed
    October 17, 1997, SEC File No. 333-38223).
|       
|        | 10.25 |                         |  | Prism Prototype Retirement Plan &
    Trust & 401(k) Profit Sharing Plan Adoption Agreement,
    dated November 1, 1994 (incorporated herein by reference to
    Exhibit 10.28 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                                                                                                                                                                                                
|       
|        | 10.26 |                         |  | Prism Prototype Retirement Plan and Trust
    (incorporated herein by reference to Exhibit 10.29 of the
    Companys Registration Statement on form S-1, filed
    October 17, 1997, SEC File No. 333-38223).                                                                                                                                                                                                                                                                                                                                              
|       
|        | 10.27 |                         |  | Agreement of Purchase and Sale between Agnem
    Holdings, Inc. and TRW Inc. dated as of August 5, 1986
    (incorporated herein by reference to Exhibit 10.30 of the
    Companys Registration Statement on form S-1, filed
    October 17, 1997, SEC File No. 333-38223).                                                                                                                                                                                                                                                                                
|       
|        | 10.28 | *                       |  | 1997 Stock Appreciation Rights Plan (incorporated
    herein by reference to Exhibit 10.31 of the Companys
    Annual Report on form 10-K, for the year ended
    October 31, 1998).                                                                                                                                                                                                                                                                                                                                                                       
|       
|        | 10.29 | *                       |  | AT Holdings Corporation/ Argo-Tech
    Corporation 1998 Equity Replacement Stock Option Plan
    (incorporated herein by reference to Exhibit 10.32 of the
    Companys registration statement on form S-4 filed
    March 1, 1999, SEC File No. 333-73179).                                                                                                                                                                                                                                                                                               
|       
|        | 10.30 | *                       |  | Amendment to the AT Holdings Corporation/
    Argo-Tech Corporation 1998 Equity Replacement Stock Option Plan
    dated June 12, 2001 (incorporated herein by reference to
    Exhibit 10.2 of the Companys Quarterly Report on
    form 10-Q for the quarter ended July 28, 2001).                                                                                                                                                                                                                                                                        
|       
|        | 10.31 | *                       |  | Form of Stock Option Agreement in connection with
    the AT Holdings Corporation/ Argo-Tech Corporation 1998
    Equity Replacement Stock Option Plan (incorporated herein by
    reference to Exhibit 10.33 of the Companys
    registration statement on form S-4 filed March 1,
    1999, SEC File No. 333-73179).                                                                                                                                                                                                                                     

32



---



##### Table of Contents



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------- | ----- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10.32 | *                       |  | First Amendment to the Argo-Tech Corporation
    Employee Stock Ownership Plan Excess Benefit Plan (incorporated
    herein by reference to Exhibit 10.34 of the Companys
    registration statement on form S-4 filed March 1,
    1999, SEC File No. 333-73179).                                                                                                                                                                                           
|       
|        | 10.33 |                         |  | Amendment, dated December 4, 1998 to the
    Amended and Restated Credit Facility, dated July 18, 1997,
    as amended and restated on September 26, 1997, between
    Argo-Tech, AT Holdings Corporation, the Lenders party
    thereto and Chase Manhattan Bank, as Administrative Agent
    (incorporated herein by reference to Exhibit 10.32 of the
    Companys registration statement on form S-4/A filed
    April 22, 1999, SEC File No. 333-73179).
|       
|        | 10.34 |                         |  | Amendment, dated June 9, 2000 to the Amended
    and Restated Credit Facility, dated July 18, 1997, as
    amended and restated on September 26, 1997, between Argo-Tech,
    AT Holdings Corporation, the Lenders party thereto and
    Chase Manhattan Bank, as Administrative Agent (incorporated
    herein by reference to Exhibit 10.31 of the Companys
    Annual Report on Form 10-K, for the year ended
    October 28, 2000).                      
|       
|        | 10.35 | **                      |  | Amendment, dated October 26, 2002 to the
    Amended and Restated Credit Facility, dated July 18, 1997,
    as amended and restated on September 26, 1997, between
    Argo-Tech, AT Holdings Corporation, the Lenders party
    thereto and JPMorgan Chase Bank, as Administrative Agent.                                                                                                                                                                    
|       
|        | 10.36 | **                      |  | Amendment, dated November 22, 2002, to
    Argo-Tech Corporation Trust Agreement, dated October 28,
    1994.                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 12**  |                         |  | Statement regarding computation of ratios.                                                                                                                                                                                                                                                                                                                                                                                                                    
|       
|        | 21    |                         |  | List of Subsidiaries (incorporated herein by
    reference to Exhibit 21 of the Companys Registration
    Statement on form S-1, filed October 17, 1997, SEC
    File No. 333-38223).                                                                                                                                                                                                                                                                        
|       
|        | 99**  |                         |  | Certification Pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                               



---



|    |                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------
|*   | Reflects management contract or other
    compensatory arrangement required to be filed as an exhibit
    pursuant to Item 14(c) of this Report.
|   
|**  | Filed herewith                                                                                                                                  
|   
|(b) | We did not file any reports on Form 8-K
    during the fourth quarter of 2002.                                                                  



|    |                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------
|(c) | The exhibits which are listed under
    Item 15(a)(3) are filed or incorporated by reference herein.



|    |                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------
|(d) | No financial statement schedules are required to
    be filed herein, therefore, none are listed under
    Item 15(a)(2).

Supplemental Information to be furnished with
reports filed pursuant to Section 15(d) of the Act by
Registrants which have not registered securities pursuant to
Section 12 of the Act

No annual report or proxy statement covering our
last fiscal year has been or will be circulated to security
holders.

33



---



##### Table of Contents






SIGNATURES

Pursuant to the requirements of
Section 13 of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

| |  |                        |  |                                                                    
| |  | ---------------------- |  | -------------------------------------------------------------------
| |  | ARGO-TECH CORPORATION 
|
| |  | By:                    |  | /s/ FRANCES S. ST. CLAIR                                           
| |  |                        |  |                                                                    
| |  |                        |  | Frances S. St. Clair
    Vice President and Chief Financial Officer
|
| |  | Date: January 24, 2003

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|                                             |  |                                                                                                |  |                 
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------------- |  | ----------------
|SIGNATURE                                    |  | TITLE                                                                                          |  | DATE            
|                                             |  |                                                                                                |  |                 
|                                            
|/s/ MICHAEL S. LIPSCOMBMichael S. Lipscomb   |  | Chairman, President and Chief Executive Officer
    and Director (Principal Executive Officer) |  | January 24, 2003
|/s/ FRANCES S. ST. CLAIRFrances S. St. Clair |  | Vice President and Chief Financial Officer and
    Director (Principal Financial Officer)      |  | January 24, 2003
|/s/ PAUL R. KEENPaul R. Keen                 |  | Vice President, General Counsel, Secretary and
    Director                                    |  | January 24, 2003
|/s/ PAUL A. SKLADPaul A. Sklad               |  | Controller (Principal Accounting Officer)                                                      |  | January 24, 2003

34



---



##### Table of Contents



CERTIFICATION

I, Michael S. Lipscomb, certify that:



| |                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.     I have reviewed
    this annual report on Form 10-K of Argo-Tech Corporation;                                                                                                                                                                                                                                                                   
|
| | 2.     Based on my
    knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact
    necessary to make the statements made, in light of the
    circumstances under which such statements were made, not
    misleading with respect to the period covered by this annual
    report;
|
| | 3.     Based on my
    knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in
    all material respects the financial condition, results of
    operations and cash flows of the registrant as of, and for, the
    periods presented in this annual report;                       
|
| | 4.     The
    registrants other certifying officer and I are responsible
    for establishing and maintaining disclosure controls and
    procedures (as defined in Exchange Act Rules 13a-14 and
    15d-14) for the registrant and we have:                                                                                                        



| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this annual report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this annual report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



| |                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5.     The
    registrants other certifying officer and I have disclosed,
    based on our most recent evaluation, to the registrants
    auditors and the audit committee of registrants board of
    directors (or persons performing the equivalent function):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    



| |                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6.     The
    registrants other certifying officer and I have indicated
    in this annual report whether or not there were significant
    changes in internal controls or in other factors that could
    significantly affect internal controls subsequent to the date of
    our most recent evaluation, including any corrective actions
    with regard to significant deficiencies and material weaknesses.

Date: January 24, 2003



| |     |                                                                                                                                 
| | --- | --------------------------------------------------------------------------------------------------------------------------------
| | By: | /s/ MICHAEL S. LIPSCOMB 
     ______________________________________ 
     Michael S. Lipscomb 
     Chairman, President and CEO

35



---



##### Table of Contents



CERTIFICATION

I, Frances S. St. Clair, certify that:



| |                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.     I have reviewed
    this annual report on Form 10-K of Argo-Tech Corporation;                                                                                                                                                                                                                                                                   
|
| | 2.     Based on my
    knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact
    necessary to make the statements made, in light of the
    circumstances under which such statements were made, not
    misleading with respect to the period covered by this annual
    report;
|
| | 3.     Based on my
    knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in
    all material respects the financial condition, results of
    operations and cash flows of the registrant as of, and for, the
    periods presented in this annual report;                       
|
| | 4.     The
    registrants other certifying officer and I are responsible
    for establishing and maintaining disclosure controls and
    procedures (as defined in Exchange Act Rules 13a-14 and
    15d-14) for the registrant and we have:                                                                                                        



| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this annual report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this annual report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



| |                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5.     The
    registrants other certifying officer and I have disclosed,
    based on our most recent evaluation, to the registrants
    auditors and the audit committee of registrants board of
    directors (or persons performing the equivalent function):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    



| |                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6.     The
    registrants other certifying officer and I have indicated
    in this annual report whether or not there were significant
    changes in internal controls or in other factors that could
    significantly affect internal controls subsequent to the date of
    our most recent evaluation, including any corrective actions
    with regard to significant deficiencies and material weaknesses.

Date: January 24, 2003



| |     |                                                                                                                              
| | --- | -----------------------------------------------------------------------------------------------------------------------------
| | By: | /s/ FRANCES S. ST. CLAIR 
     ______________________________________ 
     Frances S. St. Clair 
     Vice President and CFO

36



---



##### Table of Contents



ARGO-TECH CORPORATION AND SUBSIDIARIES

ANNUAL REPORT ON FORM 10-K:

FISCAL YEAR ENDED OCTOBER 26, 2002


ITEM 8 AND ITEM 15(a)(1)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES

(A Wholly-Owned Subsidiary of AT Holdings
Corporation)







INDEX TO FINANCIAL STATEMENTS

|                                                                                                                                                        |  |      |          | 
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -------- | 
|                                                                                                                                                        |  | Page
|                                                                                                                                                        |  |     
|INDEPENDENT AUDITORS REPORT                                                                                                                            |  |      | F-1      | 
|CONSOLIDATED BALANCE SHEETS AS OF OCTOBER 26,
    2002 AND OCTOBER 27, 2001                                                                             |  |      | F-2      | 
|CONSOLIDATED STATEMENTS OF NET INCOME FOR THE
    FISCAL YEARS ENDED OCTOBER 26, 2002, OCTOBER 27, 2001 AND
    OCTOBER 28, 2000                        |  |      | F-3      | 
|CONSOLIDATED STATEMENTS OF SHAREHOLDERS
    EQUITY/(DEFICIENCY) FOR THE FISCAL YEARS ENDED OCTOBER 26, 2002,
    OCTOBER 27, 2001 AND OCTOBER 28, 2000 |  |      | F-4      | 
|CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
    FISCAL YEARS ENDED OCTOBER 26, 2002, OCTOBER 27, 2001 AND
    OCTOBER 28, 2000                        |  |      | F-5      | 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR
    THE FISCAL YEARS ENDED OCTOBER 26, 2002, OCTOBER 27, 2001 AND
    OCTOBER 28, 2000                   |  |      | F-6F-20 | 



---



##### Table of Contents






INDEPENDENT AUDITORS REPORT

To the Shareholder and Board of Directors

of Argo-Tech Corporation and subsidiaries


(a wholly-owned subsidiary of AT Holdings
Corporation)


We have audited the accompanying consolidated
balance sheets of Argo-Tech Corporation and subsidiaries (a
wholly-owned subsidiary of AT Holdings Corporation) (the
Company) as of October 26, 2002 and
October 27, 2001 and the related consolidated statements of
net income, shareholders equity/(deficiency), and cash
flows for each of the three years in the period ended
October 26, 2002. These financial statements are the
responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, such consolidated financial
statements present fairly, in all material respects, the
financial position of the Company as of October 26, 2002
and October 27, 2001, and the results of its operations and
its cash flows for each of the three years in the period ended
October 26, 2002 in conformity with accounting principles
generally accepted in the United States of America.

As discussed in Note 7 to the consolidated
financial statements, effective October 28, 2001, the
Company changed its method of accounting for goodwill as a
result of the adoption of Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets.

/s/ Deloitte & Touche LLP

Cleveland, Ohio

January 24, 2003


F-1



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES

(A Wholly-Owned Subsidiary of AT Holdings
Corporation)







CONSOLIDATED BALANCE SHEETS





October 26, 2002 and October 27,
2001


|                                                            |                                                                                           |                                         |         |         |         |   |         |         |         |  
|----------------------------------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                                                            |                                                                                           | 2002                                    |         | 2001   
|                                                            |                                                                                           |                                         |         |        
|                                                            |                                                                                           |                                        
|                                                            |                                                                                           | (In thousands, except                  
|                                                            |                                                                                           | share data)                            
|ASSETS                                                     
|CURRENT ASSETS:                                             |                                                                                           |                                         |         |         |         |   |         |        
|                                                            | Cash and cash equivalents                                                                 |                                         | $       | 17,769  |         |   | $       | 8,057   |        
|                                                            | Receivables, net                                                                          |                                         |         | 24,550  |         |   |         | 32,051  |        
|                                                            | Income tax receivable                                                                     |                                         |         | 3,274   |         |   |         | 3,885   |        
|                                                            | Inventories                                                                               |                                         |         | 25,123  |         |   |         | 28,861  |        
|                                                            | Deferred income taxes and prepaid expenses                                                |                                         |         | 5,002   |         |   |         | 5,648   |        
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|                                                            |                                                                                           | Total current assets                    |         |         | 75,718  |   |         |         | 78,502  |  
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|PROPERTY AND EQUIPMENT, net of accumulated
    depreciation |                                                                                           |                                         | 26,204  |         |         |   | 29,027  |        
|GOODWILL, net of accumulated amortization                   |                                                                                           |                                         | 110,059 |         |         |   | 108,933 |        
|INTANGIBLE ASSETS, net of accumulated amortization          |                                                                                           |                                         | 38,331  |         |         |   | 44,145  |        
|OTHER ASSETS                                                |                                                                                           |                                         | 10,021  |         |         |   | 12,967  |        
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|Total Assets                                                |                                                                                           | $                                       | 260,333 |         |         | $ | 273,574 |        
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|LIABILITIES                                                
|CURRENT LIABILITIES:                                        |                                                                                           |                                         |         |         |         |   |         |        
|                                                            | Current portion of long-term debt                                                         |                                         | $       | 16,000  |         |   | $       | 18,612  |        
|                                                            | Accounts payable                                                                          |                                         |         | 5,252   |         |   |         | 4,840   |        
|                                                            | Accrued liabilities                                                                       |                                         |         | 21,114  |         |   |         | 19,146  |        
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|                                                            |                                                                                           | Total current liabilities               |         |         | 42,366  |   |         |         | 42,598  |  
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|LONG-TERM DEBT, net of current maturities                   |                                                                                           |                                         | 219,045 |         |         |   | 234,768 |        
|OTHER NONCURRENT LIABILITIES                                |                                                                                           |                                         | 21,720  |         |         |   | 24,333  |        
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|                                                            |                                                                                           | Total Liabilities                       |         |         | 283,131 |   |         |         | 301,699 |  
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|REDEEMABLE ESOP STOCK                                       |                                                                                           |                                         | 11,355  |         |         |   | 18,194  |        
|                                                            | Unearned ESOP stock                                                                       |                                         |         | (2,520  | )       |   |         | (4,200  | )      
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|                                                            |                                                                                           |                                         | 8,835   |         |         |   | 13,994  |        
|SHAREHOLDERS EQUITY/(DEFICIENCY):                          |                                                                                           |                                         |         |         |         |   |         |        
|                                                            | Common Stock, $.01 par value, authorized
    3,000 shares; 1 share issued and outstanding |                                         |         |        |         |   |         |        |        
|                                                            | Paid-in capital                                                                           |                                         |         |        |         |   |         |        |        
|                                                            | Accumulated other comprehensive loss                                                      |                                         |         | (3,235  | )       |   |         | (1,948  | )      
|                                                            | Accumulated deficit                                                                       |                                         |         | (28,398 | )       |   |         | (40,171 | )      
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|                                                            |                                                                                           | Total shareholders equity/(deficiency) |         |         | (31,633 | ) |         |         | (42,119 | )
|                                                            |                                                                                           |                                         |         |         |         |   |         |        
|Total Liabilities and Shareholders
    Equity/(Deficiency) |                                                                                           | $                                       | 260,333 |         |         | $ | 273,574 |        
|                                                            |                                                                                           |                                         |         |         |         |   |         |        



The accompanying notes to consolidated financial
statements are an integral part of these statements.


F-2



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES

(A Wholly-Owned Subsidiary of AT Holdings
Corporation)







CONSOLIDATED STATEMENTS OF NET
INCOME





For the Fiscal Years Ended October 26,
2002, October 27, 2001 and October 28, 2000


|                                    |                    |                |         |        |  |      |         |        |  |   |         |        | 
|----------------------------------- | ------------------ | -------------- | ------- | ------ |  | ---- | ------- | ------ |  | - | ------- | ------ | 
|                                    |                    | 2002           |         | 2001   |  | 2000
|                                    |                    |                |         |        |  |     
|                                    |                    |               
|                                    |                    | (In thousands)
|Net revenues                        |                    | $              | 155,303 |        |  | $    | 173,208 |        |  | $ | 159,353 |       
|Cost of revenues                    |                    |                | 88,669  |        |  |      | 94,175  |        |  |   | 92,483  |       
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|                                    | Gross profit       |                |         | 66,634 |  |      |         | 79,033 |  |   |         | 66,870 | 
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|Selling, general and administrative |                    |                | 23,359  |        |  |      | 23,094  |        |  |   | 24,404  |       
|Research and development            |                    |                | 11,722  |        |  |      | 10,265  |        |  |   | 9,597   |       
|Amortization of intangible assets   |                    |                | 3,721   |        |  |      | 7,515   |        |  |   | 7,517   |       
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|                                    | Operating expenses |                |         | 38,802 |  |      |         | 40,874 |  |   |         | 41,518 | 
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|Income from operations              |                    |                | 27,832  |        |  |      | 38,159  |        |  |   | 25,352  |       
|Interest expense                    |                    |                | 21,434  |        |  |      | 24,534  |        |  |   | 25,644  |       
|Other, net                          |                    |                | (97     | )      |  |      | (51     | )      |  |   | (402    | )     
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|Income before income taxes          |                    |                | 6,495   |        |  |      | 13,676  |        |  |   | 110     |       
|Income tax provision (benefit)      |                    |                | 569     |        |  |      | 2,876   |        |  |   | (642    | )     
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       
|Net income                          |                    | $              | 5,926   |        |  | $    | 10,800  |        |  | $ | 752     |       
|                                    |                    |                |         |        |  |      |         |        |  |   |         |       



The accompanying notes to consolidated financial
statements are an integral part of these statements.


F-3



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES

(A Wholly-Owned Subsidiary of AT Holdings
Corporation)







CONSOLIDATED STATEMENTS OF SHAREHOLDERS
EQUITY/(DEFICIENCY)





For the Fiscal Years Ended October 26,
2002, October 27, 2001 and October 28, 2000


|                                        |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  
|--------------------------------------- |  | -------------- | - | ------- |  | ------------- | - | ----------- |  | ----- | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                        |  |                |   |         |  | Accumulated   |   |             |  |      
|                                        |  | Common         |   | Paid-In |  | Comprehensive |   | Accumulated |  |      
|                                        |  | Stock          |   | Capital |  | Income/(Loss) |   | Deficit     |  | Total
|                                        |  |                |   |         |  |               |   |             |  |      
|                                        |  |               
|                                        |  | (In thousands)
|BALANCE, OCTOBER 30, 1999               |  | $              |  |         |  | $             |  |             |  | $     | 132    |   |  | $ | (79,087 | ) |  | $ | (78,955 | )
|                                        |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  
|Net income                              |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 752     |   |  |   | 752     |  
|Reduction of redeemable ESOP stock      |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 25,133  |   |  |   | 25,133  |  
|Dividend                                |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (5,383  | ) |  |   | (5,383  | )
|Foreign currency translation adjustment |  |                |   |         |  |               |   |             |  |       | (101   | ) |  |   |         |   |  |   | (101    | )
|Other, net                              |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (288    | ) |  |   | (288    | )
|                                        |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  
|BALANCE, OCTOBER 28, 2000               |  |                |  |         |  |               |  |             |  |       | 31     |   |  |   | (58,873 | ) |  |   | (58,842 | )
|Net income                              |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 10,800  |   |  |   | 10,800  |  
|Additional minimum pension liability    |  |                |   |         |  |               |   |             |  |       | (1,828 | ) |  |   |         |   |  |   | (1,828  | )
|Reduction of redeemable ESOP stock      |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 9,081   |   |  |   | 9,081   |  
|Dividend                                |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (1,661  | ) |  |   | (1,661  | )
|Foreign currency translation adjustment |  |                |   |         |  |               |   |             |  |       | (151   | ) |  |   |         |   |  |   | (151    | )
|Activity related to stock options       |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 526     |   |  |   | 526     |  
|Other, net                              |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (44     | ) |  |   | (44     | )
|                                        |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  
|BALANCE, OCTOBER 27, 2001               |  |                |  |         |  |               |  |             |  |       | (1,948 | ) |  |   | (40,171 | ) |  |   | (42,119 | )
|Net income                              |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 5,926   |   |  |   | 5,926   |  
|Additional minimum pension liability    |  |                |   |         |  |               |   |             |  |       | (1,273 | ) |  |   |         |   |  |   | (1,273  | )
|Reduction of redeemable ESOP stock      |  |                |   |         |  |               |   |             |  |       |        |   |  |   | 6,504   |   |  |   | 6,504   |  
|Dividend                                |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (578    | ) |  |   | (578    | )
|Foreign currency translation adjustment |  |                |   |         |  |               |   |             |  |       | (14    | ) |  |   |         |   |  |   | (14     | )
|Other, net                              |  |                |   |         |  |               |   |             |  |       |        |   |  |   | (79     | ) |  |   | (79     | )
|                                        |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  
|BALANCE, OCTOBER 26, 2002               |  | $              |  |         |  | $             |  |             |  | $     | (3,235 | ) |  | $ | (28,398 | ) |  | $ | (31,633 | )
|                                        |  |                |   |         |  |               |   |             |  |       |        |   |  |   |         |   |  |   |         |  

The accompanying notes to consolidated financial
statements are an integral part of these statements.

F-4



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES

(A Wholly-Owned Subsidiary of AT Holdings
Corporation)







CONSOLIDATED STATEMENTS OF CASH
FLOWS





For the Fiscal Years Ended October 26, 2002,
October 27, 2001 and October 28, 2000


|                                      |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |         |        |        |  
|------------------------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | ----------------------------- | ------- | ------ | ----- | ----- | ------- | ------ | ------ | ----- | ------- | ------ | ------ | -
|                                      |                                                                                       | 2002                                                                                 |                               | 2001    |        | 2000 
|                                      |                                                                                       |                                                                                      |                               |         |        |      
|                                      |                                                                                       |                                                                                     
|                                      |                                                                                       | (In thousands)                                                                      
|CASH FLOWS FROM OPERATING ACTIVITIES: |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|                                      | Net income                                                                            |                                                                                      | $                             | 5,926   |        |       | $     | 10,800  |        |        | $     | 752     |       
|                                      | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                                      |                               |         |        |       |       |         |        |        |       |         |       
|                                      |                                                                                       | Depreciation                                                                         |                               |         | 4,608  |       |       |         | 5,559  |        |       |         | 5,977  |       
|                                      |                                                                                       | Amortization of intangible assets and deferred
    financing costs                   |                               |         | 5,779  |       |       |         | 9,655  |        |       |         | 9,658  |       
|                                      |                                                                                       | Accretion of bond discount                                                           |                               |         | 277    |       |       |         | 252    |        |       |         | 230    |       
|                                      |                                                                                       | Compensation expense recognized in connection
    with employee stock ownership plan |                               |         | 1,344  |       |       |         | 2,091  |        |       |         | 2,972  |       
|                                      |                                                                                       | Compensation expense recognized in connection
    with stock options                 |                               |         |        |       |       |         | 526    |        |       |         |        |       
|                                      |                                                                                       | Amortization of inventory step-up                                                    |                               |         |        |       |       |         |        |        |       |         | 155    |       
|                                      |                                                                                       | Deferred pension cost                                                                |                               |         | (1,375 | )     |       |         | (2,299 | )      |       |         | (523   | )     
|                                      |                                                                                       | Deferred income taxes                                                                |                               |         | (1,658 | )     |       |         | (1,962 | )      |       |         | (2,136 | )     
|                                      |                                                                                       | Changes in operating assets and liabilities:                                         |                               |         |        |       |       |         |        |        |       |         |        |       
|                                      |                                                                                       |                                                                                      | Receivables                   |         |        | 8,112 |       |         |        | (8,928 | )     |         |        | 3,161  |  
|                                      |                                                                                       |                                                                                      | Inventories                   |         |        | 3,738 |       |         |        | 1,254  |       |         |        | 3,773  |  
|                                      |                                                                                       |                                                                                      | Prepaid expenses              |         |        | 307   |       |         |        | 301    |       |         |        | (191   | )
|                                      |                                                                                       |                                                                                      | Accounts payable              |         |        | 412   |       |         |        | (150   | )     |         |        | (1,657 | )
|                                      |                                                                                       |                                                                                      | Accrued and other liabilities |         |        | 3,284 |       |         |        | 1,161  |       |         |        | 382    |  
|                                      |                                                                                       | Other, net                                                                           |                               |         | (30    | )     |       |         | (197   | )      |       |         | (126   | )     
|                                      |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|                                      | Net cash provided by operating activities                                             |                                                                                      |                               | 30,724  |        |       |       | 18,063  |        |        |       | 22,427  |       
|                                      |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|CASH FLOWS FROM INVESTING ACTIVITIES: |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|                                      | Capital expenditures                                                                  |                                                                                      |                               | (1,785  | )      |       |       | (1,885  | )      |        |       | (3,025  | )     
|                                      |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|                                      | Net cash used in investing activities                                                 |                                                                                      |                               | (1,785  | )      |       |       | (1,885  | )      |        |       | (3,025  | )     
|                                      |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|CASH FLOWS FROM FINANCING ACTIVITIES: |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|                                      | Additional borrowing of long-term debt                                                |                                                                                      |                               |         |        |       |       |         |        |        |       | 6,000   |       
|                                      | Repayment of long-term debt                                                           |                                                                                      |                               | (18,612 | )      |       |       | (11,634 | )      |        |       | (17,343 | )     
|                                      | Durodyne acquisition note payable                                                     |                                                                                      |                               |         |        |       |       |         |        |        |       | (1,112  | )     
|                                      | Payment of financing related fees                                                     |                                                                                      |                               | (37     | )      |       |       |         |        |        |       | (263    | )     
|                                      | Dividend                                                                              |                                                                                      |                               | (578    | )      |       |       | (1,661  | )      |        |       | (5,383  | )     
|                                      |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|                                      | Net cash used in financing activities                                                 |                                                                                      |                               | (19,227 | )      |       |       | (13,295 | )      |        |       | (18,101 | )     
|                                      |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|CASH AND CASH EQUIVALENTS:            |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|Net increase for the period           |                                                                                       |                                                                                      | 9,712                         |         |        |       | 2,883 |         |        |        | 1,301 |        
|Balance, Beginning of period          |                                                                                       |                                                                                      | 8,057                         |         |        |       | 5,174 |         |        |        | 3,873 |        
|                                      |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        
|Balance, End of period                |                                                                                       | $                                                                                    | 17,769                        |         |        | $     | 8,057 |         |        | $      | 5,174 |        
|                                      |                                                                                       |                                                                                      |                               |         |        |       |       |         |        |        |       |        

The accompanying notes to consolidated financial
statements are an integral part of these statements.

F-5



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES

(A Wholly-Owned Subsidiary of AT Holdings
Corporation)







NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS





For the Fiscal Years Ended October 26, 2002,
October 27, 2001 and October 28, 2000




|   |                      
|-- | ---------------------
|1. | Basis of Presentation

The principal operations of Argo-Tech Corporation
(a wholly-owned subsidiary of AT Holdings Corporation) and
its subsidiaries (the Company) include the design,
manufacture and distribution of aviation products, primarily
aircraft fuel pumps, throughout the world. In addition, the
Company leases a portion of its Cleveland, Ohio manufacturing
facility to other parties. Argo-Techs fiscal year ends on
the last Saturday in October. The fiscal years ended
October 26, 2002, October 27, 2001 and
October 28, 2000 consisted of 52 weeks. Argo-Tech is
obligated to fulfill certain obligations of AT Holdings
Corporation. As a result, those obligations have been reflected
in the Companys financial statements. Certain
reclassifications have been made in the prior years
financial statements to conform to the current year presentation.

Argo-Tech Corporation is a parent, holding
company with four wholly-owned operating subsidiaries that
guarantee Argo-Techs senior subordinated notes. Argo-Tech
has no outside assets, liabilities or operations apart from its
wholly-owned subsidiaries. The senior subordinated notes
(Note 11) are fully, unconditionally, jointly and severally
guaranteed by the guarantor subsidiaries, and therefore,
separate financial statements of the guarantor subsidiaries will
not be presented. Management has determined that the information
presented by such separate financial statements is not material
to investors.



|   |                                               
|-- | ----------------------------------------------
|2. | Summary of Significant Accounting
    Policies

Principles of Consolidation The consolidated financial
statements include the accounts of the Company. All material
intercompany accounts and transactions between these entities
have been eliminated.

Cash Equivalents Cash equivalents represent
short-term investments with an original maturity of three months
or less.

Receivables The Company does not generally
require collateral or other security to guarantee trade
receivables.

Inventories Inventories are stated at standard
cost which approximates the costs which would be determined
using the first-in, first-out (FIFO) method. The recorded
value of inventories is not in excess of market value.

Property and Equipment Property and equipment are stated
at cost and are depreciated using the straight-line or an
accelerated method over their estimated useful lives as follows:

|                           |  |  |               | 
|-------------------------- |  |  | ------------- | 
|Buildings and improvements |  |  | 7 to 30 years | 
|Equipment                  |  |  | 3 to 10 years | 

Goodwill Goodwill represents the excess of
the cost of companies acquired over the fair value of their net
assets at the dates of acquisition.

Intangible Assets In conjunction with the
acquisition of Argo-Tech Corporation Costa Mesa in 1997, the
Company recognized identified intangible assets, which are
amortized on a straight-line basis over their estimated economic
lives as follows:

|                    |  |  |             | 
|------------------- |  |  | ----------- | 
|Contracts           |  |  | 10 Years    | 
|Spare Parts Annuity |  |  | 10-28 Years | 
|Patents             |  |  | 14-17 Years | 

Deferred Financing Costs The costs of obtaining financing
are included in Other Assets in the Consolidated Balance Sheets
and are amortized over the terms of the financing. The amortized
cost is included in

F-6



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

interest expense in the consolidated statements
of net income. Accumulated amortization at October 26, 2002
and October 27, 2001 was $9,404,000, and $7,346,000
respectively.

Redeemable Stock Redeemable ESOP Stock has been
excluded from Shareholders Equity/ (Deficiency) due to the
ability of the holders of AT Holdings common stock to
put, subject to certain restrictions, the shares to
the Company. The increase/ (decrease) in the Redeemable ESOP
Stock has been recorded in Accumulated Deficit.

Foreign Currency Translation Assets and liabilities of the
Companys foreign subsidiaries are translated into
U.S. dollars at the current rate of exchange, while
revenues and expenses are translated at the average exchange
rate during the year. Adjustments from translating foreign
subsidiaries financial statements are excluded from the
consolidated statements of net income and are reported as a
component of shareholders equity/ (deficiency).

Derivative Financial
Instruments All
derivative financial instruments, such as interest rate swap
contracts and foreign exchange contracts, are recognized in the
financial statements and measured at fair value regardless of
the purpose or intent for holding them. Changes in the fair
value of derivative financial instruments are either recognized
periodically in income or shareholders equity (as a
component of comprehensive income), depending on whether the
derivative is being used to hedge changes in fair value or cash
flows. At October 26, 2002 the Company did not have any
open derivative contracts.

Revenue Recognition Revenues are generally recognized
when goods are shipped or services provided.

Income Taxes Income taxes are accounted for
under the asset and liability approach, which can result in
recording tax provisions or benefits in periods different than
the periods in which such taxes are paid or benefits realized.
Expected tax benefits from temporary differences that will
result in deductible amounts in future years and from
carryforwards, if it is more likely than not that such tax
benefits will be realized, are recognized currently.

Use of Estimates The preparation of financial
statements in conformity with accounting principles generally
accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

F-7



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |                                
|-- | -------------------------------
|3. | Other Balance Sheet Information

The major components of the following balance
sheet captions were (in thousands):

|                              |                                   |             |   |             |        |  |   |        |        | 
|----------------------------- | --------------------------------- | ----------- | - | ----------- | ------ |  | - | ------ | ------ | 
|                              |                                   | October 26, |   | October 27,
|                              |                                   | 2002        |   | 2001       
|                              |                                   |             |   |            
|Accrued liabilities:          |                                   |             |   |             |        |  |   |       
|                              | Salaries and accrued compensation |             | $ | 8,086       |        |  | $ | 7,077  |       
|                              | Accrued interest                  |             |   | 1,315       |        |  |   | 1,315  |       
|                              | Accrued warranty                  |             |   | 1,493       |        |  |   | 1,668  |       
|                              | Accrued income taxes              |             |   | 4,833       |        |  |   | 3,120  |       
|                              | Other                             |             |   | 5,387       |        |  |   | 5,966  |       
|                              |                                   |             |   |             |        |  |   |       
|                              |                                   | Total       |   | $           | 21,114 |  |   | $      | 19,146 | 
|                              |                                   |             |   |             |        |  |   |       
|Other noncurrent liabilities: |                                   |             |   |             |        |  |   |       
|                              | Deferred income taxes             |             | $ | 10,154      |        |  | $ | 13,323 |       
|                              | Accrued post retirement benefits  |             |   | 10,287      |        |  |   | 9,843  |       
|                              | Other                             |             |   | 1,279       |        |  |   | 1,167  |       
|                              |                                   |             |   |             |        |  |   |       
|                              |                                   | Total       |   | $           | 21,720 |  |   | $      | 24,333 | 
|                              |                                   |             |   |             |        |  |   |       



|   |            
|-- | -----------
|4. | Receivables

Receivables consist of the following (in
thousands):

|                                                                                 |                                                              |                      |        |             |      |   |        |         |     | 
|-------------------------------------------------------------------------------- | ------------------------------------------------------------ | -------------------- | ------ | ----------- | ---- | - | ------ | ------- | --- | 
|                                                                                 |                                                              | October 26,          |        | October 27,
|                                                                                 |                                                              | 2002                 |        | 2001       
|                                                                                 |                                                              |                      |        |            
|Amounts billed  net of allowance for
    uncollectible amounts of $310 and $316 |                                                              | $                    | 25,000 |             |      | $ | 31,598 |        
|Amounts unbilled (principally commercial
    customers):                         |                                                              |                      |        |             |      |   |        |        
|                                                                                 | Net reimbursable costs incurred on uncompleted
    contracts |                      |        | 847         |      |   |        | 16,550  |    
|                                                                                 | Billings to date                                             |                      |        | (1,297      | )    |   |        | (16,097 | )  
|                                                                                 |                                                              |                      |        |             |      |   |        |        
|                                                                                 |                                                              | Total unbilled  net |        |             | (450 | ) |        |         | 453 | 
|                                                                                 |                                                              |                      |        |             |      |   |        |        
|Net receivables                                                                  |                                                              | $                    | 24,550 |             |      | $ | 32,051 |        
|                                                                                 |                                                              |                      |        |             |      |   |        |        



|   |            
|-- | -----------
|5. | Inventories

Inventories consist of the following (in
thousands):

|                                          |       |             |        |             |  |   |        |        | 
|----------------------------------------- | ----- | ----------- | ------ | ----------- |  | - | ------ | ------ | 
|                                          |       | October 26, |        | October 27,
|                                          |       | 2002        |        | 2001       
|                                          |       |             |        |            
|Finished goods                            |       | $           | 1,861  |             |  | $ | 2,100  |       
|Work-in-process and purchased parts       |       |             | 16,593 |             |  |   | 17,696 |       
|Raw materials and supplies                |       |             | 11,723 |             |  |   | 12,975 |       
|                                          |       |             |        |             |  |   |        |       
|                                          | Total |             |        | 30,177      |  |   |        | 32,771 | 
|Reserve for excess and obsolete inventory |       |             | (5,054 | )           |  |   | (3,910 | )     
|                                          |       |             |        |             |  |   |        |       
|Inventories  net                         |       | $           | 25,123 |             |  | $ | 28,861 |       
|                                          |       |             |        |             |  |   |        |       

F-8



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |                  
|-- | -----------------
|6. | Intangible Assets

The following is a summary of intangible assets,
other than goodwill (in thousands):

|                   |                     |                  |   |                  |        |        |   |              |        |  |   |        |        |  |   |       |        | 
|------------------ | ------------------- | ---------------- | - | ---------------- | ------ | ------ | - | ------------ | ------ |  | - | ------ | ------ |  | - | ----- | ------ | 
|                   |                     |                  |   |                 
|                   |                     | October 26, 2002 |   | October 27, 2001
|                   |                     |                  |   |                 
|                   |                     | Gross            |   | Accumulated      |        | Gross  |   | Accumulated 
|                   |                     | Amount           |   | Amortization     |        | Amount |   | Amortization
|                   |                     |                  |   |                  |        |        |   |             
|Intangible Assets: |                     |                  |   |                  |        |        |   |              |        |  |   |        |        |  |   |      
|                   | Contracts           |                  | $ | 17,100           |        |        | $ | 8,693        |        |  | $ | 17,100 |        |  | $ | 6,983 |       
|                   | Spare parts annuity |                  |   | 38,200           |        |        |   | 8,537        |        |  |   | 38,200 |        |  |   | 6,857 |       
|                   | Patents             |                  |   | 387              |        |        |   | 126          |        |  |   | 387    |        |  |   | 102   |       
|                   | Workforce-in-place  |                  |   |                  |        |        |   |              |        |  |   | 4,900  |        |  |   | 2,500 |       
|                   |                     |                  |   |                  |        |        |   |              |        |  |   |        |        |  |   |      
|                   |                     | Total            |   | $                | 55,687 |        |   | $            | 17,356 |  |   | $      | 60,587 |  |   | $     | 16,442 | 
|                   |                     |                  |   |                  |        |        |   |              |        |  |   |        |        |  |   |      

Amortization expense recorded on the intangible
assets for the fiscal years ended October 26, 2002 and
October 27, 2001 was $3.4 million and
$4.0 million, respectively. The reduction in the gross
carrying amount and accumulated amortization in the table above
reflect the removal of the intangible asset, workforce in place,
which was reclassified from intangible assets to goodwill upon
the adoption of Statement of Financial Accounting Standards
(SFAS) No. 142. The estimated amortization expense for each
of the four succeeding fiscal years 2003 through 2006 is
$3.4 million and in fiscal year 2007 is $3.2 million.



|   |         
|-- | --------
|7. | Goodwill

Argo-Tech adopted SFAS No. 142,
Goodwill and Other Intangible Assets as of
October 28, 2001. Under this statement, goodwill and other
intangibles determined to have an infinite life are no longer
amortized; however, these assets are to be reviewed for
impairment on a periodic basis. Argo-Tech completed its
transitional impairment test for goodwill during the second
fiscal quarter of 2002 using a present value of future cash
flows valuation method. This process did not result in any
impairment being recorded upon the adoption of SFAS
No. 142. Goodwill is subject to an impairment test at least
annually thereafter. All of the Companys goodwill is
allocated to its Aerospace segment.

Upon adoption of SFAS No. 142,
$2.4 million related to the unamortized portion of the
intangible asset, workforce in place, was reclassified from
intangible assets to goodwill along with the related long-term
deferred tax liability of $1.0 million. The following pro
forma information shows what income would have been had SFAS
No. 142 been in effect as of October 31, 1999:

|                          |                                                 |      |       |      |  |      |        |       |  |   |       |       | 
|------------------------- | ----------------------------------------------- | ---- | ----- | ---- |  | ---- | ------ | ----- |  | - | ----- | ----- | 
|                          |                                                 | 2002 |       | 2001 |  | 2000
|                          |                                                 |      |       |      |  |     
|Net income as reported    |                                                 | $    | 5,926 |      |  | $    | 10,800 |       |  | $ | 752   |      
|Add amortization expense: |                                                 |      |       |      |  |      |        |       |  |   |       |      
|                          | Goodwill                                        |      |       |      |  |      |        | 3,489 |  |   |       | 3,490 | 
|                          | Workforce in place, net of tax of $245 and $245 |      |       |      |  |      |        | 367   |  |   |       | 367   | 
|                          |                                                 |      |       |      |  |      |        |       |  |   |       |      
|Adjusted net income       |                                                 | $    | 5,926 |      |  | $    | 14,656 |       |  | $ | 4,609 |      
|                          |                                                 |      |       |      |  |      |        |       |  |   |       |      

F-9



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |                       
|-- | ----------------------
|8. | Property and Equipment

Owned Property Property and equipment owned by
the Company consists of the following (in thousands):

|                                 |       |             |         |             |  |   |         |        | 
|-------------------------------- | ----- | ----------- | ------- | ----------- |  | - | ------- | ------ | 
|                                 |       | October 26, |         | October 27,
|                                 |       | 2002        |         | 2001       
|                                 |       |             |         |            
|Land and land improvements       |       | $           | 7,663   |             |  | $ | 7,663   |       
|Buildings and building equipment |       |             | 34,199  |             |  |   | 34,058  |       
|Machinery and equipment          |       |             | 39,045  |             |  |   | 37,383  |       
|Office and automotive equipment  |       |             | 7,409   |             |  |   | 7,721   |       
|Construction-in-progress         |       |             | 979     |             |  |   | 822     |       
|                                 |       |             |         |             |  |   |         |       
|                                 | Total |             |         | 89,295      |  |   |         | 87,647 | 
|Accumulated depreciation         |       |             | (63,091 | )           |  |   | (58,620 | )     
|                                 |       |             |         |             |  |   |         |       
|Total  net                      |       | $           | 26,204  |             |  | $ | 29,027  |       
|                                 |       |             |         |             |  |   |         |       

Property Leased to Others The Company leases certain
portions of its facility in Euclid, Ohio. The leases have been
accounted for as operating leases whereby revenue is recognized
as earned over the lease terms. The cost of property leased to
others is included in property and equipment and is being
depreciated over its estimated useful life. It is not practical
to determine the cost of the property that is being leased to
others or the related amount of accumulated depreciation. In
addition, the Company has separate service contracts with its
tenants under which the Company provides maintenance,
telecommunications and various other services.

Total rental revenue under the property leases
and service contracts is included in Net revenues
and was as follows for the fiscal years ended 2002, 2001 and
2000 (in thousands):

|                                                  |       |      |       |       |  |      |       |       |  |   |       |       | 
|------------------------------------------------- | ----- | ---- | ----- | ----- |  | ---- | ----- | ----- |  | - | ----- | ----- | 
|                                                  |       | 2002 |       | 2001  |  | 2000
|                                                  |       |      |       |       |  |     
|Minimum contractual amounts under property leases |       | $    | 4,526 |       |  | $    | 4,368 |       |  | $ | 4,548 |      
|Service contracts revenue based on usage          |       |      | 792   |       |  |      | 862   |       |  |   | 847   |      
|                                                  |       |      |       |       |  |      |       |       |  |   |       |      
|                                                  | Total |      | $     | 5,318 |  |      | $     | 5,230 |  |   | $     | 5,395 | 
|                                                  |       |      |       |       |  |      |       |       |  |   |       |      

Future minimum rentals under the noncancelable
property leases and service contracts at October 26, 2002
are (in thousands): $3,923 in 2003, $2,270 in 2004, $741 in
2005, $271 in 2006, and $6 in 2007.



|   |                       
|-- | ----------------------
|9. | Employee Benefit Plans

Employee Stock Ownership Plan The Company has an Employee Stock
Ownership Plan (ESOP) to provide retirement benefits to
qualifying, salaried employees. The ESOP grants to participants
in the plan certain ownership rights in, but not possession of,
the common stock of AT Holdings Corporation held by the Trustee
of the Plan. Shares of common stock are allocated annually to
participants in the ESOP pursuant to a prescribed formula. The
value of the shares committed to be released by the Trustee
under the Plans provisions for allocation to participants
was recognized as an expense of $1,344,000, $2,091,000 and
$2,972,000 for the fiscal years ended 2002, 2001 and 2000,
respectively. The cost of the shares acquired for the ESOP that
are not committed to be released to participants is shown as a
contra-account, Unearned ESOP shares.

F-10



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Summary information regarding ESOP activity
consists of the following:

|                                             |  |             |           |             |  |   |           |  
|-------------------------------------------- |  | ----------- | --------- | ----------- |  | - | --------- | -
|                                             |  | October 26, |           | October 27,
|                                             |  | 2002        |           | 2001       
|                                             |  |             |           |            
|Allocated shares                             |  |             | 315,000   |             |  |   | 273,000   |  
|Shares released for allocation               |  |             | 42,000    |             |  |   | 42,000    |  
|Unearned ESOP shares                         |  |             | 63,000    |             |  |   | 105,000   |  
|                                             |  |             |           |             |  |   |           |  
|Total ESOP shares                            |  |             | 420,000   |             |  |   | 420,000   |  
|Repurchased shares received as distributions |  |             | (65,151   | )           |  |   | (54,588   | )
|                                             |  |             |           |             |  |   |           |  
|Total available ESOP shares                  |  |             | 354,849   |             |  |   | 365,412   |  
|                                             |  |             |           |             |  |   |           |  
|Fair market value of unearned ESOP shares    |  | $           | 2,016,000 |             |  | $ | 5,227,950 |  
|                                             |  |             |           |             |  |   |           |  

All of the shares acquired for the ESOP (both
allocated and unearned shares) are owned and held in trust by
the ESOP.

The stock of AT Holdings Corporation is not
listed or traded on an active stock market and market prices
are, therefore, not available. Annually, an independent
financial consulting firm determines the fair market value based
upon the Companys performance and financial condition.

The Company provides an internal
market for shareholders through its purchase of their
common shares. Participants in the Companys ESOP have the
right to require the Company, within a specified period, to
repurchase shares received as distributions under the ESOP at
their fair market value.

Pension and Savings Plans The Company has two
noncontributory defined benefit pension plans for qualifying
hourly and salary employees. A plan covering salaried employees
provides pension benefits that are based on the employees
compensation and years of service. The future accrual of
benefits was terminated in connection with the formation of the
ESOP. A plan covering hourly employees provides benefits of
stated amounts for each year of service. The Companys
funding policy is to contribute actuarially determined amounts
allowable under Internal Revenue Service regulations. The
Company also sponsors four employee savings plans, which cover
substantially all of the Companys employees. The plan
covering Argo-Tech Corporation Costa Mesa employees provides for
a match of participating employees contributions. The
Companys contribution, recognized as expense was
approximately $408,000, $373,000 and $507,000 in fiscal years
2002, 2001 and 2000 respectively.

A summary of the components of net periodic
pension cost for the pension plans for the fiscal years ended
2002, 2001 and 2000 is as follows (in thousands):

|                                                          |  |      |        |      |  |      |        |   |  |   |        |  
|--------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                          |  | 2002 |        | 2001 |  | 2000
|                                                          |  |      |        |      |  |     
|Service cost  benefits earned during
    the period      |  | $    | 255    |      |  | $    | 196    |   |  | $ | 224    |  
|Interest cost on projected benefit obligation             |  |      | 1,279  |      |  |      | 1,191  |   |  |   | 1,149  |  
|Expected return on plan assets                            |  |      | (1,628 | )    |  |      | (1,666 | ) |  |   | (1,642 | )
|Net amortization and deferral                             |  |      | 218    |      |  |      | (99    | ) |  |   | (135   | )
|                                                          |  |      |        |      |  |      |        |   |  |   |        |  
|Net periodic pension cost/ (benefit)                      |  |      | 124    |      |  |      | (378   | ) |  |   | (404   | )
|                                                          |  |      |        |      |  |      |        |   |  |   |        |  
|Settlement (gain)/ loss                                   |  |      | (184   | )    |  |      |        |   |  |   |        |  
|Special termination benefits                              |  |      | 770    |      |  |      |        |   |  |   |        |  
|                                                          |  |      |        |      |  |      |        |   |  |   |        |  
|Net periodic pension cost/(benefit) after
    settlements |  | $    | 710    |      |  | $    | (378   | ) |  | $ | (404   | )
|                                                          |  |      |        |      |  |      |        |   |  |   |        |  

F-11



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table sets forth the change in
projected benefit obligation (in thousands):

|                                        |  |             |        |             |  |   |        |  
|--------------------------------------- |  | ----------- | ------ | ----------- |  | - | ------ | -
|                                        |  | October 26, |        | October 27,
|                                        |  | 2002        |        | 2001       
|                                        |  |             |        |            
|Benefit obligation at beginning of year |  | $           | 17,875 |             |  | $ | 15,309 |  
|Service cost                            |  |             | 255    |             |  |   | 196    |  
|Interest cost                           |  |             | 1,279  |             |  |   | 1,191  |  
|Benefits paid                           |  |             | (918   | )           |  |   | (900   | )
|Actuarial (gain) loss                   |  |             | (547   | )           |  |   | 95     |  
|Change due to amendments                |  |             | 401    |             |  |   |        |  
|Curtailments                            |  |             | 118    |             |  |   |        |  
|Settlements                             |  |             | (1,222 | )           |  |   |        |  
|Special termination benefits            |  |             | 770    |             |  |   |        |  
|Change in discount rate                 |  |             | 1,169  |             |  |   | 1,984  |  
|                                        |  |             |        |             |  |   |        |  
|Benefit obligation at end of year       |  | $           | 19,180 |             |  | $ | 17,875 |  
|                                        |  |             |        |             |  |   |        |  

The following table sets forth the change in plan
assets (in thousands):

|                                               |  |             |        |             |  |   |        |  
|---------------------------------------------- |  | ----------- | ------ | ----------- |  | - | ------ | -
|                                               |  | October 26, |        | October 27,
|                                               |  | 2002        |        | 2001       
|                                               |  |             |        |            
|Fair value of plan assets at beginning of year |  | $           | 18,789 |             |  | $ | 19,291 |  
|Actual return on plan assets                   |  |             | (965   | )           |  |   | (114   | )
|Employer contributions                         |  |             | 1,000  |             |  |   | 512    |  
|Benefits paid                                  |  |             | (918   | )           |  |   | (900   | )
|Settlements                                    |  |             | (1,222 | )           |  |   |        |  
|                                               |  |             |        |             |  |   |        |  
|Fair value of plan assets at end of year       |  | $           | 16,684 |             |  | $ | 18,789 |  
|                                               |  |             |        |             |  |   |        |  

The following table sets forth the funded status
of the plans (in thousands):

|                                |  |             |        |             |  |   |       | 
|------------------------------- |  | ----------- | ------ | ----------- |  | - | ----- | 
|                                |  | October 26, |        | October 27,
|                                |  | 2002        |        | 2001       
|                                |  |             |        |            
|Funded status                   |  | $           | (2,496 | )           |  | $ | 914   | 
|Unrecognized net loss           |  |             | 5,169  |             |  |   | 1,789 | 
|Unrecognized prior service cost |  |             | 543    |             |  |   | 224   | 
|                                |  |             |        |             |  |   |       | 
|Prepaid benefit cost            |  | $           | 3,216  |             |  | $ | 2,927 | 
|                                |  |             |        |             |  |   |       | 

Amounts recognized in the statements of financial
position consist of (in thousands):

|                                     |  |             |        |             |  |   |        |  
|------------------------------------ |  | ----------- | ------ | ----------- |  | - | ------ | -
|                                     |  | October 26, |        | October 27,
|                                     |  | 2002        |        | 2001       
|                                     |  |             |        |            
|Prepaid benefit cost                 |  |             |        |             |  | $ | 1,066  |  
|Accrued benefit liability            |  | $           | (2,496 | )           |  |   | (1,409 | )
|Intangible asset                     |  |             | 543    |             |  |   | 224    |  
|Accumulated other comprehensive loss |  |             | 5,169  |             |  |   | 3,046  |  
|                                     |  |             |        |             |  |   |        |  
|Net amount recognized                |  | $           | 3,216  |             |  | $ | 2,927  |  
|                                     |  |             |        |             |  |   |        |  

F-12



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Both of the plans for the year ended
October 26, 2002 were underfunded. The foregoing net
amounts regarding the pension benefit obligation and the value
of plan assets for the year ended October 27, 2001 are
based on a combination of both overfunded and underfunded plans.
The aggregate amounts relating to the underfunded plan are as
follows (in thousands):

|                             |  |             |       | 
|---------------------------- |  | ----------- | ----- | 
|                             |  | October 27,
|                             |  | 2001       
|                             |  |            
|Projected benefit obligation |  | $           | 8,357 | 
|Fair value of plan assets    |  |             | 6,948 | 

The assumptions used to determine net periodic
pension cost as well as the funded status are:

|                                                 |  |      |      |      |  |      |      |   |  |  |      |  
|------------------------------------------------ |  | ---- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                                 |  | 2002 |      | 2001 |  | 2000
|                                                 |  |      |      |      |  |     
|Discount rate                                    |  |      | 7.00 | %    |  |      | 7.50 | % |  |  | 8.25 | %
|Expected long-term rate of return on plan assets |  |      | 9.0  | %    |  |      | 9.0  | % |  |  | 9.0  | %

Other Postretirement Benefits The Company provides certain
postretirement health care benefits to qualifying hourly
retirees and their dependents.

The net postretirement benefit cost for the
fiscal years ended 2002, 2001 and 2000 includes the following
components (in thousands):

|                                |  |      |     |      |  |      |     |   |  |   |     | 
|------------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  | - | --- | 
|                                |  | 2002 |     | 2001 |  | 2000
|                                |  |      |     |      |  |     
|Service cost                    |  | $    | 136 |      |  | $    | 124 |   |  | $ | 146 | 
|Interest cost                   |  |      | 650 |      |  |      | 634 |   |  |   | 626 | 
|Net amortization and deferral   |  |      | (7  | )    |  |      | (32 | ) |  |   |     | 
|                                |  |      |     |      |  |      |     |   |  |   |     | 
|Net postretirement benefit cost |  | $    | 779 |      |  | $    | 726 |   |  | $ | 772 | 
|                                |  |      |     |      |  |      |     |   |  |   |     | 

The following table sets forth the change in
projected benefit obligation (in thousands):

|                                        |  |             |       |             |  |   |       |  
|--------------------------------------- |  | ----------- | ----- | ----------- |  | - | ----- | -
|                                        |  | October 26, |       | October 27,
|                                        |  | 2002        |       | 2001       
|                                        |  |             |       |            
|Benefit obligation at beginning of year |  | $           | 9,167 |             |  | $ | 8,321 |  
|Service cost                            |  |             | 136   |             |  |   | 124   |  
|Interest cost                           |  |             | 650   |             |  |   | 634   |  
|Benefits paid                           |  |             | (335  | )           |  |   | (188  | )
|Actuarial (gain) loss                   |  |             | (330  | )           |  |   | (584  | )
|Change in discount rate                 |  |             | 666   |             |  |   | 860   |  
|                                        |  |             |       |             |  |   |       |  
|Benefit obligation at end of year       |  | $           | 9,954 |             |  | $ | 9,167 |  
|                                        |  |             |       |             |  |   |       |  

The following table sets forth the funded status
of the plans (in thousands):

|                             |  |             |         |             |  |   |        |  
|---------------------------- |  | ----------- | ------- | ----------- |  | - | ------ | -
|                             |  | October 26, |         | October 27,
|                             |  | 2002        |         | 2001       
|                             |  |             |         |            
|Benefit obligation           |  | $           | (9,954  | )           |  | $ | (9,167 | )
|Unrecognized net (gain) loss |  |             | (333    | )           |  |   | (676   | )
|                             |  |             |         |             |  |   |        |  
|Accrued benefit cost         |  | $           | (10,287 | )           |  | $ | (9,843 | )
|                             |  |             |         |             |  |   |        |  

Benefit costs were generally estimated assuming
retiree health care costs would initially increase at an 11%
annual rate, decreasing gradually to a 5% annual growth rate
after 12 years and remain at a 5% annual growth

F-13



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

rate thereafter. A 1% increase in this
annual trend rate would have increased the accumulated
postretirement benefit obligation at October 26, 2002 by
$1,499,132 with a corresponding effect on the 2002
postretirement benefit expense of $145,165. The discount rate
used to estimate the accumulated postretirement benefit
obligation was 7.00% and 7.50% for fiscal years 2002 and 2001.

10.     Income
Taxes

The income tax provision consists of the
following for the fiscal years ended 2002, 2001 and 2000 (in
thousands):

|                                 |                 |       |        |       |       |      |        |       |       |   |        |       |       | 
|-------------------------------- | --------------- | ----- | ------ | ----- | ----- | ---- | ------ | ----- | ----- | - | ------ | ----- | ----- | 
|                                 |                 | 2002  |        | 2001  |       | 2000
|                                 |                 |       |        |       |       |     
|Current tax provision:           |                 |       |        |       |       |      |        |       |       |   |        |      
|                                 | Federal         |       | $      | 1,647 |       |      | $      | 4,143 |       |   | $      | 1,590 |      
|                                 | State and local |       |        | 580   |       |      |        | 695   |       |   |        | (96   | )    
|                                 |                 |       |        |       |       |      |        |       |       |   |        |      
|                                 |                 | Total |        |       | 2,227 |      |        |       | 4,838 |   |        |       | 1,494 | 
|Deferred tax provision (benefit) |                 |       | (1,658 | )     |       |      | (1,962 | )     |       |   | (2,136 | )    
|                                 |                 |       |        |       |       |      |        |       |       |   |        |      
|Income tax provision (benefit)   |                 | $     | 569    |       |       | $    | 2,876  |       |       | $ | (642   | )    
|                                 |                 |       |        |       |       |      |        |       |       |   |        |      

The difference between the recorded income tax
provision and the amounts computed using the statutory
U.S. Federal income tax rates are as follows (in thousands):

|                                                  |  |      |       |      |  |      |        |   |  |   |        |  
|------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                  |  | 2002 |       | 2001 |  | 2000
|                                                  |  |      |       |      |  |     
|Income tax provision at statutory rate            |  | $    | 2,273 |      |  | $    | 4,787  |   |  | $ | 39     |  
|State tax provision  net of federal
    benefits |  |      | 366   |      |  |      | 451    |   |  |   | (541   | )
|Extraterritorial income (FSC)                     |  |      | (996  | )    |  |      | (1,458 | ) |  |   | (1,941 | )
|R & D credit                                      |  |      | (584  | )    |  |      | (2,714 | ) |  |   | (240   | )
|Goodwill                                          |  |      |       |      |  |      | 1,195  |   |  |   | 1,222  |  
|ESOP                                              |  |      | (114  | )    |  |      | 291    |   |  |   | 429    |  
|Other  net                                       |  |      | (376  | )    |  |      | 324    |   |  |   | 390    |  
|                                                  |  |      |       |      |  |      |        |   |  |   |        |  
|Income tax provision (benefit)                    |  | $    | 569   |      |  | $    | 2,876  |   |  | $ | (642   | )
|                                                  |  |      |       |      |  |      |        |   |  |   |        |  

During the fiscal year ended 2002, the Company
received a net refund of income taxes of approximately $0.8. In
fiscal years 2001 and 2000 the company paid (net of refunds
received) approximately $6.6 and $2.2 million in income
taxes, respectively.

F-14



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The components of the Companys net deferred
tax asset (liability) are as follows (in thousands):

|                           |                         |             |         |             |   |   |         |         |  
|-------------------------- | ----------------------- | ----------- | ------- | ----------- | - | - | ------- | ------- | -
|                           |                         | October 26, |         | October 27,
|                           |                         | 2002        |         | 2001       
|                           |                         |             |         |            
|Current:                   |                         |             |         |             |   |   |         |        
|                           | Inventory               |             | $       | 1,312       |   |   | $       | 1,369   |  
|                           | Employee benefits       |             |         | 1,273       |   |   |         | 1,285   |  
|                           | Warranty                |             |         | 851         |   |   |         | 954     |  
|                           | Engineering reserves    |             |         | 516         |   |   |         | 482     |  
|                           | Other reserves          |             |         | 514         |   |   |         | 897     |  
|                           |                         |             |         |             |   |   |         |        
|Total current              |                         |             | 4,466   |             |   |   | 4,987   |        
|                           |                         |             |         |             |   |   |         |        
|Long-term:                 |                         |             |         |             |   |   |         |        
|                           | Hourly retiree medical  |             |         | 4,254       |   |   |         | 4,594   |  
|                           | Prepaid pension benefit |             |         | 531         |   |   |         | (148    | )
|                           | Property and equipment  |             |         | 1,137       |   |   |         | (206    | )
|                           | Intangible assets       |             |         | (15,719     | ) |   |         | (18,080 | )
|                           | Other  net             |             |         | (357        | ) |   |         | 517     |  
|                           |                         |             |         |             |   |   |         |        
|Total long-term            |                         |             | (10,154 | )           |   |   | (13,323 | )      
|                           |                         |             |         |             |   |   |         |        
|Net deferred tax liability |                         | $           | (5,688  | )           |   | $ | (8,336  | )      
|                           |                         |             |         |             |   |   |         |        

The temporary difference described above
principally represent differences between the tax bases of
assets (principally inventory, property and equipment, and
intangible assets) or liabilities (principally related to
employee benefits and loss reserves) and their reported amounts
in the consolidated financial statements that will result in
taxable or deductible amounts in future years when the reported
amounts of the assets or liabilities are recovered or settled,
respectively.



|    |     
|--- | ----
|11. | Debt

Summary The Companys long-term debt
consists of the following (in thousands):

|                          |                  |             |         |             |  |   |         |         | 
|------------------------- | ---------------- | ----------- | ------- | ----------- |  | - | ------- | ------- | 
|                          |                  | October 26, |         | October 27,
|                          |                  | 2002        |         | 2001       
|                          |                  |             |         |            
|Term Loans                |                  | $           | 41,850  |             |  | $ | 60,462  |        
|Revolving Credit Facility |                  |             |         |             |  |   |         |        
|Senior Subordinated Notes |                  |             | 193,195 |             |  |   | 192,918 |        
|                          |                  |             |         |             |  |   |         |        
|                          | Total borrowings |             |         | 235,045     |  |   |         | 253,380 | 
|Current maturities        |                  |             | (16,000 | )           |  |   | (18,612 | )      
|                          |                  |             |         |             |  |   |         |        
|Long-term portion         |                  | $           | 219,045 |             |  | $ | 234,768 |        
|                          |                  |             |         |             |  |   |         |        

Credit Facility and Term Loans The Company has available
$115.0 million principal amount of Term Loans, and a
seven-year $20.0 million Revolving Credit Facility. The
unused balance of the Revolving Credit Facility ($19.5 million
at October 26, 2002 after reduction of $.5 million for
letters of credit) is subject to a .50% commitment fee. The
Credit Facility is collateralized by substantially all of the
tangible assets of the Company (including the capital stock of
AT Holdings) as well as the unearned shares of the AT
Holdings common stock held by the ESOP. The Credit
Facility contains a number of covenants that, among other
things, limit the Companys ability to incur additional
indebtedness, pay dividends, prepay subordinated indebtedness,
dispose of

F-15



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

certain assets, create liens, make capital
expenditures, make certain investments or acquisitions and
otherwise restrict corporate activities. The Credit Facility
also requires the Company to comply with certain financial
ratios and tests, under which the Company is required to achieve
certain financial and operating results. On October 26,
2002, the Consolidated Interest Coverage Ratio for the fiscal
quarter ending October 26, 2002 in the Credit Facility was
amended, primarily to adjust for the decrease in consolidated
earnings before interest, taxes, depreciation and amortization.
In addition, the supplemental percentage of interest applied to
an Alternate Base Rate or LIBOR, as chosen by the Company, was
increased .25%. The Company was in compliance with the covenants
at October 26, 2002. Interest was calculated, at the
Companys choice, using an alternate base rate
(ABR) or LIBOR, plus a supplemental percentage determined
by the ratio of debt to EBITDA. The interest rate for fiscal
year 2002 ranged from .75% to 1.50% plus ABR or 1.75% to 2.50%
plus LIBOR.

Senior Subordinated Notes The Company has outstanding
$195.0 million 8 5/8% Senior Subordinated Notes due
2007 (the Notes). At October 26, 2002 the
accreted value of the Notes was $193.2 million. Interest on
the Notes is payable semiannually on April 1 and October 1 of
each year. The Notes will mature on October 1, 2007. After
October 1, 2002, the Company may redeem the Notes, in whole
or in part, at the redemption prices at the time, together with
accrued and unpaid interest, if any, to the date of redemption.

The Notes are unsecured and are subordinated in
right of payment to all existing and future Senior Indebtedness
of the Company and are subject to certain limitations and
restrictions which the Company has not exceeded at
October 26, 2002.

Annual Maturities and Interest
Payments The
maturities of the Companys long-term debt during each of
the next five fiscal years are as follows (in thousands):

|            |  |        |         | 
|----------- |  | ------ | ------- | 
|Fiscal Year |  | Amount
|            |  |       
|2003        |  | $      | 16,000  | 
|2004        |  |        | 12,000  | 
|2005        |  |        | 13,850  | 
|2006        |  |        |         | 
|2007        |  |        | 193,195 | 
|            |  |        |         | 
|Total       |  | $      | 235,045 | 
|            |  |        |         | 

Total interest paid during the fiscal years ended
2002, 2001 and 2000 was $19.0 million, $22.1 million
and $23.7 million, respectively.



|    |                    
|--- | -------------------
|12. | Segment Information

The Company operates in two business segments,
Aerospace and Industrial. The Aerospace segment includes the
design, manufacture, distribution, repair and overhaul of
aviation products throughout the world consisting of aircraft
engine fuel pumps, fuel flow related products and systems found
on a planes airframe, and aerial refueling pumps and
related equipment. The Industrial segment includes the design,
manufacture and distribution of industrial pumps, ground fueling
valves and related components, industrial marine cryogenic pumps
and nozzles for transferring liquefied natural gas and operation
of a business park in Cleveland, Ohio where the Company
maintains its headquarters and one of its production facilities.

The Company evaluates the performance of its
segments based primarily on operating profit before amortization
of goodwill, deferred financing fees and other identified
intangibles, interest expense, interest income, other
miscellaneous fees and income taxes.

F-16



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table presents revenues and other
financial information by business segment (in thousands):

2002

|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------ |  | --------- | ------- | ---------- |  | --------- | ------ | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                                                     |  | Aerospace |         | Industrial |  | Corporate |        | Consolidated
|                                                                                     |  |           |         |            |  |           |        |             
|Customer revenues                                                                    |  | $         | 120,891 |            |  | $         | 34,412 |              |  | $ |        |   |  | $ | 155,303 |  
|Intersegment revenues                                                                |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Eliminations                                                                         |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Operating profit (loss)                                                              |  |           | 30,978  |            |  |           | 1,843  |              |  |   | (1,268 | ) |  |   | 31,553  |  
|Amortization of intangible assets                                                    |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 3,721   |  
|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income from operations                                                               |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 27,832  |  
|Interest expense                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 21,434  |  
|Other, net                                                                           |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (97     | )
|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income before tax                                                                    |  |           |         |            |  |           |        |              |  |   |        |   |  | $ | 6,495   |  
|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Capital expenditures                                                                 |  |           | 1,240   |            |  |           | 545    |              |  |   |        |   |  |   | 1,785   |  
|Depreciation                                                                         |  |           | 2,796   |            |  |           | 1,362  |              |  |   | 450    |   |  |   | 4,608   |  
|Compensation expense recognized in connection
    with employee stock ownership plan |  |           | 1,205   |            |  |           | 139    |              |  |   |        |   |  |   | 1,344   |  

2001

|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------ |  | --------- | ------- | ---------- |  | --------- | ------ | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                                                     |  | Aerospace |         | Industrial |  | Corporate |        | Consolidated
|                                                                                     |  |           |         |            |  |           |        |             
|Customer revenues                                                                    |  | $         | 142,000 |            |  | $         | 31,208 |              |  | $ |        |   |  | $ | 173,208 |  
|Intersegment revenues                                                                |  |           |         |            |  |           | 10     |              |  |   |        |   |  |   | 10      |  
|Eliminations                                                                         |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (10     | )
|Operating profit (loss)                                                              |  |           | 47,548  |            |  |           | (252   | )            |  |   | (1,622 | ) |  |   | 45,674  |  
|Amortization of goodwill and intangible assets                                       |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 7,515   |  
|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income from operations                                                               |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 38,159  |  
|Interest expense                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 24,534  |  
|Other, net                                                                           |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (51     | )
|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income before tax                                                                    |  |           |         |            |  |           |        |              |  |   |        |   |  | $ | 13,676  |  
|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Capital expenditures                                                                 |  |           | 1,453   |            |  |           | 432    |              |  |   |        |   |  |   | 1,885   |  
|Depreciation                                                                         |  |           | 3,124   |            |  |           | 1,165  |              |  |   | 1,270  |   |  |   | 5,559   |  
|Compensation expense recognized in connection
    with employee stock ownership plan |  |           | 1,791   |            |  |           | 300    |              |  |   |        |   |  |   | 2,091   |  
|Compensation expense recognized in connection
    with stock options                 |  |           |         |            |  |           |        |              |  |   | 526    |   |  |   | 526     |  

F-17



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

2000

|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------ |  | --------- | ------- | ---------- |  | --------- | ------ | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                                                     |  | Aerospace |         | Industrial |  | Corporate |        | Consolidated
|                                                                                     |  |           |         |            |  |           |        |             
|Customer revenues                                                                    |  | $         | 129,406 |            |  | $         | 29,947 |              |  | $ |        |   |  | $ | 159,353 |  
|Intersegment revenues                                                                |  |           |         |            |  |           | 7      |              |  |   |        |   |  |   | 7       |  
|Eliminations                                                                         |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (7      | )
|Operating profit (loss)                                                              |  |           | 34,628  |            |  |           | (204   | )            |  |   | (1,555 | ) |  |   | 32,869  |  
|Amortization of goodwill and intangible assets                                       |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 7,517   |  
|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income from operations                                                               |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 25,352  |  
|Interest expense                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   | 25,644  |  
|Other, net                                                                           |  |           |         |            |  |           |        |              |  |   |        |   |  |   | (402    | )
|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Income before tax                                                                    |  |           |         |            |  |           |        |              |  |   |        |   |  | $ | 110     |  
|                                                                                     |  |           |         |            |  |           |        |              |  |   |        |   |  |   |         |  
|Capital expenditures                                                                 |  |           | 2,329   |            |  |           | 696    |              |  |   |        |   |  |   | 3,025   |  
|Depreciation                                                                         |  |           | 3,311   |            |  |           | 1,607  |              |  |   | 1,059  |   |  |   | 5,977   |  
|Amortization of inventory step-up                                                    |  |           |         |            |  |           |        |              |  |   | 155    |   |  |   | 155     |  
|Compensation expense recognized in connection
    with employee stock ownership plan |  |           | 2,645   |            |  |           | 327    |              |  |   |        |   |  |   | 2,972   |  

13.     Major
Customers and Export Sales

During the fiscal years ended 2002, 2001 and
2000, the Company had revenues in excess of 10% from the
following customers (in thousands):

|                           |  |      |        |      |  |      |        |  |  |   |        | 
|-------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                           |  | 2002 |        | 2001 |  | 2000
|                           |  |      |        |      |  |     
|Customer A (Related Party) |  | $    | 21,231 |      |  | $    | 26,792 |  |  | $ | 21,969 | 
|Customer B                 |  |      |        |      |  |      |        |  |  | $ | 16,261 | 

During the fiscal years ended 2002, 2001 and
2000, export sales to foreign customers were comprised of the
following (in thousands):

|                                        |       |      |        |        |  |      |        |        |  |   |        |        | 
|--------------------------------------- | ----- | ---- | ------ | ------ |  | ---- | ------ | ------ |  | - | ------ | ------ | 
|                                        |       | 2002 |        | 2001   |  | 2000
|                                        |       |      |        |        |  |     
|Europe                                  |       | $    | 28,002 |        |  | $    | 34,954 |        |  | $ | 31,116 |       
|All others (individually less than 10%) |       |      | 40,576 |        |  |      | 45,841 |        |  |   | 39,366 |       
|                                        |       |      |        |        |  |      |        |        |  |   |        |       
|                                        | Total |      | $      | 68,578 |  |      | $      | 80,795 |  |   | $      | 70,482 | 
|                                        |       |      |        |        |  |      |        |        |  |   |        |       



|    |                                    
|--- | -----------------------------------
|14. | Fair Value of Financial Instruments

The Company has various financial instruments,
including cash and short-term investments and long-term debt.
The Company has determined the estimated fair value of these
financial instruments by soliciting available market information
and utilizing appropriate valuation methodologies, which require
judgment. The Company believes that the carrying values of the
short-term investments and term loans approximates their fair
value. The fair value of the Companys Senior Subordinated
Notes approximated $136.5 million at October 26, 2002
based upon quoted market prices. The Company does not enter into
derivative contracts for trading or speculative purposes. A 10%
fluctuation in interest rates would not materially affect
Argo-Techs financial condition, result of operations or
cash flow.

F-18



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |              
|--- | -------------
|15. | Contingencies

Environmental
Matters The soil and
groundwater at the Companys Euclid, Ohio facility and the
Costa Mesa, California facility contain elevated levels of
certain contaminants which are currently in the process of being
removed and/or remediated. Because the Company has certain
indemnification rights from former owners of the facilities for
liabilities arising from these or other environmental matters,
in the opinion of the Companys management, the ultimate
outcome is not expected to materially affect the Companys
financial condition, results of operations or liquidity.

Other
Matters The Company is
subject to various legal actions and other contingencies. In the
opinion of the Companys management, after reviewing the
information which is currently available with respect to such
matters and consulting with the Companys legal counsel,
any liability which may ultimately be incurred with respect to
these additional matters is not expected to materially affect
the Companys financial condition, results of operations or
liquidity.



|    |                         
|--- | ------------------------
|16. | New Accounting Standards

In June 2001, the Financial Accounting Standards
Board (FASB) issued SFAS No. 143, Accounting for
Asset Retirement Obligations. This statement requires
entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. The
amount recorded as a liability will be capitalized by increasing
the carrying amount of the related long-lived asset. Subsequent
to initial measurement, the liability is accreted to the
ultimate amount anticipated to be paid and is also adjusted for
revisions to the timing of the amount of estimated cash flows.
The capitalized cost is depreciated over the useful life of the
related asset. Upon settlement of the liability, an entity
either settles the obligation for its recorded amount or incurs
a gain or loss upon settlement. The provisions of this statement
become effective for the Companys fiscal year beginning
October 27, 2002. The Company has determined that this
statement will not have any impact on its consolidated financial
statements upon initial adoption.

In August 2001, the FASB issued SFAS No.
144, Accounting for the Impairment or Disposal of Long
Lived Assets. This statement improves the financial
reporting by requiring that one accounting model be used for
long-lived assets to be disposed of by sale, whether previously
held and used or newly acquired, and by broadening the
presentation of discontinued operations to include more disposal
transactions. The provisions of this statement become effective
for the Companys fiscal year beginning October 27,
2002. The Company has determined that this statement will not
have any impact on its consolidated financial statements upon
initial adoption.

In June 2002, the FASB issued
SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities. This statement requires
that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred. The
provisions of this statement are effective for exit or disposal
activities that are initiated after December 31, 2002.
Management has not determined the impact, if any, that this
statement will have on Argo-Techs consolidated financial
statements.

In November 2002, the FASB issued FASB
Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of
Others. FIN 45 requires that a liability be recorded
in the guarantors balance sheet upon issuance of a
guarantee. In addition, FIN 45 requires disclosures about
the guarantees that an entity has issued, including a
rollforward of the entitys product warranty liabilities.
The Company will apply the recognition provisions of FIN 45
prospectively to guarantees issued after December 31, 2002.
The disclosure provisions of FIN 45 are effective for
financial statements for the first quarter of its fiscal year
2003. Management is currently in the process of evaluating the
potential impact that the adoption of FIN 45 will have on
its consolidated financial statements.

F-19



---



##### Table of Contents



ARGO-TECH CORPORATION AND
SUBSIDIARIES


(A Wholly-Owned Subsidiary of AT Holdings
Corporation)


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                  
|--- | ---------------------------------
|17. | Other Comprehensive Income (Loss)

Other comprehensive income (loss) includes
foreign currency translation adjustments and deferred pension
expense (in thousands).

|                                                           |                                         |      |        |        |   |      |        |        |   |   |      |      |  
|---------------------------------------------------------- | --------------------------------------- | ---- | ------ | ------ | - | ---- | ------ | ------ | - | - | ---- | ---- | -
|                                                           |                                         | 2002 |        | 2001   |   | 2000
|                                                           |                                         |      |        |        |   |     
|Net income                                                 |                                         | $    | 5,926  |        |   | $    | 10,800 |        |   | $ | 752  |     
|Other comprehensive loss:                                  |                                         |      |        |        |   |      |        |        |   |   |      |     
|                                                           | Foreign currency translation adjustment |      |        | (14    | ) |      |        | (151   | ) |   |      | (101 | )
|                                                           | Deferred pension expense                |      |        | (2,123 | ) |      |        | (3,046 | ) |   |      |      |  
|                                                           |                                         |      |        |        |   |      |        |        |   |   |      |     
|Other comprehensive loss before tax                        |                                         |      | (2,137 | )      |   |      | (3,197 | )      |   |   | (101 | )   
|Income tax benefit related to other comprehensive
    loss |                                         |      | 850    |        |   |      | 1,218  |        |   |   |      |     
|                                                           |                                         |      |        |        |   |      |        |        |   |   |      |     
|Other comprehensive loss net of tax                        |                                         |      | (1,287 | )      |   |      | (1,979 | )      |   |   | (101 | )   
|                                                           |                                         |      |        |        |   |      |        |        |   |   |      |     
|Comprehensive income                                       |                                         | $    | 4,639  |        |   | $    | 8,821  |        |   | $ | 651  |     
|                                                           |                                         |      |        |        |   |      |        |        |   |   |      |     



|    |                 
|--- | ----------------
|18. | Subsequent Event

On January 24, 2003 the Company amended and
restated its Credit Facility to allow for the re-amortization of
the outstanding balance of the Term Loans, amending the
Consolidated Interest Coverage Ratio for the remainder of the
agreement, adjusting the supplemental percentage of interest
applied to an Alternate Base Rate (ABR) or LIBOR, changing the
commitment fee rate, increasing the Letter of Credit sublimit in
the revolving credit facility to an amount not to exceed
$5,000,000 and establishing a borrowing base covenant on
revolving credit borrowings in excess of $10.0 million and
a fixed charge coverage ratio. The maturities of the
Companys Term Loans are now as follows:
$16.0 million, $12.0 million and $13.9 million
for fiscal years 2003, 2004 and 2005, respectively. The
supplemental percentage of interest applied to ABR or LIBOR, as
chosen by the Company, when the leverage ratio, as defined by
the ratio of total debt to EBITDA, exceeds the following
multiples is now:

|                                                  |  |             |      |                    |  |                      |      |  |  |  |      | 
|------------------------------------------------- |  | ----------- | ---- | ------------------ |  | -------------------- | ---- |  |  |  | ---- | 
|Leverage ratio:                                   |  | ABR spread: |      | Eurodollar Spread: |  | Commitment Fee Rate:
|                                                  |  |             |      |                    |  |                     
|Greater than or Equal to 6.00                     |  |             | 2.50 |                    |  |                      | 3.50 |  |  |  | 0.75 | 
|Greater than or Equal to 4.00, but Less than 6.00 |  |             | 2.25 |                    |  |                      | 3.25 |  |  |  | 0.50 | 
|Less than 4.00                                    |  |             | 1.75 |                    |  |                      | 2.75 |  |  |  | 0.50 | 

* * * * * *

F-20



---



##### Table of Contents






EXHIBIT INDEX

|        |    |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- | -- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                        
|Number  |    | Description of Document
|        |    |                        
|        | 3  | .1                      |  | Restated Certificate of Incorporation of the
    Company, dated April 16, 1999 (incorporated herein by
    reference to Exhibit 3.1 of the Companys registration
    statement on form S-4/A filed April 22,1999, SEC File
    No. 333-73179).                                                                                                                                                                                                   
|       
|        | 3  | .2                      |  | Restated By-Laws of the Company dated
    April 16, 1999 (incorporated herein by reference to
    Exhibit 3.2 of the Companys registration statement on
    form S-4/A filed April 22, 1999, SEC File
    No. 333-73179).                                                                                                                                                                                                                        
|       
|        | 4  | .1                      |  | Indenture dated September 26, 1997, between
    the Company, the Subsidiary Guarantors signatory thereto and
    Harris Trust and Savings Bank, as Trustee, relating to the
    8 5/8% Senior Subordinated Notes due 2007 (the form of
    which is included in such Indenture) (incorporated herein by
    reference to Exhibit 4.1 of the Companys Registration
    Statement on form S-1, filed October 17, 1997, SEC
    File No. 333-38223).
|       
|        | 4  | .2                      |  | First Supplemental Indenture, dated
    December 17, 1998 between the Company, the Subsidiary
    Guarantors signatory thereto and Harris Trust and Savings Bank,
    related to the Indenture dated September 26, 1997
    (incorporated by reference to Exhibit 4.4 of the
    Companys Current Report on Form 8-K, filed
    January 14, 1999).                                                                                               
|       
|        | 4  | .3                      |  | Indenture dated December 17, 1998 between
    the Company, the Subsidiary Guarantors signatory thereto and
    Harris Trust and Savings Bank, as Trustee, related to the
    8 5/8% Senior Subordinated Notes due 2007 (a form of which
    is included in such Indenture) (incorporated by reference to
    Exhibit 4.5 of the Companys Current Report on
    Form 8-K, filed January 14, 1999).                                                
|       
|        | 10 | .1*                     |  | Form of Stay Pay and Severance Agreement dated
    June 6, 1996, between the Company and certain Executive
    Officers of the Company (Michael S. Lipscomb, Frances S.
    St. Clair, and Paul R. Keen) (incorporated herein by
    reference to Exhibit 10.1 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                      
|       
|        | 10 | .2*                     |  | Employment Agreement dated February 13, 1989
    between the Company and Paul R. Keen (incorporated herein by
    reference to Exhibit 10.2 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                                                                         
|       
|        | 10 | .3*                     |  | Employment Agreement dated October 15, 1986
    between the Company and Michael S. Lipscomb (incorporated herein
    by reference to Exhibit 10.3 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                                                                   
|       
|        | 10 | .4*                     |  | Argo-Tech Corporation Trust Agreement dated
    October 28, 1994 between the Company and Society National
    Bank, as Trustee, relating to the Employment Agreement dated
    October 15, 1986 between the Company and Michael S.
    Lipscomb (incorporated herein by reference to Exhibit 10.4
    of the Companys Registration Statement on form S-1,
    filed October 17, 1997, SEC File No. 333-38223).                                   
|       
|        | 10 | .5*                     |  | Argo-Tech Corporation Salaried Pension Plan,
    dated November 1, 1995 (incorporated herein by reference to
    Exhibit 10.5 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                                                                                                                                       
|       
|        | 10 | .6*                     |  | First Amendment to Argo-Tech Corporation Salaried
    Pension Plan (incorporated herein by reference to
    Exhibit 10.6 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                                                                                                                                            
|       
|        | 10 | .7*                     |  | Argo-Tech Corporation Employee Stock Ownership
    Plan and Trust Agreement, dated May 17, 1994 (incorporated
    herein by reference to Exhibit 10.7 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                                                               
|        | 10 | .8*                     |  | First Amendment to the Argo-Tech Corporation
    Employee Stock Ownership Plan and Trust Agreement, dated
    October 26, 1994 (incorporated herein by reference to
    Exhibit 10.8 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                                                                                
|       
|        | 10 | .9*                     |  | Second Amendment to the Argo-Tech Corporation
    Employee Stock Ownership Plan and Trust Agreement, dated
    May 9, 1996 (incorporated herein by reference to
    Exhibit 10.9 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                                                                                    

X-1



---



##### Table of Contents



EXHIBIT INDEX  Continued


|        |    |                         |  |                                                                                                                                                                                                                                                                                                                                                                                       
|------- | -- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                        
|Number  |    | Description of Document
|        |    |                        
|       
|        | 10 | .10*                    |  | Third Amendment to the Argo-Tech Corporation
    Employee Stock Ownership Plan and Trust Agreement, dated
    July 18, 1997 (incorporated herein by reference to
    Exhibit 10.10 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                      
|       
|        | 10 | .11*                    |  | Argo-Tech Corporation Employee Stock Ownership
    Plan Excess Benefit Plan, dated May 17, 1994 (incorporated
    herein by reference to Exhibit 10.11 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                  
|       
|        | 10 | .12                     |  | AT Holdings Corporation Stockholders
    Agreement, dated December 17, 1998 (incorporated herein by
    reference to Exhibit 10.12 of the Companys Annual
    Report on form 10-K for the year ended October 30,
    1999, SEC File No. 333-38223).                                                                                                                                 
|       
|        | 10 | .13                     |  | AT Holdings Corporation 1998 Supplemental
    Stockholders Agreement, dated December 17, 1998
    (incorporated herein by reference to Exhibit 10.13 of the
    Companys Annual Report on form 10-K for the year
    ended October 30, 1999, SEC File No. 333-38223).                                                                                                               
|       
|        | 10 | .14*                    |  | Form of Management Incentive Compensation Plan
    for key employees of Argo-Tech (incorporated herein by reference
    to Exhibit 10.19 of the Companys Registration
    Statement on form S-1, filed October 17, 1997, SEC
    File No. 333-38223).                                                                                                                                
|       
|        | 10 | .15*                    |  | 1991 Management Incentive Stock Option Plan, as
    amended, dated May 16, 1994 (incorporated herein by
    reference to Exhibit 10.20 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                                                                                  
|       
|        | 10 | .16*                    |  | Amendment to the 1991 Management Incentive Stock
    Option Plan, as amended, dated June 12, 2001 (incorporated
    herein by reference to Exhibit 10.3 of the Companys
    Quarterly Report on form 10-Q for the quarter ended
    July 28, 2001).                                                                                                                                  
|       
|        | 10 | .17*                    |  | Form of Stock Option Agreement in connection with
    the Management Incentive Stock Option Plan, as amended, between
    Argo-Tech and each member of Argo-Techs Executive Staff
    (incorporated herein by reference to Exhibit 10.21 of the
    Companys Registration Statement on form S-1, filed
    October 17, 1997, SEC File No. 333-38223).                               
|       
|        | 10 | .18*                    |  | 1991 Performance Stock Option Plan, as amended,
    dated May 16, 1997 (incorporated herein by reference to
    Exhibit 10.22 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                                                                           
|       
|        | 10 | .19*                    |  | Amendment to the 1991 Performance Stock Option
    Plan, as amended, June 12, 2001 (incorporated herein by
    reference to Exhibit 10.1 of the Companys Quarterly
    Report on form 10-Q for the quarter ended July 28,
    2001).                                                                                                                                                 
|       
|        | 10 | .20*                    |  | Form of Stock Option Agreement in connection with
    the 1991 Performance Stock Option Plan, as amended, between
    Argo-Tech and certain key employees (incorporated herein by
    reference to Exhibit 10.23 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                        
|       
|        | 10 | .21                     |  | Credit Facility, dated July 18, 1997, as
    amended and restated on September 26, 1997, between
    Argo-Tech, AT Holdings, the lenders party thereto and the
    Chase Manhattan Bank, as Administrative Agent (incorporated
    herein by reference to Exhibit 10.24 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223). 
|       
|        | 10 | .22                     |  | Distributorship Agreement, dated
    December 24, 1990, between Argo-Tech, Yamada Corporation
    and Vestar Capital Partners, Inc. (incorporated herein by
    reference to Exhibit 10.25 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).                                                                              
|       
|        | 10 | .23                     |  | Japan Distributorship Agreement, dated
    December 24, 1990, between Argo-Tech, Aerotech World Trade
    Corporation, Yamada Corporation, Yamada International
    Corporation and Vestar Capital Partners, Inc. (incorporated
    herein by reference to Exhibit 10.26 of the Companys
    Registration Statement on form S-1, filed October 17,
    1997, SEC File No. 333-38223).

X-2



---



##### Table of Contents



EXHIBIT INDEX  Continued


|        |    |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | -- | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                        
|Number  |    | Description of Document
|        |    |                        
|       
|        | 10 | .24                     |  | Stock Purchase Agreement, dated August 1,
    1997, between Argo-Tech, J.C. Carter Company, Inc., Robert
    L. Veloz, Individually and as Trustee, Marlene J. Veloz,
    Individually and as Trustee, Edith T. Derbyshire, Individually
    and as Trustee, Harry S. Derbyshire, Individually and as
    Trustee, Michael Veloz, Katherine Canfield and Maureen Partch,
    as Trustee (incorporated herein by reference to
    Exhibit 10.27 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).
|       
|        | 10 | .25                     |  | Prism Prototype Retirement Plan &
    Trust & 401(k) Profit Sharing Plan Adoption Agreement,
    dated November 1, 1994 (incorporated herein by reference to
    Exhibit 10.28 of the Companys Registration Statement
    on form S-1, filed October 17, 1997, SEC File
    No. 333-38223).                                                                                                                                                                                                                                                                
|       
|        | 10 | .26                     |  | Prism Prototype Retirement Plan and Trust
    (incorporated herein by reference to Exhibit 10.29 of the
    Companys Registration Statement on form S-1, filed
    October 17, 1997, SEC File No. 333-38223).                                                                                                                                                                                                                                                                                                                                              
|       
|        | 10 | .27                     |  | Agreement of Purchase and Sale between Agnem
    Holdings, Inc. and TRW Inc. dated as of August 5, 1986
    (incorporated herein by reference to Exhibit 10.30 of the
    Companys Registration Statement on form S-1, filed
    October 17, 1997, SEC File No. 333-38223).                                                                                                                                                                                                                                                                                
|       
|        | 10 | .28*                    |  | 1997 Stock Appreciation Rights Plan (incorporated
    herein by reference to Exhibit 10.31 of the Companys
    Annual Report on form 10-K, for the year ended
    October 31, 1998).                                                                                                                                                                                                                                                                                                                                                                       
|       
|        | 10 | .29*                    |  | AT Holdings Corporation/Argo-Tech Corporation
    1998 Equity Replacement Stock Option Plan (incorporated herein
    by reference to Exhibit 10.32 of the Companys
    registration statement on form S-4 filed March 1,
    1999, SEC File No. 333-73179).                                                                                                                                                                                                                                                                                                
|       
|        | 10 | .30*                    |  | Amendment to the AT Holdings
    Corporation/Argo-Tech Corporation 1998 Equity Replacement Stock
    Option Plan dated June 12, 2001 (incorporated herein by
    reference to Exhibit 10.2 of the Companys Quarterly
    Report on form 10-Q for the quarter ended July 28,
    2001).                                                                                                                                                                                                                                                                     
|       
|        | 10 | .31*                    |  | Form of Stock Option Agreement in connection with
    the AT Holdings Corporation/Argo-Tech Corporation 1998 Equity
    Replacement Stock Option Plan (incorporated herein by reference
    to Exhibit 10.33 of the Companys registration
    statement on form S-4 filed March 1, 1999, SEC File
    No. 333-73179).                                                                                                                                                                                                                                      
|       
|        | 10 | .32*                    |  | First Amendment to the Argo-Tech Corporation
    Employee Stock Ownership Plan Excess Benefit Plan (incorporated
    herein by reference to Exhibit 10.34 of the Companys
    registration statement on form S-4 filed March 1,
    1999, SEC File No. 333-73179).                                                                                                                                                                                                                                                                                         
|       
|        | 10 | .33                     |  | Amendment, dated December 4, 1998 to the
    Amended and Restated Credit Facility, dated July 18, 1997,
    as amended and restated on September 26, 1997, between
    Argo-Tech, AT Holdings Corporation, the Lenders party thereto
    and Chase Manhattan Bank, as Administrative Agent (incorporated
    herein by reference to Exhibit 10.32 of the Companys
    registration statement on form S-4/A filed April 22,
    1999, SEC File No. 333-73179).                                                                                              
|       
|        | 10 | .34                     |  | Amendment, dated June 9, 2000 to the Amended
    and Restated Credit Facility, dated July 18, 1997, as
    amended and restated on September 26, 1997, between
    Argo-Tech, AT Holdings Corporation, the Lenders party thereto
    and Chase Manhattan Bank, as Administrative Agent (incorporated
    herein by reference to Exhibit 10.31 of the Companys
    Annual Report on Form 10-K, for the year ended
    October 28, 2000).                                                                                                                    
|       
|        | 10 | .35**                   |  | Amendment, dated October 26, 2002 to the
    Amended and Restated Credit Facility, dated July 18, 1997,
    as amended and restated on September 26, 1997, between
    Argo-Tech, AT Holdings Corporation, the Lenders party thereto
    and JPMorgan Chase Bank, as Administrative Agent.                                                                                                                                                                                                                                                                  

X-3



---



##### Table of Contents



EXHIBIT INDEX  Continued


|        |    |                         |  |                                                                                                                                                                                       
|------- | -- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                        
|Number  |    | Description of Document
|        |    |                        
|        | 10 | .36**                   |  | Amendment, dated November 22, 2002, to
    Argo-Tech Corporation Trust Agreement, dated October 28,
    1994.                                                                         
|       
|        | 12 | **                      |  | Statement regarding computation of ratios.                                                                                                                                            
|       
|        | 21 |                         |  | List of Subsidiaries (incorporated herein by
    reference to Exhibit 21 of the Companys Registration
    Statement on form S-1, filed October 17, 1997, SEC
    File No. 333-38223).
|       
|        | 99 | **                      |  | Certification Pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                       



---



|  |                                                                                                                                                 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------
|* | Reflects management contract or other
    compensatory arrangement required to be filed as an exhibit
    pursuant to Item 14(c) of this Report.



|   |                
|-- | ---------------
|** | Filed herewith.

X-4