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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[Amendment No. ............................]
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Carpenter Technology Corporation
-----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Carpenter Technology Corporation
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
*Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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>
CarTech LOGO CARPENTER TECHNOLOGY CORPORATION
101 WEST BERN STREET READING, PA 19601
------
Notice of Annual Meeting of Stockholders to be held October 23, 1995
------
To the Stockholders of CARPENTER TECHNOLOGY CORPORATION:
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of Stockholders of
CARPENTER TECHNOLOGY CORPORATION will be held at the Muhlenberg Township
Senior High School Auditorium, Laureldale (north of the city of Reading),
Pennsylvania, on Monday, October 23, 1995, at 4 p.m., local time, for the
purpose of:
(1) Electing five directors (Proposal No. 1);
(2) Approving the appointment of independent accountants of the
Corporation for the fiscal year ending June 30, 1996 (Proposal No. 2);
(3) Approving an amendment to the Non-Qualified Stock Option Plan for
Non-Employee Directors (Proposal No. 3);
(4) Transacting such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on September 1,
1995, as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting. A list of stockholders will be
available at the time and place of the meeting and, during the 10 days prior
to the meeting, at the office of the Corporate Secretary, 101 West Bern
Street, Reading, Pennsylvania.
It is important that your shares be represented at the meeting regardless
of the number of shares that you own. Please complete and sign the enclosed
proxy card, which is being solicited by the Board of Directors of the
Corporation, and return it in the enclosed postage pre-paid envelope as soon
as you can.
If you plan to attend the meeting, please use the admission card attached
to your proxy card. You may, of course, attend the meeting without an
admission card upon proper identification.
A proxy statement for your additional information is attached to this
notice.
You are cordially invited to attend the meeting. A map showing the
location of the Muhlenberg Township Senior High School appears at the end of
the proxy statement.
Respectfully,
JOHN R. WELTY
Secretary
Dated: September 29, 1995
<PAGE>
CarTech LOGO CARPENTER TECHNOLOGY CORPORATION
101 WEST BERN STREET READING, PA 19601
PROXY STATEMENT
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation of
proxies to be used at the Annual Meeting of Stockholders to be held on
October 23, 1995, and at any adjournment thereof. The Corporation's annual
report to stockholders, including financial statements, accompanies this
notice and proxy statement, but is not incorporated as part of the proxy
statement and is not to be regarded as part of the proxy solicitation
material.
Proxies are solicited by the Board of Directors of the Corporation in
order to provide every stockholder an opportunity to vote on all matters
scheduled to come before the meeting, whether or not he or she attends the
meeting in person. When the enclosed proxy card is returned properly signed,
the shares represented thereby will be voted by the proxy holders named on
the card in accordance with the stockholder's directions. You are urged to
specify your choices by marking the appropriate boxes on the enclosed proxy
card. If the proxy is signed and returned without specifying choices, the
shares will be voted as recommended by the Board of Directors. A stockholder
giving a proxy may revoke it at any time before it is voted at the meeting by
filing with the Corporate Secretary an instrument revoking it, or by a duly
executed proxy bearing a later date. If you do attend, you may, if you wish,
vote by ballot at the meeting, thereby canceling any proxy vote previously
given.
If a stockholder wishes to give a proxy to someone other than those
designated on the proxy card, he or she may do so by crossing out the names
of the designated proxies and by then inserting the name of another
person(s). The signed proxy card should be presented at the meeting by the
person(s) representing the stockholder.
On September 15, 1995, a 2-for-1 stock split of the shares of the
Corporation's common stock became effective, with respect to stockholders of
record on September 1, 1995. Throughout this proxy statement all references
to and calculations of the number or value of shares of common stock have
been restated to reflect the stock split.
On September 1, 1995, there were 16,419,590 shares of common stock issued
and outstanding, each of which is entitled to one vote. There were also
456.107 shares of the Corporation's series A convertible preferred stock held
by the trustee of the Corporation's Employee Stock Ownership Plan (ESOP).
Each share of preferred stock is convertible, per operation of the ESOP, into
at least 2,000 shares of common stock with the equivalent of 1.3 votes for
each such common share, subject to anti-dilution adjustments and to limitations
under applicable securities laws and stock exchange regulations. The
preferred stock votes together with the common stock as a single class on all
matters upon which the common stock is entitled to vote. Each ESOP
Participant is entitled to direct the Trustee how to vote both the shares of
preferred stock allocated to his or her account and his or her proportionate
share of any unvoted or unallocated shares of preferred stock. Under the
Savings Plan, each Participant is entitled to direct the Trustee how to vote
the shares of common stock allocated to his or her account. The Trustee shall
vote any undirected shares in the same proportion and manner as the directed
shares.
The holders of a majority of the outstanding shares must be present in
person or by proxy at the annual meeting in order to constitute a quorum for
the purpose of transacting business at the meeting. Except for the election
of directors, the affirmative vote of the holders of a majority of the
outstanding shares of common stock present in person or by proxy at the
meeting and entitled to vote on the proposals is required to ratify and
approve the proposals. Directors are elected by a plurality of the votes cast
by written ballot. Abstentions are counted in tabulations of the votes cast
by stockholders on the proposals and will have the effect of a negative vote.
Brokers who hold shares in street name for customers have the authority to
1
<PAGE>
vote only on certain routine matters in the absence of instruction from the
beneficial owners. A broker non-vote occurs when the broker does not have the
authority to vote on a particular proposal. Under applicable Delaware law,
broker non-votes will not be counted for purposes of determining whether any
proposal has been approved.
The Board of Directors believes that as of September 1, 1995, the
following entities owned more than 5% of the Corporation's issued and
outstanding shares of common stock:
<TABLE>
<CAPTION>
Number of Shares(1) Percent
Name and Address of Beneficial Owner Beneficially Owned of Class
---------------------------------------- ---------------------- ------------
<S> <C> <C>
State Street Bank and Trust Company 1,873,906 shares(2) 11%
P.O. Box 1389
Boston, MA 02104
FMR Corp. 1,051,000 shares(3) 6%
82 Devonshire Street
Boston, MA 02109
Putnam Investments 982,200 shares(4) 6%
1 Post Office Square
Boston, MA 02109
Travelers Group Inc. 963,034 shares(5) 5%
388 Greenwich Street
New York, NY 10013
</TABLE>
- ------
1) The amounts reflect the Corporation's 2-for-1 stock split effective
September 15, 1995, to stockholders of record September 1, 1995.
2) State Street Bank and Trust Company has advised the Corporation that,
acting as Trustee for various collective investment funds for employee
benefit plans and other index accounts, it had sole voting power with
respect to 76,400 shares of common stock; sole dispositive power with
respect to 76,400 shares of common stock; acting as Trustee for the
Corporation's Savings Plan, it had shared voting power and shared
dispositive power with respect to 885,292 shares of common stock; and
acting as Trustee for the Corporation's Employee Stock Ownership Plan
(ESOP), it had shared voting power and shared dispositive power with
respect to 912,214 shares of common stock, representing the amount of
common stock that would be held if the shares of series A convertible
preferred stock actually held were converted into common stock using the
ratio of one preferred share equal to 2,000 shares of common stock.
3) The number of shares beneficially owned by FMR Corp. is based on its
holdings as of August 31, 1995, as notified by FMR Corp. FMR Corp. advised
Carpenter Technology Corporation on September 19, 1995, that this number
includes 1,051,000 shares beneficially owned by Fidelity Management &
Research Company, as a result of its serving as investment adviser to
various investment companies registered under Section 8 of the Investment
Company Act of 1940 and serving as investment adviser to certain other
funds which are generally offered to limited groups of investors. The
ownership of one investment company, Fidelity Magellan Fund amounted to
961,000 shares of common stock of Carpenter Technology Corporation. FMR
Corp. has sole voting power with respect to zero shares and sole
dispositive power with respect to 1,051,000 shares.
4) The number of shares beneficially owned by Putnam Investments is based on
its August 31, 1995, 13(f) filing.
5) The number of shares beneficially owned by Travelers Group Inc. is based
on its June 30, 1995, 13(f) filing.
Except as discussed above, the Board of Directors and management is not aware
of any other person or entity who holds beneficially more than 5% of the
outstanding common stock of the Corporation.
Solicitation of proxies is made on behalf of the Board of Directors of the
Corporation, and the cost of preparing, assembling, and mailing the notice of
annual meeting, proxy statement, and form of proxy will be borne by the
Corporation. In addition to the use of the mail, proxies may be solicited by
directors, officers and regular employees of the Corporation, without
additional compensation, in person or by telephone or telegraph. Solicitation
of proxies may also be made on behalf of the Corporation by D. F. King & Co.
at a cost of approximately $4,500. The Corporation will reimburse brokerage
houses and other nominees for their expenses in forwarding proxy material to
beneficial owners of the Corporation's stock.
<PAGE>
BOARD OF DIRECTORS
The Corporation's Board of Directors held 11 meetings during fiscal year
1995. All of the directors attended more than 93% of the meetings of the
Board of Directors and the Committees of the Board of Directors on which they
served.
No director who is an employee of the Corporation is compensated as a
member of the Board or any Committee of the Board. Compensation for
non-employee directors consists of an annual retainer of $20,000 and a $1,000
fee, plus travel expenses, where appropriate, for each Board meeting attended
and a $800 fee for each Committee meeting attended. Each Committee
Chairperson receives an additional annual retainer of $3,000.
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COMMITTEES OF THE BOARD
The standing Committees of the Board of Directors are the Audit, Corporate
Governance, Human Resources and Finance Committees.
The Audit Committee reviews the adequacy of the Corporation's financial
reporting, accounting systems and controls and recommends the independent
accountants to conduct the annual audit of the books and accounts of the
Corporation. The Audit Committee also evaluates the Corporation's internal
and external auditing procedures, the security of data processing systems,
and its environmental compliance program. The Committee maintains a direct
line of communication with the Corporation's independent accountants. The
Committee held 3 meetings during fiscal year 1995. No member of the Audit
Committee may be an employee or former employee of the Corporation. The Audit
Committee currently consists of Messrs. Garr, Chairman; Draeger; Evarts;
Humphrey; Kay, and Ms. Turner.
The Corporate Governance Committee reviews and recommends any action
proposed with respect to changes in the Corporate Charter or By-Laws, and any
stockholder proposals. The Committee reviews and recommends to the Board the
size, composition and committee structure of the Board, as well as nominees
to the Board of Directors and its Committees to fill vacancies. The Committee
also considers the performance and potential conflicts of incumbent directors
in determining whether to recommend them to the Board as nominees for
reelection, and maintains guidelines informing the directors of their duties
and obligations. The Committee met 3 times during fiscal year 1995. No member
of the Corporate Governance Committee may be an employee or former employee
of the Corporation. Members of the Corporate Governance Committee currently
are Messrs. Hudson, Jr., Chairman; Bennett; Draeger; Evarts, and Wolfe.
The Corporate Governance Committee will consider sound and meritorious
nomination suggestions from stockholders. All letters of recommendation for
nomination at the 1996 Annual Meeting of Stockholders should be received by the
Corporate Secretary at the Corporation's headquarters on or before August 24,
1996 but not sooner than July 26, 1996. Such stockholder's notice to the
Secretary shall set forth (a) as to each person whom the stockholder proposes
to nominate for election or reelection as a director, (i) the name, age,
business address and residence address of the person, (ii) the principal
occupation or employment of the person, (iii) the class and number of shares
of capital stock of the Corporation which are beneficially owned by the
person and (iv) any other information relating to the person that is required
to be disclosed in solicitations for proxies for election of directors
pursuant to Schedule 14A under the Securities Exchange Act of 1934, as
amended; and (b) as to the stockholder giving the notice, (i) the name and
record address of the stockholder, and (ii) the class and number of shares of
capital stock of the Corporation which are beneficially owned by the
stockholder. The Corporation may require any proposed nominee to furnish
other information as may reasonably be required by the Corporation to
determine the eligibility of such proposed nominee to serve as director of
the Corporation. No person shall be eligible for election as a director of
the Corporation unless nominated in accordance with the procedures set forth
in the Corporation's By-Laws and applicable law. A signed statement from the
person recommended for nomination should accompany the letter of
recommendation indicating that he or she consents to be considered as a
nominee.
The Human Resources Committee reviews and recommends actions to the Board
of Directors on such matters as the salary of the Chief Executive Officer and
the salary and other compensation of officers. The Human Resources Committee
also (1) oversees the administration of the Corporation's pension plans
(other than pension fund asset management), (2) reviews the Corporation's
succession plan for officers, (3) has the authority to administer, grant and
award stock and stock options under the Corporation's incentive equity plans,
and (4) reviews and reports on the Corporation's progress on affirmative
action and equal opportunity matters, employee health and safety issues and
workers' compensation costs. The Committee held 4 meetings during fiscal year
1995. No member of the Human Resources Committee may be an employee or former
employee of the Corporation. Current members of the Committee are Messrs.
Miller, Jr., Chairman; Bennett; Garr; Hudson, Jr.; Langenberg, and Ms.
Turner.
The Finance Committee reviews and recommends certain actions to the Board
of Directors relating primarily to the Corporation's capital structure, cash
management strategies, pension fund asset management and dividend policy. The
Committee met 3 times during fiscal year 1995. Current members of the
Committee are Messrs. Langenberg, Chairman; Cardy; Humphrey; Kay; Miller,
Jr.; Roedel, and Wolfe.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Corporation's Board of Directors consists of 13 directors serving in
three classes, the respective terms of which expire alternately over a
three-year period. Ms. Mylle Bell Magnum resigned as a member of the Board of
Directors and has advised the Corporation that her resignation was necessary
because her promotion to Senior Vice President of Holiday Inn Corporation
will not allow her sufficient time to fulfill her duties as a member of the
Board.
Unless otherwise specified by the stockholders, the shares represented by
the proxies will be voted for the five nominees for directors listed below.
Messrs. Robert W. Cardy, Arthur E. Humphrey, Edward W. Kay, Frederick C.
Langenberg and Kathryn C. Turner are nominated for terms which will expire at
the 1998 Annual Meeting of Stockholders. Each nominee for director has
consented to their nomination as a director and, so far as the Board and
management are aware, will serve as a director if elected. The names and
biographical summaries of the five persons who have been nominated to stand
for election at the 1995 Annual Meeting of Stockholders and the remaining
eight directors whose terms are continuing appear below.
The Board of Directors recommends that you vote FOR the election of
Messrs. Cardy, Humphrey, Kay, Langenberg and Ms. Turner.
Nominees -- Term to Expire 1998
ROBERT W. CARDY Director Since 1990
Chairman of the Board, President, Chief Executive Officer and Director,
Carpenter Technology Corporation.
PHOTO Mr. Cardy, age 59, received a bachelor's degree in industrial
management from the University of Cincinnati. He came to Carpenter with
prior experience at the Delco Products Division of General Motors
Corporation, where he was a systems analyst. After joining the
Corporation in 1962, Mr. Cardy served in numerous capacities, becoming
general sales manager in 1977, division vice president - commercial in
1979, vice president - commercial in 1982, vice president - sales and
marketing in 1987, executive vice president in 1989, president and
chief operating officer on November 1, 1990, and chairman of the board,
president and chief executive officer on July 1, 1992. In addition to
his numerous community activities, Mr. Cardy serves as a director of
Meridian Bancorp, Inc., the Reading Hospital & Medical Center, United
Way of Berks County and Pennsylvania Business Roundtable. Mr. Cardy
serves on the Corporation's Finance Committee.
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ARTHUR E. HUMPHREY Director Since 1980
Professor of Chemical Engineering, Pennsylvania State University.
Provost Emeritus, Lehigh University.
PHOTO Dr. Humphrey, age 67, received a bachelor's and a master's degree in
chemical engineering from the University of Idaho, a doctorate degree
in chemical engineering from Columbia University and a master's degree
in food technology from the Massachusetts Institute of Technology. He
held various teaching positions at the University of Pennsylvania
beginning in 1953 and became dean of the School of Engineering and
Applied Science in 1972. From 1980 to 1986, Dr. Humphrey served as vice
president and provost of Lehigh University and in 1986, became a T. L.
Diamond professor of chemical engineering and director of the Center
for Molecular Bioscience and Biotechnology at Lehigh. He assumed his
present position in July 1992. He is past president of the American
Institute of Chemical Engineers, and past director of the United
Engineering Trust of New York. From 1971 to 1975, he served as director
of the New Brunswick Scientific Co.; and from 1975 to 1980, he was
technical director of ABEC, Inc. He serves as a consultant to Hoffman
LaRoche and to Merck, Inc. He has also served on the Scientific
Advisory Boards of Repap Technologies, Inc. and Biochem Technology,
Inc. Dr. Humphrey is the coauthor of a number of technical books, is
the holder of four U.S. Patents, and is a member of the National
Academy of Engineering, the American Institute of Chemical Engineers,
the American Chemical Society and the American Society of Microbiology.
Dr. Humphrey has been a Fulbright lecturer in Japan and Australia and
has received other scientific awards. He currently serves on the
Corporation's Audit and Finance Committees.
EDWARD W. KAY Director Since 1989
Retired Co-Chairman and Chief Operating Officer, Ernst & Whinney, now
in practice as Ernst & Young.
PHOTO Mr. Kay, age 67, graduated from the University of Pittsburgh with a
bachelor of science degree. Following his graduation, he joined Ernst &
Ernst (predecessor to Ernst & Whinney), a public accounting firm, where
he held numerous positions, including managing partner of the
Pittsburgh office in 1966 and vice chairman and regional managing
partner of the Mid-Atlantic Region in 1978. He served as co-chairman
and chief operating officer of Ernst & Whinney from 1984 to 1988, when
he retired from active service. He also serves as a director of
Constellation Holdings, Inc. and Meridian International Center. Mr. Kay
serves on the Corporation's Audit and Finance Committees.
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FREDERICK C. LANGENBERG Director Since 1981
Director and Retired Chairman of the Board and Chief Executive Officer,
the Interlake Corporation.
PHOTO Dr. Langenberg, age 68, graduated from Lehigh University with bachelor
of science and master of science degrees in metallurgical engineering
in 1950 and 1951, respectively. He received a Ph.D. degree from The
Pennsylvania State University in metallurgical engineering in 1955 and
took additional courses at Massachusetts Institute of Technology and
Carnegie-Mellon University. Dr. Langenberg joined Interlake, Inc.
(predecessor of The Interlake Corporation) in April 1979 as president
and chief operating officer, became chief executive officer in 1982,
was elected chairman of the board in October 1983, and also serves as a
director of that corporation. He retired as chairman and chief
executive officer in April 1991. From July 1975 until his employment
with Interlake, Dr. Langenberg served as president and director of the
American Iron and Steel Institute. Dr. Langenberg also serves as a
director of Peoples Energy Corporation, Chicago, The Interlake
Corporation and Dietrich Industries. He currently serves as chairman of
the Corporation's Finance Committee and as a member of the Human
Resources Committee.
KATHYRN C. TURNER Director Since December 1994
Chairperson and Chief Executive Officer, Standard Technology, Inc.
PHOTO Ms. Turner, age 48, graduated from Howard University with a bachelor's
degree in chemistry. After graduating, she began her career as a
chemist for the Naval Ordinance Station in Maryland. Ms. Turner became
involved with software development for Control Data Corporation in
1969, then advanced through various technical and management positions
in several firms in the Washington, D.C. area. In 1975, at General
Electric Information Services Company, Ms. Turner moved from systems
engineering to marketing and sales, where she consistently realized
recognition as one of the top twenty revenue producers. Ms. Turner
founded STI, a high-technology, engineering, systems integration, and
manufacturing firm in 1985. STI is headquartered in Rockville,
Maryland, with offices in northern Virginia; Dallas, Texas and
Jacksonville, Florida. In 1991, she was appointed to the Defense Policy
Committee on Trade. In 1993, she was appointed to the Commission on the
Future of Worker-Management Relations, a joint commission of the
Department of Labor and Commerce, established by the President. In
1994, she was appointed to the President's Export Council. She is a
member of the Air Force Women Owned Business Council. Ms. Turner is on
the Board of Directors of Phillips Petroleum Company and the Northern
Virginia Urban League. She is a member of the Corporation's Audit
Committee and Human Resources Committee.
Although the Board of Directors and management do not contemplate that any
of the nominees will be unable to serve, in the event that prior to the
meeting any of the nominees becomes unable to serve because of special
circumstances, the shares of stock represented by the proxies may be voted
for the election of a nominee who shall be designated by the Board.
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The following are the other directors whose terms continue after this
year's meeting, as indicated:
Term to Expire 1996
MARCUS C. BENNETT Director Since 1993
Senior Vice President and Chief Financial Officer, and Director
Lockheed Martin Corporation.
PHOTO Mr. Bennett, age 59, graduated from Georgia Institute of Technology
with a bachelor of science in industrial management. Following his
graduation, he joined Martin Marietta Corporation and advanced through
various engineering and finance positions. Mr. Bennett was appointed
treasurer of the Aerospace Company in January of 1977, then in 1983 he
was promoted to vice president business management, with responsibility
for contracts and finance. He was appointed in 1983 chairman of
International Laser Systems and to the Board of International Light
Metals Corporation (both former majority owned subsidiaries of Martin
Marietta). Mr. Bennett was elected corporate vice president of finance
in February 1984 and named chief financial officer in July 1988. In
addition, he is the current chairman of Orlando Central Park Inc. and
Chesapeake Park, Inc. wholly owned subsidiaries of Lockheed Martin.
Currently, Mr. Bennett serves on the board of directors of Lockheed
Martin. He is chairman of the board of directors of Martin Marietta
Materials, majority owned publicly traded subsidiary of Lockheed
Martin. He also serves on the board of directors for the Private Sector
Council, is a member of their CFO task force; and he is a member of
MAPI Finance Council, Financial Executive Institute and The Economic
Club of Washington. Mr. Bennett is a member of the Corporation's Human
Resources Committee and Corporate Governance Committee.
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DENNIS M. DRAEGER Director Since 1992
President, Worldwide Floor Products Operations for Armstrong World
Industries, Inc.
PHOTO Mr. Draeger, age 54, graduated from Ohio State University with a
bachelor of science degree in business. Following his graduation, he
joined Armstrong World Industries, Inc., and advanced through various
sales and marketing positions. Mr. Draeger was elected vice president
and general sales manager of the floor division in 1983, elected group
vice president in 1988 and assumed his current global responsibilities
in 1993. In November of 1994, he was named president of Worldwide Floor
Products Operations. He currently serves on the board of directors of
the Boys Club and Girls Club of Lancaster. Mr. Draeger is a member of
the Corporation's Audit Committee and Corporate Governance Committee.
CARL R. GARR Director Since 1977
Director and Retired Chairman of the Board and Chief Executive Officer,
Bank of Pennsylvania.
PHOTO Dr. Garr, age 68, received a bachelor of science degree from Kent State
University in physics and received a masters degree and doctorate
degree from Case Institute of Technology in physics and metallurgical
engineering, respectively. From 1984 to 1987, Dr. Garr was president
and chief executive officer of The Polymer Corporation, then an
affiliate of Chesebrough-Pond's Inc. He also served as vice president
of Chesebrough-Pond's Inc. from 1984 to 1986. The Polymer Corporation,
now a unit of DSM International, a Dutch corporation, is a producer of
engineering plastics. From 1982 to 1984, Dr. Garr was president and
chief executive officer of Empire Steel Castings, Inc., a producer of
alloy steel castings primarily for the pump and valve industries.
Previously, Dr. Garr held a number of positions with ACF Industries,
Inc., a manufacturer of transportation, energy related and industrial
equipment, including vice president - research and development in 1968;
director, president and chief executive officer of The Polymer
Corporation, then an affiliate of ACF, in 1970; and vice president from
1976 to 1982. He currently serves as chairman of the Corporation's
Audit Committee and serves on the Human Resources Committee.
MARLIN MILLER, JR. Director Since 1989
President, Chief Executive Officer and Director, Arrow International,
Inc.
PHOTO Mr. Miller, age 63, graduated from Alfred University with a bachelor of
science degree in ceramic engineering and received a master's degree in
business administration from Harvard Business School. He served as a
finance officer in the United States Army from 1956 to 1959. In 1959,
he joined Glen-Gery Corporation, a building products company, where he
served as executive vice president and as a director. In 1972, he
joined Connors Investor Services, Inc., an investment management firm.
Mr. Miller founded Arrow International, Inc. in 1975. Arrow is a
leading producer of medical devices for critical care medicine. He is
currently also a director of Arrow International, Inc., CoreStates
Financial Corporation, and Connors Investor Services, Inc. He serves as
a member of the board of trustees of Alfred University and of the
Reading Hospital and Medical Center. Mr. Miller is chairman of the
Corporation's Human Resources Committee and a member of the Finance
Committee.
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Term to Expire 1997
DR. C. McCOLLISTER EVARTS Director Since 1990
Senior Vice President for Health Affairs, Dean, College of Medicine,
and Professor of Orthopaedics, The Pennsylvania State University,
College of Medicine and University Hospitals, The Milton S. Hershey
Medical Center.
PHOTO Dr. Evarts, age 64, received a bachelor's degree in zoology from
Colgate University, and a medical degree from the University of
Rochester School of Medicine and Dentistry. He served his internship
and residency at the University of Rochester Strong Memorial Hospital.
He served as medical officer on the U.S.S. Antietam, and Orthopaedic
Ward Medical Officer at the Great Lakes United States Naval Hospital.
Before coming to The Pennsylvania State University, Dr. Evarts was
professor and chairman of the Department of Orthopaedics and vice
president for development at the University of Rochester School of
Medicine and Dentistry. His special area of interest and expertise is
adult reconstructive surgery. He has published over 185 scientific
articles and is editor of a 2nd edition, five-volume text. Dr. Evarts
is a member of many orthopaedic organizations. Also, he is a
chair-elect of the Board of Directors of the Association of Academic
Health Centers, a member of the Association of American Medical
Colleges, Society of Medical Administrators, and serves on the board of
directors for the National Association of Biomedical Research, the
Hershey Trust, and the Harrisburg Symphony. He is also a member of the
board of managers of the Milton Hershey School, and is a member of a
Health Care Advisory Committee for the United States Congress. He is
currently a member of the Corporation's Audit and Corporate Governance
Committees.
WILLIAM J. HUDSON, JR. Director Since 1992
Chief Executive Officer and President and Director, AMP Incorporated.
PHOTO Mr. Hudson, age 61, has a bachelor of electrical engineering and a
master's certificate in electrical engineering from Cornell University.
He also has earned credit toward a masters in business administration
at Drexel University. Mr. Hudson joined AMP Incorporated in 1961. He
has held a variety of management positions in the U.S. operations and
was a vice president, Asian/Pacific for eight years before becoming
executive vice president, international in 1991, and elected chief
executive officer and president in 1992. He has served on numerous
community and professional organizations, is a director of Capital
Health Foundation and is a director of AMP Incorporated. Mr. Hudson is
chairman of the Corporation's Corporate Governance Committee and a
member of the Human Resources Committee.
9
<PAGE>
PAUL R. ROEDEL Director Since 1973
Director and Retired Chairman of the Board and Chief Executive Officer,
Carpenter Technology Corporation.
PHOTO Mr. Roedel, age 68, received a bachelor's degree in accounting from
Rider College. After joining the Corporation upon his graduation, Mr.
Roedel served in numerous capacities, becoming controller in 1965,
treasurer in 1972, vice president - finance and treasurer in 1973,
executive vice president in 1975, president and chief operating officer
in 1979, president and chief executive officer in 1981, and chairman of
the board and chief executive officer in 1987 until his retirement on
June 30, 1992. In addition to his numerous community activities, Mr.
Roedel serves as a director of Meridian Bancorp, Inc., General Public
Utilities Corporation and P. H. Glatfelter Company. He is chair of the
board of trustees of Gettysburg College. Mr. Roedel currently serves as
a member of the Corporation's Finance Committee.
KENNETH L. WOLFE Director Since April 1995
Chairman of the Board and Chief Executive Officer and Director, Hershey
Foods Corporation.
PHOTO Mr. Wolfe, age 56, graduated from Yale University with a bachelor of
arts degree, and a master's degree in business administration from the
University of Pennsylvania. He joined Hershey Foods Corporation in 1967
and advanced through various finance positions. Mr. Wolfe was elected
vice president, finance and chief financial officer of the corporation
in 1981 and senior vice president and chief financial officer in 1984.
He has been a director with Hershey Foods Corporation since 1984,
chairs the executive committee and serves as a member of the committee
on directors and corporate governance. Mr. Wolfe is a director of
Bausch & Lomb Inc. and Hershey Trust Company and is a member of the
Board of Managers, Milton Hershey School. Mr. Wolfe is a member of the
Corporation's Corporate Governance Committee and Finance Committee.
There is no family relationship between any of the directors or nominees.
10
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth information regarding beneficial ownership
as of September 1, 1995, of the Corporation's common stock of each director,
the five most highly compensated officers and the directors and officers as a
group:
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
<TABLE>
<CAPTION>
Aggregate Number Percent of
of Shares Outstanding
Name Beneficially Owned(2) Shares(4)
---- -------------------- -------------
<S> <C> <C>
Bennett, M. C. ................................. 4,400
Cardy, R. W. ................................... 60,616(a) .4
Draeger, D. M. ................................. 5,200
Evarts, C. M. .................................. 7,200
Garr, C. R. .................................... 9,100
Hudson, W. J., Jr. ............................. 5,400
Humphrey, A. E. ................................ 7,600
Kay, E. W. ..................................... 8,000
Langenberg, F. C. .............................. 13,000(b)
Miller, M., Jr. ................................ 7,800
Roedel, P. R. .................................. 69,688(c) .4
Turner, K. C. .................................. 0
Wolfe, K. L. ................................... 1,000
Bristol, D. C. ................................. 46,670(a) .3
Cottrell, G. W. ................................ 35,945(a) .2
Fiore, N. F. ................................... 30,948(a) .2
Weiler, R. J. .................................. 34,894(a) .2
All directors and officers as a group (24 in all) 399,504(3) .3
</TABLE>
- ------
(1) Excludes fractional shares owned under the Corporation's Dividend
Reinvestment Plan. The amounts also reflect the Corporation's 2-for-1 stock
split effective September 15, 1995, to stockholders of record September 1,
1995.
(2) The amounts include common shares which are subject to outstanding stock
options, exercisable within 60 days of September 1, 1995, as follows: D. C.
Bristol, 35,320 shares; G. W. Cottrell, 30,920 shares; R. W. Cardy, 29,320
shares; R. W. Weiler, 28,840 shares; N. F. Fiore, 27,200 shares; C. R.
Garr, M. Miller, Jr., 7,000 shares each; A. E. Humphrey, 6,600 shares;
C. M. Evarts, F. C. Langenberg, 6,000 shares each; P. R. Roedel, 5,000
shares; D. M. Draeger, 4,200 shares; M. C. Bennett, E. W. Kay, 4,000 shares
each; W.J. Hudson, Jr., 2,000 shares and directors and officers as a group
274,896 shares.
(a) Share ownership for Messrs. Bristol, Cardy, Cottrell, Fiore and Weiler,
respectively, include 2,498, 2,452, 1,127, 10 and 312 shares held under
the Carpenter Technology Savings Plan. Share ownership also includes 58
shares for each individual held under the Employee Stock Ownership Plan
(ESOP), representing the equivalent amount of common stock if the
amounts of the ESOP preferred stock actually held were converted into
common stock using the ratio of one preferred share equal to 2,000
shares of common stock.
(b) Share ownership includes 2,000 shares held in Mrs. Langenberg's estate.
(c) Share ownership shown for Mr. Roedel includes 11,020 shares held under
the Carpenter Technology Savings Plan.
(3) The amount shown for all officers as a group represents 9,311 shares held
under the Carpenter Technology Savings Plan; and 638 shares held under the
Employee Stock Ownership Plan (ESOP), representing the equivalent amount of
common stock if the amounts of the ESOP preferred stock actually held were
converted into common stock using the ratio of one preferred share equal to
2,000 shares of common stock.
(4) Less than 0.1% except where indicated.
11
<PAGE>
The Revenue Reconciliation Act of 1993 limits the annual deduction that a
publicly held corporation may take for certain types of compensation paid or
accrued with respect to certain executives to $1 million per year per
executive for taxable years beginning after December 31, 1993. The
Corporation does not believe that compensation paid currently to its
executives is affected by such limitation.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation paid by the Corporation during the fiscal years ended June 30,
1995, 1994 and 1993 to the Corporation's chief executive officer and each of
the Corporation's four other most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
---------------------------------- --------------------------------------
Awards Payouts All
-------------------------- --------- Other
Re- Securities Compen-
Name and Other stricted Underlying sation
Principal Fiscal Salary Bonus Annual Stock $ Options/ LTIP ($)
Position Year $ $ Comp. $ (1)(2) SARs #(2) $ (3)
---------------------- -------- --------- --------- --------- ---------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert W. Cardy 1995 374,404 259,835 0 130,250 20,000 0 4,468
Chairman, President, 1994 347,596 189,440 0 105,053 13,920 0 6,658
and CEO 1993 324,424 123,281 0 125,029 15,400 0 7,916
Donald C. Bristol 1995 237,249 131,198 0 41,029 7,600 0 4,619
Senior Vice President 1994 227,834 98,880 0 45,885 6,080 0 6,854
Steel Division 1993 192,213 52,974 0 61,703 7,600 0 5,766
G. Walton Cottrell 1995 187,592 90,417 0 29,958 5,600 0 4,632
Senior Vice President 1994 178,000 67,284 0 33,206 4,280 0 5,340
Finance & CFO 1993 170,308 42,691 0 40,594 5,000 0 5,109
Nicholas F. Fiore 1995 182,208 87,821 0 29,306 5,400 0 4,643
Senior Vice President 1994 172,354 65,150 0 38,640 5,020 0 5,171
Strategic Businesses 1993 164,077 41,203 0 40,594 5,000 0 4,922
Richard J. Weiler 1995 165,485 68,014 0 23,119 4,200 0 4,562
Vice President 1994 159,237 51,433 0 24,150 3,200 0 4,805
Business Development 1993 153,924 35,403 0 27,063 4,000 0 4,618
Steel Division
</TABLE>
- ------
(1) 7,790 common shares awarded in the aggregate to the named officers on June
28, 1995, valued at $32.5625 per share. 8,180 common shares awarded in the
aggregate to the named officers on June 22, 1994, valued at $30.1875 per
share. 10,900 common shares awarded in the aggregate to the named officers
on June 22, 1993, valued at $27.0625 per share. At the end of fiscal year
1995, Messrs. Cardy, Bristol, Cottrell, Fiore, and Weiler, respectively,
held 12,100, 5,060, 3,520, 3,680, and 2,510 shares of restricted stock
valued at $412,156, $172,356, $119,900, $125,350, and $85,497 based on the
June 30, 1995, closing price of $34.0625. Shares are scheduled to vest at
20% per year over five years. Dividends on all stock awards are paid at the
same rate as paid to all stockholders.
(2) All calculations of the number and value of shares reflect the
Corporation's 2-for-1 stock split effective September 15, 1995, to
stockholders of record September 1, 1995.
(3) Amounts of All Other Compensation are amounts contributed for fiscal 1995,
1994 and 1993 for the named officers under the Corporation's Savings Plan.
Any key employee or director may elect to defer a portion or all of his or
her compensation, subject to the terms of the Corporation's deferred
compensation plans. Deferral may be, at the Participant's election, until the
key employee's or director's termination of services, or the date of his or
her death, or any other date or event certain to occur. Amounts deferred will
earn interest and are payable in 10 or 15 annual installments or in a lump
sum, at the Participant's election.
12
<PAGE>
The Corporation entered into Special Severance Agreements dated April 3,
1995, with Robert W. Cardy, Donald C. Bristol, G. Walton Cottrell and
Nicholas F. Fiore. Under such Agreements, if a named officer's employment is
terminated after a "change in control" of the Corporation, he will receive
his full salary and all other bonuses, pension and other benefits through the
termination date plus, if the termination is by the Corporation (other than
for cause) or by the named officer for good reason, he will receive an
additional lump sum payment equal to two years' salary, bonus and pension
benefits and the value of all outstanding options and restricted stock,
whether or not then vested. The Special Severance Agreements continue until
December 31, 1998 and automatically renew for additional one-year periods,
subject to termination upon appropriate notice.
HUMAN RESOURCES COMMITTEE REPORT
The Human Resources Committee of the Board of Directors (the "Committee")
is composed entirely of non-management directors, and the Committee is
responsible for the establishment and oversight of the Corporation's
executive compensation and equity compensation programs.
COMPENSATION PHILOSOPHY
The Corporation's executive compensation programs are designed to fulfill
the following objectives:
-- Attract, retain, and motivate highly effective executives
-- Reward sustained corporate, functional, and/or individual performance
with an appropriate base salary and incentive opportunity
-- Increase management ownership in the Corporation
-- Link executive reward with stockholder value and profitability
-- Communicate the Corporation's goals through performance measures linked
to pay that focus executives on achievement of business objectives.
Each year, the Committee conducts a review of the Corporation's executive
compensation program for appropriateness and competitiveness.
There are three components of executive compensation reviewed by the
Committee: base salary, annual incentive awards, and long-term incentive
awards. The combination of these programs produces total direct compensation.
The Corporation's compensation philosophy is to pay at market competitive
levels for achieving planned performance. Market comparisons include general
industry, metals companies, and a select group of capital intensive companies
that are approximately the same size as the Corporation. More emphasis is
placed on general industry than the steel industry. The market comparator
group is a representative sample of organizations used in the performance
graph, but is not identical due to limitations on available data.
Beginning in fiscal year 1993, senior executives had a greater proportion
of their total direct compensation at risk in the form of annual and
long-term incentives. Long-term incentives may consist of stock options,
restricted stock and stock appreciation rights, with guidelines tied to
executive performance, position level and/or continuing employment. Stock
ownership is encouraged to create a true ownership view and to further align
executive and stockholder interests.
BASE SALARY
Base salaries are administered on the basis of performance, with pay
falling within a range determined through market comparisons as described
earlier. Actual base salary as well as increases are based on incumbent
performance, experience, and reference to competitive rates for jobs with
comparable content. Base salary ranges were adjusted by 3% in fiscal year
1996 to reflect competitive market movement. Actual base salary adjustments
for executives varied based on performance, job content, and pay position
within the range. As a group, the named officers' base salaries were
approximately at 100% of market rate medians.
13
<PAGE>
ANNUAL INCENTIVES
The Corporation's executive annual incentive awards include two plans: the
Profit Sharing Plan and the Executive Annual Compensation Plan.
The Profit Sharing Plan of the Corporation allows all eligible employees
to share proportionally in the profits of the Corporation's Steel Division.
The Profit Sharing Plan covers all permanent employees, except those with the
Special Products Division, those in locations outside the United States, and
certain warehouse system employees. Profit Sharing payments are based on
Steel Division performance during the fiscal year and are paid quarterly
based on year-to-date Steel Division pretax profits and base pay. A profit
pool is established equal to 10% of the first $40 million earned year-to-date
in Steel Division pretax profit, plus 20% of the profit above $40 million.
The profit pool is divided by the total base pay paid year-to-date to
Participants to arrive at the profit sharing percentage. Amounts paid to
Participants are determined by multiplying their base pay by the profit
sharing percentage. Payments made for prior quarters of the fiscal year are
deducted from the result to determine the amount of the current quarterly
payment to each Participant. The amount paid for fiscal year 1995 to all
eligible employees was 12.8% of base pay. For executive compensation
purposes, the Profit Sharing Plan is targeted at a 10% payout for Plan
performance. The amounts paid under this Plan to the named officers for
fiscal year 1995 are included in the Summary Compensation Table.
The Executive Annual Compensation Plan provides variable compensation for
designated executives with payments based on corporate financial performance
and individual performance. For fiscal year 1995, the Committee established a
return on equity objective of 16.9% and a target performance threshold level
before any payout was made of 13.5%. The calculation of return on equity
excluded the impact of the startup of Walsin- Cartech Specialty Steel
Corporation, the Corporation's 19% owned joint venture in Taiwan. The
Corporation achieved a 19.7% return on equity in fiscal 1995 excluding the
startup of Walsin-Cartech. The amounts paid under the Executive Annual
Compensation Plan to the named officers for fiscal year 1995 are included in
the Summary Compensation Table.
For fiscal year 1995, the Profit Sharing Plan and the Executive Annual
Compensation Plan compensated the named officer group at approximately 108%
of the market rate medians for incentive compensation.
For fiscal year 1996, the Executive Annual Compensation Plan will be based
on a 21.7% target return on equity performance with a threshold at 80% of
target. The Executive Annual Compensation Plan target payouts to executives
vary in percentage to produce total cash compensation for planned performance
equivalent to the market rate median for total compensation. Corporate
performance determines 80% of the total Executive Annual Compensation Plan
performance and individual performance determines the remaining 20%. Personal
performance is measured against strategic personal performance goals. The
Plan provides the flexibility to grant personal Executive Annual Compensation
Plan awards if the financial threshold is not achieved (subject to Board of
Directors approval).
LONG-TERM INCENTIVES
The Corporation uses equity-based long-term incentives to ensure a
significant portion of total direct compensation is linked to stockholder
value. By emphasizing equity ownership, the Corporation provides an added
linkage between executive and shareholder interests.
The Corporation's long-term incentive plan includes restricted stock,
stock appreciation rights, and both non-qualified stock options and incentive
stock options. Stock options provide executives with incentive for long-term
strategy design and implementation to increase stockholder equity value.
Restricted stock provides executives with a vehicle for increasing stock
ownership. Stock appreciation rights provide incentives for increasing equity
value without the need to issue additional shares.
Grant guidelines provide present values at market competitive levels as
discussed earlier in this section. In determining market values, the
Corporation used data from a national survey that calculates present value of
long-term incentives using a capital asset pricing model. The Black-Scholes
model was used as a secondary reference. Grant guidelines split present
values equally between stock options and restricted stock, using an
equivalency ratio of six option shares to one restricted share. There were no
grants of stock appreciation rights.
14
<PAGE>
For stock awards in 1995, grant guidelines were based on a percentage of
salary ranging from 60 to 180 percent of salary grade classification and
performance without regard to prior grants. Stock options vest 100% in one
year. Restricted shares vest 20% per year over five years and carry dividend
equivalents until vested. Personal performance is measured against strategic
personal performance goals (including, for example, expansion into new
markets and products). The Committee decides on the grant guidelines for each
fiscal year and awards specific grants. Non-qualified stock options will be
used instead of incentive stock options so that the Corporation will be
entitled to a tax deduction upon exercise by the Participant.
CEO COMPENSATION
The CEO's compensation package is consistent with the spirit and
objectives of the Corporation's executive compensation program as follows:
BASE SALARY
As defined earlier, base salaries are administered on the basis of
performance. Under Mr. Cardy's leadership, the Corporation made
significant improvements in operating performance. Earnings per share
(restated to reflect the Corporation's 2-for-1 stock split effective
September 15, 1995) increased to $2.81 in 1995 from $2.15 in 1994, an
increase of 31%, while return on equity increased to 19.3% in 1995 from
16.3% in 1994. Net income rose 31% to $47.5 million in 1995 from $36.3
million in 1994. In addition to improved financial performance, Mr. Cardy
also directed a number of strategic actions (including expansion into
foreign markets and new areas of product development) to position the
Corporation for future growth. As a result, for fiscal year 1996, Mr.
Cardy's annual base salary has been increased by 10% to $415,000,
effective August 1, 1995, and represents 98% of market rate (median) as
described earlier.
ANNUAL INCENTIVES
The CEO received a $47,922 Profit Sharing Plan payout (12.8% of base).
This is the same percentage of base salary payout all eligible employees
received.
The CEO received a $211,913 payout from the Executive Annual
Compensation Plan determined through return on equity and personal
performance.
LONG-TERM INCENTIVES
The disclosed long-term grant is made under the Stock-Based Incentive
Compensation Plan for Officers and Key Employees. The CEO grant includes
(restated to reflect the Corporation's 2-for-1 stock split effective
September 15, 1995) 20,000 shares of non-qualified options, and 4,000
shares of restricted stock. The non-qualified options vest 100% after one
year. The restricted stock shares vest 20% per year over a five-year
period and carry dividend equivalents. This grant is within the guidelines
for the CEO position.
SUBMITTED BY THE HUMAN RESOURCES COMMITTEE OF THE CORPORATION'S BOARD OF
DIRECTORS
Marlin Miller, Jr., Chairman
Marcus C. Bennett
Carl R. Garr
William J. Hudson, Jr.
Frederick C. Langenberg
Kathryn C. Turner
15
<PAGE>
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly change in the
cumulative total stockholder return on the Corporation's common stock against
the cumulative total return of the S&P Composite - 500 Stock Index and the
Peer Group Index for the period of five years commencing June 30, 1990 and
ending June 30, 1995.
STOCKHOLDER RETURN PERFORMANCE TABLE
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(1)
CARPENTER TECHNOLOGY AND S&P 500 AND PEER GROUP
June 30, 1990 to June 30, 1995
(Insert Table)
(1) Assumes that the value of the investment in the Corporation's common stock,
and each index, was $100 on June 30, 1990, and that all dividends were
reinvested.
The Peer Group Index is comprised of the following companies: Allegheny
Ludlum, A.M. Castle, Armco Inc., Slater Industries and The Timken Company.
The Peer Group consists of publicly traded companies which have some
similarity to the Corporation. In particular, the Peer Group companies are
involved in the distribution and/or manufacture of specialty metal products
in the United States and each Peer Group company has a division or unit which
competes or has competed with the Corporation during a portion of the period
shown.
The Total Stockholder Return assumes reinvestment of dividends and the
total return of each company included in the S&P 500 Index and the Peer Group
has been weighted in accordance with the Corporation's market capitalization
as of the end of each respective period. The weighting was accomplished by
(1) calculating the year-end market capitalization for each company based on
the closing stock price and outstanding shares, (2) determining the
percentage that each such market capitalization represents against the total
of such market capitalizations for all companies included in the Index or the
Peer Group as the case may be, and (3) multiplying the percentage determined
in (2) above by the total stockholder return of the company in question for
each respective period.
16
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon the Corporation's review of copies of such reports
furnished to it and upon representations by persons required to file reports
under Section 16(a), to the Corporation's knowledge, all such persons were in
compliance with Section 16(a) filing requirements applicable to such persons
with respect to fiscal year 1995.
RETIREMENT BENEFITS
The General Retirement Plan of the Corporation, as amended, provides for
retirement benefits for employees, including officers, at the age of 65 (with
5 years service), or as early as age 55 (with 15 years service); or at any
age with 30 years service. Pensions are based on the number of years of
service, or on the product of 1.26% times the number of years of service
multiplied by the individual's average earnings during the greater of either
(1) the eight highest earnings years or (2) the five highest consecutive
earnings years, of the last 12 years of continuous service prior to
retirement. For pension purposes individual earnings include all salaries,
bonuses, and extra compensation. As of June 30, 1995, the years of service
credited under the Plan were as follows: Mr. Bristol, 20.8 years; Mr. Cardy,
32.9 years; Mr. Cottrell, 6.3 years; Dr. Fiore, 5.3 years; and Mr. Weiler,
36.6 years. All funds required for the payment of benefits under the Plan are
provided by the Corporation and these funds may be paid into one or more
pension trusts.
The Corporation has established two retirement plans, the Benefit
Equalization Plan and the Earnings Adjustment Plan, for those participants in
the General Retirement Plan for whom benefits are reduced by reason of the
limitations imposed under Section 415 and/or Section 401(a)(17) of the
Internal Revenue Code of 1986, as amended. The Plans will pay the difference
between the amount payable to the Participant under the General Retirement
Plan and the amount which the Participant would have been paid but for the
Section 415 and/or Section 401(a)(17) limitations. In general, benefits under
these Plans are subject to the same terms and conditions as the benefits
payable to the Participant under the General Retirement Plan.
Employees who have been designated by the Board of Directors as
Participants are entitled to receive benefits under the Supplemental
Retirement Plan for Executives. Participants or their beneficiaries are
entitled to receive an annual supplemental retirement benefit for 15 years
commencing in the month following the month in which retirement occurs, or,
at the election of a disabled Participant, commencing at a later specified
date. In the event of the death of the Participant before retirement but
subsequent to the attainment of eligibility for a Normal Retirement or Early
Retirement benefit under the Supplemental Retirement Plan for Executives, the
benefit will be paid to the Participant's beneficiary for the said 15-year
period. The benefit is calculated so that following retirement, Participants
may receive General Retirement Plan benefits, Benefit Equalization Plan
benefits, Earnings Adjustment Plan benefits, Primary Social Security
benefits, pension benefits from any prior employment and supplemental
retirement benefits, the aggregate of which will be equivalent to 60% of the
Participant's earnings (calculated in the same manner as the General
Retirement Plan) if retirement takes place upon the Participant's attaining
30 years' service with the Corporation. However, Mr. Cottrell's benefits are
calculated without regard to pension benefits from prior employment. Messrs.
Bristol, Cardy, Cottrell, Fiore and Weiler have been designated Participants
in the Plan.
The Officers' Supplemental Retirement Plan of the Corporation provides
supplemental pension benefits to certain key employees who qualify for
benefits under the General Retirement Plan and for whom benefits under the
General Retirement Plan are reduced by reason of amounts deferred pursuant to
the Deferred Compensation Plan. The Officers' Supplemental Retirement Plan
will pay the difference between the amount payable (prior to application of
Internal Revenue Code limitations) to the Participant under the General
Retirement Plan and the amount which the Participant would have been paid by
disregarding the above-mentioned deferred compensation. Benefits under this
Plan are subject to the same terms and conditions as the benefits payable to
the Participant under the General Retirement Plan.
17
<PAGE>
The following table illustrates the total annual retirement benefits
payable under the retirement plans described in this Section. All such
retirement plans are payable for the life of the Participant and, if
applicable, the life of a survivor with the exception of the Supplemental
Retirement Plan for Executives which is payable for 15 years certain.
<TABLE>
<CAPTION>
Average Annual
Earnings for the Annual Gross Pension Benefits
Applicable Years of for Years of Service Shown(1)
Service Period ---------------------------------------------------------------
Preceding Retirement 15 Years 20 Years 25 Years 30 Years 35 Years
-------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$125,000 ........... $ 70,375 $ 75,000 $ 75,000 $ 75,000 $ 76,563
150,000 ........... 84,450 90,000 90,000 90,000 91,875
175,000 ........... 98,525 105,000 105,000 105,000 107,188
200,000 ........... 112,600 120,000 120,000 120,000 122,500
250,000 ........... 140,750 150,000 150,000 150,000 153,125
300,000 ........... 168,900 180,000 180,000 180,000 183,750
350,000 ........... 197,050 210,000 210,000 210,000 214,375
400,000 ........... 225,200 240,000 240,000 240,000 245,000
450,000 ........... 253,350 270,000 270,000 270,000 275,625
500,000 ........... 281,500 300,000 300,000 300,000 306,250
</TABLE>
- ------
(1) Amounts payable under the General Retirement Plan that exceed the maximum
permitted by the Internal Revenue Code are paid under the Benefit
Equalization Plan and/or the Earnings Adjustment Plan. A pension based on
the amount of any deferred compensation is paid under the Officers
Supplemental Retirement Plan.
The Corporation has established a retirement plan for directors who have
at least three years of service with the Corporation as a director and who
are not entitled to receive benefits under any other pension plan of the
Corporation. The Plan provides an annual benefit equal to the basic director
annual retainer fee in effect at the time of the director's departure from
the Board. This benefit, payable only during the lifetime of the Participant,
continues for a period equal to the amount of time the director was an active
director up to a maximum of ten years, during which period the Participant
will be available to the Chief Executive Officer for consultation.
Trust agreements have been established by the Corporation with Chase
Manhattan Bank (as Trustee) to assure the satisfaction of the obligations of
the Corporation under the non-qualified retirement benefit and deferred
compensation plans previously described, to present and future participants,
including the named officers, and to assure the satisfaction of the
obligations of the Corporation to present and future participants under the
Director Retirement Plan and the Deferred Compensation Plan for
Non-Management Directors of Carpenter Technology Corporation. The Corporation
has purchased Corporate-Owned Life Insurance (COLI) on the lives of certain
key executives, including the named officers. These policies have been
assigned to the trusts with the Trustee granted authority to manage these
policies as Trust-Owned Life Insurance (TOLI) and to use the proceeds to pay
benefits under these same non-qualified retirement benefit and deferred
compensation plans.
CARPENTER TECHNOLOGY CORPORATION SAVINGS PLAN
The Savings Plan is a profit sharing plan established pursuant to Sections
401(a) and 401(k) of the Internal Revenue Code. Under this Plan, the
Corporation contributes 3% of the base pay of each eligible employee,
including officers, to a trustee for investment into one or more
pre-established investment funds as the Participant may choose. In addition,
a Participant may authorize the Corporation to make further salary deferral
contributions, limited to the lesser of $9,240 (the same as in calendar 1994)
or 17% of total pay. Amounts in the Summary Compensation Table include such
amounts deferred. Participants may also invest up to 17% of total
compensation pursuant to the provisions of Section 401(a). The maximum
combined allowable savings rate for a Participant may not exceed 17% of total
pay.
Withdrawals of contributions and earnings from the Savings Plan may be
made at the Participant's discretion from funds invested under the provisions
of Section 401(a) or, in the event of hardship or attainment of age 59 1/2 ,
from funds invested under the provision of Section 401(k). Other
distributions may occur following separation from service or the occurrence
of a permanent disability. In addition, loans to a Participant from his or
her Section 401(k) fund are available.
18
<PAGE>
EMPLOYEE STOCK OWNERSHIP PLAN
The Carpenter Technology Corporation Employee Stock Ownership Plan (ESOP)
was established on September 6, 1991. The Trustee of the ESOP, State Street
Bank and Trust Company, purchased 461.5384615 shares of series A convertible
preferred stock from the Corporation at a price of $65,000 per share, or an
aggregate purchase price of approximately $30 million, for a fifteen year
note issued by the Trustee to the Corporation and a small amount of cash.
The following discussion of the ESOP contains adjustments to reflect the
2-for-1 split of the Corporation's common stock effective September 15, 1995
for stockholders of record on September 1, 1995.
The shares of series A convertible preferred stock have a liquidation
preference of $65,000 per share, plus any accrued and unpaid dividends.
Dividends on the preferred stock are paid annually and accrue quarterly at
the rate of the higher of (1) $1,340.625 per share of preferred stock or (2)
the dividends paid for such quarter on the number of shares of common stock
into which the share of preferred stock is convertible. Each share of
preferred stock is convertible, at the Trustee's option, into at least 2,000
shares of common stock at a conversion price of $32.50 per share of common
stock. The conversion price (and the conversion ratio) will be adjusted to
reflect any future stock splits, stock dividends, combinations,
reclassifications, certain distributions of rights or warrants and certain
other issuances of stock or stock repurchases with respect to the common
stock. The preferred stock votes together with the common stock as a single
class on matters upon which the common stock is entitled to vote and has the
equivalent of 1.3 votes per share of the common stock into which it is
convertible, subject to anti-dilution adjustments and to limitations under
applicable securities laws and stock exchange regulations. The ESOP preferred
shares are divided into units, representing a fraction (1/2000) of each
convertible preferred share. Each ESOP unit is convertible into one whole
share of common stock. On the effective date of the ESOP, September 6, 1991,
an initial unit allocation was made to each eligible employee. Additional
units are allocated among employees as the loan is repaid. Generally, only
those employees who are actively employed with the Corporation on the last
day of the Plan year, December 31, will receive an allocation in respect of
such Plan year. The funds used by the ESOP to repay the ESOP loan are
acquired from contributions by the Corporation and dividends on the shares
held by the ESOP.
ESOP participants are fully vested in their accounts after five years of
employment with the Corporation. Any participants who terminate employment
with the Corporation after vesting are guaranteed the greater of the floor
redemption value or the current equivalent common share price of the units.
Participants who terminate employment before vesting forfeit their accounts
and their units are reallocated to remaining ESOP Participants' accounts.
During fiscal 1995, 18.4892 (post-split basis) units of ESOP preferred stock
(including dividends) were allocated to each of the accounts of Messrs.
Bristol, Cardy, Cottrell, Fiore and Weiler.
STOCK OPTIONS
The Corporation had three incentive stock option plans in effect during
the fiscal year, i.e., the Stock-Based Incentive Compensation Plan for
Officers and Key Employees, adopted at the 1993 Annual Meeting by the
stockholders (the "1993 Plan"), the Incentive Stock Option Plan for Officers
and Key Employees, adopted in June 1982 (the "1982 Plan"), and the Management
and Officers Capital Appreciation Plan adopted in May 1977 (the "1977 Plan").
The 1993 Plan provides that the Board of Directors may grant incentive stock
options, non- qualified stock options, stock appreciation rights and
restricted stock, and will determine the terms and conditions of each grant.
Options granted under this Plan must be at no less than market value on the
date of grant, are exercisable after one year of employment following the
date of grant, and will expire no more than ten years after the date of
grant. Incentive stock options granted during the ten-year term of the Plan
may not exceed 1,000,000 (post-split basis) shares plus any shares cancelled
or expired. The number of shares available annually for awards under this
Plan is limited to one percent of the common shares outstanding at the end of
the preceding fiscal year plus shares available, but not awarded, during the
preceding two years and any shares or options forfeited, expired or
terminated. The restricted stock awarded vests equally at the end of each
year of employment during the five-year period from the date of grant. As of
June 30, 1995 and 1994, 10,186 (post-split basis) and 21,164 (post-split
basis) shares, respectively, were reserved for options and restricted stock
which may be granted under this Plan.
19
<PAGE>
The 1982 Plan automatically expired in June 1992, in accordance with its
terms, i.e., ten years after its adoption on June 10, 1982. However, all
outstanding, unexpired options granted under the 1982 Plan prior to its
termination remain in effect in accordance with its terms. Under the 1982 and
1977 plans, options are granted at the market value of the Corporation's
common stock on the date of grant, and are exercisable after one year of
employment following the date of grant. Options granted under the 1982 Plan
expire five years after grant if granted prior to August 9, 1990, and all the
options granted since that date expire ten years after grant. Options granted
under the 1977 Plan expire ten years after grant. At June 30, 1995, and 1994,
284,720 (post-split basis) shares were reserved for options under the 1977
Plan.
All three Plans contain change in control provisions which provide that,
in the event of a change in control of the Corporation, previously granted
stock options vest and become immediately exercisable and, for the 1993 Plan,
any remaining restrictions on restricted stock shall immediately lapse, and
each SAR then outstanding shall be fully exercisable for the sixty-day period
immediately following the occurrence of the Change in Control Event using the
Change in Control Price to determine the spread.
The following table shows as to the named officers, certain information
with respect to stock options and stock appreciation rights granted as of the
end of fiscal year 1995. Each stock appreciation right entitles the holder to
receive a payment in cash or the Corporation's common stock, upon the
exercise of the underlying stock option, in an amount equivalent to the
excess of the market value over the option price of the Corporation's common
stock at the date exercised. The method of payment of stock appreciation
rights is determined by the Board of Directors at the time of grant. There
are currently no stock appreciation rights outstanding.
20
<PAGE>
STOCK OPTIONS / SAR GRANTS IN FISCAL YEAR 1995
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------
Number of % of
Securities Total Options/ Exercise
Underlying SARs Granted to or Base Grant Date
Options/SARs Employees in Price Expiration Present
Name Granted(1)(2) Fiscal Year ($/SH)(2) Date Value(3)
------------------- -------------- --------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Robert W. Cardy ... 20,000 15.3% $32.562 06/28/2005 $149,400
Donald C. Bristol .. 7,600 5.8% $32.562 06/28/2005 $ 56,772
G. Walton Cottrell.. 5,600 4.3% $32.562 06/28/2005 $ 41,832
Nicholas F. Fiore... 5,400 4.1% $32.562 06/28/2005 $ 40,338
Richard J. Weiler... 4,200 3.2% $32.562 06/28/2005 $ 31,374
</TABLE>
- ------
(1) Options granted under this Plan must be at no less than market value on the
date of grant, are exercisable after one year of employment following the
date of grant, and will expire no more than ten years after the date of
grant.
(2) The amounts reflect the Corporation's 2-for-1 stock split effective
September 15, 1995, to stockholders of record September 1, 1995.
(3) Based on the Black-Scholes option pricing model adapted for use in valuing
officer stock options. The actual value, if any, an executive may realize
will depend on the excess of the stock price over the exercise price on the
date the option is exercised, so that there is no assurance the value
realized by an executive will be at or near the value estimated by the
Black-Scholes model. The estimated values under that model are based on
arbitrary assumptions as to variables such as stock price volatility,
interest rates, and future dividend yield. Specifically, the Black-Scholes
evaluation employed the following factors: risk-free rate of return of
6.17% based upon the ten-year T-Bill rate as of grant date, dividend yield
of 3.69% based upon average annual dividend payout for the prior two years
(from grant date), exercise term of ten years, stock price volatility of
18.3% based upon the quarterly stock price for the prior three years (from
grant date), no adjustments have been made for transferability of risk or
forfeiture of the options.
STOCK OPTIONS / SAR EXERCISES AND YEAR END HOLDINGS
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Shares Options/SARs at Options/SARs at
Acquired Fiscal Year End(1) Fiscal Year End(3)
on Exercise Value -------------------------------- --------------------------------
Name (#)(1) Realized Exercisable Unexercisable Exercisable Unexercisable
------------------- ------------- ---------- ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Cardy ... 2,000 $12,500 61,620 20,000 $465,446 $30,000
Donald C. Bristol... 35,320 7,600 $286,632 $11,400
G. Walton Cottrell.. 30,920 5,600 $257,458 $ 8,400
Nicholas F. Fiore... 27,200 5,400 $217,429 $ 8,100
Richard J. Weiler... 28,840 4,200 $246,273 $ 6,300
</TABLE>
- ------
(1) The amounts reflect the Corporation's 2-for-1 stock split effective
September 15, 1995, to stockholders of record September 1, 1995.
(2) Calculated as fair market value at exercise minus grant price.
(3) Based on June 30, 1995 market closing price of $34.0625 per share of common
stock.
21
<PAGE>
The Corporation also has in effect the 1990 Stock Option Plan for
Non-Employee Directors ("Directors Option Plan"), which was adopted on August
9, 1990, and approved by the stockholders at the 1990 Annual Meeting of
Stockholders. The Plan provides for the grant by the Corporation of
non-qualified options to the directors of the Corporation who are not
otherwise employees of the Corporation to purchase shares of common stock at
not less than the fair market value of the common stock at the date of the
grant. The aggregate number of shares of common stock which may be issued
pursuant to the exercise of options granted was limited to 90,000 shares
(pre-split basis) of which 44,500 shares (pre-split basis) remain available
for issuance, subject to certain adjustments made by the Board of Directors
pursuant to the Plan. On August 9, 1990, each non-employee director was
granted an initial option to purchase 2,000 shares (pre-split basis). Any
non-employee director who joined the Board of Directors after that date was
granted an option to purchase 2,000 shares (pre-split basis). In addition,
each non-employee director was granted an option to acquire 500 shares
(pre-split basis) of common stock after each annual meeting. Options are
exercisable only after the director has completed one year of service on the
Board of Directors since the date of grant, and expire ten years from the
date of the grant unless sooner exercised or terminated pursuant to the terms
of the Plan. There is a provision in the Plan which provides that, in the
event of a change in control of the Corporation, options previously granted
vest and become immediately exercisable.
Under Proposal No. 3 of this proxy statement, the stockholders have been
asked to approve certain amendments to the Directors Option Plan. The
amendments (1) increase the number of options to be granted to each director
after each annual meeting from 500 to 1,000 shares (pre-split basis) which
would be 2,000 shares on a post-split basis and (2) increase the number of
shares reserved for options not yet granted from 44,500 shares (pre-split
basis) to 180,000 shares on a post-split basis.
PROPOSAL NO. 2
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Unless otherwise specified by the stockholders, the shares of stock
represented by the proxies will be voted for the approval of the appointment
of Coopers & Lybrand L.L.P. ("Coopers & Lybrand"), a firm of independent
accountants, to audit and report upon the financial statements of the
Corporation for fiscal year 1996. Coopers & Lybrand has been the independent
accountants of the Corporation since 1918 and, in the opinion of the Board of
Directors and management, is well qualified to act in this capacity.
Audit services performed by Coopers & Lybrand in fiscal year 1995 included
audits of the financial statements of the Corporation and certain of the
pension and other employee benefit plans of the Corporation, limited reviews
of quarterly financial statements of the Corporation and other accounting
related matters. Fees and expenses in fiscal year 1995 for these audit
services were $439,000.
A representative of Coopers & Lybrand is expected to be present at the
annual meeting. The representative will have the opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions. The Corporation has been advised by Coopers & Lybrand
that the firm has no financial interest, direct or indirect, in the
Corporation, except its providing tax counseling, acquisition auditing, and
independent accounting services during the period stated.
The Board of Directors recommends that stockholders vote FOR the approval of
the appointment of Coopers & Lybrand as independent accountants.
22
<PAGE>
PROPOSAL NO. 3
APPROVAL OF AMENDMENT TO THE NON-QUALIFIED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
On October 30, 1990, the stockholders approved the Non-Qualified Stock
Plan for Non-Employee Directors ("Directors Option Plan") which provided that
each eligible director would be granted an option to acquire 500 shares
(pre-split basis) of common stock immediately after each annual meeting of
the Corporation's stockholders. After review of the purposes of the Directors
Option Plan, the Board of Directors at its August 10, 1995, meeting (1)
approved an amendment increasing the number of options to be granted each
year from 500 shares (pre-split basis) of common stock to 1,000 shares
(pre-split basis) of common stock, which is equivalent to 2,000 shares
(post-split basis), (2) approved an amendment increasing the total number of
remaining shares reserved for grant to 180,000 shares (post-split basis), and
(3) directed that these amendments are subject to stockholder approval
through adoption of the following resolutions at the 1995 Annual Meeting of
Stockholders:
RESOLVED, that the stockholders of Carpenter Technology Corporation
hereby approve the amendment of the Non-Qualified Stock Plan for
Non-Employee Directors, increasing the number of granted options annually
to acquire shares of common stock from 500 (pre-split basis) to 2,000
(post-split basis) shares; and
FURTHER RESOLVED, that the total number of shares reserved with respect
to options not yet granted under the Non-Qualified Stock Option Plan for
Non-Employee Directors shall be increased from 44,500 shares (pre-split
basis) to 180,000 shares (post-split basis) as recommended by the Board of
Directors of the Corporation.
The Board of Directors believes that the amendment to increase the option
grants from 500 shares (pre- split basis) of common stock to 2,000 shares
(post-split basis) of common stock to Directors of Carpenter Technology
Corporation will, (1) make the Directors Option Plan more comparable with
competitive practice, (2) further increase the Eligible Director's incentive
to contribute to the future success of the Corporation, and (3) further align
the interest of the director with those of the stockholder.
The Board of Directors recommends that stockholders vote FOR the Proposal
to amend the Non-Qualified Stock Option Plan For Non-Employee Directors.
1996 STOCKHOLDER PROPOSALS
In the event that a stockholder desires to have a proposal included in the
proxy statement for the 1996 Annual Meeting of Stockholders, the proposal
must be received by the Corporation in writing on or before June 1, 1996, by
certified mail, return receipt requested, and must comply in all respects with
applicable rules and regulations of the Securities and Exchange Commission,
the laws of the state of Delaware and the Corporation's By-Laws relating to
such inclusion. Stockholder proposals may be mailed to the Corporate Secretary,
Carpenter Technology Corporation, 101 West Bern Street, Reading, PA 19601.
OTHER BUSINESS
The Board of Directors and management know of no matters to be presented
at the meeting other than those set forth in this proxy statement. However,
if any other business is properly brought before the meeting or any
adjournment thereof, the proxy holders will vote in regard thereto according
to their discretion insofar as such proxies are not limited to the contrary.
By order of the Board of Directors.
JOHN R. WELTY
Secretary
23
<PAGE>
MAP
<PAGE>
CARPENTER TECHNOLOGY CORPORATION
Proxy Solicited on Behalf of the Board of Directors
for the Annual Meeting October 23, 1995
The undersigned stockholder of Carpenter Technology Corporation appoints
P PAUL R. ROEDEL and JOHN R. WELTY, or either of them, proxies with full
R power of substitution, to vote all shares of stock which the stockholder
O would be entitled to vote if present at the Annual Meeting of Stockholders
X of CARPENTER TECHNOLOGY CORPORATION to be held at the Muhlenberg Township
Y Senior High School auditorium, Laureldale, Pennsylvania, on Monday, October
23, 1995 at 4 p.m., local time, and at any adjournments thereof, with all
powers the stockholder would possess if present. The stockholder hereby
revokes any proxies previously given with respect to such meeting.
Election of Directors. Comments: (change of address)
----------------------------------------
Nominees -- Term to Expire 1998 ----------------------------------------
Robert W. Cardy (If you have written in the above space,
Arthur E. Humphrey please mark the corresponding box on the
Edward W. Kay reverse side of this card.)
Frederick C. Langenberg
Kathryn C. Turner
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE, BUT IF NO
SPECIFICATION IS MADE, IT WILL BE VOTED FOR PROPOSALS 1, 2 and 3 AND WILL BE
VOTED IN THE DISCRETION OF THE PROXIES ON OTHER MATTERS AS MAY COME BEFORE
THE MEETING OR ANY ADJOURNMENT THEREOF.
THIS CARD ALSO CONSTITUTES VOTING INSTRUCTIONS FOR ANY SHARES HELD FOR THE
STOCKHOLDER IN THE FOLLOWING: CARPENTER TECHNOLOGY CORPORATION'S EMPLOYEE
STOCK OWNERSHIP PLAN, SAVINGS AND STOCK-BASED INCENTIVE COMPENSATION PLANS.
(PLEASE DATE AND SIGN ON REVERSE SIDE.)
FOLD AND DETACH HERE
GRAPHIC
SERVICES AVAILABLE
TO ASSIST OUR STOCKHOLDERS
Electronic Funds Transfer (DIRECT DEPOSIT) of Dividends
| | Dividend monies deposited directly into your bank account.
| | No worry of lost dividend checks.
| | Immediate access of dividend money, no mail delays.
| | Verification of dividend receipts on monthly bank statement.
Dividend Reinvestment Plan
| | Dividends automatically reinvested to purchase additional shares of
Carpenter common stock.
| | Invest all or only a portion of your dividends.
| | Invest a maximum of $60,000 in voluntary cash payments per year.
| | Make voluntary cash investments as frequently as every month.
| | Deposit your Carpenter common stock certificates for safekeeping, free of
charge.
The Dividend Reinvestment Plan offers you three options to increase your
investment in Carpenter Technology Corporation Common Stock. Depending on
your personal financial goals, you can enroll in any option of the Plan
which is administered by First Chicago Trust Company of New York. Carpenter
pays all brokerage commissions and administrative costs for purchases of
Carpenter common stock under the Plan.
--------------------------------------------------------------------------
To attain an Electronic Funds Transfer Authorization Form or a Dividend
Reinvestment Plan brochure and Authorization Form, please contact:
Carpenter Shareholder Services
First Chicago Trust Company
P.O. Box 2500
Jersey City, NJ 07303-2500
Be sure to include a reference to Carpenter in your correspondence.
If you prefer, you may call First Chicago at (201) 324-0498 between 9:00
a.m. and 6:00 p.m. Eastern Time.
<PAGE>
Please mark your 0276
|X| votes as in this
example.
This proxy, when properly executed, will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR election of
directors and FOR proposals 2 and 3.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR all nominees and proposals 1, 2,
and 3.
- -----------------------------------------------------------------------------
FOR WITHHELD
1. Election of | | | |
Directors.
(See Reverse)
To withhold your vote for any nominee(s),
write the name(s) here:
---------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of | | | | | |
independent
accountants.
3. Approval of FOR AGAINST ABSTAIN
amendment to the | | | | | |
Non-Qualified Stock
Option Plan For
Non-Employee
Directors.
4. In the discretion of the proxies named herein, the proxies are authorized
to vote upon other matters as are properly brought before the meeting.
- --------------------------------------------------------------------------------
I plan YES NO
to attend the | | | |
Meeting.
The signer hereby revokes all proxies
heretofore given by the signer to vote at said
meeting or any adjournments thereof.
Please sign exactly as your name appears
hereon. Joint owners should each sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title
as such.
---------------------------------------------
---------------------------------------------
SIGNATURE(S) DATE
<PAGE>
THIS IS YOUR PROXY. YOUR VOTE IS IMPORTANT.
GRAPHIC
ADMISSION TICKET
ANNUAL MEETING
OF
STOCKHOLDERS OF CARPENTER TECHNOLOGY CORPORATION
MONDAY, OCTOBER 23, 1995
4:00 P.M.
AUDITORIUM
MUHLENBERG TOWNSHIP SENIOR HIGH SCHOOL
LAURELDALE (NORTH OF THE CITY OF READING)
PENNSYLVANIA
- --------------------------------------------------------------------------------
AGENDA
o Election of five Directors.
o Approving the appointment of independent accountants of the Corporation
for the
fiscal year ending June 30, 1996.
o Approving an amendment to the Non-Qualified Stock Option Plan For
Non-Employee Directors.
o Transacting such other business as may properly come before the meeting.
- --------------------------------------------------------------------------------
It is important that your shares are represented at this meeting, whether or not
you attend the meeting in person. To make sure your shares are represented, we
urge you to complete and mail the proxy card above.
- --------------------------------------------------------------------------------
If you plan to attend the 1995 Annual Meeting of Stockholders, please mark
the appropriate box on the proxy card above.
Present this ticket to the Carpenter Technology Corporation representative at
the entrance to the Muhlenberg Township Senior High School Auditorium.
- --------------------------------------------------------------------------------
