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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Primex Technologies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LOGO OF PRIMEX TECHNOLOGIES]
10101 9th Street North
St. Petersburg, FL 33716
March 21, 2000
Dear Shareholder:
You are cordially invited to attend our 2000 Annual Meeting of Shareholders
at 10:00 a.m. on Tuesday, May 2, 2000. The meeting will be held at the
Renaissance Vinoy Resort, 501 Fifth Avenue N.E., St. Petersburg, Florida.
The accompanying Notice of Annual Meeting and Proxy Statement describe the
proposals to be considered at the meeting. Whether or not you plan to attend,
please sign and date the enclosed form of proxy and return it in the enclosed
envelope, which requires no postage if mailed in the United States. If you do
plan to attend, please so indicate by checking the appropriate box on the proxy
card.
Sincerely,
/s/ James G. Hascall
James G. Hascall
Chairman of the Board and
Chief Executive Officer
<PAGE>
PRIMEX TECHNOLOGIES, INC.
10101 9th Street North
St. Petersburg, FL 33716
-------------
NOTICE OF THE 2000 ANNUAL MEETING OF SHAREHOLDERS
-------------
PRIMEX TECHNOLOGIES, INC. will hold its 2000 Annual Meeting of Shareholders
on Tuesday, May 2, 2000, at the Renaissance Vinoy Resort, 501 Fifth Avenue
N.E., St. Petersburg, Florida. The meeting will begin at 10:00 a.m.
The Board of Directors has fixed the close of business on March 7, 2000 as
the record date for determining shareholders entitled to notice of, and to
vote at, the meeting or any adjournments thereof that may take place. At the
meeting, the shareholders will consider and take action on the following:
(1) election of two directors;
(2) ratification of the appointment of independent auditors for 2000; and
(3) transaction of any other business properly presented at the meeting and
at any adjournment thereof.
By order of the Board of
Directors:
George H. Pain
Secretary
March 21, 2000
YOUR VOTE IS IMPORTANT
You are urged to sign, date and promptly
return your proxy card in the enclosed envelope.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Shares Outstanding and Entitled to Vote.................................. 1
Certain Beneficial Owners................................................ 2
Proposal No. 1--Election of Directors.................................... 2
Additional Information Regarding the Board of Directors.................. 4
Attendance
Committees of the Board
Compensation of Directors
Security Ownership of Directors and Officers............................. 6
Stock Ownership Guidelines
Section 16(a) Beneficial Ownership Reporting Compliance
Executive Compensation................................................... 8
Report of the Compensation and Nominating Committee
Summary Compensation Table
Option Grants of Common Stock in 1999
Aggregated Option Exercises in 1999 and Year-end Option Values
Performance Graph
Executive Agreements and Change-in-Control Arrangements
Proposal No. 2--Appointment of Independent Auditors...................... 15
Certain Relationships and Related Transactions........................... 15
Miscellaneous............................................................ 16
Shareholder Proposals
</TABLE>
<PAGE>
PRIMEX TECHNOLOGIES, INC.
PROXY STATEMENT
----------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 2000
This Proxy Statement is furnished to the shareholders of Primex
Technologies, Inc. ("Primex") in connection with the solicitation by the Board
of Directors of Primex (the "Board") of proxies to be voted at the Annual
Meeting of Shareholders to be held on May 2, 2000, and at any adjournment
thereof. The mailing address of Primex's principal executive office is 10101
9th Street North, St. Petersburg, Florida 33716. This Proxy Statement, the
related proxy card and Primex's Annual Report on Form 10-K are first being
mailed to shareholders on or about March 21, 2000.
Primex was organized under the laws of the Commonwealth of Virginia on May
10, 1996 as a wholly owned subsidiary of Olin Corporation ("Olin"). Primex
began operating as an independent publicly held company on December 31, 1996 as
a result of its spin-off from Olin.
Shares represented by duly executed proxies in the accompanying form,
received by Primex prior to the meeting, will be voted at the meeting. Where a
shareholder directs in the proxy a choice regarding any matter that is to be
voted on, that direction will be followed. If no direction is made, proxies
will be voted for the election of directors as set forth below and in favor of
the ratification of the appointment of Ernst & Young, LLP as Primex's
independent auditors for 2000. Primex does not know of any matters other than
those referred to in the accompanying Notice that are to come before the
meeting. If any other matters are properly presented for action, the persons
named in the accompanying form of proxy will vote the proxy in accordance with
their best judgment. Any person who has returned a proxy has the power to
revoke it at any time before it is exercised by submitting a subsequently dated
proxy, by giving notice in writing to the Secretary or by voting in person at
the meeting.
SHARES OUTSTANDING AND ENTITLED TO VOTE
The close of business on March 7, 2000 has been fixed as the record date for
the 2000 Primex Annual Meeting of Shareholders and any adjournment thereof. As
of the record date, there were 10,406,543 shares of Primex common stock, $1.00
par value per share ("Common Stock"), outstanding, each of which is entitled to
one vote. Of those shares of Common Stock outstanding as of the record date,
approximately 1,143,389 shares were held in the Primex Technologies, Inc.
Retirement Investment Management Experience Plan (the "PRIME Plan") and are
held by Boston Safe Deposit and Trust Company, N.A. as the Trustee.
Approximately 858,716 shares were held in the Olin Corporation Contributing
Employee Ownership Plan (the "CEOP") and are held by State Street Bank and
Trust Company as the Trustee. Each individual participating in the PRIME Plan
and the CEOP is entitled to instruct the Trustee how to vote all shares of
Common Stock credited to the individual's account as of the record date. Shares
of Common Stock held in the PRIME Plan and the CEOP for which voting
instructions are not received from PRIME Plan or CEOP participants,
respectively, will be voted by the Trustee in the same proportion as shares of
Common Stock for which the Trustee has received instructions.
On February 2, 1999, the Primex Board of Directors authorized a two-for-one
split of its common stock payable March 22, 1999, in the form of a 100% stock
dividend, for shareholders of record on February 22, 1999. All share amounts in
this proxy statement reflect this stock dividend.
The Bank of New York is Primex's registrar and transfer agent.
<PAGE>
CERTAIN BENEFICIAL OWNERS
Except as noted below, Primex knows of no person who, as of December 31,
1999, was the beneficial owner of more than five percent of the outstanding
shares of Primex Common Stock. This information is based on reports filed by
such persons with the United States Securities and Exchange Commission ("SEC").
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address of Beneficial Percent of
Beneficial Owner Ownership Class
------------------- ----------- ----------
<S> <C> <C>
Neuberger Berman, LLC.............................. 1,259,061(a) 12.60
Neuberger Berman, Inc.
Neuberger Berman Management, Inc................... 751,700(a) 7.52
Neuberger Berman Genesis Portfolio
605 Third Ave.,
New York, NY 10158-3698
State Street Bank and Trust Company................ 926,186(b) 9.27
PO Box 1389,
Boston, MA 02104-1389
</TABLE>
- --------
(a) As reported on a Schedule 13G filed with the SEC on February 4, 2000,
Neuberger Berman, LLC, a registered investment advisor, and Neuberger
Berman, Inc., a parent holding company (collectively "Neuberger"), are
deemed to have beneficial ownership as of December 31, 1999 of 1,259,061
shares of Primex Common Stock. As reported in the Schedule 13G, Neuberger
possesses sole voting power with respect to 504,861 of such shares, shared
voting power with respect to 751,700 of such shares and shared dispositive
power with many unrelated clients with respect to all 1,259,061 shares.
Included in this share total are the 751,700 shares held by the Neuberger
Berman Genesis Portfolio, a series of Equity Managers Trust. Neuberger
Berman LLC and Neuberger Berman Management Inc., sub-advisor and investment
manager, respectively, of the Neuberger Berman Genesis Portfolio, share
voting and dispositive power with the Neuberger Berman Genesis Portfolio
with respect to all 751,700 shares. Employees of Neuberger Berman, LLC own
an additional 3,300 shares. Neuberger Berman, LLC disclaims beneficial
ownership of these shares.
(b) Primex has been advised in a Schedule 13G filing that as of December 31,
1999, State Street Bank and Trust Company, acting in its fiduciary
capacities, had sole voting power with respect to 43,340 shares, shared
voting power with respect to 882,846 shares and sole dispositive power with
respect to 926,186 shares of Primex Common Stock. State Street Bank and
Trust Company is Trustee of the Olin Corporation CEOP. Shares are voted in
accordance with instructions received from CEOP participants as described
above.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
The members of the Board of Directors of Primex are divided into three
classes with the term of office of each class being three years, ending in
different years. Two persons, as set forth below under "Nominees for Terms
Expiring at the 2003 Annual Meeting," have been nominated by the Board for
election as Class I directors to serve until the Annual Meeting of Shareholders
in 2003 and thereafter until their successors have been duly elected and have
qualified. The terms of the other directors will continue after the meeting as
indicated below.
On November 3, 1999, Edwin M. Glasscock retired as a Director. Upon his
retirement, the number of directors constituting the whole Board was reduced to
eight.
Each of the nominees is a director at the present time. It is not expected
that any of the nominees will be unable to serve as a director, but if any
current nominee is unable to accept election, shares for which proxies have
been received will be voted for the election of a substitute nominee selected
by the Board, unless the number of directors is reduced.
2
<PAGE>
The election of each nominee as a director requires the affirmative vote of
a plurality of the votes cast in the election. Votes withheld and shares held
in street name ("Broker Shares") that are not voted in the election of
directors will not be included in determining the number of votes cast.
The Board of Directors recommends a vote FOR the election as directors of
all of the nominees listed below.
CLASS I
NOMINEES FOR TERMS EXPIRING AT THE 2003 ANNUAL MEETING
ROBERT H. RAU, 63, retired as President of the Aerostructures Group of B.F.
Goodrich Company in September 1998. From April 1993 until its merger with B. F.
Goodrich in December 1997, Mr. Rau was President and Chief Executive Officer of
Rohr, Inc. From 1988 to 1993, Mr. Rau served as Executive Vice President of
Parker Hannifin Corporation and President of the Aerospace Group of Parker
Hannifin. He is a member of the Board of Directors of B.F. Goodrich Company,
Willis Lease Finance Corporation and HCC Industries Inc. Mr. Rau has served as
a director of Primex since January 1997.
LEON E. SALOMON, 63, has been a Logistics Consultant since March 1999. From
January 1998 to his retirement from Rubbermaid Incorporated, he served as
Senior Vice President of Procurement. From May 1996 to January 1998, he was the
Corporate Vice President of Purchasing and Logistics for Rubbermaid. In 1996,
after 37 years of service, General Salomon retired from active duty in the U.S.
Army. From 1994 to 1996, General Salomon commanded the U.S. Army Material
Command. From 1992 to 1994, he was the U.S. Army Deputy Chief of Staff for
Logistics. Prior to that assignment, he was the Deputy Commanding General for
Combined Arms Support, U.S. Army Training and Doctrine Command, and Commanding
General, U.S. Army Combined Arms Support Command at Fort Lee, Virginia. He is a
member of the Board of Directors of GRC International, Inc. General Salomon has
served as a director of Primex since January 1997.
CLASS II
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 2001 ANNUAL MEETING
J. DOUGLAS DEMAIRE, 53, is President of Primex, a position he has held since
January 1999. From January 1997, when Primex was spun off from Olin
Corporation, until December 1998, he served as Executive Vice President of
Primex. From December 1995 through December 1996, Mr. DeMaire was Vice
President, Corporate Planning of Olin with responsibilities for strategic
planning, corporate development and mergers and acquisitions. From 1991 to
1995, he was Vice President, Planning and Development for Olin's Brass and
Winchester Divisions. Mr. DeMaire has served as a director of Primex since
January 1999.
BOB MARTINEZ, 65, is Managing Director, Government Consulting Group of
Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., a position he has held
since January 1999. From 1993 to January 1999, he was a principal of Bob
Martinez & Company, a domestic and international business development
consulting firm that he founded in 1993. From 1991 to 1993, pursuant to
presidential appointment, Mr. Martinez served as the United States Drug Czar,
and from 1987 to 1991, he served as the Governor of the State of Florida. Mr.
Martinez has served as a director of Primex since January 1997.
ANTHONY W. RUGGIERO, 58, is Executive Vice President and Chief Financial
Officer of Olin Corporation, a position he has held since January 1999. From
September 1995 until January 1999, he was Senior Vice President and Chief
Financial Officer of Olin. Mr. Ruggiero was Senior Vice President and Chief
Financial Officer of the Reader's Digest Association, Inc. from 1990 to 1995.
He joined Squibb Corporation in 1969 and served as Senior Vice President and
Chief Financial Officer and as a Director from 1983 to 1990. Mr. Ruggiero is a
director of Olin Corporation. Mr. Ruggiero has served as a director of Primex
since January 1997.
3
<PAGE>
CLASS III
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 2002 ANNUAL MEETING
JAMES G. HASCALL, 61, is Chairman and Chief Executive Officer of Primex, a
position he assumed in January 1997 when Primex was spun off from Olin
Corporation. From January 1996 through December 1996, Mr. Hascall served as
Executive Vice President of Olin, having operating responsibility for Olin's
Brass, Winchester, Ordnance and Aerospace Divisions. From 1985 through 1995,
Mr. Hascall served as President of Olin's Brass Division. He was an Olin
Corporate Vice President from 1985 to 1990 and a Senior Vice President from
1990 to December 1995.
DAVID LASKY, 67, is Chairman and Chief Executive Officer of Curtiss-Wright
Corporation. Mr. Lasky joined Curtiss-Wright in 1962, was elected Director,
President and Chief Executive Officer in 1993, and in 1995, he was elected to
the additional position of Chairman of the Board. Mr. Lasky has served as a
director of Primex since January 1997.
WILLIAM B. MITCHELL, 64, retired as Vice Chairman of the Board of Texas
Instruments Incorporated in December 1996. Mr. Mitchell joined Texas
Instruments in 1961, was elected a Corporate Vice President and President of
the Defense Systems and Electronics Group in 1984, Executive Vice President and
President of the Systems and Equipment Sector in 1991 and Vice Chairman in
1993. He is a director of Curtiss-Wright Corporation and a trustee of Mitre
Corporation. Mr. Mitchell has served as a director of Primex since January
1997.
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
Attendance
During 1999, the Board held eight meetings. All directors attended at least
75% of the meetings of the Board and committees of the Board on which they
served.
Committees of the Board
The standing committees of the Corporation's Board of Directors are an Audit
Committee and a Compensation and Nominating Committee. During 1999, each such
committee held four meetings.
The Audit Committee advises the Board on internal and external audit matters
affecting Primex, including the appointment and termination of the independent
auditors of Primex; reviews with such auditors the scope and results of their
examination of the financial statements of Primex and any investigations and
surveys conducted by such auditors; reviews reports of Primex's internal audit
activities; reviews senior executive and Board member expenses and reviews the
presentation of Primex's financial results. The committee approves the
appointment and removal of trustees for qualified retirement, savings and
fringe benefit programs. It also approves investment policy, investment funds
offered and company contribution amounts and levels in these plans. The
committee also advises the Board on compliance with the Primex Code of Business
Conduct, on government and other compliance programs, on corporate and
governmental security matters and any major litigation involving Primex. The
Audit Committee currently consists of Messrs. Rau (Chair), Ruggiero and
Salomon.
The Compensation and Nominating Committee sets policy, develops and monitors
strategies, and administers the programs addressing the compensation of the
Chief Executive Officer ("CEO") and the other senior executives of Primex. The
committee approves the salary plans for the CEO and other senior executives. It
approves the measures, goals, objectives, weighting, payout matrices and actual
payouts and certifies performance for and administers Primex's incentive
compensation plans. The committee approves qualified and non-qualified
retirement and savings programs and reviews health, welfare and fringe benefit
programs. It issues an annual report on Executive Compensation that appears in
the Proxy Statement, approves Executive
4
<PAGE>
Agreements and reviews plans for management development and succession, health,
welfare and fringe benefits. The committee also advises the Board on such
matters as the composition and remuneration of the Board and committees
thereof, including the nomination of directors, protection against liability
and indemnification. The committee will consider candidates recommended by
shareholders for election as directors at annual meetings. Shareholder
recommendations for director nominees must be in writing and submitted to the
Secretary of Primex by December 1 of the year prior to such meeting,
accompanied by a biography and the written consent of the candidate. The
Compensation and Nominating Committee currently consists of Messrs. Lasky,
Martinez and Mitchell (Chair).
The Corporation's Bylaws require that advance notice of nominations for the
election of directors to be made by a shareholder (as distinguished from a
shareholder's recommendation to the Compensation and Nominating Committee) be
given to the Secretary of Primex no later than 90 days before an annual meeting
of shareholders or seven days following notice of special meetings of
shareholders for the election of directors, together with the name and address
of the shareholder and of the person to be nominated; a representation that the
shareholder is entitled to vote at the meeting and intends to appear there in
person or by proxy to make the nomination; a description of arrangements or
understandings between the shareholder and others pursuant to which the
nomination is to be made; such other information regarding the nominee as would
be required in a proxy statement filed under the SEC proxy rules; and the
consent of the nominee to serve as a director, if elected.
Compensation of Directors
During 1999, directors who were not employees of Primex received a fixed
annual retainer of $20,000 (50% of which was distributed in the form of Common
Stock) and an annual stock grant valued at $15,000. Each such director also
received a fee of $1,000 for each meeting of the Board and for each meeting of
a committee of the Board attended. Chairpersons of committees received an
additional annual fee of $3,000. The Primex Stock Plan for Nonemployee
Directors (the "Directors Plan") permits directors to (i) elect to receive the
balance of their fixed annual retainer in cash or Common Stock, (ii) receive
meeting fees in cash or Common Stock, and (iii) defer the cash or stock
portions of their annual retainer and meetings fees into cash accounts or into
stock accounts. Deferred cash balances are credited with interest and deferred
stock balances with dividend equivalents.
Directors are reimbursed for expenses incurred in the performance of their
duties as directors and are covered while on company business under the Primex
business travel accident insurance policy which covers employees of Primex
generally.
5
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table shows the number of shares of Common Stock beneficially
owned as of January 15, 2000 by (i) each director and nominee for director of
Primex, (ii) each of the individuals named in the Summary Compensation Table on
page 11, and (iii) all directors and current executive officers of Primex as a
group. Unless otherwise indicated in the footnotes below, each person had sole
voting and investment power with respect to such shares. Also included in the
table are shares of Common Stock which may be acquired within 60 days.
<TABLE>
<CAPTION>
No. of Shares
Beneficially Percent of
Name of Beneficial Owner Owned(a,b) Class(c)
------------------------ ------------- ----------
<S> <C> <C>
J. D. DeMaire................................... 133,772 1.3%
J. E. Fischer................................... 66,281 --
J. G. Hascall................................... 260,821 2.5%
D. Lasky........................................ 5,883 --
B. Martinez..................................... 600 --
W. B. Mitchell.................................. 3,892 --
G. H. Pain...................................... 65,354 --
R. H. Rau....................................... 22,900(d) --
A. W. Ruggiero.................................. 2,150 --
L. E. Salomon................................... -- --
M. S. Wilson.................................... 89,394 --
Directors and executive officers as a group,
including
those named above (14 persons)................. 814,864 7.8%
</TABLE>
- --------
(a) Excluded from this table are shares of Common Stock credited to deferred
accounts pursuant to the arrangements described above under "Compensation
of Directors" in the amounts of 7,439 shares for Mr. Martinez, 7,319 for
Mr. Mitchell, 8,661 for Mr. Rau, 8,837 for Mr. Ruggiero and 6,037 for Mr.
Salomon. Such shares have no voting power.
(b) The amounts shown include shares of Common Stock which the following
persons have the right to acquire as a result of the exercise of stock
options within 60 days after January 15, 2000 under the 1996 Long Term
Incentive Plan of Primex Technologies, Inc.:
<TABLE>
<S> <C>
J. D. DeMaire 60,000 shares
J. E. Fischer 26,001 shares
J. G. Hascall 100,001 shares
G. H. Pain 26,001 shares
M. S. Wilson 38,001 shares
Directors and executive officers as a group,
including those named above: 314,674 shares
</TABLE>
(c) Unless otherwise indicated, beneficial ownership of any named individual
does not exceed 1% of the outstanding shares of Common Stock.
(d) Includes 21,000 shares held by a trust in which Mr. Rau is co-trustee
sharing voting and investment power and in which his children are
beneficiaries. Also includes 900 shares held by a trust in which his
stepchildren are beneficiaries and his spouse is trustee. Mr. Rau
disclaims beneficial ownership of such shares.
6
<PAGE>
Stock Ownership Guidelines
The Compensation and Nominating Committee of the Board of Directors has
established guidelines for stock ownership for all key executives, including
executive officers, and for all nonemployee Directors. Such guidelines ask that
each executive and non-employee Director, within 5 years of attaining such
position, acquire ownership of shares of Common Stock, the aggregate value of
which meets or exceeds:
<TABLE>
<S> <C>
Directors (nonemployee)................. 4 times annual retainer
CEO..................................... 4 times annual base salary
President............................... 3 1/2 times annual base salary
Executive Vice Presidents, Division
Presidents,
Chief Financial Officer................ 3 times annual base salary
Other Executive Officers................ 2 times annual base salary
All other key executives................ 1 times annual base salary
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Primex executive officers and directors, and persons who own more than ten
percent of a registered class of Primex's equity securities, to file reports of
ownership and changes in ownership with the SEC. Executive officers, directors
and greater than ten-percent shareholders are required by SEC regulation to
furnish Primex with copies of all Section 16(a) filings. Based solely upon the
review of copies of such filings furnished to Primex or written representations
that no filings were required, Primex believes that for the period January 1,
1999 through December 31, 1999, all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than ten-percent
beneficial owners were timely filed with the SEC, except for one report for one
transaction by S. C. Curley, an executive officer of Primex.
7
<PAGE>
EXECUTIVE COMPENSATION
Report of the Compensation and Nominating Committee on Executive Compensation
The Compensation and Nominating Committee (the "Committee"), which is
composed of three members of the Board of Directors who are not Primex officers
or employees, establishes and administers the executive compensation program of
Primex.
Compensation Philosophy. The Committee, in designing and administering
Primex's executive compensation program, seeks to achieve the following
objectives:
. To attract and retain high-quality executives;
. To create a link between executive compensation and Primex's long-term
financial performance and shareholder value; and
. To unite management as a team.
The Committee believes that, in order to accomplish these objectives,
Primex's compensation program must be competitive with the compensation
opportunities available at companies which compete with Primex for executive
talent. Accordingly, in fashioning its executive compensation program, the
Committee has reviewed and analyzed, and will continue to review and analyze,
executive compensation data for companies which the Committee believes are
similar to Primex in size and scope of operations ("Comparable Companies").
These data are obtained from surveys conducted by independent compensation
consultants. The compensation surveys cover companies with which the Committee
believes Primex competes for executive resources, but do not necessarily
include the companies used in the peer group comparison shown in the
Performance Graph on page 13 of this Proxy Statement. In reviewing such
compensation data, the Committee takes into account how Primex's compensation
policies and overall performance compare to the Comparable Companies.
Components of Compensation Program. Primex's executive compensation program
is comprised of the following three components:
.Annual base salary;
.Annual incentive compensation; and
.Long-term incentive compensation.
The Committee believes that placing an emphasis on the variable-pay
components of the compensation program (annual incentive compensation and long-
term incentive compensation) is the most effective means of achieving the
above-described objectives, including building shareholder value. Accordingly,
the Committee has endeavored to structure Primex's executive compensation
program so that approximately 50% to 60% of an executive officer's total
targeted compensation consists of variable pay. The Committee intends to review
Primex's executive compensation program each year in order to ensure that the
type and mix of compensation, including the emphasis on variable pay, are in
line with the objectives and performance of Primex.
Annual Base Salary. In setting the annual base salaries of Primex's
executive officers, including the Chief Executive Officer (the "CEO"), the
Committee reviews and analyzes base salary data for the Comparable Companies.
In determining whether to adjust the base salary of an executive officer,
including the CEO, the Committee takes into account, among other things, the
salaries paid for comparable positions at Comparable Companies, changes in the
executive officer's responsibilities, and the individual executive officer's
performance. The Committee's long-term objective is to set the base salaries of
its executive officers at or above the median salaries of similar-level
executives of the Comparable Companies. The CEO's base salary for 1999 was
$500,000. Based on a competitive analysis of the CEO's base salary, the
Committee did not adjust his base salary beyond the 1998 level.
8
<PAGE>
Annual Incentive Compensation. In February 1997, Primex adopted an incentive
compensation plan (the "ICP") as the vehicle for awarding executive officers
annual incentive compensation. For all executive officers, other than the
Division Presidents, the ICP awards annual cash bonuses determined solely on
the basis of the Economic Value Added ("EVA") performance of Primex for the
year versus a previously agreed-upon target EVA for the year. Seventy-five
percent of the cash bonus to each Division President is based on the EVA
performance of the respective Division; the remaining 25% is based on the EVA
performance of Primex as a whole. This EVA system, which has been successfully
adopted and implemented by a wide range of public and private companies around
the world, uses as its principal measure an estimate of the net operating
profit after subtracting taxes and the cost of capital employed (including both
debt and equity). The Committee believes that the EVA system closely aligns the
interests of management and shareholders.
The EVA-based annual incentive award is calculated solely by reference to
Primex's financial results and without reference to any individual's
performance. Under the EVA bonus formula, a bonus multiple is generated that is
then applied to the target bonus set at the beginning of a bonus year,
resulting in a "declared bonus" award. Under the bonus plan, the declared bonus
award is then placed into an individual's "bonus bank" from which only a
predetermined portion of the bonus bank balance is actually paid out as the
bonus award in a given year. For 1999, the predetermined payout was 33% of most
participants' bonus bank balance. The remaining bonus bank balance is deferred,
to be paid out over subsequent years if performance is sustained. The
predetermined bonus payout for 2000 will be 33% of most participants' bonus
bank balance.
The CEO's incentive compensation award is determined by the EVA performance
of Primex for the year. For 1999, Primex's actual EVA performance versus the
target approved by the Board exceeded the goal. For 1999, the CEO received a
bonus payout of $551,741. His remaining bonus bank balance is $1,120,201.
Long Term Incentive Compensation. In December 1996, the Board of Directors
adopted the 1996 Long-Term Incentive Plan of Primex Technologies, Inc. (the
"1996 LTIP") as the primary vehicle for making grants of long-term incentive
compensation to executive officers and other key employees of Primex. By
providing for the grant of equity-based awards, the 1996 LTIP serves the
objective of creating a link between a key employee's compensation and the
long-term financial performance of Primex. That is, equity-based awards enable
the executive officers and key employees who participate in the 1996 LTIP to
reap benefits when shareholder value is created. Under the 1996 LTIP, the
Committee is authorized to make grants of restricted stock, restricted stock
units (rights to receive stock in the future), stock appreciation rights, and
both qualified and non-qualified stock options.
On January 4, 1999, the Committee awarded the CEO options to purchase
100,000 shares of Primex Common Stock with an exercise price of $21.13 per
share. The table entitled "Option Grants of Common Stock in 1999" in this Proxy
Statement sets forth certain information regarding stock option grants to other
executive officers during 1999.
The Committee currently intends that all long-term incentive awards made in
the foreseeable future will be equity-based awards similar to those available
for grant under the 1996 LTIP and currently anticipates that such awards will
be primarily in the form of stock options. There are, however, less than 25,000
shares of Primex Common Stock available for issuance under the 1996 LTIP as
restricted stock, restricted stock units or pursuant to stock options, and
accordingly, the only long-term incentive awards currently available for grant
by the Committee under the 1996 LTIP are stock appreciation rights. On February
1, 2000, the Committee recommended, and the Board of Directors approved, the
adoption of a new long-term incentive plan, the Primex Technologies, Inc. 2000
Long Term Incentive Plan (the "2000 LTIP") which, like the 1996 LTIP,
authorizes the Committee to grant equity based awards in amounts determined by
the Committee.
From time to time, the Committee may award bonus compensation to an
executive officer of Primex in recognition of an extraordinary contribution
made by the officer. These awards, which are infrequent and which are made
solely at the discretion of the Committee, are made on an individual basis at
such time or times as the Committee determines such awards are warranted. The
Committee is not obligated to make such awards, and the Committee did not make
any such awards in 1999.
9
<PAGE>
Section 162(m) of the Internal Revenue Code. Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), limits the deductibility of
certain compensation paid to the Chief Executive Officer and the other four
most highly compensated executive officers of a public company during a taxable
year. This limitation on deductibility, which is set at $1 million per officer,
does not apply to certain types of performance-based compensation. The
Committee's philosophy with respect to Section 162(m) is that Primex should
maximize the benefit of the tax laws for Primex shareholders, where
appropriate, by awarding performance-based compensation to the extent
consistent with Primex's compensation policies and practices.
Conclusion. The Committee believes that the executive compensation program
described above has facilitated and will continue to facilitate Primex's
ability to retain, motivate, and attract the executive resources necessary to
maximize shareholder value. The Committee intends to continue to emphasize the
variable-pay element of the compensation program and the link between executive
compensation and shareholder value.
The Compensation and Nominating Committee:
William B. Mitchell, Chairman March 3, 2000
David Lasky
Bob Martinez
10
<PAGE>
Summary Compensation Table
The following table shows for Primex's Chief Executive Officer and the four
other most highly compensated executive officers of Primex (the "Named
Executive Officers") compensation for fiscal years 1997--1999.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
----------------------------------- ------------------------------
Awards Payouts
Name and Principal Other Restricted Securities
Position as of Annual Stock Underlying All Other
December 31, 1999 Year Salary Bonus Compensation Units(b) Options(c) LTIP (d) Compensation(e)
------------------ ---- -------- -------- ------------ ---------- ---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James G. Hascall........ 1999 $500,000 $551,741 $ 12,339 $ 0 100,000 $393,800 $163,880
Chairman and Chief 1998 500,000 555,961 9,411 0 100,000 0 144,179
Executive Officer 1997 425,000 452,403 184,251(a) 1,046,400 0 0 69,237
J. Douglas DeMaire...... 1999 $362,500 $328,894 $ 16,436 $ 0 60,000 $ 98,450 $ 83,022
President 1998 350,000 315,265 9,307 0 60,000 0 71,400
1997 225,000 163,162 134,666(a) 401,120 0 0 32,483
Michael S. Wilson ...... 1999 $275,000 $212,406 $ 5,339 $ 0 34,000 $ 76,075 $ 55,263
Executive Vice President 1998 250,000 182,104 0 0 40,000 0 52,296
1997 200,000 135,810 0 401,120 0 0 27,319
George H. Pain ......... 1999 $275,000 $167,148 $ 2,089 $ 0 28,000 $ 35,800 $ 44,740
Vice President and 1998 250,000 163,089 198 0 25,000 0 38,889
General Counsel 1997 200,000 96,413 176,177(a) 209,280 0 0 23,531
John E. Fischer ........ 1999 $275,000 $150,910 $ 4,120 $ 0 28,000 0 $ 31,985
Vice President and 1998 250,000 130,285 2,089 0 25,000 0 33,349
Chief Financial Officer 1997 190,000 116,413 0 401,120 0 0 19,768
</TABLE>
- --------
(a) Dollar amounts shown include relocation expenses paid by Olin for Messrs.
Hascall, DeMaire and Pain of $112,346, $84,347,and $111,031 respectively.
Amounts also include tax gross-ups paid for imputed income on such
relocation expenses of $40,673 for Mr. Hascall, $31,937 for Mr. DeMaire and
$65,146 for Mr. Pain.
(b) Dollar amounts shown equals number of restricted stock units granted
multiplied by the fair market value of a share of Primex Common Stock on
the grant date. The number and value of the restricted stock units held on
December 31, 1999, based on the $20.75 per share closing price of Primex
Common Stock on December 31, 1999, were J. G. Hascall--120,000 units
($2,490,000), J. D. DeMaire--46,000 units ($954,500), M. S. Wilson--46,000
units ($954,500), G. H. Pain-24,000 units ($498,000), J. E. Fischer-46,000
units ($954,500). Number of units reflect an equitable adjustment to the
original grant made pursuant to anti-dilution provisions of the plan as a
result of the 2-for-1 stock dividend. Dividends are accrued on all
restricted stock units at the same rate as unrestricted shares of Common
Stock and interest is accrued on all cash balances.
(c) All awards shown reflect an equitable adjustment made pursuant to the anti-
dilution provisions of the plans for a 2-for-1 stock dividend.
(d) These amounts represent payouts under the Transition Bonus Program of
Primex Technologies, Inc., which was adopted to help ensure that Primex
executives, previously employed by Olin, were not penalized due to the
forfeiture of unvested awards made to such executives under benefit plans
of Olin resulting from the spin-off of Primex.
(e) Amounts reported in this column for 1999 are comprised of the following
items:
<TABLE>
<CAPTION>
PRIME Plan
Company Match
and Restoration Term Life
Retirement Plan(1) Insurance(2)
------------- ----------- -----------
<S> <C> <C> <C>
J. G. Hascall...................... $20,000 $138,222 $5,658
J. D. DeMaire...................... 16,340 63,649 3,033
M. S. Wilson....................... 16,340 36,496 2,427
G. H. Pain......................... 15,175 27,492 2,073
J. E. Fischer...................... 11,024 19,102 1,859
</TABLE>
11
<PAGE>
- --------
(1) The Internal Revenue Code of 1986, as amended, imposes a cap on the amount
of contributions that an employer may make to tax-deferred benefit plans on
account of a particular employee. The Primex Technologies, Inc. Restoration
Bonus Plan (the "Restoration Bonus Plan") provides for cash bonuses to each
employee equal to the amount in excess of such cap that Primex would have
contributed to the PRIME Plan on account of such employee if the cap did
not exist. Such bonuses accrue throughout the year and are payable on or
before December 31 of each year.
(2) Under the Primex key executive life insurance program, additional life
insurance is provided to each executive. Amounts shown represent premiums
paid under the program on behalf of such executives during 1999.
Option Grants of Common Stock in 1999
The following table presents additional information concerning the option
awards shown in the Summary Compensation Table on page 11 for fiscal year 1999.
These options to purchase Common Stock were granted to the Named Executive
Officers under the 1996 LTIP.
<TABLE>
<CAPTION>
Potential Realizable
Value at
Assumed Annual Rates
of
Stock Price
Appreciation for
Individual Grants (a) Option Term (e)
--------------------------------------------------- ---------------------
% of Total
Number of Options
Securities Granted to
Underlying Employees
Options in Exercise Expiration
Name Date Granted(b,c) Fiscal Year Price(d) Date 5% 10%
---- ------ ----------- ----------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
J. G. Hascall........... 1/4/99 100,000 20.6 $21.13 1/3/09 $1,328,850 $3,367,580
J. D. DeMaire........... 1/4/99 60,000 12.3 $21.13 1/3/09 797,310 2,020,548
M. S. Wilson............ 1/4/99 34,000 7.0 $21.13 1/3/09 451,809 1,144,977
G. H. Pain.............. 1/4/99 28,000 5.8 $21.13 1/3/09 372,078 942,922
J. E. Fischer........... 1/4/99 28,000 5.8 $21.13 1/3/09 372,078 942,922
</TABLE>
- --------
(a) Number of options and the exercise price reflect an equitable adjustment to
the original grant made pursuant to anti-dilution provisions of the 1996
LTIP as a result of the 2-for-1 stock dividend.
(b) Consists of option grants under the 1996 LTIP. The 1996 LTIP provides for
the grant of stock options and related stock appreciation rights ("SARs"),
as well as restricted stock, to key employees, as determined by the
Compensation and Nominating Committee of the Board of Directors. Options
granted under the 1996 LTIP may be granted either as incentive stock
options, which qualify for certain favorable tax treatment, or as non-
qualified options. One-third of the options granted in 1999 becomes
exercisable on each January 3 beginning in 2000.
(c) Under the 1996 LTIP, the Compensation Committee, in its discretion, may
grant stock appreciation rights ("SARs") to optionees. In 1999, Primex
granted 34,000 SARs. Each such right will relate to and have the same terms
and conditions, including restrictions, as a specific option granted,
together with such additional terms and conditions as the Compensation
Committee may prescribe.
(d) The exercise price of the options reflects the fair market value of Common
Stock on the date of grant adjusted for the 2-for-1 stock split.
(e) No gain to the optionees is possible without appreciation in the stock
price that will benefit all shareholders commensurately. The dollar
amounts under these columns are the result of calculations at the 5% and
10% assumption rates set by the SEC and therefore are not intended to
forecast possible future appreciation of Primex's stock price or to
establish any present value of the options.
The following table sets forth as to the individuals named in the Summary
Compensation Table on page 11, information regarding options exercised during
1999 and the value of in-the-money outstanding options at the end of 1999.
12
<PAGE>
Aggregated Option Exercises in 1999 and Year-end Option Values (a)
<TABLE>
<CAPTION>
Number of Securities Aggregate Value of
Underlying Unexercised Unexercised, In-the-Money
Shares Options at 12/31/99 Options at 12/31/99(b)
Acquired Value ------------------------- -------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. G. Hascall........... 0 $ 0 33,334 166,666 $127,003 $253,997
J. D. DeMaire........... 0 0 20,000 100,000 76,200 152,400
M. S. Wilson............ 0 0 13,334 60,666 50,803 101,597
G. H. Pain.............. 0 0 8,334 44,666 31,753 63,497
J. E. Fischer........... 0 0 8,334 44,666 31,753 63,497
</TABLE>
- --------
(a) Figures presented are adjusted to reflect the 2-for-1 stock dividend.
(b) Value was computed as the difference between the exercise price and the
$20.75 per share closing price of Primex Common Stock on December 31,
1999, as reported on the consolidated transaction reporting system of the
Nasdaq National Market System.
PERFORMANCE GRAPH
Primex Technologies, Inc., the Russell 2000 Index and the Dow Jones Aerospace &
Defense Index*
<TABLE>
<CAPTION>
Cumulative Total Return
---------------------------------------
1/2/97 6/97 12/97 6/98 12/98 6/99 12/99
------ ---- ----- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Primex Technologies, Inc................ 100 106 169 258 216 220 170
Russell 2000............................ 100 115 132 138 123 130 121
DJ Aerospace & Defense.................. 100 107 106 106 87 105 79
</TABLE>
- --------
* Assuming $100 invested on January 2, 1997 in Primex Common Stock and on
12/31/96 in the Russell 2000 Index and the DJ Aerospace & Defense Index,
including reinvestment of dividends. Fiscal year ending December 31.
13
<PAGE>
Executive Agreements and Change in Control Arrangements
Each of the Named Executive Officers has entered into an to Executive
Agreement with Primex. Each Executive Agreement provides certain benefits to
the officer in the event such officer's employment with Primex is terminated.
More specifically, if the officer's employment is terminated by Primex without
cause, the officer is entitled to a lump-sum payment equal to the sum of (i)
twelve months of the officer's then current monthly salary, plus (ii) an amount
equal to the greater of the average annual bonus payout to the officer under
Primex's ICP over the three years immediately preceding the officer's
termination or the officer's then current target bonus under Primex's ICP (the
aggregate amount set forth under (i) and (ii) above being referred to as the
"Executive Severance"). In the event that the officer's employment is
terminated without cause by Primex or any successor entity after a change in
control of Primex, the officer is entitled to an additional lump-sum payment
equal to two times the Executive Severance. The officer is also entitled to the
above amounts if he or she terminates his or her own employment for certain
specified reasons, including a reduction in such officer's base salary, a
reduction in responsibilities or position with Primex, relocation of his or her
office under certain circumstances, and failure of Primex to maintain the
officer's level of participation in certain benefit plans. In addition, the
Executive Agreements for Messrs. Hascall, DeMaire, Pain, Fischer and one other
executive officer provide that each is entitled to the above amounts if he
terminates his employment with Primex for any reason within the 90-day period
immediately following the expiration of the six months following the date of a
change in control of Primex.
Under the Executive Agreements, if an officer becomes entitled to Executive
Severance, then, in addition to such Executive Severance, the officer will be
entitled to receive a lump sum payment equal to the amount (or, in the case of
a change in control, three times the amount) contributed or credited by Primex
to the officer's accounts in all defined contribution plans of Primex during
the twelve months preceding the officer's termination. The officer will also,
under certain circumstances, be compensated upon a change in control for
certain benefits that would be lost under Olin's qualified pension plan as a
result of the change in control (assuming that such officer, at the time of the
change in control, has an accrued vested benefit under such pension plan).
Under each Executive Agreement, the officer will also continue to enjoy
coverage under all Primex medical, dental, and life insurance plans for an
additional one year after termination or, if the termination is after a change
in control, for an additional three years. Lastly, the Executive Agreements
provide that, with respect to any "excess parachute payment" tax imposed on an
officer's severance benefits by Section 4999 of the Internal Revenue Code of
1986, as amended, the officer's benefits will be grossed-up so that after-tax
severance benefits will equal what would have been received had the officer not
been subject to Section 4999. Each of the Executive Agreements expires on
December 31, 2002.
In addition to the Executive Agreements, certain of Primex's benefit and
compensation plans provide for the acceleration or increase of benefits in the
event of a change in control of Primex. Under the ICP, upon a change in control
of Primex, an additional bonus equal to the participant's preceding year's
declared bonus or current year's ICP target bonus (whichever is greater) will
be added to the participant's bonus bank, and any positive bonus bank balance
must thereafter be paid to the participant as soon as administratively
practicable after such change in control. Under the Restoration Bonus Plan (as
described above in Footnote (e) to the Summary Compensation Table), all bonuses
for the year payable under such plan will automatically be paid to participants
upon a change in control. Under the Directors Plan (as described above under
the caption "ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS--
Compensation of Directors"), upon a change in control of Primex, all shares and
other amounts credited to a director's stock and cash accounts under the
Director's Plan will promptly be distributed to such director. Under the 1996
LTIP and 2000 LTIP, upon a change in control of Primex, all options and stock
appreciation rights then outstanding under the 1996 LTIP and 2000 LTIP will
become immediately and fully exercisable, notwithstanding any vesting
requirements contained in the 1996 LTIP, 2000 LTIP or the individual grant. In
addition, each 1996 LTIP and 2000 LTIP participant holding an option shall also
be deemed to hold a stock appreciation right related to such option (unless a
stock appreciation right has already been granted with respect to such option),
in which case
14
<PAGE>
the participant may elect to exercise either the option or the related stock
appreciation right (but not both). Such stock appreciation rights will be
exercisable on the same terms and conditions as the related option. All
restrictions and conditions of all restricted stock and restricted stock units
granted under the 1996 LTIP and 2000 LTIP will, upon a change in control, be
deemed satisfied as of the date of the change in control and will be paid in
either cash or Common Stock (at the election of the participant), and all
performance awards under the 1996 LTIP and 2000 LTIP will become vested, deemed
earned in full, and promptly paid upon a change in control.
In the Executive Agreements and in the foregoing benefit and compensation
plans, "change in control" is defined as the occurrence of any one of the
following events: (i) Primex ceases to be owned by at least 300 shareholders of
record, or ceases, by action of Primex's Board of Directors, to be either
listed on a national securities exchange or authorized for quotation on the
Nasdaq Stock Market; (ii) 15% of the outstanding voting stock of Primex becomes
owned by one person or entity (other than Primex, a majority-owned subsidiary
of Primex, or an employee benefit plan of Primex or one of its subsidiaries);
(iii) the incumbent directors or their designated successors cease, over a two-
year period, to constitute a majority of the Board of Directors; (iv) all or
substantially all of Primex's business or assets is disposed of pursuant to a
merger, consolidation or other transaction, whether or not Primex is the
surviving or resulting entity in the transaction (unless the shareholders of
Primex immediately preceding the transaction own more than 50% of the voting
stock or other ownership interest in the surviving entity or combined company);
(v) Primex's Board of Directors determines that a tender offer for Primex
shares indicates a serious intention by the offeror to acquire control of
Primex; or (vi) shareholder approval of a liquidation or dissolution of Primex.
PROPOSAL NO. 2--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Ernst & Young LLP ("Ernst &
Young") as independent auditors of Primex for the year 2000. The appointment of
Ernst & Young was recommended to the Board by its Audit Committee.
The submission of this matter to shareholders at the Annual Meeting is not
required by law or by Primex's Bylaws. The Board of Directors of Primex is
nevertheless submitting it to the shareholders to ascertain their views. If
this appointment is not ratified at the Annual Meeting, the Board of Directors
intends to reconsider its appointment of Ernst & Young as independent auditors.
A representative of Ernst & Young is expected to be present at the Annual
Meeting and will have an opportunity to make a statement if he or she desires
to do so and to respond to appropriate questions.
The ratification of the appointment of independent auditors for 2000
requires that the votes cast in favor of the ratification exceed the votes cast
opposing such ratification. Abstentions and Broker Shares that are not voted
will not be included in determining the number of votes cast.
The Board of Directors recommends a vote FOR the ratification of the
appointment
of Ernst & Young LLP as Primex's independent auditors for 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Anthony W. Ruggiero, a director of Primex, is Executive Vice President and
Chief Financial Officer of Olin. During Primex's 1999 fiscal year, Primex and
Olin were parties to certain agreements, including a Powder Supply Requirements
Agreement and a Component Supply Agreement which set forth the terms by which
Olin purchased propellant powder from Primex and Primex purchased certain
ammunition components from Olin. These agreements were originally negotiated
while Primex was wholly owned by Olin, however, the Powder
15
<PAGE>
Supply Requirements Agreement was re-negotiated in 1999. The Component Supply
Agreement expired at the end of 1999. Accordingly, the Component Supply
Agreement and the original Powder Supply Requirements Agreement were not the
result of arm's-length negotiations between independent parties, although
Primex believes that these agreements contained terms that generally are
comparable to those that would have been reached in arm's-length negotiations
between unaffiliated parties.
MISCELLANEOUS
Primex will pay the entire expense of this solicitation of proxies.
Georgeson & Company Inc., New York, New York, will solicit proxies by
personal interview, mail, telephone and telegram, and will request brokerage
houses and other custodians, nominees and fiduciaries to forward solicitation
material to the beneficial owners of the Common Stock held of record by such
persons. Primex will pay Georgeson & Company Inc. a fee of $6,500 covering its
services and will reimburse Georgeson & Company Inc. for payments made to
brokers and other nominees for their expenses in forwarding solicitation
material. In addition, proxies may be solicited by personal interview,
telephone and telegram by directors, officers and employees of Primex.
Shareholder Proposals
Proposals of shareholders intended to be presented at Primex's 2001 Annual
Meeting of Shareholders must be received at Primex's principal executive
offices by November 21, 2000 for inclusion in Primex's proxy statement and form
of proxy for that meeting. All such proposals must be in writing and addressed
to the Corporate Secretary, Primex Technologies, Inc., 10101 9th Street North,
St. Petersburg, Florida 33716.
By order of the Board of Directors:
/s/ George H. Pain
George H. Pain
Secretary
March 21, 2000
16
<PAGE>
PRIMEX TECHNOLOGIES, INC.
10101 9th Street N., St. Petersburg, FL. 33716
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JAMES G. HASCALL, BOB MARTINEZ, and LEON E. SALOMON, or any of them with
full power of substitution, are hereby appointed proxies to vote all Common
Stock of the undersigned in Primex Technologies, Inc. which the undersigned
would be entitled to vote on all matters which may come before the Annual
Meeting of Shareholders to be held at the Renaissance Vinoy Resort, 501 Fifth
Ave. N.E., St. Petersburg, Florida, on May 2, 2000, at 10:00 a.m. and at any
adjournment thereof.
This Proxy will be voted as directed by the shareholder on the items listed
on the reverse side. If no contrary direction is specified, this Proxy will be
voted FOR Items 1 and 2. Should any nominee for election to the Board of
Directors be unable to serve, this Proxy may be voted for a substitute selected
by the Board of Directors.
PRIMEX TECHNOLOGIES, INC.
P.O. BOX 11190
NEW YORK, N.Y. 10203-0190
(IMPORTANT: PLEASE DATE AND SIGN THE PROXY ON REVERSE SIDE)
<PAGE>
Please Detach Here
\/ You Must Detach This Portion of the Proxy Card \/
Before Returning it in the Enclosed Envelope
- --------------------------------------------------------------------------------
ITEM 1. ELECTION OF DIRECTORS:
FOR all nominees listed below. [_]
WITHHOLD AUTHORITY to vote for [_]
all nominees listed below.
*EXCEPTIONS [_]
Nominees: Robert H. Rau and Leon E. Salomon
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the space
provided below.)
*Exceptions______________________________________________________________
ITEM 2. Appointment of Independent Auditors.
FOR [_]
AGAINST [_]
ABSTAIN [_]
If You Plan to Attend the
Annual Meeting Mark Here [_]
Change of Address and/ [_]
or Comments Mark Here
Please mark, date and sign as your name appears hereon. If acting as
executor, administrator, trustee, guardian, etc., you should so indicate
when signing. If the signer is a corporation, please sign the full
corporate name, by a duly authorized officer and indicate the title of such
officer. If shares are held jointly, each stockholder named should sign. If
you receive more than one proxy card, please date and sign each card and
return all proxy cards in the enclosed envelope.
Dated: ___________________________________________________________, 2000
Signature ______________________________________________________________
Signature ______________________________________________________________
Votes must be indicated (x) in Black or Blue ink.
PLEASE DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED ENVELOPE.
<PAGE>
From: ------------
PROXY TABULATOR FIRST CLASS
P.O. BOX 9132 U.S. POSTAGE
HINGHAM, MA 02043-9132 PAID
PROXY
TABULATOR
------------
VOTING INSTRUCTION FORM
PLEASE MARK, SIGN, DATE AND RETURN THE VOTING INSTRUCTION FORM PROMPTLY USING
THE ENCLOSED ENVELOPE
This voting instruction is requested by Boston Safe Deposit and Trust Company in
conjunction with a proxy solicitation by the Board of Directors of Primex
Technologies, Inc.
Please read the enclosed Proxy Statement and the Annual Report to Stockholders
for more information.
CONFIDENTIAL VOTING INSTRUCTION FORM
To: Boston Safe Deposit and Trust Company
As Trustee of the Primex Technologies, Inc. Retirement Investment Management
Experience Plan
\/ Please fold and detach card at perforation before mailing \/
The undersigned hereby instructs Boston Safe Deposit and Trust Company, as
Trustee of the Primex Technologies, Inc. Retirement Investment Management
Experience Plan (the "PRIME Plan") to vote in person or by proxy at the Annual
Meeting of the Shareholders of Primex Technologies, to be held on May 2, 2000,
and at any postponements thereof, all shares of Common Stock of Primex
Technologies, Inc., for which the undersigned shall be entitled to instruct, in
the manner specified on the other side hereof.
Boston Safe Deposit and Trust Company will vote the shares represented by this
Voting Instruction Form if it is properly completed, signed, and received by
Boston Safe Deposit and Trust Company before 5:00 p.m. EST on April 28, 2000 at
P.O. Box 9116, Hingham, MA 02043. Please sign exactly as your name appears
below. The PRIME Plan provides that Common Stock credited to participants'
accounts for which no written instruction is received by the Trustee before the
meeting date will be voted in the same proportion as shares of Common Stock for
which the Trustee has received instructions.
Boston Safe Deposit and Trust Company makes no recommendation regarding any
voting instruction.
Dated _____________________ , 2000
__________________________________
SIGNATURE
<PAGE>
\/ Please fold and detach card at perforation before mailing \/
Please vote by marking the appropriate boxes below.
---------------------------------------------------
The Board of Directors of Primex Technologies, Inc.
recommends a vote FOR Proposals 1 and 2.
---------------------------------------------------
1. ELECTION OF DIRECTORS
FOR ALL
FOR WITHHOLD EXCEPT
Nominees: ALL ALL (noted at left)
Robert H. Rau [_] [_] [_]
Leon E. Salomon
(Instruction: To withhold authority to vote for any individual nominee mark the
"FOR ALL EXCEPT" box above and write that nominee's name below. Your shares
will be voted for the remaining nominee.)
_______________________________________________________________________________
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS.
FOR WITHHOLD ABSTAIN
[_] [_] [_]
Please note: If this Voting Instruction Form is signed, but no direction is
given on Proposal #1, Boston Safe Deposit and Trust Company will vote "FOR" all
nominees listed, or if no direction is given on Proposal #2, Boston Safe Deposit
and Trust Company will vote "FOR" Proposal #2.
(Continued and to be dated and signed on the other side)
