SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
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
CURTISS-WRIGHT CORPORATION
-----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
PACKARD
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(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:
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*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>
CURTISS-WRIGHT CORPORATION
1200 WALL STREET WEST, LYNDHURST, NEW JERSEY 07071
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
CURTISS-WRIGHT CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of
Curtiss-Wright Corporation, a Delaware corporation, will be held at the
Novotel Meadowlands Hotel, One Polito Avenue, Lyndhurst, New Jersey on
Friday, April 12, 1996, at 2:00 p.m., for the following purposes:
(1) To elect eight directors, each to hold office until the next Annual
Meeting of Stockholders and until his or her successor shall have been
elected and shall qualify;
(2) To consider and act upon a proposal to approve the Corporation's
1996 Stock Plan for Non- Employee Directors;
(3) To appoint independent accountants for the current year, Price
Waterhouse LLP having been nominated as such by the Board of Directors;
and
(4) To consider and transact such other business as may properly come
before the meeting.
Only holders of common stock of record at the close of business on
February 22, 1996 are entitled to notice of and to vote at the meeting. A
list of such holders will be at the offices of the Corporation, 1200 Wall
Street West, Lyndhurst, N.J. 07071, during the ten days preceding the meeting
date.
PLEASE FILL IN, SIGN AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. Stockholders who plan to attend the meeting in person
are nevertheless requested to sign and return their proxies to make certain
that their stock will be represented at the meeting should they be prevented
unexpectedly from attending.
By Order of the Board of Directors,
DANA M. TAYLOR, JR.
Secretary
February 26, 1996
<PAGE>
CURTISS-WRIGHT CORPORATION
1200 WALL STREET WEST, LYNDHURST, NEW JERSEY 07071
PROXY STATEMENT
This Proxy Statement is furnished by Curtiss-Wright Corporation
(hereinafter called the "Corporation" or the "Company") in connection with
the solicitation of proxies for use at the Annual Meeting of Stockholders to
be held at the time and place and for the purposes set forth in the foregoing
Notice of Annual Meeting of Stockholders. The Proxy Statement and
accompanying proxy will be first mailed to stockholders on or about February
29, 1996.
As of February 22, 1996, the record date for determining the holders of
common stock entitled to notice of and to vote at the Annual Meeting, there
were outstanding and entitled to vote at the Annual Meeting 5,074,026 shares
of common stock. Each share of stock is entitled to one vote.
The proxy card provides space for a shareholder to withhold voting for any
or all nominees for the Board of Directors, and to abstain from voting for
the appointment of independent accountants and for the Corporation's 1996
Stock Plan for Non-Employee Directors if the shareholder chooses to do so.
The election of directors requires a plurality of the votes cast while the
approval of the appointment of independent accountants and of the
Corporation's 1996 Stock Plan for Non-Employee Directors both require the
affirmative vote of a majority in interest of the stockholders present in
person or by proxy and entitled to vote. Abstentions and broker non-votes
are counted for purposes of determining whether a quorum is present at the
meeting. An abstention will be treated as a negative vote with respect to
each matter other than the election of directors as to which the shareholder
abstained. As to broker non-votes, if a broker indicates on the proxy that it
does not have discretionary authority to vote on a particular matter, those
shares will not be considered as present and entitled to vote with respect to
that matter.
Where a specific designation is given in the proxy with respect to the
vote on the election of directors, the appointment of independent
accountants, or approval of the Corporation's 1996 Stock Plan for
Non-Employee Directors, the proxy will be voted in accordance with such
designation. If no such designation is made, the proxy will be voted in favor
of the directors named below, in favor of the appointment of independent
accountants, and in favor of the 1996 Stock Plan for Non-Employee Directors.
Anyone giving a proxy may revoke it at any time before its use at the Meeting
by personally appearing at the Meeting and casting a contrary vote, or by
giving a later proxy indicating a desire to vote differently than is
indicated by his earlier proxy.
ELECTION OF DIRECTORS
At this Annual Meeting eight directors are to be elected, each to hold
office until the next Annual Meeting of Stockholders and until his or her
successor shall have been duly elected and shall qualify. Each nominee has
been recommended for election by the Nominating Committee of the Board of
Directors and by the Board. In the event that any such nominee should become
unavailable for election, the persons named in the proxy may vote for the
election of a substitute nominee. However, the Board of Directors has no
reason to believe that any of the nominees described below will be
unavailable for election.
<PAGE>
The following information is provided as of January 16, 1996 with respect
to each nominee for election as a director.
<TABLE>
<CAPTION>
Business Experience and
Principal Occupation
For Last Five Years; Year
Directorships in Public First
Corporations and Investment Elected
Name Companies; Age Director
------------------- ---------------------------------------------------------------------- ----------
<S> <C> <C>
Thomas R. Berner Partner in Berner & Berner, P.C., attorneys. Age 47. 1990
John S. Bull Former President of Moran Towing & Transportation Co., Incorporated, 1961
engaged 1961 in marine transportation. Age 85.
James B. Busey IV President and chief executive officer of Armed Forces Communications and 1995
Electronics Association since September 1992; Director, Mitre Corporation
since February 1995; Director, Texas Instruments, Incorporated since July
1992; Deputy Secretary, U.S. Department of Transportation, 1991-June 1992;
Administrator, Federal Aviation Administration, 1989-91. Age 63.
David Lasky Chairman of the Board of Directors of Curtiss-Wright Corporation since May 1993
1995 and President since May 1993; formerly Senior Vice President, General
Counsel and Secretary of the Corporation. Age 63.
William B. Mitchell Vice Chairman of Texas Instruments Incorporated since 1993; Director since
1990, and Executive Vice President since 1987; Vice Chairman, American
Electronics Association. Age 60.
John R. Myers Chairman of the Board of Garrett Aviation Services since 1993; limited 1996
partner of Carlisle Enterprises, a venture capital group, since 1993;
President, Chief Operating Officer and Director of Thiokol Corporation,
1992-1993; President of Lycoming Engine Goup of Textron Corporation,
1985-1992. Age 58.
William W. Sihler Professor of Business Administration, Darden Graduate School of Business 1991
Administration, University of Virginia. Age 58.
J. McLain Stewart Director, McKinsey & Company, Management Consultants. Age 79. 1989
</TABLE>
The following table sets forth information concerning the ownership of common
stock of the Corporation by each director and nominee, each of the executive
officers named in the Summary Compensation Table below and all directors and
executive officers as a group, as of February 6, 1996. Except as noted in the
first footnote to this table, the shares were owned directly and the owner
had the sole voting and investment power in respect thereof. None of those
individuals owned any common stock of Unitrin, Inc., Argonaut Group, Inc., or
Teledyne, Inc. (For information in respect of the relationship among Unitrin,
Inc., Argonaut Group, Inc., Teledyne, Inc. and the Corporation, see pages 11
and 12.)
<TABLE>
<CAPTION>
% of
Number of Shares Outstanding
Name of Beneficial Owner Beneficially Owned Common Stock
------------------------ ------------------ --------------
<S> <C> <C>
Thomas R. Berner ....................................... 485(1) (2)
John S. Bull ........................................... 250 (2)
James B. Busey IV ...................................... 200 (2)
David Lasky ............................................ 32,021(3) (2)
Robert E. Mutch ........................................ 7,483(4) (2)
John R. Myers .......................................... 0 (2)
Gerald Nachman ......................................... 20,298(5) (2)
William W. Sihler ...................................... 200 (2)
J. McLain Stewart ...................................... 0 (2)
Dana M. Taylor, Jr. .................................... 4,183(6) (2)
George J. Yohrling ..................................... 5,046(7) (2)
Directors and Executive Officers as a group (14 persons) 77,114 1%
</TABLE>
- ------
(1) Includes 190 shares owned by Nancy Berner, wife of Mr. Berner. Mr. Berner
denies that he is the beneficial owner of such shares.
2
<PAGE>
(2) Less than one percent.
(3) Of the total number of shares, 6,100 represents the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan.
(4) Of the total number of shares, 3,166 represents the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan.
(5) Of the total number of shares, 3,365 represents the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan.
(6) Of the total number of shares, 1,666 represents the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan.
(7) Of the total number of shares, 1,470 represents the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan.
OPERATION OF BOARD OF DIRECTORS AND COMMITTEES
During 1995 the Board of Directors held six meetings. All of the Directors
attended at least 75% of the aggregate of all meetings in 1995 of the Board
of Directors and Committees on which they served.
The Audit Committee of the Board of Directors, presently consisting of
Messrs. Thomas R. Berner, John S. Bull, and William W. Sihler, met two times
during 1995. The Committee's functions include the following: making
recommendations to the Board as to the nomination of independent accountants
for appointment by the stockholders; reviewing annual financial statements of
the Corporation prior to their publication; reviewing the report by the
independent accountants concerning the prior year's audit and management's
response thereto; and consulting with the independent accountants and
management concerning internal accounting controls.
The Executive Compensation Committee, presently consisting of Messrs.
Thomas R. Berner, John S. Bull and J. McLain Stewart, met three times during
1995. This Committee reviews compensation of elected officers prior to
submission to the Board; establishes specific awards to be made to
individuals under the Corporation's Incentive Compensation Plan and the
Corporation's 1995 Long-Term Incentive Plan; and reviews the establishment
and/or amendment of executive compensation plans, including the Savings and
Investment Plan.
The Nominating Committee, presently consisting of Messrs. John S. Bull,
James B. Busey IV and J. McLain Stewart, met once in 1995. Its
responsibilities include the following: (i) recommending to the Board of
Directors nominees for election as Directors; (ii) establishing procedures
for identifying candidates for the Board and periodically reviewing potential
candidates; and (iii) recommending to the Board criteria for Board
membership. Any stockholder may recommend nominees to the Committee for
consideration by writing to the Secretary of the Corporation. Such submission
should include the full name and address of each proposed nominee, a
statement of his or her business experience and qualifications and a written
statement from the proposed nominee consenting to his or her nomination and
agreeing to serve if elected.
INDEPENDENT ACCOUNTANTS
The Board of Directors has nominated the firm of Price Waterhouse LLP for
appointment by the stockholders as independent accountants for the purpose of
auditing and reporting upon the financial statements of the Corporation for
its fiscal year ending December 31, 1996, subject to the approval of its
appointment by stockholders at the Annual Meeting. The firm of Price
Waterhouse LLP was engaged in 1992 and has served in this capacity for the
Corporation through the fiscal year ended December 31, 1995. The selection of
Price Waterhouse LLP to serve as independent accountants of the Corporation
was based upon a recommendation by the Audit Committee of the Board of
Directors and was approved by the full Board. Representatives of Price
Waterhouse LLP are expected to be present at the Annual Meeting of
Stockholders to make such statements and answer such questions as are
appropriate.
If the stockholders fail to so appoint Price Waterhouse LLP, the Board of
Directors, pursuant to the By-Laws of the Corporation, will appoint other
independent accountants to perform such duties for the current fiscal year.
It is not contemplated that such appointment of other independent accountants
would be submitted to the stockholders for ratification. The appointment of
independent accountants to serve with respect to the year 1997 would be acted
upon by the stockholders at their Annual Meeting early in that year.
3
<PAGE>
EXECUTIVE COMPENSATION
REPORT OF EXECUTIVE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Executive Compensation Committee (the "Committee") of the Board of
Directors is responsible for the administration of the executive compensation
program of the Corporation. The Committee is composed of three non-employee
Directors, who are not eligible to participate in the Corporation's
compensation plans for employees.
In 1995 the compensation of the executive officers of the Corporation
consisted of salary, cash awards under the Modified Incentive Compensation
Plan (the "I.C. Plan") of the Corporation and non-qualified stock options and
restricted common stock pursuant to the Corporation's 1995 Long-Term
Incentive Plan. The levels of these compensation elements are arrived at
through consideration of a number of objective and subjective factors.
Salaries are reviewed by the Committee, generally annually, largely on the
basis of individual performance and contributions to the Corporation. The
recommendations of the Committee as to salary adjustments are acted upon by
the Board. The maximum amount available each year for awards under the I.C.
Plan is based solely on a formula tied to the earnings of the Corporation as
a whole (i.e., the sum of 12% of the excess over $3,000,000 of consolidated
net earnings (after taxes and before deducting such 12% amount) of the
Corporation and its subsidiaries for each of the four consecutive years
immediately preceding the year in which the current award is to be made, less
the aggregate amount of the awards made during the three consecutive years
immediately preceding the year in which the current award is to be made).
Stock options and restricted stock are offered to attract and retain highly
qualified key employees and to provide those employees with an additional
incentive to work toward increasing the value of the Corporation.
In determining Mr. Lasky's salary the Committee took into account specific
measures of performance, including return on assets, return on capital
employed, return on equity, and operating cash flow, both actual and budgeted
and forecasted for the Corporation for the first quarter of 1995 as well as
for the full years 1993 and 1994. The Committee also considered the
compensation paid by other corporations of similar size and nature, the
advice of a compensation consultant in regard thereto, his year's of service
and other compensation. The Committee also took into consideration various
indicators of corporate performance in making an award to Mr. Lasky under the
I.C. Plan. In awarding stock options and restricted common stock to Mr.
Lasky, the Committee considered Mr. Lasky's progress in identifying and
exploring growth opportunities and the compensation awarded other chief
executive officers, as reported by a compensation consultant advising the
Corporation in respect of the 1995 Long-Term Incentive Plan. Also considered
were a number of objective financial measures of corporate performance.
With respect to considering the increase of salaries of its other
executive officers the Committee considered each person's years of service
and total compensation received. The Committee then considered schedules
showing return on assets, return on capital employed, return on equity and
operating cash flow, actual, budgeted and forecasted, of each of the
Corporation's facilities and of the Corporation as a whole. At the same time,
the Committee took into account the relationship of the compensation of the
Corporation's executive officers to the compensation of individuals occupying
comparable positions in other organizations of a similar size and nature,
with a view to ensuring that executives are appropriately compensated,
properly motivated and, where desirable, are retained in the employment of
the Corporation. The Committee was advised by a compensation consultant
concerning such salary increases. The Committee also considered factors
relating to the performance of the individual officers. In making awards to
its executive officers under the I.C. Plan, the Committee took into
consideration the individual contributions each made to the success of the
Corporation, through personal ability, industry, loyalty and service pursuant
to the provisions of the I.C. Plan, as well as total compensation received.
The Board in turn has reviewed and approved such awards.
In awarding stock options and restricted common stock to its key employees
and executive officers the Committee considered the effect such persons'
efforts could have on the growth of the Corporation. In determining the size
of such awards, the Committee considered the previously expressed views of
its compensation consultant, who had advised that awards of the size granted
under the 1995 Long-Term Incentive Plan were fair and reasonable and
consistent with corresponding awards made by other corporations.
John S. Bull, Chairman
Thomas R. Berner
J. McLain Stewart
4
<PAGE>
SUMMARY COMPENSATION TABLE
The following table contains information concerning the five most highly
compensated executive officers of the Corporation.
<TABLE>
<CAPTION>
Long Term Awards
----------------------------
Annual Compensation (f) (g)
(a) --------------------------------- Restricted Securities (i)
Name and Principal (b) (c) (d) Stock Underlying All Other
Position Year Salary(1) Bonus(2) Awards(3) Options Compensation(4)
------------------------------------- ------ ---------- ---------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
David Lasky, Chairman and
President 1995 $338,000 $200,000 $122,550 4,560 $ 6,406
1994 $311,000 $183,500 7,500 $10,031
1993 $284,000 $158,500 5,400 $15,976
Gerald Nachman, Executive V.P. 1995 $276,000 $105,000 $ 68,101 2,533 $ 4,603
of Curtiss-Wright Corp; Pres., 1994 $264,000 $ 93,250 3,700 $ 8,252
Metal Improvement Company 1993 $253,000 $108,250 3,200 $13,762
Robert E. Mutch 1995 $189,800 $ 70,000 $ 57,351 2,133 $ 5,503
Executive V.P. of Curtiss-Wright 1994 $180,200 $ 64,000 3,500 $ 8,629
Corp.; President, Curtiss-Wright 1993 $171,000 $ 67,000 3,000 $ 6,721
Flight Systems, Inc. & Curtiss-Wright
Flight Systems/Shelby, Inc.
George J. Yohrling 1995 $165,200 $ 50,000 $ 24,188 900 $ 1,529
V.P. of Curtiss-Wright Corp.; Sr. 1994 $159,600 $ 49,300 1,710 $ 4,545
V.P., Curtiss-Wright Flight 1993 $152,000 $ 55,000 1,350 $ 6,962
Systems/Shelby, Inc.
Dana M. Taylor, Jr., General 1995 $170,000 $ 35,000 $ 30,476 1,133 $ 3,534
Counsel & Secretary 1994 $162,615 $ 30,000 1,800 $ 6,666
1993 $154,115 $ 30,000 1,600 $ 9,234
</TABLE>
- ------
(1) Includes salaries and amounts deferred under the Corporation's Savings
and Investment Plan.
(2) Includes portions paid in 1993 and 1994 of deferred bonus installments
awarded in 1992 provided officer satisfied certain conditions, including
continued service with the Corporation. Messrs. Lasky, Nachman and Mutch
received $13,500, $8,250 and $7,000 respectively in each year. Mr.
Yohrling received $5,000 in 1993 and $4,250 in 1994 and Mr. Taylor
received $5,000 in 1993 and $125 in 1994.
(3) Messrs. Lasky, Nachman, Mutch, Yohrling and Taylor, were awarded 2,280,
1,267, 1,067, 450 and 567 shares, respectively, of common stock of the
Corporation pursuant to the Corporation's 1995 Long-Term Incentive Plan.
The values of the restricted stock awards shown in the Summary
Compensation Table are based upon the closing market price of $53.75 at
the end of 1995. These shares however do not have a current realizable
value since they were received subject to restrictions against sale,
transfer or pledge and are subject to rights of repurchase for three
years from the date of grant. Holders of restricted stock receive
dividends at the same time and at the same rate as other common stock
owners.
(4) This consists of the dollar value of insurance premiums paid by the
Corporation during the covered fiscal year for term life insurance and
contributions by the Corporation which have become vested pursuant to the
Corporation's Employees' Savings Plan made to September 1, 1994 at which
time the Plan was modified and contributions were no longer made by the
Corporation.
5
<PAGE>
OPTIONS GRANTED IN LAST FISCAL YEAR
PURSUANT TO THE CORPORATION'S 1995 LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
% of Total
Options
Shares Covered Granted to Grant Date
by Options Employees in Exercise Price Expiration Present
Name Granted(1) 1995 per Share Date Value(2)
------------------- -------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
David Lasky 4,560 14.03% $48.00 Dec. 14, 2005 $56,726
Gerald Nachman 2,533 7.79 $48.00 Dec. 14, 2005 $31,510
Robert E. Mutch 2,133 6.56 $48.00 Dec. 14, 2005 $26,534
George J. Yohrling 900 2.76 $48.00 Dec. 14, 2005 $11,196
Dana M. Taylor, Jr. 1,133 3.48 $48.00 Dec. 14, 2005 $14,094
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Underlying In-the-Money
Unexercised Options Options at
at Fiscal Year-End Fiscal Year-End(3)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized ($) Unexercisable Unexercisable
------------------- --------------- ---------------- -------------------- --------------------
<S> <C> <C> <C> <C>
David Lasky 0 $0 6,100/11,360 $121,091/$153,328
Gerald Nachman 0 $0 3,365/6,065 $ 67,317/$81,051
Robert E. Mutch 0 $0 3,166/5,465 $ 63,328/$74,967
George J. Yohrling 0 $0 1,470/2,490 $ 29,296/$34,999
Dana M. Taylor, Jr. 0 $0 1,666/2,866 $ 33,366/$39,179
</TABLE>
- ------
(1) Options were granted with an exercise price of 100% of the market price
on the date of grant. The options are exercisable to the extent of one
third of the total number of shares covered beginning on the first
anniversary of the grant, two thirds from the second anniversary and in
full after the third anniversary. The options are not transferrable other
than by will or by the laws of descent and distribution. If the optionee
terminates his or her employment (other than by reason of retirement) the
option expires upon such event.
(2) These values were calculated using the Black-Scholes option pricing
model. The Black-Scholes model is a complicated mathematical formula
which is widely used and accepted for valuing traded stock options. The
model is premised on immediate exercisability and transferability of the
options. This is not true for the Corporation's options granted to
executive officers and other employees. Therefore, the values shown are
theoretical and are not intended to reflect the actual values the
recipients may eventually realize. Any ultimate value will depend on the
market value of the Corporation's stock at a future date. In addition to
the stock price at time of grant and the exercise price, which are
identical, and the ten-year term of each option, the following
assumptions were used to calculate the values shown: expected dividend
yield (2.1 percent the current yield of the Corporation's common shares
on the grant date), expected stock price volatility (.3321 the most
recent volatility for the month-end stock prices of the Corporation's
common shares for the preceding 10 years), and risk-free rate of return
(5.8 percent equal to the yield on a 10-year U.S. Treasury bond on the
option grant date).
(3) Calculated by determining the difference between the fair market value of
the Common Stock underlying the options on December 31, 1995 ($53.75, the
closing price on the New York Stock Exchange Composite Transactions) and
the exercise price of the options on that date.
6
<PAGE>
TERMINATION OF EMPLOYMENT
Pursuant to a policy designed to retain key employees established by the
Corporation's Board of Directors in 1977, the Corporation has agreements with
Messrs. Lasky, Nachman, Mutch, Yohrling and Taylor which provide for the
payment by the Corporation of severance pay, in the case of involuntary
termination of employment other than for cause, in an amount equal to one
year's base salary at the time of termination, as well as the continued
availability of certain employee benefits, for a period of one year following
termination. The agreements provide that such severance pay and benefits also
would be made available in the case of voluntary retirement or termination of
employment which is the direct result of a change in the terms or conditions
of employment, including a reduction in compensation or in job
responsibilities. At the option of the employee, said amount of severance pay
may be paid over the two year period following such termination, in which
case such employee benefits would continue in effect for the same period.
Under the agreements, the payment of severance pay, and the availability of
benefits, is contingent upon a number of conditions, including the employee's
performance of his agreements with respect to providing consulting services
and not entering into competition with the Corporation.
RETIREMENT PLAN
The Corporation's Retirement Plan is a tax qualified, defined benefit,
trusteed plan. On September 1, 1994 the Corporation amended this plan. The
amended Plan provides that employees are to receive their benefit accrued to
September 1, 1994, adjusted for increases in compensation between that date
and retirement or other termination, together with the benefit accruing under
the new Plan. The amended Plan also provides that an employee age 55 or older
on the date of the amendment with five years of contributory service as of
August 31, 1994 shall not receive a lesser benefit than he would have
received under the Plan as in effect prior to the amendment, adjusted for the
value of contributions that would have been made subsequent to September 1,
1994. As of September 1, 1994 the following monthly pension benefits have
been accrued under the prior plan: David Lasky, $12,909; Gerald Nachman,
$11,885; Robert E. Mutch, $1,905; George J. Yohrling, $2,559; and Dana M.
Taylor, Jr., $4,961. These amounts would be less if retirement occurred prior
to age 65, or more if retirement occurred after said age.
The Plan as amended on September 1, 1994 provides benefits computed
prospectively under a formula which is integrated with social security and
which provides for an annual benefit at age 65 equal to 1% of the employee's
five-year final average compensation up to the social security covered
compensation (currently $27,576) times years of service on and after
September 1, 1994, plus 1.5% of compensation in excess of social security
covered compensation times years of service on or after September 1, 1994.
The chart below illustrates the estimated aggregate amount of annual benefits
on a straight life annuity basis attributable to service on or after
September 1, 1994 under the new formula that will be payable on retirement at
age 65 to an employee in the compensation classification specified, under
various assumptions as to compensation and years of service.
YEARS OF SERVICE
<TABLE>
<CAPTION>
Compensation 15 20 25 30 35
- -------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$125,000 ...... $ 26,056 $ 34,742 $ 43,428 $ 52,114 $ 60,799
150,000 ...... 31,681 42,242 52,803 63,363 73,924
175,000 ...... 37,306 49,742 62,178 74,613 87,049
200,000 ...... 42,931 57,242 71,553 85,863 100,174
225,000 ...... 48,556 64,742 80,928 97,113 113,299
250,000 ...... 54,181 72,242 90,303 108,363 126,424
300,000 ...... 65,431 87,242 109,053 130,863 152,674
400,000 ...... 87,931 117,242 146,553 175,863 205,174
450,000 ...... 99,181 132,242 165,303 198,363 231,424
500,000 ...... 110,431 147,242 184,053 220,863 257,674
550,000 ...... 121,681 162,242 202,803 243,363 283,924
</TABLE>
For the above chart, the current compensation covered by the Retirement
Plan is substantially equivalent to the cash compensation reported under the
headings entitled "Salary" and "Bonus" on page 5 of this Proxy Statement for
the executive officers listed there.
7
<PAGE>
In addition, a cash balance component was added to the Plan on September
1, 1994 under which during each year of participation in the Plan a
participant earns a pay-based credit equal to 3% of his or her compensation.
The employee's account balance is credited with interest annually.
Under the Employee Retirement Income Security Act of 1974 ("ERISA"), many
employees elect a survivor option payable to the employees spouse and as a
consequence, the amount actually received on retirement by such employee
would be less than reflected in the preceding chart. The Internal Revenue
Code provides that effective January 1, 1996 the maximum allowable annual
benefit under the Retirement Plan is $120,000 (adjusted for each year of
employment beyond age 65) and the maximum allowable annual compensation that
may be included in the calculation of a benefit under the Retirement Plan is
$150,000. These limits are substantially lower than the maximum amounts shown
above. Accordingly, the Corporation maintains a Retirement Benefits
Restoration Plan (the "Restoration Plan") whereby all participants in the
Retirement Plan whose benefits or compensation under the Retirement Plan
would exceed the limitations imposed by the Internal Revenue Code will
receive a supplemental retirement benefit equal to the excess of the benefit
which would have been payable to them under the Retirement Plan but for said
limitations, over the amount payable under the Retirement Plan, given said
limitations. Such supplemental benefit is not funded. The amount set forth in
the preceding chart includes amounts payable pursuant to the Restoration
Plan. Benefit amounts listed in the preceding chart are not subject to
reduction for any social security benefits to which Plan participants may be
entitled. Credited years of service under the Retirement Plan at December 31,
1995 are as follows: David Lasky, 33 years; Gerald Nachman, 21 years; Robert
E. Mutch, 17 years; George J. Yohrling, 19 years; and Dana M. Taylor, Jr., 22
years. For each of these persons as of said date, credited service includes
16 months under the preceding chart.
COMPENSATION OF DIRECTORS
Currently all Directors who are not also employees of the Corporation
receive an annual director's fee of $20,000. Each non-employee Director
receives a fee of $900 for every Board and Committee meeting attended. For
each Director who is not an employee, the Corporation provides group term
life insurance coverage of $50,000. Subject to the approval of stockholders,
the Board has adopted the 1996 Stock Plan for Non-Employee Directors, which
is described at pages 9 through 11 of this Proxy Statement.
8
<PAGE>
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total stockholder
returns (assuming the reinvestment of dividends) on common stock of the
Corporation with such returns of companies listed on the Russell 2000 Index
and the S & P Aerospace/Defense Index. The graph assumes $100 invested on
January 1, 1991 in stock of the Corporation and the companies on each of
these indices.
$300|------------------------------------------------------------------|
| & |
| |
$280|------------------------------------------------------------------|
| |
| * |
$260|-------------------------------------------------------------#----|
| |
| |
$240|------------------------------------------------------------------|
| |
| |
$220|------------------------------------------------------------------|
| |
| # |
$200|-------------------------------------------------#----------------|
| |
| |
$180|------------------------------------------------------------------|
| &* |
| # * |
$160|-------------------------------------&----------------------------|
| |
| # Internal Rate of Return|
$140|-------------------------*----------------- 1 Year 5 Years |
| * --------------------------------------|
| & Curtiss-Wright | 51.14% 21.61% |
$120|---------------&----------- S&P Aerospace | 65.54% 23.99% |
| Russell 2000 | 28.71% 21.06% |
| --------------------------------------|
$100|---*&#---------|---------|-----------|-----------|-----------|----|
1/91 12/91 12/92 12/93 12/94 12/95
*=Curtiss-Wright &=S & P Aerospace #=Russell 2000
<TABLE>
<CAPTION>
Five Year Total Return
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
Curtiss-Wright Corp. Total Return 100.00 135.00 141.00 169.00 176.00 266.00
S&P Aerospace and Defense Index 100.00 120.00 126.00 164.00 177.00 293.00
Russell 2000 Index 100.00 146.00 173.00 206.00 202.00 260.00
</TABLE>
APPROVAL OF THE CURTISS-WRIGHT CORPORATION
1996 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
On January 31, 1996 the Board of Directors adopted, subject to the
approval of the stockholders of the Corporation, the 1996 Stock Plan for
Non-Employee Directors (the "Plan"). As discussed above under "Compensation
of Directors," non-employee directors of the Corporation currently receive
cash compensation in the form of an annual retainer and fees for attending
Committee and Board meetings. The Corporation believes it is important that
the interests of its directors be aligned with those of its shareholders and,
consequently, adopted the Plan as a means of further strengthening that link.
The following summary of the principal features of the Plan is qualified
in its entirety by the complete text of the Plan, which is set forth in
Exhibit A to this Proxy Statement. Capitalized terms used in the following
summary, but not defined herein, shall have the meanings contained in the
Plan.
Purpose. The purpose of the Plan is to enhance the ability of the
Corporation to attract and retain exceptionally qualified individuals and to
vest them with a proprietary interest in the growth and performance of the
Company, and align their interests with those of the shareholders of the
Corporation.
Administration. Ministerial aspects of the Plan will be administered by
the Secretary of the Corporation, who is empowered to interpret and
administer this Plan and any instrument or agreement relating to stock to be
granted under it. However, the number of shares that may be awarded is
controlled entirely by formulas contained in the Plan.
Participation. All directors of the Corporation who are not now, and who
have never been, employees of the Corporation would participate in the Plan.
The Corporation currently has six such directors, and will have seven if all
current nominees are elected.
9
<PAGE>
Shares Available Under the Plan. The total number of shares that might be
called for under the Plan would be a function of the number of eligible
directors, the extent to which each of them elects to receive his or her
retainer and meeting fee compensation in shares rather than cash, and the
market price of the shares at the time of each relevant transaction. Based on
an assumed market price of $50 per share, if, during the ten years of the
Plan life, no new directors joined the Corporation, director compensation
were not increased, the aggregate number of Board and Committee meetings each
year was the same as in 1995, and all seven eligible current director
nominees were to choose to receive all of their retainer and meeting fee
compensation in shares, the result would be awards of approximately 3,724
shares of restricted stock and the payment of approximately 3,952 shares of
unrestricted stock in lieu of retainer and meeting fees.
Initial and Fifth Anniversary Award Grants. The initial grants of
restricted stock to each director would be of approximately 250 shares, the
actual number being a function of the price of the stock on the New York
Stock Exchange on April 12, 1996, the effective date of the plan. Each
initial grant would have a date-of-award market value of $13,300, which is
approximately what the shortfall in Curtiss-Wright's director compensation
(as measured against that of Curtiss-Wright's "peer group" companies) was
estimated, by the Corporation's compensation consultant, to total in five
years. A second round of grants would occur on the fifth anniversary of the
initial grants, and have a higher value (computed as specified in the Plan),
reflecting five additional years of anticipated growth in director
compensation. An individual who became a director after the Plan went into
effect would receive his or her initial grant upon becoming a director, and
his or her second grant five years after that. The stock awarded in these
grants would be restricted stock that could not be sold or transferred by the
director (other than under the laws of descent and distribution). The
director would forfeit these shares if, during the period of restrictions, he
or she resigned as a director or declined to continue serving as such. The
period of restrictions for each initial and fifth anniversary award would be
five years from the date of award, or until a change of control of the
Corporation, as defined, at which time the restrictions would lapse and the
stock would be owned outright by the director.
Option to Receive Retainer and Meeting Fees in Stock Rather than Cash.
The option to receive all or a portion of meeting fees and annual retainer
in shares of Company stock rather than in cash would allow the director to
acquire the stock at then current market values without incurring brokerage
fees. Unlike that of the initial and fifth anniversary grants, the stock that
a director would receive in lieu of retainer and meeting fees would be
unrestricted stock that, unless deferred, would be owned outright by the
director who selected this option.
Option to Defer Receipt of Retainer and Meeting Fees. The option to defer
all or a portion of the meeting fees and annual retainer is available
regardless of whether those benefits are paid in cash, in stock, or in a
combination of the two. This option is made somewhat more attractive for the
director who elects to receive compensation in stock, since the director who
elects to defer compensation paid in stock will be awarded more shares, by
ten percent, than if the compensation were not deferred.
A number of special restrictions apply to the deferral option in order to
qualify it for Federal Income Tax deferral treatment, among them being the
following. The Company would keep records of deferrals in unfunded accounts,
and would credit the deferral account of each non-employee director with
periodic interest (at a rate equal to the Corporation's pre-tax cost of
borrowing funds) on cash deferrals and with an amount equal to the amount of
dividends on deferred stock. Directors who deferred compensation in the form
of stock would not be entitled to vote the shares or have any other benefits
of ownership of the deferred shares (other than the above- mentioned dividend
credits) during their deferral periods. With respect to their deferral
accounts, the directors would have the status of general, unsecured creditors
of the Company. In this regard, the Plan would constitute a mere promise by
the Company to make payments in the future.
Amendments, Termination and Expiration. The Board would be empowered to
amend, alter, suspend, discontinue or terminate this Plan provided, however,
that (a) the provisions of the Plan may not be amended more than once every
six months other than to comport with changes in the Internal Revenue Code of
1986 (the "Code") or the rules thereunder, and (b) no such action shall: (i)
increase the benefits accruing to directors under this Plan, (ii) increase
the quantum of stock that may be issued under this Plan; (iii) materially
modify the requirements as to eligibility for participation in this Plan; or
(iv) adversely affect the rights under any restricted stock theretofore
granted under this Plan or the rights to any amounts or stock theretofore
credited to a director's deferral account.
10
<PAGE>
No restricted stock could be granted under the Plan on or after the tenth
anniversary of its effective date, nor could any compensation payable to a
director be payable in stock or deferred under this Plan after that date.
However, any restricted stock theretofore granted and deferrals theretofore
made may remain outstanding beyond such date.
Federal Income Tax Consequences.
The following is a summary of the Federal income tax treatment of the
restricted stock awards and income deferral actions under the Plan based upon
the current provisions of the Code and regulations promulgated thereunder.
Restricted Stock Awards. Restricted stock awards granted under the Plan
will constitute taxable income to the recipient, and a deductible expense to
the Company, in the year in which the restrictions lapse unless the
participant elects to recognize income in the year the award is made. Unless
such an election is made, the amount of the taxable income and corresponding
deduction will be equal to the fair market value of the stock on the date the
restrictions lapse. The Company is also allowed a compensation deduction for
dividends paid to participants (provided they have not elected to recognize
income at the time of the award) on restricted stock while the restrictions
remain in force.
Deferred Income. Retainer and meeting fee compensation that a director
elects to defer under the plan, whether deferred in the form of cash or
company stock, will become subject to Federal income taxation to the director
only as and when the cash or stock is actually paid over to the director. The
Company will become entitled to a compensation expense deduction at the same
time. The same treatment applies to interest and dividends credited to the
director's account during the period of deferral.
Recommendation of the Board of Directors.
The Board of Directors recommends approval of the Plan.
SECURITY OWNERSHIP AND TRANSACTIONS WITH CERTAIN BENEFICIAL OWNERS
The following information is given with respect to the persons who, to the
knowledge of the Corporation, own beneficially more than 5% of any class of
the voting securities of the Corporation outstanding as of February 22, 1996.
<TABLE>
<CAPTION>
Amount & Nature
Name & Address of of Beneficial Percent of
Title of Class Beneficial Owner Ownership Class
------------------ ----------------------------- -------------------- --------------
<S> <C> <C> <C>
Common Stock Unitrin, Inc. 2,191,200 shares 43.2%
One East Wacker Drive Indirect
Chicago, Illinois 60601
Common Stock Argonaut Group, Inc. 411,100 shares 8.1%
1800 Avenue of the Stars Indirect
Los Angeles, Cal. 90067
Common Stock GAMCO Investors, Inc. and Gabelli 477,820 shares 9.4%
Funds, Inc. and Gabelli Direct 3.7%
International Limited II 189,800 shares .2%
Corporate Center at Rye Rye, NY Direct
10580 8,000 shares
Common Stock Quest Advisory Corp. and Quest 365,100 shares 7.2%
Management Co. 1414 Ave. of the Direct .4%
Americas New York, NY 10019 21,000 shares
Direct
</TABLE>
A Schedule 13D dated April 6, 1990 of Unitrin, Inc. ("Unitrin") and two of
its subsidiaries reported: (i) ownership by those subsidiaries of the
2,191,200 shares of common stock shown above; (ii) that the stock had been
acquired for investment; (iii) that each of the subsidiaries shares with
11
<PAGE>
Unitrin voting and dispositive power with respect to the stock owned by that
subsidiary and (iv) that Unitrin might be deemed a beneficial owner of this
stock. A Teledyne, Inc. ("Teledyne") Schedule 13D amendment dated April 6, 1990
indicated that the Unitrin subsidiaries owning common stock of the Corporation
had been Teledyne subsidiaries but that as a result of the spin-off by Teledyne
to its stockholders of the outstanding stock of Unitrin, those companies had
ceased to be Teledyne subsidiaries, effective March 31, 1990. The amendment also
stated that Teledyne may no longer be deemed to be a beneficial owner of the
common stock of the Corporation owned by the Unitrin subsidiaries. According to
Teledyne's proxy statement dated March 28, 1995 three of the seven Directors of
Unitrin are Directors of Teledyne. The Teledyne proxy statement also indicates
that Directors and executive officers of Teledyne own beneficially in the
aggregate over 25% of the outstanding common stock of Unitrin.
A Schedule 13D dated October 9, 1986 of Argonaut Group, Inc. ("Argonaut")
and three of its subsidiaries reported: (i) ownership by those subsidiaries
of the 411,100 shares of common stock shown above; (ii) that the stock had
been acquired for investment; (iii) that each of those subsidiaries shares
with Argonaut voting and dispositive power with respect to the stock owned by
that subsidiary and (iv) that Argonaut might be deemed a beneficial owner of
this stock. A Teledyne Schedule 13D amendment dated October 9, 1986 also
indicated that the Argonaut subsidiaries owning common stock of the
Corporation had been Teledyne subsidiaries but that as a result of the
spin-off by Teledyne to its stockholders of the outstanding stock of
Argonaut, those companies had ceased to be Teledyne subsidiaries, effective
September 30, 1986. The amendment also stated that Teledyne may no longer be
deemed to be a beneficial owner of the common stock of the Corporation owned
by the Argonaut subsidiaries. Teledyne's proxy statement dated March 28, 1995
indicates that three of the seven Teledyne Directors are also Directors of
Argonaut and that Directors and executive officers of Teledyne beneficially
own in the aggregate more than 20% of Argonaut's outstanding common stock.
Finally, the Teledyne proxy statement states that three Directors of Unitrin
are also Directors of Argonaut.
Under the circumstances outlined above, Teledyne may be deemed to be in
"control" of the Corporation (as the term control is defined in the
regulations promulgated pursuant to the Securities Exchange Act of 1934).
However, to date no attempt has been made to obtain representation on the
Board of Directors of the Corporation, to direct its management or policies
or otherwise to exercise "control" over it.
Since January 1, 1995 the Corporation and its subsidiaries have engaged in
various transactions with subsidiaries of Teledyne in the ordinary course of
business, each of which was either in an amount of less than $60,000 or was
awarded on the basis of competitive bidding.
In their Schedule 13D as amended through June 30, 1995, GAMCO Investors,
Inc. ("GAMCO"), Gabelli Funds, Inc. ("GFI") and Gabelli International Limited
II ("GIL") have reported that (i) they beneficially own the shares set forth
in the above table; (ii) GAMCO and GFI are investment advisors but have no
economic interest in their shares (such interest presumably residing in their
investment advisory clients); (iii) the GAMCO and GFI shares were purchased
for investment; (iv) GAMCO exercises sole dispositive power over 477,820
shares, and sole voting power over 407,320 shares, GFI exercises sole voting
and dispositive power over 189,800 shares and GIL exercises sole voting and
dispositive power over 8,000 shares; (v) GAMCO and GFI were formerly
wholly-owned subsidiaries of The Gabelli Group, Inc. ("TGGI") which,
effective August 31, 1990, merged into GFI, and GAMCO is a wholly-owned
subsidiary of GFI; (vi) Mario J. Gabelli is the majority stockholder,
Chairman of the Board and Chief Executive Officer of GFI, the sole director
and Chairman and Chief Executive Officer of GAMCO, and Chief Investment
Officer of GAMCO and GFI; (vii) Mr. Gabelli is deemed to have beneficial
ownership of the shares beneficially owned by GAMCO, GFI and GIL and GFI is
deemed to have beneficial ownership of the securities owned beneficially by
each of the foregoing entities other than Mr. Gabelli and (viii) the power of
Mr. Gabelli and GFI is indirect with respect to stock beneficially owned
directly by GAMCO and GIL.
A February 14, 1996 amended Schedule 13G filed by Quest Advisory Corp.
("Quest") and Quest Management Company ("QMC"), both described as investment
advisors, reported that they had increased their beneficial ownership from
326,400 shares to 365,100 shares and from 18,900 shares to 21,000 shares,
respectively, of common stock of the Corporation. The amended report stated
that Charles M. Royce may be deemed to be a controlling person of Quest and
QMC and as such may be deemed to beneficially own the shares of common stock
of the Corporation beneficially owned by Quest and QMC but that he disclaimed
beneficial ownership of the shares held by Quest and QMC. The amended report
further stated that these shares had been acquired in the ordinary course of
business and not for the purposes of control of the Corporation.
12
<PAGE>
OTHER MATTERS WHICH MAY BE PRESENTED FOR ACTION AT THE MEETING
The Board of Directors does not intend to present for action at this
Annual Meeting any matter other than those specifically set forth in the
Notice of Annual Meeting. If any other matter is properly presented for
action at the Meeting, it is the intention of persons named in the proxy to
vote thereon in accordance with their judgment pursuant to the discretionary
authority conferred by the proxy.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next Annual
Meeting must be received by the Office of the Secretary, Curtiss-Wright
Corporation, 1200 Wall Street West, Lyndhurst, New Jersey 07071 no later than
November 1, 1996 for inclusion in the Corporation's Proxy Statement and form
of proxy relating to that Meeting.
PERSONS MAKING THE SOLICITATION
This solicitation of proxies is made on behalf of the Board of Directors
of the Corporation, and the cost thereof will be borne by the Corporation.
The Corporation will reimburse brokerage firms and nominees for their
expenses in forwarding proxy material to beneficial owners of the stock of
the Corporation. In addition, a number of employees, officers and directors
of the Corporation (none of whom will receive any compensation therefore in
addition to his regular compensation) may solicit proxies. The solicitation
will be made by mail and in addition, the telephone, facsimile, telegrams and
personal interviews may be utilized.
By Order of the Board of Directors
Dana M. Taylor, Jr.
Secretary
Dated: February 26, 1996
13
<PAGE>
EXHIBIT A
CURTISS-WRIGHT CORPORATION
1996 STOCK PLAN
FOR
NON-EMPLOYEE
DIRECTORS
The Curtiss-Wright Corporation 1996 Stock Plan for Non-employee Directors
is designed to enhance the ability of the Company to attract and retain
exceptionally qualified individuals and to vest them with a proprietary
interest in the growth and performance of the Company.
For purposes of this Plan, unless otherwise indicated, the term "Company"
shall mean Curtiss-Wright Corporation.
1. Eligibility
All directors of the Company who are not during the term of this Plan and
who have not previously been officers or employees of the Company shall
participate in this Plan.
2. Definitions
As used in this Plan, the following terms shall have the meanings set
forth:
(a) "Board" means the Board of Directors of the Company.
(b) A "Change in Control" shall be deemed to have occurred for the
purposes of the Plan on the date of occurrence of any of the events set
forth in clauses (1), (2) and (3) of this subparagraph;
(1) the date the Company acquires knowledge of the filing under the
Exchange Act of a statement on Schedule 13D, or any amendment thereto,
relating to a transaction or series of transactions in which any person
or group deemed a person under Section 13(d)(3) of the Exchange Act
shall have become the beneficial owner, directly or indirectly (with
beneficial ownership determined as provided in Rule 13d-3, or any
successor rule, under the Exchange Act), of securities of the Company
entitling the person or group to 20% or more of all votes to which all
shareholders of the Company would be entitled in the election of
directors were an election held on such date; provided, that any shares
held prior to January 1, 1996 by a person or group who filed or who
would have been obligated to file a Schedule 13D or 13G with respect to
beneficial ownership of securities of the Company, any affiliate or
associate as of January 1, 1996 of any such person, any beneficiary or
any trust or estate included in any such person or group, any member of
the family of any such person, and trust or estate (including the
trustees or executors thereof) established by or for the benefit of any
such person, or any charitable foundation, whether a trust or a
corporation (including the trustees and directors thereof) established
by or for the benefit of any such person (in each case, an "Existing
Shareholder"), shall be excluded from the shares held by any person or
group for purposes of determining whether the foregoing 20% threshold
for securities ownership has been reached by such person or group; and
provided further that, notwithstanding the foregoing, the securities
beneficially owned by any Existing Shareholder shall not be so excluded
from the securities beneficially owned by any person or group if such
person or group includes any person who is not an Existing Shareholder
and such person or group has beneficial ownership of securities of the
Company having 20% or more of all votes in the election of directors;
(2) the date on which there is a failure of individuals who were
members of the Board as of April 12, 1996 to constitute at least a
majority of the Board, unless the election (or the nomination for
election by the shareholders) of each new director was approved by a
vote of at least two-thirds of the total of such individuals then still
in office and such other directors as may previously have been elected
or nominated pursuant to such a two-thirds vote; or
(3) the date of approval by the shareholders of the Company of an
agreement ( a "reorganization agreement") providing for (i) the merger
or consolidation of the Company with another corporation in which the
A-1
<PAGE>
Company is not the surviving corporation, or pursuant to which its common
stock is converted, other than a merger where the shareholders of the
Company immediately prior to the merger or consolidation beneficially
own, immediately after the merger or consolidation, shares of the
corporation issuing cash or securities in the merger or consolidation
entitling such shareholders to 50% or more of all votes to which all
shareholders of such corporation would be entitled in the election of
directors or where the members of the Board of the Company immediately
prior to the merger or consolidation constitute, immediately after the
merger or consolidation, a majority of the Board of the corporation
issuing cash or securities in the merger or consolidation, or (ii) the
sale or other disposition or liquidation of all or substantially all of
the assets of the Company; provided, however that notwithstanding
anything to the contrary in this Plan, no transaction or series of
transactions shall constitute a "Change in Control" as to any
Non-employee Director if such transaction or series of transactions
required such Non-employee Director to be identified in any United States
securities law filing as a person or a member of any group acquiring,
holding or disposing of beneficial ownership of the Company's securities
and effecting a "Change in Control" as defined herein.
(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(d) "Deferred Cash Account" means an account established under this
Plan for a Non-employee Director to which all or portions of his or her
committee meeting fees and regular stipulated compensation have been or
are to be credited in the form of cash.
(e) "Deferred Shares Account" means an account established under this
Plan for a Non-employee Director to which all or portions of his or her
committee meeting fees and regular stipulated compensation have been or
are to be credited in the form of Shares.
(f) "Fair Market Value" shall mean, with respect to any Shares, the
simple average of the high and low prices of such Shares on the New York
Stock Exchange on the date as to which Fair Market Value is to be
calculated (or, if there is no trading on the New York Stock Exchange on
such date, then on the first previous date on which there is such
trading);
(g) "Non-employee Director" shall mean a director who meets the
eligibility requirements of Section 1, hereof;
(h) "Restricted Stock" shall mean any Shares granted Pursuant to
Section 5 of this Plan, provided that such definition shall remain
operative only as to Shares as to which the restrictions set forth herein
have not lapsed;
(i) "Shares" shall mean shares of the common stock of the Company, $
1.00 par value.
3. Administration of this Plan
This Plan shall be administered by the Secretary of the Company (the
"Secretary"). The Secretary shall have full power and authority to construe,
interpret and administer this Plan. The Secretary may issue rules and
regulations for administration of this Plan. All decisions of the Secretary
shall be final, conclusive and binding upon all parties, including the
Company, the stockholders and the directors. In the event of the absence or
inability of the Secretary, any Assistant Secretary shall have the authority
to act in his place.
Subject to the terms of this Plan and applicable law, the Secretary shall
have full power and authority: (i) to interpret and administer this Plan and
any instrument or agreement relating to Restricted Stock granted under, this
Plan; (ii) to establish, amend, suspend or waive such rules and regulations
and appoint such agents as the Secretary shall deem appropriate for the
proper administration of this Plan; and (iii) to make any other determination
and take any other action that the Secretary deems necessary or desirable for
the administration of this Plan.
4. Shares Available for Grant
Subject to adjustment as provided below:
(a) Sources of Shares Deliverable Under this Plan. Any Shares granted
pursuant to this Plan shall be from treasury Shares.
A-2
<PAGE>
(b) Adjustments. In the event that the Secretary shall determine that
any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase or exchange of Shares or other
securities of the Company, issuance of warrants or other rights to
purchase Shares or other securities of the Company, or other similar
corporate transaction or occurrence affects the Shares such that an
adjustment is determined by the Secretary to be appropriate in order to
prevent dilution or significant enlargement of the benefits or potential
benefits intended to be made available under this Plan, then the Secretary
shall, in such manner as he or she may deem equitable, adjust the number
of Restricted Stock Shares outstanding hereunder; provided, however, that
any fractional Shares created by such transaction or occurrence may in the
discretion of the Secretary be rounded upwards to full Shares, to the end
that no fractional Shares shall remain outstanding hereunder.
Notwithstanding any such corporate transaction or occurrence, no
adjustment shall be made in the number of Restricted Stock Shares to be
granted to new Non-employee Directors who are elected after the occurrence
of any such corporate transaction or occurrence.
5. Grants of Restricted Stock
(a) Initial Grants. The Company, as of the effective date of this Plan,
shall grant to each then current Non-employee Director of the Company,
that number of Shares of Restricted Stock as shall have a Fair Market
Value of $13,300, calculated as of the effective date of grant, provided
however that if such calculation shall produce a result that includes
fractional Shares, such fractional Shares shall be rounded upwards to full
Shares.
Upon the initial election of any new Non-employee Director of the
Company subsequent to but within five years of the effective date of this
Plan, the Company, as of the effective date of such new Non-employee
Director's initial election, shall grant to such new Non-employee Director
that number of Shares of Restricted Stock as shall have a Fair Market
Value equal to the product of increasing $13,300 at an annual rate of
2.96%, compounded monthly from the effective date of this Plan, calculated
as of the effective date of such new Non-employee Director's election,
provided however that if such calculation produces a result that includes
a fractional Share, such fractional Share shall be rounded upwards to a
full Share.
(b) Subsequent Grants. On the fifth anniversary of the initial grant of
Restricted Stock under this Plan to any Non-employee Director who shall
then remain a Non-employee Director, the Company, as of such anniversary,
shall grant to such remaining Non-employee Director that number of Shares
of Restricted Stock as shall have a Fair Market Value equal to the product
of increasing $13,300 at an annual rate of 2.96%, compounded monthly from
the effective date of this Plan, calculated as of the effective date of
the anniversary in question, provided however that if such calculation
produces a result that includes a fractional Share, such fractional Share
shall be rounded upwards to a full Share.
6. Features of Restricted Stock
(a) Custody of Shares. Restricted Stock Shares granted hereunder shall
be held by the Company or its representative for the account of the
recipient until the restrictions expire, whereupon, assuming no event has
occurred that would effect a forfeiture of the recipient's interest in the
Shares, a certificate or certificates evidencing unrestricted ownership of
such Shares shall be delivered to the recipient.
(b) Share Certificates. Should it become necessary or convenient to
issue certificates for Restricted Stock, such certificates shall be
subject to such stop transfer orders and other restrictions as the
Secretary may deem advisable under this Plan and the rules, regulations,
and other requirements of the Securities and Exchange Commission, any
stock exchange upon which such Shares or other securities are then listed,
and any applicable Federal or state securities laws, and the Secretary may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(c) Nature of Restrictions. During the period of restrictions relevant
to any Restricted Stock issued hereunder neither such Restricted Stock nor
any right under it may be sold, pledged, alienated, attached, transferred,
assigned or otherwise encumbered other than by will or the laws of descent
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and distribution or as otherwise provided herein (a transfer may be made
pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act or the rules
thereunder), and any purported sale, pledge, alienation, attachment,
transfer, assignment or encumbrance thereof shall be void and unenforceable
against the Company.
(d) Other Incidents of Ownership. The recipients of the Restricted
Stock shall receive all dividends thereon, and shall be entitled to vote
them in any matter in which shareholders of the Company shall be entitled
to vote. All such rights shall be exercisable during the recipient s
lifetime only by the recipient or, if permissible under applicable law, by
the participant's guardian or legal representative.
(e) Duration of Restrictions. As to each recipient the restrictions on
Restricted Stock granted hereunder shall last for the shorter of (a) five
years from the date of grant or (b) until such time as the service of the
recipient as a Non-employee Director of the Company shall have ended by
reason of his or her (i) death or disability or (ii) failure to be
reelected if such failure does not result from his or her resignation from
the Board or from his or her decision not to stand for reelection,
provided, however, that in no event shall the period of restrictions
terminate within less than six months after the date of grant for any
reason other than death or disability.
(f) Forfeiture of Restricted Stock. In the event the recipient's
membership on the Board shall terminate prior to the completion of five
years of service as a Non-employee Director from and after a grant of
Restricted Stock hereunder by reason of his or her resignation from the
Board or by reason of his or her decision not to stand for re-election,
all such Restricted Stock Shares granted to him or her hereunder less than
five years prior to such termination, including all right, title and
interest of the recipient therein, shall be forfeited by the recipient in
their entirety and shall revert to the Company.
(g) Change of Control. Notwithstanding any other provision hereof, a
Change of Control shall result in the immediate lapse of all restrictions
on Restricted Stock that was granted hereunder six months or more prior to
the Change of Control. Upon such event certificates evidencing
unrestricted ownership of Shares that have come free of restriction shall
promptly be delivered to the affected directors, and, to the extent not
already done pursuant to Section 6(b) hereof, certificates reflecting the
remaining restrictions shall promptly be delivered to directors who then
have Shares that have not yet come free of restriction.
7. Payment of Regular Stipulated Compensation and Meeting Fees in Shares;
Deferral of Payments.
(a) Election to Receive Meeting Fees and Regular Stipulated
Compensation in Shares in Lieu of Cash. Subject to the terms and
conditions of this Plan, a Non-employee Director may elect to receive
Shares of common stock in lieu of all or a portion of the director meeting
fees and all or a portion of the quarterly installments of regular
stipulated compensation that would otherwise be payable in cash by the
Company for his or her service as a director. Such election shall be made
in accordance with Section 7(c). As to Shares that the recipient does not
elect to defer pursuant to Section 7(b), below, the number of Shares
(rounded up to the next whole Share in the event of a fractional Share) to
be paid in lieu of any meeting fee and any given installment of regular
stipulated compensation, or portion thereof, shall be the quotient that
results from the division of the dollar value of the fee or installment,
or portion thereof, by the Fair Market Value of Shares as of the date the
fee or installment would have become due and payable to the director had
it not been for his or her election hereunder. As to Shares that the
recipient does elect to defer pursuant to Section 7(b), the number of
Shares shall be calculated as in the preceding sentence except that,
instead of the Fair Market Value, a figure of one hundred ten per cent
(110%) of the Fair Market Value shall be used. Except with respect to any
Shares the director has elected to defer pursuant to Section 7(b),
certificates representing Shares payable hereunder shall be delivered to
the Non-employee Director as soon as practicable.
(b) Deferrals of Meeting Fees and Regular Stipulated
Compensation. Subject to the terms and conditions of this Plan, a
Non-employee Director may elect to defer all or a portion of the Shares
payable under Section 7(a) and all or portions of the director meeting
fees and installments of regular stipulated compensation payable in cash
by the Company for his or her service as a director for the calendar year.
Such elections shall be made in accordance with Section 7(c). A
Non-employee Director who elects to so defer shall have any deferred
Shares deferred in the form of Shares and any deferred cash meeting fees
and cash installments of regular stipulated compensation deferred in the
form of cash.
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(c) Elections.
(1) All elections under Sections 7(a) and 7(b) shall (A) be made in
writing and delivered to the Secretary of the Company and (B) be
irrevocable. All elections for payments or deferrals in the form of
Shares shall be made before July 1 of the year prior to the year in
which the Shares or director's meeting fees and installments of regular
stipulated compensation are to be earned, except that (i) in 1996 an
eligible participant s election may be made within thirty days after
the effective date of the Plan, and (ii) in the case of an individual
who becomes a Non-employee Director during a calendar year the election
may be made within thirty days after he or she becomes a Non-employee
Director, provided, however, that in the event of either (i) or (ii)
the election shall not be effective with respect to meeting fees and
installments of regular stipulated compensation earned in whole or in
part during the first six months following the election. Elections for
deferrals in the form of cash under Section 7(b) shall be made on or
before December 31 prior to the year the director's meeting fees or
installments of regular stipulated compensation are to be earned,
except that (i) in 1996 an eligible participant s election may be made
within thirty days after the effective date of the Plan, and (ii) in
the case of an individual who becomes a Non-employee Director during a
calendar year the election may be made within thirty days after he or
she becomes a Non-employee Director, provided, however, that in the
event of either (i) or (ii) the election shall not be effective with
respect to meeting fees and installments of regular stipulated
compensation earned in whole or in part during such thirty day period.
Deferral elections shall also specify (A) the portions (in 10%
increments) to be deferred and (B) the future date or dates on which
deferred amounts are to be paid or the future event or events upon the
occurrence of which the deferred amounts are to be paid and the method
of payment (lump sum or annual installments of approximately equal
amounts (up to 10), provided, however, that in no event shall any such
election be structured in a manner that could result in a deferral of
less than two years from the date of election, or that could result in
the deferral of any future payment or installment to a date later than
the twenty-fifth anniversary of the date of the election. In the event
of an election under Section 7(a) for director meeting fees or
installments of regular stipulated compensation to be paid in Shares,
the election shall specify the portion (in 10% increments) to be so
paid. Any change with respect to the terms of an election for (A) the
payment of director meeting fees or installments of regular stipulated
compensation under Section 7(a) from Shares to cash or vice versa and
(B) the amount of any deferral in the form of Shares and the timing or
amount of payments from the Deferred Shares Account shall be effective
six months following such change in the election.
(2) Credit of Deferrals. A Non-employee Director who has elected to
defer Shares under Section 7(b) shall receive a credit to his or her
Deferred Shares Account for each deferral action. The number of Shares
so credited for each deferral action shall be as determined in
accordance with Sections 7(a) and 7(b). A Non-employee Director who has
elected to defer cash compensation under Section 7(b) shall receive a
credit to his or her Deferred Cash Account for each deferral action.
The amount of such credit shall equal the amount of the deferral in
question. The timing of each credit under this section shall be as of
the date the that the fee or installment to which the credit relates
would have become due and payable to the director had it not been for
his or her election or elections hereunder.
(4) Dividends and Interest. Each time a cash dividend is paid on
the Shares, a Non-employee Director who has Shares credited to his or
her Deferred Shares Account shall receive a credit for such dividends
on the dividend payment date to his or her Deferred Shares Account;
provided dividends paid with respect to Shares granted under Section
7(a) shall not be credited to the Deferred Shares Account but shall
instead be promptly paid directly to such Non-employee Director unless
such director shall have elected to defer receipt of the Shares to
which the dividend relates as provided in Section 7(b). The amount of
the dividend credit shall be the number of Shares (rounded to the
nearest one-hundredth of a Share) determined by multiplying the
dividend amount per Share by the number of Shares credited to such
director's Deferred Shares Account as of the record date for the
dividend and dividing the product by the Fair Market Value per Share on
the dividend payment date. The Cash Account of a Non-employee Director
shall be credited on the first business day of each calendar quarter
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<PAGE>
with interest on such account's balance at the end of the preceding
quarter, payable at a rate equal to the pre-tax cost of borrowing of the
Company on such date as determined from time to time by the Chief
Financial Officer, Controller or Treasurer of the Company.
(5) Payouts. Deferred Cash Accounts will be paid out in cash and
Deferred Shares Accounts shall be paid out in full Shares, provided,
however, that, on the occasion of the payment of the final installment
of Shares to be made out of a Deferred Shares Account, fractional
Shares totaling less than a full Share shall be rounded upwards to the
next full Share. Cash amounts credited to a Deferred Cash Account and
certificates representing Shares credited to a Deferred Shares Account
shall be delivered to the Non-employee Director as soon as practicable
following the termination of the deferral, or when they would become
due in terms of the deferral, and consistent therewith.
(d) No Stock Rights. The deferral of Shares into a Deferred Shares
Account shall confer no rights upon the Non-employee Director in whose
name such account exists, as a shareholder of the Company or otherwise,
with respect to the Shares held in such Deferred Shares Account, but shall
confer only the right to receive such Shares credited as and when provided
herein.
(e) Change in Control. Notwithstanding anything to the contrary in this
Plan or any election, in the event a Change in Control occurs, amounts and
Shares credited to Deferred Cash Accounts and Deferred Share Accounts
shall be promptly distributed to the appropriate Non-employee Directors.
(f) Beneficiaries. A Non-employee Director may designate at any time
and from time to time a beneficiary for his or her Deferred Cash and
Deferred Shares Accounts in the event either or both of said accounts may
be paid out following his or her death. Such designation shall be in
writing in such form as may be prescribed by the Company and shall be
received by the Company at least 30 days prior to the death to be
effective.
8. Amendment and Termination
Except to the extent prohibited by applicable law and unless expressly
provided in this Plan:
(a) Amendments to this Plan. The Board may amend, alter, suspend,
discontinue or terminate this Plan without the consent of any stockholder,
participant, other holder or beneficiary of Restricted Stock or other
person; provided, however, that (a) the provisions of the Plan may not be
amended more than once every six months other than to comport with changes
in the Code or the rules thereunder, and (b) no such action shall:
(i) increase the benefits accruing to directors under this Plan,
(ii) increase the quantum of Stock that may be issued under this
Plan;
(iii) materially modify the requirements as to eligibility for
participation in this Plan; or
(iv) adversely affect the rights under any Restricted Stock
theretofore granted under this Plan or the rights to any amounts or
Shares theretofore credited to a Deferred Cash Account or a Deferred
Shares Account.
(b) Correction of Defects, Omissions and Inconsistencies. The Secretary
may correct any defect, supply any omission, or reconcile any
inconsistency in this Plan or any Restricted Stock in the manner and to
the extent he or she shall deem desirable to carry this Plan into effect.
9. General Provisions
(a) Withholding. The Company is authorized to withhold from any
Restricted Stock Shares granted and from any dividends to be paid on
Restricted Stock the amount (in cash, Shares, other securities, or other
property) of any taxes required to be withheld in respect of a grant,
payment or settlement of Restricted Stock Shares or any payment of
dividends under such Restricted Stock Shares or under this Plan and to
take such other action as may be necessary in the opinion of the Company
to satisfy all obligations for the payment of any such taxes.
A-6
<PAGE>
(c) No Limit on Other Compensation Arrangements. Nothing contained in
this Plan shall prevent the Company from adopting or continuing in effect
other or additional compensation arrangements, and such arrangements may
be either generally applicable or applicable only in specific cases.
(d) No Right to Continued Board Membership. The grant of a benefit
hereunder shall not be construed as giving a participant the right to be
retained as a director of the Company. The Board may at any time fail or
refuse to nominate a participant for election to the Board, and the
stockholders of the Company may at any election fail or refuse to elect
any participant to the Board free from any liability or claim under this
Plan or any grant hereunder.
(e) Governing Law. The validity, construction, and effect of this Plan
and any rules and regulations relating to this Plan shall be determined in
accordance with the laws of the State of Delaware and applicable Federal
law.
(f) Severability. If any provision of this Plan or any grant or
deferral hereunder is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction, or as to any person or any other grant
or deferral, or would disqualify this Plan or any grant or deferral under
any law deemed applicable by the Secretary, such provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot
be so construed or deemed amended without, in the determination of the
Secretary, materially altering the intent of this Plan or the grant or
deferral, such provision shall be stricken as to such jurisdiction,
person, grant or deferral, and the remainder of this Plan and any such
grant or deferral shall remain in full force and effect.
(g) No Trust or Fund Created. Neither this Plan nor any grant or
deferral, nor any account pertaining thereto shall create or be construed
to create a trust or separate fund of any kind or a fiduciary relationship
between the Company and a participant or any other person. To the extent
that any person acquires a right to receive Shares or cash from the
Company pursuant to this Plan, such right shall be no greater than the
right of any unsecured general creditor of the Company.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to this Plan.
10. Effective Date of this Plan
Contingent upon its approval by a majority of the shareholders of the
Company, this Plan shall be effective as of April 12, 1996.
11. Term of this Plan
No Restricted Stock Shares shall be granted under this Plan on or after
the tenth anniversary of its effective date, nor shall any compensation
payable to a Non-employee Director be payable in Shares or deferred under
this Plan after such anniversary. However, unless otherwise expressly
provided in this Plan or in the restrictions or provisions applying to
Restricted Stock Shares previously issued or deferrals previously made, any
Restricted Stock Shares theretofore granted and deferrals theretofore made
may remain outstanding beyond such date (subject to the provisions of Section
7(c)(1) and the authority of the Secretary to interpret, construe, administer
and make determinations under this Plan, and the authority of the Board to
amend this Plan, shall extend beyond such tenth anniversary.
A-7
<PAGE>
PROXY CURTISS-WRIGHT CORPORATION
1200 WALL STREET WEST, LYNDHURST, NEW JERSEY 07071
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints DAVID LASKY, ROBERT A. BOSI and DANA M.
TAYLOR, JR. and each of them as proxies with power of substitution to vote
all shares of the Corporation which the undersigned is entitled to vote at
the Annual Meeting of Stockholders on April 12, 1996, at the Novotel
Meadowlands Hotel, One Polito Avenue, Lyndhurst, New Jersey at 2:00 p.m. or
any adjournment thereof, with all the powers the undersigned would have if
personally present, as specified, respecting the following matters described
in the accompanying Proxy Statement and, in their discretion, on other
matters which come before the meeting.
A Vote FOR Items 1, 2 and 3 is recommended.
(1) ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) [ ] listed below [ ]
T. R. Berner, J. S. Bull, J. B. Busey IV, D. Lasky, W. B. Mitchell,
J. R. Myers, W. W. Sihler, J. M. Stewart
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below)
--------------------------------------
(2) PROPOSAL TO APPROVE THE APPOINTMENT OF PRICE WATERHOUSE LLP as independent
public accountants of the Corporation.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) PROPOSAL TO APPROVE 1996 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(Continued and to be signed on reverse side)
<PAGE>
This proxy will be voted in accordance with stockholder specifications.
Unless directed to the contrary, this proxy will be voted FOR Items 1, 2 and
3. A majority (or if only one, then that one) of the proxies or substitutes
acting at the meeting may exercise the powers conferred herein. Receipt of
the accompanying Notice of Meeting and Proxy Statement is hereby
acknowledged.
.................................... 1996
(Date)
.........................................
.........................................
(Signature)
(Please sign name as fully and exactly as it
appears opposite. When signing in a
fiduciary or representative capacity, please
give full title as such. Where more than one
owner, each owner should sign. Proxies
executed by a corporation should be signed
in full corporate name by duly authorized
officer.)
PLEASE MARK, SIGN, DATE AND MAIL IN ENCLOSED ENVELOPE. NO POSTAGE REQUIRED IN
UNITED STATES.
