<PAGE> 1
SCHEDULE 14A
Information Required in Proxy Statement
(Section 240.14a-101)
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 Sections 240.14a-11(c) or
240.14a-12
ESTERLINE TECHNOLOGIES CORPORATION
(Name of Registrant as Specified In Its Charter)
Robert W. Stevenson
Executive Vice President and Secretary
(Name of Person 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:
not applicable
---------------------------------------------------------
2) Aggregate number of securities to which transaction
applies:
not applicable
---------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
not applicable
---------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
not applicable
---------------------------------------------------------
( ) 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 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> 2
ESTERLINE TECHNOLOGIES CORPORATION
10800 NE 8TH STREET
BELLEVUE, WASHINGTON 98004
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 30, 1994
------------------------
NOTICE IS HEREBY GIVEN that the 1994 ESTERLINE TECHNOLOGIES CORPORATION annual
meeting of shareholders will be held on Wednesday, March 30, 1994, at 10:00
a.m., at the Bellevue Hilton Hotel, 100 112th Avenue NE, Bellevue, Washington
for the following purposes:
(1) to elect four directors;
(2) to ratify the selection of independent auditors; and
(3) to transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on February 2, 1994, as
the record date for determination of shareholders entitled to notice of and to
vote at the meeting.
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE. HOLDERS OF A MAJORITY OF THE OUTSTANDING
SHARES MUST BE PRESENT EITHER IN PERSON OR BY PROXY FOR THE MEETING TO BE HELD.
If you attend the meeting and vote your shares personally, any previous proxies
will be revoked.
By order of the Board of Directors
[FACSIMILE SIGNATURE]
ROBERT W. STEVENSON
Executive Vice President and Secretary
February 3, 1994
<PAGE> 3
PROXY STATEMENT
This proxy statement, which is first being mailed to shareholders on or about
February 10, 1994, has been prepared in connection with the solicitation by the
Board of Directors of Esterline Technologies Corporation (the "Company") of
proxies in the accompanying form to be voted at the 1994 annual meeting of
shareholders of the Company to be held on March 30, 1994, and at any adjournment
thereof. The Company's principal executive office is at 10800 NE 8th Street,
Bellevue, Washington 98004.
Any proxy given pursuant to the solicitation may be revoked at any time prior to
being voted. A proxy may be revoked by the record holder or other person
entitled to vote (a) by attendance in person at the meeting and voting the
shares, (b) by executing another proxy dated as of a later date, or (c) by
written notification to the Secretary of the Company, at its address set forth
on the notice of the meeting, if received prior to the meeting date. All shares
represented by valid proxies will be voted at the meeting. Proxies will be voted
in accordance with the specification made therein or, in the absence of
specification, in accordance with the provisions of the proxy.
The Board of Directors has fixed the close of business on February 2, 1994, as
the record date for determination of holders of common stock of the Company (the
"Common Stock") entitled to notice of and to vote at the meeting. At the close
of business on that date there were outstanding and entitled to vote 6,512,641
shares of Common Stock, which are entitled to one vote per share. The presence
in person or by proxy of the holders of record of a majority of the outstanding
shares of Common Stock entitled to vote is required to constitute a quorum for
the transaction of business at the meeting. The Common Stock is listed for
trading on the New York Stock Exchange.
ELECTION OF DIRECTORS
Four directors are to be elected at the 1994 annual meeting of shareholders,
three to serve three-year terms expiring at the 1997 annual meeting and one to
serve a one-year term expiring at the 1995 annual meeting, or until their
successors are elected and qualified.
Directors of the Company are normally elected for three-year terms which are
staggered such that one-third of the directors are elected each year. The
current directors whose terms expire at the 1994 annual meeting are Gilbert W.
Anderson, Wendell P. Hurlbut and Malcolm T. Stamper. All have been nominated for
reelection to serve for terms expiring at the 1997 annual meeting. In addition,
Edward H. Cooley, whose term expires at the 1995 annual meeting, is retiring at
the 1994 annual meeting in accordance with the Company's current policy on
retirement age for directors. In anticipation of Mr. Cooley's retirement, the
Board of Directors was temporarily expanded from nine to ten members at the
September 15, 1993 meeting with the appointment of Paul G. Schloemer to a term
expiring at the 1994 annual meeting. Mr. Schloemer has been nominated for
shareholder election to a one-year term expiring at the 1995 annual meeting.
Information as to each nominee and each director whose term will continue after
the 1994 annual meeting is provided below. The four nominees who receive the
greatest number of votes cast for the election of directors at the meeting by
the shares present in person or represented by proxy at the meeting and entitled
to vote shall be elected directors. In the election of directors, any action
other than a vote for the nominee will have the practical effect of voting
against the nominee. Unless otherwise instructed, it is the intention of the
persons named in the accompanying proxy to vote shares represented by properly
executed proxies for the four nominees named below. Management knows of no
reason why any of the nominees will be unable or refuse to serve. If any nominee
becomes unavailable to serve, it is intended that the persons named as proxies
will vote for the election of such other persons, if any, as management may
recommend.
1
<PAGE> 4
<TABLE>
<CAPTION>
TERM TO EXPIRE
PRINCIPAL OCCUPATION AND OTHER AT THE ANNUAL DIRECTOR
NAME AND AGE DIRECTORSHIPS MEETING IN SINCE
- ------------------------------ ---------------------------------------- --------------- --------
<S> <C> <C> <C>
NOMINEES:
Gilbert W. Anderson, 65....... Retired President and Chief Executive 1997 1991
Officer, Physio-Control Corporation
(medical equipment manufacturer), having
held such position from 1986 to 1991;
director, Key Bank of Washington.
Wendell P. Hurlbut, 62........ Chairman, President and Chief Executive 1997 1989
Officer of the Company since January
1993; President and Chief Executive
Officer of the Company from February
1989 to December 1992; President and
Chief Operating Officer of the Company
from May 1988 to February 1989.
Paul G. Schloemer, 65......... Retired President and Chief Executive 1995 1993
Officer, Parker Hannifin Corporation
(manufacturer of motion control
products), having held such position
from 1984 to 1993; director, Society
Corporation, AMP Inc. and Rubbermaid.
Malcolm T. Stamper, 68........ Retired President and Vice Chairman, The 1997 1991
Boeing Company, having held such
position from 1985 to 1990; director,
Chrysler Corporation, The Travelers
Corporation and Nordstrom, Inc.
CONTINUING DIRECTORS:
John F. Clearman, 56.......... Retired President and Chief Executive 1995 1989
Officer, NC Machinery Co. (heavy
machinery distributor), having held such
position from 1986 to December 1993;
director, Metropolitan Bancorp.
Edwin I. Colodny, 67.......... Retired Chairman, USAir Group, Inc., 1995 1992
having held such position from June 1990
to July 1992; of Counsel, Paul,
Hastings, Janofsky and Walker; prior
thereto for more than five years,
President and Chief Executive Officer,
USAir Group, Inc.; director, USAir
Group, Inc., Martin Marietta Corporation
and COMSAT.
E. John Finn, 62.............. Chairman and Partner, Dorr-Oliver 1996 1989
Incorporated (fluid/particle treatment
equipment manufacturer) since April
1988; director, Bay Mills, Ltd.,
Advanced Refractory Technologies and
Flakt, Inc.
Robert F. Goldhammer, 62...... Partner, Concord International 1996 1974
Investments Group L.P. since 1991;
Partner, Rohammer Corporation (private
investment company) from 1989 to 1991;
Managing Director, Kidder, Peabody
Group, Inc. (investment banking firm)
from May 1987 to January 1989; director
of EG&G, Inc. and Imclone Systems, Inc.
Jerome J. Meyer, 55........... Chairman and Chief Executive Officer, 1996 1992
Tektronix, Inc. (electronic equipment
manufacturer) since November 1990;
President, Industrial Group of
Honeywell, Inc. from June 1988 to
November 1990.
</TABLE>
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of February 2, 1994, the only persons known to the Company to be beneficial
owners of more than 5% of its outstanding shares of Common Stock were as
follows:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
------------------------------------------------ ---------------- ----------------
<S> <C> <C>
Dimensional Fund Advisors Inc................... 449,900(1) 6.9%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Merrill Lynch Investment Management, Inc........ 350,600(2) 5.4%
d/b/a Merrill Lynch Asset Management
P.O. Box 9011
Princeton, NJ 08540
</TABLE>
- ---------------
(1) The holding shown is based on a Schedule 13G filed with the SEC on or about
February 10, 1993 by Dimensional Fund Advisors Inc. a registered investment
advisor that disclaims beneficial ownership of these shares.
(2) The holding shown is based on a Schedule 13G jointly filed with the SEC on
or about February 4, 1993 by Merrill Lynch Investment Management, Inc.,
d/b/a Merrill Lynch Asset Management (MLAM), a registered investment
advisor, Fund Asset Management, Inc., a subsidiary of MLAM and a registered
investment advisor, and Merrill Lynch Phoenix Fund, Inc., a registered
investment company.
As of February 2, 1994, the amount and nature of beneficial ownership of shares
of Common Stock by each director and nominee, each of the executive officers
named in the Summary Compensation Table, and all directors, nominees and
executive officers as a group was as follows:
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER(1) NUMBER OF SHARES PERCENT OF CLASS
------------------------------------------------ ---------------- ----------------
<S> <C> <C>
Gilbert W. Anderson............................. 3,122 *
John F. Clearman................................ 5,000 *
Edward H. Cooley................................ -- *
Edwin I. Colodny................................ 2,000 *
Robert W. Cremin................................ 78,000(2) 1.2%
E. John Finn.................................... 18,000 *
Robert F. Goldhammer............................ 8,750 *
Wendell P. Hurlbut.............................. 226,821(2) 3.5%
Stephen R. Larson............................... 47,500(2) *
Jerome J. Meyer................................. 1,000 *
Paul G. Schloemer............................... 500 *
Malcolm T. Stamper.............................. 1,000 *
Robert W. Stevenson............................. 125,362(2) 1.9%
Lee Zuker....................................... 64,200(2) *
Directors, nominees and executive officers
as a group (18 persons)....................... 656,205(2) 10.1%
</TABLE>
- ---------------
* None or less than 1%.
(1) Each person (or spouse, where applicable) has sole voting and investment
power.
(2) Includes options for shares granted under the Company's stock option plan
which are exercisable currently or within 60 days of the date of this proxy
statement as follows: Mr. Cremin, 75,000 shares; Mr. Hurlbut, 187,500
shares; Mr. Larson, 47,500 shares; Mr. Stevenson, 115,000 shares; Mr. Zuker,
62,500 shares; and directors, nominees and executive officers as a group,
551,250 shares.
3
<PAGE> 6
OTHER INFORMATION AS TO DIRECTORS
Each director who is not an employee of the Company receives an annual retainer
fee of $20,000 for services on the Board and all committees thereof; a fee of
$1,000 for each special meeting attended; and a fee of $200 for each telephonic
meeting in which they participate. In addition, committee chairmen who are not
employees of the Company also receive an annual fee of $5,000. There were four
meetings of the Board of Directors during fiscal 1993.
Committees of the Board of Directors are as follows:
The Audit Committee, currently consisting of Messrs. Clearman (Chairman),
Anderson, Colodny, Meyer and Schloemer, recommends to the Board the
independent auditors to be selected to audit the Company's annual financial
statements and reviews the fees charged for audits and for any non-audit
assignments. This Committee also reviews the scope and results of the
annual audit by the independent auditors, any recommendations of the
independent auditors resulting therefrom and management's response thereto,
the accounting principles being applied by the Company in financial
reporting, the activities of the Company's internal auditors, the adequacy
of internal accounting controls and such other related matters as it deems
appropriate. The Audit Committee met four times during 1993.
The Compensation & Stock Option Committee, currently consisting of Messrs.
Goldhammer (Chairman), Finn and Stamper, recommends salaries for officers
of the Company and administers the Company's incentive compensation plans.
The Compensation & Stock Option Committee has also been appointed by the
Board of Directors to administer the Company's stock option plans. The
Compensation & Stock Option Committee met three times during 1993.
The Executive Committee, currently consisting of Messrs. Hurlbut
(Chairman), Finn, Goldhammer and Stamper, reviews situations that might, at
some future time, become items for consideration of the entire Board of
Directors, and acts on behalf of the entire Board of Directors between its
meetings. The Executive Committee met twice during fiscal 1993.
The Nominating Committee, currently consisting of Messrs. Stamper
(Chairman), Colodny and Finn, recommends individuals to be presented to the
shareholders of the Company for election or reelection to the Board of
Directors. Written proposals from shareholders for nominees for directors
to be elected at the 1995 annual meeting which are submitted to the
Secretary of the Company by October 13, 1994, and which contain sufficient
background information concerning the nominee to enable a proper judgment
to be made as to his or her qualifications will be considered by the
Nominating Committee. The Nominating Committee met once during fiscal 1993.
Each director, during fiscal 1993, attended at least 75% of the total number of
meetings of the Board of Directors and Board committees of which he was a
member.
4
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation paid or
accrued during fiscal years 1993, 1992 and 1991 for services in all capacities
to the Company by the persons who, at October 31, 1993, were the Chief Executive
Officer and the four other most highly compensated executive officers of the
Company (collectively the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------
AWARDS
-----------
NUMBER OF
SECURITIES
ANNUAL COMPENSATION UNDERLYING PAYOUTS ALL OTHER
--------------------- OPTIONS ---------- COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) GRANTED(#) LTIP($)(1) ($)(2)
- -------------------------------------- ----- --------- -------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Wendell P. Hurlbut.................... 1993 350,000 -- -- -- 2,249
Chairman of the Board, President 1992 330,000 142,996 75,000 127,359 2,182
and Chief Executive Officer(3) 1991 325,000 253,381 -- 336,345 2,119
Robert W. Stevenson................... 1993 250,000 -- -- -- 2,249
Executive Vice President and 1992 250,000 90,275 30,000 55,179 2,182
Chief Financial Officer, 1991 247,500 159,962 -- 118,710 2,119
Secretary and Treasurer
Robert W. Cremin...................... 1993 233,333 -- -- -- 2,249
Senior Vice President and 1992 222,500 73,123 50,000 46,318 2,182
Group Executive 1991 206,666 107,495 -- 108,818 2,119
Lee Zuker............................. 1993 201,667 -- -- -- 2,249
Group Vice President 1992 193,333 56,332 25,000 41,203 2,182
1991 183,333 94,698 -- 108,818 2,119
Stephen R. Larson..................... 1993 185,833 -- -- -- 2,249
Group Vice President(4) 1992 166,667 49,110 45,000 47,491 2,182
1991 140,416 64,829 20,000 31,900 2,119
</TABLE>
- ---------------
(1) Long-term incentive plan.
(2) Amounts contributed to or accrued by the Company for the Named Executive
Officer under the Company voluntary savings 401(k) plan.
(3) Chairman of the Board, President and Chief Executive Officer since January
1993. Prior to that date, President and Chief Executive Officer of the
Company.
(4) Group Vice President since April 1991. Prior to that date, President of
Korry Electronics Co., an Esterline company.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR END (#) FISCAL YEAR END ($)(1)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- ------------- ------------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Wendell P. Hurlbut.... -- -- 156,250 68,750 0 0
Robert W. Stevenson... -- -- 101,250 28,750 0 0
Robert W. Cremin...... -- -- 58,750 41,250 0 0
Lee Zuker............. -- -- 52,500 22,500 0 0
Stephen R. Larson..... -- -- 28,750 46,250 0 0
</TABLE>
- ---------------
(1) Based on the closing price of the Common Stock on October 29, 1993 as
reported by the New York Stock Exchange ($7.50); no options were
in-the-money at year end.
5
<PAGE> 8
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK
NUMBER OF OTHER PERIOD PRICE-BASED PLANS
SHARES, UNITS UNTIL MATURATION -------------------------------------------
NAME OR OTHER RIGHTS OR PAYOUT THRESHOLD ($) TARGET ($) MAXIMUM ($)
- ------------------------- ---------------- ----------------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Wendell P. Hurlbut....... -- 1993-1996 53,125 212,500 425,000
Robert W. Stevenson...... -- 1993-1996 21,875 87,500 175,000
Robert W. Cremin......... -- 1993-1996 18,750 75,000 150,000
Lee Zuker................ -- 1993-1996 17,188 68,750 137,500
Stephen R. Larson........ -- 1993-1996 17,188 68,750 137,500
</TABLE>
The above awards were made pursuant to the Company's long-term incentive
compensation plan. Under this plan, payments are made either in cash or Common
Stock, based on the Company's performance over a period of four years relative
to the performance of a selected peer group of companies. No awards will be paid
unless performance meets certain minimum standards. Partial payments are made
based on performance through years two and three, with final awards paid after
the fourth year of each cycle. (See Compensation Committee Report, below.)
RETIREMENT BENEFITS
The Named Executive Officers are covered by a defined benefit retirement plan
which requires an employee contribution of 1% of annual compensation. Under the
plan, benefits accrue until retirement, limited to 30 years of service, with
normal retirement at age 65. Retirees are entitled to receive an annuity
computed under a five-year average compensation formula, which includes salary,
amounts earned under incentive compensation plans (annual and long-term) or
realized upon exercise of stock options, and is integrated with Social Security.
The retirees may select either a life annuity or one of several forms of payment
with an equivalent actuarial value.
The approximate annual annuity payable upon retirement to employees in higher
salary classifications is shown in the following table. The amounts shown are
for retirement at age 65, and integration with Social Security is based on the
career average Social Security wage base in effect in 1993. To the extent the
wage base is increased after 1993, the benefits payable under the retirement
plan would be lower than the amounts shown. To the extent benefits cannot be
provided under the retirement plan due to the limitations of Section 415 of the
Internal Revenue Code of 1986, as amended (currently maximum annual benefit of
$115,641 and maximum covered compensation of $235,840), such benefits will be
provided to the Named Executive Officers by a non-qualified supplemental benefit
plan as discussed below.
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
AVERAGE -----------------------------------------------------------
COMPENSATION 10 15 20 25 30
- ------------------------------------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000............................ $13,800 $ 20,700 $ 27,600 $ 34,500 $ 41,500
200,000............................ 29,800 44,700 59,600 74,500 89,500
300,000............................ 45,800 68,700 91,600 114,500 137,500
400,000............................ 61,800 92,700 123,600 154,500 185,500
500,000............................ 77,800 116,700 155,600 194,500 233,500
</TABLE>
The Named Executive Officers currently have the following completed years of
service for purposes of the retirement plan: Mr. Hurlbut, 19; Mr. Stevenson, 20;
Mr. Cremin, 16; Mr. Larson, 14; and Mr. Zuker, 10.6.
The Named Executive Officers are also covered by a Supplemental Executive
Retirement Plan (the "SERP"), which is a non-qualified retirement plan
established to provide supplemental retirement benefits in excess of statutory
limits, up to full benefits as would otherwise be provided under the existing
retirement plan. SERP benefits are to be computed based on the five-year average
compensation formula, excluding amounts earned under the long-term incentive
compensation plan or realized upon exercise of stock options. Additionally, the
SERP will provide retirement plan service maximums to Mr. Hurlbut at age 65. At
the Board of Directors' discretion, the SERP could provide such service maximums
should Mr. Hurlbut retire early.
6
<PAGE> 9
TERMINATION AGREEMENTS
The Company has entered into termination protection agreements with the Named
Executive Officers which are designed to induce them to remain in the employ of
the Company or any successor company in the event of certain changes in
ownership or control by assuring compensation benefits if an officer is
terminated "Without Cause" or resigns for "Good Reason," as defined in the
agreements. In the event of such termination within two years after a change in
ownership or control, the agreements provide for lump sum payments equal to
twice the average compensation received during the prior two years, payment of
certain legal fees and expenses associated with the termination, and insurance
benefits for the remainder of the initial two-year period or until other
full-time employment is accepted.
COMPENSATION COMMITTEE REPORT
EXECUTIVE COMPENSATION PRINCIPLES
The Compensation & Stock Option Committee (the "Committee") is responsible for
administering the compensation program for the executive officers of the
Company. The Committee is composed exclusively of independent, non-employee
directors who are not eligible to participate in any of the executive
compensation programs.
The Company's executive compensation practices are based on principles designed
to align executive compensation with Company objectives, business strategy,
management initiatives and financial performance. In applying these principles
the Committee has established a program to:
- Support a performance-oriented environment that rewards performance not
only with respect to the Company's annual results but also Company
performance as compared to that of longer-term industry performance
levels.
- Reward executives for long-term strategic management and the enhancement
of shareholder values.
- Attract and retain key executives critical to the success of the
Company.
EXECUTIVE COMPENSATION PROGRAM
Each executive's total compensation consists of both cash and equity-based
compensation. The annual portion consists of a base salary and participation in
an annual incentive plan. The Committee determines the initial salary for key
executive officers based upon surveys of salaries for comparable
responsibilities taking into account competitive norms. Subsequent salary
changes are based upon individual performance or changes in responsibilities.
At the beginning of each year the Committee establishes the level (stated as a
percentage of base salary) of each executive's participation in the annual
incentive plan and the plan's performance measurement goals for the upcoming
year. Actual awards under the annual incentive plan depend on the Company's
actual performance against the plan's goals for the upcoming year (in 1993,
earnings per share). Payout to each executive can range from 0% to 150% of their
targets. In 1993 no payments under the annual incentive plan were made. No
individual can receive more than 90% of salary from the annual incentive plan.
In addition, long-term incentives are provided through both the long-term
incentive compensation plan and stock option awards. Under the long-term
incentive compensation plan the Committee establishes a new four-year cycle each
year and reviews and approves the target participation level of executive
officers for each new cycle. The plan ties actual payouts to performance of the
Company (measured by ROE and growth in EPS) relative to the performance of a
self-selected peer group of companies which, in the aggregate, are intended to
reflect the diversified manufacturing activities of the Company and the markets
in which its products are sold. The plan requires minimum performance levels and
sets maximum payouts. Based on cumulative performance for each four-year cycle
partial awards are paid after the second and third years of each cycle, with
final awards paid after the fourth year of each cycle. Awards are paid in cash
or in shares of the Company's common stock. In 1993 no payments under the
long-term incentive compensation plan were made.
7
<PAGE> 10
The portion of the long-term incentives provided from stock options contemplates
that the annual future gain potential of an executive's previously granted stock
options should be approximately equal to the targeted annual payment from the
long-term incentive compensation plan. The Committee periodically reviews each
executive's situation in this light and grants additional options if deemed
needed. In FY 1993 options were granted to newly hired officers.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee has followed a policy of offering the CEO a
compensation package for target Company performance which, in addition to base
salary, would pay cash incentives of 125% of salary. Additionally, approximately
75% of salary is targeted to be earned through annual gains from stock options.
In setting targeted amounts, the Committee considers amounts paid to CEOs with
comparable qualifications, experience and responsibilities at other
comparably-sized companies engaged in similar businesses as the Company. In 1993
the CEO's salary was increased 6.1% to reflect the assumption of additional
duties as chairman, no annual bonus was earned and the minimum threshold for
payment under the long-term incentive compensation plan was not achieved.
The Compensation Committee believes that total compensation of the CEO should be
closely linked to corporate performance and the CEO's compensation has been
structured so that the payouts from the annual incentive plan and the long-term
incentive compensation plan vary closely with the Company's operating income. In
prior years, the Committee established additional goals aimed at reducing the
Company's exposure to leverage associated with high levels of debt. The
Committee is satisfied that the CEO and the management team have been successful
in reducing the Company's debt levels.
Annually the Committee separately reviews the CEO's salary and participation
levels in both the annual incentive plan and the long-term incentive
compensation plan.
Respectfully submitted,
ROBERT F. GOLDHAMMER, CHAIRMAN
E. JOHN FINN
MALCOLM T. STAMPER
8
<PAGE> 11
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total return to shareholders on the
Company's Common Stock with the cumulative total return of the Standard & Poors
500 Stock Index and the Standard & Poors High Technology Composite Index.
[In accordance with the provisions of Section 232.304 of
Regulation S-T, a paper copy of the stock price performance
graph which appears here has been furnished to the Securities
and Exchange Commission under cover of Form SE dated
February 8, 1994.]
The cumulative total return on the Company's Common Stock and each index assumes
the value of each investment was $100 on October 31, 1988, and that all
dividends were reinvested. The measurement dates plotted above indicate the last
trading date of each fiscal year shown.
SELECTION OF INDEPENDENT AUDITORS
The selection by the Board of Directors, on the recommendation of the Audit
Committee, of Deloitte & Touche, Seattle, Washington, as independent auditors to
audit the financial statements of the Company for the fiscal year ending October
31, 1994, is to be submitted to the meeting for ratification. Said firm has
audited the financial statements of the Company since 1987.
Representatives of Deloitte & Touche are expected to be present at the 1994
annual meeting and will be given the opportunity to make a statement if they
wish to do so and will be available to respond to appropriate questions.
The Company is not obligated by law or its Certificate of Incorporation or
Bylaws to seek ratification of the directors' selection of auditors but does so
as a matter of corporate policy. If the selection of auditors is not ratified by
shareholders, the Board may continue to use Deloitte & Touche as auditors or
select new auditors if in the opinion of the Board such a change would be in the
best interest of the Company and its shareholders; any such change would not be
expected to be submitted to shareholders for ratification prior to the 1995
annual meeting.
The affirmative vote of a majority of the votes cast by shareholders present in
person or by proxy and entitled to vote at the meeting is required to ratify the
appointment of Deloitte & Touche as independent auditors.
9
<PAGE> 12
OTHER MATTERS
As of the date of this proxy statement the only matters which management intends
to present at the meeting are those set forth in the notice of meeting and in
this proxy statement. Management knows of no other matters which may come before
the meeting. However, if any other matters properly come before the meeting, it
is intended that proxies in the accompanying form will be voted in respect
thereof in accordance with the judgment of the person or persons voting as
proxies.
SHAREHOLDER PROPOSALS
Shareholder proposals for inclusion in the proxy statement for the 1995 annual
meeting must be received at the Company's principal executive office not later
than October 13, 1994.
COST OF SOLICITATION
The cost of this solicitation will be borne by the Company. In addition to
solicitation by mail, officers and employees of the Company may solicit the
return of proxies by telephone, telegram, messenger or personal interview
without additional compensation. Arrangements may also be made with brokerage
houses and other custodians, nominees and fiduciaries to send proxies and proxy
material to their principals, and the Company may reimburse such persons for
their expenses in so doing.
By order of the Board of Directors
[FACSIMILE SIGNATURE]
ROBERT W. STEVENSON
Executive Vice President and Secretary
February 3, 1994
10
<PAGE> 13
ESTERLINE TECHNOLOGIES CORPORATION
This Proxy is Solicited on Behalf of The Board of Directors
The undersigned hereby appoints Wendell P. Hurlbut and Robert W. Stevenson and
each of them as proxies, each with full power of substitution, to represent and
vote for and on behalf of the undersigned, the number of shares of common stock
of Esterline Technologies Corporation that the undersigned would be entitled to
vote if personally present at the annual meeting of shareholders to be held on
March 30, 1994, or at any adjournment thereof. The undersigned directs that
this proxy be voted as follows:
(Continued and to be signed on other side)
<PAGE> 14
COMMON
Please mark your votes X
as in this example. -------
(1) Election of the following Nominees as Directors:
Gilbert W. Anderson, Wendell P. Hurlbut, Paul G. Schloemer, Malcolm
T. Stamper.
FOR _____ WITHHELD _____ EXCEPT _____
INSTRUCTION: To withhold authority to vote for any individual nominee,
print that nominee's name in the following space:
__________________________________________
(2) Ratification of Deloitte & Touche as the Company's independent auditors.
FOR ______ WITHHELD ______ ABSTAIN _____
(3) In their discretion, the holders of this proxy are authorized to vote
upon such other business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed on
this proxy card. Management recommends a vote FOR all nominees designated on
this proxy card and FOR each of the proposals referred to hereon; if no
specification is made, a vote FOR all of said nominees and FOR approval of all
of said proposals will be entered.
The undersigned hereby revokes any proxy or proxies heretofore given for such
shares and ratifies all that said proxies or their substitutes may lawfully do
by virtue hereof.
Dated: ___________________, 1994
_________________________________________
Signature
_________________________________________
Signature if held jointly
Please sign exactly as name appears on this proxy. If stock is held jointly,
each owner should sign. Persons signing in a representative capacity should
give their title.
PLEASE PROMPTLY DATE, SIGN AND RETURN THIS PROXY CARD.
