MOOG
Moog Inc., East Aurora, New York 14052
____________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of MOOG Inc. will be held in the Auditorium of the
Albright-Knox Art Gallery, 1285 Elmwood Avenue, Buffalo, New
York, on Wednesday, February 9, 1994, at 9:00 a.m., for the
following purposes:
1. To elect two directors of the Company, one of whom
will be a Class A director, elected by the holders
of Class A shares, and one of whom will be a
Class B director, elected by the holders of
Class B shares, to serve three year terms expiring
in 1997, or until the election and qualification
of their successors.
2. To consider and ratify the selection of KPMG Peat
Marwick, independent certified public accountants,
as auditors of the Company for the 1994 fiscal
year.
3. To consider and transact such other business as
may properly come before the meeting or any
adjournment or adjournments thereof.
The Board of Directors has fixed the close of business
on December 19, 1993, as the record date for determining which
shareholders shall be entitled to notice of and to vote at such
meeting. SHAREHOLDERS WHO WILL BE UNABLE TO BE PRESENT
PERSONALLY MAY ATTEND THE MEETING BY PROXY. SUCH SHAREHOLDERS
ARE REQUESTED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY. THE
PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED.
By Order of the Board of Directors
John B. Drenning, Secretary
Dated: East Aurora, New York
January 7, 1994
<PAGE>
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS OF
MOOG INC.
____________________
TO BE HELD IN THE AUDITORIUM OF THE ALBRIGHT-KNOX ART GALLERY
1285 ELMWOOD AVENUE, BUFFALO, NEW YORK
ON FEBRUARY 9, 1994
This Proxy Statement is furnished to shareholders by
the Board of Directors of MOOG Inc. (the "Company") in connection
with the solicitation of proxies for use at the Annual Meeting of
Shareholders on Wednesday, February 9, 1994, at 9:00 a.m., and at
any adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. This
Proxy Statement and accompanying proxy will be mailed to
shareholders on or about January 7, 1994.
If the enclosed form of proxy is properly executed and
returned, the shares represented thereby will be voted in
accordance with the instructions thereon. Unless otherwise
specified, the proxy shall be deemed to confer authority to vote
the shares represented by the proxy "FOR" Proposal 1, the
election of directors, and "FOR" Proposal 2, the ratification of
KPMG Peat Marwick as independent auditors for the fiscal year
1994.
Any proxy given pursuant to this solicitation may be
revoked by the person giving it insofar as it has not been
exercised. Such revocation may be made in person at the meeting,
or by submitting a proxy bearing a date subsequent to that on the
proxy to be revoked, or by written notification to the Secretary
of the Company.
GENERAL
The Board of Directors has fixed the close of business
on December 19, 1993, as the record date for determining the
holders of common stock entitled to notice of and to vote at the
meeting. On December 19, 1993, the Company had outstanding and
entitled to vote, a total of 6,036,651 shares of Class A common
stock ("Class A shares") and 1,676,814 shares of Class B common
stock ("Class B shares"). Holders of Class A shares are entitled
to elect at least 25% of the Board of Directors (rounded up to
the nearest whole number) so long as the number of outstanding
Class A shares is at least 10% of the number of outstanding
shares of both classes of common stock. Currently, the holders
of Class A shares are entitled, as a class, to elect three
directors of the Company, and the holders of the Class B shares
are entitled, as a class, to elect the remaining four directors.
Other than on matters relating to the election of directors or as
required by law, where the holders of Class A shares and Class B
<PAGE>
- 2 -
shares vote as separate classes, the record holder of each
outstanding Class A share is entitled to one-tenth vote per share
and the record holder of each outstanding Class B share is
entitled to one vote per share on all matters to be brought
before the meeting. The Class A director and the Class B
director will be elected by a plurality of the votes cast by the
respective class. The other matters submitted to the meeting may
be adopted by a majority of the votes cast, a quorum of 3,018,327
Class A shares and 838,408 Class B shares being present. The
record holders of 9% Cumulative Convertible Exchangeable
Preferred Shares, Series B, $1.00 par value ("Series B Preferred
Stock") are not entitled to vote on the matters upon which action
is to be taken at the meeting.
In accordance with New York law, abstentions are not
counted in determining the votes cast in connection with the
ratification of the selection of KPMG Peat Marwick as auditors of
the Company for the 1994 fiscal year. Votes withheld in
connection with the election of one or more nominees for director
will not be counted and will have no effect.
CERTAIN BENEFICIAL OWNERS
Security Ownership
The only persons known by the Company to own
beneficially more than five percent of the outstanding shares of
either class of the voting common stock of the Company are set
forth below.
<TABLE>
<CAPTION>
Class A Class B
Common Stock(1) Common Stock(1)(2)
Amount and Amount and
nature of nature of
Name and address of beneficial Percent beneficial Percent
beneficial owner ownership of Class ownership of Class
<S> <C> <C> <C> <C>
Estate of Jane B. Moog (3)
c/o Moog Inc.
Jamison Rd.
East Aurora, NY 14052 86,348 1.4 119,753 7.1
Seneca Foods Corporation (4)
1162 Pittsford-Victor Road
Pittsford, NY 14534 714,600 11.8 55,900 3.3
David L. Babson & Co., Inc.
One Memorial Drive
Cambridge, MA 02142 392,600 6.5 -0- -0-
Moog Inc. Retirement Plan Trust (5)
c/o Moog Inc.
Jamison Rd.
East Aurora, NY 14052 304,155 5.0 245,503 14.6
<PAGE>
- 3 -
Moog Inc. Savings and Stock
Ownership Plan Trust (6)
c/o Moog Inc.
Jamison Rd.
East Aurora, NY 14052 -0- -0- 85,166 5.1
</TABLE>
_________________
(1) See the table on pages 5-6 containing information concerning
the shareholdings of directors and officers of the Company.
(2) Class B shares are convertible into Class A shares on a
share-for-share basis.
(3) Class B share beneficial ownership includes options to
acquire 4,804 Class B shares. Shares held are voted by the
Estate's executors, Richard A. Aubrecht, Douglas B. Moog and
Susan L. Moog.
(4) Does not include 99,900 Class A shares, 20,300 Class B
shares and $289,000 in principal amount of the Company's
9.875% Convertible Subordinated Debentures due January 15,
2006 which are convertible into Class A shares at $22.88 per
share, held by the Seneca Foods Corporation Employees
Pension Benefit Plan Trust. Nor does it include a total of
41,221 Class A shares and options to acquire 45,000 Class A
shares, or 25,972 Class B shares and options to acquire
21,804 Class B shares, beneficially owned by the directors
and executive officers of Seneca Foods Corporation
("Seneca"). Nor does it include a total of 89,700 Class A
shares beneficially owned by the Seneca Foods Foundation.
Arthur S. Wolcott, the Chairman, director and major
shareholder of Seneca, is also a director of the Company.
Robert T. Brady, President and Chief Executive Officer of
the Company, is also a director of Seneca (See "Nominees and
Directors").
(5) Shares held are voted by the Trustee, Manufacturers and
Traders Trust Company, Buffalo, New York, as directed by the
Moog Inc. Retirement Plan Committee.
(6) The 85,166 unallocated shares held are voted by the Trustee,
Mellon Bank, N.A., Pittsburgh, Pennsylvania, as directed by
the Investment Committee under the Savings and Stock
Ownership Plan. An additional 279,202 Class B shares,
representing 214,368 Class B shares purchased by individual
contributions as well as 64,834 Class B shares contributed
by the Company and beneficially owned by and allocated to
individual participants under the Plan, are voted by the
Trustee as directed by the participant to whom such shares
are allocated. As of September 30, 1993, 11,255 of the
purchased Class B shares and 2,759 of the allocated Class B
shares belong to officers and are included in the share
totals for all directors and executive officers as a group.
<PAGE>
- 4 -
Moog Family Agreement As to Voting
The Moog Family Agreement as to Voting is an agreement
among the following relatives of the late Jane B. Moog: her
children, Nancy Moog Aubrecht, Constance Moog Silliman,
Douglas B. Moog and Susan L. Moog; her adult grandchildren; her
son-in-law, Richard A. Aubrecht; her daughter-in-law, Jeanne M.
Moog; and Albert K. Hill, former counsel to the Company, whose
shares are not covered by the agreement.
The agreement relates to 2,000 Class A shares owned by
the Estate of Jane B. Moog, and 109,198 Class A shares and
163,398 Class B shares, exclusive of currently exercisable
options, owned of record or beneficially by each of the other
parties to the agreement.
Each of the named parties granted an irrevocable proxy
covering that person's shares of stock subject to the agreement
to certain parties to the agreement who are required to take any
action and cause all shares subject to the agreement to be voted
as may be determined by the vote of any four of: Richard A.
Aubrecht, Constance Moog Silliman, Jeanne M. Moog, Douglas B.
Moog, Susan L. Moog and Albert K. Hill.
The agreement contains restrictions on the ability of
any party to remove all or any shares of stock from the
provisions of the agreement and further provides for each of the
parties who have the right to vote in certain instances to have
successors named by them. In addition, the transfer in any
manner of any shares of the Company is subject to the agreement.
The agreement, by its terms, continues in force until
December 31, 2015, unless certain specified contingencies occur
prior to that date.
ELECTION OF DIRECTORS
One of three classes of the Board of Directors of the
Company is elected annually to serve three year terms. Of the
two directors whose terms of office expire at the meeting, one is
a Class A director to be elected by the holders of the
outstanding Class A shares and one is a Class B director to be
elected by the holders of the outstanding Class B shares. Such
nominees will be elected to hold office until 1997 and the
election and qualification of their successors. The persons
named in the enclosed proxy will vote Class A shares for the
election of the Class A nominee named below, and Class B shares
for the election of the Class B nominee named below, unless the
proxy directs otherwise. In the event any of the nominees should
be unable to serve as a director, the proxy will be voted in
accordance with the best judgment of the person or persons acting
under it. It is not expected that any of the nominees will be
unable to serve.
<PAGE>
- 5 -
Nominees and Directors
Certain information regarding nominees for Class A and
Class B directors, as well as those directors whose terms of
office continue beyond the date of the 1994 Annual Meeting of
Shareholders, including their beneficial ownership of equity
securities, is set forth below. Unless otherwise indicated, each
person held various positions with the Company for the past five
years and has sole voting and investment power with respect to
the securities beneficially owned. Beneficial ownership includes
securities which could be acquired pursuant to currently
exercisable options or options which become exercisable within 60
days of the date of this Proxy Statement.
All of the nominees have previously served as directors
and have been elected as directors at prior annual meetings of
shareholders.
<PAGE>
- 6 -
<TABLE>
<CAPTION>
Series B
Preferred
Shares of Common Stock Stock(1)
First Percent Percent Percent
Principal Elected Class of Class of of
Age Occupation Director A Class B Class Shares Class
Nominee for Class B
Director
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Term expiring in 1997
Richard A. 49 Chairman of 1980 41,413 * 23,074 1.4 17,222 17.2
Aubrecht (2) the Board,
Moog Inc.
Nominee for Class A Director
Term expiring in 1997
Peter P. Poth (3) 64 Retired 1984 500 * 4,804 * -0- -0-
Executive
Class B Directors Continuing in Office
Term expiring in 1995
Arthur S. 67 Chairman, 1977 26,085 * 17,684 1.1 -0- -0-
Wolcott (4) Seneca Foods
Corporation
Term expiring in 1996
Kenneth J. 66 Retired 1976 11,000 * 8,804 * -0- -0-
McIlraith Banking
Executive
Joe C. Green 52 Executive Vice 1986 40,500 * 22,110 1.3 11,111 11.1
President, Chief
Administrative
Officer,
Moog Inc.
<PAGE>
Class A Directors Continuing in Office
Term expiring in 1995
Robert R. Banta 51 Executive Vice 1991 40,500 * 17,000 1.0 11,111 11.1
President, Chief
Financial Officer,
Assistant
Secretary,
Moog Inc.
Term expiring in 1996
Robert T. 53 President, 1984 53,636 * 29,792 1.8 11,111 11.1
Brady (5) Chief Executive
Officer,
Moog Inc.
All directors and
officers as a group
(sixteen persons) 574,744(6) 9.0 458,847(6) 25.3 100,000 100.0
</TABLE>
<PAGE>
- 7 -
_________________
* Does not exceed one percent of the class.
(1) Each share of Series B Preferred Stock, which has one vote
per share on matters as to which the class is entitled to
vote, is convertible into .086 Class A share. Under an
agreement dated October 15, 1988, the nine holders of the
Series B Preferred Stock appointed as proxies Vice
Presidents Richard C. Sherrill and Robert H. Maskrey, who
will vote all shares of such stock as determined by a
majority of such shares.
(2) Nancy Moog Aubrecht, wife of Richard A. Aubrecht, is the
beneficial owner of 12,499 Class A shares and 16,668 Class B
shares, which are not included.
(3) Mr. Poth was Vice Chairman of Delaware North Companies,
Incorporated from November 1991 until he retired in December
1992, and was its President from February 1, 1989 to
October 31, 1991. From July 1983 to December 1987, he was
Executive Vice President - Administration, and from
December 1, 1987 to February 1, 1989, he was a business
consultant for that company.
(4) Does not include 50 Class A shares held by Mr. Wolcott's
wife, or 99,900 Class A shares, 20,300 Class B shares and
$289,000 in principal amount of the Company's 9.875%
Convertible Subordinated Debentures due January 15, 2006
held in a pension plan under which Mr. Wolcott is one of
three trustees as well as one of a number of beneficiaries.
Also not included are 714,600 Class A shares and 55,900
Class B shares owned by Seneca Foods Corporation, of which
Mr. Wolcott is Chairman and a director and a major
shareholder. Also excluded are 89,700 Class A shares held
by the Seneca Foods Foundation, of which Mr. Wolcott is
Chairman and a director (see "Certain Beneficial Owners").
(5) Not included are 200 Class A shares owned by the spouse of
Robert T. Brady and 3,600 Class B shares owned by such
spouse as custodian for their children.
(6) Does not include shares held by spouses, or as custodian or
trustee for minors, as to which beneficial interest has been
disclaimed, but does include shares held under the "Moog
Family Agreement as to Voting" described above, and shares
held by the Estate of Jane B. Moog. Includes 322,700
Class A shares and 138,216 Class B shares subject to
currently exercisable options. Officers and directors of
the Company have entered into an agreement among themselves
and with the Company's Savings and Stock Ownership Plan (the
"SSOP"), the Employees' Retirement Plan and the Company,
which provides that prior to selling Class B shares obtained
through exercise of a non-statutory option, the remaining
officers and directors, the SSOP, the Employees' Retirement
Plan and the Company have an option to purchase the shares
being sold.
<PAGE>
- 8 -
During the fiscal year ended September 30, 1993, all
executive officers and directors of the Company had timely filed
with the Securities and Exchange Commission all required reports
regarding their beneficial ownership of Company securities except
Mr. Wolcott, who filed one report eighteen days late.
Other Directorships
Directors of the Company are presently serving on the
following boards of directors of other publicly traded companies:
Name of Director Company
Robert T. Brady . . . . . . . . . .Acme Electric Corporation;
Seneca Foods Corporation;
Astronics Corporation
Arthur S. Wolcott . . . . . . . . .Seneca Foods Corporation
Richard A. Aubrecht . . . . . . . .R.P. Adams Company, Inc.
Board of Directors and Committee Meetings
From October 1, 1992 to September 30, 1993, the Board
of Directors held four meetings. Standing committees of the
Board of Directors and the number of meetings they each held were
as follows:
Number of
Committees Meetings Members
Audit. . . . . . . . . . . . . 3 Messrs. McIlraith,
Poth and Wolcott
Executive. . . . . . . . . . . 0 Messrs. Aubrecht,
Banta, Brady, Green
and Poth
Executive
Compensation . . . . . . . . . 1 Messrs. McIlraith,
Poth and Wolcott
Stock Option . . . . . . . . . 1 Messrs. McIlraith,
Poth and Wolcott
Every member of the Board of Directors attended all the
meetings of the Board of Directors and of all committees on which
he served.
The Executive Committee, between meetings of the Board
of Directors and to the extent permitted by law, exercises all of
the powers and authority of the Board in the management of the
business of the Company. The Executive Compensation Committee
<PAGE>
- 9 -
determines the compensation of corporate officers and oversees
the compensation of top management of the Company. The Stock
Option Committee is responsible for the administration of the
stock option plans of the Company and recommends to the Board of
Directors proposed recipients of stock options. The Audit
Committee recommends the engaging and discharging of the
independent auditors, acts as liaison between the independent
auditors and the Board of Directors, and oversees the Company's
internal accounting controls. The Board of Directors does not
have a Nominating Committee.
COMPENSATION COMMITTEE REPORT
The Executive Compensation Committee (the "Compensation
Committee") determines the compensation of Corporate officers and
oversees the administration of executive compensation programs.
The Compensation Committee is composed solely of independent,
non-employee Directors of the Company. Messrs. McIlraith, Poth
and Wolcott served on the Compensation Committee for the past
fiscal year, as did Jane B. Moog until her death on May 1, 1993.
The Compensation Committee is responsible for all elements of
executive compensation including base salary management, profit
sharing and other benefit programs for key executives.
The goals of the Company's executive compensation program
are to:
1. Pay competitively to attract, retain and motivate
superior executives who must operate in a highly
competitive and technologically specialized
environment,
2. Relate total compensation for each executive to overall
Company performance as well as individual performance,
and
3. Align executives' performance and financial interests
with shareholder value.
It is the Company's policy to consider the deductibility of
executive compensation under applicable income tax rules, as one
of many factors used to make specific compensation determinations
consistent with the goals of the Company's executive compensation
program. No component of the Company's executive compensation
has been determined to be non-deductible to the Company.
Salaries
Base salary ranges are developed after considering the
recommendations of professional compensation consultants who
conduct annual compensation surveys of similar companies. Base
salaries within these ranges are targeted to be above average and
competitive in relation to salaries paid for similar positions in
<PAGE>
- 10 -
comparable companies. On an annual basis the Committee reviews
management recommendations for executives' salaries utilizing the
results of survey data for comparable executive positions.
Individual salary determinations within the established ranges
are determined based on position accountabilities, experience,
sustained individual performance, overall Company performance,
and peer comparisons inside and outside the Company, with each
factor being weighed reasonably in relation to the other factors.
In light of the restructuring charge taken in 1992 and the
resulting loss incurred by the Company, no salary increases were
awarded in fiscal 1993.
Management Profit Sharing Plan
Under the Management Profit Sharing Plan, which is a part of
an overall employee profit sharing plan approved by the Board of
Directors, an individual executive's annual profit share is
determined by multiplying his base salary by the product of the
Company's net margin and a multiple which varies with the
executive's accountabilities. The Company uses net margin as the
performance parameter because it is the principal determinant of
Return on Investment and its measurement is clear. The annual
net margin is not affected by other complicating factors in the
Company's financial structure.
There is no management profit share paid unless the
Company's net margin is at least 2% for the fiscal year. This
plan is intended to motivate executives toward the achievement of
goals which are directly aligned with shareholder interests.
Officers of the Company participate in this plan with all other
key executives. No management profit share was paid to
executives in either 1992 or 1993 because net margins did not
achieve the minimum of 2%.
Stock Options
Stock option plans have been used in past years to relate
the long-term financial interests of executives with those of
shareholders.
The Company had an Incentive Stock Option Plan and a Non-
Statutory Stock Option Plan, both of which expired on
December 31, 1992. Options granted under these plans, including
those granted on December 4, 1992 and shown in the Summary
Compensation Table on page 10, remain outstanding. All stock
options granted under these plans were priced at the fair market
value of the underlying stock as of the date of grant. Option
grants made during fiscal 1993 were similar in size to prior
years' grants, which were relatively modest, and intended to link
an adequate portion of executive compensation to benefits
produced for all shareholders. Mr. Brady's annual options grants
recently have been somewhat larger than those of other executive
officers, reflecting his greater individual responsibility.
<PAGE>
- 11 -
Other Compensation Plans
In order that the total aggregated compensation package
provided officers meets the Company's goals, officers are
provided certain additional benefit plans as discussed on
pages 12-13. These plans are comparable to those provided to
executives in companies surveyed by the Company's professional
compensation consultants.
Compensation of the Chief Executive Officer
The Compensation Committee determines the Chief Executive
Officer's salary and other compensation elements based on
performance. The salary is established within a salary range
recommended by an independent compensation consulting firm. The
Company has undergone major restructuring over the past few years
in response to significant cuts in defense spending. The
Company's overall 1992 financial performance reflected these
difficulties. In view of the Company's reported results in 1992,
the Compensation Committee did not increase the Chief Executive
Officer's salary or any other officer salaries in that year.
Mr. Brady's leadership continues to reshape the Company to
meet the challenges presented by changing markets and intense
worldwide competition. His efforts resulted in much improved
earnings during fiscal 1993 and placed the Company in a strong
position for future business successes.
The Compensation Committee believes that its actions have
been an effective implementation of the Company's overall
compensation policies.
Kenneth J. McIlraith Peter P. Poth Arthur S. Wolcott
STOCK PRICE PERFORMANCE GRAPH
1988-1993
The following graph compares the cumulative total
shareholder return on the Company's Class A Common Stock with
that of the AMEX Market Value Index, a major market index of the
American Stock Exchange, and the S&P Aerospace/Defense Index, an
industry index published by Standard and Poor's Corporation. The
comparison for each of the periods assumes that $100 was invested
on September 30, 1988 in each of the Company's Class A common
stock, the stocks included in the AMEX Market Value Index and the
stocks included in the S&P Aerospace/Defense Index. These
indices, which reflect formulas for dividend reinvestment and
weighting of individual stocks, do not necessarily reflect
returns that could be achieved by individual investors.
[Insert Graph]
<PAGE>
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SUMMARY COMPENSATION TABLE
The following tabulation shows information concerning
the compensation for services in all capacities to the Company
for the fiscal years ended September 30, 1993, 1992 and 1991, of
those persons who were at September 30, 1993 the Company's five
most highly compensated executive officers (the "Named
Executives").
<PAGE>
- 13 -
<TABLE>
<CAPTION>
Securities All Other
Annual Compensation Underlying Compensation
Name & Principal Position Year Salary($) Bonus($) Other($) Options(#) ($)(1)
<S> <C> <C> <C> <C> <C> <C>
Robert T. Brady 1993 338,782 0 6,664 6,000 61,305
President 1992 338,782 0 7,809 7,000 3,321
Chief Executive Officer 1991 322,650 53,753 3,797 7,000 2,169
Joe C. Green 1993 236,897 0 3,797 5,500 7,185
Executive Vice President 1992 236,897 0 3,797 5,000 7,099
Chief Administrative Officer 1991 222,827 37,123 3,797 5,000 101,417
Robert H. Maskrey 1993 216,986 0 7,831 5,500 3,218
Vice President 1992 216,986 0 7,632 5,000 3,066
General Manager 1991 201,847 33,628 6,497 5,000 1,983
Robert R. Banta 1993 211,635 0 6,866 5,500 34,958
Executive Vice President 1992 211,635 0 7,120 5,000 5,415
Chief Financial Officer 1991 199,119 33,169 6,208 5,000 5,087
Richard A. Aubrecht 1993 209,299 0 5,703 5,500 3,426
Chairman of the Board 1992 209,299 0 4,059 5,000 3,211
1991 195,790 32,619 4,821 5,000 3,071
(1) Amounts shown for 1993 include $0, $0, $819, $0 and $2,046 representing Company matching
contributions to the Company's Savings and Stock Ownership Plan, $57,984, $4,556, $0, $32,559
and $0 representing payments in lieu of vacation, and $3,321, $2,629, $2,399, $2,399 and $1,380
representing premiums on group life insurance, paid by the Company on behalf of Messrs. Brady,
Green, Maskrey, Banta and Aubrecht, respectively.
</TABLE>
<PAGE>
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STOCK OPTION GRANTS IN LAST FISCAL YEAR
The tabulation below shows additional information
respecting option grants to the Named Executives during fiscal
1993, which grants are reflected in the Summary Compensation
Table on page 10. No SARs were granted during the fiscal year.
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Appreciation for
Ten-Year Option
Individual Grants Term(2)
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Per Expiration
Name Granted(1) Fiscal Year Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Rober T. Brady 6,000 10.5% $5.625 12/4/02 $21,225 $53,789
Joe C. Green 5,500 9.6% $5.625 12/4/02 $19,456 $49,306
Robert H. Maskrey 5,500 9.6% $5.625 12/4/02 $19,456 $49,306
Robert R. Banta 5,500 9.6% $5.625 12/4/02 $19,456 $49,306
Richard A.
Aubrecht 5,500 9.6% $5.625 12/4/02 $19,456 $49,306
</TABLE>
(1) Only Class A stock options were granted in fiscal 1993.
(2) Potential realizable value is based on the assumed annual
growth rates for the ten-year option term. 5% annual growth
results in a stock price of $9.16 per share and 10% results
in a price of $14.59 per share. Actual gains, if any, on
stock options exercises are dependent on the future
performance of the stock. There can be no assurance that
the amounts reflected in this table will be achieved.
<PAGE>
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FISCAL YEAR-END OPTION/SAR VALUES (1)
Shown below is information as to the number and value
of currently exercisable but as yet unexercised options and stock
appreciation rights ("SARs") granted during fiscal 1993 and prior
years under the Company's Incentive Stock Option Plan and Non-
Statutory Stock Option Plan to the Named Executives. Both of
these plans terminated in accordance with their own provisions on
December 31, 1992. None of the Named Executives exercised
options or SARs during fiscal 1993.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs at Options/SARs at
Fiscal Year-End Fiscal Year-End
Name Class A Class B/SARs Class A Class B/SARs
<S> <C> <C> <C> <C>
Robert T. Brady 45,000 34,000 $18,875 $0
Joe C. Green 40,500 34,000 $16,125 $0
Robert H. Maskrey 40,500 34,000 $16,125 $0
Robert R. Banta 40,500 34,000 $16,125 $0
Richard A. Aubrecht 40,500 34,000 $16,125 $0
</TABLE>
(1) All Class A and Class B Options and SARs are currently
exercisable. Class B options are exercisable in tandem with
SARs.
EMPLOYEES' RETIREMENT PLAN
Under the Company's Employees' Retirement Plan,
benefits are payable monthly upon retirement to participating
employees of the Company based upon compensation and years of
service and subject to limitations imposed by the Employee
Retirement Income Security Act of 1974 ("ERISA"). The Employees'
Retirement Plan is administered by a Retirement Plan Committee
and covers all employees with one year of service and a minimum
of 1,000 hours of employment.
Benefits payable under the Plan are determined on the
basis of compensation and credited years of service. It is a
career average type plan. Base annual rate of pay for prior
service compensation is determined as of January 1, 1984, but in
no event may this amount exceed the average rate based upon the
five highest January 1 pay rates preceding the plan year of date
of determination. Effective October 1, 1989, future service
compensation is the basic annual rate of pay for the preceding
plan year plus overtime and shift differential compensation.
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The prior service pension is 3/4% of the first $9,000
of prior service compensation, plus 1-3/4% of the excess,
multiplied by prior service but not less than the accrued benefit
as of September 30, 1984, determined under the prior plan. The
future service pension for each year of credited service after
September 30, 1984, and before October 1, 1986, is 3/4% of the
first $9,000 of future service compensation for such year plus 1-
3/4% of the excess. The future service pension for each year of
credited service after September 30, 1986, and prior to
October 1, 1989, is 3/4% of the first $12,000 of future service
compensation for such year, plus 1-3/4% of the excess.
Effective October 1, 1989, the future service pension
for each year of credited service is 1.15% of the first $20,000
of future service compensation for such year, plus 1-3/4% of the
excess. Any participant with five years or more of service
receives a minimum pension of $2,400 per year, reduced pro rata
for credited service of less than 15 years.
SUPPLEMENTAL RETIREMENT PLAN
The Company also has a Supplemental Retirement Plan
applicable to all officers of the Company with at least 10 years
continuous service retirement at age 65 or older.
The Supplemental Retirement Plan provides benefits for
an officer at age 65 with 25 years of service equal to 60% of the
average of the highest consecutive three year base salary of such
officer prior to retirement, less any benefits payable under the
Employees' Retirement Plan, and also less the primary Social
Security benefit of such officer at age 65. An officer 60 or
more years of age, whose chronological age and years of service
equal or exceed 90, may elect early retirement and receive
reduced benefits. A reduced benefit is available for officers 65
years of age with between 10 and 25 years of service.
Benefits are payable in the same form and manner as
benefits under the Employees' Retirement Plan, but are payable
solely from the general assets of the Company and not from the
trust fund maintained under the Employees' Retirement Plan, or
any other particular fund. A participant's benefits are vested
in the event of an involuntary termination of employment other
than for active wrongdoing or other grievous cause. For purposes
of the Supplemental Retirement Plan, a change in duties,
responsibilities, status, pay or perquisites which follows a
change in ownership or control of the Company is deemed an
involuntary termination.
The projected annual benefits, assuming level
continuation of earnings, payable at normal retirement age for
each of the Named Executives under the Employees' Retirement Plan
and the Supplemental Retirement Plan are:
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Projected Annual
Benefit Payable at
Name Normal Retirement Age
Robert T. Brady ............... $188,653
Joe C. Green .................. 127,642
Robert H. Maskrey ............. 115,623
Robert R. Banta ............... 112,557
Richard A. Aubrecht ........... 111,047
EMPLOYMENT TERMINATION BENEFITS AGREEMENTS
Certain executive officers of the Company, including
those named in the Summary Compensation Table, have entered into
Employment Termination Benefits Agreements with the Company.
The Employment Termination Benefits Agreements provide
that upon death, disability or retirement, the executive will
receive those benefits provided to him by the Company under all
its benefit plans. Where employment is terminated for cause, the
executive is entitled to the cash equivalent of any accrued
extended vacation, but is not entitled to participate in any
profit sharing award or incentive compensation payable after the
date of termination. In such circumstances, the right to
exercise any stock options is also terminated. Upon a voluntary
termination, the executive receives employment benefits up to the
date of termination, as well as the cash value of any extended
vacation benefits. In the event of a voluntary termination, the
executive is not entitled to receive any profit sharing award
payable after termination.
Upon an involuntary termination, the executive is
immediately vested under the Employees' Retirement Plan and
Supplemental Retirement Plan and is entitled to receive for one
year, certain perquisites and insurance benefits. The
executive also receives amounts otherwise payable under the
Management Profit Sharing Plan. Stock options may be exercised,
or if not then exercisable, the executive is entitled to cash in
an amount equal to the difference between the then current market
value of the Company common stock underlying the option and the
option's exercise price. The executive is entitled to accrued
extended vacation benefits, as well as to the continuation of
base compensation for between 12 and 36 months, based on years of
service. Where involuntary termination occurs by reason of a
change in control of the Company, the executive receives the
benefits otherwise provided for an involuntary termination, with
accelerated vesting of compensation continuation.
During the term of the Employment Termination Benefits
Agreements, and in the event of involuntary termination upon a
change of control, until the last payment to the executive is
made under the Employment Termination Benefits Agreements, the
executive may not compete with the Company.
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DIRECTORS AND OFFICERS INDEMNIFICATION INSURANCE
On October 25, 1993, the Company renewed an officers
and directors indemnification insurance policy written by The
Chubb Group. The renewal was for a one-year period at an annual
premium of $84,258. The policy provides indemnification benefits
and the payment of expenses in actions instituted against any
director or officer of the Company for claimed liability arising
out of their conduct in such capacities. No payments or claims
of indemnification or expenses have been made under any such
insurance policies purchased by the Company at any time.
COMPENSATION OF DIRECTORS
Non-management directors are paid $1,250 per month and
reimbursed for expenses incurred in attending Board and committee
meetings. They received aggregate cash remuneration of $82,750
for the fiscal year ended September 30, 1993, including all fees
paid to Warren B. Cutting, Director Emeritus.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. McIlraith, Poth and Wolcott served on the
Compensation Committee for the past fiscal year, as did Jane B.
Moog until her death on May 1, 1993. Mr. Wolcott is also
Chairman of the Board and a major shareholder of Seneca Foods
Corporation ("Seneca"). Mr. Brady, the Company's President and
Chief Executive Officer, is a director of Seneca.
TRANSACTIONS WITH MOOG CONTROLS INC.
During fiscal year 1993, the Company sold to Moog
Controls Inc. ("MCI") products and services in the amount of
$2,387,466, and purchased from MCI products and services in the
amount of $2,678,796. MCI is wholly-owned by the father-in-law
of Richard A. Aubrecht, Chairman of the Board of the Company.
INDEPENDENT AUDITORS
The Board of Directors, on recommendation of the Audit
Committee, has selected KPMG Peat Marwick, independent certified
public accountants, to continue as independent auditors of the
Company for fiscal year 1994. Representatives of KPMG Peat
Marwick are expected to attend the shareholders meeting, will be
available to respond to appropriate questions and will be given
the opportunity to make a statement if they so desire.
The Board of Directors recommends a vote "FOR"
ratification of KPMG Peat Marwick as auditors for fiscal year
1994.
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PROPOSALS OF SHAREHOLDERS FOR 1995 ANNUAL MEETING
Proposals of shareholders intended to be presented to
the 1995 Annual Meeting of Shareholders must be received by the
Secretary of the Company prior to September 2, 1994, for
inclusion in the Proxy Statement for that meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of
Directors does not intend to present, and has not been informed
that any other person intends to present, any matter for action
at this meeting other than those specifically referred to in this
Proxy Statement. If other matters properly come before the
meeting, it is intended that the holders of the proxies will act
in respect thereto in accordance with their best judgment.
The cost of this solicitation of proxies will be borne
by the Company. The Company may request brokerage houses,
nominees, custodians and fiduciaries to forward soliciting
material to the beneficial owners of stock held of record, and
will reimburse such persons for any reasonable expense in
forwarding the material. In addition, officers, directors and
employees of the Company may solicit proxies personally or by
telephone and will not receive any additional compensation.
Copies of the 1993 Annual Report of the Company are
being mailed to shareholders, together with this Proxy Statement,
proxy card and Notice of Annual Meeting of Shareholders.
Additional copies may be obtained from the Treasurer of the
Company, East Aurora, New York 14052.
By Order of the Board of Directors
JOHN B. DRENNING, Secretary
Dated: East Aurora, New York
January 7, 1994
