<PAGE>
[LOGO OF WHITTAKER]
Whittaker Corporation . 1955 N. Surveyor Avenue . Simi Valley . California
93063
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 3, 1998
The Annual Meeting of Stockholders of Whittaker Corporation will be held at
the Radisson Simi Valley Hotel, 999 Enchanted Way, Simi Valley, California on
Friday, April 3, 1998 at 10:00 A.M., for the following purposes:
1) To elect George H. Benter, Jr., George Deukmejian and Gregory T.
Parkos as directors to serve for a term of three years;
2) To consider and act upon a proposal to ratify the appointment of Ernst
& Young LLP as the Company's independent auditor for the fiscal year ending
October 31, 1998; and
3) To consider and act upon such other business as properly may come
before the meeting.
The Board of Directors has fixed the close of business on February 6, 1998
as the record date for the purpose of determining stockholders entitled to
notice of, and to vote at, said meeting.
All stockholders are cordially invited to attend the meeting in person. TO
INSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE AND PROMPTLY MAIL
YOUR PROXY IN THE RETURN ENVELOPE PROVIDED. This will not prevent you from
voting in person, should you so desire, but will help to secure a quorum and
will avoid added solicitation costs.
By Order of the Board of Directors
/s/ Lynne M. O. Brickner
----------------------------------
Secretary
Simi Valley, California
March 3, 1998
<PAGE>
[LOGO OF WHITTAKER]
Whittaker Corporation . 1955 N. Surveyor Avenue . Simi Valley . California
93063
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS, APRIL 3, 1998
SOLICITATION OF PROXIES AND VOTING
The accompanying proxy is solicited on behalf of the Board of Directors of
Whittaker Corporation (the "Company") for use at the Annual Meeting of
Stockholders to be held on April 3, 1998, and at any and all adjournments
thereof. It is anticipated that such proxy, together with this Proxy
Statement, will be first transmitted to the Company's stockholders on or about
March 3, 1998.
All shares represented by each properly executed, unrevoked proxy received
in time for the meeting will be voted as specified therein, and if no
specification is made, the shares will be voted in accordance with the
recommendations of the Board of Directors. Any proxy given may be revoked at
any time prior to its exercise by filing with the Secretary of the Company an
instrument revoking it or a duly executed proxy bearing a later date or by
attending the meeting and voting in person.
Provided that a quorum is present, the affirmative vote of not less than a
majority of the total voting power of the Company's Common Stock, present in
person or by proxy at the meeting and entitled to vote on the subject matter,
is required for approval of each of the matters submitted for stockholder
approval in the accompanying proxy.
Votes cast in person or by proxy at the meeting will be tabulated by the
inspector of elections appointed for the meeting. In accordance with Delaware
law, abstentions and "broker non-votes" (i.e. proxies from brokers or nominees
indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares as to a matter with
respect to which the brokers or nominees do not have discretionary power to
vote) will be treated as present for purposes of determining the presence of a
quorum. For purposes of determining approval of a matter presented at the
meeting, abstentions will be deemed present and entitled to vote and will,
therefore, have the same legal effect as a vote "against" a matter presented
at the meeting. Broker non-votes will be deemed not entitled to vote on the
subject matter as to which the non-vote is indicated and will, therefore, have
no legal effect on the vote on that particular matter.
In addition to use of the mails, proxies may be solicited, in person and by
telephone, by regular employees of the Company, who will not receive any
additional compensation for such solicitation. The Company has also engaged
Georgeson & Company Inc. to assist in the solicitation of proxies. This firm
will be paid a fee of $4,500 and will be reimbursed for expenses incurred in
connection with such engagement. The cost of solicitation of proxies will be
borne by the Company.
March 3, 1998
<PAGE>
EQUITY SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record at the close of business on February 6, 1998 (the
"Record Date") will be entitled to vote at the Annual Meeting of Stockholders
to be held on April 3, 1998. As of the Record Date, there were outstanding
11,204,658 shares of Common Stock. Each share of Common Stock is entitled to
one vote on all matters expected to be presented at the Annual Meeting of
Stockholders. Cumulative voting will not be in effect.
Based on information available to it, the Company believes that the
following persons held beneficial ownership of more than 5% of the outstanding
shares of Common Stock as of the Record Date:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE PERCENT OF
NAME AND ADDRESS OF OWNERSHIP CLASS
---------------- ------------ ----------
<S> <C> <C>
Raytheon Company 1,974,333(1) 17.62%
141 Spring Street
Lexington, MA 02173
Schneider Capital Management 1,844,500(2) 16.46%
460 E. Swedesford Rd.
Suite 1080
Wayne, PA 19087
Pioneering Management Corporation 820,000(3) 7.32%
60 State Street
Boston, MA 02114
Dimensional Fund Advisors Inc. 817,300(4) 7.29%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
</TABLE>
- --------
(1) The holder discloses that it holds sole voting power and sole dispositive
power as to the shares reported.
(2) The holder discloses that it holds sole voting power as to 418,300 shares
and sole dispositive power as to the shares reported.
(3) The holder discloses that it holds sole voting power and sole dispositive
power as to the shares reported.
(4) The holder discloses that it and its officers have sole voting power as to
590,300 shares and sole dispositive power as to the shares reported. The
holder has advised the Company that it disclaims beneficial ownership of
such shares.
2
<PAGE>
The following table sets forth, as of the Record Date except where another
date is indicated below, certain information with respect to the beneficial
ownership of the Company's equity securities for each of the Company's
directors, executive officers, and directors and executive officers as a
group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OF BENEFICIAL OF
TITLE OF CLASS OWNER OWNERSHIP CLASS(1)
-------------- ----------------------- ------------------- --------
<S> <C> <C> <C>
COMMON STOCK DIRECTORS
Joseph F. Alibrandi 528,583(2) 4.72%
George H. Benter, Jr. 13,146(3) (4)
George Deukmejian 8,346(5) (4)
Jack L. Hancock 12,146(6) (4)
Edward R. Muller 143,531(7) 1.28%
Gregory T. Parkos 18,146(8) (4)
Malcolm T. Stamper 10,146(9) (4)
EXECUTIVE OFFICERS
Joseph F. Alibrandi (set forth above)
Lynne M. O. Brickner 3,859(10) (4)
Joseph F. Fernandes 24,000(11) (4)
John K. Otto 29,745(12) (4)
Michael C. Thurk -- (13) (4)
All Directors and
Executive Officers
as a Group (14 persons) 795,164(14) 7.03%
SERIES D PARTICIPATING
CONVERTIBLE PREFERRED
STOCK (15)
Joseph F. Alibrandi 577.18 100%
All Directors and
Executive Officers
as a Group (14 persons) 577.18 100%
</TABLE>
- --------
(1) The number of outstanding stock options exercisable within 60 days of the
Record Date held by any indicated person or group of persons are added to
the shares of Common Stock actually outstanding as of the Record Date for
the purpose of computing the percentage of outstanding shares owned by
such person or such group of persons but not any other stockholder.
(2) Includes 1,000 shares issuable upon exercise of outstanding stock options
exercisable within 60 days of the Record Date.
(3) Includes 12,146 shares issuable upon exercise of outstanding stock
options exercisable within 60 days of the Record Date.
(4) The number of shares shown as beneficially owned represents less than 1%
of the outstanding shares.
3
<PAGE>
(5) Includes 7,146 shares issuable upon exercise of outstanding stock options
exercisable within 60 days of the Record Date.
(6) Includes 10,146 shares issuable upon exercise of outstanding stock
options exercisable within 60 days of the Record Date.
(7) Includes 10,146 shares issuable upon exercise of outstanding stock
options exercisable within 60 days of the Record Date. Mr. Muller shares
voting power and investment power with respect to 133,385 shares of
Common Stock.
(8) Includes 8,146 shares issuable upon exercise of outstanding stock options
exercisable within 60 days of the Record Date.
(9) Represents 10,146 shares issuable upon exercise of outstanding stock
options exercisable within 60 days of the Record Date.
(10) Includes 3,334 shares issuable upon exercise of outstanding stock options
exercisable within 60 days of the Record Date. Also includes 525 shares
allocated to Ms. Brickner's account under the Company's Partnership Plan.
(11) Includes 21,000 shares issuable upon exercise of outstanding stock
options exercisable within 60 days of the Record Date. Mr. Fernandes
retired on January 15, 1998 but is entitled to exercise such options
during the 12 months following his date of retirement.
(12) Includes 24,247 shares issuable upon exercise of outstanding stock
options exercisable within 60 days of the Record Date. Also includes
2,498 shares allocated to Mr. Otto's account under the Company's
Partnership Plan.
(13) Mr. Thurk ceased service as an executive officer of the Company upon the
sale of Xyplex, Inc. on January 30, 1998. Thus, as of the Record Date, he
held no outstanding stock options.
(14) Includes an aggregate of 109,290 shares issuable upon exercise of
outstanding stock options exercisable within 60 days of the Record Date.
Also includes an aggregate of 3,706 shares allocated to the accounts of
executive officers who participate in the Company's Partnership Plan.
Directors of the Company do not participate in such plan.
(15) Each share of Series D Preferred Stock, in connection with a qualifying
transfer, will be automatically converted into 326.531 shares of Common
Stock. A qualifying transfer occurs upon, among other things, any
transfer of Series D Preferred Stock to any third party who is not an
affiliate or employee of the Company (both before and immediately after
giving effect to such transfer) or pursuant to a transaction available to
all holders of Common Stock, including any tender or exchange offer to
purchase shares of Common Stock or open market transaction.
The Company has no reason to believe that the officers and directors of the
Company did not have sole voting power and sole investment power with respect
to the foregoing securities, except (i) with respect to shares of Common Stock
beneficially owned under the Company's Partnership Plan, pursuant to which the
trustee has the power to vote shares but seeks each participant's direction on
voting; and (ii) as to which beneficial ownership, voting power or investment
power is disclaimed or shared as described in the footnotes set forth above.
4
<PAGE>
ELECTION OF DIRECTORS
The Company's Board of Directors is a classified board presently consisting
of seven directors. Directors are divided into three classes, each consisting,
as nearly as possible, of one-third of the total number of directors. Class I,
Class II and Class III directors hold office for "staggered" terms which
expire, respectively, in 1999, 2000 and 1998, in each case until their
respective successors are elected at the annual meeting of stockholders to be
held in each such year. Persons elected as directors are elected for a term of
three years.
Shares represented by the enclosed proxy are intended to be voted, unless
authority is withheld, for the election of George H. Benter, Jr., George
Deukmejian and Gregory T. Parkos, who currently serve as Class III directors
and who must therefore stand for election at the Annual Meeting of
Stockholders to be held on April 3, 1998. To the best of the Company's
knowledge, Messrs. Benter, Deukmejian and Parkos are available to serve, and
the other members of the Board of Directors named below who are not currently
standing for election continue to be available to serve.
DIRECTORS
<TABLE>
<CAPTION>
CLASS
NAME AND RECENT DIRECTOR OF
BUSINESS EXPERIENCE AGE SINCE DIRECTOR
------------------- --- -------- --------
<S> <C> <C> <C>
Joseph F. Alibrandi 69 1970 I
Mr. Alibrandi was elected Chairman of the Board in 1985
and was Chief Executive Officer from 1974 until Decem-
ber 31, 1994. From 1970 until his election as Chairman
of the Board of Whittaker, he served as President of
the Company. He was elected President again in 1991 and
served in such capacity until 1993. He became Chief Ex-
ecutive Officer and President of the Company again in
September 1996. From 1991 to 1997, he also was Chairman
of the Board of BioWhittaker, Inc. He was
BioWhittaker's Chief Executive Officer from 1991 to
1992.
George H. Benter, Jr. 56 1989 III
Since 1992, Mr. Benter has been President and Chief Op-
erating Officer of City National Bank. From 1991 until
1992, he was Vice Chairman and Chief Credit Officer of
Security Pacific Corporation (which merged in 1992 with
BankAmerica Corporation). From 1987 until 1991, he was
Vice Chairman of Security Pacific National Bank (which
merged in 1992 with Bank of America N.T.&S.A.), and
held numerous other positions with Security Pacific
prior to 1987. . +
George Deukmejian 69 1996 III
Since 1991, Mr. Deukmejian has been a partner of Sidley
& Austin, Los Angeles, California. From 1983 to 1991 he
served as the Governor of the State of California.*
Jack L. Hancock 67 1993 II
Mr. Hancock was an Executive Vice President of Pacific
Bell from 1987 until his retirement in 1993. From 1982
to 1987, he was with Wells Fargo Bank as an Executive
Vice President. He was Senior Vice President at Chemi-
cal Bank (now Chase Manhattan Bank, N.A.) from 1978 to
1982. He retired from the U.S. Army as a Major General
in 1978. . +
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
CLASS
NAME AND RECENT DIRECTOR OF
BUSINESS EXPERIENCE AGE SINCE DIRECTOR
------------------- --- -------- --------
<S> <C> <C> <C>
Edward R. Muller 45 1993 II
Since 1993, Mr. Muller has been President and Chief Ex-
ecutive Officer of Edison Mission Energy. From 1992 un-
til 1993, he was the Company's Chief Financial Officer.
He served as the Company's Chief Administrative Officer
from 1988 until 1992. Mr. Muller was appointed General
Counsel and elected Vice President and Secretary of the
Company in 1985, and served in such capacities until
1993. From 1991 until 1993, Mr. Muller was also Vice
President, General Counsel and Secretary of
BioWhittaker, Inc..*
Gregory T. Parkos 67 1984 III
Mr. Parkos joined the Company in 1979 and was elected a
Vice President in 1980. He was named an Executive Vice
President and elected to the Board of Directors in
1984. He was President and Chief Operating Officer of
the Company from 1985 until his retirement as an offi-
cer in 1991. Mr. Parkos was elected Vice Chairman of
the Company in May 1997.*
Malcolm T. Stamper 72 1993 I
Since 1990, Mr. Stamper has been Chairman of the Board,
Chief Executive Officer and Publisher of Storytellers
Ink Publishing Co. From 1985 until his retirement in
1990, he was Vice Chairman of The Boeing Company. He
was Boeing's President from 1972 until 1985.+
</TABLE>
- --------
. Member of the Audit Committee of the Board of Directors.
+ Member of the Compensation and Stock Option Committee of the Board of
Directors.
* Member of the Nominating and Governance Committee of the Board of
Directors.
The directors serve on the boards of directors of other publicly held
companies as follows: Mr. Alibrandi--BankAmerica Corporation, Burlington
Northern Santa Fe Corporation, Catellus Development Corporation and Jacobs
Engineering Group Inc.; Mr. Benter--City National Bank and The Wet Seal, Inc.;
Mr. Deukmejian--Burlington Northern Santa Fe Corporation and Foundation Health
Systems, Inc.; Mr. Hancock--Union Bank of California; Mr. Muller--Global
Marine, Inc. and Oasis Residential, Inc.; Mr. Parkos--Cookson PLC; and
Mr. Stamper--Esterline Corporation.
The Board of Directors held 12 meetings during fiscal 1997. Except for one
special meeting of the Board of Directors (which two directors were unable to
attend), attendance of the Company's directors at all Board and committee
meetings during the year was 100%, with each director attending all of the
meetings of the Board and committees on which he served. Directors are
reimbursed for travel and other expenses related to attendance at Board and
committee meetings.
The Audit Committee, which met four times during fiscal 1997, reviews and
acts or reports to the Board with respect to various auditing and accounting
matters, including the selection of the Company's independent auditor, the
scope of audit procedures, the nature of services to be performed for the
Company by, and the fees to be paid to, the independent auditor, the
performance of the Company's independent and internal auditors, and the
accounting practices of the Company.
The Compensation and Stock Option Committee, which met twice during fiscal
1997, has been delegated the functions of the Board with respect to the
compensation of executive officers and the administration of the Company's
stock-based plans, including the granting of stock options and restricted
stock.
The Nominating and Governance Committee, which met once during fiscal 1997,
recommends nominees for election as directors at annual meetings of
stockholders and to fill vacancies which may occur between annual
6
<PAGE>
meetings. The Committee considers as potential nominees persons recommended by
stockholders. Recommendations should be submitted to the Committee in care of
the Secretary of the Company. The Committee also considers various other
matters pertaining to corporate responsibility.
Directors who are executive officers receive no compensation for Board and
committee services. Other directors (excluding Mr. Alibrandi) receive annual
fees of $20,000 for serving on the Board of Directors, annual fees of $2,500
per committee for serving on various committees, and an additional fee of $750
per day for participation in meetings of the Board and its committees, except
for telephonic meetings having a duration of less than 30 minutes. Prior to
October 1, 1996, Mr. Alibrandi received an annual fee of $30,000 for serving
as Chairman of the Board, no annual fee for service on committees, and an
additional fee of $1,500 per day for participation in meetings of the Board
and its committees, except for telephonic meetings having a duration of less
than 30 minutes. For his service as Chairman of the Board, Mr. Alibrandi was
paid $1,500 for each day that he devoted a substantial portion of his time to
the business and affairs of the Company. Such fees could not exceed $200,000
per fiscal year. Mr. Alibrandi also was entitled as Chairman to reimbursement
for certain expenses. Effective October 1, 1996 and following Mr. Alibrandi's
election as an executive officer of the Company, none of these fees was
accrued or paid to Mr. Alibrandi. Mr. Parkos, for his service as Vice Chairman
of the Board, receives a fee determined by the Board of Directors of $1,250
per day of service.
EXECUTIVE COMPENSATION
The following report of the Compensation and Stock Option Committee and the
performance graph included elsewhere in this proxy statement shall not be
deemed soliciting material or otherwise deemed filed and shall not be deemed
to be incorporated by reference by any general statement incorporating by
reference this proxy statement into any other filing under the Securities Act
of 1933 of the Securities Exchange Act of 1934, except to the extent the
Company specifically incorporates this report or the performance graph by
reference therein.
Board Compensation Committee Report on Executive Compensation. The
Compensation and Stock Option Committee (the "Committee") is composed entirely
of outside directors. The Committee is responsible, among other things, for
setting the compensation of executive officers, including any stock-based
awards to executive officers under the Company's Long-Term Stock Incentive
Plan (1989). The current members of the Committee are Messrs. Benter, Hancock
and Stamper.
The Committee seeks to compensate executive officers to achieve the primary
goal of the Company's stockholders: increased share value. Thus, a substantial
portion of the cash compensation of each executive officer is contingent upon
the Company's performance. Bonuses may, therefore, be substantial, may vary
significantly for an individual from year to year, and may vary significantly
among the executive officers. Another significant form of the compensation of
executive officers is the granting of stock options to purchase the Company's
Common Stock, which become exercisable upon the earlier to occur of (i) the
attainment of designated average closing prices of the Company's Common Stock
over five consecutive trading days, (ii) the expiration of five years
following the date of grant, or (iii) certain changes in control of the
Company. For those executive officers who are division managers, stock options
become exercisable upon (i) the attainment of preestablished performance
targets, (ii) the expiration of five years following the date of grant or
(iii) certain changes in control of the Company. In the past, restricted stock
grants also were a significant part of the compensation of some of the
executive officers. However, restricted stock grants are no longer issued to
executive officers.
For fiscal 1997, the Committee set salaries in December 1996. The salaries
of the other executive officers were individually evaluated by the Committee,
with the advice of Mr. Alibrandi (except as to himself), in light of each
individual's responsibilities for fiscal 1997 and performance during fiscal
1996.
7
<PAGE>
In December 1996, the Committee, with advice from Mr. Alibrandi, also
established targets and operating goals, the achievement of which would be
considered in determining payments of bonuses to executive officers with
respect to the Company's fiscal 1997 performance. Such targets and goals
included the achievement of both financial results and operating objectives
for the Company. For fiscal 1997, the Committee concluded that the targets and
goals had not been achieved and, accordingly, no cash bonuses were awarded to
executive officers.
The Committee made grants of stock options to all executive officers of the
Company during fiscal 1997. The Committee made the grants, with the advice of
Mr. Alibrandi (except as to himself), on the basis of each individual's
performance.
Deductibility of Compensation. Section 162(m) of the Internal Revenue Code
limits the tax deductibility by a company of compensation in excess of
$1,000,000 paid to any of its most highly compensated executive officers.
However, performance-based compensation that has been approved by stockholders
is excluded from the $1,000,000 limit if, among other requirements, the
compensation is payable only upon attainment of preestablished objective
performance goals and the board committee that establishes such goals consists
only of "outside directors" (as defined for purposes of 162(m)). All of the
members of the Committee qualify as "outside directors".
The Committee has considered these requirements and the regulations under
162(m). Although the tax impact of any compensation arrangement is one factor
to be considered, such impact is evaluated by the Committee in light of the
Company's overall compensation philosophy and objectives. The Committee has
established executive officer compensation programs such as stock option
grants that will maximize the Company's federal income tax deductions for
compensation expense. The Committee believes that the Company's current
compensation arrangements, which are primarily based on performance measures
which are expected to be reflected in increased stockholder value, are
appropriate and in the best interests of the Company and its stockholders. The
Committee also believes there are circumstances in which the Company's and
stockholders' interests may be best served by providing compensation that may
not be fully deductible for federal tax purposes, and that under such
circumstances (which include changes in tax laws) the Committee would not
anticipate making significant changes in the practices and philosophy
underlying its executive compensation program.
GEORGE H. BENTER, JR. JACK L. HANCOCK MALCOLM T. STAMPER
Compensation Committee Interlocks and Insider Participation. Messrs. Benter,
Hancock and Stamper comprise the Compensation and Stock Option Committee. None
of these directors is or has been an officer or employee of the Company.
During fiscal 1997, no executive officer of the Company served as a member of
a compensation committee or as a director of another entity of which any
executive officer served as a member of the Company's Compensation and Stock
Option Committee or Board of Directors.
Compensation. The following table sets forth certain information concerning
the annual and long-term compensation for services rendered in all capacities
to the Company by each of the named executive officers for the fiscal years
ended October 31, 1997, 1996 and 1995.
8
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- --------------------- -------
OTHER
NAME ANNUAL RESTRICTED SECURITIES ALL OTHER
AND COMPEN- STOCK UNDERLYING LTIP COMPEN-
PRINCIPAL SATION AWARD(S) OPTIONS PAYOUTS SATION
POSITION YEAR SALARY($)(1) BONUS($)(2) ($) ($) (#) ($) ($)(3)
--------- ----- ------------ ----------- ------- ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph F. Alibrandi 1997 450,154 -- -- -- 100,000 -- 13,515(4)(5)
Chairman, Chief 1996 40,192(6) -- -- -- 1,000(7) -- 1,154(5)
Executive Officer 1995 84,654 -- -- -- -- -- 673
and President
Lynne M. O. Brickner 1997 192,528 -- -- -- 10,000 -- 5,370
Vice President 1996 152,895 -- -- -- -- -- 166
and Secretary(8) 1995 17,307 10,000 -- -- 5,000 -- --
--
Joseph F. Fernandes 1997 156,816 -- -- -- 12,000 6,726
President, Whittaker 1996 181,170 454,200 -- -- 12,000 -- 2,365
Aerospace(9) 1995 158,283 374,250 -- -- 12,000 -- 2,797
John K. Otto 1997 124,485 -- -- -- 57,500 -- 3,243
Vice President, Chief 1996 117,462 -- -- -- 6,000 -- 4,509
Financial Officer and 1995 110,926 45,000 -- -- 4,000 -- 4,254
Treasurer(10)
Michael C. Thurk, 1997 278,622 50,000 -- -- 12,000 -- 19,625(12)
President, Whittaker 1996 97,796 100,000 18,950(12)
Communications, Inc.
and Xyplex, Inc.(11)
</TABLE>
- --------
(1) Amounts represent cash compensation earned and received by executive
officers.
(2) Amounts represent cash bonuses which were accrued during the fiscal year
shown but paid subsequent to the end of such fiscal year.
(3) Unless otherwise noted, the amounts shown in this column constitute
contributions by the Company under the Company's Partnership Plan, a
defined contribution plan, for the benefit of the named executive
officers.
(4) Includes $6,077 paid on behalf of Mr. Alibrandi for premiums under the
Company's split-dollar life insurance policy provided to its executive
officers.
(5) In addition, Mr. Alibrandi continues to receive retirement benefits under
the Whittaker Corporation Employee Pension Plan, the Supplemental Benefit
Plan and the Excess Benefit Plan.
(6) Mr. Alibrandi became Chief Executive Officer and President of the Company
in September 1996.
(7) Mr. Alibrandi retired as Chief Executive Officer of the Company in
December 1994. On December 29, 1995, Mr. Alibrandi was granted options to
purchase 1,000 shares under the 1992 Stock Option Plan for Non Employee
Directors.
(8) Ms. Brickner became an executive officer of the Company in October 1996
and joined the Company in September 1995.
(9) Mr. Fernandes became President of Whittaker Aerospace in November 1995
and was President of Whittaker Controls, Inc. since 1992. Mr. Fernandes
retired from the Company on January 15, 1998.
9
<PAGE>
(10) Mr. Otto became Chief Financial Officer in October 1997.
(11) Mr. Thurk joined Whittaker Communications, Inc. and Xyplex, Inc. in July
1996 as President. On January 30, 1998, Xyplex, Inc. was sold by the
Company and he ceased service as an executive officer of the Company on
that date.
(12) Mr. Thurk received payment of relocation allowances in 1996 and 1997.
Option Grants. The following table sets forth certain information concerning
grants of options to purchase shares of Common Stock made by the Company to
the named executive officers during fiscal 1997:
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE GRANT DATE
OPTIONS GRANTED TO EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME (#)(1) FISCAL YEAR ($/SHARE)(2) DATE VALUE(4)
---- --------------- ---------------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Joseph F. Alibrandi..... 100,000(4) 27.7 $13.250 12/16/2006 $518,000
Lynne M. O. Brickner.... 10,000(4) 2.8 $13.250 12/16/2006 $ 51,800
Joseph F. Fernandes..... 12,000(4) 3.3 $13.250 12/16/2006 $ 62,160
John K. Otto............ 7,500(4) 2.1 $13.250 12/16/2006 $ 38,850
50,000(4) 13.9 $13.031 10/03/2007 $254,500
Michael C. Thurk........ 12,000(4) 3.3 $13.250 12/16/2006 $ 62,160
</TABLE>
- --------
(1) The option price of each stock option which has been granted is not less
than 100% of the market value of the Common Stock on the date of grant,
and the term of each such option is 10 years, subject to earlier
termination in certain events related to death, retirement or other
termination of employment. Options become exercisable upon the earliest to
occur of (i) the attainment of designated average closing prices of the
Company's Common Stock over five consecutive trading days; (ii) the
expiration of five years following the date of grant; or (iii) certain
changes in control of the Company. Options granted to executive officers
who are also division managers, such as Mr. Fernandes, become exercisable
upon the earliest to occur of (i) the attainment of certain operating
profit and return on asset goals; (ii) the expiration of five years
following the date of grant; or (iii) certain changes in control of the
Company.
(2) The exercise price and tax withholding obligations related to exercise may
be paid by delivery of already owned shares and/or by offset of the
underlying shares, subject to certain conditions.
(3) Based upon the Black-Scholes option valuation model. The actual value, if
any, an executive officer may realize is based on the difference between
the market price of the Company's Common Stock on the date of exercise and
the exercise price. There is no assurance that the actual realized value
will be at or near the value estimated by the Black-Scholes model.
Assumptions under the Black-Scholes model are: expected volatility of
32.87%; risk-free rate of return of 5.73%; dividend yield of 0%; and time
of exercise at 5 years. No adjustments have been made for non-
transferability or risk of forfeiture.
(4) At October 31, 1997, such option was not currently exercisable.
10
<PAGE>
Option Exercises and Fiscal Year-End Values. The following table sets forth
certain information concerning (i) the exercise of options to purchase shares
of Common Stock during fiscal 1997, and (ii) the aggregate number of shares of
Common Stock subject to options outstanding as of October 31, 1997 with
respect to options granted to the named executive officers under the Company's
stock option plans.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR ENDED OCTOBER 31, 1997 AND OCTOBER
31, 1997 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
OCTOBER 31, OCTOBER 31,
1997 (#) 1997 (1)
------------- --------------
SHARES ACQUIRED VALUED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED UNEXERCISABLE UNEXERCISABLE
---- --------------- ---------- ------------- --------------
<S> <C> <C> <C> <C>
Joseph F. Alibrandi.... -- -- 1,000/100,000 0/0
Lynne M. O. Brickner... -- -- 3,334/11,666 0/0
Joseph F. Fernandes.... -- -- 21,000/28,000 0/0
John K. Otto........... -- -- 24,247/57,500 $49,222/0
Michael C. Thurk....... -- -- 33,334/66,666 0/0
</TABLE>
- --------
(1) Based on the difference between the average of the high and low market
price of the Company's Common Stock on October 31, 1997 and the exercise
price.
11
<PAGE>
Company Performance. The following graph shows a five-year comparison of
cumulative total returns for the Company, the S&P 500 Composite Index and the
Dow Jones Aerospace and Defense Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG WHITTAKER CORPORATION, THE S&P 500 INDEX,
AND THE DOW JONES AEROSPACE & DEFENSE INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
DOW JONES
Measurement Period WHITTAKER S&P AEROSPACE
(Fiscal Year Covered) CORP. 500 INDEX & DEFENSE
- ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-10/31/92 $100.00 $100.00 $100.00
FYE 10/31/93 $115.00 $114.00 $133.00
FYE 10/31/94 $160.00 $119.00 $161.00
FYE 10/31/95 $173.00 $151.00 $244.00
FYE 10/31/96 $123.00 $187.00 $347.00
FYE 10/31/97 $ 92.00 $247.00 $392.00
</TABLE>
* Assumes that the value of the investment in the Company's Common Stock and
each index was $100 on October 31, 1992 and that all dividends were
reinvested.
The Company has historically used the Dow Jones Aerospace and Defense Index
for performance comparison purposes.
Employees' Pension Plan. The Company maintains the Employees' Pension Plan
for the benefit of all eligible employees, including executive officers.
Directors of the Company who are not also employees do not participate in the
Employees' Pension Plan. The Employees' Pension Plan is a tax-qualified,
Company funded plan subject to the provisions of the Employee Retirement
Income Security Act of 1974. Company contributions to the Employees' Pension
Plan are actuarially determined, and benefits are computed based upon years of
service and remuneration. As a result of an amendment to the Employee's
Pension Plan, effective October 31, 1994 benefits were "frozen" for all
participants in the plan: adjustments for changes in credited years of service
ceased on October 31, 1994, and adjustments for changes in remuneration ceased
on December 31, 1994.
12
<PAGE>
The Internal Revenue Code (the "Code") limits the annual benefits which may
be paid from a tax-qualified retirement plan. The Company has adopted various
supplemental plans for the benefit of executive officers which authorize the
payment of benefits in excess of the limits imposed by the Code. Under such
plans, aggregate pension benefits for executive officers are equal to the
excess of (i) the annual benefits which would be payable pursuant to the
Employees' Pension Plan without regard to the limitations under the Code or to
a formula change under the Employees' Pension Plan which took effect on
January 1, 1989; over (ii) the amounts actually payable under the Employees'
Pension Plan. These supplemental plans were "frozen" as described in the
preceding paragraph, and are hereinafter referred to as the frozen
supplemental plans.
The Company adopted a separate supplemental plan in 1996 which provides a
targeted level of replacement income at retirement for selected executive
officers of the Company. The target is 60% of compensation. The targeted
benefit is offset by 50% of the Social Security benefit and all company
provided qualified retirement plan benefits. The benefit is payable at age 65
in the form of a life annuity, and is reduced for less than 15 years of
credited service. To the extent that the offsets exceed the targeted
retirement income, the fixed components (Social Security and the company
provided qualified retirement plan benefits) are still payable.
The following table shows, for Messrs. Fernandes, Otto, Thurk and Ms.
Brickner, the estimated annual benefits payable under the supplemental plan,
the Employees' Pension Plan, employer provided benefits under all other
qualified retirement plans, and 50% of the Social Security retirement benefit.
These amounts are payable at age 65, including the effect of the freeze in
benefits described above.
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE -------------------------------
COMPENSATION 5 10 15 20
------------- ----- ------- -------- --------
<S> <C> <C> <C> <C>
$ 50,000............................... $ 0 $10,000 $ 30,000 $ 30,000
75,000............................... 0 15,000 45,000 45,000
100,000............................... 0 20,000 60,000 60,000
125,000............................... 0 25,000 75,000 75,000
150,000............................... 0 30,000 90,000 90,000
175,000............................... 0 35,000 105,000 105,000
200,000............................... 0 40,000 120,000 120,000
225,000............................... 0 45,000 135,000 135,000
250,000............................... 0 50,000 150,000 150,000
300,000............................... 0 60,000 180,000 180,000
350,000............................... 0 70,000 210,000 210,000
400,000............................... 0 80,000 240,000 240,000
</TABLE>
The compensation upon which annual benefits is based for active participants
in the supplemental plan is the average of the highest annual compensation
paid during any three consecutive years of employment with the Company. For
this purpose, compensation includes base compensation plus up to $100,000
annual bonus for division managers, and base compensation plus annual bonus
for participants other than division managers.
Compensation for determining benefits under the frozen supplemental plans
was based on the provisions of the plans at the time the plans were frozen.
The compensation upon which annual benefits is based for all participants in
the Employees' Pension Plan is the average of the highest annual cash
compensation paid during five consecutive years within the final ten years of
employment. For this purpose cash compensation includes salary and bonus but
does not include the auto allowance component of salary or any compensation
earned after December 31, 1994.
13
<PAGE>
Messrs. Thurk, Fernandes, Otto and Ms. Brickner have approximately 1, 5, 14,
and 2 years of service with the Company, respectively. Mr. Fernandes and Mr.
Thurk are division managers. Retirement benefits are computed on a straight-
life annuity basis. The benefits listed in the tables set forth above include
retirement income from the supplemental retirement plan, the frozen Employees'
Pension Plan, employer provided benefits under all other qualified retirement
plans, and 50% of the Social Security retirement benefit. Messrs. Thurk
Fernandes, Otto and Ms. Brickner have annual accrued frozen benefits in the
Employees' Pension Plan of $0, $10,880, $24,176 and $0 payable at age 65.
Mr. Alibrandi retired from the Company on December 31, 1994 with
approximately 25 years of service under the Employees' Pension Plan, and
receives a retirement benefit under the Employees' Pension Plan and the frozen
supplemental plans equal to $27,897 per month. Mr. Alibrandi returned to
active service with the Company in September 1996 and his retirement benefits
are not affected by his return.
Directors' Retirement Plan. Each director who is not an employee of the
Company is paid upon the director's retirement from the Board of Directors,
for the number of years equaling the director's years of service as a
director, an annual payment in quarterly installments in an amount equal to
the lesser of (i) one and one-half times the basic annual fee (currently
$20,000) payable during the last year of the director's service, or (ii) the
total fees actually paid during the last twelve months of the director's
service. No payments are paid after the death of a director except to a
director's surviving spouse. Death while serving as a director is treated as
retirement for purposes of the Directors' Retirement Plan. The Director's
Retirement Plan was "frozen" and no further benefits are to be accrued for
service by directors after April 4, 1997.
Whittaker Corporation 1992 Stock Option Plan for Non-Employee Directors. The
purposes of the Whittaker Corporation 1992 Stock Option Plan for Non-Employee
Directors (the "Directors Plan") are to attract and retain highly qualified
individuals to serve as directors of the Company, to encourage such directors
to acquire an equity interest in the Company in order to align more closely
the interests of such directors with those of the Company's stockholders, and
to compensate such directors for their contributions to the Company's growth
and profitability.
Each director of the Company who is not an employee of the Company or any of
the Company's affiliates is an eligible director under the Directors Plan.
There are currently six eligible directors: Messrs. Benter, Deukmejian,
Hancock, Muller, Parkos and Stamper.
On December 31, 1996, each director who was then an eligible director was
granted an option under the Directors Plan to purchase 1,000 shares of the
Company's Common Stock at a purchase price of $12.625 per share, the fair
market value on the date of grant. Recipients of such options were Messrs.
Benter, Deukmejian, Hancock, Muller, Parkos and Stamper. Options become
exercisable six months from the date of grant, and each option expires on the
earlier to occur of (x) 10 years from its date of grant, and (y) one year from
the date of termination of service as an eligible director.
In April 1997, the stockholders ratified amendments to the Directors Plan
and to the Directors' Retirement Plan which were designed to align the
interests of the directors more directly with those of the Company's
stockholders by the issuance of stock options to directors and the termination
of the Directors' Retirement Plan.
Under the Amended and Restated Directors Plan, on the date of each annual
meeting of the Company's stockholders, each eligible director who is a member
of the Board of Directors on such date is granted an option (the "Fixed
Option") to acquire 1,000 shares of Common Stock and an option (the "Formula
Option") to acquire a number of shares of Common Stock based upon the
following formula: 150% of the director's base
14
<PAGE>
compensation as a member of the Board of Directors during the prior 12 month
period, divided by the product of the fair market value of the Common Stock
and a percentage based on the Black-Scholes option pricing model as applied to
the Common Stock. The provisions of the Directors Plan relating to Formula
Options were added to replace future accruals of retirement benefits by the
eligible directors under the Company's Directors' Retirement Plan, which was
terminated and all accruals for retirement benefits were "frozen" effective as
of April 4, 1997, the date of approval by the stockholders of the amendments
to the Directors Plan.
The per share exercise price for each option granted under the Amended and
Restated Directors Plan is equal to the fair market value of a share of Common
Stock on the date of grant and each option has a ten-year term, subject to
earlier expiration one year after the date upon which a Director's status as
an eligible director under the Directors Plan terminates for any reason,
including death. Fixed Options granted under the Amended and Restated
Directors Plan are not exercisable until six months after the date of grant
and Formula Options are not exercisable until one year after the date of
grant, except that in the event of a director's death, all of the director's
outstanding options are then immediately exercisable. Options granted under
the Amended and Restated Directors Plan may be exercised by payment in cash,
cash equivalents or in shares of Common Stock, based upon the fair market
value of any such non-cash consideration on the date of exercise.
A total of 150,000 shares of the Company's Common Stock may be subject to
options granted under the Amended and Restated Directors Plan.
On April 4, 1997, each director who was then an eligible director received
options under the Amended and Restated Directors Plan consisting of a Fixed
Option of 1,000 shares and a Formula Option of 5,146 shares, all exercisable
at the fair market price of $9.63 per share.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of
the Securities Exchange Act requires the Company's officers and directors, and
persons who own more than 10 percent of the Company's Common Stock, to file
reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission and the New York Stock Exchange. Officers,
directors and greater than 10 percent beneficial owners are required to
furnish the Company with copies of all Forms 3, 4 and 5 which they file.
Based solely on the Company's review of copies of such forms it has
received, the Company believes that all of its officers, directors and greater
than 10 percent beneficial owners have complied with all filing requirements
applicable to them during fiscal 1997.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
In recognition of the important role of the independent auditor, the Board
of Directors has determined that its selection of the independent auditor for
the Company should be submitted to the Company's stockholders for ratification
on an annual basis. The Board of Directors, upon the recommendation of its
Audit Committee, has appointed Ernst & Young LLP to serve as the Company's
independent auditor for the fiscal year ending October 31, 1998, subject to
ratification by the Company's stockholders. Ernst & Young LLP conducted the
audit of the Company's financial statements for the fiscal year ended October
31, 1997. If the appointment is not ratified, the Board of Directors will
appoint another firm as the Company's independent auditor for the fiscal year
ending October 31, 1998. The Board of Directors also retains the power to
appoint another independent auditor for the Company to replace an auditor
ratified by the stockholders in the event the Board of Directors determines
that the interests of the Company require such a change.
15
<PAGE>
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting of Stockholders. Such representatives will have the opportunity
to make a statement if they so desire and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITOR OF
THE COMPANY FOR THE FISCAL YEAR ENDING OCTOBER 31, 1998.
STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS
Stockholder proposals to be presented at the 1999 Annual Meeting of
Stockholders must be received at the Company's executive offices at 1955 North
Surveyor Avenue, Simi Valley, California 93063 by October 31, 1998 in order to
be included in the Company's proxy statement and form of proxy relating to
that meeting.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
As of the date of this Proxy Statement, the Company knows of no business
other than that described herein that will be presented for consideration at
the meeting. If, however, any other business properly shall come before the
meeting, the proxy holders intend to vote the proxies in accordance with their
best judgment.
By Order of the Board of Directors
/s/ Lynne M. O. Brickner
-----------------------------------
Secretary
March 3, 1998
16
<PAGE>
WHITAKER CORPORATION PROXY
PARTNERSHIP PLAN ("PLAN")
INSTRUCTION CARD
TO: THE CHARLES SCHWAB TRUST COMPANY ("SCHWAB"), TRUSTEE UNDER THE PLAN
Schwab is hereby instructed to vote the appropriate number of shares of
Whittaker Corporation Common Stock which represents my proportionate interest in
the Plan at the Annual Meeting of Stockholders of Whittaker Corporation to be
held on April 3, 1998 at 10:00 A.M., and at any adjournment or adjournments
thereof, with respect to the proposals listed on the reverse side hereof.
(CONTINUED ON REVERSE SIDE)
PLEASE SIGN AND DATE ON REVERSE SIDE AND RETURN IN THE ACCOMPANYING ENVELOPE
- FOLD AND DETACH HERE -
WHITTAKER CORPORATION ANNUAL
MEETING OF
STOCKHOLDERS
April 3, 1998, 10:00 a.m.
Radisson Simi Valley Hotel
999 Enchanted Way
Simi Valley, California
<PAGE>
Please mark your vote as indicated in this example [X]
1. ELECTION OF DIRECTORS
For the nominees listed below [_]
Withhold Authority to vote for [_]
the nominees listed below
The Board of Directors recommends a
vote "FOR" the nominees listed below.
Nominees: George H. Benter, Jr., George Deukmejian,
Gregory T. Parkos
Instruction: To withhold authority to vote for any
nominee, strike a line through that nominee's
name.
2. Proposal to ratify the appointment
of Ernst & Young LLP as the Company's
Independent Auditor for the fiscal year
ending October 31, 1998.
The Board of Directors recommends a vote "FOR"
the ratification of Proposal 2.
FOR [_] AGAINST [_] ABSTAIN [_]
I understand that in the absence of instructions
you will vote the shares represented by this
proxy on the listed proposals and on other business
which properly may come before the meeting proportionately
in the same manner as those shares for which instructions
are received.
Please sign exactly as your name or names appear. Persons
acting in a fiduciary capacity should so indicate. PLEASE
NOTE any change of address and supply any missing Zip Code
number.
- ------------------------------------------
- ------------------------------------------
Zip Code No.
Signature(s)------------------Signature(s)---------------------Dated------, 1998
-FOLD AND DETACH HERE-
ADMISSION TICKET
Annual Meeting
of
Whittaker Corporation Stockholders
Friday, April 3,1998
10:00 a.m.
Radisson Simi Valley Hotel
999 Enchanted Way
Simi Valley, California
<PAGE>
WHITTAKER CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph F. Alibrandi and Lynne M. O.
Brickner, or either of them, the proxy or proxies of the undersigned with power
of substitution, to vote all shares of stock of Common Stock of Whittaker
Corporation held of record by the undersigned as of February 6, 1998 at the
Annual Meeting of Stockholders of Whittaker Corporation to be held on Friday,
April 3, 1998 at 10:00 A.M., and at any adjournment or adjournments thereof, as
indicated on the reverse side hereof.
(Continued on reverse side)
PLEASE SIGN AND DATE ON REVERSE SIDE AND RETURN IN THE ACCOMPANYING ENVELOPE
- FOLD AND DETACH HERE -
Annual
WHITTAKER CORPORATION Meeting of
Stockholders
April 3, 1998, 10:00 a.m.
Radisson Simi Valley Hotel
999 Enchanted Way
Simi Valley, California
<PAGE>
Please mark your votes as indicated in this example [X]
1. ELECTION OF DIRECTORS
FOR the nominees listed below [_]
WITHHOLD AUTHORITY to vote for [_]
the nominees listed below
The Board of Directors recommends a
vote "FOR" the nominees listed below.
Nominees: George H. Benter, Jr., George Deukmejian,
Gregory T. Parkos
Instruction: To withhold authority to vote for any
nominee, strike a line through that nominee's
name.
2. Proposal to ratify the appointment
of Ernst & Young LLP as the Company's
Independent Auditor for the fiscal year
ending October 31, 1998.
The Board of Directors recommends a vote "FOR"
the ratification of Proposal 2.
FOR [_] AGAINST [_] ABSTAIN [_]
3. In their discretion, the proxies are authorized
to vote upon such other business as properly may
come before the meeting.
If properly executed, the shares represented by this proxy
will be voted in the manner directed herein by the
undersigned stockholder. If or to the extent directions
are not given, such shares will be voted for the election
as directors of the nominees named hereon and for
ratification of the appointment of Ernst & Young LLP
as the Company's independent auditor for the fiscal year
ending October 31, 1998.
Please sign exactly as your name or names appear. Persons
acting in a fiduciary capacity should so indicate. PLEASE
NOTE any change of address and supply any missing Zip Code
number.
------------------------------------------
------------------------------------------
Zip Code No.
Signature(s)__________________Signature(s)_________________Dated__________, 1998
-FOLD AND DETACH HERE-
ADMISSION TICKET
Annual Meeting
of
Whittaker Corporation Stockholders
Friday, April 3, 1998
10:00 a.m.
Radisson Simi Valley Hotel
999 Enchanted Way
Simi Valley, California
