<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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
LITTON INDUSTRIES, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
FRANK A. PICCOLO, SECURITIES COUNSEL,
LITTON INDUSTRIES, INC.
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
LITTON INDUSTRIES, INC.
360 NORTH CRESCENT DRIVE, BEVERLY HILLS, CALIFORNIA 90210-4867
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 8, 1994
TO THE SHAREHOLDERS OF LITTON INDUSTRIES, INC.:
The 1994 Annual Meeting of the Shareholders of LITTON INDUSTRIES, INC. (the
"Company"), will be held at the Davidson Conference Center of the University of
Southern California, Jefferson Boulevard at Figueroa Street, Los Angeles,
California, on Thursday, December 8, 1994, at 11:00 a.m., for the following
purposes:
1. To elect a Board of Directors.
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors.
3. To consider and act upon such other matters as may properly be presented
for action at the meeting or any adjournment thereof.
Only shareholders of record at the close of business on October 14, 1994,
are entitled to vote at the meeting. A list of such shareholders shall be open
to the examination of any shareholder at the meeting and, for a period of ten
days prior to the date of the meeting for any purpose germane to the meeting
and, during ordinary business hours at The Bank of New York, 10990 Wilshire
Boulevard, Suite 1700, Los Angeles, California.
Holders of a majority of the Company's outstanding voting shares must be
present either in person or by proxy in order for the meeting to be held.
WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING OR NOT, YOUR VOTE IS IMPORTANT.
ACCORDINGLY, YOU ARE REQUESTED TO SIGN AND DATE THE ENCLOSED PROXY CARD AND
RETURN IT IN THE ENCLOSED ENVELOPE. If you plan to attend the meeting and wish
to vote your shares personally, you may do so at any time before the proxy is
voted.
All shareholders are cordially invited to attend the meeting.
JEANETTE M. THOMAS
SECRETARY
October 28, 1994
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE COMPLETED,
SIGNED, AND RETURNED PROMPTLY
<PAGE>
LITTON INDUSTRIES, INC.
360 NORTH CRESCENT DRIVE, BEVERLY HILLS, CALIFORNIA 90210-4867
October 28, 1994
PROXY STATEMENT
This statement is furnished in connection with the solicitation by the Board
of Directors of Litton Industries, Inc., a Delaware corporation (hereinafter
called the "Company", "Litton" or "LIT"), of proxies to be used at the Annual
Meeting of the Shareholders of the Company to be held on Thursday, December 8,
1994, at 11:00 a.m., at the Davidson Conference Center of the University of
Southern California, Jefferson Boulevard at Figueroa Street, Los Angeles,
California, and at any adjournment thereof.
A form of proxy is enclosed for use at the meeting. The proxy may be revoked
by the shareholder at any time, before it is voted, by written notice to the
Secretary of the Company at the Company's address shown above. Unless contrary
instructions are indicated on the proxy, all shares represented by valid proxies
received pursuant to this solicitation (and not revoked before they are voted)
will be voted FOR the election of the 11 nominees for directors named below; and
FOR the ratification of the appointment of Deloitte & Touche LLP as independent
auditors.
This Proxy Statement is being mailed to shareholders beginning on or about
October 28, 1994, accompanied by Litton's annual report to shareholders for the
fiscal year ended July 31, 1994.
The cost of soliciting proxies on behalf of the Board of Directors will be
borne by the Company. Proxies may be solicited by directors, officers, or
regular employees of Litton in person or by telephone, telegraph, facsimile
transmission, or telex. In addition, the Company has retained D. F. King & Co.,
Inc., to aid in the solicitation at an estimated cost of $12,000 plus
out-of-pocket expenses. Arrangements have been made for brokerage houses,
nominees, and other custodians to send proxy materials to their principals, and
the Company will reimburse them for doing so.
Only shareholders of record at the close of business on October 14, 1994,
will be entitled to vote at the Annual Meeting. At the close of business on such
record date there were 45,965,039 shares of $1 par value of Common Stock
("Common Stock") and 410,643 shares of Series B $2 Cumulative Preferred Stock,
par value $5 ("Series B Preferred Stock"), outstanding and entitled to vote. No
other class of voting security of the Company is issued and outstanding. Each
share of Common Stock or Series B Preferred Stock entitles the holder thereof to
one vote.
Assuming a quorum is present in person or by proxy at the meeting, with
respect to the election of directors, the 11 nominees receiving the greatest
number of votes cast by the holders of the Common Stock and Series B Preferred
Stock voting as one class will be elected directors. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock and Series B
Preferred Stock represented at the Annual Meeting in person or by proxy and
voting as one class is necessary for the ratification of the appointment of the
independent auditors.
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For purposes of determining whether a matter has received a majority vote,
abstentions will be included in the vote totals, with the result that an
abstention has the same effect as a negative vote. In instances where brokers
are prohibited from exercising discretionary authority for beneficial owners who
have not returned a proxy (so-called "broker nonvotes"), those shares will not
be included in the vote totals and therefore will have no effect on the vote.
DISTRIBUTION OF STOCK OF WESTERN ATLAS INC.
Certain matters referred to in this Proxy Statement are related to the
distribution to the Company's shareholders on March 17, 1994, (the
"Distribution") of all the Common Stock of Western Atlas Inc. ("Western Atlas"
or "WAI"), a subsidiary of Litton which conducted the Company's oilfield
information services and industrial automation systems businesses.
THE ELECTION OF DIRECTORS
It is intended that the persons named in the proxy will, unless otherwise
instructed, vote for the election of the 11 nominees listed below to serve as
directors until the succeeding Annual Meeting of Shareholders and until
respective successors are elected and qualify. If any nominee, for any reason
presently unknown, cannot be a candidate for election, the shares represented by
valid proxies will be voted in favor of the remaining nominees and may be voted
for the election of a substitute nominee recommended by the Board of Directors
(or the number of authorized directors may be reduced).
Each of the nominees, except for Rudolph E. Lang, Jr., John M. Leonis,
William P. Sommers and Admiral David E. Jeremiah was elected to his or her
present term of office at Litton's last Annual Meeting of Shareholders. Messrs.
Lang and Leonis were elected to the Company's Board of Directors in March 1994,
in connection with the Distribution. Dr. Sommers was elected to the Company's
Board of Directors in August 1994. Admiral Jeremiah was elected to the Company's
Board of Directors in September 1994.
In keeping with the Board's retirement policy for directors, one incumbent
member of the Board, Wallace W. Booth, will not be standing for re-election. Mr.
Booth has been a member of the Company's Board of Directors for 17 years and the
Company has benefited greatly from his wise counsel.
The following information with respect to the principal occupation and other
affiliations of each nominee and in regard to past business experience has been
furnished to the Company by the respective nominees for directors.
ALTON J. BRANN has been the Chairman of the Board of Litton since March 17,
1994. Mr. Brann is also the Chairman of the Board and Chief Executive Officer of
Western Atlas Inc. Mr. Brann is a former President and Chief Executive Officer
of Litton. Mr. Brann joined Litton in 1973. Mr. Brann was elected a Senior Vice
President of Litton in 1987, was elected President and Chief Operating Officer
in November 1990 and served as President and Chief Executive Officer of Litton
from December 1992 until March 17, 1994. Mr. Brann is a director of the Los
Angeles World Affairs Council and the United Way of Los Angeles. He is a member
of the Board of Governors of Town Hall of Los Angeles, the U.S.-Russia Business
Council, the Board of Overseers of the Executive Council on Foreign Diplomacy,
the Board of the Petroleum Equipment Suppliers Association, the President's
Cabinet of California Polytechnic State University, the California Business
Higher Education Forum and serves as a Trustee of the Manufacturers
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Alliance for Productivity and Innovation. He is a senior member of the Institute
of Electrical and Electronic Engineers, and also a member of the Optical Society
of America, the Institute of Navigation and the Society of Petroleum Engineers.
Age 52. First elected a director in 1990.
JOSEPH T. CASEY is Vice Chairman and Chief Financial Officer of Western
Atlas Inc. Mr. Casey is a former Vice Chairman and Chief Financial Officer of
Litton. Mr. Casey was elected a Senior Vice President of Litton in 1969. He
became an Executive Vice President in 1976, and served as the Vice Chairman and
Chief Financial Officer of Litton from 1988 to March 17, 1994. He is a trustee
of Claremont McKenna College and of the Don Bosco Technical Institute. Age 63.
First elected a director in 1981.
CAROL B. HALLETT has been a Senior Government Relations Advisor with
Collier, Shannon, Rill & Scott since February 1993, and is a Trade Advisor of
Clark Company, Paso Robles, California. From November 1989 to January 1993, she
served as Commissioner of United States Customs. From May to November of 1989,
Mrs. Hallett was associated with The Carmen Group, Inc. (public and government
relations). She was U. S. Ambassador to the Commonwealth of Bahamas from
September 1986 to May 1989. She is also a director of Radix Group International,
Fleming Companies, Inc., and the American Association of Exporters and
Importers; a member of The Defense Advisory Committee on Women in the Services
as well as a member of the President's Cabinet of California Polytechnic State
University; and a Trustee of the United States Naval Institute and Junior
Statesmen of America. Age 57. First elected a director in 1993.
THOMAS B. HAYWARD, Admiral, U. S. Navy (Ret.), is President of Thomas B.
Hayward Associates, an executive consulting firm for Asia-Pacific business
development. Admiral Hayward served as the Chief of Naval Operations of the
United States Navy from 1978 until his retirement from active service with the
Navy in 1982. He is a director of Bancorp Hawaii, Inc., and its affiliates Bank
of Hawaii and Bank of Hawaii International, Inc.; The Ethics Resource Center;
Maxwell Laboratories, Inc., and its subsidiary Foodco Corporation; the Private
Sector Council; and Armed Services YMCA. Admiral Hayward is also Chairman
Emeritus of the State of Hawaii High Technology Development Corporation and is
Chairman of the Marimed Foundation. He is Chairman and President of the Pacific
Aerospace Museum, Vice Chairman of The Pacific Forum, and an associate fellow of
the Center for Strategic and International Studies. Age 70. First elected a
director in 1982.
ORION L. HOCH is Chairman Emeritus of Litton. Mr. Hoch is a former Chairman
of the Board of Directors of Litton and a former Chief Executive Officer of
Litton. Mr. Hoch served as Chief Executive Officer from 1986 through 1992, and
served as Chairman of the Board from 1988 through March 17, 1994. Mr. Hoch is a
director of Western Atlas Inc. and is Chairman of the Executive Committee of the
Board of Directors of Western Atlas Inc. He is also a director of Measurex
Corporation and a trustee of Carnegie Mellon University. Age 65. First elected a
director in 1982.
DAVID E. JEREMIAH, Admiral, U. S. Navy (Ret.), is President and Chief
Executive Officer of Technology Strategies & Alliances, a consulting firm
specializing in providing strategic planning advice in the areas of
telecommunications and defense. Admiral Jeremiah served as Vice Chairman, Joint
Chiefs of Staff, from 1990 to 1994. From 1987 to 1990 he was Commander-in-Chief,
U.S. Pacific Fleet. Admiral Jeremiah is also the Chairman of the Defense Systems
Electronics Group Advisory Committee of Texas Instruments Incorporated. Age 60.
First elected a director in 1994.
3
<PAGE>
RUDOLPH E. LANG, JR. is a Senior Vice President and the Chief Financial
Officer of Litton. Mr. Lang joined Litton in 1961 as Manager of Accounting at
the Guidance and Control Systems division, was named Vice President, Finance in
1969, became Group Vice President in 1978, and was elected a corporate Vice
President in 1984. He was elected a Senior Vice President in 1988 and served as
the corporate Controller of Litton from December 1988 to June 1994. He became
Chief Financial Officer in March 1994. Age 58. First elected a director in 1994.
ROBERT H. LENTZ is a former Senior Vice President and General Counsel of
Litton. He joined Litton in 1954. He became Senior Vice President and General
Counsel in 1979 (which position he held until his retirement in 1990). From 1983
to 1991, Mr. Lentz was a director of the American Arbitration Association. He is
presently a venture capital investor in and a consultant to various small
privately-held companies. Age 69. First elected a director in 1993.
JOHN M. LEONIS is President and Chief Executive Officer of Litton. Prior to
assuming his current position on March 17, 1994, Mr. Leonis was a corporate
Senior Vice President and Group Executive of the Company's Navigation, Guidance
and Control Systems Group. Mr. Leonis has been with Litton for 34 years, serving
primarily in a number of key management positions with the Company's Navigation,
Guidance and Control Systems Group. He served as Vice President of Engineering
before becoming President of the Company's Guidance and Control Systems division
in 1986. In March 1988 he was promoted to Group Executive of the Navigation,
Guidance and Control Systems Group. He was elected a Senior Vice President in
June 1990. Age 61. First elected a director in 1994.
WILLIAM P. SOMMERS is President and Chief Executive Officer of SRI
International, Menlo Park, CA. Dr. Sommers currently serves on the boards of
Kemper Mutual Funds, Rohr, Inc., Therapeutic Discovery Co. and the Bay Area
Council. Prior to joining SRI International early in 1994, Dr. Sommers was
Executive Vice President of Iameter, Inc., San Mateo, CA. Earlier, he was with
Booz-Allen & Hamilton, Inc. for 30 years, and served as a director and President
of the Technology Management Group. From 1961 to 1963, Dr. Sommers was the Chief
of Propulsion Development of Martin Marietta Corporation, Baltimore, MD. Age 61.
First elected a director in 1994.
C. B. THORNTON, JR. is President of Thornton Corporation, which is engaged
in mining and private investments. From 1974 until 1982 Mr. Thornton was
president and principal owner of the T Lazy S Ranch in Nevada, which conducted
farming, mining, and cattle operations. He is a former executive of Cessna
Aircraft Company and a former consultant with McKinsey & Company. He is
president of The Thornton Foundation and a member of the Twentieth Century Round
Table and of the Society of Experimental Test Pilots. Mr. Thornton is also a
trustee of Harvey Mudd College and of Harvard-Westlake School, Los Angeles. Age
52. First elected a director in 1981.
INFORMATION REGARDING THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
The Company's Board of Directors presently has the following standing
committees, the membership and principal responsibilities of which are described
below:
EXECUTIVE COMMITTEE
Members: Joseph T. Casey (Chairman), Alton J. Brann, Rudolph E. Lang, Jr.,
Robert H. Lentz and John M. Leonis
4
<PAGE>
Between meetings of the Board of Directors, the Executive Committee has all
powers which may be lawfully delegated to it under Delaware law. In general,
such powers include supervision of the management of all business of the Company
except for matters which by law specifically require the action of the full
Board or of the shareholders. During the 1994 fiscal year, the Executive
Committee took action without a formal meeting by unanimous written consent on
35 occasions. All of such actions taken by the Executive Committee during fiscal
1994 were subsequently ratified by the full Board.
AUDIT AND COMPLIANCE COMMITTEE
Members: Thomas B. Hayward (Chairman), Wallace W. Booth, Joseph T. Casey,
Carol B. Hallett and C. B. Thornton, Jr.
The Audit and Compliance Committee held four meetings during the 1994 fiscal
year. This Committee reviews and makes inquiries, as it deems appropriate, with
respect to the scope and results of the audit by the independent auditors, the
activities of the Company's internal auditors, and the adequacy of the Company's
system of internal accounting controls and procedures. This Committee proposes
the appointment of independent auditors subject to approval by the Board and
ratification by the shareholders and approves the fees paid for services
rendered by such auditors. The Audit and Compliance Committee also reviews the
implementation of, and monitoring of compliance with, Litton's "Statement of
Principles and Standards of Conduct" and is responsible for the "Reportable
Interests Program" of the Company.
COMPENSATION AND SELECTION COMMITTEE
Members: Wallace W. Booth (Chairman), Carol B. Hallett and C. B. Thornton,
Jr.
The Compensation and Selection Committee reviews and makes recommendations
with respect to the Company's various compensation programs. This Committee
administers and designates employees to participate in the Company's Performance
Award Plan, the 1984 Long-Term Stock Incentive Plan, and certain other employee
incentive plans of the Company and determines certain of the terms thereof and
the amount of the individual awards thereunder. The Compensation and Selection
Committee also reviews and approves the remuneration of, any employment or
change in control agreements with, and the amount of any loans to be made by the
Company to, senior officers of Litton. During the 1994 fiscal year, the
Committee met five times.
NOMINATING COMMITTEE
Members: Carol B. Hallett (Chairman), Wallace W. Booth, Alton J. Brann and
Thomas B. Hayward
The Nominating Committee recommends possible candidates to fill vacancies on
the Board of Directors and reviews the qualifications of candidates recommended
by others. The Committee will consider nominees recommended by shareholders.
Such recommendations should be submitted in writing to the Committee in care of
the Secretary of the Company at its address set forth on the first page of this
Proxy Statement. The Nominating Committee met one time during the 1994 fiscal
year and took action without a formal meeting by unanimous written consent on
one occasion.
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DIRECTOR'S COMPENSATION AND RETIREMENT POLICIES
Directors who are not employees of Litton are paid an annual fee for Board
service of $27,500 payable in quarterly installments, and an attendance fee of
$1,500 for each Board meeting attended and each meeting of a committee of the
Board attended, other than meetings of the Executive Committee. The
non-executive Chairman of the Board is paid an additional annual fee of $60,000
payable in quarterly installments. The non-employee Chairman of the Executive
Committee is paid an additional annual fee of $15,000 payable in quarterly
installments. Other non-employee members of the Executive Committee are paid an
additional annual fee of $12,000 payable in quarterly installments. Directors
who are employees of the Company are not paid any fee or additional remuneration
for services as members of the Board or any committee thereof.
Pursuant to the Litton Industries, Inc. Deferred Compensation Plan for
Directors, any director of the Company may defer his or her annual fee for Board
service and fees earned for attendance at meetings of the Board or any committee
thereof. Amounts deferred bear interest at the prime rate in effect on the first
business day of each calendar quarter. Payments of deferred amounts, including
accrued interest, will be paid in the number of annual installments requested by
the director, commencing after the director ceases to be a member of the Board;
provided that upon the occurrence of certain events resulting in a change in the
control of the Company, all such amounts will become immediately due and payable
in a lump sum.
Under the terms of the Litton Industries, Inc. Director Stock Option Plan,
directors and advisory directors who are not employees of the Company or any
subsidiary thereof automatically receive annual grants of options to purchase
shares of the Company's Common Stock at the fair market value of such stock on
the date of grant. Pursuant to this plan, each incumbent director of the
Company, except Messrs. Brann, Hoch, Casey, Leonis, Lang, Sommers and Jeremiah,
and Ambassador Hallett, received on December 9, 1993, options to purchase 2,000
shares of Common Stock at a purchase price of $64.06 per share. Ambassador
Hallett received on December 9, 1993, options to purchase 10,000 shares of
Common Stock at a purchase price of $64.06 per share. As a result of the
Distribution, and in accordance with the terms of the plan, such purchase price
was adjusted to $26.97 per share and each such optionee also received options to
purchase 2,000 shares (10,000 shares in the case of Ambassador Hallett) of WAI
common stock at a purchase price of $37.09 per share. Subsequent grants of
options to purchase 2,000 shares of Common Stock will be made to each outside
director in December of each year; however, any person who joins the Board or
becomes an advisory director subsequent to the date of the preceding grant of
options under the plan (and who was not an employee of the Company subsequent to
such preceding grant date) will receive an initial grant of options to purchase
10,000 shares. All options granted under the plan become fully exercisable on
the first anniversary of the grant thereof; however, if a director or advisory
director dies or becomes permanently disabled while serving in either such
capacity, or if the director retires pursuant to the policy for mandatory
retirement of directors described below, then all options held by such director
or advisory director become exercisable in full. In addition, if any of certain
events resulting in a change in the control of the Company occurs, then all
options granted under the plan become fully exercisable.
The Company has a policy establishing the mandatory retirement date of each
member of the Board as the date of the Annual Meeting of the Shareholders of
Litton next following his or her 72nd birthday.
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Under the retirement program for directors, upon retirement from the Board
at or after age 65, or upon his or her death after attaining age 65 while
serving as a nonemployee director, each director of the Company (or, in the case
of death, his or her surviving spouse) is entitled to receive an annual fee, for
the period set forth below, equal to the annual fee paid to active members of
Litton's Board of Directors as such fee is in effect from time to time (but in
no event less than the annual fee in effect on the date of the next Annual
Meeting of Shareholders following the retirement date of the director or
advisory director or the date of his or her death, if earlier). In the event of
the resignation or removal of a director or his or her failure to be re-elected
a director prior to the date of his or her 65th birthday, in connection with and
as the result of a change in the control of the Company, such director shall
thereafter be entitled to receive the annual fee in effect for members of the
Board for the year immediately prior to such change in control. In the case of
either the fee payable upon retirement (or death) or the fee payable in
connection with a change in the control of Litton, payment of the fee to a
director shall continue for a period of time equal to the SHORTER of (1) ten
years OR (2) the number of years the director served as a member of the Board of
Directors of Litton or as an advisory director; provided, however, that in the
event the director dies prior to the end of such period of time, such payments
shall be made to his or her surviving spouse, if any, for the remainder of such
period, but shall in no event continue beyond the death of the surviving spouse
(or beyond the death of the director if not survived by a spouse).
For information regarding certain additional compensation paid by the
Company to Admiral Hayward and Messrs. Brann, Casey, Hoch and Lentz during the
1994 fiscal year, see note (b) to the Summary Compensation Table on page 12, see
also pages 17 and 18, and the section captioned "Other Information" beginning on
page 24.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During the 1994 fiscal year the Board held eight meetings, acted on one
occasion by special committee and acted on two occasions by unanimous written
consent. Average attendance by incumbent directors at such meetings was 96.6%.
During fiscal 1994, all incumbent directors attended 88% or more of the
aggregate of (i) all meetings of the Board and (ii) all meetings of the
committees of the Board on which such directors served; nine directors attended
100% of the meetings associated with their Board and committee memberships.
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BENEFICIAL OWNERSHIP OF THE COMPANY'S SECURITIES
BY MANAGEMENT
The following table sets forth the number of shares of Common Stock of
Litton beneficially owned by each director of the Company and each nominee for
director, each of the executive officers named in the Summary Compensation Table
on page 11 (the "Named Executive Officers"), and all directors, nominees, and
executive officers as a group as of September 30, 1994. As of such date, no
executive officer, director, or nominee held shares of Series B Preferred Stock.
In each case where the number of shares shown exceeds 1% of the Common Stock
outstanding on the record date (exclusive of treasury shares), such percentage
of outstanding Common Stock is indicated in parentheses. Except as otherwise
indicated, each individual named has sole investment and voting power with
respect to the securities shown.
<TABLE>
<CAPTION>
Share of
Common Stock
Name Beneficially Owned (a)
- - --------------------------------------------- ------------------------
<S> <C>
Wallace W. Booth............................. 21,094(b)
Alton J. Brann............................... 14,040
Michael R. Brown............................. 20,720
Joseph T. Casey.............................. 126,023(c)(d)
Richard D. Fleck............................. 5,332
Carol B. Hallett............................. 10,140
Thomas B. Hayward............................ 18,662(e)
Orion L. Hoch................................ 191,977(f)
David E. Jeremiah............................ -0-
Rudolph E. Lang, Jr.......................... 62,855
Robert H. Lentz.............................. 19,238(g)
John M. Leonis............................... 32,770
William P. Sommers........................... -0-
Gerald J. St. Pe............................. 43,444(e)
C. B. Thornton, Jr........................... 1,008,620(h)(2.19%)
Directors, nominees, and executive
officers as a group (19 persons)........... 1,625,811(i)(j)(3.51%)
<FN>
- - ---------
(a) Includes shares of Litton Common Stock subject to options which are
presently exercisable or become exercisable prior to December 31, 1994,
held by the named individuals or the group as follows: Mr. Booth, 20,000
shares; Mr. Brann, 10,640 shares; Mr. Brown, 20,720 shares; Mr. Casey,
89,000 shares; Mr. Fleck, 5,332 shares; Ambassador Hallett, 10,000 shares;
Admiral Hayward, 17,650 shares; Mr. Hoch, 25,916 shares; Mr. Lang, 52,400
shares; Mr. Lentz, 12,000 shares; Mr. Leonis, 27,400 shares; Mr. St. Pe,
35,360 shares; Mr. Thornton, 20,000 shares; and such group, 377,998 shares.
(b) Includes shares held by a trust of which Mr. Booth is trustee and in which
he has a beneficial interest.
(c) Excludes 5,000 shares held by a charitable corporation of which Mr. Casey
serves as trustee. Mr. Casey has voting and investment power with respect
to such 5,000 shares and may, thus, be deemed to have incidents of
beneficial ownership thereof for certain purposes within the meaning of
applicable regulations of the Securities and Exchange Commission
</TABLE>
8
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<TABLE>
<S> <C>
("SEC"). Mr. Casey has advised the Company that he disclaims beneficial
ownership of the assets of such charitable corporation, including such
shares of the Company's Common Stock.
(d) The table does not include 255,126 shares of Common Stock owned by the
Litton Master Trust (the "Master Trust"), a trust organized to hold
retirement funds of certain qualified domestic retirement plans of the
Company and its subsidiaries. An Investment Committee appointed by the
Board of Directors, which is presently comprised of Mr. Casey, Mr. Lang,
Mr. Lentz and one other executive officer of Litton, is empowered to direct
the disposition of the assets of the Master Trust and to instruct the
appropriate bank trustee with respect to the voting of shares of the
Company's Common Stock held by the Master Trust. Accordingly, the
Investment Committee has sole investment power and shares voting power with
respect to such shares of Common Stock held by the Master Trust and thus
may be deemed to have incidents of beneficial ownership thereof for certain
purposes within the meaning of the SEC regulations referred to above.
Except for any indirect interest in the Master Trust they may have by
virtue of participation in the Company's retirement plans, the members of
the Investment Committee disclaim beneficial ownership of the assets of the
Master Trust.
(e) Includes shares of Common Stock owned jointly by the named individual and
his spouse, as to which he shares investment and voting power with his
spouse.
(f) Does not include 1,080 shares of Common Stock owned by Mr. Hoch's wife, as
to which shares Mr. Hoch disclaims beneficial ownership.
(g) Includes 7,238 shares of Common Stock held by a trust for the benefit of
Mr. Lentz and his spouse, as to which Mr. Lentz shares voting power with
his spouse. Does not include 358 shares of Common Stock held by a trust
under the will of a deceased spouse of Mr. Lentz, as to which shares Mr.
Lentz disclaims beneficial ownership.
(h) Excludes 33,454 shares of Common Stock owned by or for the benefit of Mr.
Thornton's children, as to which shares Mr. Thornton disclaims beneficial
ownership. The table does not include 25,378 shares of Common Stock owned
by a private foundation of which Mr. Thornton is an officer and trustee.
Mr. Thornton shares voting and investment power with respect to such 25,378
shares with another trustee and may thus be deemed to have incidents of
beneficial ownership thereof for certain purposes within the meaning of the
SEC regulations referred to above. Mr. Thornton has advised the Company
that he disclaims ownership of the assets of such foundation, including
such shares of the Company's Common Stock.
(i) Does not include 50,000 shares of Common Stock held by the Foundation of
the Litton Industries (the "Foundation"). Voting power with respect to
these shares is exercised by the Foundation's president, who is an officer
of the Company; investment power with respect thereto is exercised by the
directors of the Foundation, who are elected by, and may be removed by, the
Nominating Committee of the Board of Directors of the Company.
(j) If the 305,126 shares of Common Stock held by the Master Trust and the
Foundation as set forth in notes (d) and (i) above were included in the
total amount of outstanding shares of Common Stock beneficially owned by
directors, nominees, and executive officers as a group, then the percentage
of Common Stock owned by the group would be 4.17%.
</TABLE>
BY OTHERS
Unitrin, Inc., One East Wacker Drive, Chicago, Illinois 60601, reported in a
filing on Schedule 13D under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"),
9
<PAGE>
that two of its subsidiaries, Trinity Universal Insurance Company and United
Insurance Company of America, own in the aggregate 12,657,764 shares of Common
Stock constituting 27.54% of the Common Stock outstanding on the record date.
Unitrin, Inc., reported that it had sole voting power and sole dispositive power
with respect to all such shares.
In August 1994, Heine Securities Corporation ("HSC"), 51 John F. Kennedy
Parkway, Short Hills, New Jersey 07078, reported in a filing on Schedule 13F
under the Exchange Act aggregate beneficial ownership of 4,077,400 shares of
Common Stock, or 8.87% of the outstanding shares of Common Stock on the record
date. HSC has previously reported that HSC and its president have sole voting
power and sole dispositive power as to all shares of Common Stock held by HSC.
In August 1994, Capital Research and Management Company, 333 South Hope
Street, Los Angeles, California 90071, reported in a filing on Schedule 13F
under the Exchange Act that it has investment discretion with respect to
2,424,100 shares of Common Stock, or 5.27% of the outstanding shares of Common
Stock on the record date.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors, upon the recommendation of its Audit and Compliance
Committee, has selected the accounting firm of Deloitte & Touche LLP to serve as
independent auditors of the Company with respect to the 1995 fiscal year and
proposes the ratification by the shareholders of such decision. Deloitte &
Touche LLP and a predecessor firm have served as Litton's independent auditors
continuously since the 1954 fiscal year, are familiar with the business and
operations of the Company and its subsidiaries, and have offices in or
convenient to most of the localities in the United States and in most other
countries where the Company and its subsidiaries operate.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting. They will have an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS.
10
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
A summary of the compensation for the Company's chief executive officer, and
for the other executive officers who were the highest paid for the 1994 fiscal
year for services to Litton and its subsidiaries is shown in the following
table.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------------- -------------
(A) (B) (C) (D)
All Other
Fiscal Compensation
Name and Principal Position Year Salary ($) Bonus ($)(a) Options (#) ($)(b)
- - ---------------------------------------------- --------- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
John M. Leonis................................ 1994 376,351 425,000 77,000 1,691
President and Chief Executive 1993 290,661 290,000 -0- 1,012
Officer 1992 276,970 231,188 30,000
Rudolph E. Lang, Jr........................... 1994 310,198 300,000 32,000 5,466
Senior Vice President and 1993 286,936 285,000 -0- 6,011
Chief Financial Officer 1992 266,970 270,000 30,000
Gerald J. St. Pe.............................. 1994 307,616 315,000 30,000 2,982
Senior Vice President 1993 292,078 300,000 -0- 3,461
1992 281,846 260,000 30,000
Michael R. Brown.............................. 1994 262,706 200,000 19,000 21,311
Senior Vice President 1993 238,239 200,000 12,000 106,205
1992 231,676 140,625 18,000
Richard D. Fleck.............................. 1994 248,392 190,000 -0- 760
Senior Vice President 1993 248,752 118,000 -0- 988
1992 245,999 204,906 10,000
Alton J. Brann................................ 1994 322,915 408,000 -0- 54,785
President and Chief Executive 1993 505,781 740,000 30,000 5,707
Officer through March 17, 1994 1992 392,312 525,000 56,000
Chairman of the Board
Joseph T. Casey............................... 1994 307,535 264,000 -0- 42,603
Vice Chairman and 1993 500,011 635,000 18,000 10,138
Chief Financial Officer 1992 496,165 500,000 48,000
through March 17, 1994
Director
Orion L. Hoch................................. 1994 403,082 768,000 -0- 31,931
Chairman of the Board 1993 800,009 1,125,000 -0- 15,077
through March 17, 1994 1992 792,317 800,000 28,000
Chairman Emeritus and Director
<FN>
- - ---------
(a) Messrs. Brann, Casey and Hoch each received, in December, 1993, an award in
a single payment paid from the general corporate funds of the Company. The
awards to Messrs. Leonis (in fiscal 1994 only) and Lang represent awards
made under Litton's
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
Performance Award Plan, which provides that one half of the award is
payable in December following the end of fiscal year for which the award is
made and the remainder is payable in two equal installments in December of
each of the two following years, provided the recipient is then in the
employ of the Company.
(b) Pursuant to the SEC's transition rules, amounts prior to fiscal 1993 are
excluded from this column. Included for fiscal 1993 and 1994, respectively,
are the following: (i) the present value cost of the Company's portion of
premiums for split-dollar life insurance, or the amount of term life
insurance premiums, above the coverage level provided generally to salaried
employees, which were as follows for the Named Executive Officers
indicated: Mr. Hoch, $11,107 and $3,898; Mr. Brann, $1,355 and $1,623; Mr.
Casey, $5,391 and $5,827; Mr. Lang, $2,508 and $2,630; Mr. St. Pe, $1,936
and $2,244; Mr. Brown, $1,451 and $1,723; and Mr. Fleck, $660 and $740;
(ii) amounts of $104,754 and $16,796 paid either to or on behalf of Mr.
Brown in connection with his relocation to the Company's headquarters in
Beverly Hills, California; (iii) the following amounts representing
premiums paid by Litton with respect to the participation in Litton's
Executive Medical Plan, which were as follows for the Named Executive
Officers indicated: Mr. Hoch, $2,792 and $9,709; Mr. Brann, $2,792 and
$1,163; Mr. Casey, $2,792 and $1,163; Mr. Lang, $2,792 and $2,792; Mr.
Leonis, $1,629 for fiscal 1994 only; Mr. Brown, $2,792 for fiscal 1994
only; and Mr. St. Pe although not a participant in Litton's Executive
Medical Plan was reimbursed by the Company for amounts not paid by the
employee medical plan in the amounts of $561 for fiscal 1993 and $679 for
fiscal 1994; and (iv) the following amounts representing interest imputed
to and taxable to recipients of the loans described on page 18-19; Mr.
Brann, $1,560 and $153; Mr. Casey, $1,955 and $123; Mr. Fleck, $328 and
$20; Mr. Hoch, $1,178 and $74; Mr. Lang, $711 and $44; Mr. Leonis, $1,012
and $62; and Mr. St. Pe, $964 and $59.
Upon the Distribution, Mr. Brann became the non-executive Chairman of the
Board and a member of the Executive and Nominating Committees of the Board
of Directors and Mr. Casey became the Chairman of the Executive Committee
and a member of the Audit and Compliance Committee of the Board of
Directors. During fiscal 1994, Mr. Brann received an aggregate of $51,846
and Mr. Casey received an aggregate of $28,997 for services rendered in
these positions. During fiscal 1994, Mr. Hoch received an aggregate of
$18,250 as a non-employee member of the Board of Directors. In addition,
during fiscal 1994, Mr. Casey received $6,493 as a member of the Investment
Committee of Litton Industries, Inc.
</TABLE>
12
<PAGE>
INFORMATION CONCERNING STOCK OPTIONS
The following table reflects information with respect to stock options
granted by the Compensation and Selection Committee to the Named Executive
Officers during fiscal 1994, as indicated in the Summary Compensation Table. In
addition, in accordance with SEC regulations, there are shown hypothetical gains
or "option spreads" that could be realized for the respective options, based on
assumed rates of annual stock price appreciation of 0%, 5% and 10% from the date
the options were granted over the full ten-year term of the options.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------
Market price
on date of
grant if
% of Total different
Options from
Options Granted to Exercise exercise
Granted Employees in Price price Expiration
Name (#) Fiscal Year ($/Sh) ($/sh) Date
- - ----------------------- ------- ------------ -------- ------------ ----------
<S> <C> <C> <C> <C> <C>
John M. Leonis......... 29,697(b) 6.94% 30.38 6/9/2004
12,303(c) 2.87% 30.38 6/9/2004
35,000(d) 8.18% 15.19 30.38 6/9/2004
Rudolph E. Lang, Jr.... 19,697(b) 4.60% 30.38 6/9/2004
12,303(c) 2.87% 30.38 6/9/2004
Gerald J. St. Pe....... 17,697(b) 4.13% 30.38 6/9/2004
12,303(c) 2.87% 30.38 6/9/2004
Michael R. Brown....... 6,697(b) 1.56% 30.38 6/9/2004
12,303(c) 2.87% 30.38 6/9/2004
Richard D. Fleck....... -0- 0.0% -0- --
Alton J. Brann......... -0- 0.0% -0- --
Joseph T. Casey........ -0- 0.0% -0- --
Orion L. Hoch.......... -0- 0.0% -0- --
<CAPTION>
Potential Realizable Value At Assumed
Annual Rates of Stock Price Appreciation
for Option Term (a)
------------------------------------------
Value Value Value
realized at realized at realized at
0% stock 5% stock 10% stock
appreciation appreciation appreciation
Name ($) ($) ($)
- - ----------------------- ------------ ------------ ------------
<S> <C> <C> <C>
John M. Leonis......... -0- 567,510 1,554,935
-0- 235,110 644,185
531,650 1,200,500 2,364,250
Rudolph E. Lang, Jr.... -0- 376,410 1,031,335
-0- 235,110 644,185
Gerald J. St. Pe....... -0- 338,190 926,615
-0- 235,110 644,185
Michael R. Brown....... -0- 127,980 350,655
-0- 235,110 644,185
Richard D. Fleck....... -0- -0- -0-
Alton J. Brann......... -0- -0- -0-
Joseph T. Casey........ -0- -0- -0-
Orion L. Hoch.......... -0- -0- -0-
<FN>
- - ------------
(a) These amounts represent certain assumed rates of appreciation only.
Actual gains, if any, on stock option exercises or stock holdings are
dependent on the future performance of the stock and overall market
conditions. There can be no assurance that the amounts reflected in this
table will be achieved.
(b),(c) Nonstatutory stock options (b) and incentive stock options (c) which
become exercisable on a combined basis at the rate of 20% per year
commencing on June 9, 1995, except in the event of a change in control
(as defined in such option agreements), in which case such options
become immediately exercisable.
(d) Nonstatutory stock options which become exercisable at the rate of 33%
on June 9, 1997, 33% on June 9, 1998 and 34% on June 9, 1999, except in
the event of a change in control (as defined in such option agreements)
in which case such options become immediately exercisable.
</TABLE>
13
<PAGE>
The following table reflects the value realized (market price on the date of
exercise less exercise price) with respect to options exercised by any of the
Named Executive Officers during the 1994 fiscal year. Such table also shows the
number of shares covered by all exercisable and unexercisable stock options held
by the Named Executive Officers as of July 31, 1994, as well as fiscal 1994
year-end values for their unexercised "in the money" options, which represent
the positive spread between the exercise price of any such options and the
year-end market price of the Common Stock.
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 July 31, 1994 (#)(1) July 31, 1994 ($)(2)
Acquired on Value --------------------------- ---------------------------
Name Company Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- - --------------------------- ----------- ------------- ------------ ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
John M. Leonis............. LIT 5,280 202,277 27,400 99,000 666,071 1,496,000
WAI 4,000 140,018 23,400 22,000 699,400 577,148
Total 9,280 342,295 50,800 121,000 1,365,471 2,073,148
Rudolph E. Lang, Jr. ...... LIT 8,680 380,813 52,400 54,000 1,384,694 669,262
WAI 13,000 453,253 39,400 22,000 1,289,129 577,148
Total 21,680 834,066 91,800 76,000 2,673,823 1,246,410
Gerald J. St. Pe........... LIT -0- -0- 35,360 52,000 887,275 656,147
WAI -0- -0- 35,360 22,000 1,132,344 577,148
Total -0- -0- 70,720 74,000 2,019,619 1,233,295
Michael R. Brown........... LIT -0- -0- 19,120 42,600 466,863 630,506
WAI 2,720 98,404 16,400 23,600 493,070 637,109
Total 2,720 98,404 35,520 66,200 959,933 1,267,615
Richard D. Fleck........... LIT -0- -0- 5,332 4,668 89,332 96,374
WAI -0- -0- 5,332 4,668 109,605 120,939
Total -0- -0- 10,664 9,336 198,937 217,313
Alton J. Brann............. LIT 80,376 3,569,035 8,000 75,280 134,032 1,309,718
WAI -0- -0- 8,000 75,280 164,448 1,614,122
Total 80,376 3,569,035 16,000 150,560 298,480 2,923,840
Joseph T. Casey............ LIT 12,400 682,372 89,000 52,400 2,367,049 933,538
WAI -0- -0- 89,000 52,400 3,034,085 1,153,636
Total 12,400 682,372 178,000 104,800 5,401,134 2,087,174
Orion L. Hoch.............. LIT 1,042 22,335 25,916 -0- 506,864 -0-
WAI -0- -0- 25,916 -0- 632,662 -0-
Total 1,042 22,335 51,832 -0- 1,139,526 -0-
<FN>
- - ------------
(1) In connection with the Distribution, and pursuant to the Company's 1984
Long-Term Stock Incentive Plan, all Company stock options were adjusted to
reflect the effects of the Distribution. Each incentive stock option and
each nonstatutory stock option held by a Company employee (or former
employee) prior to the Distribution was effectively converted into two
separate options, a Company option and a WAI option, in both cases for a
number of shares equal to the underlying Company option. The exercise price
of the underlying Company option was allocated to the two options pursuant
to a formula designed to preserve the economic value of the underlying
Company option prior to the Distribution. The WAI options include only
those issued as a result of the Distribution and do not include any WAI
options granted after March 17, 1994.
(2) These values are based on a per share price for Company Common Stock of
$36.94 and a per share price for WAI common stock of $48.31. These prices
represent the average of the high and low trading prices for a share on
July 29, 1994.
</TABLE>
14
<PAGE>
CERTAIN CHANGE IN CONTROL ARRANGEMENTS
The Compensation and Selection Committee of the Company's Board of Directors
has determined that certain officers and other key employees of the Company be
offered the opportunity to enter into change in control agreements
("Agreements") with the Company. The Agreements become operative only upon the
occurrence of a "change in control," which includes substantially those events
described below. Absent a "change in control," the Agreements do not require the
Company to retain the executives or to pay them any specified level of
compensation or benefits. Of the Named Executive Officers, Messrs. Leonis, Lang,
St. Pe, Brown and Fleck have entered into such Agreements.
Generally, and subject to certain exceptions, a "change in control" is
deemed to have occurred if: (a) a majority of the Board becomes composed of
persons other than persons for whose election proxies have been solicited by the
Board, or who are then serving as directors appointed by the Board to fill
vacancies caused by death or resignation (but not removal) of a director or to
fill newly-created directorships; (b) another party becomes the beneficial owner
of a least 30% of the Company's outstanding voting stock, other than as a result
of a repurchase by the Company of its voting stock; or (c) the Company
consummates a merger, reorganization or consolidation with another party (other
than certain limited types of mergers), or sells or otherwise disposes of all or
substantially all of the Company's assets, or the shareholders approve the
liquidation or dissolution of the Company.
Each Agreement provides that for three years after a "change in control"
there will be no adverse change in the executive's salary, bonus opportunity,
benefits or location of employment. If during this three-year period the
executive's employment is terminated by the Company other than for cause, or if
the executive terminates his or her employment for good reasons, as defined in
the Agreements (including compensation reductions, demotions, relocations and
required excessive travel), or voluntarily during the 30-day period following
the first anniversary of the "change in control," the executive is entitled to
receive an accrued salary and the annual incentive payment through the date of
termination and, except in the event of death or disability, a lump-sum
severance payment equal to three times the sum of the executive's base salary
and annual bonus (and certain pension credit and insurance and other welfare
plan benefits). Further, an additional payment ("gross up") is required in such
amount that after the payment of all taxes, income and excise, the executive
will be in the same after-tax position as if no excise tax under the Code had
been imposed.
RETIREMENT BENEFITS
Of the Named Executive Officers, Messrs. Leonis, Lang, St. Pe, Brown and
Fleck, participate in Litton's Financial Security and Savings Program ("FSSP"),
a contributory plan intended to qualify under Section 401(k) of the Internal
Revenue Code of 1986, as amended (the "Code"). Subject to the satisfaction of
any applicable waiting period, most salaried and hourly employees of Litton and
of designated divisions and subsidiaries thereof are eligible to participate in
the FSSP.
A participant in the FSSP may elect to defer from 2% to 18% of his or her
covered compensation for investment in the trust established under the FSSP, but
the maximum amount which the employee may contribute to the FSSP for any
calendar year is limited by provisions of the Code relating to the maximum
amount, as adjusted annually for inflation, which may be contributed to plans
qualified under Section 401(k) of the Code (the "401(k) Maximum
15
<PAGE>
Amount"), which is $9,240 for calendar 1994. Deposits of 2% to 4% of the
participant's compensation will be invested in a Retirement Fund, while deposits
in excess of 4% will be invested in one or more investment funds as designated
by the participant.
The Company adds to the investment fund account of an FSSP participant an
amount (not to exceed 2% of the participant's compensation) equal to 50% of the
participant's deposits from 5% to 8% of his or her compensation. In the case of
employees who are classified as highly compensated pursuant to applicable
Treasury releases (those earning over $66,000 for 1994), such employees'
permissible contributions may be reduced further and the amount of the
employer's matching contribution may be limited if certain nondiscrimination
tests set forth in the Code are not achieved. Generally, a participant is
entitled to receive his or her entire FSSP account, to the extent it has become
vested, upon retirement or earlier termination of employment with the Company.
Benefits under the FSSP are integrated with and intended to supplement
benefits under the Company's retirement plans. The employee's contribution of 2%
to 4% of his or her gross earnings to the FSSP causes the employee to become
eligible to accrue benefits under such retirement plans. Covered compensation
for purposes of both the retirement plans and the FSSP is aggregate cash
compensation including bonuses and commissions but would, in the case of the
Named Executive Officers who participate in such plans, be limited pursuant to
provisions of the Code.
The amount of a participant's annual retirement benefit at his or her normal
retirement date (generally age 65) under most of the Company's retirement plans
is the higher of (A) 60% of the participant's deposits to the contributory
retirement plans of the Company and to the Retirement Fund of the FSSP (during
the entire period of his or her employment) or (B) 85% of such deposits minus
75% of the participant's estimated Social Security primary benefit at age 65,
with adjustments in the amount of the benefit to take into account factors such
as age at retirement, degree of vesting and form of benefit selected.
The annual retirement benefit at normal retirement age is reduced by the
actuarial equivalent of lump sum distributions made (at the request of the
participant) of the participant's Retirement Fund account in the FSSP comprised
of deposits with earnings and/or the participant's deposits with interest from
contributory retirement plans of Litton (primarily the retirement plans which
were in effect prior to the adoption of the FSSP).
The 401(k) Maximum Amount causes certain participants in the FSSP to lose
Company-provided benefits which they could otherwise have derived from full
participation in the FSSP. Consequently, the Company has adopted a
noncontributory and unfunded plan (the "Restoration Plan") designed to restore
the approximate amount of lost Company-provided benefit to those employees who
participate in the FSSP to the fullest extent permitted by the applicable Code
provisions but who are unable (as a result of the 401(k) Maximum Amount
limitation) to contribute 8% of their compensation to the FSSP. Such lost
Company-provided benefits to be restored under this plan consist of (i) all or
part of the 50% matching contributions to the investment fund account of the
FSSP participant and (ii) in the case of FSSP participants who are not
participants in the Supplemental Plan described below, a portion of the full
benefit under the Company's retirement plans if the participant's contributions
to the FSSP Retirement Fund are limited to less than 4% of his or her
compensation. Amounts that would have been deposited to the employee's FSSP
Retirement Fund account by the employee and to his or her FSSP investment fund
account by the Company are projected with interest to the participant's normal
retirement date. Based upon these amounts, the participant's lost benefits from
the
16
<PAGE>
Company's retirement plans and lost Company contributions to the investment fund
are determined and converted to, and payable upon the participant's retirement,
as a single life annuity if the participant is unmarried at such time or as a
100% joint and survivor annuity if the participant is then married; however, no
payment will commence until the participant reaches the age of 62.
Based upon their prior participation in Litton's retirement plans, the FSSP,
and the Restoration Plan, and assuming their retirement from the Company at age
65, their continuing participation in the FSSP to the maximum permissible
extent, and election of a benefit in the form of a single life annuity, the
estimated annual benefits payable at retirement to the following Named Executive
Officers pursuant to Litton's retirement plans, the FSSP, and the Restoration
Plan are as follows: Mr. Leonis, $195,757; Mr. Lang, $257,111; Mr. St. Pe,
$319,555; Mr. Brown, $206,497; and Mr. Fleck, $138,840. Of these amounts, the
following amounts represent the portion of such benefit which is deemed to have
been provided by the employer's (as opposed to the employee's) contribution: Mr.
Leonis, $169,111; Mr. Lang, $212,903; Mr. St. Pe, $271,155; Mr. Brown, $168,941;
and Mr. Fleck, $116,211.
In addition to the FSSP, the related retirement plans, and the Restoration
Plan, the company has a noncontributory supplemental retirement plan (the
"Supplemental Plan") designed to provide additional benefits to certain
executive officers selected as participants by the Compensation and Selection
Committee. Currently, there are no further retirement benefits being earned
under the terms of the Supplemental Plan. However, until the date of the
Distribution, Messrs. Brann and Casey continued to earn retirement benefits
under the terms of the Supplemental Plan. If a participant retired on or after
age 65 following 25 years of service with the Company, his or her annual benefit
(computed as a single life annuity) under the Supplemental Plan was 55% of the
participant's average annual cash compensation for the three years in which his
or her cash compensation was highest during the final five years of the
participant's employment, less amounts payable to the participant under Social
Security and less that portion of pension benefits deemed to have been provided
by the employer's (as opposed to the participant's) contributions which would
have been received by the participant under any other retirement plan sponsored
by the Company (or a subsidiary) if he or she was eligible to and had
participated at all times in any such plan to the maximum extent permitted
(regardless of the degree of actual participation). If a participant's
employment terminated before the participant had completed 25 years of service
or attained the age of 65, then the percentage of 55% referred to above was
reduced in accordance with a schedule relating to age and length of service;
however, payment of retirement benefits to a participant under the Supplemental
Plan could in no event commence until the participant reached age 62. In
addition to retirement benefits, the Supplemental Plan provided certain benefits
in the event of the death or disability of a participant while in the employ of
the Company or a subsidiary.
As stated above, Messrs. Brann and Casey were covered under the terms of the
Supplemental Plan. In addition, Mr. Hoch had a contractual pension benefit
substantially similar to the benefit provided under the Supplemental Plan, but
subject to adjustment in the amount of the pension payable to Mr. Hoch to take
into account any pension benefits payable to him under retirement plans of a
former employer (not affiliated with the Company). Because Mr. Hoch was
ineligible to participate in the Company's basic retirement plans, such contract
provided for no offset of benefits which could have been received thereunder.
In 1988 the Company deposited into an irrevocable trust the sum of
$12,000,000 and a letter of credit issued by the trustee bank in the maximum
amount of $8,000,000 to provide, under certain circumstances, payment of
benefits under the Supplemental Plan, under the
17
<PAGE>
contractual pension benefit described above, and under the other contracts to
which the Company is party which provide for payment of supplemental retirement
or death benefits to certain retired officers of the Company or their
beneficiaries. In fiscal 1994 the Company deposited into such trust an
additional sum of $6,000,000. The funds in the trust are subject to claims of
the Company's creditors in the event of the insolvency or bankruptcy of the
Company. The establishment and funding of the trust does not increase the
payments due to any participant in the Supplemental Plan or any beneficiary of
such participant.
During fiscal year 1994 Messrs. Hoch and Casey retired from Litton for
purposes of Mr. Hoch's contractual benefit and Mr. Casey's participation in the
Supplemental Plan. At the times of their retirement, Messrs. Hoch and Casey had
28 and 30 years of service, respectively, and commenced receiving benefits. For
Mr. Casey, there will be offset from such benefit, beginning at age 65, the
amount Mr. Casey would, but for the asset transfer referred to below, receive as
an employer-provided pension benefit accrued under Litton's basic contributory
retirement plan. In accordance with the terms of a certain benefits separation
agreement between the Company and Western Atlas, the liability to pay such
pension benefit accrued under Litton's basic contributory retirement plan with
respect to Mr. Casey has been transferred, along with sufficient assets to
satisfy such liabilities, from Litton's basic contributory retirement plan to
the corresponding Western Atlas retirement plan. In addition, the liability to
pay Mr. Casey's retirement benefit under the Company's Restoration Plan has been
transferred to the corresponding Western Atlas restoration plan. Under the
Supplemental Plan, Mr. Casey receives a monthly benefit of $35,683 in the form
of a 100% joint and survivor annuity. Such monthly benefit will be reduced to
$27,075 on October 1, 1996, when Mr. Casey attains age 65. Under the terms of
the Company's contractually provided pension benefit, and Restoration Plan, Mr.
Hoch receives a combined monthly benefit of $60,391 in the form of a 100% joint
and survivor annuity. In connection with the Distribution, Litton's liability
for the payment of Restoration Plan and Supplemental Plan benefits to Mr. Brann
was transferred to a substantially identical restoration plan and supplemental
retirement plan provided by Western Atlas.
INFORMATION REGARDING INDEBTEDNESS OF MANAGEMENT TO THE COMPANY
INCENTIVE LOANS
As a form of additional incentive for the Company's key employees, the
Company provides loans to certain such employees located in the United States.
Under the Company's incentive loan program, unsecured loans, not to exceed
$6,000,000 in the aggregate outstanding at any one time, may be made to not more
than 50 employees and may not exceed the annual salary rate of the borrower.
These loans presently bear interest at the rate of 4% per annum and are payable
on the Company's demand, but in any event not later than the EARLIER of (i)
termination of the borrower's employment OR (ii) December 31, 1996. Loans to any
officer of Litton of the level of Senior Vice President or higher require the
approval of the Compensation and Selection Committee.
As of October 15, 1994, loans upon the terms set forth above in the
aggregate amount of $1,283,000 were outstanding to seven executive officers of
the Company as follows: Gerald J. St. Pe, $200,000; Michael R. Brown, $250,000;
Richard D. Fleck, $68,000; Rudolph E. Lang, Jr. $150,000; John M. Leonis,
$310,000; John E. Preston, $170,000; and Timothy G. Paulson, $135,000. The
principal balances, plus accrued interest, on the Company incentive loans to
Alton J. Brann and Joseph T. Casey were each paid in full on March 17, 1994, and
the principal balance, plus accrued interest, on the Company incentive loan to
Orion Hoch was paid in full on April 28, 1994. Such principal balances were
$516,000 in the case of Mr. Brann, $415,000 in
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the case of Mr. Casey, and $250,000 in the case of Mr. Hoch. When the amounts
repaid by Messrs. Brann, Casey, and Hoch are aggregated with the $1,283,000
amount stated above, the total represents the largest amount of indebtedness of
such individuals and present executive officers as a group under the Company's
incentive loan program outstanding at any time since July 31, 1993.
Mr. Hoch also had a loan from a subsidiary of Litton evidenced by a
promissory note dated October 15, 1982, which bore interest at the rate of 6%
per annum, and which had a final maturity date of the EARLIER of October 14,
2012, OR the date of Mr. Hoch's termination of employment with the Company. The
note was secured by a deed of trust on Mr. Hoch's residence, and level payments
of principal and interest in the amount of $6,443 were due each month. The
remaining principal balance of the note ($862,756) plus accrued interest was
paid in full in April, 1994.
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<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The following graph illustrates the performance of Litton Common Stock over
the five-year period from August 1, 1989 through July 31, 1994, compared to the
performance of the S&P 500 Index and the S&P Conglomerates Index:
Litton Industries, Inc.
Comparison of Cumulative Total Return [1]
August 1, 1989 -- July 31, 1994
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Litton Industries,
Inc. S&P 500 Index Conglomerates Index
<S> <C> <C> <C>
Aug-89 100.00 100.00 100.00
Jul-90 80.33 106.50 96.94
Jul-91 89.61 120.09 86.51
Jul-92 100.83 135.45 101.42
Jul-93 148.75 147.27 137.12
Jul-94 194.09 154.87 139.55
</TABLE>
[1] Assumes $100 invested August 1, 1989 in Litton Industries, Inc. Common
Stock, the S&P 500 Index and the S&P Conglomerates Index (dividends
reinvested).
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COMPENSATION AND SELECTION COMMITTEE REPORT
The Compensation and Selection Committee (the "Committee"), composed
entirely of independent outside directors, is responsible for establishing and
administering the compensation policies applicable to the Company's officers
having the title of Senior Vice President or above, including all executive
officers of the Company regardless of title.
COMPENSATION POLICY AND PROGRAMS. The Committee's responsibility is to
provide a strong and direct link among shareholder values, company performance,
and executive compensation through its oversight of the design and
implementation of a sound compensation program that will attract and retain
highly qualified personnel. Compensation programs are intended to complement the
Company's short-term and long-term business objectives and to focus executive
efforts on the fulfillment of these objectives.
During the 1994 fiscal year the Committee reviewed the Company's executive
compensation program as it related to the composition of the Company both prior
and subsequent to the distribution of the common stock of Western Atlas Inc.
(The Distribution is described at page 2.) In performing these reviews, the
Committee continued its practice to establish target levels of compensation for
senior officers consistent with that of companies comparable in size and
complexity to Litton, as well as companies which are direct business competitors
of Litton. After considerable review of extensive data relating to all aspects
of compensation paid by such groups of companies, actual compensation of the
Company's executive officers is subject to increase or decrease by the Committee
from targeted levels according to the Company's overall performance and the
individual's efforts and contributions. Total compensation for the Company's
senior management is composed of base salary, near-term incentive compensation
in the form of awards or bonuses, and long-term incentive compensation in the
form of stock options. The Committee retains the discretion to adjust certain
items of compensation so long as total compensation reflects overall corporate
performance and individual achievement.
CHIEF EXECUTIVE OFFICER BASE SALARY. In determining the base salary of a
particular executive, including the President and Chief Executive Officer, the
Committee considers the executive's level of responsibility, individual
performance, including the accomplishment of short-term and long-term
objectives, and various subjective criteria including initiative, contribution
to overall corporate performance, and leadership ability. The Committee also
considers the levels of compensation at other similarly situated companies and
at direct competitors, and internal issues of consistency and fairness.
In determining Mr. Brann's base salary for fiscal 1994, the Committee took
into account a comparison of base salaries of chief executives of a peer group
of companies and of direct competitors of the Company as it existed prior to the
Distribution. The Committee also took into account Mr. Brann's considerable time
devoted to and involvement with the, then anticipated, successful completion of
the Distribution. The Committee also considered the Company's success in meeting
its return on equity goals in fiscal 1993, Mr. Brann's individual performance,
his years of prior service with the Company in various capacities and his
general knowledge and leadership abilities. The Committee also took into account
the fact that it was contemplated at that time that the Distribution would occur
on or about January 1, 1994 and that Mr. Brann would then become Chairman and
Chief Executive Officer of Western Atlas Inc. Notwithstanding the Committee's
finding that, based on the foregoing criteria, under normal circumstances Mr.
Brann's performance would warrant an increase to his base salary, the
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<PAGE>
Committee decided that, in view of his anticipated departure to Western Atlas
Inc., Mr. Brann's base salary would not be increased from the annual rate of
$525,000 for the portion of fiscal year 1994 during which he would remain
employed by the Company.
When Mr. Leonis was identified as Mr. Brann's successor, he commenced to
accept certain responsibilities to assure an orderly transition. Mr. Leonis
succeeded Mr. Brann as President and Chief Executive Officer of Litton upon the
Distribution. (Mr. Brann continues to serve as the non-executive Chairman of the
Board of Directors of Litton.) In establishing Mr. Leonis' base salary as
President and Chief Executive Officer, the Committee took into account a
comparison of base salaries of chief executive officers of a peer group of
companies and of direct competitors of the Company as it would exist following
the Distribution. The Committee also took into account the fact that Mr. Leonis
has been the Group Executive of the Company's Navigation, Guidance and Control
Systems Group and that he has extensive expertise and knowledge of the Company's
continuing lines of business. Effective January 1, 1994 Mr. Leonis was granted a
base salary at the annual rate of $425,000.
INCENTIVE AWARD COMPENSATION. The Company's executive officers are eligible
for annual incentive awards under various performance-oriented plans of the
Company and its subsidiaries. The amount of awards for senior officers are
within guidelines established by the Committee as a result of its review of
total compensation for senior management, including the chief executive officer,
of both peer companies and competitors. The actual amount awarded, within these
guidelines, is determined principally by the Committee's assessment of the
individual's contribution to the Company's overall financial performance.
Consideration is also given to factors such as the individual's successful
completion of a special project, any significant increase or decrease in the
level of the participant's executive responsibility and the Committee's
evaluation of the individual's overall efforts and ability to discharge the
responsibilities of his or her position.
Under the Performance Award Plan in which Messrs. Leonis and Lang are
eligible to participate, the Committee has the right to make an equitable
adjustment to the computation of the amount which can be credited to the Plan's
account to take into account certain events which either favorably or adversely
impact the Plan's computation formula. In that regard, the Committee recognized
that certain decisions made by the Company's Board of Directors, including the
decision to effect the Distribution, the decision to effect the in-substance
defeasance of certain subordinated debentures of the Company and the decision to
settle certain legal proceedings involving the Company, were designed to enhance
shareholder value and improve the Company's long-term performance. The Committee
recognized that the outcome of these events was desired by the Company and
achieved, in significant part, through the efforts of senior management. For the
foregoing reasons, the Committee decided to make an equitable adjustment to the
computation of the amount to be credited to the Plan's account for fiscal year
1994 to take into account these events. Awards under this Plan are payable in
three annual installments, with 50% of the award being paid in December of the
year it is granted and 25% thereof in December of each of the two subsequent
years provided the recipient of the award is then in the employ of the Company.
The Committee determined to credit the Plan's account with the amount of
$2,597,000 for fiscal 1994. In making such determination, and in setting the
amounts of the specific awards for fiscal 1994, the Committee gave consideration
to a review of the Company's executive compensation prepared by an independent
national compensation consulting firm. That review provided the Committee with
certain data which included the financial performance and executive compensation
patterns of a selected peer group of companies. Mr. Leonis' bonus award for
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<PAGE>
fiscal 1994 was based upon the consideration of various factors. The Committee
considered the conclusions of the above-described compensation review and Mr.
Leonis' performance as President and Chief Executive Officer. The Committee
recognized that Mr. Leonis provides continued stability to the senior management
of the Company and that he has successfully recruited key employees. In
addition, the Committee recognized that Mr. Leonis has played an important role
in introducing the Company, as it exists after the Distribution, to the
investment community and that he has made significant contributions towards the
implementation of the Company's strategic planning. Mr. Leonis was granted a
bonus award of $425,000 for fiscal 1994.
On December 8, 1993 the Committee made one-time bonus awards of $768,000 to
Mr. Hoch, $408,000 to Mr. Brann and $264,000 to Mr. Casey with respect to the
period from August 1, 1993 to December 31, 1993. In determining the amount of
the awards, the Committee gave particular consideration to the considerable
amount of time and effort devoted by Messrs. Hoch, Brann and Casey in
accomplishing the Distribution.
Under other plans of the Company and its subsidiaries, group executives with
responsibility for major operating business units of the Company are awarded
bonuses for achieving group financial performance consistent with the Company's
overall corporate goals. The amount of the bonus is dependent principally upon
the year-end financial results of the relevant operating unit, measured by
factors such as return on capital utilized. The Committee (or Chief Executive
Officer, in the case of participants who are not senior officers of the Company)
retains the discretion to adjust bonuses under these plans to take account of
other factors including an individual's efforts and contribution towards
accomplishing one or more of the Company's corporate objectives.
STOCK OPTIONS. Under the Company's 1984 Long-Term Stock Incentive Plan, as
amended, stock options may be granted to the Company's officers and other key
employees either in the form of incentive stock options, which must be granted
at 100% of fair market value of the stock on the date of grant, or as
nonstatutory options, which may have an exercise price of not less than 50% nor
more than 100% of fair market value on the date of grant. This approach, which
combines a broad range of exercise prices at which options may be granted with
an extended vesting schedule, is designed to incentivize the creation of
shareholder value over the long term, since the full benefit of the compensation
package cannot be realized unless the stock price appreciation occurs over a
number of years. The Committee sets guidelines for the number and terms of stock
option awards based on factors similar to those considered with respect to the
other components of the Company's compensation program. The Committee may decide
not to award stock options in any given fiscal year although exceptions to this
policy may be made for individuals who have assumed substantially greater
responsibilities and other similar factors. Stock options are designed to align
the interests of executives with those of the shareholders and generally become
exercisable in cumulative installments over a period of five years; the
individual forfeits any installment which has not vested during the period of
his or her employment. The Committee has concluded that in limited circumstances
it is desirable to grant selected executives options at below market exercise
prices. For fiscal year 1994, the Committee concluded that, after the
Distribution, it was in the Company's best interest to promote the stability of
the Company's management by making a concerted effort to retain critical members
of the Company's management team who assumed their positions at the time of the
Distribution. The utilization of below market option grants encourages
management retention due to the fact that all of the contracts relating to
options granted at below market exercise prices during fiscal year 1994 require
that employment with the Company continue for a period of three years before any
installment vests.
23
<PAGE>
In fiscal year 1994, Mr. Leonis was granted options to purchase 42,000
shares of the Company's Common Stock at an exercise price of $30.38
(representing 100% of the market price of the date of grant). In addition, in
fiscal year 1994, Mr. Leonis was granted options to purchase 35,000 shares of
the Company's Common Stock at an exercise price of $15.19 (representing 50% of
the market price on the date of grant). The methodology applied by the Committee
to determine the number of options granted to Mr. Leonis is based upon a
multiple of base salary to a targeted future stock price. In fiscal year 1994,
Mr. Brann was not granted any options to purchase shares of the Company's Common
Stock.
SECTION 162(M) DISCUSSION. Section 162(m) of the Internal Revenue Code
limits future tax deductions of the Company for certain compensation paid to the
five highest paid executives to $1 million per individual commencing with the
1995 fiscal year of the Company. The Company has not amended its variable bonus
and option plans in consideration of Section 162(m) as final regulations have
not yet been published. The final regulations implementing Section 162(m) are
expected later this year, and upon their publication, the Committee will take
appropriate action. Currently, the Company believes that the payment of
compensation will not exceed $1 million for any covered executive for fiscal
year 1995.
THE FOREGOING REPORT HAS BEEN FURNISHED BY THE FOLLOWING MEMBERS OF THE
COMPENSATION AND SELECTION COMMITTEE:
Wallace W. Booth, CHAIRMAN
Carol B. Hallett
C. B. Thornton, Jr.
OTHER INFORMATION
Robert H. Lentz, a former Senior Vice President and General Counsel of the
Company and a former advisory director who now serves as a director to the
Company for the consideration described on pages 6 and 7, also served as an
independent consultant to the Company pursuant to a consulting contract for an
annualized consideration of $100,000 for the period from April 1, 1993, through
December 7, 1993. During this period Mr. Lentz had agreed to be available to the
Company for consulting purposes during 65 days; if requested to perform
consulting services beyond such 65 days, Mr. Lentz was compensated at a daily
rate of $1,500. Days spent rendering service as an advisory director were not
included in the 65-day period specified in such contract. Mr. Lentz was
provided, during the term of this agreement, with an office and secretarial
services; was entitled to exercise, under the terms of agreements previously
entered into, stock options granted under various employee stock option plans of
the Company; and was covered by the terms of a contract providing medical
insurance to Mr. Lentz and his spouse. During the 1994 fiscal year Mr. Lentz was
paid $35,434 under the terms of such consulting contract. The premium paid by
the Company with respect to Mr. Lentz's medical insurance for the 1994 fiscal
year was $10,787. During fiscal 1994 Mr. Lentz exercised options to purchase
8,000 shares of common stock of WAI granted to Mr. Lentz as a result of his
having received Common Stock options granted to him while an officer of the
Company under the 1984 Long-Term Stock Incentive Plan. Mr. Lentz realized net
value (market value less exercise price) of $183,755 upon such exercise. Under
the terms of the Company's basic retirement plans, supplemental retirement plan,
and Restoration Plan described on pages 15-18, Mr. Lentz receives a combined
monthly benefit of $14,081 in the form of a 100% joint and survivor annuity. In
addition, during fiscal year 1994 Mr. Lentz received $9,756 as a member of the
Investment Committee of Litton Industries, Inc.
A subsidiary of the Company has entered into a contract with Thomas B.
Hayward Associates ("Hayward Associates") pursuant to which Hayward Associates
has agreed to provide consulting services to a division of such subsidiary in
connection with the marketing and sales
24
<PAGE>
of shipboard electronic warfare systems to foreign customers for the period from
April 30, 1994 through May 1, 1997. Hayward Associates is paid a monthly
retainer of $4,000 for such services. Thomas B. Hayward, a director of the
Company, is president and sole proprietor of Hayward Associates.
In connection with the relocation of Alton J. Brann to the Company's
executive offices in 1988, the Company guaranteed to Wells Fargo Bank, N.A., the
repayment of certain indebtedness of Mr. Brann and his spouse incurred in
connection with their purchase of a principal residence. This arrangement
between Mr. Brann and the Company was terminated in fiscal 1994.
During the 1994 fiscal year, the Company purchased insurance policies
covering certain liabilities of directors and officers and providing
reimbursement for amounts paid by the Company as indemnification to directors
and officers. The premium cost of such policies was $1,841,095 for the thirteen
month period from March 1, 1994, to April 1, 1995. These policies provide for
payment of covered losses in excess of certain retention amounts with an
aggregate limit of liability of $100,000,000. Those insured under these policies
are all persons (or their legal representatives or estates) who were, now are,
or shall be directors or officers of Litton or any subsidiary thereof. In
addition, certain individuals serving on the boards of other organizations at
the request of the Company are covered.
Section 16(a) of the Exchange Act requires the Company's directors, officers
and persons who beneficially own more than 10% of a registered class of the
Company's equity securities to file certain reports on SEC Forms 3, 4 and/or 5
describing ownership and changes in ownership in the Company's equity
securities. Based solely on a review of the Forms 3, 4 and 5 furnished to the
Company during fiscal year 1994, the Company believes that all filings required
by Section 16(a) of the Exchange Act were made in a timely fashion except that
the Form 3's of Ambassador Hallett (upon becoming an advisory director prior to
becoming a director of the Company) and Claire W. Gargalli (a former advisory
director of the Company) were not filed with the SEC on a timely basis due to a
misunderstanding as to the interpretation of the applicability of Section 16(a)
of the Exchange Act to advisory directors. Both Form 3's were subsequently
filed.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the Common Stock Performance Graph on page 20 and the Report
of the Compensation and Selection Committee on pages 21-24 shall not be
incorporated by reference into any such filings.
1995 MEETING--SHAREHOLDER PROPOSALS
Any shareholder proposal to be presented at Litton's 1995 annual meeting of
shareholders must be received by the Secretary of the Company by July 1, 1995,
in order to be timely received for inclusion in Litton's proxy statement for
that meeting.
OTHER MATTERS
The Board of Directors does not know of any other matters that are to be
presented for action at the December 8, 1994 meeting. Should any other matter
come before the meeting, the accompanying proxy will be voted with respect to
the matter in accordance with the best judgment of the persons voting the proxy.
THE BOARD OF DIRECTORS
LITTON INDUSTRIES, INC.
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<PAGE>
Directors recommend a vote "FOR"
1. Election of Directors
FOR all nominees listed below X
WITHHOLD AUTHORITY
to vote for ALL nominees listed below X
EXCEPTIONS*
as indicated X
Alton J. Brann, Joseph T. Casey, Carol B. Hallett, Thomas B. Hayward, Orion L.
Hoch, David E. Jeremiah, Rudolph E. Lang, Jr.,
Robert H. Lentz, John M. Leonis, William P. Sommers, C. B. Thornton, Jr.
If you desire to withhold authority to vote for any individual nominee, mark the
"EXCEPTIONS" box and please write that nominee's name on the space
provided.
*EXCEPTIONS____________________________________________________________________
Directors recommend a vote "FOR"
2. Proposal to ratify the selection of Deloitte & Touche LLP as independent
auditors for the fiscal year ending July 31, 1995.
Address Change
and/or Comments X
FOR X AGAINST X ABSTAIN X
PROXY DEPARTMENT
NEW YORK, N.Y. 10203-0153
Note: Please sign exactly as shown at left. If stock is jointly held, each owner
should sign. Executors, administrators, trustees, guardians, attorneys and
corporate officers should indicate their fiduciary capacity or full title when
signing.
Dated:_______________________, 1994
________________________________________
Signature
________________________________________
Signature
(if jointly held)
Please Mark, Date, Sign and Mail This Proxy Card Promptly in the Enclosed
Envelope.
Votes must be indicated
(x) in Black or Blue ink. X
<PAGE>
LITTON INDUSTRIES, INC.
PROXY
The undersigned appoints John M. Leonis and Rudolph E. Lang, Jr., and each of
them (with full power to act without the other), with full power of substitution
in each, the proxies of the undersigned, to represent the undersigned and vote
all shares of Litton Industries, Inc., Common Stock and Series B Preferred Stock
which the undersigned may be entitled to vote at the Annual Meeting of
Shareholders to be held on December 8, 1994, and at any adjournment thereof,
upon the following matters and in the manner designated on the reverse hereof
and in their discretion upon such other business as may properly come before the
meeting and any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
(Continued, and to be signed and dated, on reverse side.)
