<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
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
240.142-12
CRANE CO.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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(i)(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>
[CRANE LOGO]
CRANE CO. 100 FIRST STAMFORD PLACE, STAMFORD, CONNECTICUT 06902
April 5, 1994
DEAR CRANE CO. SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of the Shareholders
of Crane Co., to be held at 10:00 a.m. Eastern Daylight Time on Monday, May 9,
1994, at the Sheraton Stamford Hotel, Freedom II Meeting Room, One First
Stamford Place, Stamford, Connecticut.
The Notice of Meeting and Proxy Statement on the following pages describe
the matters to be presented to the meeting. Management will report on current
operations and there will be an opportunity for discussion of the Company and
its activities. Our 1993 Annual Report also accompanies this proxy statement.
It is important that your shares be represented at the meeting regardless of
the size of your holdings. If you are unable to attend in person, we urge you to
participate by voting your shares by proxy. You may do so by filling out and
returning the enclosed proxy card.
Sincerely,
[Signature]
R.S. EVANS
CHAIRMAN,
CHIEF EXECUTIVE OFFICER
AND PRESIDENT
<PAGE>
CRANE CO.
100 FIRST STAMFORD PLACE
STAMFORD, CONNECTICUT 06902
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 9, 1994
April 5, 1994
To The Shareholders of Crane Co.:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of the Shareholders of Crane
Co. will be held at the Sheraton Stamford Hotel, Freedom II Meeting Room, One
First Stamford Place, Stamford, Connecticut on Monday, May 9, 1994 at 10:00
a.m., Eastern Daylight Time, for the following purposes:
1. To elect three Directors to serve for three year terms until the Annual
Meeting of Shareholders in 1997.
2. To consider and act upon a proposal to approve the selection of Deloitte
& Touche as independent auditors for the Company for 1994.
3. To consider and act upon a proposal to approve the Company's EVA
Incentive Compensation Plan for Executive Officers.
4. To transact such other business as may properly come before the meeting
in connection with the foregoing or otherwise.
The Board of Directors has fixed the close of business on March 16, 1994, as
the record date for the purpose of determining shareholders entitled to notice
of and to vote at said meeting or any adjournment thereof. A complete list of
such shareholders will be open to the examination of any shareholder during
regular business hours for a period of ten days prior to the meeting at the
offices of the Company at 100 First Stamford Place, Stamford, Connecticut.
In order to assure a quorum, it is important that shareholders who do not
expect to attend the meeting in person fill in, sign, date and return the
enclosed proxy in the accompanying envelope.
By Order of the Board of Directors,
PAUL R. HUNDT
SECRETARY
IF YOU EXPECT TO ATTEND THE MEETING IN PERSON, WE REQUEST THAT YOU WRITE
FOR YOUR CARD OF ADMISSION TO THE SECRETARY, CRANE CO., 100 FIRST STAMFORD
PLACE, STAMFORD, CONNECTICUT 06902. YOU MAY USE THE ENCLOSED ENVELOPE.
<PAGE>
CRANE CO.
100 FIRST STAMFORD PLACE
STAMFORD, CONNECTICUT 06902
-------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 9, 1994
The enclosed proxy is solicited by the Board of Directors of Crane Co. (the
"Company") for use at the Annual Meeting of Shareholders to be held at the
Sheraton Stamford Hotel, Freedom II Meeting Room, One First Stamford Place,
Stamford, Connecticut, on Monday, May 9, 1994, at 10:00 a.m., Eastern Daylight
Time, or at any adjournment thereof. The enclosed proxy, properly executed and
received by the Secretary prior to the meeting, and not revoked, will be voted
in accordance with the directions thereon or, if no directions are indicated,
the proxy will be voted for each nominee for election as a director; for
approval of the selection of Deloitte & Touche as independent auditors for the
Company for 1994; and for the proposal to approve the Company's EVA Incentive
Plan for Executive Officers. If any other matter should be presented at the
Annual Meeting upon which a vote may properly be taken, the shares represented
by the proxy will be voted with respect thereto in accordance with the
discretion of the person or persons holding such proxy. Proxies may be revoked
by shareholders at any time prior to the voting of the proxy by written notice
to the Company, by submitting a new proxy, or by personal ballot at the meeting.
The first date on which this proxy statement and enclosed form of proxy are
being sent to the Company's shareholders is on or about April 5, 1994.
OUTSTANDING SHARES AND REQUIRED VOTES. As of the close of business on March
16, 1994, the record date for determining shareholders entitled to vote at the
meeting, the Company had issued and outstanding 29,905,091 Common Shares, par
value $1.00 per share ("Common Shares" or "Common Stock"). Each Common Share is
entitled to one vote at the meeting. Directors will be elected by a plurality,
and each of the other proposals set forth below will require for approval a
majority of the votes of the common shares present in person or represented by
proxy at the meeting. Abstentions from the election of Directors will be treated
as such. Abstentions from the proposals will, since they will not be recorded in
favor of the proposals, have the effect of negative votes. Broker non-votes will
be treated as shares as to which voting power has been withheld by the
beneficial holders of the shares and, therefore, as shares not entitled to vote
on the proposal as to which there is the broker non-vote.
ELECTION OF DIRECTORS
The Board of Directors of the Company will consist of nine members divided
into three classes. At the meeting three Directors are to be elected to hold
office for three year terms until the 1997 Annual Meeting and until their
successors are elected and qualified. The proxy will be voted for election of
the three Directors named in the following table, whose election has been
proposed and recommended by the Board of Directors. If any nominee shall, prior
to the meeting, become unavailable for election as a Director, the persons named
in the accompanying form of proxy will vote for such nominee, if any, in their
discretion as may be recommended by the Board of Directors or the Board of
Directors may reduce the number of Directors to eliminate the vacancy.
<PAGE>
The respective ages, positions with the Company, periods of service as
Directors of the Company, business experience during the past five years,
directorships in other companies, and shareholdings in the Company as of March
16, 1994 of both the nominees for election and those Directors whose terms will
continue are set forth below:
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY
OWNED (1)
-----------------
<S> <C>
NOMINEES FOR DIRECTOR TO BE ELECTED FOR TERMS TO EXPIRE IN 1997
R. S. EVANS.................................................................................... 1,208,205
Age 50; Chairman and Chief Executive Officer of the Company, 1984 to present; President 1987
to 1991 and since 1992, Director since 1979. Chairman and Chief Executive Officer of Medusa
Corporation, 1987 to present. Other directorships: Medusa Corporation, Fansteel, Inc., HBD
Industries, Inc., Mid-Ocean Reinsurance Company Ltd.
DORSEY R. GARDNER.............................................................................. 1,734
Age 51; Director 1982 to 1986 and since 1989. President, Kelso Management Co., Inc., Boston,
MA. (investment management). Other directorships: Medusa Corporation.
DWIGHT C. MINTON............................................................................... 16,900
Age 59; Director since 1983. Chairman of the Board and Chief Executive Officer, Church &
Dwight Co., Inc., Princeton, NJ (manufacturer of consumer and specialty products). Other
directorships: Medusa Corporation, Chemical Bank of New Jersey, First Brands Corporation.
DIRECTORS WHOSE TERMS WILL EXPIRE IN 1995
MONE ANATHAN, III.............................................................................. 871
Age 55; Director since 1992. President Filene's Basement, Inc., Boston, MA (Retailer), 1988
to present. Other directorships: Medusa Corporation, Brookstone, Inc., Harvard Community
Health Plan, Advest Advantage Trusts.
RICHARD S. FORTE............................................................................... 6,116
Age 49; Director since 1983. President, Forte Cashmere Company, Inc., South Natick, MA
(importer and manufacturer), 1988 to present. Other directorships: Medusa Corporation.
ARTHUR A. SEELIGSON, JR........................................................................ 5,632
Age 73; Director since 1982. Independent Oil Operator, Investments, San Antonio, TX. Other
directorships: Medusa Corporation.
DIRECTORS WHOSE TERMS WILL EXPIRE IN 1996
E. THAYER BIGELOW, JR.......................................................................... 8,690
Age 52; Director since 1984. President and Chief Executive Officer, Time Warner Cable
Programming Inc., Stamford, CT, 1991 to present; President, Home Box Office, Inc. (cable
programming and entertainment), a subsidiary of Time Warner Inc., 1988 to 1991. Other
directorships: Medusa Corporation.
CHARLES J. QUEENAN, JR......................................................................... 6,326
Age 63; Director since 1986. Partner, Kirkpatrick & Lockhart, Pittsburgh, PA (attorneys at
law). Other directorships: Fansteel, Inc., Allegheny Ludlum Corporation, Medusa Corporation.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY
OWNED (1)
-----------------
<S> <C>
BORIS YAVITZ................................................................................... 3,425
Age 70; Director since 1987. Dean Emeritus, Columbia University Graduate School of Business,
New York, NY; Deputy Chairman and Director, Federal Reserve Bank of New York, 1976 to 1982;
Director, The Institute for the Future. Other directorships: J.C. Penney Company Inc.,
Barnes Group, Inc., Medusa Corporation.
<FN>
- --------------
(1) As determined in accordance with Rule 13d-3 under the Securities Exchange
Act of 1934. No Director except Mr. R. S. Evans owns more than 1% of the
outstanding common shares of the Company. See Beneficial Ownership of
Company Stock by Directors and Management, page 4.
</TABLE>
The Board of Directors met 9 times during 1993. The average attendance of
Directors at those meetings was 94% and, with the exception of Mr. D. R.
Gardner, all Directors attended 75% or more of the Board and Committee meetings
which they were scheduled to attend.
In 1993 the Board of Directors had standing Executive, Audit and
Organization and Compensation Committees. The Company does not have a standing
nominating committee. The Executive Committee which meets when a quorum of the
full board cannot be readily obtained, did not meet in 1993. The Audit Committee
met 3 times in 1993 with the Company's management, internal auditors and
independent auditors to review matters relating to the quality of financial
reporting and internal accounting control and the nature, extent and results of
their audits, and otherwise maintained communications between the auditors of
the Company and the Board of Directors. The Organization and Compensation
Committee met 5 times in 1993. (See the Committee's report on page 9.)
The following Directors were members of committees during 1993: Executive
Committee -- R. S. Evans, E. T. Bigelow, Jr., D.C. Minton and B. Yavitz; Audit
Committee -- M. Anathan, III, R. S. Forte, D. R. Gardner, C. J. Queenan, Jr.,
(Chairman); Organization and Compensation Committee -- E. T. Bigelow, Jr., D. R.
Gardner, D. C. Minton and B. Yavitz (Chairman).
COMPENSATION OF DIRECTORS. The Company's standard retainer payable to each
non-
employee director is $25,000 per annum. Pursuant to the Non-Employee Director
Restricted Stock Plan, non-employee directors receive, in lieu of cash, shares
of Common Stock of the Company with a market value equal to that portion of the
standard annual retainer which exceeds $15,000. All directors who are not
full-time employees of the Company, of which there will be eight, participate in
the plan. The shares are issued each year after the Company's annual meeting,
are forfeitable if the director ceases to remain a director until the Company's
next annual meeting, except in the case of death, disability or change in
control, and may not be sold for a period of five years or until a director
leaves the Board. In May 1993 each non-employee director received 380 restricted
shares of Common Stock pursuant to the plan.
Directors also receive $500 for each Board meeting attended. Non-employee
members of the Executive Committee receive an annual retainer of $2,000. Members
of other committees receive $500 and chairmen receive $750 for each committee
meeting attended.
The Crane Co. Retirement Plan for Non-Employee Directors provides for a
benefit at age 65 equal to the participant's annual retainer in effect at the
time the Director's service terminates, payable for a period of time equal to
the number of years the participant has served on the Board and not as an
employee. After two years of service, participants are 50% vested in benefits
payable, and after each full year of service thereafter, participants are vested
in an additional 10%. In the event of a change in control, or death or
disability, participants are automatically 100% vested and in the case of a
change in control, a minimum of seven years of retirement benefits is payable.
Additionally, a participant leaving the Board after a change in control would be
entitled to receive a cash payment such that the participant will retain, after
all applicable taxes, the present value of all future retirement benefits
3
<PAGE>
payable under the plan. A former Director may receive his benefits prior to age
65 on an actuarially reduced basis and in the form of a joint and survivor
benefit and/or a pre-retirement spouse benefit. The plan is unfunded and
benefits thereunder are payable as an operating expense.
BENEFICIAL OWNERSHIP OF COMPANY STOCK
BY DIRECTORS AND MANAGEMENT
To focus management attention on growth in shareholder value, the Company
believes that officers and key employees should have a significant equity stake
in the Company. It therefore encourages its officers and key employees to
increase their ownership of and to hold Company Common Stock through the Stock
Option, the Restricted Stock Award and Savings and Investment Plans. Directors
also receive 40% of their annual retainer in Restricted Stock issued under the
Non-Employee Director Restricted Stock Plan. The beneficial ownership of Company
Common Stock by the non-employee directors as a group (see pages 2 and 3 for
individual holdings), the executive officers named in the compensation table,
the other executive officers of the Company as a group as of March 16, 1994 and
by key employees as a group as of December 31, 1993 is as follows:
<TABLE>
<CAPTION>
STOCK SHARES IN
SHARES OPTIONS COMPANY % OF SHARES
UNDER EXERCISABLE SAVINGS TOTAL SHARES OUTSTANDING
SHARES RESTRICTED WITHIN PLAN BENEFICIALLY AS OF
OWNED STOCK PLANS 60 DAYS (401(K)) OWNED (1)(2) 3/16/93 (2)
----------- ------------- ------------- ---------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Non-Employee Directors as a Group (8
persons)........................... 46,654 3,040 -- -- 49,694 0.17
R.S. Evans.......................... 891,454 132,500 180,000 4,251 1,208,205 4.02
R.J. Muller, Jr..................... 96,205 44,250 68,500 5,412 214,367 0.72
J.P. Cronin(3)...................... 44,315 39,750 85,000 2,504 171,569 0.57
P.R. Hundt.......................... 108,180 33,250 69,840 3,135 214,405 0.72
M.L. Raithel........................ 53,757 20,500 48,000 2,262 124,519 0.42
Other Executive Officers (5
persons)........................... 45,945 48,000 127,392 4,779 226,116 0.75
----------- ------------- ------------- ---------- -------------- -------------
Sub Total -- Directors and Executive
Officers as a Group (18 persons)... 1,286,510 321,290 578,732 22,343 2,208,875 7.25
Key Employees (48 persons).......... 50,341 36,000 436,314 54,116 576,771 1.90
----------- ------------- ------------- ---------- -------------- -------------
Total............................... 1,336,851 357,290 1,015,046 76,459 2,785,646 9.01(4)
----------- ------------- ------------- ---------- -------------- -------------
----------- ------------- ------------- ---------- -------------- -------------
<FN>
- --------------
(1) Does not include: 3,457,074 shares of Common Stock Owned by The Crane Fund
(See Principal Shareholders of the Company); nor an aggregate of 226,876
shares of Common Stock owned by The Crane Fund for Widows and Children;
nor 303,874 shares of Common Stock held by trusts for the pension plans of
the Company and certain of its subsidiaries which shares may be voted or
disposed of in the discretion of the trustees unless the sponsor of the
particular plan directs otherwise. Messrs. Hundt, Raithel and one other
executive officer are Trustees of The Crane Fund for Widows and Children.
None of the directors or trustees has any direct beneficial interests in,
and all disclaim beneficial ownership of the shares held by the trusts.
(2) As determined in accordance with Rule 13d-3 under the Securities Exchange
Act of 1934.
(3) Mr. Cronin resigned as an executive officer of the Company effective March
16, 1994.
(4) In addition, as of December 31, 1993, 2,293 employees of the Company held
737,708 shares of Common Stock in the Company's Savings and Investment
Plan resulting in a total of 3,523,354 shares of Company Common Stock held
by directors, officers, and employees or 11.40% of the outstanding shares
as of March 16, 1994.
</TABLE>
4
<PAGE>
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The following table sets forth the ownership by each person who owned of
record or was known by the Company to own beneficially more than 5% of its
Common Shares on March 16, 1994.
<TABLE>
<CAPTION>
NATURE OF
NAME AND ADDRESS OF BENEFICIAL BENEFICIAL PERCENT
AMOUNT AND TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- ---------------------------------------- ------------------------------ ------------ ---------
<S> <C> <C> <C>
Common.................................. The Crane Fund (1) 3,457,074 11.56%
100 First Stamford Place
Stamford, Connecticut
<FN>
- --------------
(1) The Crane Fund is a charitable trust managed by trustees appointed by the
Board of Directors of the Company. The incumbent trustees are M.L.
Raithel, R.B. Phillips and P.R. Hundt, all of whom are executive officers
of the Company. Pursuant to the trust instrument, the shares held by the
trust shall be voted by the trustees as directed by the Board of
Directors, the distribution of the income of the trust for its charitable
purposes is subject to the control of the Board of Directors, and the
shares may be sold by the trustees only upon the direction of the Board of
Directors acting by a two-thirds vote. None of the directors or the
trustees has any direct beneficial interest in, and all disclaim
beneficial ownership of, shares held by the Crane Fund.
</TABLE>
EXECUTIVE COMPENSATION
A. SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid to the Company's Chief
Executive Officer and to each of the four most highly paid executive officers
for each of the last three completed fiscal years.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------- ----------------------- PAYOUTS
(E) (G) ------- (I)
OTHER (F) SECURITIES (H) ALL
(A) ANNUAL RESTRICTED (2) UNDERLYING LTIP OTHER
NAME AND (B) (C) (D) COMPENSATION STOCK AWARD(S) OPTIONS/ PAYOUTS COMPENSATION (1)
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(4) $ $ SARS (#) ($)(2) ($)
- --------------------------- ---- ----------- --------- ------------ -------------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R.S.Evans 1993 610,000 308,463 104,063 0 40,000 0 6,926
Chairman, Chief Executive 1992 610,000 210,099 266,028(3) 0 40,000 0 6,452
Officer & President 1991 610,000 191,533 124,688 0 40,000 0 6,222
R.J. Muller 1993 235,000 146,985 33,188 0 20,000 0 5,552
Executive Vice President 1992 235,000 124,617 28,267 0 10,000 0 5,418
1991 220,000 155,312 30,844 0 20,000 0 5,211
J.P. Cronin (5) 1993 250,000 71,650 30,843 0 20,000 0 7,157
Vice President -- Finance 1992 240,000 50,644 29,484 0 20,000 0 5,443
& Chief Financial Officer 1991 231,000 45,254 32,812 0 20,000 0 5,270
P.R. Hundt 1993 194,000 70,224 25,405 0 15,000 0 5,495
Vice President, General 1992 187,000 47,974 23,390 0 15,000 0 5,347
Counsel & Secretary 1991 180,000 33,468 25,968 0 15,000 0 5,523
M.L. Raithel 1993 149,000 68,919 15,846 0 12,000 0 5,103
Controller 1992 143,300 45,511 15,002 0 12,000 0 4,938
1991 137,800 33,719 17,346 0 12,000 0 4,557
<FN>
- ------------------
(1) Amounts in each case include the Company's matching contribution of $4,497
for the purchase of company stock in the Company's Saving & Investment
Plan (401(k)) and premiums for life insurance.
(2) Certain shares of restricted stock issued under the Company's Restricted
Stock Award Plan are not subject solely to performance based conditions
for vesting and are classified as restricted stock which would be
reportable in column (f) upon grant. Other shares of restricted stock
which are subject solely to performance based conditions for vesting are
classified as long term incentive
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
awards reportable upon grant in Section D on page 7 as long term incentive
awards and in column (h) of this table upon vesting. The shares of
restricted stock under that plan held by each of the persons identified in
the table and the aggregate value there of at December 31, 1993 were as
follows:
</TABLE>
<TABLE>
<CAPTION>
RESTRICTED STOCK HOLDINGS
--------------------------------------------------------
RESTRICTED AGGREGATE
STOCK HELD LTIP RESTRICTED AGGREGATE
# OF SHARES # OF SHARES SHARES HELD VALUE
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
R.S. Evans 15,000 117,500 132,500 $ 3,279,375
R.J. Muller 2,500 41,250 44,250 1,095,188
J.P. Cronin 3,500 36,250 39,750 983,813
P.R. Hundt 2,500 30,250 33,250 822,938
M.L. Raithel 2,000 18,500 20,500 507,375
<FN>
- --------------
Dividends paid on all restricted stock are reported in column (e).
(3) $162,434 of $266,028 relates to an adjustment required to a 1989 and 1990
tax gross-up based upon a tax assessment received.
(4) The named executives had credited to their accounts under the company's
existing EVA incentive compensation program (see Company's Organization &
Compensation Committee Report on page 9 and the proposal to approve the EVA
Incentive Compensation Plan for Executive Officers on page 13) the
following amounts which are subject to increase or decrease in future
years: R.S. Evans $308,463; R.J. Muller $146,985; J.P. Cronin $71,650; P.R.
Hundt $70,224; and M.L. Raithel $68,919. Under the program one third (50%
in 1993) of the account balance in any year will be payable to the named
executive.
(5) Mr. Cronin resigned as an executive officer of the Company effective March
16, 1994
</TABLE>
B. OPTION GRANTS IN LAST FISCAL YEAR.
The following table shows all individual grants of stock options to the
named executive officers of the Company during the fiscal year ended December
31, 1993.
<TABLE>
<CAPTION>
(B)
NUMBER OF (C)
SECURITIES % OF
UNDERLYING TOTAL OPTIONS/SARS (1) (F)
OPTIONS/ GRANTED TO (D) (E) GRANT DATE
(A) SARS (1) EMPLOYEES EXERCISE OR EXPIRATION PRESENT
NAME GRANTED (#) IN FISCAL YEAR BASE PRICE ($/SH) (2) DATE VALUE ($)(3)
- --------------- ------------- ------------------------- --------------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
R.S. Evans 40,000 14.13 % $ 26.50 5/10/2003 $ 404,840
R.J. Muller 12,000 4.24 % 26.50 5/10/2003 121,452
J.P. Cronin 15,000 5.30 % 26.50 5/10/2003 151,815
P.R. Hundt 15,000 5.30 % 26.50 5/10/2003 151,815
M.L. Raithel 12,000 4.24 % 26.50 5/10/2003 121,452
<FN>
- --------------
(1) The Company no longer grants SARs.
(2) The option price of options granted under the plan were and may not be less
than 100% of the average fair market value of the shares on the date of
grant. Options granted become exercisable 50% one year, 75% two years and
100% three years after grant and expire, unless exercised, ten years after
grant. If employment terminates, the optionee may exercise the option only
to the extent it could have been exercised on the date his employment
terminated and within three months thereof. In the event employment
terminates by reason of retirement, permanent disability or change in
control, options become fully exercisable. The exercise price may be paid
by delivery of shares owned for more than six months and income tax
obligations related to exercise may be satisfied by surrender of shares
received upon exercise, subject to certain conditions.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
(3) The Options were valued using the Black-Scholes Method which indicated a
value of $10.121 per option. The assumptions used were: volatility .96,
risk free rate of return 5.89% based on the 10-YR. Treasury constant
maturities on 5/10/93 from the Federal Reserve Statistical Release H.15;
the Assumed Dividend Pay-Out Rate was 0 and a ten year time of exercise.
The Actual Value, if any, an executive may realize will depend on the
excess of the stock price over the exercise price on the date the option is
exercised so that there is no assurance the value will be at or near the
value estimated by the Black-Scholes Method.
</TABLE>
C. AGGREGATE OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR END
OPTION VALUES
The following table provides information concerning each option exercised
during the fiscal year ended December 31, 1993 by each of the named executive
officers and the value of unexercised options held by such executive officers on
December 31, 1993.
<TABLE>
<CAPTION>
(D) (E)
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY
OPTIONS/SARS(1)AT OPTIONS/SARS(1) AT FISCAL
(B) (C) FISCAL YEAR END (#) YEAR END ($)
(A) SHARES ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE / UNEXERCISABLE EXERCISABLE / UNEXERCISABLE
- --------------- ----------------- --------------- ----------------------------- -----------------------------
<S> <C> <C> <C> <C>
R.S. Evans 97,443 1,491,609(2) 140,000/ 70,000 $ 1,431,550/0
R.J. Muller 55,000/ 22,000 156,000/0
J.P. Cronin 67,500/ 30,000 209,700/0
P.R. Hundt 54,840/ 26,250 203,958/0
M.L. Raithel 13,642 179,836(2) 36,000/ 21,000 100,695/0
<FN>
- --------------
(1) The Company no longer grants SARs.
(2) Computed based upon the difference between aggregate fair-market value and
aggregate exercise price.
</TABLE>
D. LONG TERM INCENTIVE AWARDS IN LAST FISCAL YEAR
The following table shows long term incentive awards to the named executive
officers during the fiscal year ended December 31,1993.
<TABLE>
<CAPTION>
(C) ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK PRICE BASED
(B) PERFORMANCE PLANS
NUMBER OR OTHER ----------------------------------------------------
OF SHARES PERIOD UNTIL (D) (E) (F)
(A) UNITS OR OTHER MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#) OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
- ------------------- ---------------- ------------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
R.S. Evans......... 20,000 50% 11/10/95; 10,000 shares 10,000 shares 20,000 shares
50% to 100% 5/10/98 11/10/95 5/10/98
R.J. Muller........ 7,500 50% 11/10/95; 3,750 shares 3,750 shares 7,500 shares
50% to 100% 5/10/98 11/10/95 5/10/98
J.P. Cronin........ 5,000 50% 11/10/95; 2,500 shares 2,500 shares 5,000 shares
50% to 100% 5/10/98 11/10/95 5/10/98
P.R. Hundt......... 5,000 50% 11/10/95; 2,500 shares 2,500 shares 5,000 shares
50% to 100% 5/10/98 11/10/95 5/10/98
M.L. Raithel....... 3,500 50% 11/10/95; 1,750 shares 1,750 shares 3,500 shares
50% to 100% 5/10/98 11/10/95 5/10/98
</TABLE>
All long term incentive awards ("LTIP shares") were made under the Company's
restricted stock award plan. During the restriction period the LTIP shares are
subject to forfeiture and may not be sold, transferred, assigned or pledged
("the restrictions"). The restrictions on the LTIP shares shall automatically
lapse:
7
<PAGE>
(i) On fifty percent (50%) of the LTIP share award on November 10, 1995
if on that date the total return on the Company's shares (based on stock
price appreciation with dividends reinvested in Company stock) since May
10,1993 exceeds 125% of the S&P 500 total return;
(ii) On fifty percent (50%) of the LTIP share award on May 10, 1998 if
on that date the total return on the Company's shares (based on stock price
appreciation with dividends reinvested in Company stock) since November 10,
1995 exceeds 125% of the S&P 500 total return;
(iii) On one hundred percent (100%) of the LTIP share award on May 10,
1998 (if any portion thereof remains unvested by reason of the failure to
satisfy Section (i) and (ii) above) if on that date the total return on the
Company's shares (based on stock price appreciation with dividends
reinvested in Company stock) since May 10, 1993 exceeds 125% of the S&P 500
total return;
(iv) Restrictions lapse on death, permanent disability, normal retirement
age or a change in control;
(v) Income and excise tax if any are grossed up upon lapse in
restrictions.
On May 10, 1993 the average price of a Company common share was $26.50.
However, absent death, disability or a change-in-control, recipients will
realize value (other than dividends) only if the objectives stated above are
achieved. Thus there is no assurance that any of the LTIP shares awarded will
have value to the recipients.
E. PERFORMANCE GRAPH
The following performance graph compares the total return to shareholders of
an investment of $100 in each of Crane Co. Common Stock, the S&P 500 Index and
the S&P Manufacturing (Diversified Industrials) in which the Company is included
as one of 12 companies from December 31, 1988 to December 31, 1993. "Total
Return" means the increase in value of an investment in a security over a given
period assuming reinvestment in that security of all dividends received thereon
during the period.
[GRAPHIC]
8
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
BY THE ORGANIZATION AND COMPENSATION
COMMITTEE OF THE COMPANY
The Board of Directors and the Organization and Compensation Committee (the
"Committee") believe that an effective compensation program for executive
officers and key employees should be able to compete for and to retain qualified
executives, reward operational success in a timely fashion and encourage the
Company's executive officers to focus on increasing shareholder value. The
Committee also believes developing and implementing an effective compensation
program is a dynamic process and that the Company's approach to executive
compensation must necessarily evolve to meet the challenges of an ever-changing
economic and legal environment. At present, the Committee continues to be of the
view that ownership of a significant equity position in the Company is the best
means to obtain the desired focus on shareholder value and that, over time,
management and particularly the executive officers can most readily be made
significant shareholders in the Company through the executive compensation
program. Therefore, the Company continued in 1993 and plans to continue in 1994
its three-pronged approach to executive officer and key employee compensation:
first, it paid a competitive base salary; second, it attempted to link both
short-term and long-term incentive compensation directly or indirectly to
increases in shareholder value; and third, as part of the process, it continued
to establish significant rewards for performance with, and strongly encouraged
executive officers and key employees to hold a significant portion of their net
worth in, Common Stock of the Company. It is intended that, as their holdings of
Company stock continue to increase, executive officers in particular will
approach their responsibilities more and more like owners of the Company. This
philosophy starts with the Board of Directors, the non-employee members of which
now receive 40% of their annual retainer in Company Stock. To date, almost
11.40% of the Company's Common Stock is beneficially owned by the directors,
management and the employees, with the CEO owning 4.02% and the four other Named
Executive Officers owning 2.4%. (See Beneficial Ownership of Company Stock by
Directors and Management page 4.)
The Company provides competitive health, retirement and savings programs to
all its employees. With respect to retirement benefits, the Company's basic
policy for many years has been to provide salaried employees a percentage of
final average compensation determined on the basis of years of service. The
amounts that would otherwise be payable under the terms of retirement and
savings programs to highly compensated executive officers have been capped by
the Internal Revenue Code and the regulations thereunder and the Company does
not presently provide supplemental benefit programs to make up the difference,
as do many other companies.
A. BASE SALARIES. The Company pays competitive salaries to attract and
retain the highly qualified executive officers needed to manage the Company and
its business units. From time to time widely published general surveys of the
compensation practices of a broad range of industrial companies are reviewed to
determine whether salary levels remain close to the average salaries paid by
U.S. industry for equivalent positions. The Company at times will suspend or
limit annual salary increases when operating performance of the company or the
return to shareholders do not support increases. For 1994, the Company limited
increases for executive officers to 3.76% overall. It was also agreed that the
1994 salary of the Chief Executive Officer who also serves as President and
Chief Operating Officer will again remain at the 1990 level which in the
judgment of the Committee remains appropriate for an individual having such
broad responsibilities. The Committee is of the view, in any event, that the
CEO's compensation package should emphasize incentives closely linked to
shareholder return through significant grants of stock options and performance
based restricted stock. Thus, for 1993 and 1994, increases in CEO compensation
will only result from improved corporate performance.
B. ANNUAL INCENTIVE COMPENSATION. The Company's annual incentive
compensation program utilizes the principles of Economic Value Added ("EVA"),
which as compared to such common performance measures as return on capital,
return on equity, growth in earnings per share and growth
9
<PAGE>
in cash flow, has the highest statistical correlation with the creation of value
for shareholders. EVA is defined as the difference between the return on total
capital invested in the business and the cost of capital, multiplied by total
capital employed.
The Company's annual incentive awards are based on the EVA increase or
decrease for a business unit during the year both absolutely and compared to the
prior year thereby motivating managers to focus on continuous value improvement.
Awards are uncapped to provide maximum incentive to create value, but, there is
also a downward exposure since annual awards whether positive or negative, are
credited to a notional "bank account," only a percentage of which is paid out in
any year. The balance in a bank account is thus subject to decrease if the EVA
is determined to be negative in subsequent years, and to forfeiture if a
participant leaves the Company. The vulnerable bank account concept gives the
annual incentive compensation program a longer-term perspective and provides
participants with ownership incentives as the account balances build or decline.
Although the program is formula driven, the Committee retains discretion to
review and adjust its impact on business units and individuals for
reasonableness and to preserve its incentivizing objectives. The 1993 EVA
incentive compensation award for the CEO was originally calculated on the basis
of the change in the Company's EVA since the prior year and a percentage of that
EVA as $394,220. The actual amount paid from his account was $308,463. With
respect to future incentive compensation for the CEO and the other executive
officers, the Company is proposing for shareholder approval at the 1994 Annual
Meeting a formal EVA Incentive Compensation Plan for Executive Officers. See
page 13.
C. LONG-TERM INCENTIVE COMPENSATION. The Company has used its existing
Stock Option Plan and its Restricted Stock Award Plan as the foundation for its
long-term stock-based incentive compensation program.
(i) THE COMPANY'S STOCK OPTION PLAN. The Stock Option Plan is administered
by the Committee, which is authorized to grant options to key employees of the
Company or any majority-owned subsidiary of the Company. The option price of
options granted under the plan must not be less than 100% of the average fair
market value on the date of grant of the shares under option. Options granted
become exercisable 50% one year, 75% two years and 100% three years after grant
and expire, unless exercised, ten years after grant. Because the Company's Stock
Option Plan requires that options be granted at no less than fair market value,
a gain can only result if the Company's share price increases from the date of
grant. This ties this incentive program directly into increases in shareholder
value. In 1993, the CEO received 40,000 stock options. In the Committee's
judgment, significant grants of stock options over time better align the CEO's
interests with those of the shareholders.
(ii) THE COMPANY'S RESTRICTED STOCK AWARD PLAN. Under the Restricted Stock
Award Plan, restricted shares of the Company's Common Stock may be awarded to
selected key officers and employees. The Committee administers the plan and has
the authority to select participants to determine the amount and timing of
awards, restriction periods, market value thresholds and any terms and
conditions applicable to grants. The Committee has utilized criteria to
determine when restrictions on stock awarded under the Plan would lapse.
Currently, the Committee establishes performance targets based on the attainment
of specified absolute or comparative rates of return to shareholders. In 1993,
the CEO was awarded 20,000 shares of performance based restricted stock under
the Plan which in the Committee's judgment would provide the appropriate
incentive to focus his attention on increasing shareholder value by further
aligning his management incentives with those of the shareholders. If the
established performance goals are not met, the restricted stock will be
forfeited at the end of five years.
D. OMNIBUS BUDGET REVENUE RECONCILIATION ACT OF 1993. In 1993, Congress
adopted the Omnibus Budget Revenue Reconciliation Act of 1993, certain
provisions of which for tax years beginning after December 31, 1993 limit to $1
million per employee the deductibility of compensation paid to the executive
officers required to be listed in the Company's proxy statement unless the
compensation meets certain specific requirements. To date, only proposed
regulations have been
10
<PAGE>
issued by the Internal Revenue Service. Under the transitional rules contained
in the proposed regulations, the Company believes that all prior long-term
incentive awards under the Stock Option and Restricted Stock Award Plans will be
exempt from the non-deductibility provisions of the law until the Annual Meeting
of Shareholders in 1997. The EVA Incentive Compensation Program for Executive
Officers being presented to the shareholders for approval at this meeting is
intended to create a performance based plan meeting the criteria for continued
deductibility set out in the proposed regulations. As a matter of policy, the
Committee intends to develop and administer compensation programs which comply
with terms of the specified exemptions under Section 162(m) and to maintain
deductibility for all executive compensation, except in the limited circumstance
when the materiality of the deduction is in the judgment of the Committee
significantly outweighed by the incentive value of the compensation.
Submitted by:
The Organization and Compensation
Committee of the Board of Directors of
Crane Co.
B. Yavitz, Chairman
E. T. Bigelow, Jr.
D. R. Gardner
D. C. Minton
RETIREMENT BENEFITS
All officers of the Company, including the individuals identified in the
Compensation Table, are participants in the Company's pension plan for
non-bargaining employees. Non-Employee Directors do not participate in the Plan.
Certain amounts realized from participation in the stock option plans of the
Company and in its Stock Appreciation Rights Plan, which are included for
pension purposes in the Compensation Table, are included in the computation of
compensation prior to January 1, 1993, but are excluded from such computation
thereafter.
Eligibility for retirement benefits is subject to certain vesting
requirements which, effective January 1, 1989, include completion of five years
of service where employment is terminated prior to normal or other retirement or
death as determined by applicable law and the Plan. Benefit accruals continue
for years of service after age 65.
The annual pension benefits payable under the pension plan are equal to
1 2/3% per year of service of the participant's average annual compensation
during the five highest compensated consecutive years of the ten years of
service immediately preceding retirement less 1 2/3% per year of service of the
participant's Social Security benefit, up to a maximum deduction of 50% of the
Social Security benefit.
The table below sets forth the estimated annual benefit payable on
retirement at normal retirement age (age 65) under the Company's plan based on
benefit accruals through December 31, 1993 for specified salary and years of
service classifications, and assumes benefits to be paid in the form of a single
life annuity. The amounts have not been reduced by the Social Security offset
referred to above.
11
<PAGE>
PENSION PLAN TABLE
<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE
ANNUAL -----------------------------------------------------------
COMPENSATION 10 20 25 30 35
- ----------------------------------------- --------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$150,000................................ $ 25,005 $ 50,010 $ 62,513 $ 75,015 $ 87,518
$175,000............................... 29,173 58,345 72,931 87,518 102,104
$200,000............................... 33,340 66,680 83,350 100,020 116,690
$225,000............................... 37,508 75,015 93,769 112,523 131,276*
$235,000............................... 39,175 78,349 97,936 117,524 136,111*
$250,000**............................. 41,675 83,350 104,188 125,025* 145,863*
<FN>
- --------------
* Effective January 1, 1993, the actual retirement benefit at normal
retirement date payable pursuant to Section 235 (a) of the Tax Equity and
Fiscal Responsibility Act of 1982 (and subsequent to 1986 at the age at
which unreduced Social Security benefits may commence pursuant to the Tax
Reform Act of 1986) may not exceed the lesser of $118,800 or 100% of the
officer's average compensation during his highest three consecutive
calendar years of earnings (the "Tax Act Limitation"). The Tax Act
Limitation will be adjusted annually for changes in the cost of living.
The dollar limit is subject to further reduction to the extent that a
participant has fewer than ten years of service with the Company or ten
years of participation in the defined benefit plan.
** Between January 1, 1989 and December 31, 1993, for the purpose of
determining benefit accruals and benefit limitations under the pension
plan for all plan years beginning in 1989, a participant's compensation is
deemed to be limited to $200,000 indexed for inflation ($235,840 for 1993)
("Limitation"). As a result of the Limitation, the covered compensation
under the Company's pension plan for each of Messrs. Evans, Cronin, Hundt,
Muller and Raithel (who have 20, 5, 25, 9, and 23 years of service credit,
respectively) is limited to $235,840 in 1993. However, in no event will
the Limitation reduce any participant's accrued benefit below his accrued
benefit as of December 31, 1988. Commencing January 1, 1994, the
compensation limit was further reduced to $150,000 indexed for inflation
in future years ("OBRA '93 Limitation"). As a result of the OBRA '93
Limitation, the covered compensation under the Company's pension plan for
the foregoing individuals is limited to $150,000 for 1994, but in no event
will the OBRA '93 Limitation reduce any participant's accrued benefit as
of December 31, 1993.
</TABLE>
OTHER AGREEMENTS AND INFORMATION
The Company has entered into indemnification agreements with R.S. Evans,
each other Director of the Company, and P.R. Hundt the form of which was
approved by the shareholders of the Company at the 1987 Annual Meeting. The
Indemnification Agreements require the Company to indemnify the officers or
directors to the full extent permitted by law against any and all expenses,
(including advances thereof), judgments, fines, penalties, and amounts paid in
settlement incurred in connection with any claim against such person arising out
of the fact that he was a director, officer, employee, trustee, agent or
fiduciary of the Company or was serving as such for another entity at the
request of the Company, to maintain directors and officers liability insurance
coverage or to the full extent permitted by law to indemnify such person for the
lack thereof.
Each of the individuals named in the Compensation Table (and certain other
executive officers) has an agreement which, in the event of a change of control
of the Company, provides for the continuation of the employee's then current
base salary, bonus plan, and benefits for the three year period following the
change in control. Upon termination within three years after a change in
control, by the Company without cause or by the employee with "Good Reason" (as
defined in the agreement), the employee is immediately entitled to a
proportionate amount of the last year's bonus, three times his annual salary and
either the last year's bonus or the average of the last three years' bonuses if
higher, all accrued or deferred compensation and vacation pay, and a lump sum
retirement benefit (and all income and excise taxes attributable thereto) equal
to the present value of the additional
12
<PAGE>
amount of retirement benefits he would have received at retirement (without
actuarial reduction for early retirement) but for the termination, if his
employment had continued for an additional three years from the date of
termination. Employee benefits also continue for three years after termination.
"Good Reason" under the agreements includes, among other things, any action by
the Company which results in a diminution in the position, authority, duties or
responsibilities of the employee. The agreements of Messrs. Evans, Cronin, Hundt
and Raithel and certain other executive officers not named in the Compensation
Table also provide that the employee may terminate for any reason during the 30
day period immediately following the first year after the change of control,
which shall be deemed "Good Reason" under the agreement. If it is determined
that any economic benefit or payment or distribution by the Company to the
individual, pursuant to the agreement or otherwise, (including, but not limited
to, any economic benefit received by the employee by reason of the acceleration
of rights under the various options, restricted stock and stock appreciation
rights Plans of the Company) ("Payment") is subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code (the "Code"), the agreements provide
that the Company shall make additional cash payments to the employee such that
after payment of all taxes including any excise tax imposed on such payments,
the employee will retain an amount equal to the excise tax on all the Payments.
The agreements were for a three year period beginning in November, 1988, but are
automatically renewed annually for a three year period unless the Company gives
notice that the period shall not be extended.
OTHER TRANSACTIONS AND RELATIONSHIPS
TRANSACTIONS
During 1993, the Company purchased approximately $339,692 worth of products
from Peerless-Winsmith, Inc. ("Peerless"), a wholly-owned subsidiary of HBD
Industries, Inc. ("HBD"). Mr. T.M. Evans, the father of Mr. R.S. Evans, is the
controlling shareholder and a director of both companies. Mr. R.S. Evans is a
shareholder and director of HBD. The law firm of Kirkpatrick & Lockhart, of
which Mr. Queenan is a partner, furnished legal services to the Company in 1993.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Organization and Compensation Committee is or has ever been
an employee of the Company and no executive officer of the Company has served as
a director or member of a compensation committee of another company of which any
member of this Committee is an executive officer.
APPROVAL OF THE SELECTION OF AUDITORS
The Board of Directors proposes and recommends that the shareholders approve
the selection of the firm of Deloitte & Touche as independent auditors for the
Company for 1994. Deloitte & Touche have been the independent auditors for the
Company since 1979. Unless otherwise directed by the shareholders, proxies will
be voted for approval of the selection of Deloitte & Touche to audit the books
and accounts of the Company for the current year. In accordance with the
Company's practice, a member of the firm will attend the Annual Meeting, have an
opportunity to make a statement if he desires to do so and to respond to
appropriate questions which may be asked by shareholders.
PROPOSAL TO APPROVE THE COMPANY'S EVA INCENTIVE COMPENSATION PLAN FOR EXECUTIVE
OFFICERS
INTRODUCTION
As is set forth in the Report of the Organization and Compensation Committee
at pages 9 to 11, the Company has adopted an annual incentive compensation
program based on the principles of Economic Value Added ("EVA") throughout the
Company. The purpose of the EVA approach is to maximize shareholder value by
aligning management's interests with those of shareholders and rewarding
management for sustainable and continuous improvement in the business being
managed.
13
<PAGE>
Recent changes in the Internal Revenue Code have placed limits on the
deductibility of the compensation paid to the executive officers who may be
named in the compensation table of the Company's proxy statement ("Named
Executive Officers") to the extent such compensation exceeds $1 million dollars
unless it meets requirements set forth in Section 162(m) of the Internal Revenue
Code and the regulations issued thereunder. This limit on deductibility does not
apply to compensation paid to any other executive officer, business unit
president, key business unit executive or other participant in the Company's
incentive compensation programs.
In order to preserve the deductibility of incentive compensation paid to
Named Executive Officers in the future, the Company has created a separate
incentive compensation plan for the executive officers of the Company and for
the other employees who may become Named Executive Officers by reason of the
executive compensation disclosure rules under the Securities Act of 1934. The
Plan is intended to satisfy the specific requirements of Section 162(m) of the
Code, as outlined by the Internal Revenue Service in recently issued proposed
regulations. If the Plan is not approved by the shareholders the Plan will not
be implemented but, the Company will review what other options are available to
it to provide meaningful incentive compensation to its executive officers in
1994 and in future years being mindful of the limitations on deductibility
imposed by Section 162(m) of the Internal Revenue Code.
PRINCIPLE PROVISIONS OF THE PLAN
The Plan will be administered by the Organization and Compensation Committee
of the Board of Directors (the "Committee"). EVA is defined as the difference
between the return on total capital invested in the business and the cost of
capital, multiplied by total capital employed ("EVA Calculation"). While
particular EVA formulas will be tailored to the size and unique characteristics
of the business unit or units for which a specific executive is responsible, the
key elements of the EVA formula applicable to any executive officer will be the
Cost of Capital (generally the cost of capital to the corporation), the Return
on Capital, the Amount of Capital employed in the business unit, the net
operating profit of the unit after tax, and the prior year's EVA. Awards will be
calculated on the basis of year-end results. Formulas for individual business
units may utilize both a percentage of the change in the EVA of a business unit
from the prior year, whether positive or negative, plus a percentage of the
positive EVA, if any, in the current year; the EVA award would usually be
calculated for an entire business unit and the executive officer would receive a
percentage of the unit's EVA award. For executive officers or business units
responsible for more than one business unit, the formula may be based on a
percentage of the aggregate EVA, positive or negative, of the units reporting to
the executive or unit. The Committee will have the discretion and authority to
develop other EVA based formulas or goals for utilization pursuant to the Plan
in future years. In any instance in which an executive officer participates in a
unit EVA award in which a group of employees participates, the executive
officer's percentage of the unit's EVA award would be specified.
Before the beginning of each fiscal year, the Committee will establish the
EVA formula applicable to each executive officer and each potential Named
Executive Officer of the Company for that year (including the percentage of any
business unit award in which he may participate). However, the Committee will
retain discretion to revise formulas or an executive's percentage participation
in any unit EVA award if the Committee deems it appropriate as circumstances
develop during the year provided however, in the case a Named Executive Officer,
such revisions may only have a negative effect on the amount of the Named
Executive Officer's award for the year. As soon as is reasonably practicable
after the year ends the Committee will review the EVA Calculations and certify
to the Board of Directors the EVA incentive compensation award for each
executive officer.
After the EVA award for a particular executive has been determined it will
be credited whether positive or negative, to the executive's account. The
executive will then be paid, if the account remains a positive number, a
specified percentage (currently by 33 1/3%) of the account balance in cash. The
remainder of the account balance represents that individual's "equity" in the
account for future years. If EVA awards are or have been negative, an account
balance can be negative. In such case, the
14
<PAGE>
executive officer will receive no incentive compensation until the aggregate of
subsequent EVA awards results in a positive account balance. Each year, the
Company will add interest to a positive balance or charge interest on a negative
balance at an appropriate money market rate. The account will be subject to
forfeiture in the event a executive officer leaves the Company by reason of
termination or resignation.
Since the EVA Calculation will occur at the end of the fiscal year, the
awards which Named Executive Officers may earn in the future, and who they will
be, cannot be determined at this time. However, if the Plan, as proposed, had
been in effect in 1993, the Named Executive Officers identified in this proxy
statement and the other executive officers in 1993 would have received the
following awards and payments and had the following account balances at risk for
performance in future years.
<TABLE>
<CAPTION>
PAYMENT OF 1/3
OF ACCOUNT BALANCE ACCOUNT BALANCE
AFTER AT RISK FOR
NAME 1993 AWARD 1993 AWARD FUTURE YEARS
- ------------------------------------- -------------- ----------------------- -----------------------
<S> <C> <C> <C>
R. S. Evans.......................... $ 394,220 $ 205,642 $ 411,284
R. J. Muller, Jr..................... 161,876 97,990 195,980
J. P. Cronin......................... 89,596 47,767 95,533
P. R. Hundt.......................... 89,596 46,816 93,632
M. L. Raithel........................ 89,596 45,946 91,892
Other Executive Officers (5
Persons)............................ 322,940 165,124 330,248
</TABLE>
The entire account balance will become payable upon normal retirement (age
65), death, or disability, or a change-in-control. (The Committee will have the
discretion to pay the entire account balance upon early retirement.) If it is
determined that any payment of an account by the Company to an executive officer
by reason of a change-in-control is subject to the excise tax imposed by Section
4999 of the Internal Revenue Code (the "Code"), the Plan provides that the
Company shall make additional cash payments to the executive officer such that
after payment of all taxes including any excise tax imposed on such payments,
the executive officer will retain an amount equal to the excise tax on all the
payments.
The Committee's decisions in the administration of the Plan shall be binding
on all parties.
The Board of Directors may modify, suspend or terminate the Plan at any
time. By proposing this Plan to the shareholders for approval, the Company does
not intend to limit itself to the EVA approach to executive officer
compensation. Approval of the Plan is being sought to assure the deductibility
of any compensation paid under the Plan. The Company reserves the right to pay
its executive officers incentive compensation for performance under such
programs and agreements and in such amounts and under such terms as it deems
appropriate at the time, keeping in mind the requirements for deductibility and
whether the materiality of a deduction is significantly outweighed by the
incentives created by the availability of the compensation.
VOTE REQUIRED
The affirmative vote of a majority of the shares present or represented and
entitled to vote at the Annual Meeting is required to approve the Plan. See also
Outstanding Shares and Required Votes, page 1.
The Board of Directors recommends that you vote FOR Approval of the proposed
EVA Incentive Compensation Plan for Executives Officers.
15
<PAGE>
MISCELLANEOUS
SOLICITATION OF PROXIES. The Company will bear all of the costs of the
solicitation of proxies for use at the Annual Meeting. In addition to the use of
the mails, proxies may be solicited by personal interview, telephone and
telegram by directors, officers and employees of the Company, who will undertake
such activities without additional compensation. To aid in the solicitation of
proxies, the Company has retained Beacon Hill Partners, Inc. which will receive
a fee for its services of $5,500 plus up to $1,500 in expenses. Banks, brokerage
houses and other institutions, nominees or fiduciaries will be requested to
forward the proxy materials to the beneficial owners of the Company's Common
Stock held of record by such persons and entities and will be reimbursed for
their reasonable expenses in forwarding such material.
INCORPORATION BY REFERENCE. The Report on Executive Compensation on pages 9
to 11 and the graph entitled "Cumulative Return of Crane Co. etc." on page 8 of
this Proxy Statement shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934
except to the extent that the Company specifically incorporates said report or
said graph by reference and neither the report nor the graph shall otherwise be
deemed filed under such Acts.
NEXT ANNUAL MEETING. The Bylaws presently provide that the Annual Meeting
of the Shareholders of the Company will be held on the second Monday in May in
each year unless otherwise determined by the Board of Directors. Appropriate
proposals of security holders intended to be presented at the 1995 Annual
Meeting must be received by the Company for inclusion in the Company's proxy
statement and form of proxy relating to that meeting on or before December 7,
1994.
Shareholders who do not expect to attend in person are urged to sign, date
and return the enclosed proxy in the envelope provided. In order to avoid
unnecessary expense, we ask your cooperation in mailing in your proxy promptly,
no matter how large or how small your holdings may be.
By Order of the Board of Directors,
PAUL R. HUNDT
Secretary
16
<PAGE>
CRANE CO.
ANNUAL MEETING OF SHAREHOLDERS MAY 9, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned does hereby appoint and constitute E. T. Bigelow, Jr., R. S.
Evans and D. C. Minton, and each of them, his true and lawful agents and proxies
with power of substitution, and hereby authorizes each of them to vote, as
directed on the reverse side of this card, or, if not so directed, in accordance
with the Board of Directors' recommendations, all shares of Crane Co. held of
record by the undersigned at the close of business on March 16, 1994 at the
Annual Meeting of Shareholders of Crane Co. to be held in the Freedom II Meeting
Room at the Sheraton Stamford Hotel, One First Stamford Place, Stamford,
Connecticut on Monday, May 9, 1994 at 10:00 a.m., Eastern Daylight Time, or at
any adjournment thereof with all the powers the undersigned would possess if
then and there personally present, and to vote, in their discretion, upon such
matters as may come before said meeting.
Election of Directors, Nominees:
R. S. Evans, Dorsey R. Gardner, Dwight C. Minton
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE
REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
Please mark your
/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.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR all nominees and FOR proposals 2 and 3.
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of 2. Approval of 30. Approval of the
Directors / / / / Independent / / / / / / Company's EVA / / / / / /
(See Reverse) Auditors Incentive
Compensation Plan
for Executive Officers
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The signer hereby revokes all proxies
heretofore given by the signer to vote at
said meeting or any adjournments thereof.
Please sign exactly as 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
