<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[_] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
DRAVO CORPORATION
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF DRAVO CORP]
March 26, 1996
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders at
10:00 a.m. on Thursday morning, April 25, 1996, in the Urban Room on the
seventeenth floor of the Westin William Penn Hotel located in downtown
Pittsburgh.
A Proxy Card or Voter Direction Card is enclosed with the notice of meeting
and proxy statement. Whether or not you now plan to attend the annual meeting,
we urge you to sign, date and mail the enclosed card and return it in the
enclosed envelope at your earliest convenience. Regardless of the size of your
holding, it is important that your shares be represented. If you attend the
annual meeting, you may withdraw your proxy and vote in person.
Admission to the meeting will be by Admission Card only. If you plan to
attend, you may obtain an Admission Card by completing the Admission Card
Request Form and returning it along with your Proxy Card or Voter Direction
Card.
We look forward with pleasure to seeing you on April 25th.
Sincerely,
/s/ Carl A. Gilbert
Carl A. Gilbert
President and Chief
Executive Officer
<PAGE>
DRAVO CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 1996
The 1996 annual meeting of the shareholders of Dravo Corporation, a
Pennsylvania corporation (the "Corporation"), will be held in the Urban Room on
the seventeenth floor of the Westin William Penn Hotel, Pittsburgh,
Pennsylvania, on Thursday, April 25, 1996 at 10:00 a.m., Eastern Daylight
Savings Time, for the purpose of:
1. Electing two Directors to the class of the Board of Directors whose
term expires at the 1999 annual meeting of shareholders;
2. Considering and taking action on the proposed Non-Employee
Directors' Retainer Fee Plan, set forth as Appendix A to the accompanying
Proxy Statement;
3. Considering and taking action on the proposed Stock Incentive
Compensation Plan, set forth as Appendix B to the accompanying Proxy
Statement;
4. Electing certified public accountants to examine the financial
statements of the Corporation and its subsidiaries as of December 31, 1996,
and to report upon the financial statements to the shareholders as of
December 31, 1996; and
5. Transacting such other business as may properly be brought before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 6, 1996 as
the record date for determining shareholders entitled to notice of and to vote
at the annual meeting or any adjournment thereof.
A copy of the Corporation's Annual Report for the year ended December 31,
1995 is being mailed herewith to each shareholder.
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD OR VOTER DIRECTION
CARD IN THE POSTAGE-PAID AND ADDRESSED ENVELOPE PROVIDED.
By Order of the Board of Directors
JAMES J. PUHALA,
Secretary
3600 One Oliver Plaza
Pittsburgh, Pennsylvania 15222-2682
March 26, 1996
<PAGE>
PROXY STATEMENT
This proxy statement and the related letter to shareholders, notice of
meeting and Proxy Card or Voter Direction Card are being mailed to the
shareholders of Dravo Corporation, a Pennsylvania corporation (the
"Corporation"), on or about March 26, 1996 in connection with the solicitation
by the Board of Directors of the Corporation of proxies to be voted at the
annual meeting of shareholders to be held at 10:00 a.m., Eastern Daylight
Savings Time, on Thursday, April 25, 1996 in the Urban Room on the seventeenth
floor of the Westin William Penn Hotel, Pittsburgh, Pennsylvania and any
adjournments thereof (the "1996 Annual Meeting"). Proxies are revocable until
exercised, but under Pennsylvania law such revocation is not effective until
notice thereof has been given to the Secretary of the Corporation at its
principal executive office, 3600 One Oliver Plaza, Pittsburgh, Pennsylvania
15222-2682 or at the 1996 Annual Meeting.
The Board of Directors has fixed the close of business on March 6, 1996 as
the record date (the "Record Date") for determining shareholders entitled to
vote at the meeting.
On the Record Date the Corporation had outstanding 14,707,546 shares of
Common Stock, par value $1.00 per share (the "Common Stock"), 25,386 shares of
$2.475 Cumulative Convertible Series B Preference Stock, par value $1.00 per
share (the "Series B Preference Stock") and 200,000 shares of Series D
Cumulative Convertible Exchangeable Preference Stock, par value $1.00 per share
(the "Series D Preference Stock"). Each holder of record at the close of
business on the Record Date of Common Stock, Series B Preference Stock and
Series D Preference Stock is entitled to one vote for each share of any class
held. The holders of Common Stock and of Series B and Series D Preference Stock
vote as a single class on the elections of Directors and of certified public
accountants and on the approval of the Non-Employee Directors' Retainer Fee Plan
and Stock Incentive Compensation Plan.
ELECTIONS OF DIRECTORS
The Corporation has a staggered Board of Directors (the "Board"), so that
the Directors are divided into classes whose members' terms expire in different
years. The Board has three classes with terms expiring presently at the annual
meetings of shareholders in 1996, 1997 and 1998. Pennsylvania law requires that
each class of Directors to be elected at a meeting of shareholders be elected in
a separate election.
Directors will be elected at the 1996 Annual Meeting to serve until the
annual meeting in the year their term expires and until their successors are
duly elected and qualified. The following are the Board's nominees for the two
positions in the class of the Board whose members' terms presently expire at the
1996 Annual Meeting, and after the election whose members' terms will expire at
the 1999 annual meeting of shareholders (the "1999 Class of Directors"):
<TABLE>
<CAPTION>
NOMINEE TERM TERM EXPIRES
------- ---- ------------
<S> <C> <C>
Arthur E. Byrnes 3 years 1999
James C. Huntington, Jr. 3 years 1999
</TABLE>
Although it is expected that each of the nominees of the Board listed above
will be available for election, if either of them is not a candidate at the time
the election occurs, it is intended that proxies solicited by the Board will be
voted for the election of a substitute nominee designated by the Board upon the
recommendation of the Nominating Committee of the Board unless the number of
Directors has been reduced, in which event such proxies will be voted for the
reduced number of nominees.
Messrs. Byrnes and Huntington have previously been elected Directors by the
shareholders.
Record holders of the Corporation's Common Stock, Series B Preference Stock
and Series D Preference Stock have cumulative voting rights in the elections of
Directors. In the election to take place at the 1996 Annual Meeting for
positions in the 1999 Class of Directors, each shareholder entitled to vote
shall have the number of votes equal to the number of shares of Common Stock,
Series B Preference Stock and Series D Preference Stock owned by the shareholder
on the Record Date, multiplied by two (being the number of Directors to be
elected to positions in the 1999 Class of
1
<PAGE>
Directors); the shareholder may allocate those votes in favor of any one or more
candidates in such election as the shareholder determines. The candidates
receiving the highest number of votes in such election up to the number of
Directors to be elected will be elected.
Under cumulative voting for Directors, unless otherwise indicated by the
shareholder, a vote for the nominees of the Board will give the named
proxyholders (the "Proxies") discretionary authority to cumulate all votes to
which the shareholder is entitled and to allocate them after the total vote
counts are available in favor of any one or more such nominees as the Proxies
determine, with a view to maximizing the number of nominees of the Board who are
elected. The effect of cumulation and voting in accordance with that
discretionary authority may be to offset the effect of a shareholder's having
withheld authority to vote for an individual nominee or nominees because the
Proxies will be able to allocate votes of shareholders who have not withheld
authority to vote in any manner they determine among such nominees. If a
shareholder desires specifically to allocate votes among one or more nominees,
the shareholder should so specify on the Proxy Card or Voter Direction Card.
Nominations for Directors at the annual meeting, other than those made by
or on behalf of the Board of Directors, must be submitted in writing and
received by the Secretary of the Corporation at least 90 days prior to the
anniversary date of the immediately preceding annual meeting, and must comply
with certain other requirements as set forth in the By-laws of the Corporation,
a copy of which may be obtained upon written request to the Secretary of the
Corporation at 3600 One Oliver Plaza, Pittsburgh, Pennsylvania 15222-2682.
INFORMATION CONCERNING DIRECTORS AND NOMINEES FOR DIRECTOR
There follows certain information, including business experience during the
past five years, concerning the nominees for Director and Directors of the
Corporation whose terms of office will extend beyond the 1996 Annual Meeting.
Arthur E. Byrnes, Age 51, Director since December 9, 1993. Present term
expires 1996. Chairman, Deltec Asset Management Corporation (independent
investment counselors) since May 1988. Director of Deltec International S.A.(1)
and Home Federal Financial Corporation.
Carl A. Gilbert, Age 54, Director since December 8, 1994. Present term
expires 1998. President and Chief Executive Officer of the Corporation since
January 1, 1995 and President of Dravo Lime Company since February 1983.
President and Chief Operating Officer of the Corporation from
March 31, 1994 to January 1, 1995. Prior thereto Senior Vice President of the
Corporation.
James C. Huntington, Jr., Age 67, Director since January 28, 1988. Present
term expires 1996. Independent businessman since August 1988. Senior Vice
President of American Standard, Incorporated (manufacturers of air conditioning,
building products and transportation equipment) from January 1977 until
retirement in August 1988. Director of Cyprus AMAX Minerals Company, Alumax Inc.
and Westinghouse Air Brake Company.
William E. Kassling, Age 52, Director since January 28, 1993. Present term
expires 1997. Chairman, Chief Executive Officer and President of Westinghouse
Air Brake Company (supplier of air brake systems and related products) since
March 9, 1990. Prior thereto Vice President, Group Executive, Railway Products
Group, American Standard, Incorporated. Director of Scientific Atlantic, Inc.
and Commercial Intertech.
William G. Roth, Age 57, Director since June 25, 1987. Present term expires
1998. Retired. Chairman of the Board of Directors of the Corporation from
December 1989 until retirement in May 1994. Prior thereto Chairman of the Board
of Directors and Chief Executive Officer of the Corporation. Director of Amcast
Industrial Corporation and Teknowledge Corp.
Konrad M. Weis, Age 67, Director since October 22, 1981. Present term
expires 1997. Retired. President, Chief Executive Officer and Director, Bayer
USA Inc. (specialty chemicals, pharmaceuticals,
- - ---------
1. See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS" at page 3.
2
<PAGE>
imaging and graphic systems) from June 1984 until retirement in July 1991.
Director of Michael Baker Corporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information, as of January 19, 1996, as to
beneficial ownership of shares of the outstanding Common Stock, Series B
Preference Stock and Series D Preference Stock of the Corporation:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP (1)
----------------------------
TITLE OF NAME AND ADDRESS AGGREGATE PERCENT OF
CLASS OF BENEFICIAL OWNER SHARES HELD CLASS (2)
----- ------------------- ----------- ---------
<S> <C> <C> <C>
Common Stock Cowen & Company 1,350,224(3) 9.2%
Financial Square
New York, NY 10005-3597
Common Stock Deltec International S.A. 959,200(4) 6.5%
Deltec House
Lyford Cay
Nassau, Bahamas
Common Stock Kingdon Capital 1,000,000(5) 6.8%
Management Corporation
152 W. 57th Street
New York, NY 10019
Common Stock Neuberger & Berman L.P. 959,015(6) 6.5%
605 Third Avenue
New York, NY 10158-3698
Common Stock Norwest Corporation 1,377,299(7) 9.3%
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-1026
Common Stock The Prudential Insurance 1,609,700(8) 9.9%
Company of America, Inc.
Prudential Plaza
Newark, NJ 07102-3777
Series B Floyd A. Mechling 21,000 82.7%
Preference Stock 5 North Calibogue Cay
Hilton Head Island, SC 29928-2913
Series B Nations Bank of South 4,386 17.3%
Preference Stock Carolina, N.A.
P.O. Box 16
Hilton Head Island, SC 29938
as Trustee U/A with D.L. Mechling for the
Benefit of Gladys H. Hale
Series D The Prudential Insurance 200,000(8) 100%
Preference Stock Company of America, Inc.
Prudential Plaza
Newark, NJ 07102-3777
</TABLE>
- - ---------
1. For purposes of the foregoing table, a "beneficial owner" includes any
person who directly or indirectly has or shares the power to vote or to
direct the voting of shares of the Corporation's stock or who directly or
indirectly has or shares the power to dispose of or to direct the
disposition of such shares.
3
<PAGE>
2. As of January 19, 1996 there were 14,707,546 shares of Common Stock, 25,386
shares of Series B Preference Stock and 200,000 shares of Series D
Preference Stock of the Corporation outstanding.
3. Cowen & Company has filed with the Securities and Exchange Commission under
the Securities Exchange Act of 1934 Amendment No. 1 to Schedule 13G which
disclosed that as of Decem-
ber 31, 1995 Cowen & Company had sole voting and investment power with
respect to 259,400 shares, shared voting power with respect to 660,000
shares, and shared investment power with respect to 1,090,824 shares of
Common Stock of the Corporation.
4. On March 8, 1996 Deltec International S.A. ("Deltec International") filed
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934 Amendment No. 2 to Schedule 13D which disclosed that as of
December 31, 1995 Deltec International, through its subsidiary and
affiliated entities, Depasa Corporation ("Depasa"), Deltec Asset Management
Corporation ("Deltec Asset Management"), The Deltec Banking Corporation
Limited ("Deltec Banking"), Deltec Panamerica Trust Company Limited
("Deltec Trust") and Kikis Fusco Asset Management Corporation ("KFAM") had
sole voting and investment power with respect to 226,800 shares and shared
voting and investment power with respect to 732,400 shares of Common Stock
of the Corporation. The address of each of Deltec Banking and Deltec Trust
is the same as Deltec International. The address of each of Depasa, Deltec
Asset Management and KFAM is 535 Madison Avenue, 26th Floor, New York, NY
10022. Arthur E. Byrnes, a Director of the Corporation, is the Chairman of
Deltec Asset Management and a director of Deltec International.
5. On September 1, 1995 Kingdon Capital Management Corporation filed with the
Securities and Exchange Commission under the Securities Exchange Act of
1934 Amendment No. 1 to Schedule 13D, which disclosed that as of March 8,
1995 Kingdon Capital Management Corporation had sole voting and investment
power with respect to 1,000,000 shares of Common Stock of the Corporation.
6. Neuberger & Berman L.P. has filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 Amendment No. 2 to
Schedule 13G which disclosed that as of December 31, 1995 Neuberger &
Berman L.P. had sole voting power with respect to 108,011 shares and shared
investment power with respect to 959,015 shares of Common Stock of the
Corporation, including 15,500 shares owned by partners of Neuberger &
Berman L.P. in their personal accounts, as to which Neuberger & Berman L.P.
disclaims beneficial ownership.
7. Norwest Corporation has filed with the Securities and Exchange Commission
under the Securities Exchange Act of 1934 Amendment No. 11 to Schedule 13G
on behalf of itself and its directly and indirectly owned subsidiaries,
Norwest Colorado, Inc., Norwest Bank Bldg., 1740 Broadway, Denver, Colorado
80274-8620, and Norwest Bank Colorado, National Association, 1740 Broadway,
Denver, Colorado 80274-8677, which disclosed that as of December 31, 1995
Norwest Corporation, directly and indirectly through its subsidiaries, had
sole voting power with respect to 1,122,999 shares, sole investment power
with respect to 1,375,749 shares, and shared investment power with respect
to 250 shares of Common Stock of the Corporation.
8. The Prudential Insurance Company of America has filed with the Securities
and Exchange Commission under the Securities Exchange Act of 1934 Amendment
No. 9 to Schedule 13G which disclosed that the 200,000 shares of Series D
Preference Stock owned by it are presently convertible into a total of
1,600,000 shares of Common Stock of the Corporation. Said Amendment No. 9
also disclosed that as of December 31, 1995 The Prudential Insurance
Company of America had sole investment and voting power with respect to
6,900 additional shares and shared investment power with respect to 2,800
additional shares of Common Stock. The total of the foregoing, 1,609,700
shares, would represent 9.9% of the Corporation's Common Stock.
4
<PAGE>
OWNERSHIP BY MANAGEMENT OF EQUITY SECURITIES
The following table sets forth information as of January 19, 1996
concerning the beneficial ownership, direct or indirect, of shares of Common
Stock of the Corporation, including shares of Common Stock as to which a right
to acquire beneficial ownership exists (for example, through the exercise of
stock options, conversions of securities or various trust arrangements) within
the meaning of Rule 13d-3(d)(1) of the Securities Exchange Act, of each nominee
for Director, each Director whose term will extend beyond the 1996 Annual
Meeting, each of the five most highly compensated executive officers of the
Corporation named in the Summary Compensation Table on page 6 hereof ("Named
Executives") and all Directors, nominees for Director and executive officers as
a group. No shares of Series B Preference Stock or Series D Preference Stock are
beneficially owned by any Director, nominee for Director or executive officer of
the Corporation.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF COMMON STOCK
BENEFICIALLY OWNED ON JANUARY 19, 1996
-----------------------------------------------------------
NUMBER OF STOCK PERCENT OF
SHARES OPTIONS OUTSTANDING
BENEFICIALLY AND AGGREGATE COMMON STOCK
OWNED SARS(1) TOTAL OWNED (2)
----- ------- ----- -------------
<S> <C> <C> <C> <C>
Arthur E. Byrnes 15,000 1,500 16,500 --
Carl A. Gilbert 2,162 114,500 116,662 --
James C. Huntington, Jr. 11,000 1,500 12,500 --
William E. Kassling 4,000 1,500 5,500 --
Ernest F. Ladd, III 7,851(3) 102,000 109,851 --
John R. Major 1,638 48,400 50,038 --
James J. Puhala 2,015(4) 47,400 49,415 --
William G. Roth 49,000 420,000 469,000 3.2%
Donald H. Stowe, Jr. 621(5) 27,900 28,521 --
Konrad M. Weis 2,705(6) 1,500 4,205 --
All Directors, nominees for Director
and executive officers as a group
(13 persons) 97,536 839,200 936,736 6.4%
</TABLE>
- - ---------
1. Includes stock options of the persons and group named above which are
currently exercisable. No separately granted SARs are presently
outstanding. See page 8 for further information under the heading
"OPTION/SAR EXERCISES AND HOLDINGS."
2. Percentages of less than 1 percent are omitted.
3. Includes 3,439 shares owned by Mr. Ladd's wife.
4. 800 shares owned jointly with his wife.
5. 27 shares owned jointly with his wife.
6. Owned jointly with his wife.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following summary compensation table sets forth the compensation
awarded, accrued or paid for each of the Named Executives as of December 31,
1995, for services rendered in all capacities during the fiscal year ended
December 31, 1995 and for the previous two years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------- ------------------------------------------
AWARDS PAYOUTS
--------------------------- -------
(A) (B) (C) (D) (E) (F) (G) (H)
SECURITIES
OTHER RESTRICTED UNDERLYING
ANNUAL STOCK OPTIONS/ LTIP
NAME AND SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#)(1) ($)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Carl A. Gilbert(2) 1995 225,000 111,900 0 0 100,000 0
President and Chief 1994 180,000 0 0 0 40,000 0
Executive Officer 1993 178,750 41,500 0 0 10,000 0
Ernest F. Ladd, III 1995 195,000 67,800 0 0 25,000 0
Executive Vice 1994 190,000 0 0 0 10,000 0
President & Chief 1993 188,700 0 0 0 10,000 0
Financial Officer
Donald H. Stowe, Jr.(3) 1995 140,000 27,300 0 0 25,000 0
Vice President, 1994 135,840 0 0 0 10,000 0
Sales & Technology 1993 130,265 21,900 0 0 5,000 0
John R. Major 1995 140,000 27,300 0 0 25,000 0
Vice President, 1994 134,000 0 0 0 10,000 0
Administration 1993 130,000 0 0 0 5,000 0
James J. Puhala 1995 135,000 27,300 0 0 25,000 0
Vice President, 1994 129,000 0 0 0 10,000 0
General Counsel 1993 125,000 0 0 0 5,000 0
& Secretary
<CAPTION>
(A) (I)
ALL
OTHER
NAME AND COMPENSATION
PRINCIPAL POSITION ($)
- - ------------------------------------------------
<S> <C>
Carl A. Gilbert(2) 0
President and Chief 0
Executive Officer 0
Ernest F. Ladd, III 0
Executive Vice 0
President & Chief Financial 0
Officer
Donald H. Stowe, Jr.(3) 0
Vice President, 0
Sales & Technology 0
John R. Major 0
Vice President, 0
Administration 0
James J. Puhala 0
Vice President, 0
General Counsel 0
& Secretary
</TABLE>
- - ---------
(1) Stock Option Awards for 1994 were deferred until the completion of the sale
of Dravo Basic Materials Company to Martin Marietta Materials, Inc. The
deferred 1994 shares were granted in January 1995, but are set forth in the
table above as 1994 long-term compensation. In July 1995, the Compensation
Committee awarded the options which are set forth in the table above as
1995 long term compensation, with the understanding that there would be no
options granted to senior management in 1996.
(2) Mr. Gilbert has served as President and Chief Executive Officer since
January 1, 1995. From April 1, 1994 to December 31, 1994 he served as
President and Chief Operating Officer. Previously he had served as Senior
Vice President of the Corporation and President of Dravo Lime Company.
(3) Mr. Stowe has served as Vice President, Sales and Technology of the
Corporation since January 1, 1995. Since March 1, 1992 Mr. Stowe has served
as Executive Vice President, Sales and Technology of Dravo Lime Company.
6
<PAGE>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table presents information concerning the grant of stock
options and stock appreciation rights in the fiscal year ended December 31, 1995
to the Named Executives.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E) (F)
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL
OPTIONS/SARS OPTIONS/ SARS
GRANTED GRANTED TO EXERCISE OR GRANT DATE
(#) (1) EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME (2) FISCAL YEAR ($/SH) DATE ($) (3)
- - ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Carl A. Gilbert 40,000/ 30%/ 10.6875/ 1/26/05/ 251,798/
100,000 37% 14.0625 7/27/05 845,156
Ernest F. Ladd, III 10,000/ 7.4%/ 10.6875/ 1/26/05/ 62,949/
25,000 9.2% 14.0625 7/27/05 211,289
Donald H. Stowe, Jr. 10,000/ 7.4%/ 10.6875/ 1/26/05/ 62,949/
25,000 9.2% 14.0625 7/27/05 211,289
John R. Major 10,000/ 7.4%/ 10.6875/ 1/26/05/ 62,949/
25,000 9.2% 14.0625 7/27/05 211,289
James J. Puhala 10,000/ 7.4%/ 10.6875/ 1/26/05/ 62,949/
25,000 9.2% 14.0625 7/27/05 211,289
</TABLE>
- - ---------
(1) Two grants of options were made in 1995, and are set forth separately
above. The first number represents options granted in January 1995 as
deferred awards in respect of 1994. The second number represents awards
made in July 1995. (See footnote (1) to the Summary Compensation Table on
page 6).
(2) All grants were in the form of nonstatutory stock options granted at 100%
of fair market value of the Corporation's Common Stock at the date of
grant. The options may be exercised after one year but no more than ten
years from the date of grant and only while in the employ of the
Corporation or within three (3) months following termination of employment
and only to the extent that the option would be exercisable by the grantee
at the time of termination. Notwithstanding the foregoing, in the event
that termination is by reason of retirement, permanent disability or death,
the option may be exercised in whole or in part until the earlier of (1)
the expiration of the term of the option, or (2) five years after said
termination. In the event the grantee dies within five years following
retirement or termination by reason of permanent disability, the estate may
exercise the option until the earlier of (1) the expiration of the term of
the option, or (2) five years after said employee's termination. For this
purpose, the grantee may designate to the Compensation Committee the person
or persons to whom the rights under the option may pass in the event of
death. In the event of a change in control, the holder may be entitled to
payments in respect of certain unexercised options, and certain unmatured
options may become immediately exercisable. See SEVERANCE ARRANGEMENTS at
pages 9 and 10 below.)
(3) Grant date present value determined using Black-Scholes valuation
methodology. In accordance with the Securities and Exchange Commission's
guidelines, the following assumptions were used with the Black-Scholes
Methodology to determine the present values: Expected volatility: January
grant .2917, July grant .3109; Risk-free rate of return: 7.5%; Dividend
yield 0%; Option term 10 years; one year vesting discount 3%. In order to
recognize this gain, for those options granted in January, the value of the
Corporation's Common Stock would increase 58.9% (i.e., the stock price
would increase from the grant price of $10.6875 to approximately $16.98),
and for those options granted in July, the value of the Corporation's
Common Stock would increase 60.1% (i.e., the stock price would increase
from the grant price of $14.0625 to approximately $22.51).
7
<PAGE>
OPTION/SAR EXERCISES AND HOLDINGS
The following table presents information with respect to the Named
Executives concerning the exercise of options and/or SARs during the fiscal year
ended December 31, 1995, and unexercised options and SARs held by such
individuals as of December 31, 1995.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
VALUE REALIZED UNEXERCISED IN-THE-MONEY
(MARKET PRICE OPTIONS/SARS OPTIONS/SARS
SHARES AT EXERCISE AT FY-END AT FY-END
ACQUIRED ON DATE LESS OPTION (#) ($)
EXERCISE PRICE) EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Carl A. Gilbert 0 0 114,500/ 135,781/
100,000 0
Ernest F. Ladd, III 0 0 102,000/ 96,406/
25,000 0
Donald H. Stowe, Jr. 0 0 27,900/ 26,250/
25,000 0
John R. Major 0 0 48,400/ 59,062/
25,000 0
James J. Puhala 0 0 47,400/ 58,937/
25,000 0
</TABLE>
EXECUTIVE BENEFIT PLAN
The Corporation's Executive Death and Disability Income Plan, as adopted in
October 1980, was amended and restated by the Board effective July 1, 1984, and
redesignated the Executive Benefit Plan. The Plan was further amended in 1994 to
reflect changes in IRS limitations.
Participation in the Plan is limited to high-ranking officers of the
Corporation and its subsidiaries as selected by the Compensation Committee of
the Board. The Plan, which is noncontributory, affords retirement,
pre-retirement death, and disability benefits. The benefits under the Executive
Benefit Plan supplement, and are offset by, benefits payable from the
Corporation's broad-based benefit programs.
Retirement benefits are calculated pursuant to a final average earnings
formula reduced by benefits payable under the Corporation's pension plan at
normal retirement (age 65). The Compensation Committee of the Board may approve
early retirement benefits after age 55. The following chart shows the estimated
straight-life annual benefits payable at normal retirement age to eligible
participants in specified earnings and years of service classifications. These
estimates are before reduction for benefits payable under the Corporation's
pension plan and are not subject to any deduction for Social Security benefits
or other offset amounts. Messrs. Gilbert, Ladd, Major, Puhala and Stowe are
participants in the Plan, having 22, 34, 10, 21, and 22 years of credited
service, respectively. One other executive is a participant in the Plan.
8
<PAGE>
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFIT
ANNUAL AVERAGE EARNINGS*
--------------------------------------------------------------------------
YEARS OF ANNUAL AVERAGE EARNINGS*
SERVICE $100,000 $200,000 $300,000 $400,000 $500,000 $600,000
------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
5 $ 15,000 $ 30,000 $ 45,000 $ 60,000 $ 75,000 $ 90,000
10 30,000 60,000 90,000 120,000 150,000 180,000
15 45,000 90,000 135,000 180,000 225,000 270,000
20 47,500 95,000 142,500 190,000 237,500 285,000
25 50,000 100,000 150,000 200,000 250,000 300,000
30 52,500 105,000 157,500 210,000 262,500 315,000
35 55,000 110,000 165,000 220,000 275,000 330,000
40 57,500 115,000 172,500 230,000 287,500 345,000
</TABLE>
- - ---------
* Earnings for this purpose are amounts reported as Annual Compensation in the
Summary Compensation Table, averaged over the five years preceding
retirement.
In the event of the participant's death, the Plan provides a surviving
spouse an annual benefit equal to 45% of the participant's compensation (basic
annual salary at death plus any incentive compensation paid in the 12-month
period preceding death), reduced by the periodic surviving spouse benefit
payable under the Corporation's pension plan, if applicable.
The disability benefit provided under the Plan is an annual amount equal to
60% of the participant's compensation (basic annual salary at the onset of
disability plus any incentive compensation paid in the 12-month period preceding
the onset of disability), reduced by benefits payable under, and by amounts used
as an offset in, the Corporation's long-term disability plan.
DIRECTORS' COMPENSATION
Directors who are not officers or employees of the Corporation receive, for
all services as Directors, remuneration of $14,400 per year plus $1,000 per
meeting for attendance at Committee meetings and regular and special meetings of
the Board. The Chairmen of the Standing Committees of the Board are compensated
an additional $1,000 per year for serving as Chairmen. Directors who are also
officers or employees of the Corporation do not receive any additional
remuneration for so serving. Under the Stock Option Plan of 1994, Directors who
are not officers or employees of the Corporation are granted options to purchase
1,500 shares of Common Stock, priced as of the day following each annual
shareholders' meeting. In 1995, the Board of Directors elected to receive
compensation equivalent to the annual retainer fee in the form of Dravo
Corporation Common Stock.
A new Non-Employee Retainer Fee Plan will be presented to the shareholders
at the 1996 Annual Meeting. Under that Plan each Director who is not an employee
will receive, in lieu of cash remuneration of $14,400, 1,000 shares of Dravo
Corporation Common Stock. Remuneration for attendance at Board and Committee
meetings and for serving as Chairmen of Standing Committees would continue to be
paid in cash. See "PROPOSAL TO APPROVE THE DRAVO CORPORATION NON-EMPLOYEE
DIRECTORS' RETAINER FEE PLAN" at page 14 below.
SEVERANCE ARRANGEMENTS
The Corporation has entered into severance arrangements with Messrs.
Gilbert, Ladd, Major, Puhala, Stowe and three other executive officers. An
executive receives benefits under these agreements only in the event of the
termination of such executive's employment by the Corporation following a change
in control of the Corporation (as defined in the agreements). In such event, the
executive is entitled to receive, in addition to any amounts otherwise payable
to him, (i) three (or a proportionately smaller multiple if the executive's age
is within three years of his normal retirement age) times the sum of his base
salary (as defined) plus the average incentive award received by him under the
Corporation's Incentive Compensation Plan for the prior two years; (ii) payments
with respect to stock options which were outstanding for at least six months
prior to the date of termination measured by the difference between the higher
of the then market price or the highest price paid per share in the
9
<PAGE>
transaction resulting in the change in control and the exercise price of the
options, and acceleration of certain unmatured options; (iii) credit for
purposes of the Corporation's pension plan as though he had remained in the
employ of the Corporation for three years after the date of termination, at his
then covered remuneration plus certain annual increases; (iv) continued
participation in the Corporation's Executive Benefit Plan as though the
executive were continuously an employee of the Corporation at his then
compensation for a period of three years after the date of termination; and (v)
continued participation in all other benefit plans for three years after the
date of termination. No benefits will be paid under these arrangements in the
event termination is due to death, disability, retirement at normal retirement
age (usually 65), or for cause (all as defined in the agreements). The
agreements with all executives are for a five-year term, and all of the
agreements provide for an automatic renewal for an additional five-year term,
unless notice of termination is provided to the executive prior thereto.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
Objectives of the Executive Compensation Program
In order to attain its short- and long-term performance objectives, the
Corporation must attract, motivate and retain outstanding individuals.
Accordingly, the Corporation will provide a total executive compensation package
that will enable it to attract, motivate and retain such individuals and align
their success with that of shareholders.
The following general principles guide all of the Corporation's executive
officer compensation programs. The programs are designed in the aggregate to
support a consistent, organization-wide philosophy which is internally equitable
and externally competitive, and are directed toward securing and retaining the
services of outstanding individuals who exhibit a high degree of business
responsibility, personal integrity and professionalism. The programs provide key
executives with a mix of total cash compensation, including base salaries
targeted at the middle of the competitive salary market and a formula determined
Incentive Compensation Program (ICP) opportunity supportive of the business
planning process and targeted to produce awards at the 50th percentile of
competitor organizations based on appropriate Corporate results. The base
salaries are based upon general industry data for employees of companies with
comparable revenues holding positions with comparable responsibilities. The
award targets under the Incentive Compensation Plan are similarly established.
The Corporation annually reviews published surveys in the competitive market
(e.g., Wyatt ECS, Towers Perrin Compensation Data Bank). Competitor
organizations are defined annually as part of the planning process and include
selected natural resource companies engaged in the production and sale of
natural resource materials, as well as companies selected on the basis of
broader industry comparison (e.g., comparable sized general industry companies).
Variability of actual payments in the ICP, both up and down, is a function of
business objectives approved each year by the Compensation Committee of the
Board. The long-term incentive component of the program is provided by the Dravo
Corporation Employee Stock Option Plan of 1988 and the Dravo Corporation Stock
Option Plan of 1994 ("Long-Term Incentives") and emphasizes long-term incentive
opportunities for the key individuals at the 50th percentile of competitor
organizations. The Long-Term Incentives are designed to encourage stock
ownership and executive retention. Executive benefits are provided on a
competitive basis but are not emphasized.
All programs are developed and administered in such a fashion as to fulfill
the commitment of the Corporation to nondiscrimination as to race, age, sex or
other factors unrelated to an individual's performance, and to comply with all
applicable federal, state and local laws and regulations.
Base Salary Program
The level of base salary paid to executive officers in general and to the
Chief Executive Officer in particular is determined on the basis of performance,
experience and such other factors that may, from time to time, be appropriately
considered by the Compensation Committee of the Board. Specific
10
<PAGE>
marketplaces which the Corporation uses in the analysis of base salary
competitiveness are determined on the basis of the nature and level of the
position(s) in question and the labor market(s) from which the qualified
individuals would be recruited. The primary marketplace in which the Corporation
desires to be competitive for key executives is the natural resource industry.
For positions which are not specific to the natural resource industry (e.g.,
human resources, finance, etc.), the relevant marketplace(s) is expanded to
include general industry companies of comparable size. Annual salary increase
budgets are based on such factors as Corporate performance, general economic
conditions, marketplace compensation trends, and the appropriateness of
aggregate individual pay levels. As indicated in the Summary Compensation Table,
in 1995, Mr. Gilbert, who became CEO on January 1, 1995, received a 21.6%
increase over his 1994 base salary.
Incentive Compensation Program (ICP)
The purposes of the ICP are to encourage and reward management achievements
that contribute to the value of the Corporation; focus participants' efforts on
specific performance areas and objectives established by the organization
recognizing individual and team performance which support overall Corporate
success; communicate key Corporate and divisional priorities through the
compensation program; provide an element of compensation which varies directly
with performance on both the upside and the downside; provide managers and other
key employees a competitive 50th percentile of competitor organizations annual
incentive compensation opportunity; utilize programs and approaches which are
consistent with industry and other competitors' practices; and provide
additional motivation toward achievement of predetermined levels of excellence.
The ICP was adopted by the Board in January 1989, to replace the Executive
Incentive Compensation Plan which had been adopted in 1983. The ICP was amended
in January, 1995 to permit the Committee, at its discretion, to divide awards to
senior executives into cash and Dravo Stock. A further amendment, clarifying
changes adopted in 1995, was adopted by the Board in January 1996, and will be
presented to the shareholders for approval at the 1996 Annual Meeting. See
"PROPOSAL TO APPROVE THE DRAVO CORPORATION STOCK INCENTIVE COMPENSATION PLAN" at
page 15 below.
The ICP is a target incentive plan which provides for the establishment of
threshold, target and maximum levels of awards based on performance against
specific predetermined performance objectives. The business objectives include
earnings per share from continuing operations, and earnings before interest and
taxes at the divisional level. For the Chief Executive Officer, for other Named
Executives, and for Management employees at the Corporate level, the performance
objective is based upon earnings per share from continuing operations. For
Management employees at the divisional level, there are two performance
components: earnings per share from continuing operations, and as appropriate,
division operating performance. The Plan is administered by the Compensation
Committee of the Board, which is comprised exclusively of Directors who are not
employees. Awards may be made under the Plan to officers and key employees of
the Corporation and its subsidiaries who are in a position to make significant
contributions to the financial success of the Corporation.
Prior to the beginning of the 1995 Plan year, financial measures were
established for corporate and divisional performance for the year.
Recommendations for 1995 as to proposed participants, threshold, target and
maximum award levels and allocation of awards among the performance components
for each individual were made by the Chief Executive Officer to the Compensation
Committee. The final determination as to participants and awards was made solely
by the Committee.
In January of 1996, each participant's performance was reviewed against the
pre-established performance objectives. Based on the Corporation's performance
for 1995, awards near the threshold level of performance were paid. The Chief
Executive Officer's award was $111,900.
In the event of extraordinary circumstances the Committee retains the right
to make adjustments to incentive award amounts as appropriate to maintain the
fairness of the Plan.
11
<PAGE>
Long-Term Incentives
The purposes of long-term incentive compensation are to focus key
executives' efforts on performance which will increase the value of the
Corporation for its shareholders; align the interests of key executives with
those of the shareholders by encouraging share ownership; provide a 50th
percentile of competitor organizations long-term incentive and capital
accumulation opportunity; and provide a significant retention incentive for key
individuals.
The Corporation's Stock Option Plan of 1978 (the "1978 Plan"), which
terminated in January, 1988, the Long-Term Incentive Award Plan of 1983 (the
"1983 Plan"), which terminated in July, 1993, the Employee Stock Option Plan of
1988 (the "1988 Plan"), and the Stock Option Plan of 1994 (the "1994 Plan")
authorize the granting of options and stock appreciation rights ("SARs"),
whether separately or in tandem with each other. The 1978 Plan, the 1983 Plan,
the 1988 Plan and the 1994 Plan are hereinafter collectively referred to as the
"Plans". The Compensation Committee administers the Plans.
Officers and other key employees of the Corporation and its subsidiaries
were eligible for awards under the 1978 Plan and the 1983 Plan, and are eligible
for awards under the 1988 Plan and the 1994 Plan. The Committee selects the
participants under each Plan and the amount and form of each award. The
Committee also determines the terms of options and SARs. Options and SARs may be
granted for terms up to ten years.
No Named Executive exercised any stock options in 1995. In January 1995,
awards which had been deferred from 1994 were granted; and in July 1995, when
options are normally granted, 1995 options were granted. The number of options
granted to the Named Executives was larger than in previous years, with the
understanding that this would represent more than one year of grants to the
executives.
Other
The Compensation Committee of the Board of Directors, in exercising its
responsibility to review and establish the compensation levels of the
Corporation's executive officers, to administer the Corporation's various
incentive plans and to authorize bonuses, grants of stock options and other
forms of remuneration, has solicited the advice and counsel of KPMG Peat
Marwick, LLP, Towers Perrin, and Buchanan Ingersoll Professional Corporation to
assist with issues related to accounting, design and legal considerations,
respectively.
Respectfully submitted by the Compensation Committee of the Board of
Directors of Dravo Corporation.
Konrad M. Weis, Chairman
Arthur E. Byrnes
James C. Huntington, Jr.
William E. Kassling
William G. Roth
COMPANY PERFORMANCE
In accordance with requirements of the Securities and Exchange Commission,
the following line-graph presents a comparison of the cumulative, five-year
shareholder returns (including reinvestment of dividends) with the S&P 500 Stock
Index and a market capitalization weighted index of peer companies. The peer
company group is based on the Value Line Investment Survey Cement and Aggregates
Industry Grouping, which is the same group as used last year.
12
<PAGE>
DRAVO CORPORATION
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
VS S&P 500 AND VALUE LINE CEMENT AND AGGREGATES INDUSTRY GROUP
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG DRAVO, S&P 500 INDEX AND PEER GROUP INDEX
<TABLE>
<CAPTION>
Measurement period S&P 500 Peer Group
(Fiscal year Covered) Dravo Index Index
- - --------------------- ----- ------- -------
<S> <C> <C> <C>
Measurement PT -
12/31/90 $100 $100 $100
FYE 12/31/91 $ 73.49 $130.47 $ 95.97
FYE 12/31/92 $ 85.54 $140.41 $130.00
FYE 12/31/93 $107.23 $154.56 $173.97
FYE 12/31/94 $113.25 $156.60 $182.76
FYE 12/31/95 $115.66 $215.45 $235.89
</TABLE>
Assumes $100 invested on 12/31/90 in the Corporation's common stock, S&P 500
index and peer group index assuming dividend reinvestment.
- - ---------
(1) The Value Line Investment Survey Cement and Aggregates Industry Grouping
includes the following companies: CalMat, Florida Rock, Lafarge, Lone Star,
Medusa, Southdown, Texas Industries and Vulcan Materials.
ACTIVITIES AND FUNCTIONS OF THE BOARD OF DIRECTORS
During 1995 the Board of the Corporation held 7 regularly scheduled and
special meetings. All of the Directors attended at least 75% of the aggregate of
the total number of meetings of the Board and of Committees of the Board on
which they served (during the periods that each of them served).
The By-Laws of the Corporation provide that there shall be, as Standing
Committees of the Board, an Audit Committee, a Compensation Committee, a Finance
Committee and a Nominating Committee, each comprised exclusively of Directors
who are not current officers or employees of the Corporation.
The Audit Committee is comprised of Messrs. Kassling, Chairman, Byrnes,
Huntington, Roth and Weis. The Audit Committee's duties include recommending,
for nomination by the Board and election at the annual shareholders' meeting,
the firm of independent accountants to audit the Corporation's financial
records, and reviewing the overall approach followed by the independent
accountants and the Corporation's internal auditors to insure the integrity with
which the Corporation's published financial statements are prepared. In
discharging these duties the Committee reviews the audit plans for the
13
<PAGE>
fiscal year and reviews reports from the independent auditors to determine,
among other things, whether there have been any material changes in accounting
principles and, if so, the effect of such changes on the valuation of the
Corporation's assets or the determination of its earnings. After the end of each
fiscal year, the Committee meets separately with the independent auditors and
with the Chief Financial Officer of the Corporation to review the audit report
and their comments with respect thereto. During 1995 the Audit Committee held 2
meetings.
The Compensation Committee of the Board is empowered to fix the
compensation of the top officers of the Corporation. This Committee also selects
the participants in the Corporation's Executive Benefit Plan and discharges the
functions of the Committee under the Corporation's Incentive Compensation Plan
and of the Committee which determines awards under the Corporation's Employee
Stock Option Plan of 1988 and Stock Option Plan of 1994. The Compensation
Committee held 3 meetings in 1995. Otherwise, its work was performed informally,
through conferences, correspondence and telephone conversations among Committee
members. The Committee members are Messrs. Weis, Chairman, Byrnes, Huntington,
Kassling and Roth.
The Finance Committee is comprised of Messrs. Kassling, Chairman, Byrnes,
Huntington, Roth and Weis. The function of the Finance Committee is to assist
and counsel the Chief Executive Officer and Chief Financial Officer of the
Corporation in the formulation and development of financial policies and plans.
The Finance Committee did not formally meet in 1995.
The Nominating Committee is comprised of Messrs. Weis, Chairman, Byrnes,
Huntington, Kassling and Roth. The Nominating Committee recommends, for
nomination by the Board and election by the shareholders, individuals to serve
as members of the Board. The Nominating Committee did not formally meet in 1995.
The Committee would consider shareholder recommendations for positions on the
Board. Any shareholder wishing to recommend a nominee for consideration by the
Nominating Committee may do so by letter addressed to the Secretary of the
Corporation, 3600 One Oliver Plaza, Pittsburgh, Pennsylvania 15222-2682.
PROPOSAL TO APPROVE THE DRAVO CORPORATION
NON-EMPLOYEE DIRECTORS' RETAINER FEE PLAN
BACKGROUND
In January of 1996, the Board resolved to recommend to shareholders at the
Annual Meeting that annual retainer fees to non-employee directors for service
on the Board be paid entirely in shares of the Corporation's Common Stock, in
lieu of cash. This proposed change is intended to further align the economic
interests of non-employee directors with those of shareholders. The change will
also assist the Corporation in maintaining a competitive director compensation
package that will allow it to attract, motivate and retain highly qualified
individuals to serve as directors.
The proposed change will replace the Corporation's current retainer of
$14,400 with an annual grant of 1,000 shares of Common Stock. Directors who are
newly appointed to the Board between annual meetings of the shareholders will
receive a proportionately smaller number of shares upon their appointment. The
proposed change will result in all annual director compensation consisting of
equity in the Corporation, other than cash paid for meeting fees and for serving
as a chairperson of a Board Committee. On the date of the annual meeting of
shareholders non-employee directors are also granted options to purchase 1,500
shares of the Corporation's Common Stock at fair market value on that date.
The Corporation's Common Stock closed at $12 1/8 on March 18, 1996, as
reported on the New York Stock Exchange composite tape. At that price, the value
of 1,000 shares to each of the Corporation's non-employee directors would be
$12,125.
In order to implement the proposed change to replace the cash annual
retainer fee with a grant of 1,000 shares of Common Stock, the Board adopted the
Dravo Corporation Non-Employee Directors' Retainer Fee Plan (the "Directors' Fee
Plan") and is submitting the plan to the shareholders for approval. The
Directors' Fee Plan is being submitted to the shareholders in order to ensure
that the
14
<PAGE>
award of Common Stock to non-employee directors will not result in short-swing
liability under Section 16 of the Securities Exchange Act of 1934 (the "Exchange
Act").
SUMMARY OF THE NON-EMPLOYEE DIRECTORS' RETAINER FEE PLAN
The following description is of the principal features of the Directors'
Fee Plan and is qualified in its entirety by the complete text of the Directors'
Fee Plan which appears as Appendix A hereto.
Purpose. The purpose of the Directors' Fee Plan is to assist the
Corporation in attracting, retaining and motivating highly qualified
non-employee directors and to further align such directors' interests with those
of the shareholders.
Administration. The Directors' Fee Plan shall be administered by a
committee of the Board appointed by the Board to administer the Directors' Fee
Plan (the "Committee") which shall be the Compensation Committee unless
otherwise determined by the Board. The Committee is authorized to interpret and
construe the Directors' Fee Plan and to make all determinations and take such
actions as are necessary or advisable for the administration of the Directors'
Fee Plan.
Common Stock Subject to the Plan. The maximum number of shares of Common
Stock that may be issued pursuant to the Directors' Fee Plan is 30,000. In the
event of any stock dividend, stock split, subdivision, reclassification,
recapitalization or similar corporate transaction or event affecting the
Corporation's Common Stock, the number of shares available for issuance pursuant
to the Directors' Fee Plan shall be automatically adjusted in order to preserve
the full benefit of the Directors' Fee Plan.
Payment of Shares. Each non-employee director shall automatically receive
1,000 shares of Common Stock in lieu of an annual cash retainer. Such Common
Stock shall be paid to each Director on the date of the annual meeting of the
shareholders of the Corporation. Directors who are newly appointed to the Board
between annual meetings of the shareholders will receive a proportionately
smaller number of shares upon their appointment.
Amendment or Termination. The Board may from time to time amend the
Directors' Fee Plan in any respect or terminate or suspend the Directors' Fee
Plan at any time in whole or in part, provided that, if shareholder approval of
an amendment is required for continued compliance with the requirements of Rule
16b-3 of the Exchange Act, such amendment shall be subject to obtaining the
required shareholder approval.
Governing Law. The validity, construction and effect of the Directors' Fee
Plan and any action taken or relating to the Directors' Fee Plan shall be
determined in accordance with the laws of the Commonwealth of Pennsylvania and
applicable federal law.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares voting at
the Annual Meeting is required to approve the Directors' Fee Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE NON-EMPLOYEE
DIRECTORS' RETAINER FEE PLAN. THE PROXYHOLDERS WILL VOTE ALL PROXIES RECEIVED
FOR APPROVAL OF THE PLAN UNLESS INSTRUCTED OTHERWISE.
PROPOSAL TO APPROVE THE DRAVO CORPORATION
STOCK INCENTIVE COMPENSATION PLAN
BACKGROUND
Since September 1983, the Corporation has had an Incentive Compensation
Plan (the "ICP"), pursuant to which incentive compensation may be paid to
certain senior managers and other key employees based on the Corporation's
achievement of certain levels of operating performance. See Incentive
Compensation Program (ICP) at page 11.
15
<PAGE>
In January 1996, the Board determined that it was desirable that the
Corporation be permitted to pay a portion of the incentive compensation payments
under the ICP in the form of the Corporation's Common Stock. This change is
intended to further align the interests of key employees with those of
shareholders of the Corporation.
In order to implement this change the Board adopted the Dravo Corporation
Stock Incentive Compensation Plan (the "Stock Incentive Plan") and is submitting
the Stock Incentive Plan to the shareholders for approval. Shareholder approval
is being sought to ensure that stock awards to executive officers will be exempt
from short-swing liability under Section 16 of the Securities Exchange Act of
1934 (the "Exchange Act").
The Stock Incentive Plan does not increase the amount or value of awards
under the ICP and does not change the basis on which awards are made; its sole
purpose is to change the form of a portion of the awards to designated
participants from cash to Common Stock having an equivalent value.
SUMMARY OF THE STOCK INCENTIVE COMPENSATION PLAN
The following description is a summary of the principal features of the
Stock Incentive Plan and is qualified in its entirety by the complete text of
the Stock Incentive Plan which appears as Appendix B hereto.
Purpose. The purpose of the Stock Incentive Plan is to promote the
interests of the Corporation and its shareholders by providing an incentive to
participating officers and key employees of the Corporation to make significant
contributions to the performance of the Corporation and rewarding outstanding
performance on the part of those individuals in a manner which further promotes
identification and alignment with the interests of shareholders of the
Corporation.
Eligibility. Participation is limited to officers and key employees
selected for participation in the ICP. ICP participants are recommended by the
President and Chief Executive Officer and approved by the Compensation
Committee.
Administration. The Stock Incentive Plan shall be administered by a
committee of the Board of Directors (the "Stock Incentive Plan Committee") which
shall be the Compensation Committee of the Board unless otherwise determined by
the Board. The Stock Incentive Plan Committee shall have the power to make rules
and regulations for the administration of the Stock Incentive Plan and to
determine the percentage of a participant's annual incentive compensation that
will be paid in the form of Common Stock. The maximum percentage of annual
incentive compensation under the ICP that may be paid in the form of Common
Stock is fifty percent (50%).
Common Stock Subject to Plan. The maximum number of shares of Common Stock
that may be issued pursuant to the Stock Incentive Plan is 70,000. In the event
of any stock dividend, stock split, subdivision, reclassification,
recapitalization or similar corporate transaction or event affecting the
Corporation's Common Stock, the number of shares available for issuance pursuant
to the Stock Incentive Plan shall be automatically adjusted in order to preserve
the full benefit of the Stock Incentive Compensation Plan.
Amendment or Termination. The Board may from time to time amend the Stock
Incentive Plan in any respect or terminate or suspend the Stock Incentive Plan
at any time in whole or in part, provided that, if shareholder approval of an
amendment is required for continued compliance with the requirements of Rule
16b-3 of the Exchange Act, such amendment shall be subject to obtaining the
required shareholder approval.
Governing Law. The validity, construction and effect of the Stock
Incentive Plan and any action taken or relating to the Stock Incentive Plan
shall be determined in accordance with the laws of the Commonwealth of
Pennsylvania and applicable federal law.
16
<PAGE>
TAX INFORMATION
Under present federal income tax regulations, participants will realize
ordinary income equal to the value of the Common Stock on the date of grant. The
Corporation will receive a deduction for the amount constituting ordinary income
to the participant, provided that aggregate payments to such participant do not
exceed the limitations established under Section 162(m) of the Code.
The foregoing brief summary of the effect of federal income taxation upon
participants and the Corporation with respect to the Stock Incentive Plan does
not purport to be complete and reference should be made to the applicable
provisions of the Code. In addition, this summary does not discuss the
provisions of income tax laws of any municipality, state or foreign country in
which a participant may reside.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares voting at
the Annual Meeting is required to approve the Stock Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE STOCK
INCENTIVE COMPENSATION PLAN. THE PROXYHOLDERS WILL VOTE ALL PROXIES RECEIVED FOR
APPROVAL OF THE PLAN UNLESS INSTRUCTED OTHERWISE.
ELECTION OF AUDITORS
The Board of Directors of the Corporation proposes that KPMG Peat Marwick,
LLP be elected as independent certified public accountants to examine the
financial statements of the Corporation and its subsidiaries as of December 31,
1996 and to report upon the financial statements to the shareholders as of
December 31, 1996. The election of KPMG Peat Marwick, LLP was recommended by the
Audit Committee of the Board, which is composed of Directors who are not
officers or employees of the Corporation. One or more representatives of KPMG
Peat Marwick, LLP will be present at the 1996 Annual Meeting with the
opportunity to make a statement if they desire to do so. It is expected that
such representatives will be available to respond to appropriate questions.
KPMG Peat Marwick, LLP is a member of the SEC Practice Section of the
American Institute of Certified Public Accountants.
Although election of independent certified public accountants by the
shareholders is not required by Pennsylvania law or the Articles of
Incorporation or By-Laws of the Corporation, the Board believes that the
shareholders should have an opportunity to express themselves on this subject.
In the event that the vote on this matter is negative, the Board, acting upon
advice from its Audit Committee, will select other independent certified public
accountants.
PROPOSALS OF SECURITY HOLDERS FOR CONSIDERATION AT THE
1997 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals for the 1997 Annual Meeting of the shareholders of
the Corporation must be submitted to the Corporation, in care of the Secretary,
3600 One Oliver Plaza, Pittsburgh, Pennsylvania 15222-2682 on or before November
27, 1996 in order to be considered for inclusion in the 1997 proxy statement.
PROXY SOLICITATION
The expenses of soliciting proxies will be paid by the Corporation which
will also reimburse banks, brokerage houses and other persons holding stock in
their names, or in the names of nominees, for their expenses in sending proxy
material to principals and obtaining their proxies. The Corporation has retained
Morrow & Co., Inc. to assist in the solicitation of proxies for shares in
broker, bank and other nominee names for a fee of approximately $7,500 plus
expenses. Some of the officers and other regular
17
<PAGE>
employees of the Corporation may solicit proxies personally, by telephone and by
mail if deemed appropriate.
EFFECT OF ABSTENTIONS AND BROKER NON-VOTES
Abstentions and broker non-votes on any matter submitted to the
shareholders for approval have no effect on the vote on such matter since, under
Pennsylvania law, the affirmative vote of at least a majority of the votes cast
by shareholders at the meeting, in person or by proxy, is necessary for approval
of the matter. Broker non-votes as to any matter are shares held by brokers and
other nominees which are voted at the meeting on matters as to which the nominee
has discretionary authority, but which are not voted on the matter in question
because the nominee does not have discretionary voting authority as to such
matter.
OTHER BUSINESS
As far as is known, no matters other than the matters hereinabove mentioned
will come before the 1996 Annual Meeting. However, if any other matters should
properly come before the 1996 Annual Meeting, it is the intention of the persons
named in the enclosed proxy to vote in accordance with their judgment for the
best interests of the Corporation.
By Order of the Board of Directors
JAMES J. PUHALA,
Secretary
3600 One Oliver Plaza
Pittsburgh, Pennsylvania 15222-2682
March 26, 1996
18
<PAGE>
APPENDIX A
DRAVO CORPORATION
NON-EMPLOYEE DIRECTORS' RETAINER FEE PLAN
ARTICLE I
GENERAL PROVISIONS
Section 1.1 ESTABLISHMENT AND PURPOSE. There is hereby established the
Dravo Corporation Non-Employee Directors' Retainer Fee Plan (the "Plan")
pursuant to which each director of Dravo Corporation (the "Company") who is not
an employee of the Company or any of its subsidiaries (a "Non-Employee
Director") shall automatically receive one thousand (1,000) shares of the
Company's Common Stock, par value $1.00 (the "Common Stock"), as an annual
retainer fee for services as a director, in lieu of cash compensation. The
purpose of the Plan is to assist the Company in attracting, retaining and
motivating highly qualified Non-Employee Directors and to promote identification
of, and align Non-Employee Directors' interest more closely with, the interest
of shareholders of the Company.
Section 1.2 DEFINITIONS. In addition to the terms previously or hereafter
defined herein, the following terms when used herein shall have the meanings set
forth below:
"BOARD" shall mean the Board of Directors of the Company.
"COMMITTEE" shall mean the committee of the Board appointed by the
Board to administer the Plan. Unless otherwise determined by the Board, the
Committee shall be the Compensation Committee of the Board.
"RETAINER FEE" shall mean the annual retainer fee paid to a
Non-Employee Director for service as such.
Section 1.3 ADMINISTRATION. The Plan shall be administered by the
Committee. The Committee shall serve at the pleasure of the Board of Directors.
A majority of the Committee shall constitute a quorum and the acts of a majority
of the members of the Committee present at any meeting at which a quorum is
present or acts approved in writing by a majority of the members of the
Committee, shall be deemed the acts of the Committee. The Committee is
authorized to interpret and construe the Plan, to make all determinations and
take all other actions necessary or advisable for the administration of the
Plan, and to delegate to employees of the Company or any subsidiary the
authority to perform administrative functions under the Plan.
Section 1.4 ELIGIBILITY. A Non-Employee Director who is either elected to
the Board at the annual meeting of shareholders, who continues as a Non-Employee
Director following such annual meeting or who is appointed to the Board between
annual meetings of the shareholders shall be eligible to participate in the
Plan.
Section 1.5 COMMON STOCK SUBJECT TO THE PLAN. The maximum number of
shares of Common Stock that may be issued pursuant to the Plan is 30,000. Common
Stock to be issued under the Plan may be either authorized and unissued shares
of Common Stock or shares of Common Stock held in the treasury by the Company.
ARTICLE II
COMMON STOCK ISSUANCES
Section 2.1 COMMON STOCK IN LIEU OF CASH COMPENSATION. Each Non-Employee
Director shall receive 1,000 shares of Common Stock under this Plan as payment
of the Retainer Fee in lieu of cash otherwise payable to such Non-Employee
Director; provided, however, that in the event that a new Non-Employee Director
is appointed to the Board following the date of the annual meeting of
shareholders, then the number of shares to be granted to such Non-Employee
Director shall be equal to the product of eighty-three (83) multiplied by the
number of full months remaining prior to the first anniversary of such annual
meeting of shareholders (in each case, the "Common Stock Grant").
A-1
<PAGE>
Section 2.2 PAYMENT AND CALCULATION OF COMMON STOCK GRANT. The Common
Stock Grant shall be made on the date of the annual meeting of shareholders of
the Company or in the case of a new Non-Employee Director, on such date that the
new Non-Employee Director's term on the Board commences (the "Grant Date").
ARTICLE III
MISCELLANEOUS PROVISIONS
Section 3.1 AMENDMENT AND DISCONTINUANCE. The Board of Directors may
alter, amend, suspend or discontinue the Plan, provided that no such action
shall deprive any person without such person's consent of any rights theretofore
granted pursuant hereto. The Board of Directors may, in its discretion, submit
any proposed amendment to the Plan to the shareholders of the Company for
approval and shall submit proposed amendments to the Plan to the shareholders of
the Company for approval if such approval is required in order for the Plan to
comply with Rule 16b-3 of the Exchange Act (or any successor rule).
Section 3.2 COMMON STOCK ADJUSTMENTS. If the Company shall at any time
increase or decrease the number of its outstanding shares of Common Stock or
change in any way the rights and privileges of such shares by means of the
payment of a stock dividend or any other distribution upon such shares payable
in Common Stock, or through a stock split, subdivision, consolidation,
combination, reclassification or recapitalization involving the Common Stock,
then in relation to the Common Stock that is affected by one or more of the
above events, the numbers, rights and privileges of the shares of Common Stock
which may be granted under the Plan shall be appropriately adjusted in order to
preserve the full benefit of the Plan.
Section 3.3 COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Notwithstanding any
provisions of the Plan or the terms of any agreement entered into pursuant to
the Plan, the Company shall not be required to issue any shares hereunder prior
to registration of the shares subject to the Plan under the Securities Act of
1933 or the Exchange Act, if such registration shall be necessary, or before
compliance by the Company or any participant with any other provisions of either
of those acts or of regulations or rulings of the Securities and Exchange
Commission thereunder, or before compliance with other federal and state laws
and regulations and rulings thereunder, including the rules of the New York
Stock Exchange, Inc. The Company shall use its best efforts to effect such
registrations and to comply with such laws, regulations and rulings forthwith
upon advice by its counsel that any such registration or compliance is
necessary.
Section 3.4 COMPLIANCE WITH SECTION 16. Transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 (or its
successor rule). To the extent that any provision of the Plan or any action by
the Board of Directors or the Committee fails to so comply, it shall be deemed
null and void to the extent permitted by law and to the extent deemed advisable
by the Committee.
Section 3.5 GOVERNING LAW. The Plan shall be governed by and construed
and interpreted in accordance with the internal laws of the Commonwealth of
Pennsylvania.
Section 3.6 EFFECTIVE DATE OF THE PLAN. The Plan shall become effective
upon approval and adoption of the Plan by the holders of a majority of the
shares present and entitled to vote at the 1996 annual meeting of shareholders.
A-2
<PAGE>
APPENDIX B
DRAVO CORPORATION
STOCK INCENTIVE COMPENSATION PLAN
ARTICLE I
GENERAL PROVISIONS
Section 1.1. ESTABLISHMENT AND PURPOSE. There is hereby established the
Dravo Corporation (the "Company") Stock Incentive Compensation Plan (the "Plan")
pursuant to which each participant in the Dravo Corporation Incentive
Compensation Plan (the "Incentive Plan") shall be eligible to receive shares of
the Company's Common Stock, par value $1.00 per share (the "Common Stock"), in
lieu of cash bonus compensation. The purposes of the Plan are to provide an
incentive to Company executives and to provide the Company with a method to
further promote identification of, and align executive officers interest more
closely with, the interest of shareholders of the Company.
Section 1.2. DEFINITIONS. In addition to the terms previously or
hereafter defined herein, the following terms when used herein shall have the
meaning set forth below:
"BOARD" shall mean the Board of Directors of the Company.
"BONUS COMPENSATION" shall mean all remuneration designated as bonus
compensation that is earned by a Participant (as defined below) pursuant to
the Incentive Plan.
"COMMITTEE" shall mean the committee of the Board appointed by the
Board to administer the Plan. Unless otherwise determined by the Board, the
Committee shall be the Compensation Committee of the Board.
"FAIR MARKET VALUE" shall mean, as of any date, the mean between the
highest and lowest sales prices for the Common Stock as reported in the New
York Stock Exchange--Composite Transactions reporting system for the date
in question or, if no sales were effected on such date, on the next
preceding date on which sales were effected.
Section 1.3. ADMINISTRATION. The Plan shall be administered by the
Committee. The Committee shall serve at the pleasure of the Board. A majority of
the Committee shall constitute a quorum, and the acts of a majority of the
members of the Committee present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the members of the Committee, shall be
deemed the acts of the Committee. The Committee is authorized to determine the
amount of Bonus Compensation to be paid in the form of Common Stock, to
determine the terms and conditions subject to which grants of Common Stock will
be made, to interpret and construe the Plan, to make all determinations and take
all other actions necessary or advisable for the administration of the Plan, and
to delegate to employees of the Company or any subsidiary the authority to
perform administrative functions under the Plan.
Section 1.4. ELIGIBILITY. Participation in the Plan shall be limited to
officers and other key employees of the Company that are selected by the
Committee.
Section 1.5. COMMON STOCK SUBJECT TO THE PLAN. The maximum number of
shares of Common Stock that may be issued pursuant to the Plan is 70,000. Common
Stock to be issued under the Plan may be either authorized and unissued shares
of Common Stock or shares of Common Stock held in the treasury by the Company.
ARTICLE II
TERMS AND CONDITIONS
Section 2.1. CALCULATION OF COMMON STOCK GRANT. The amount of Bonus
Compensation to be received in the form of Common Stock shall be as determined
by the Committee and may not exceed one-half (1/2) of Bonus Compensation. The
actual number of shares of Common Stock to be received in lieu of cash shall be
equal to the amount of Bonus Compensation to be granted in the form of Common
B-1
<PAGE>
Stock divided by the Fair Market Value of the Common Stock on the date that the
balance of such Bonus Compensation is paid in cash.
ARTICLE III
MISCELLANEOUS PROVISIONS
Section 3.1. AMENDMENT AND DISCONTINUANCE. The Board may alter, amend,
suspend or discontinue the Plan, provided that no such action shall deprive any
person without such person's consent of any rights theretofore granted pursuant
hereto. The Board may, in its discretion, submit any proposed amendment to the
Plan to the shareholders of the Company for approval and shall submit proposed
amendments to the Plan to the shareholders of the Company for approval if such
approval is required in order for the Plan to comply with Rule 16b-3 of the
Exchange Act (or any successor rule).
Section 3.2. COMMON STOCK ADJUSTMENTS. If the Company shall at any time
increase or decrease the number of its outstanding shares of Common Stock or
change in any way the rights and privileges of such shares by means of the
payment of a stock dividend or any other distribution upon such shares payable
in Common Stock, or through a stock split, subdivision, consolidation,
combination, reclassification or recapitalization involving the Common Stock,
then in relation to the Common Stock that is affected by one or more of the
above events, the numbers, rights and privileges of the shares of Common Stock
available for issuance pursuant to the Plan shall be appropriately increased,
decreased or changed in order to preserve the full benefit of the Plan.
Section 3.3. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Notwithstanding
any provision of the Plan or the terms of any agreement entered into pursuant to
the Plan, the Company shall not be required to issue any Common Stock hereunder
prior to registration of the shares subject to the Plan under the Securities Act
of 1933 or the Exchange Act, if such registration shall be necessary, or before
compliance by the Company or any Participant with any other provisions of either
of those acts or of regulations or rulings of the Securities and Exchange
Commission thereunder, or before compliance with other federal and state laws
and regulations and rulings thereunder, including the rules of the New York
Stock Exchange, Inc. The Company shall use its best efforts to effect such
registrations and to comply with such laws, regulations and rulings forthwith
upon advice by its counsel that any such registration or compliance is
necessary.
Section 3.4. COMPLIANCE WITH SECTION 16. With respect to persons subject
to Section 16(a) of the Exchange Act, transactions under this Plan are intended
to comply with all applicable conditions of Rule 16b-3 (or its successor rule).
To the extent that any provision of the Plan or any action by the Board or the
Committee fails to so comply, it shall be deemed null and void to the extent
permitted by law and to the extent deemed advisable by the Committee.
Section 3.5. WITHHOLDING TAXES. To the extent required by applicable law
or regulation, the Company shall withhold any federal, state or local income or
other tax applicable to the receipt of Common Stock under the Plan.
Section 3.6. GOVERNING LAW. The Plan shall be governed by and construed
and interpreted in accordance with the internal laws of the Commonwealth of
Pennsylvania.
Section 3.7. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective
upon approval by the Board; provided, however, that awards to individuals who
are subject to Section 16 of the Exchange Act may be made prior to obtaining
shareholder approval of the Plan only if such awards are made subject to
shareholder approval.
B-2
<PAGE>
[LOGO OF DRAVO CORPORATION]
- - -----------------------
NOTICE OF THE
1996 ANNUAL MEETING AND
PROXY STATEMENT
- - -----------------------
<PAGE>
[LOGO OF DRAVO CORPORATION]
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, APRIL 25, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Carl A. Gilbert and Ernest F. Ladd, III, and
each of them, with full power of substitution, as proxies (the "Proxies") to
vote all shares of Common Stock which the undersigned is entitled to vote at the
above stated Annual Meeting of shareholders, and any adjournments thereof, upon
the matters set forth in the Notice and Proxy Statement, as follows:
1. ELECTION OF DIRECTORS to the class of the Board of Directors whose term
expires at the 1999 Annual Meeting of shareholders (check one box only).
[_] FOR all nominees listed below: [_] WITHHOLD AUTHORITY to vote
for all nominees listed below:
Arthur E. Byrnes and James C. Huntington, Jr.
(to withhold authority for any individual nominee, check the "FOR all
nominees" box above and write that nominee's name in the space provided below)
------------------------------------------------------------------------------
2. APPROVAL OF THE PROPOSED NON-EMPLOYEE DIRECTORS' RETAINER FEE PLAN.
[_] FOR [_] AGAINST [_] ABSTAIN
3. APPROVAL OF THE PROPOSED STOCK INCENTIVE COMPENSATION PLAN.
[_] FOR [_] AGAINST [_] ABSTAIN
4. APPROVAL OF THE APPOINTMENT OF KPMG PEAT MARWICK, LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE YEAR 1996.
[_] FOR [_] AGAINST [_] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 and 4.
In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the Annual Meeting of shareholders, and any
adjournments thereof.
(Continued and to be signed on reverse side)
<PAGE>
THIS PROXY WILL BE VOTED AS SPECIFIED HEREIN. IF NO DIRECTION IS GIVEN THIS
PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3 and 4. IN THEIR DISCRETION THE PROXIES
ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENTS THEREOF, INCLUDING WITHOUT LIMITATION, THE ELECTION
OF ANY PERSON TO THE BOARD OF DIRECTORS FOR WHICH A BONA FIDE NOMINEE IS NAMED
IN THE PROXY STATEMENT AND IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE.
A VOTE FOR THE NOMINEES LISTED WILL GIVE THE PROXIES DISCRETIONARY AUTHORITY TO
CUMULATE ALL VOTES TO WHICH THE UNDERSIGNED IS ENTITLED AND ALLOCATE THEM IN
FAVOR OF ANY ONE OF THE NOMINEES, AS THE PROXIES DETERMINE. Any proxy heretofore
given by the undersigned with respect to such stock is hereby revoked.
Receipt of Notice of the Annual Meeting and Proxy Statement is hereby
acknowledged.
PLEASE SIGN, DATE, AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
Dated................................., 1996
PLEASE SIGN EXACTLY AS NAME APPEARS AT LEFT.
............................................
(Signature)
............................................
(Signature if held jointly)
............................................
<PAGE>
[LOGO OF DRAVO CORPORATION]
VOTER DIRECTION CARD DRAVO CORPORATION SAVINGS PLAN
FOR ANNUAL MEETING OF SHAREHOLDERS, APRIL 25, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TO: THE VANGUARD GROUP, TRUSTEE
The undersigned, a participant having Common Stock of Dravo Corporation
credited to my account, does hereby instruct the Trustee that in voting all
shares of Common Stock held in the Dravo Corporation Stock Fund at the above
stated Annual Meeting of shareholders, and any adjournments thereof, upon the
matters set forth in the Notice and Proxy Statement, the shares of Common Stock
indicated on the reverse side hereof shall be counted as follows:
1. ELECTION OF DIRECTORS to the class of the Board of Directors whose term
expires at the 1999 Annual Meeting of shareholders (check one box only).
[_] FOR all nominees listed below: [_] WITHHOLD AUTHORITY to vote for
all nominees listed below:
Arthur E. Byrnes and James C. Huntington, Jr.
(to withhold authority for any individual nominee, check the "FOR all
nominees" box and write that nominee's name in the space provided below)
----------------------------------------------------------------------------
2. APPROVAL OF THE PROPOSED NON-EMPLOYEE DIRECTORS' RETAINER FEE PLAN.
[_] FOR [_] AGAINST [_] ABSTAIN
3. APPROVAL OF THE PROPOSED STOCK INCENTIVE COMPENSATION PLAN.
[_] FOR [_] AGAINST [_] ABSTAIN
4. APPROVAL OF THE APPOINTMENT OF KPMG PEAT MARWICK, LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE YEAR 1996.
[_] FOR [_] AGAINST [_] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 and 4.
(Continued and to be signed on reverse side)
<PAGE>
The Trustee shall vote upon such other matters as may properly come before
the Annual Meeting of shareholders, and any adjournments thereof, as the proxies
named in the solicitation of the Board of Directors (the "Board Named Proxies")
determine, including without limitation, the election of any person to the Board
of Directors for which a bona fide nominee is named in Proxy Statement and is
unable to serve or for good cause will not serve.
THE TRUSTEE WILL VOTE THE SHARES IN THE DRAVO CORPORATION STOCK FUND IN
ACCORDANCE WITH THE PLAN. IN DETERMINING HOW TO VOTE THE FUND'S SHARES, THE
SHARES INDICATED BELOW WILL BE COUNTED AS DIRECTED ON THE REVERSE SIDE HEREOF.
IF NO DIRECTION IS GIVEN, THE SHARES INDICATED BELOW WILL BE COUNTED AS BEING
FOR PROPOSALS 1, 2, 3 AND 4. IF THE UNDERSIGNED VOTES FOR THE NOMINEES LISTED,
THE TRUSTEE MAY CUMULATE ALL VOTES WHICH THE UNDERSIGNED IS ENTITLED TO DIRECT
AND ALLOCATE THEM IN FAVOR OF ANY ONE OF THE NOMINEES, AS THE BOARD NAMED
PROXIES DETERMINE. THE TRUSTEE MAY APPOINT THE BOARD NAMED PROXIES TO VOTE THE
SHARES IN THE DRAVO CORPORATION STOCK FUND IN THE MANNER DIRECTED BY THE
TRUSTEE. Any voter direction card heretofore given by the undersigned with
respect to such stock is hereby revoked.
Receipt of Notice of the Annual Meeting and
Proxy Statement is hereby acknowledged.
PLEASE SIGN, DATE, AND RETURN THIS CARD
PROMPTLY IN THE ENCLOSED ENVELOPE.
Dated................................., 1996
PLEASE SIGN EXACTLY AS NAME APPEARS AT LEFT.
............................................
(Signature)
............................................
