<PAGE>
SCHEDULE 14A INFORMATION
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 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 26, 2000
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 Triumph's
principal executive offices at Four Glenhardie Corporate Center, 1255 Drummers
Lane - Suite 200, Wayne, Pennsylvania 19087, on Wednesday, July 26, 2000,
beginning at 9:30 a.m., local time, for the following purposes:
1. To elect all six directors for the coming year;
2. To ratify the selection of Ernst & Young LLP as Triumph's independent
auditors for the fiscal year ending March 31, 2001; and
3. To transact any other business as may properly come before the meeting
or any postponements or adjournments.
Management currently 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 with their judgment on those matters.
The board of directors has fixed the close of business on May 31, 2000
as the record date for determining stockholders entitled to notice of and to
vote at the meeting and any adjournments. To make sure 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 Triumph.
By order of the board of directors,
/s/ Richard M. Eisenstaedt
----------------------
Richard M. Eisenstaedt
June 28, 2000 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 PLAN TO ATTEND 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 2000 Annual Meeting of Stockholders
To be held on July 26, 2000
GENERAL INFORMATION
This proxy statement is sent by the board of directors of Triumph
Group, Inc. to solicit proxies to be voted at its annual meeting of stockholders
on Wednesday, July 26, 2000, to be held at 9:30 a.m., local time, at Triumph's
offices at Four Glenhardie Corporate Center, 1255 Drummers Lane - Suite 200,
Wayne, Pennsylvania and at any adjournments, for the purposes stated in the
accompanying notice of the meeting. This proxy statement, the notice and the
enclosed proxy card will first be mailed to stockholders entitled to vote on or
about June 28, 2000.
Sending a signed proxy will not affect your right to attend the meeting
and vote in person because the proxy is revocable. You have the power to revoke
your proxy by, among other methods, giving written notice to the Secretary of
Triumph at any time before your proxy is exercised or by attending the meeting
and voting in person.
When your proxy card is returned properly signed, your shares will be
voted according to 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 with their judgment in those matters. In the absence of contrary
instructions, your shares included on the enclosed proxy will be voted "FOR" the
nominees for director stated thereon and "FOR" the ratification of the selection
of Ernst & Young LLP as Triumph's independent auditors for the fiscal year
ending March 31, 2001.
SOLICITATION OF PROXIES
Triumph will pay for this proxy solicitation. Officers and other
regular employees may solicit proxies by mail, in person or by telephone or
telecopy. These officers and other regular employees will not receive additional
compensation. Triumph is required to pay, upon request, the reasonable expenses
incurred by record holders of 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.
<PAGE>
QUORUM AND VOTING RIGHTS
Holders of record of Triumph's common stock and class D common stock,
as of the close of business on May 31, 2000, the record date, will be entitled
to notice and to vote at the meeting and at any adjournments. 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 in 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.
As of the record date, there were 8,324,111 shares of common stock
outstanding and entitled to vote on the election of directors. As of the record
date, there were 8,324,111 shares of common stock and 3,348,535 shares of class
D common stock for a total of 11,672,646 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 in 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 means a holder of common stock may cast as many
votes in the aggregate as he or she is entitled to vote multiplied by the number
of directors to be elected and to cast all votes for one director nominee or
distribute these votes among two or more director nominees, as a holder sees
fit. Each holder of common stock may indicate his or her preference on the
enclosed proxy. If no preference is indicated, that holder's votes will be voted
pro rata in favor of all nominees indicated.
Ratification of the board's selection of Triumph'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 shares of common stock and
class D common stock, voting together as a class, represented in person or by
proxy at the meeting. Triumph is not aware of any matter, other than as referred
to in this proxy statement, to be presented at the meeting. Abstentions in
ratification of the selection of Triumph'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.
Broker non-votes for all proposals will not be counted in determining
the presence of a quorum and will not be considered as votes cast, and 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 vacancy. Michael
Delaney, a former director of Triumph, resigned from the board on March 31,
2000. At the meeting, the stockholders will elect all
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<PAGE>
six directors for a term ending at the next annual meeting of stockholders and
until that director's successor is duly elected and qualified.
The table below lists the name of each person nominated by the board to
serve as a director for the coming year. All of the nominees are currently
directors of Triumph for terms expiring at the meeting. Each nominee has
consented to be named as a nominee and, to the knowledge of Triumph, 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),
solicited proxies 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 William O.
Albertini.
<TABLE>
<CAPTION>
NOMINEES AGE YEAR FIRST ELECTED A DIRECTOR
-------- --- ------------------------------
<S> <C> <C>
Richard C. Ill 57 1993
John R. Bartholdson 55 1993
Richard C. Gozon 61 1993
Claude F. Kronk 68 1993
Joseph M. Silvestri 38 1994
William O. Albertini 56 1999
</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 Triumph since 1993. 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 Triumph since 1993. Mr. Bartholdson
serves on the board of directors and is a member of the compensation committee
of PBHG Funds, Inc.
Richard C. Gozon has been a director of Triumph since 1993. Mr. Gozon
has been Executive Vice President of Weyerhaeuser Company since 1994. Mr. Gozon
serves on the board of directors of U.G.I. Corporation, AmeriSource Health
Corporation and AmeriGas Partners, L.P.
Claude F. Kronk has been a director of Triumph 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 Bangor Hydro-Electric Co.
Joseph M. Silvestri has been a director of Triumph since 1994. Mr.
Silvestri has been employed by Citicorp Venture Capital, Ltd. since 1990 and has
been a Vice President since 1995. Mr. Silvestri serves on the board of directors
of Glenoit Mills, Euramax International, Inc., GNI Group, Inc., ISG Resources
and MacDermid, Incorporated.
3
<PAGE>
William O. Albertini has been a director of Triumph since May 1999. Mr.
Albertini was Executive Vice President and Chief Financial Officer of Bell
Atlantic Corp. from 1991 through 1997. In 1997, Mr. Albertini became Executive
Vice President and Chief Financial Officer of Bell Atlantic Global Wireless and
remained in that position until his retirement on May 1, 1999. Mr. Albertini
serves on the board of directors of American Water Works and Blackrock Funds.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" EACH OF THESE
NOMINEES. THE SIX NOMINEES RECEIVING THE HIGHEST NUMBER OF AFFIRMATIVE VOTES
WILL BE ELECTED AS DIRECTORS.
MEETINGS AND COMMITTEES OF THE BOARD
The board held four (4) meetings during Triumph's fiscal year ended
March 31, 2000 and also acted by unanimous consents in writing. The standing
committees of the board are the audit committee and the compensation committee.
Triumph does not have an executive committee or a nominating committee. The
audit committee, consisting of Messrs. Gozon, Kronk and Albertini, met twice
during the last fiscal year. Triumph's board adopted a charter for the audit
committee in April 2000. A copy of the charter will be included in next year's
proxy statement. The audit committee communicates and receives information
directly from Triumph'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 Triumph's officers, administers Triumph's 1996 stock option plan
and establishes guidelines for compensation of other personnel. The board does
not have a nominating committee.
COMPENSATION OF DIRECTORS
Directors who are also employees of Triumph or Citicorp Venture Capital
do not receive additional compensation for serving as directors. Each director
who is not an employee of Triumph or Citicorp Venture Capital 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).
Each director who is not an employee of Triumph is entitled to receive options
to purchase shares of common stock under Triumph's directors' stock option plan.
Any options granted under the directors' plan are in addition to other
compensation paid to those directors. All directors are reimbursed for
out-of-pocket expenses incurred in attending meetings of the board or its
committees.
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<PAGE>
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 Triumph and its subsidiaries, other than the President and
Chief Executive Officer, for the fiscal years ended March 31, 2000, 1999 and
1998.
"Bonus" consists of cash bonuses earned in the fiscal year identified,
of which only a portion was paid in that year to Messrs. Ill and Bartholdson at
their request and the balance was deferred.
"Other Annual Compensation" reflects amounts contributed by Triumph to
its 401(k) Plan for the benefit of the named employee.
"All Other Compensation" consists of group term life insurance premiums
and for fiscal year 2000 premiums related to Triumph's Executive Life Program -
Collateral Assignment Split Dollar Agreement.
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Annual Compensation
------------------------------------------------------------------------------
Other Annual All Other
Name and Position Year Salary Bonus Compensation Compensation
----------------- ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Richard C. Ill 2000 $375,000 $268,250 $5,025 $38,249(2)
President and Chief Executive 1999 345,000 379,500 5,225 8,550
Officer 1998 315,000 346,500 4,929 5,472
John R. Bartholdson 2000 $315,000 $204,750 $4,940 $26,847(2)
Senior Vice President, Chief 1999 290,000 290,000 5,129 4,320
Financial Officer and Treasurer 1998 267,000 267,000 4,848 4,320
Richard M. Eisenstaedt 2000 $182,500 $ 83,000 $4,853 $8,621(2)
Vice President, General 1999 175,500 115,000 4,950 2,592
Counsel and Secretary 1998 164,000 114,800 4,725 2,592
Craig N. Kitchen 2000 $152,885 $65,000 $2,337 $555
Vice President 1999(1) 5,769 - - -
1998 - - - -
Paul T. Stimmler 2000 $114,500 $46,000 $3,405 $29,386(2)
Vice President and Assistant 1999 110,000 55,000 3,300 4,950
Secretary 1998 106,500 53,000 3,196 4,950
</TABLE>
------------------
(1) Mr. Kitchen began employment with Triumph in March, 1999.
(2) These amounts include the present value of the yearly interest foregone
by Triumph for the Executive Life Program - Collateral Assignment Split
Dollar Agreement for Messrs. Ill, Bartholdson, Eisenstaedt and Stimmler
in the amounts of $29,189, $19,762, $5,850 and $22,075, respectively.
5
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table lists, for each of the named executive officers,
information about options granted under the 1996 stock option plan during the
fiscal year ended March 31, 2000.
The following options were granted on April 17, 1999 and February 8,
2000. The options vest in four equal installments on each of the first, second,
third and fourth anniversaries of the grant date.
The exercise price for each option is equal to the fair market value of
the common stock on the date of grant.
Potential realizable value is based on the assumed annual growth rates
listed, compounded annually for the ten-year option term.
The dollar amounts set forth under this heading are the results of
calculations required by the SEC and are not intended to forecast possible
future appreciation, if any, of the value of the common stock.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------------
Number of % of Total Potential Realizable Value
Securities Options At Assumed Annual Rates
Underlying Granted to Exercise or of Stock Appreciation for
Options Employees in Base Price Expiration Option Term
----------------------------
Name Granted (#) Fiscal Year ($/sh) Date 5% 10%
---- ----------- ----------- ------ ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Richard C. Ill 20,000 10.4987% $26.438 4/17/09 $332,534.32 $842,707.26
John R. Bartholdson 20,000 10.4987 26.438 4/17/09 332,534.32 842,707.26
Richard M. Eisenstaedt 5,000 2.6247 26.438 4/17/09 83,133.59 210,676.81
2,000 1.0499 24.625 2/8/10 30,973.06 78,491.82
Craig N. Kitchen 6,000 3.1496 26.438 4/17/09 99,760.30 252,812.18
2,000 1.0499 24.625 2/8/10 30,973.06 78,491.82
Paul T. Stimmler 2,000 1.0499 26.438 4/17/09 33,253.43 84,270.73
</TABLE>
6
<PAGE>
FISCAL YEAR END OPTION VALUES
The following table lists, for each of the named executive officers,
information about the value of unexercised options at March 31, 2000.
The fair market value of "in-the-money" options was calculated based on
the difference between the exercise price of the options held and the closing
price per share for common stock on the NYSE of $29.125 on March 31, 2000,
multiplied by the number of options held.
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised Unexercised In-
Options at Fiscal the-Money Options at
Shares Year End (#) Fiscal Year End ($)
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized($) Unexercisable Unexercisable
---- ------------ ----------- ------------- -------------
<S> <C> <C> <C> <C>
Richard C. Ill 0 0 30,750/42,250 $265,781.26/142,333.76
John R. Bartholdson 0 0 30,750/42,250 265,781.26/142,333.76
Richard M. Eisenstaedt 0 0 8,750/13,250 75,937.50/47,747.50
Craig N. Kitchen 0 0 0/8,000 0.00/25,122.00
Paul T. Stimmler 0 0 8,000/6,000 75,937.50/30,686.50
</TABLE>
EMPLOYMENT AGREEMENTS
Triumph entered into employment agreements with Richard C. Ill and John
R. Bartholdson, effective July 1, 1999, pursuant to which Messrs. Ill and
Bartholdson serve as President and Chief Executive Officer and as Senior Vice
President and Chief Financial Officer, respectively, of Triumph through
September 30, 2002, unless earlier terminated by the board or, in certain
circumstances following a change in control transaction, by the executive. These
agreements provide for an annual salary to Mr. Ill of not less than $375,000 and
to Mr. Bartholdson of not less than $315,000, plus incentive compensation as
determined by the board or the compensation committee, by authority 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 Triumph or
upon termination by the executive following a change in control of Triumph. The
executive may terminate his employment following a change in control
transaction, if as a result of this change in control, the executive in good
faith is unable to carry out his duties and responsibilities, 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 Triumph equal to one-twelfth of their
respective salaries for 24 months. 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
Triumph.
Triumph has also entered into employment agreements with Richard M.
Eisenstaedt and Craig N. Kitchen, effective July 1, 1999. Pursuant to his
employment agreement, Mr. Eisenstaedt serves as Vice President and General
Counsel of Triumph through June 30, 2002, unless earlier terminated by the board
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or, in certain circumstances following a change in control transaction, by the
executive. Pursuant to his employment agreement, Mr. Kitchen serves as Vice
President of Triumph through June 30, 2001, unless earlier terminated by the
board or, in certain circumstances following a change in control transaction, by
the executive.
These agreements provide for an annual salary to Mr. Eisenstaedt of not
less than $182,500 and to Mr. Kitchen of not less than $150,000, plus incentive
compensation as determined by the board or the compensation committee, by
authority delegated by the board, and comparable benefits and perquisites given
to other members of senior management. Messrs. Eisenstaedt and Kitchen are
entitled to severance and other payments following the earlier termination of
employment by Triumph or upon termination by the executive following a change in
control of Triumph. The executive may terminate his employment following a
change in control transaction, if as a result of this change in control, the
executive in good faith is unable to carry out his duties and responsibilities,
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. Eisenstaedt
and Kitchen are entitled to receive a severance payment from Triumph equal to
one-twelfth of their respective salaries for 24 months and 12 months,
respectively. Messrs. Eisenstaedt and Kitchen 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
Triumph.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
OVERALL POLICY
Triumph's executive compensation program is designed to be closely
linked to corporate performance and results. To this end, Triumph 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
Triumph's stockholders. Triumph'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 Triumph'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 receives from time to time comprehensive
data and analyses from an independent compensation consultant which evaluates
Triumph's compensation program against industry and peer group norms. Triumph
seeks to offer base salaries for Triumph's executive officers at levels that are
competitive with its industry group, that is, companies of similar size in the
aviation and general manufacturing industries. In addition, Triumph provides
significant incentive opportunities for its executive officers. Triumph's target
for total cash compensation opportunities (salary plus bonus) is between the
median and the 75th percentile for its industry group, with significant
variability based on company-wide, business unit and individual performance.
Triumph's annual incentive plan for executive officers is tied to business plans
using a performance matrix based on consolidated return on operating assets,
consolidated operating income and earnings per share. For the two most highly
compensated executive officers, Triumph's target for annual incentive awards is
55% and 50%, respectively, and their maximum annual incentive awards are 110%
and 100%, respectively. Triumph's other executive officers have annual incentive
award opportunities which are determined by the executive officer's job function
and
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<PAGE>
level within Triumph. The actual award is established by the President and Chief
Executive Officer of Triumph based on the performance of Triumph 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 Triumph to the executive officer. Stock options are
awarded to executive officers and other management employees to align the
interest of Triumph's management with those of its stockholders.
The compensation committee determines the compensation of Richard C.
Ill, the President and Chief Executive Officer of Triumph, and of John R.
Bartholdson, the Senior Vice President, Chief Financial Officer and Treasurer of
Triumph. In addition, the board reviews the compensation proposed to be awarded
by Messrs. Ill and Bartholdson to Triumph's other three executive officers and
the presidents of each of Triumph's operating divisions and subsidiaries.
As discussed above, the key elements of Triumph's executive
compensation consist of base salary, annual bonus and options granted under
Triumph's option plans. The compensation committee's policies for each of these
elements, including the basis for the compensation awarded to Mr. Ill, Triumph'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 Triumph to the individual, including matching
under its 401(k) plan, insurance and other benefits, as well as the programs
described below.
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 Triumph's industry group. Annual salary adjustments are
determined by evaluating the performance of Triumph and of each executive
officer, and also take into account new responsibilities.
For the base salary granted to Mr. Ill for the fiscal year ended March
31, 2000, the compensation committee took into account a comparison of base
salaries of chief executive officers of Triumph's industry group, Triumph's
success in meeting its financial objectives in this fiscal year, the success of
Triumph's financial performance compared with similar companies engaged in
providing products and services to the aviation industry, the economic
conditions encountered within the aviation industry generally, 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 Triumph and its belief that Mr. Ill is an
excellent representative of Triumph to the public by virtue of his stature in
the community and the industry. Mr. Ill was granted a base salary of $375,000
for the fiscal year ended March 31, 2000, an increase of 8.70% from his $345,000
base salary for the fiscal year ended March 31, 1999.
ANNUAL BONUS
Triumph'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, consolidated operating
income and earnings per share. If a minimum level of consolidated return
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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.
Triumph met or slightly exceeded its planned levels of performance for
the year in consolidated cash return on operating assets, consolidated operating
income and earnings per share goals for the fiscal year ended March 31, 2000.
For the fiscal year ended March 31, 2000, Mr. Ill was awarded a bonus of
$268,250.
STOCK OPTIONS
Under the 1996 stock option plan, stock options may be granted to
Triumph'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 incentivize the creation of stockholder value over the
long term because the full benefit of the compensation package cannot be
realized unless stock price appreciation occurs over a number of years.
61,000 options to purchase shares of common stock were granted to
executive officers of Triumph during the fiscal year ended March 31, 2000. The
compensation committee believes that significant equity interests in Triumph
held by Triumph's management align the interests of stockholders and management.
CONCLUSION
Through the programs described above, a significant portion of
Triumph's executive compensation is linked directly to individual and corporate
performance and stock price performance relative to that of the overall market
as well as the industry index. 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 or under the
Exchange Act except to the extent that Triumph 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.
10
<PAGE>
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 Triumph during the fiscal year ended
March 31, 2000.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
MANAGEMENT
As of May 31, 2000, the following nominees for director, the following
executive officers, all directors and executive officers as a group, and the
following 5% beneficial owners, were known to Triumph to be beneficial owners
(as defined in regulations issued by the SEC) of the outstanding common stock
and class D common stock shown below.
A person is deemed to be the beneficial owner of securities that can be
acquired by that 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
that 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, Triumph 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.
The percent of total shares outstanding is based upon outstanding
shares of common stock and class D common stock.
<TABLE>
<CAPTION>
Shares Beneficially Owned
-------------------------
Percent of
Total Shares
Name Number Outstanding
---- ------ -----------
<S> <C> <C>
Richard C. Ill............................... 310,443(1) 2.66%
John R. Bartholdson ......................... 290,576(2)(3) 2.49%
Richard M. Eisenstaedt ...................... 12,250(4) *
Craig N. Kitchen............................. 1,500(5) *
Paul T. Stimmler............................. 49,950(6)(7) *
Richard C. Gozon ............................ 72,096(8) *
Claude F. Kronk ............................. 78,470(9) *
Joseph M. Silvestri ......................... 24,825(10) *
William O. Albertini......................... 4,834(11) *
Citicorp Venture Capital, Ltd. .............. 5,298,535(12) 45.39%
399 Park Avenue
New York, NY 10043
11
<PAGE>
Private Capital Management, Inc. ............ 1,645,549 14.10%
3003 Tamiami Trail North
Naples, Fl 34103
All executive officers and
directors as a group
(10 persons) ................................ 884,697 7.58%
</TABLE>
-----------------
* Less than one percent.
(1) Mr. Ill currently holds stock options to purchase 40,250 shares of
common stock, which options may be exercised in the next 60 days.
(2) Mr. Bartholdson currently holds stock options to purchase 40,250 shares
of common stock, which options may be exercised in the next 60 days.
(3) Mr. Bartholdson disclaims beneficial ownership of 5,300 shares of
common stock beneficially owned by his daughters.
(4) Mr. Eisenstaedt currently holds stock options to purchase 11,250 shares
of common stock, which options may be exercised in the next 60 days.
(5) Mr. Kitchen currently holds stock options to purchase 1,500 shares of
common stock, which options may be exercised in the next 60 days.
(6) Mr. Stimmler currently holds options to purchase 9,000 shares of common
stock, which options may be exercised in the next 60 days.
(7) Mr. Stimmler disclaims beneficial ownership of 16,200 shares of common
stock beneficially owned by his wife.
(8) Mr. Gozon currently holds stock options to purchase 1,001 shares of
common stock, which options may be exercised in the next 60 days.
(9) Mr. Kronk currently holds stock options to purchase 1,001 shares of
common stock, which options may be exercised in the next 60 days.
(10) Mr. Silvestri currently holds stock options to purchase 1,001 shares of
common stock, which options may be exercised in the next 60 days.
(11) Mr. Albertini currently holds stock options to purchase 834 shares of
common stock, which options may be exercised in the next 60 days.
(12) 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., an
affiliate of Citicorp Venture Capital, of an outstanding warrant held
by World Equity Partners.
PRINCIPAL STOCKHOLDERS
As of May 26, 2000, each of the following persons was known to Triumph
to be a "beneficial owner" (as defined in regulations issued by the SEC) of more
than five percent of the outstanding common stock and class D common stock.
The information in this table was furnished by Citicorp Venture
Capital, Ltd. and Private Capital Management, Inc. in reports to Triumph and by
filings with the SEC.
Citicorp Venture Capital has voting and investment power for all shares
listed, except 650,000 shares of common stock which may be acquired upon
exercise by World Equity Partners, an affiliate of Citicorp Venture Capital, of
its warrant.
12
<PAGE>
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
Title of Class of Beneficial Owner Beneficial Ownership of Class
-------------- ------------------- -------------------- --------
<S> <C> <C> <C>
Common stock Citicorp Venture Capital, Ltd. 5,298,535(1) 45.39%
and class D 399 Park Avenue
common stock New York, NY 10043
Common stock Private Capital Management, Inc. 1,645,549 14.10%
3003 Tamiami Trail North
Naples, FL 34103
</TABLE>
-----------
(1) 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.
13
<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)
the Aerospace/Defense Industry Index published by Standard & Poor's and (ii) the
Russell 2000 index.
[In the printed proxy statement a graph appears
depicting the following plot points]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
----------------------------------------------------------------
############# 3/97 3/98 3/99 3/00
<S> <C> <C> <C> <C> <C>
TRUIMPH GROUP, INC. 100.00 115.52 204.02 108.05 133.91
RUSSELL 2000 100.00 109.79 157.16 122.54 138.78
S& P AEROSPACE/DEFENSE 100.00 103.05 121.47 86.45 79.38
</TABLE>
Triumph has not paid cash dividends on its common stock. HISTORIC STOCK
PRICE IS NOT INDICATIVE OF FUTURE STOCK PRICE PERFORMANCE.
14
<PAGE>
PROPOSAL NO. 2 - RATIFICATION OF SELECTION OF AUDITORS
The board has selected Ernst & Young LLP as Triumph's independent
auditors for the fiscal year ending March 31, 2001 and the stockholders are
asked to ratify this selection. Ernst & Young LLP has advised Triumph that it
has no direct or material indirect interest in Triumph 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,
2001.
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 with their judgment in those matters.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Triumph's directors,
officers (including a person performing a principal policy-making function) and
persons who own more than 10% of a registered class of Triumph's equity
securities to file with the SEC initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of Triumph.
Directors, officers and 10% holders are required by SEC regulations to send
Triumph with copies of all of the Section 16(a) reports they file. Based solely
upon a review of the copies of the forms sent to Triumph and the representations
made by the reporting persons to Triumph, Triumph believes that during the
fiscal year ended March 31, 2000, its directors, officers and 10% holders
complied with all filing requirements under Section 16(a) of the Exchange Act
except Paul T. Stimmler, an executive officer of Triumph, who filed a Statement
of Changes in Beneficial Ownership on Form 4 for March 2000 on April 11, 2000,
which was required to be filed by April 10, 2000.
15
<PAGE>
STOCKHOLDER PROPOSALS -- 2001 ANNUAL MEETINg
Proposals of stockholders intended to be presented at the annual
meeting of stockholders in 2001 must be received by February 28, 2001 to be
considered for inclusion in Triumph's proxy statement and form of proxy relating
to that meeting. If any stockholder wishes to present a proposal to the 2001
annual meeting of stockholders that is not included in Triumph's proxy statement
for that meeting and fails to submit that proposal to the Secretary of Triumph
on or before May 14, 2001, then Triumph will be allowed to use its discretionary
voting authority when the proposal is raised at the annual meeting, without any
discussion of the matter in its proxy statement. Stockholder proposals should be
directed to the Secretary, at the address of Triumph set forth on the first page
of this proxy statement.
By order of the board of directors,
/s/ Richard M. Eisenstaedt
----------------------
Richard M. Eisenstaedt
Secretary
June 28, 2000
16
<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 26, 2000 or
any adjournments thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
-FOLD AND DETACH HERE-
<PAGE>
<TABLE>
<S> <C>
IF NO DIRECTION IS MADE WITH RESPECT TO THE ELECTION OF DIRECTORS OR IF YOU VOTE "FOR" THE ELECTION OF THE PLEASE MARK
NOMINEES AS DIRECTORS, THE PROXIES WILL ALLOCATE VOTES IN THEIR DISCRETION AMONG THE NOMINEES, UNLESS YOUR VOTES AS X
OTHERWISE SPECIFIED. INDICATED IN
THE EXAMPLE
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, Richard
listed to the right AUTHORITY C. Gozon, Joseph M. Silvestri, and William O. Albertini.
(EXCEPT FOR THOSE NOMINEES to vote for all nominees
I HAVE CROSSED-OUT) 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.
-----------------------------------------------------------------------
THE BOARD RECOMMENDS A VOTE "FOR" PROPOSAL 2.
Ratify appointment of Ernst & Young LLP as independent auditors.
FOR AGAINST ABSTAIN
/ / / / / /
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.
</TABLE>
-FOLD AND DETACH HERE-
