<PAGE> 1
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
{X} Definitive Proxy Statement
{ } Definitive Additional Materials
{ } Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
FOSTER WHEELER CORPORATION
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
FOSTER WHEELER CORPORATION
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
{X} $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
{ } $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
{ } Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________
3) Per unit price or other underlying valve of transaction
computed pursuant to Exchange Act Rule 0-11:(1)
________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
{ } Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
________________________________________________________________
2) Form, Schedule or Registration Statement No.:
________________________________________________________________
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________________________________________________________________
4) Date Filed:
________________________________________________________________
<PAGE> 2
NOTICE OF MEETING AND PROXY STATEMENT
FOSTER WHEELER CORPORATION
PERRYVILLE CORPORATE PARK
CLINTON, NEW JERSEY 08809-4000
--------------------------------
NOTICE OF 1994 ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 1994
--------------------------------
The Annual Meeting of Stockholders of Foster Wheeler Corporation will
be held in the Ballroom of The Parsippany Hilton Hotel, One Hilton Court, Route
10 (West), Parsippany, New Jersey, on April 25, 1994, at two o'clock in the
afternoon for the following purposes:
1. To elect six Directors.
2. To ratify the selection of independent auditors.
3. To transact such other business as may properly come before the
meeting or adjournments thereof.
The Board of Directors has fixed the close of business on March 11,
1994, as the record date for determination of Stockholders entitled to notice
of and to vote at the meeting or adjournments thereof.
By Order of the Board of Directors
JACK E. DEONES
Vice President & Secretary
March 18, 1994
IT WILL GREATLY ASSIST MANAGEMENT IN REDUCING EXPENSES IN CONNECTION
WITH THE MEETING IF YOU PROMPTLY RETURN YOUR SIGNED PROXY IN THE ENCLOSED
ENVELOPE WHETHER YOU OWN FEW OR MANY SHARES. STOCKHOLDERS WHO EXPECT TO ATTEND
THE MEETING IN PERSON SHOULD CHECK THE APPROPRIATE SPACE ON THE PROXY CARD. A
RESERVATION CARD WILL BE SENT TO YOU UPON RECEIPT OF THE PROXY CARD SO MARKED.
<PAGE> 3
Foster Wheeler Corporation
PERRYVILLE CORPORATE PARK
CLINTON, NEW JERSEY 08809-4000
--------------------------------
PROXY STATEMENT
--------------------------------
For the 1994 Annual Meeting of Stockholders
to be held April 25, 1994
--------------------------------
GENERAL INFORMATION
This statement is furnished in connection with solicitation by the
Board of Directors of Foster Wheeler Corporation (hereinafter the "Corporation"
or "Foster Wheeler") of proxies to be used at the 1994 Annual Meeting of
Stockholders of the Corporation, to be held at the time, place and for the
purposes set forth in the accompanying Notice of 1994 Annual Meeting of
Stockholders. This solicitation will begin on the date of mailing, March 18,
1994.
Shares represented by valid proxies will be voted in accordance with
instructions contained therein or, in the absence of such instructions, in
accordance with the recommendations of the Board of Directors. A proxy may be
revoked by a Stockholder by written notice of such revocation, or by a
later-dated proxy, delivered to the Secretary of the Corporation at any time
prior to the shares represented by such earlier proxy being voted.
A copy of the 1993 Annual Report to Stockholders, including financial
statements for the fiscal year ended December 31, 1993, has been sent to each
Stockholder.
The Board of Directors has fixed the close of business on March 11,
1994 as the record date for determination of Stockholders entitled to notice of
and to vote at the meeting or adjournments thereof. As of March 11, 1994, the
outstanding voting securities of the Corporation consist of 35,754,324 shares
of Common Stock, $1.00 par value, holders of which are entitled to one vote per
share.
ELECTION OF DIRECTORS
Pursuant to an Amendment to the Corporation's Certificate of
Incorporation adopted by Stockholders at the 1983 Annual Meeting which
provided, among other things, for the classification of Directors with respect
to the term for which they shall severally hold office, the number of Directors
to be elected at this meeting is six, five of whom are to be elected for
three-year terms and one to be elected for a one-year term, so as to make each
class of Directors more equal in number. The proxy agents of the Board of
Directors intend to vote for the election of the nominees below named, unless
instructed otherwise. With the exception of Ms. Martha J. Clark and Mr. David
J. Roberts, all nominees were previously elected by the Stockholders and have
served as Directors since the years stated after their names. Ms. Clark was
elected a Director by the Board as of February 22, 1994 to fill a vacancy on
the Board. Mr. Roberts is being proposed for election for the first time. With
the exception of Mr. Roberts, all terms of office of nominees, if elected, will
expire at the 1997 Annual Meeting of Stockholders or when their successors are
duly elected and qualified. Mr. Roberts' term will expire at the 1995 Annual
Meeting. Because of a Director age restriction
<PAGE> 4
in the By-Laws, Mr. Timko must retire in 1995. If any eligible nominee
becomes unable to accept nomination or election, proxies will be voted for
those remaining, and the Board of Directors will either reduce the size of the
Board, or select substitute nominees after identifying suitable candidates. A
resolution adopted by the Board of Directors on February 22, 1994 provides for
a Board of 14 Directors. Thirteen Directors are currently serving on the Board.
If the following slate of nominees is elected, there will be fourteen Directors
on the Corporation's Board following the Annual Meeting.
The following table for Director nominees is based upon information
furnished by the nominees and speaks as of the date hereof.
<TABLE>
<CAPTION>
Shares of
First Principal Occupation Common Stock
Year During Past Five Years Owned
Name Age Elected and Other Directorships Beneficially(1)
---- --- ------- ----------------------- ---------------
<S> <C> <C> <C> <C>
Martha J. Clark . . . . . . 44 1994 President, Prudential Asset Management 400
Company, and Senior Vice President, The
Prudential Insurance Company of America.
Since 1981 an officer of various Prudential
companies (Financial Services); Director--
Dexter Corporation
John A. Hinds . . . . . . . 57 1990 Vice President and General Manager, 5,500
International Division of VeriFone, Inc. (5,000)
(Transaction Automation). Prior to March
1993, executive with AT&T International;
Director--Liberty Technologies, Inc.
David J. Roberts . . . . . 50 -- Executive Vice President and Chief Financial 18,760
Officer of the Corporation since April, 1992. (17,760)
Formerly held several financial positions with
the Corporation and its subsidiaries
John Timko, Jr. . . . . . . 70 1967 Retired, formerly Chairman of the Board of 10,691
Directors and Executive Vice President, (6,000)
Finance and Administration of the Corporation;
Director--J.F.K. Health Systems, Inc.
Charles Y.C. Tse . . . . . 67 1982 Retired, formerly Vice Chairman and 6,200
President, International Operations, Warner- (6,000)
Lambert Company (Health Care); Director--
Brandon Systems Corp., Transcell
Technologies, Inc.
Robert Van Buren . . . . . 68 1988 Chairman, Financial Facilities Management, 10,768
Inc. (Property Management); 1978-1991, (6,000)
Chairman and Chief Executive Officer of
Midlantic Corporation (Banking); Director--
Smith Corona Corp.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE ABOVE
NOMINEES.
- -----------------
(1) The tabulation of the number of shares of Common Stock owned
beneficially includes shares which the named individuals have options to
acquire within 60 days pursuant to the Corporation's 1984 Stock Option Plan
and/or The Directors' Stock Option Plan. Of the total number of shares owned
beneficially, the number of such shares which are under options exercisable
within 60 days are indicated in parentheses.
2
<PAGE> 5
SIMILAR INFORMATION ON THE REMAINING DIRECTORS IS AS FOLLOWS:
<TABLE>
<CAPTION>
Shares of
First Principal Occupation Common Stock
Year During Past Five Years Owned
Name Age Elected and Other Directorships Beneficially(1)
---- --- ------- ----------------------- ---------------
<S> <C> <C> <C> <C>
Louis E. Azzato . . . . . . 63 1978 Chairman and Chief Executive Officer of 95,075
(Term ends 1996) the Corporation; Director--First Fidelity (45,726)
Bancorporation, First Fidelity Bank, Blue
Cross and Blue Shield of New Jersey
Leland E. Boren . . . . . . 71 1977 Chairman and President, Avis Industrial 64,000
(Term ends 1995) Corporation, also director, partner and (6,000)
principal owner of several industrial
companies (Industrialist); Director--First
Citizens Bancorp of Indiana, Citizens
Banking Company; Chairman, State of
Indiana Pollution Prevention Board
Kenneth A. DeGhetto . . . . 69 1972 Retired, formerly Chairman of the Board of 21,547
(Term ends 1996) the Corporation; Director--Brandon (5,000)
Systems Corp.
E. James Ferland . . . . . 52 1993 Chairman of the Board, President and Chief 6,000
(Term ends 1996) Executive Officer of Public Service (2,000)
Enterprise Group Incorporated. Also
Chairman of the Board and Chief Executive
Officer of Public Service Electric and Gas
Company since September, 1992; prior to
such date was also President (Public
Utilities). Director--Public Service
Enterprise Group Incorporated
Harold E. Kennedy . . . . . 66 1987 Vice Chairman of the Corporation; Trustee 2,506
(Term ends 1995) --Compass Capital Group (Mutual Funds)
Joseph J. Melone . . . . . 62 1988 Chairman and Chief Executive Officer of 7,500
(Term ends 1996) The Equitable Life Assurance Society of the (6,000)
United States and President and Chief
Operating Officer, The Equitable Companies
Incorporated (Insurance and Financial
Services). Prior to November 1990,
President of The Prudential Insurance
Company of America. Director--The
Equitable Companies Incorporated, AT&T
Capital
Frank E. Perkins . . . . . 60 1981 Dean of the Graduate School, Professor of 6,200
(Term ends 1996) Civil Engineering, Massachusetts Institute (6,000)
of Technology (Educator)
Richard J. Swift . . . . . 49 1993 President and Chief Operating Officer of the 13,167
(Term ends 1995) Corporation since December 1992. Formerly (9,167)
held several executive positions with the
Corporation and its subsidiaries
</TABLE>
- -----------------
(1) The tabulation of the number of shares of Common Stock owned
beneficially includes shares which the named individuals have options to
acquire within 60 days pursuant to the Corporation's 1984 Stock Option Plan
and/or The Directors' Stock Option Plan. Of the total number of shares owned
beneficially, the number of such shares which are under options exercisable
within 60 days are indicated in parentheses.
3
<PAGE> 6
Following is stock ownership information for Mr. N. William Atwater,
an Officer of the Corporation who is listed in the compensation tables that
follow, but who is not included in the Director tabulations above.
Shares of Common
Stock Owned
Name Title Beneficially (1)
---- ----- ----------------
N. William Atwater Executive Vice President - 22,020
Engineering & Construction Group (18,660)
All persons, constituting a group of 29, who were
Directors or Officers of the Corporation at any
time during the last fiscal year . . . . . . . . . . . 501,720
(265,397)
COMMITTEES OF THE BOARD
The Board of Directors of the Corporation has established standing
committees to consider various matters and to make recommendations to the
full Board as to proposed courses of action for the Board. Among the
standing committees that have been established are the Audit Committee, the
Committee on Nominees for Directors and Officers, the Compensation
Committee, the Finance Committee and the Retirement Plan Committee.
The members of the Audit Committee are Mr. Charles Y. C. Tse,
Chairman; Mr. Leland E. Boren; Ms. Martha J. Clark; Mr.E. James Ferland;
Mr. John A. Hinds; Mr. Joseph J. Melone; Dr. Frank E. Perkins; and Mr.
Robert Van Buren. During the last fiscal year, this Committee met four
times. The functions of this Committee are to review Management's
recommendations for the engagement or discharge of independent auditors; to
review the audit programs planned by the independent auditors and the
internal auditors, and to monitor program progress; to review compliance
with Corporate policies; to review, in connection with the independent
auditors, the results of the audit, the Corporation's financial statements
and the Corporation's system of internal accounting control; to review fees
of the independent auditors; and to report the Committee's findings to the
full Board of Directors.
The members of the Committee on Nominees for Directors and Officers
are Mr. Leland E. Boren, Chairman; Mr. Louis E. Azzato; Mr. Joseph J.
Melone; Dr. Frank E. Perkins; Mr. Richard J. Swift and Mr. Charles Y. C.
Tse. During the last fiscal year, this Committee held six meetings. The
functions of this Committee are to recommend to the Board the nominees for
election as Directors and Officers, and to consider performance of
incumbent Directors and Officers to determine whether to nominate them for
reelection. The Committee will consider Director nominees recommended by
Stockholders. Such recommendations should be made by letter, including a
description of the proposed nominee's qualifications, biographical
information and a willingness to serve, sent to the attention of the
Secretary, Foster Wheeler Corporation, Perryville Corporate Park, Clinton,
New Jersey 08809-4000.
The Compensation Committee consists of Mr. Leland E. Boren, Chairman;
Mr. Joseph J. Melone; Dr. Frank E. Perkins; Mr. John Timko, Jr.; Mr.
Charles Y. C. Tse and Mr. Robert Van Buren. During the last fiscal year,
this Committee held five meetings. The functions of this Committee are to
recommend to the Board compensation arrangements for Directors and
Officers, and to approve specific benefits under such arrangements.
- -----------------
(1) The tabulation of the number of shares of Common Stock owned
beneficially includes shares which the named individuals and the group have
options to acquire within 60 days pursuant to the Corporation's 1984 Stock
Option Plan and/or The Directors' Stock Option Plan. Of the total number of
shares owned beneficially, the number of such shares which are under
options exercisable within 60 days are indicated in parentheses. No
individual nominee or Director, nor the 29 members of the group in total,
own 1% or more of the Corporation's Common Stock.
4
<PAGE> 7
Following are the members of the Finance Committee: Mr. John Timko,
Jr., Chairman; Ms. Martha J. Clark; Messrs. Louis E. Azzato; Leland E.
Boren; Kenneth A. DeGhetto; E. James Ferland; John A. Hinds; Joseph J.
Melone; David J. Roberts; Richard J. Swift; Charles Y. C. Tse; and Robert
Van Buren. Five meetings of this Committee were held during the last fiscal
year. This Committee reviews the consolidated financial results of the
Corporation; establishes payment schedules for dividends; and reviews
matters that may have an impact on the Corporation's financial statements,
including cash flows.
The members of the Retirement Plan Committee are: Mr. John Timko, Jr.,
Chairman; Ms. Martha J. Clark; Messrs. Louis E. Azzato; Leland E. Boren;
Robert D. Iseman; E. James Ferland; David J. Roberts; James E. Schessler;
and Robert Van Buren. During the last fiscal year, three meetings of the
Retirement Plan Committee were held. The Committee's authority is to
recommend the allocation of pension fund assets to the Board of Directors;
recommend qualified investment managers and/or trustees for pension fund
assets to the Board of Directors; monitor the results of the investment
managers and/or trustees and meet three times during the year to discuss
their performance; and set investment manager guidelines and objectives and
recommend appropriate action to the Board if guidelines and objectives are
not being met.
COMPENSATION OF DIRECTORS
Ten regular meetings and three special meetings of the Board of
Directors were held during the last fiscal year. During this period, each
incumbent Director attended at least 83.3% of the aggregate of (i) the
total number of meetings of the Board of Directors while he was a Director,
and (ii) the total number of meetings held by all Committees of the Board
on which he served. Directors who are employees of the Corporation receive
no additional compensation for their services as Directors. Nonemployee
Directors receive an annual retainer of $15,000 and $1,000 for each
Directors' meeting attended. In addition, each nonemployee Director
receives $700 for each meeting of a Committee of the Board attended; the
Committee Chairman receives $1,000 for each such meeting. In addition to
Director fees, the following Director received consulting fees from the
Corporation during 1993 in the amount indicated: Mr.DeGhetto $6,000.
Effective October 15, 1993, for a term of one year, the Corporation has
obtained insurance policies through National Union Fire Insurance Company of
Pittsburgh, Pennsylvania, and Continental Casualty Corporation in respect of
indemnification of Directors and Officers. The scope of these policies is
similar to coverage under prior policies held by the Corporation. The annual
premium for this coverage is $395,000.
The Corporation's Shareholders, at the 1990 Annual Meeting, approved
The Directors' Stock Option Plan. Pursuant to The Directors' Plan, each
Director who is not an employee of the Corporation or one of its
subsidiaries shall receive, following the Annual Meeting each year, a
nonqualified option to purchase 2,000 shares of the Corporation's Common
Stock. Such options have 10-year terms and become exercisable beginning one
year after the date of grant at an option exercise price equal to the fair
market value of the shares on the date of grant.
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Plan for executives of the Corporation was
originally designed in 1987 by an independent consultant. It was reviewed,
modified, and in 1988 approved and adopted by the Compensation Committee
and the Board of Directors. Since then, it has been regularly reviewed and
modified by the Committee and the Board. The Plan is intended to meet two
primary objectives: to attract and retain highly-qualified executives to
manage the Corporation's business and to reward those executives if their
performance and the Corporation's results so warrant. The Compensation
Committee,
5
<PAGE> 8
subject to review by the Board, is responsible for the implementation and
administration of all aspects of the Plan. Any payments made under this
Plan are ultimately at the discretion of the Board.
BASE SALARY
The first component of each executive's compensation is base
salary. To determine that salary, the Committee, each year, using data for
executives in similar positions in comparable companies including the
majority of those listed in the Standard & Poor's Engineering and
Construction Index, provided by an independent consultant and by the
Corporation's staff, and in consultation with the Chief Executive Officer,
establishes a salary range for each executive. The Chief Executive Officer
then proposes to the Committee a specific salary, within that range, for
each executive. The Committee considers that proposal, and then recommends
a salary for each executive to the Board for its consideration and
approval. The Committee similarly recommends a salary within the
appropriate range for the Chief Executive Officer, but without the
participation of the Chief Executive Officer. In determining such salaries,
the performance of each such executive, his experience and the performance
of the business unit for which he is responsible as well as performance of
the Corporation as a whole are all taken into account. The Chief Executive
Officer's salary in 1993 was set slightly above midpoint of the salary
range established for his position.
ANNUAL INCENTIVE
The second component of each executive's compensation is an annual
incentive payment. At the beginning of each year, corporate and business
unit earnings targets are formulated by the Chief Executive Officer, then
reviewed by the Compensation Committee and, as proposed or modified, are
recommended to the Board for its consideration and approval. The actual
incentive payment is determined by measurement of actual performance of the
Corporation and each business unit against the established targets.
LONG-TERM INCENTIVES
The Plan also provides for long-term incentives comprised of long-term
performance units and stock options. Under the Plan, each executive is
assigned long-term performance units which are valued and payable at the
end of a three-year period. The value of the long-term unit is performance
based and is determined by the growth in earnings and return on equity
during the three-year period.
The Plan also provides for long-term incentives to executives in the
form of assigned stock options annually. Such options are exercisable in
installments over three-year periods at the per share market price of the
Corporation's stock on the date of the award and, of course, become
valuable only if the market price of the Corporation's stock increases.
-----------------
As outlined above, pursuant to the Plan, the 1993 base salary for Mr.
Azzato, the Corporation's Chief Executive Officer, was determined by the
Committee within a range of salaries paid to chief executive officers of
comparable companies, based on data provided by an independent consultant
and by the Corporation's staff, and then recommended to the Board for its
consideration and approval. His target annual incentive payment, target
long-term incentive payment and stock option grant were likewise determined
by the Committee and recommended to the Board for its consideration and
approval. The actual incentive awards were based, as the Plan provides, on
the Corporation's performance in 1993, and on the Corporation's performance
over the three-year period ended December 31, 1993, and were thus tied
directly to factors tending to enhance shareholder values. In addition, in
accordance with the Plan, the Committee recommended and the Board approved
a stock option grant to Mr. Azzato of 15,000 shares at the market price on
January 3, 1993, exercisable in installments over a three-year period.
The Committee and the Board considered that Mr. Azzato's performance
as Chief Executive Officer and the results achieved by the Corporation in
1993, and over the three-year period ended December 31,1993, well supported
the salary, incentive payments and stock options awarded him since the
salary was in range with industry executives of similar responsibility,
since the Company performed
6
<PAGE> 9
satisfactorily with respect to its annual earnings targets and since long-term
earnings growth and return on equity were substantial and resulted in a payout
per the Plan.
COMPENSATION COMMITTEE:
Leland E. Boren, Chairman John Timko, Jr.
Joseph J. Melone Charles Y.C. Tse
Frank E. Perkins Robert Van Buren
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As set forth above, the following Directors serve on the Compensation
Committee: Leland E. Boren, Chairman; Frank E. Perkins; Joseph J. Melone; John
Timko, Jr.; Charles Y.C. Tse; and Robert Van Buren. Mr. Timko is a retired
Officer of Foster Wheeler. He retired in May, 1978. There are no Compensation
Committee interlocks.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The following graph compares the five-year cumulative total return of
Foster Wheeler Common Stock, the S&P 500 Index and the S&P Engineering/
Construction Index. In the preparation of the graph, the following assumptions
have been used: (i) $100 was invested on December 31, 1988 in Foster Wheeler
Common Stock, the S&P 500 Index and the S&P Engineering/Construction Index,
and (ii) Dividends were reinvested. Foster Wheeler Common Stock was trading at
$14.50 at year-end in 1988 and at $33.50 at year-end in 1993.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG FOSTER WHEELER CORPORATION, S&P 500 INDEX AND S&P
ENGINEERING/CONSTRUCTION INDEX
{GRAPH}
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Foster Wheeler 100 146 161 195 216 256
S&P 500 100 132 128 166 179 197
S&P E&C 100 155 159 192 189 198
</TABLE>
7
<PAGE> 10
SUMMARY COMPENSATION TABLE
The following is a tabulation of compensation paid or set aside by the
Corporation and its subsidiaries during each of the Corporation's last three
fiscal years for the Chief Executive Officer ("CEO") and the four most
highly-compensated executive officers of the Corporation, other than CEO.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------- -----------------------------------------------
Awards Payouts
---------------------- --------- All
Other Restrited Securities Long-Term Other
Annual Stock Underlying Incentive Compen-
Name and Compen- Award(s) Option/ Payouts sation
Principal Position Year Salary ($) Bonus ($) sation ($) ($) SARs(#) ($)(2) ($)(1)
- -------------------------- ------ ------------- ----------- ---------- --------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Louis E. Azzato 1993 $600,000 $303,900 -- -- 15,000 $296,100 $4,497
Chairman & CEO 1992 $552,000 $281,500 -- -- 15,000 $246,000 $4,364
1991 $525,000 $168,000 -- -- 15,000 $210,000 $4,238
Richard J. Swift 1993 $375,000 $151,950 -- -- 12,500 $216,996 $4,497
President & COO 1992 $289,336 $165,600 -- -- 7,500 $43,700 $4,364
1991 $250,000 $16,000 -- -- 7,500 $195,440 $4,238
Harold E. Kennedy 1993 $330,000 $133,716 -- -- 10,000 $196,284 $4,497
Vice Chairman 1992 $315,000 $128,500 -- -- 10,000 $186,500 $4,364
1991 $300,000 $76,800 -- -- 10,000 $156,310 $4,238
N. William Atwater 1993 $300,000 $147,390 -- -- 7,500 $212,610 $4,497
Executive Vice President 1992 $280,000 $154,500 -- -- 7,500 $195,500 $4,364
1991 $262,500 $134,925 -- -- 7,500 $175,075 $4,238
David J. Roberts 1993 $300,000 $121,560 -- -- 7,500 $162,000 $4,497
Executive Vice President 1992 $278,339 $114,200 -- -- 7,500 $123,000 $4,364
1991 $262,500 $67,200 -- -- 7,500 $102,270 $4,238
</TABLE>
(1) Company match on Employee 401(k) contribution.
(2) Based on earnings before impact of adoption of FASB 106.
LONG-TERM INCENTIVE PLAN - AWARDS IN LAST FISCAL YEAR
As part of the long-term incentive portion of the Corporation's
Executive Compensation Plan, "performance units", which ultimately may pay out
in cash upon completion of the three-year cycle, are awarded annually to
Corporate Officers. The following table set forth awards in 1993 to the named
individuals, along with the assumed values of the awards at the end of the
three-year Plan cycle. The ultimate value of the award will be based upon the
Corporation's earnings growth rate and return on net worth.
<TABLE>
<CAPTION>
Estimated Future Payouts Under
---------------------------------------
Non-Stock Price-Based Plans
Number of Performance or ---------------------------------------
Shares, Units or Other Period Until Threshold Target Maximum
Name Other Rights (#) Maturation or Payout ($ or #) ($ or #) ($ or #)
- ------------------ ---------------- -------------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
L. E. Azzato 300 3 Years 0 $300,000 $600,000
R. J. Swift 250 3 Years 0 $250,000 $500,000
H. E. Kennedy 235 3 Years 0 $235,000 $470,000
N. W. Atwater 150 3 Years 0 $150,000 $300,000
D. J. Roberts 150 3 Years 0 $150,000 $300,000
</TABLE>
8
<PAGE> 11
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Following is a table dealing with stock option grants which were made to
the named individuals during the last completed fiscal year. The options were
granted pursuant to the terms of the Corporation's Executive Compensation Plan
and the 1984 Stock Option Plan, which provides that ten-year term options are to
be awarded at market value on the date of the award. One-third of an option
becomes exercisable after one year, two-thirds after two years and the entire
option is exercisable after three years.
<TABLE>
<CAPTION>
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or Grant Date
Options/SARs Employees in Base Price Expiration Present Value
Name Granted(#) Fiscal Year ($/sh) Date $(1)
---- ------------ ------------ ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
L. E. Azzato 15,000 14.3% $28.75 1/1/03 $195,900
R. J. Swift 12,500 11.9% $28.75 1/1/03 $163,250
H. E. Kennedy 10,000 9.5% $28.75 1/1/03 $130,600
N. W. Atwater 7,500 7.1% $28.75 1/1/03 $97,950
D. J. Roberts 7,500 7.1% $28.75 1/1/03 $97,950
</TABLE>
(1) Based on the Black-Scholes option pricing model, using the following
assumptions: (1) the stock price on the day the options were issued was $28.75;
2) the option exercise price is $28.75 per share, the price of the stock on the
date of option issue; 3) the dividend yield of the stock was 2.09%. This was
based upon the actual dividend yield as of January 4, 1993; 4) the term of the
option are ten years; 5) the risk free rate of return on the issuance date for
the term of the option was 6.60% (the interest rate on the ten year Treasury
bond as of January 4, 1993); and 6) the volatility of the stock was calculated
empirically to be .3623, using Foster Wheeler stock pricing data for the 90
trading days immediately preceding the date of issuance of the options.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table sets forth, for the named individuals, the number of
shares of Foster Wheeler Common Stock acquired upon option exercise during 1993,
the value realized (spread between the market price on the date of exercise and
the option price) as the result of such option exercises, and the number and
value of unexercised options (both exercisable and unexercisable) as of December
31, 1993.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-The-Money
Options/SARs at Options/SARs at
Fy-End(#) Fy-End($)
--------------- ----------------
Shares Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized($) Unexercisable Unexercisable
---- ------------------ ------------ --------------- ----------------
<S> <C> <C> <C> <C>
L. E. Azzato -- -- 58,848/30,000 $947,615/189,063
R. J. Swift -- -- 9,160/20,000 $92,575/118,281
H. E. Kennedy 15,038 $203,180 3,333/20,000 $20,206/126,040
N. W. Atwater -- -- 22,907/15,000 $354,469/94,531
D. J. Roberts 900 $7,931 10,260/15,000 $105,981/94,531
</TABLE>
9
<PAGE> 12
COMPENSATION AND BENEFIT PLANS
On April 25, 1988, the Board of Directors adopted the Executive
Compensation Plan. This Plan provides annual and long-term incentives to the
Officers of the Corporation, including the Officers listed in the preceding
tables. Details of the Plan are set forth in the Compensation Committee Report
on Executive Compensation earlier in this Proxy Statement. It is noted that the
Plan provides that in the event of a "change of control," individual
participant accruals shall be paid to the participants within ten days. Under
the Plan, a "change of control" shall mean the earlier to occur of the
following events: (i) when any person, corporation, partnership, association,
trust or other entity, or any "group" as defined in Section 13(d) (3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), becomes the
"beneficial owner," as defined in Rule 13d-3 promulgated under the Exchange
Act, directly or indirectly, of securities of the Corporation representing 20
percent or more of the combined voting power of the Corporation's
then-outstanding securities; or (ii) when persons not nominated by the Board of
Directors in the Corporation's three most recent proxy statements constitute
one-third of the members of the Board.
In 1987, the Board of Directors adopted a revised Executive Severance
Plan. The Corporation has entered into agreements (the "Agreements") with
fifteen of its Officers, including the Officers listed in the preceding tables.
The Agreements provide that if, within three years of a "change of control," as
defined above, an Executive is involuntarily terminated from employment by the
Corporation or resigns following a substantial diminution in his duties,
responsibilities or status or change in workplace or a decrease in his
compensation of 15% or more, in each case which is not corrected following
notice of objection by the Executive, the Executive will be entitled to receive
a lump-sum payment in an amount equal to the sum of: (i) 2.25 times the higher
of (a) his annual salary immediately prior to the change of control, or (b) his
annual salary on the date his employment is terminated, and (ii) all unpaid
compensation and payments for earned but unused vacation and sick or personal
leave time. The Agreements also provide for a five-year continuation of certain
benefits, contingent on continued contributions by the Executive, and, under
certain circumstances, an additional three-years service and contributions
credit under the Corporation's Contributory Retirement Plan. However, if any
payments to the Executive, whether under the Agreement or otherwise, would be
subject to the "golden parachute" excise tax under Section 4999 of the Internal
Revenue Code of 1986, as amended, the payment to the Executive under (i) above
will be reduced by the amount necessary to avoid the incurrence of such excise
tax. The Agreements permit discharge of an Officer for cause.
The Corporation has provided, for more than five years, a benefit under
its defined benefit retirement program for salaried employees. All eligible
employees have automatically participated in the program; an employee had to be
eligible for and elected to participate in the contributory portion of the
program, which was in effect through March 31, 1989. Except as noted, following
are the credited years of service to age 65 and the estimated annual retirement
benefit under the revised plan payable on a single life basis at the normal
retirement age of 65 for certain individuals. The following estimated
retirement benefit at age 65, exclusive of future bonus considerations, assumes
the employee remains a plan participant and that pensionable compensation
increases at a rate of five percent per year: Louis E. Azzato (37 7/12 years)
$282,010; Harold E. Kennedy (33 3/12 years) $145,240; N. William Atwater (43
3/12 years) $168,529; David J. Roberts (21 years) $145,107 and Richard J.
Swift (35 5/12 years) $276,142. Credited years of service and estimated
retirement benefits for Messrs. Azzato and Kennedy were calculated to their
announced retirement dates, May 1, 1994. Contributory benefits prior to April
1, 1979 under prior plan provisions were determined and frozen based on
credited service, employee contributions, and the highest average plan-year
earnings to March 31, 1979. Subsequent to April 1, 1979, an employee earned a
monthly benefit of 1/24 of his total contributions made to the plan from April
1, 1979 through March 31, 1989, at which time the benefit was frozen. As of
April 1, 1989, the plan is solely noncontributory with no provision for
employee contributions. Under the plan revision which was effective April 1,
1993, the employee earns a monthly noncontributory benefit payable on
retirement date equivalent to 1.2% of average monthly earnings during the five
highest consecutive years in the last ten years preceding retirement,
multiplied by years of credited service after April 1, 1976. Noncontributory
benefits for service prior to April 1, 1976 were provided through the purchase
of annuities. As legislation limits the amount of benefits payable from a
qualified plan and since pensionable earnings are limited to $200,000 ($150,000
effective
10
<PAGE> 13
April 1,1994) per year (as indexed), the Board of Directors has approved a
nonqualified supplemental employee retirement plan for employees whose
qualified pension plan benefits would otherwise be restricted by the
aforementioned limitation. Such pension benefits are included in the
above-estimated retirement benefits.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Coopers & Lybrand as auditors of
the Corporation for 1994, subject to the approval of the Stockholders. Coopers
& Lybrand is a firm of independent certified public accountants, with broad
international practice, which has no direct or indirect financial interest in
the Corporation or its subsidiaries. Coopers & Lybrand was first selected as
auditors of the Corporation for the year 1977.
With exception of tax-related matters, the services provided by the
auditors to Foster Wheeler and its subsidiaries for 1993 were substantially
audit related. These audit functions included review of the financial
statements for the year 1993, Securities and Exchange Commission filings, the
Annual Report to Stockholders and special reports required by loan agreements.
$970,000 was paid to Coopers & Lybrand for audit-related services for 1993.
A member of Coopers & Lybrand will attend the Annual Meeting and will
be available to answer questions of the Stockholders present, and to make a
statement if he desires to do so.
The Board of Directors recommends a vote FOR the ratification of the
selection of auditors.
VOTING PROCEDURE
In 1992, the Corporation adopted a confidential voting policy in
connection with Annual Meetings of Stockholders. In essence, the policy
provides for independent vote tabulations and inspectors, and that, with
exceptions, stockholder votes not be disclosed to the Corporation.
Under Securities and Exchange Commission rules, boxes and a designated
blank space are provided on the proxy card for Stockholders to mark if they
wish either to vote "for," "against" or "abstain" on one or more of the
proposals, or to withhold authority to vote for one or more of the nominees for
Director. New York law and the Corporation's By-Laws require the presence of a
quorum for the Annual Meeting, which is defined as a majority of the votes
entitled to be cast at the Meeting. Votes withheld from Director nominees and
abstentions will be counted in determining whether a quorum has been reached.
Broker-dealer non-votes, which are defined in the second paragraph below, are
not counted for quorum purposes.
Assuming a quorum has been reached, a determination must be made as to
the results of the vote on each matter submitted for shareholder approval:(1)
The election of Directors, and (2) The ratification of auditors. The selection
of the Corporation's auditors must be approved by a majority of the votes cast
on this matter. Abstentions are not counted in determining the number of votes
cast in connection with the selection of auditors. Director nominees must
receive a plurality of the votes cast at the meeting, which means that a vote
withheld from a particular nominee or nominees will not affect the outcome of
the meeting.
Like abstentions, broker-dealer "non-votes" on "non-routine" matters
are not counted in calculating the number of votes cast on the above-noted
matters. The New York Stock Exchange has advised the Company that the election
of Directors and selection of auditors are considered "routine" items upon
which broker-dealers holding shares in street name for their customers may
vote, in their discretion, on behalf of any customers who do not furnish voting
instructions within 10 days of the Annual Meeting.
11
<PAGE> 14
Neither of the items being voted upon is such as to afford a right of
appraisal or similar right to Stockholders who fail to vote or dissent as to
any action taken with respect thereto.
OTHER MATTERS
During 1993, Mr. Harold E. Kennedy, an Officer and Director of the
Corporation, failed to file with the Securities and Exchange Commission ("SEC")
on a timely basis a required report relating to the award of an option to
acquire 10,000 shares of the Corporation's Common Stock. The report was due on
February 15, 1993 and was filed on April 12, 1993. In making this statement,
the Corporation has relied on statements by Mr. Kennedy and on a copy of the
report that has been filed with the SEC by the Corporation, on Mr. Kennedy's
behalf.
The expense of preparing, printing and mailing this proxy statement
and the accompanying material will be borne by the Corporation. Solicitation
of individual Stockholders may be made by mail, personal interviews, telephone
and telegraph by Officers and regular employees of the Corporation who will
receive no additional compensation therefor. In addition, the Corporation has
engaged Morrow & Co., Inc. to solicit proxies from brokers and nominees at a
cost of $6,000, plus out-of-pocket expenses. The Corporation will reimburse
brokers and other nominees for their expenses in forwarding soliciting material
to beneficial owners.
Stockholder proposals must be received by the Secretary of the
Corporation on or before November17, 1994 to be included in the proxy material
for the 1995 Annual Meeting of Stockholders, which will be held on April 24,
1995.
The Board of Directors of Foster Wheeler knows of no other business to
be presented at the meeting, but if matters other than those referred to above
do properly come before the meeting, it is intended that the persons named in
the proxy will vote with respect thereto in accord with their best judgment.
By Order of the Board of Directors
JACK E. DEONES
Vice President and Secretary
March 18, 1994
12
<PAGE> 15
PROXY
FOSTER WHEELER CORPORATION
ANNUAL MEETING OF STOCKHOLDERS--MONDAY APRIL 25, 1994
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned stockholder of Foster Wheeler Corporation hereby
appoints Louis E. Azzato, Thomas R. O'Brien, and Jack E. Deones, and each with
the full power of substitution, to vote as designated on the reverse side, all
the shares of common stock of Foster Wheeler Corporation held of record in the
name of the undersigned as of March 11, 1994 at the Annual Meeting of
Shareholders to be held in the Ballroom of the Parsippany Hilton Hotel, One
Hilton Court, Route 10 (West), Parsippany, New Jersey at 2:00 p.m. on Monday
April 25, 1994 or any adjournments thereof.
Please Mark, Sign, Date and promptly return this proxy card using the
enclosed envelope.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted for Proposals 1 and 2.
(Continued, and to be dated and signed, on other side)
________________________________________________________________________________
I plan to attend
The Board of Directors recommends the meeting
a vote "FOR" Items 1 and 2. / /
1. ELECTION OF DIRECTORS 2. Ratify selection of
Nominees are Ms. Martha J. Clark, Coopers & Lybrand as
Messrs. John A. Hinds, David J. Roberts, independent auditors.
John Timko, Jr., Charles Y. C. Tse
and Robert Van Buren
FOR WITHHELD (INSTRUCTIONS: To withhold FOR AGAINST ABSTAIN
authority to vote for any
individual nominee, line
through the nominee's name
in the list above
/ / / / -------------------------- / / / / / /
Signature(s) should be exactly as name
appear on this proxy. If stock is held
jointly, each holder should sign. If signing
is by attorney, executor, administrator,
trustee or guardian, please give full title.
Dated__________________________________1994
____________________________________________
Signature
____________________________________________
Signature
