<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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 Section 240.14a-11(c) or Section
240.14a-12
Triumph Group, 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)(1)
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:
------------------------------------------------------------------------
<PAGE>
TRIUMPH GROUP, INC.
FOUR GLENHARDIE CORPORATE CENTER
1255 DRUMMERS LANE - SUITE 200
WAYNE, PENNSYLVANIA 19087
(610) 975-0420
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 21, 1998
TO HOLDERS OF SHARES OF COMMON STOCK AND CLASS D COMMON STOCK:
You are invited to be present either in person or by proxy at the
Annual Meeting of Stockholders of TRIUMPH GROUP, INC. to be held at the Sheraton
Tacoma Hotel, 1320 Broadway Plaza, Tacoma, Washington, on Tuesday, July 21,
1998, beginning at 9:00 a.m., local time, for the following purposes:
1. To elect six (6) directors for the ensuing year;
2. To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to increase the number of authorized
shares of Common Stock, par value $.001 per share, from 15,000,000 to
50,000,000;
3. To approve the Company's Directors' Stock Option Plan;
4. To ratify the selection of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending March 31, 1999; and
5. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.
Management presently knows of no other business to be presented at the
meeting. If any other matters come before the meeting, the persons named in the
enclosed proxy will vote in accordance with their judgment on such matters.
The Board of Directors has fixed the close of business on May 29, 1998
as the record date for determining stockholders entitled to notice of and to
vote at the meeting and any adjournments thereof. To ensure that your vote is
counted, please complete, date and sign the enclosed proxy and return it
promptly in the enclosed envelope, whether or not you plan to attend the meeting
in person. A self-addressed, postage paid envelope is enclosed for your
convenience. If you do attend the meeting, you may then withdraw your proxy and
vote your shares in person. In any event, you may revoke your proxy prior to its
exercise. Shares represented by proxies which are returned properly signed but
unmarked will be voted in favor of proposals made by the Company.
By Order of the Board of Directors,
Richard M. Eisenstaedt
June 23, 1998 Secretary
Wayne, Pennsylvania
YOUR VOTE IS IMPORTANT
PLEASE FILL IN, DATE AND SIGN THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING.
NO POSTAGE IS NECESSARY IF THE ENVELOPE IS MAILED IN THE UNITED STATES.
<PAGE>
TRIUMPH GROUP, INC.
FOUR GLENHARDIE CORPORATE CENTER
1255 DRUMMERS LANE - SUITE 200
WAYNE, PENNSYLVANIA 19087
(610) 975-0420
-----------------
PROXY STATEMENT
FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
To be held on July 21, 1998
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation
by the Board of Directors of Triumph Group, Inc. of proxies to be voted at its
Annual Meeting of Stockholders (the "Meeting") on Tuesday, July 21, 1998, to be
held at 9:00 a.m., local time, at the Sheraton Tacoma Hotel, 1320 Broadway
Plaza, Tacoma, Washington, and at any adjournments thereof, for the purposes set
forth in the accompanying notice of the Meeting. This proxy statement, the
foregoing notice and the enclosed proxy card will first be mailed to
stockholders entitled to vote on or about June 23, 1998.
Sending a signed proxy will not affect a stockholder's right to attend
the Meeting and vote in person since the proxy is revocable. Any stockholder
giving a proxy has the power to revoke it by, among other methods, giving
written notice to the Secretary of the Company at any time before the proxy is
exercised or by attending the Meeting and voting in person.
When your proxy card is returned properly signed, the shares
represented thereby will be voted in accordance with your instructions. The
Board knows of no matters that are likely to be brought before the Meeting,
other than the matters specifically referred to in the notice of the Meeting. If
any other matters properly come before the Meeting, the persons named in the
enclosed proxy, or their duly appointed substitutes acting at the Meeting, will
be authorized to vote or otherwise act thereon in accordance with their judgment
in such matters. In the absence of instructions, the shares represented at the
Meeting by the enclosed proxy will be voted "FOR" the nominees of the Board in
the election of directors, "FOR" the amendment to the Company's Amended and
Restated Certificate of Incorporation (the "Amendment to the Certificate of
Incorporation") to increase the number of authorized shares of the Company's
Common Stock, par value $.001 per share ("Common Stock") from 15,000,000 to
50,000,000, "FOR" the Company's Directors' Stock Option Plan (the "Directors'
Plan") and "FOR" the ratification of the selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending March 31, 1999.
SOLICITATION OF PROXIES
The expense of this proxy solicitation will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited in person or by
telephone or telecopy by officers or other regular employees of the Company,
without additional compensation to such officers and other employees. The
Company is required to pay, upon request, the reasonable expenses incurred by
record holders of the
1
<PAGE>
Common Stock, who are brokers, dealers, banks, voting trustees or other
nominees for mailing proxy material and annual stockholder reports to any
beneficial owners of Common Stock they hold of record.
QUORUM AND VOTING RIGHTS
Holders of record of the Company's Common Stock and Class D Common
Stock, par value $.001 per share ("Class D Common Stock"), as of the close of
business on May 29, 1998, the record date fixed by the Board for the
determination of stockholders entitled to notice of and to vote at the Meeting
(the "Record Date"), will be entitled to notice and to vote at the Meeting and
at any adjournments thereof. Holders of shares of Common Stock are entitled to
vote on all matters brought before the Meeting. Holders of Class D Common Stock
are not entitled to vote with respect to the election of directors, but are
entitled to vote on all other matters brought before the Meeting. Each share of
Class D Common Stock may be converted into one share of Common Stock, at any
time, at the option of the holder thereof.
As of the Record Date, there were 8,550,511 shares of Common Stock
outstanding and entitled to vote on the election of directors. As of the Record
Date, there were 8,550,511 shares of Common Stock and 3,348,535 shares of Class
D Common Stock for a total of 11,899,046 shares outstanding and entitled to vote
on all other matters. Holders of Common Stock will vote on the election of
directors as a class and the holders of Common Stock and Class D Common Stock
will vote on all other matters together as a class. Each outstanding share of
Common Stock and Class D Common Stock entitles the holder to one vote.
The presence in person or by proxy of the holders of a majority of the
outstanding Common Stock and Class D Common Stock is necessary to constitute a
quorum at the Meeting.
Directors will be elected by a plurality of the votes cast by holders
of Common Stock, voting together as a class, represented in person or by proxy
at the Meeting. Abstentions with respect to the election of directors will be
counted for the purpose of determining whether a quorum is present at the
Meeting but will not be considered as votes cast. Because directors are elected
by a plurality of votes, abstentions will not have an impact on their election.
The holders of Common Stock are entitled to cumulate their votes in the
election of directors, which gives a holder of Common Stock the right to cast as
many votes in the aggregate as he is entitled to vote multiplied by the number
of directors to be elected and to cast all his votes for one director nominee or
distribute such votes among two or more director nominees, as such holder sees
fit. Each holder of Common Stock may indicate his or her preference on the
enclosed proxy. If no preference is indicated, all votes to which such holder is
entitled will be voted pro rata in favor of all the nominees indicated.
Approval of the Amendment to the Certificate of Incorporation and the
Directors' Plan and ratification of the Board's selection of the Company's
auditors and any other matters brought before the Meeting, other than the
election of directors, will require the favorable vote of a majority of the
outstanding shares of Common Stock and Class D Common Stock, voting together as
a class, represented in person or by proxy at the Meeting. The Company is not
aware of any matter, other than as referred to in this proxy statement, to be
presented at the Meeting. Abstentions with respect to the approval of the
Amendment to the Certificate of Incorporation and the Directors' Plan and the
ratification of the selection of the Company's auditors and of any other
proposals will be counted for the purpose of determining whether a quorum is
present at the Meeting and as votes cast and will have the effect of a negative
vote.
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Broker non-votes with respect to all proposals will not be counted
in determining the presence of a quorum and will not be considered as votes
cast, and thus will have no effect on the results of the votes.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Board currently consists of six directors and one vacant seat.
At the Meeting, the stockholders will elect all six directors for a term
ending at the next annual meeting of stockholders and until such director's
successor is duly elected and qualified. One vacancy will remain on the Board.
The table below sets forth the name of each person nominated by the
Board to serve as a director for the ensuing year. All of the nominees are
currently directors of the Company for terms expiring at the Meeting. Each
nominee has consented to be named as a nominee and, to the present knowledge
of the Company, is willing to serve as a director, if elected. Should any of
the nominees not remain a nominee at the end of the Meeting (a situation
which is not anticipated), proxies solicited hereunder will be voted in favor
of those who remain as nominees and may be voted for substitute nominees.
Unless contrary instructions are given on the proxy, the shares represented
by a properly executed proxy will be voted pro rata "FOR" the election of
Richard C. Ill, John R. Bartholdson, Richard C. Gozon, Claude F. Kronk,
Joseph M. Silvestri and Michael A. Delaney.
<TABLE>
<CAPTION>
Nominees for Additional Term Age Year First Elected a Director
<S> <C> <C>
Richard C. Ill 55 1993
John R. Bartholdson 53 1993
Richard C. Gozon 59 1993
Claude F. Kronk 66 1993
Joseph M. Silvestri 36 1994
Michael A. Delaney 44 1996
</TABLE>
The principal occupations and qualifications of each nominee for
director are as follows:
Richard C. Ill has been President and Chief Executive Officer and a
director of the Company since 1993. Mr. Ill joined Alco Standard Corporation
("Alco") in 1968 (now IKON Office Solutions, Inc.), and became Group Vice
President of Metalsource, a steel distribution business, in 1973. In 1975,
Mr. Ill became President of Triumph Industries and, in 1983, became President
of Metalsource. In 1988, Mr. Ill became President of Alco Diversified
Services, a division of Alco. He was named a Vice President of Alco in 1989.
Mr. Ill is a member of the Advisory Board of Outward Bound, USA and the Board
of Directors, Chairman's Council and Policy and Planning Committees of the
Steel Service Center Institute.
John R. Bartholdson has been Senior Vice President, Chief Financial
Officer and Treasurer and a director of the Company since 1993. Mr.
Bartholdson joined Alco Diversified Services in the fall of 1992. Prior to
joining Alco Diversified Services, Mr. Bartholdson was employed for 14 years
by Lukens, Inc., a manufacturer of specialty steel products, the last five
years in the position of Senior Vice President and Chief Financial Officer.
Mr. Bartholdson serves on the Board of Directors of PBHG Funds, Inc.
3
<PAGE>
Richard C. Gozon has been a director of the Company since 1993. Mr.
Gozon has been Executive Vice President of Weyerhaeuser Company since 1994.
From 1988 to 1993, Mr. Gozon served as President and Chief Operating Officer
and a director of Alco. Mr. Gozon serves on the Board of Directors of U.G.I.
Corporation and AmeriSource Health Corporation ("AmeriSource").
Claude F. Kronk has been a director of the Company since 1993. Mr. Kronk
retired on January 1, 1998 from his position as Vice Chairman and Chief
Executive Officer of J&L Specialty Steel, Inc., a position which he held in
excess of five years. Mr. Kronk serves on the Board of Directors of Cold
Metal Products, Co. and J&L Speciality Steel, Inc.
Joseph M. Silvestri has been a director of the Company since 1994. Mr.
Silvestri has been employed by Citicorp Venture Capital, Ltd. ("CVC") since
1990 and has been a Vice President since 1995. Mr. Silvestri serves on the
Board of Directors of International Media Group, Polyfibron Technologies,
Inc., Frozen Specialties, Inc., Glenoit Mills and Euramax International, Inc.
Michael A. Delaney has been a director of the Company since 1996. Mr.
Delaney has been a Vice President of CVC since 1989. From 1986 through 1989,
Mr. Delaney was Vice President of Citicorp Mergers and Acquisitions. Mr.
Delaney serves on the Board of Directors of Aetna Industries, Inc.,
AmeriSource, Clark Material Handling Company, Cort Business Services, Delco
Remy International, Enterprise Media Ltd., FabriSteel, Inc., GVC Holdings,
International Knife and Saw, Inc., JAC Holdings, MSX International, Palomar
Technologies Holdings and Southern Coil Processing.
The Board recommends that stockholders vote "FOR" each of the
nominees presented. The six nominees receiving the highest number of
affirmative votes of the shares of Common Stock present or represented and
entitled to vote at the Meeting will be elected as directors.
Meetings and Committees of the Board
The Board held five meetings during the Company's fiscal year ended
March 31, 1998 and also acted by unanimous consents in writing. The standing
committees of the Board are the Audit Committee and the Compensation
Committee. The Company does not have an executive committee or a nominating
committee. The Audit Committee, consisting of Messrs. Gozon, Kronk and
Delaney, met one time during the last fiscal year. The Audit Committee
communicates and receives information directly from the Company's independent
auditors. The Compensation Committee, consisting of Messrs. Gozon, Kronk
and Silvestri, met one time during the last fiscal year. The Compensation
Committee periodically reviews and evaluates the compensation of the
Company's officers, administers the Company's 1996 Stock Option Plan (the
"Employee Plan") and establishes guidelines for compensation of other
personnel.
Compensation of Directors
Directors who are also employees of the Company or CVC do not
receive additional compensation for serving as directors. Each director who
is not an employee of the Company or CVC receives an annual fee of $15,000
and a fee of $1,000 for attendance at each Board meeting and $500 for each
committee meeting (unless held on the same day as a Board meeting). If the
Directors' Plan is approved by the stockholders, each director who is not an
employee of the Company will be entitled to receive options to purchase
shares of Common Stock. Any options granted under the Directors' Plan would
be in addition to any other compensation to such directors. See
"Proposal 3 -- Directors' Stock
4
<PAGE>
Option Plan". All directors are reimbursed for out-of-pocket expenses
incurred in attending meetings of the Board or committees thereof.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to the
President and Chief Executive Officer and to each of the four most highly
compensated executive officers of the Company and its subsidiaries, other
than the President and Chief Executive Officer, for the fiscal years ended
March 31, 1998, 1997 and 1996.
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Annual Compensation
------------------------------------------
Other Annual All Other
Name and Principal Position Year Salary Bonus(1) Compensation(2) Compensation(3)
- ----------------------------- ----- --------- --------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Richard C. Ill 1998 $315,000 $346,500 $4,929 $5,472
President and Chief Executive 1997 291,200 291,200 3,951 5,472
Officer 1996 280,000 308,000 3,080 5,472
John R. Bartholdson 1998 $267,000 $267,000 $4,848 $4,320
Senior Vice President, Chief 1997 249,600 249,600 4,024 4,320
Financial Officer and Treasurer 1996 240,000 264,000 3,080 4,320
Richard M. Eisenstaedt 1998 $164,000 $82,000 $4,725 $2,592
Vice President, General 1997(4) 68,792 60,000 0 1,080
Counsel and Secretary
Paul T. Stimmler 1998 $106,500 $53,000 $3,196 $4,950
Vice President and 1997 103,500 50,000 2,674 4,950
Assistant Secretary 1996 98,500 50,000 1,970 4,950
Kevin E. Kindig 1998 $85,000 $42,500 $2,550 $714
Controller and 1997 78,500 39,250 2,028 462
Assistant Secretary 1996 73,000 30,000 1,460 462
</TABLE>
- --------------------
(1) The amounts shown consist of cash bonuses earned in the fiscal year
identified, of which only a portion was paid in that year to Messrs.
Ill and Bartholdson.
(2) "Other Annual Compensation" reflects amounts contributed by the Company
to its 401(k) Plan for the benefit of the named employee.
(3) The amounts shown consist of group term life insurance premiums.
(4) Mr. Eisenstaedt commenced employment with the Company in October 1996.
5
<PAGE>
The following table sets forth, for each of the named executive
officers, certain information concerning the value of unexercised options at
March 31, 1998:
Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised Unexercised In-
Options at Fiscal the-Money Options at
Shares Year End (#) Fiscal Year End ($)(1)
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized($) Unexercisable Unexercisable
- ---------------------- ------------ ----------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
Richard C. Ill 0 0 8,750/26,250 $222,075/666,225
John R. Bartholdson 0 0 8,750/26,250 222,075/666,225
Richard M. Eisenstaedt 0 0 2,500/ 7,500 63,450/190,350
Paul T. Stimmler 0 0 2,500/ 7,500 63,450/190,350
Kevin E. Kindig 0 0 2,500/ 7,500 63,450/190,350
</TABLE>
- --------------------
(1) The fair market value of "in-the-money" options was calculated on the
basis of the difference between the exercise price of the options held
and the closing price per share for Common Stock on the New York Stock
Exchange of $44.38 on March 31, 1998, multiplied by the number of
options held.
Employment Agreements
The Company has entered into employment agreements with Richard C. Ill
and John R. Bartholdson (as applicable, the "Executive"), effective October 1,
1996, pursuant to which Messrs. Ill and Bartholdson will serve as President and
Chief Executive Officer and as Senior Vice President and Chief Financial
Officer, respectively, of the Company through September 30, 1999, unless earlier
terminated by the Board or, in certain circumstances following a change of
control transaction, by the Executive. These agreements provide for an annual
salary to Mr. Ill of not less than $291,200 and to Mr. Bartholdson of not less
than $249,600, plus incentive compensation as determined by the Board or the
Compensation Committee, as such authority may be delegated by the Board, and
comparable benefits and perquisites given to other members of senior management.
Messrs. Ill and Bartholdson are entitled to severance and other payments
following the earlier termination of employment by the Company or upon
termination by the Executive following a change in control of the Company. The
Executive may terminate his employment following a change of control
transaction, if as a result of such change in control, the Executive is required
to accept a material reduction in his duties and responsibilities or a
geographical relocation or the successor company fails to assume the Executive's
employment agreement. In the event of any early termination (other than for
"cause," death or disability), Messrs. Ill and Bartholdson are entitled to
receive a severance payment from the Company equal to 24 months salary. Messrs.
Ill and Bartholdson are required to devote substantially all of their time and
effort during normal business hours (reasonable sick leave and vacations
excepted) to the business and affairs of the Company.
6
<PAGE>
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Overall Policy
The Company's executive compensation program is designed to be closely
linked to corporate performance and results. To this end, the Company has
developed an overall compensation plan to provide its executive officers with
the opportunity to earn cash compensation plus the opportunity to accumulate
stock-based wealth commensurate with the long-term growth and value created for
the Company's stockholders. The Company's compensation strategy is to place the
major portion of total compensation at risk in the form of annual incentives and
long-term, stock-based compensation programs. The overall objectives of this
strategy are to attract and retain the best and most experienced executive
talent, to motivate these executives to achieve the goals inherent in the
Company's business strategy, to link executive and stockholder interests through
equity based plans and finally to provide a compensation package that recognizes
individual contributions as well as overall business results.
The Compensation Committee has received a comprehensive report from an
independent compensation consultant which summarizes the Company's compensation
program. The Company seeks to offer base salaries for the Company's executive
officers at levels that are competitive with companies of similar size in the
aviation and general manufacturing industries (the "Industry Group"). In
addition, the Company provides significant incentive opportunities for its
executive officers. The Company's target for total cash compensation
opportunities (salary plus bonus) is between the median and the 75th percentile
for the Industry Group, with significant variability based on Company-wide,
business unit and individual performance. The Company's annual incentive plan
for executive officers is tied to business plans using a performance matrix
based on consolidated return on operating assets and consolidated operating
income. For the two most highly compensated executive officers, the Company's
target for annual incentive awards is 55% and 50%, respectively, and their
maximum annual incentive awards are 110% and 100%, respectively. The Company's
other executive officers have annual incentive award opportunities which are
determined by such executive officer's job function and level within the
Company. The actual award is established by the President and Chief Executive
Officer of the Company based upon the performance of the Company and the
individual, subject to the review and approval of the Compensation Committee.
Awards above 50% of salary must be deferred and executive officers may elect two
year deferrals or career deferrals. All deferrals are subject to the accrual of
interest to be paid by the Company to the executive officer. Stock options are
awarded to executive officers and other management employees to align the
interest of the Company's management with those of its stockholders.
The Compensation Committee determines the compensation of Richard C.
Ill, the President and Chief Executive Officer of the Company, and of John R.
Bartholdson, the Senior Vice President, Chief Financial Officer and Treasurer of
the Company. In addition, the Board reviews the compensation proposed to be
awarded by Messrs. Ill and Bartholdson to the Company's other three executive
officers and the presidents of each of the Company's operating divisions and
subsidiaries.
As discussed above, the key elements of the Company's executive
compensation consist of base salary, annual bonus and options granted under the
Employee Plan. The Compensation Committee's policies with respect to each of
these elements, including the basis for the compensation awarded to Mr. Ill, the
Company's President and Chief Executive Officer, are discussed below. In
addition, while the elements of compensation described below are considered
separately, the Compensation Committee takes into account the full compensation
package afforded by the Company to the individual, including matching under its
401(k) plan, insurance and other benefits, as well as the programs described
below.
7
<PAGE>
Base Salaries
Base salaries for executive officers are initially determined by
evaluating the responsibilities of the position held and the experience of the
individual, and by reference to the competitive marketplace for executive
talent, including a comparison to base salaries for comparable positions at
other companies in the Industry Group. Annual salary adjustments are determined
by evaluating the performance of the Company and of each executive officer, and
also take into account new responsibilities.
With respect to the base salary granted to Mr. Ill for the fiscal year
ended March 31, 1998, the Compensation Committee took into account a comparison
of base salaries of chief executive officers of the Industry Group, the
Company's success in meeting its financial objectives in such fiscal year, the
performance of the Common Stock and the assessment by the Compensation Committee
of Mr. Ill's individual performance. The Compensation Committee also took into
account the longevity of Mr. Ill's service to the Company and its belief that
Mr. Ill is an excellent representative of the Company to the public by virtue of
his stature in the community and the industry. Mr. Ill was granted a base salary
of $315,000 for the fiscal year ended March 31, 1998, as permitted by his
Employment Agreement with the Company, an increase of 8.2% from his $291,200
base salary for the fiscal year ended March 31, 1997.
Annual Bonus
The Company's executive officers are eligible for an annual cash bonus.
The corporate performance measure for bonus payments is tied to business plans
based on levels of consolidated return on operating assets and consolidated
operating income. If a minimum level of consolidated return on operating assets
and consolidated operating income is not met, no bonuses will be paid.
Individual non-financial performance measures are considered and, where
appropriate, unit performance measures, in determining bonus.
The Company exceeded its maximum levels of consolidated cash return on
operating assets and consolidated operating income goal for the fiscal year
ended March 31, 1998. Based on these results, Mr. Ill was awarded a bonus of
$346,500, which represents an increase of 19% from the bonus paid for the fiscal
year ended March 31, 1997. This increase is due to the Company's continued
record earnings, the Company's strong revenue growth in the fiscal year and Mr.
Ill's leadership in identifying and executing several key acquisitions to
position the Company for long range profitable growth. $189,000 of Mr. Ill's
bonus for the fiscal year ended March 31, 1998 has been deferred.
Stock Options
Under the Employee Plan, which was previously approved by the Company's
stockholders, stock options may be granted to the Company's executive officers
as well as its other employees. The Compensation Committee sets guidelines for
the size of stock option awards based on similar factors, including competitive
compensation data, as are used to determine base salaries and annual bonus. In
the event of poor corporate performance, the Compensation Committee may elect
not to award options.
Stock options are designed to align the interests of executives with those
of the stockholders. Stock options are granted with an exercise price equal to
the market price of the Common Stock on the date of grant, vest over four years
and may be exercised for up to ten years from the date of grant. This
approach is designed to incentive the creation of stockholder value over the
long term since the full
8
<PAGE>
benefit of the compensation package cannot be realized unless stock price
appreciation occurs over a number of years.
No options to purchase shares of Common Stock were granted to executive
officers of the Company during the fiscal year ended March 31, 1998, except to
certain officers and employees of newly acquired companies and, accordingly, Mr.
Ill did not receive any options during the fiscal year ended March 31, 1998. The
Compensation Committee believes that significant equity interests in the Company
held by the Company's management align the interests of stockholders and
management.
Conclusion
Through the programs described above, a significant portion of the
Company's executive compensation is linked directly to individual and corporate
performance and stock price appreciation. The Compensation Committee intends to
continue the policy of linking executive compensation to corporate performance
and returns to stockholders, recognizing that the ups and downs of the business
cycle from time to time may result in an imbalance for a particular period.
COMPENSATION COMMITTEE
Richard C. Gozon
Claude F. Kronk
Joseph M. Silvestri
This report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933, as
amended (the "Securities Act") or under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under the Securities Act and the Exchange Act and shall not be deemed
soliciting material.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board is composed of Richard C. Gozon,
Claude F. Kronk and Joseph M. Silvestri. None of the members of the Compensation
Committee were employees of the Company during the fiscal year ended March 31,
1998.
9
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Management
As of May 18, 1998, the following nominees for director, the following
executive officers, and all directors and executive officers as a group, were
known to the Company to be beneficial owners (as defined in regulations issued
by the SEC) of the outstanding Common Stock and Class D Common Stock shown
below.
<TABLE>
<CAPTION>
Shares Beneficially Owned(1)
-----------------------------------
Percent of
Total Shares
Name Number Outstanding(2)
- ---- ------ --------------
<S> <C> <C>
Richard C. Ill............................... 278,943 2.3%
John R. Bartholdson ......................... 261,676 (3) 2.2%
Richard M. Eisenstaedt ...................... 3,500 *
Paul T. Stimmler ............................ 55,650 (4)(5) *
Kevin E. Kindig ............................. 33,253 (6) *
Richard C. Gozon ............................ 71,095 *
Claude F. Kronk ............................. 64,969 *
Joseph M. Silvestri ......................... 23,824 *
Michael A. Delaney .......................... 20,922 *
Citicorp Venture Capital, Ltd................ 5,298,535 (7) 44.5%
399 Park Avenue
New York, NY 10043
All executive officers and
directors as a group
(9 persons) ................................ 813,832 6.8%
</TABLE>
- -----------------
* Less than one percent.
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date of this Proxy
Statement upon the exercise of options and warrants. Each beneficial
owner's percentage ownership is determined by assuming that options and
warrants that are held by such person (but not those held by any other
person) and that are exercisable within 60 days from the date of this
proxy statement have been exercised. Unless otherwise noted, the
Company believes that all persons named in the table have sole voting
and investment power with respect to all shares of Common Stock and
Class D Common Stock beneficially owned by them.
(2) Based upon outstanding shares of Common Stock and Class D Common Stock.
(3) Mr. Bartholdson disclaims beneficial ownership with respect to 2,700
shares of Common Stock beneficially owned by his daughters.
(4) Mr Stimmler disclaims beneficial ownership of 24,000 shares of Common
Stock held by his wife.
(5) Mr. Stimmler disclaims beneficial ownership of 850 shares held by his
daughter.
(6) Mr. Kindig disclaims beneficial ownership of 200 shares of Common Stock
beneficially owned by his children.
(7) Includes 1,300,000 shares of Common Stock and 3,348,535 shares of Class
D Common Stock, which Class D Common Stock cannot be voted in the
election of directors. Includes also 650,000 shares of Common Stock
which may be acquired upon exercise by World Equity Partners, L.P.
("WEP"), an affiliate of CVC, of an outstanding warrant held by WEP
(the "Warrant").
10
<PAGE>
Principal Stockholders
As of May 18, 1998, the following person was known to the Company to be
a "beneficial owner" (as defined in regulations issued by the SEC) of more than
five percent of the outstanding Common Stock and/or Class D Common Stock.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
Title of Class of Beneficial Owner Beneficial Ownership(1) of Class(2)
- -------------- ------------------- ----------------------- -----------
<S> <C> <C> <C>
Common Stock Citicorp Venture Capital, Ltd. 5,298,535(3) 44.5%
and Class D 399 Park Avenue
Common Stock New York, NY 10043
</TABLE>
- -----------
(1) Except as otherwise specified in footnotes to this table, the person
named has sole voting and investment power with respect to all shares
of Common Stock and Class D Common Stock owned. The information in this
table was furnished by the owners listed in reports to the Company and
by filings with the SEC.
(2) The percent in this table is based on the number of shares of Common
Stock and Class D Common Stock outstanding as of May 18, 1998.
(3) Includes 1,300,000 shares of Common Stock and 3,348,535 shares of Class
D Common Stock, which Class D Common Stock cannot be voted in the
election of directors. Includes 650,000 shares of Common Stock which
may be acquired upon exercise by WEP, an affiliate of CVC, of the
Warrant.
11
<PAGE>
Performance Graph
The following graph compares the percentage change in cumulative total
stockholder return on the Common Stock, on a quarterly basis, from October 24,
1996 to the present with the cumulative total return over the same period of (i)
Standard & Poor's 500 Stock Index and (ii) the Aerospace/Defense Industry Index
published by Standard & Poor's. The Company has not paid cash dividends on the
Common Stock. Historic stock price is not indicative of future stock price
performance.
[In the printed proxy statement a graph appears depicting the following plot
points]
<TABLE>
<CAPTION>
Cumulative Total Return
----------------------------------------------------------------
10/25/96 12/31/96 3/31/97 6/30/97 9/30/97 12/31/97 3/31/98
<S> <C> <C> <C> <C> <C> <C> <C>
Triumph Group Inc New TGI 100 110 116 143 154 153 204
S & P 500 100 108 111 131 140 144 165
S & P AEROSPACE/DEFENSE 100 110 103 116 124 114 121
</TABLE>
12
<PAGE>
PROPOSAL 2 - APPROVAL OF AMENDMENT TO AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
The Board has proposed and declared advisable an Amendment to the
Company's Amended and Restated Certificate of Incorporation to increase the
number of authorized shares of Common Stock from 15,000,000 to 50,000,000.
As of May 18, 1998, there were 8,549,836 shares of Common Stock
outstanding and 4,512,447 shares of Common Stock reserved for future issuance,
of which 513,912 were reserved in connection with the Employee Plan, 3,348,535
were reserved to accommodate a conversion of the Class D Common Stock and
650,000 were reserved in connection with the Warrant. In addition, 40,000 shares
of Common Stock would be reserved for future issuance if the Directors' Plan is
approved. Based on the number of outstanding shares of Common Stock and those
reserved for future issuance (including those reserved pursuant to the
Directors' Plan), there are only approximately 1,897,717 authorized shares of
Common Stock available for future issuance. If the Amendment to the Certificate
of Incorporation is approved by the holders of Common Stock and Class D Common
Stock, the number of shares available for future issuance will increase to
36,897,717.
The Board is of the opinion that the proposed increase in the number of
authorized shares of Common Stock is in the best interest of the Company and its
stockholders. The Board believes that the Company should have sufficient
authorized but unissued shares for issuance in connection with stock splits and
stock dividends, implementation of employee benefit plans, offer of shares for
cash, mergers and acquisitions and other proper business purposes. In many such
situations, prompt action may be required which would not permit seeking
stockholder approval to authorize additional shares for the specific transaction
on a timely basis. The Board believes that it is important to have the
flexibility to act promptly in the best interest of stockholders. Although these
additional shares would provide further flexibility, there are no present plans
for their use.
The additional shares of Common Stock sought by the Amendment will be
available for issuance without further action by stockholders, unless such
action is required by applicable law or the rules of any stock exchange on which
the Company's securities may be listed. The New York Stock Exchange requires
specific stockholder approval as a prerequisite to listing shares in several
instances, including an acquisition transaction where the present or potential
issuance of shares could result in an increase of 20% or more in the number of
shares of Common Stock outstanding.
If the Amendment to the Certificate of Incorporation is approved,
Article Fourth, Section A of the Amended and Restated Certificate of
Incorporation of the Company would read in its entirety as follows:
"The number of shares of stock which the Corporation shall
have authority to issue is 50,000,000 shares of Common Stock,
$.001 par value per share ("Common Stock"), 6,000,000 shares
of Class D Common Stock, $.001 par value per share ("Class D
Common Stock"), and 250,000 shares of Preferred Stock, $.01
par value per share ("Preferred Stock")."
13
<PAGE>
The favorable vote of a majority of shares of Common Stock and Class D
Common Stock entitled to vote at the Meeting, voting together as a class, is
required to approve the Amendment to the Certificate of Incorporation.
The Board recommends that stockholders vote "FOR" the approval of the
Amendment to the Certificate of Incorporation.
PROPOSAL NO. 3 - APPROVAL OF THE DIRECTORS' STOCK OPTION PLAN
General
The Board has proposed and declared advisable the Directors' Plan,
pursuant to which options to purchase up to 40,000 shares of Common Stock may be
granted to non-employee directors. The Directors' Plan is printed in full as
Exhibit A to this Proxy Statement and is incorporated herein by reference.
The purpose of the Directors' Plan is to attract and retain independent
directors and to strengthen the mutuality of interests between such directors
and the Company's stockholders. As of June 2, 1998, the Company had four
independent directors who were eligible to receive options under the Directors'
Plan (Messrs. Kronk, Gozon, Silvestri and Delaney). On June 2, 1998, the average
of the high and low sales prices of the Common Stock on the New York Stock
Exchange was $48.1875.
The Directors' Plan will become effective if it receives the favorable
vote of a majority of shares of Common Stock and Class D Common Stock entitled
to vote at the Meeting, voting together as a class.
The Directors' Plan will be administered by the Board. Under the terms
of the Directors' Plan, the option exercise price will be the fair market value
of the Common Stock on the date of grant and, generally, each option expires
upon the earlier of 30 days after the optionee ceases to be a director of the
Company or ten years. Options granted under the Directors' Plan become
exercisable as determined by the Board. The exerciseability of the options
granted under the Directors' Plan will be accelerated upon a change in control
of the Company and may be accelerated upon the death or disability of the
optionee.
Pursuant to the Directors' Plan, the Board may grant, in its
discretion, options to purchase up to 5,000 shares of Common Stock to any
non-employee director upon his or her election to the Board and will make an
annual grant to each non-employee director of options to purchase at least 500
and no more than 1,000 shares of Common Stock. The Board may from time to time,
in its discretion, grant additional options to purchase shares of Common Stock
to the Company's non-employee directors. Subject to provisions regarding
expiration and termination of options, the options will become exercisable on
terms determined by the Board.
Under the Directors' Plan, the price payable upon exercise of options
may be paid in cash or check payable to the Company. With the consent of the
Board, the exercise price may also be paid in shares of Common Stock duly owned
by the optionee or by a reduction in the number of shares of Common Stock
otherwise issuable upon exercise, in either case, based on the fair market value
on the date of exercise.
14
<PAGE>
Federal Income Tax Consequences.
The grant by the Company of a non-qualified stock option is not a
taxable event to the optionee. Generally, an optionee recognizes ordinary income
on the date option shares are issued to him or her pursuant to the exercise of
the option in an amount equal to the "spread" or the excess of the fair market
value of the shares on that date over the exercise price. Any further gain or
loss on disposition of the shares will be capital gain or loss if the shares are
held by the optionee for investment.
The Company will be entitled to deduct for federal income tax purposes
any amount the optionee is required to include in ordinary income at the time
such amount is so includable, provided that such amount is not deemed to be an
"excess parachute payment" (i.e., payment payable upon a change of control of
the Company that is in excess of reasonable compensation).
The favorable vote of a majority of shares of Common Stock and Class D
Common Stock entitled to vote at the Meeting, voting together as a class, is
required to approve the Directors' Plan.
The Board recommends that the stockholders vote "FOR" the approval of
the Directors' Plan.
PROPOSAL NO. 4 - RATIFICATION OF SELECTION OF AUDITORS
The Board has selected Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending March 31, 1999 and the stockholders are
asked to ratify this selection. Ernst & Young LLP has advised the Company that
it has no direct or material indirect interest in the Company or its affiliates.
Representatives of Ernst & Young LLP are expected to attend the Meeting, will
have the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
The favorable vote of a majority of shares of Common Stock and Class D
Common Stock entitled to vote at the Meeting, voting together as a class, is
required to approve the ratification of the selection of auditors.
The Board recommends that stockholders vote "FOR" the ratification of
Ernst & Young LLP as independent auditors for the fiscal year ending March 31,
1999.
GENERAL AND OTHER MATTERS
The Board knows of no matter, other than as referred to in this proxy
statement, which will be presented at the Meeting. However, if other matters
properly come before the Meeting, or any of its adjournments, the person or
persons voting the proxies will vote them in accordance with their judgment in
such matters.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
officers (including a person performing a principal policy-making function) and
persons who own more than 10% of a
15
<PAGE>
registered class of the Company's equity securities ("10%
Holders") to file with the SEC initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Directors, officers and 10% Holders are required by SEC regulations to furnish
the Company with copies of all of the Section 16(a) reports they file. Based
solely upon a review of the copies of the forms furnished to the Company and the
representations made by the reporting persons to the Company, the Company
believes that during the fiscal year ended March 31, 1998, its directors,
officers and 10% Holders complied with all filing requirements under Section
16(a) of the Exchange Act, except Messrs. Silvestri and Delaney, who each failed
to file, on a timely basis, one report for one transaction in April 1997 with
respect to the conversion of shares of Class D Common Stock to shares of Common
Stock and Mr. Gozon who failed to file, on a timely basis, one report for one
transaction in November 1997, as required by Section 16(a) of the Exchange Act.
STOCKHOLDER PROPOSALS -- 1999 ANNUAL MEETING
Proposals of stockholders intended to be presented at the Annual
Meeting of Stockholders in 1999 must be received by February 23, 1999 in order
to be considered for inclusion in the Company's proxy statement and form of
proxy relating to that meeting. Stockholder proposals should be directed to the
Corporate Secretary, at the address of the Company set forth on the first page
of this Proxy Statement.
By Order of the Board of Directors,
Richard M. Eisenstaedt
Secretary
June 23, 1998
16
<PAGE>
Exhibit A
TRIUMPH GROUP, INC.
DIRECTORS' STOCK OPTION PLAN
ARTICLE I
Purpose
The purpose of this Directors' Stock Option Plan (the "Plan") is to
enable Triumph Group, Inc. (the "Company") to attract and retain qualified
independent directors and to further promote the mutuality of interests between
such directors and the Company's stockholders.
ARTICLE II
Definitions
For purposes of this Plan, the following terms shall have the
following meanings:
2.1 "Board" shall mean the Board of Directors of the Company.
2.2 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.3 "Common Stock" means the Common Stock, $.001 par value per share,
of the Company.
2.4 "Effective Date" shall mean the date on which the Plan is approved
by the Company's stockholders.
2.5 "Eligible Director" shall mean any member of the Board who, on the
date of the granting of an Option, is not an officer or an employee of the
Company or any of the Company's subsidiaries.
2.6 "Fair Market Value" for purposes of the Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, as of any date, the previous day's closing price of
actual sales of shares of Common Stock on the principal national securities
exchange on which the Common Stock is listed, or if not listed, as reported on
the Nasdaq Stock Market on such date, or, if such the Common Stock was not
traded or reported on such date, on the last preceding day on which the Common
Stock was traded or reported.
2.7 "Mature Common Stock" shall mean Common Stock owned for six months
or more, or such other period as the Board
<PAGE>
may determine subject to applicable accounting regulations, by the respective
Participant.
2.8 "Participant" shall mean an Eligible Director to whom an Option has
been granted under the Plan.
2.9 "Stock Option" or "Option" shall mean any option to purchase shares
of Common Stock granted pursuant to Article VI of the Plan.
ARTICLE III
Administration
3.1 Administration. The Plan shall be administered and interpreted by
the Board.
3.2 Guidelines. Subject to Article VII hereof, the Board shall have the
authority to adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall, from time to time, deem advisable; to
interpret the terms and provisions of the Plan and any Option granted under the
Plan (and any agreements relating thereto); and to otherwise supervise the
administration of the Plan. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or in any Option in the
manner and to the extent it shall deem necessary to carry the Plan into effect.
Notwithstanding the foregoing, no action of the Board under this Section 3.2
shall impair the rights of any Participant without the Participant's consent,
unless otherwise required by law.
3.3 Decisions Final. Any decision, interpretation or other action made
or taken in good faith by the Board arising out of or in connection with the
Plan shall be final, binding and conclusive on the Company, all members of the
Board and their respective heirs, executors, administrators, successors and
assigns.
ARTICLE IV
Share Limitation
4.1 Shares. The maximum aggregate number of shares of Common Stock that
may be issued upon exercise of Options is 40,000 (subject to any increase or
decrease pursuant to Section 4.2), which may be either authorized and unissued
shares of Common Stock or issued Common Stock reacquired by the Company. If any
Option granted under the Plan shall expire, terminate or be cancelled for any
reason without having been exercised in
2
<PAGE>
full, the number of unpurchased shares shall again be available for the purposes
of the Plan.
4.2 Adjustments Upon Changes in Capitalization. In the event of a
reorganization, recapitalization, stock split, reverse stock split, spin-off,
split-off, split up, stock dividend, issuance of stock rights, combination of
shares, merger, consolidation or any other change in the corporate structure of
the Company affecting Common Stock, or any distribution to stockholders in
respect of stock other than a cash dividend, the Board shall make such
adjustments in the number and kind of shares authorized by the Plan, in the
minimum and maximum limits set forth in Section 6.2 and in any outstanding
Options as it determines appropriate. No fractional shares of Common Stock shall
be issued pursuant to such an adjustment. The Fair Market Value of any
fractional shares resulting from adjustments pursuant to this section shall,
where appropriate, be paid in cash to the Participant. If during the term of any
Option granted hereunder the Company shall be, with the prior approval of a
majority of the members of the Board, merged into or consolidated with or
otherwise combined with or acquired by a person or entity, or there is a
liquidation of the Company, then at the election of the Board, the Company may
take such other action as the Board shall determine to be reasonable under the
circumstances to permit the Participant to realize the value of such Option,
including without limitation paying cash to such Participant equal to the value
of the Option or requiring the acquiring corporation to grant options or stock
to such Participant having a value equal to the value of the Option.
ARTICLE V
Eligibility
5.1 Eligible Directors. Only Eligible Directors are eligible to be
granted Options under the Plan.
ARTICLE VI
Stock Options
6.1 Options. All Stock Options granted under the Plan shall be
non-qualified stock options (i.e., options that do not qualify as incentive
stock options under section 422 of the Code).
6.2 Grants. The Board shall have full authority to make the following
types of grants under the Plan.
3
<PAGE>
(a) Annual Grants. For as long as the Plan remains in effect,
the Board shall make an annual grant to each Eligible Director of Stock Options
to purchase at least 500 shares of Common Stock, but no more than 1,000 shares
of Common Stock. Subject to the minimum and maximum limits set forth in the
preceding sentence, the number of shares of Common Stock subject to such grants
to Eligible Directors in any year shall be determined by the Board, and may vary
from year to year.
(b) New Director Grants. For as long as the Plan remains in
effect, the Board may grant to any Eligible Director, upon his or her initial
election to the Board, Stock Options to purchase up to 5,000 shares of Common
Stock. Subject to the maximum limit set forth in the preceding sentence, the
number of shares of Common Stock subject to such Stock Options shall be
determined by the Board, and may be greater than or less than the number of
shares of Common Stock subject to any prior grants.
(c) Discretionary Grants. In addition to the grants described
in (a) and (b) above, the Board may from time to time grant to any Eligible
Director Stock Options to purchase shares of Common Stock. The Board shall have
full authority to select the Eligible Directors to whom such Options are to be
granted and to determine the number of shares of Common Stock to be covered by
each such Option.
6.3 Terms of Options. Options granted under the Plan shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of the Plan, as the Board shall
deem desirable:
(a) Stock Option Certificate. Each Stock Option shall be
evidenced by, and subject to the terms of, a Stock Option Certificate executed
by the Company. The Stock Option Certificate shall specify the number of shares
of Common Stock subject to the Stock Option, the option price, the option term,
and such other terms and conditions, consistent with the provisions of the Plan,
as the Board shall deem advisable.
(b) Option Price. The option price per share of Common Stock
purchasable upon exercise of a Stock Option shall be equal to the Fair Market
Value of a share of Common Stock on the date of grant.
(c) Option Term. The term of each Stock Option shall be ten
years from the date of grant.
(d) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Board at the time of grant; provided that the Board may waive any
installment exercise or waiting period provisions, in whole or in part, at any
time,
4
<PAGE>
based on such factors as the Board shall, in its sole discretion, deem
appropriate.
(e) Method of Exercise. Stock Options may be exercised in
whole or in part at any time during the option term by delivering to the Company
written notice of exercise specifying the number of shares of Common Stock to be
purchased and the option price therefor. The notice of exercise shall be
accompanied by payment in full of the option price and, if requested, by the
representation described in Section 9.2. The option price may paid in cash or by
check payable to the Company or, with the consent of the Board on or after the
date of grant, in whole or in part in shares of Mature Common Stock or by a
reduction in the number of shares of Common Stock otherwise issuable upon such
exercise, with the shares of Common Stock in either case valued at the Fair
Market Value on the date of exercise. Upon payment in full of the option price
and satisfaction of the other conditions provided herein, a stock certificate
representing the number of shares of Common Stock to which the Participant is
entitled shall be issued and delivered to the Participant.
(f) Termination. Unless otherwise determined by the Board,
Stock Options held by a Participant who ceases to be a member of the Board shall
be exercisable as follows:
(i) If the Participant ceases to be a member of the
Board by reason of death, any Stock Option held by such Participant may
thereafter be exercised, to the extent such Option was exercisable at the time
of death or on such accelerated basis as the Board may determine at or after
grant, by the legal representative of the Participant's estate, until the
expiration of the stated term of the Option or until such earlier time as the
Board may determine at the time the Option is granted or such accelerated basis
is determined.
(ii) If the Participant ceases to be a member of the
Board by reason of disability (as determined by the Board), any Stock Option
held by such Participant may thereafter be exercised by the Participant (or,
where appropriate, the Participant's legal representative), to the extent it was
exercisable at the time the Participant ceased to be a member of the Board or on
such accelerated basis as the Board may determine at or after grant, until the
expiration of the stated term of the Option or until such earlier time as the
Board may determine at the time the Option is granted or such accelerated basis
is determined.
(iii) If the Participant ceases to be a member of the
Board for any reason other than death or disability, the Stock Option shall
terminate 30 days after the date on which the Participant ceased to be a member
of the Board;
5
<PAGE>
provided, however, that the Board may extend such exercise period based on such
factors as the Board shall, in its sole discretion, deem appropriate, but not
beyond the expiration of the stated term of the Option.
6.4 Rights as Shareholder. A Participant shall not be deemed
to be the holder of Common Stock, or have any of the rights of a holder of
Common Stock, with respect to shares subject to an Option, until the Option is
exercised and a stock certificate representing such shares of Common Stock is
issued to the Participant.
ARTICLE VII
Termination or Amendment
7.1 Termination or Amendment of Plan. The Board may at any
time amend, discontinue or terminate the Plan or any part thereof (including any
amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement referred to in Article IX); provided, however, that,
unless otherwise required by law, the rights of a Participant with respect to
Options granted prior to such amendment, discontinuance or termination may not
be impaired without the consent of such Participant.
7.2 Amendment of Options. The Board may amend the terms of any
Stock Option previously granted, prospectively or retroactively, but, subject to
Article IV, no such amendment or other action by the Board shall impair the
rights of any holder without the holder's consent.
ARTICLE VIII
Unfunded Plan
8.1 Unfunded Status of Plan. The Plan is intended to
constitute an "unfunded" plan for incentive compensation. With respect to any
payment not yet made to a Participant by the Company, nothing contained herein
shall give the Participant any rights that are greater than those of a general
creditor of the Company.
6
<PAGE>
ARTICLE IX
General Provisions
9.1 Nonassignment. Except as otherwise provided in the Plan,
any Option granted hereunder and the rights and privileges conferred thereby
shall not be sold, transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise), and shall not be subject to
execution, attachment or similar process. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of any such Option, right or privilege
contrary to the provisions hereof, or upon the levy of any attachment or similar
process thereon, such Option and the rights and privileges conferred hereby
shall immediately terminate and the Option shall immediately be forfeited to the
Company.
9.2 Legend. The Board may require each person purchasing
shares upon exercise of a Stock Option to represent to the Company in writing
that the Participant is acquiring the shares without a view to distribution
thereof. The stock certificates representing such shares may include any legend
which the Board deems appropriate to reflect any restrictions on transfer.
All certificates representing shares of Common Stock delivered
under the Plan shall be subject to such stock transfer orders and other
restrictions as the Board may deem advisable under the rules, regulations and
other requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed, any applicable Federal or state
securities law, and any applicable corporate law, and the Board may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
9.3 Other Plans. Nothing contained in the Plan shall prevent
the Board from adopting other or additional compensation arrangements, subject
to stockholder approval if such approval is required; and such arrangements may
be either generally applicable or applicable only in specific cases.
9.4 No Right to Continue as Director. Neither the Plan nor the
grant of any Option hereunder shall confer upon any person the right to continue
as a director of the Company or obligate the Company to nominate any director
for reelection by the Company's stockholders.
9.5 Listing and Other Conditions.
(a) If the Common Stock is listed on a national
securities exchange, the issuance of any shares of Common Stock upon exercise of
an Option shall be conditioned upon such shares
7
<PAGE>
being listed on such exchange. The Company shall have no obligation to issue any
shares of Common Stock upon exercise of an Option unless and until such shares
are so listed, and the right to exercise any Option shall be suspended until
such listing has been effected.
(b) If at any time counsel to the Company shall be of
the opinion that any sale or delivery of shares of Common Stock upon exercise of
an Option is or may in the circumstances be unlawful or result in the imposition
of excise taxes under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or
delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act of 1933, as amended, or
otherwise with respect to shares of Common Stock, and the right to exercise any
Option shall be suspended until, in the opinion of said counsel, such sale or
delivery shall be lawful or shall not result in the imposition of excise taxes.
(c) Upon termination of any period of suspension
under this Section 9.5, any Option affected by such suspension which shall not
then have expired or terminated shall be reinstated as to all shares available
before such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension shall
extend the term of any Option.
9.6 Governing Law. The Plan and actions taken in connection
herewith shall be governed and construed in accordance with the laws of the
State of Delaware.
9.7 Construction. Wherever any words are used in the Plan in
the masculine gender they shall be construed as though they were also used in
the feminine gender in all cases where they would so apply, and wherever any
words are used herein in the singular form they shall be construed as though
they were also used in the plural form in all cases where they would so apply.
9.8 Liability of Board Members. No member of the Board nor any
employee of the Company or any of its subsidiaries shall be liable for any act
or action hereunder, whether of omission or commission, by any other member or
employee or by any agent to whom duties in connection with the administration of
the Plan have been delegated or, except in circumstances involving bad faith,
gross negligence or fraud, for anything done or omitted to be done by himself.
9.9 Costs. The Company shall bear all expenses incurred in
administering the Plan, including expenses related to the issuance of Common
Stock upon exercise of Stock Options.
8
<PAGE>
9.10 Severability. If any part of the Plan shall be determined
to be invalid or void in any respect, such determination shall not affect,
impair, invalidate or nullify the remaining provisions of the Plan which shall
continue in full force and effect.
9.11 Successors. The Plan shall be binding upon and inure to
the benefit of any successor or successors of the Company.
9.12 Headings. Article and section headings contained in this
Plan are included for convenience only and are not to be used in construing or
interpreting the Plan.
9.13 Change in Control. Upon the occurrence of a Change in
Control, each Option then outstanding shall become immediately exercisable to
the full extent of the shares of Common Stock subject thereto. For purposes of
this Plan, a "Change in Control" shall be deemed to have occurred if at any time
after the Effective Date any "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "1934
Act")) becomes the "beneficial owner" (as defined in Section 13(d)(3) under the
1934 Act) of securities of the Company representing more than 35 percent (35%)
of the total aggregate voting power of the Company's then outstanding securities
entitled to vote generally in the election of directors, and such person or
group owns more aggregate voting power of the Company's then outstanding
securities entitled to vote generally in the election of directors than any
other person or group. Notwithstanding anything else contained in this Section
9.13, a Participant shall be eligible to exercise Options both before and after
a Change in Control to the full extent otherwise permitted under the Plan.
ARTICLE X
Term of Plan
10.1 Effective Date. The Plan shall be effective as of the
Effective Date.
10.2 Termination. Unless sooner terminated, the Plan shall
terminate ten years after it is adopted by the Board and no Options may be
granted thereafter. Termination of the Plan shall not affect Options granted
before such date, which will continue to be exercisable after the Plan
terminates.
9
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TRIUMPH GROUP, INC.
The undersigned hereby appoints Richard C. Ill and John R. Bartholdson as
proxies, with power to act without the other and with power of substitution,
and hereby authorizes them to represent and vote, as designated on the other
side, all the shares of stock of Triumph Group, Inc. standing in the name of
the undersigned with all powers which the undersigned would possess if
present at the Annual Meeting of Stockholders of the Company to be held on
July 21, 1998 or any adjournments thereof.
(Continued, and to be marked, dated and signed, on the other side)
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<PAGE>
<TABLE>
<S> <C> <C>
If no direction is made or if you vote "FOR" the election of the nominees as Please mark
directors, Proposals 2, 3 and 4, the proxies will allocate votes in their your votes as /X/
discretion among the nominees, and the Proposals unless otherwise specified. indicated in
this example
</TABLE>
<TABLE>
<S> <C> <C>
1. ELECTION AS DIRECTORS The Board recommends a vote "FOR" the following directors:
FOR all nominees WITHHOLD Nominees: Richard C. Ill, John R. Bartholdson, Claude F. Kronk,
listed to the right AUTHORITY Richard C. Gozon, Joseph M. Silvestri and Michael A. Delaney
(except as marked to vote for all nominees
to the contrary) listed to the right To distribute your votes on a cumulative basis, write below the
name(s) of the nominee(s) you wish to vote for and the number of
/ / / / votes you wish to cast for each.
----------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
The Board recommends a vote "FOR" The Board recommends a vote "FOR" The Board recommends a vote "FOR"
proposal 2. proposal 3. proposal 4.
2. Approve an amendment to the 3. Approve the Company's 4. Ratify appointment of Ernst & Young
Company's Amended and Restated Directors' Stock Option Plan. LLP as independent auditors.
Certificate of Incorporation to
increase the number of authorized
shares of Common Stock to 50,000,000.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
/ / / / / / / / / / / / / / / / / /
</TABLE>
Signature Signature Date
------------------------ ------------------------ --------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
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