<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 (S) 240.14a-11(c) or (S) 240.14a-12
THIOKOL CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
THIOKOL CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (check the appropriate box)
[X] $125 per Exchange Act Rules O-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 Rule 14a-6(i)(4) and O-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 O-11:*
4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing is calculated and state how it was
determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
O-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 of 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>
[LOGO OF THIOKOL CORPORATION APPEARS HERE]
SEPTEMBER 23, 1994
Dear Stockholder:
We invite you to the Annual Meeting of Stockholders of Thiokol Corporation,
which will be held on Tuesday, October 25, 1994, in the Ballroom, Ogden Park
Hotel, 247 24th Street, Ogden, Utah, commencing at 10:00 a.m. local time.
Information about the matters to be voted upon at the meeting is in the
enclosed formal Notice of Meeting and Proxy Statement.
It is important that your shares be represented at this meeting whether or
not you personally plan to attend. Please sign, date and return your proxy
promptly in the enclosed envelope. This will not limit your right to vote in
person or attend the meeting.
The Company's Annual Report for the fiscal year ended June 30, 1994, is being
distributed to stockholders with this proxy statement.
[SIGNATURE OF JAMES R. WILSON [SIGNATURE OF U. EDWIN GARRISON
APPEARS HERE] APPEARS HERE]
James R. Wilson U. Edwin Garrison
President and Chairman of the Board
Chief Executive Officer
<PAGE>
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
TUESDAY, OCTOBER 25, 1994
To the Stockholders:
The Annual Meeting of Stockholders of Thiokol Corporation (the "Company")
will be held on Tuesday, October 25, 1994, in the Ballroom, Ogden Park Hotel,
247 24th Street, Ogden, Utah, at 10:00 a.m. local time, to consider and vote
upon:
1. Election of two directors (see page 2);
2. Ratification of appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending June 30, 1995 (see page
21); and
3. Any other business that may properly come before the meeting.
The close of business on August 23, 1994, has been fixed as the record date
for the meeting. All stockholders of record on that date are entitled to be
present and vote at the meeting.
Attendance at the Annual Meeting will be limited to stockholders of record,
beneficial owners of Company common stock entitled to vote at the meeting
having evidence of ownership, the authorized representative (one only) of an
absent stockholder, and invited guests of management. Any person claiming to be
an authorized representative of a stockholder must, upon request, produce
written evidence of such authorization.
The meeting will be conducted pursuant to the Company's By-Laws and rules of
order prescribed by the chairman of the meeting.
September 23, 1994
By Order of the Board of Directors,
Edwin M. North
Secretary
<PAGE>
THIOKOL CORPORATION
2475 WASHINGTON BOULEVARD
OGDEN, UTAH 84401-2398
PROXY STATEMENT
September 23, 1994
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by the
Company's Board of Directors of proxies for use at its Annual Meeting of
Stockholders to be held on Tuesday, October 25, 1994, and at any adjournment
thereof (the "1994 Annual Meeting").
Shares represented in person or by properly executed and unrevoked proxies
received in proper form in time for the 1994 Annual Meeting will be voted.
Shares will be voted in accordance with stockholder's instructions in the
accompanying proxy. If any such proxy contains no instructions, the shares will
be voted in accordance with the directors' recommendations, which are noted
herein. Any proxy given may be revoked at any time before it is voted at the
meeting.
On August 23, 1994, the record date for the 1994 Annual Meeting, there were
18,695,789 shares of $1.00 par value common stock outstanding, each entitled to
one vote, and there is no cumulative voting. A majority of these shares will
constitute a quorum for the transaction of business at the 1994 Annual Meeting.
Only stockholders of record will be entitled to vote. The Company has no other
class of equity securities outstanding.
Pursuant to the By-Laws of the Company, three Judges of Election have been
elected by the Board of Directors to serve at the 1994 Annual Meeting. In the
event any judge so elected shall not be present at the meeting, that judge
shall be replaced with a judge by the Board of Directors in advance of the
meeting or by the chairman of the meeting in advance of any voting at such
meeting. The owners of a majority of the outstanding shares entitled to vote
are required for a quorum at the 1994 Annual Meeting. Under Delaware
corporation law abstentions, withheld votes and broker no-votes (i.e., shares
held by a broker or nominee which are represented at the meeting, but with
respect to which such broker or nominee is not empowered to vote on a
particular proposal or proposals) will be considered part of the quorum.
Directors will be elected by a plurality of the votes cast at the 1994 Annual
Meeting, which means that abstentions, withheld votes and broker no-votes will
not affect the election of the candidates. All other proposals, including the
ratification of the appointment of Ernst & Young LLP as the Company's
independent auditors, require the favorable vote of the holders of a majority
of the shares present and entitled to vote at the 1994 Annual Meeting to pass.
Therefore, abstentions as to particular proposals will have the same effect as
votes against such proposals and broker no-votes will not be counted as votes
for or against the proposal, and will not be included in counting the number of
votes necessary for approval of the proposal. The polls for the casting of
ballots at the 1994 Annual Meeting shall open at 8:00 a.m. local time and shall
close at 10:00 a.m. on October 25, 1994. For a ten day period prior to the date
of the 1994 Annual Meeting, a list of stockholders entitled to vote is open for
examination during normal business hours at the Company's principal offices,
2475 Washington Blvd., Ogden, Utah, and may be examined by any stockholder for
any purpose germane to the meeting.
The Company will bear the cost of the solicitation. In addition to
solicitation by mail, the Company will request banks, brokers, and other
custodian nominees and fiduciaries to supply proxy material to the beneficial
owners of the Company's common stock of whom they have knowledge, and will
1
<PAGE>
reimburse them for their expenses in so doing. Certain directors, officers, and
other employees of the Company, not specifically employed for the purpose, may
solicit proxies, without additional remuneration therefore, by personal
interview, mail, telephone or telegraph. In addition, the Company has retained
D. F. King & Co., Inc., to assist in the solicitation for a fee of $5,000 plus
expenses.
1. ELECTION OF DIRECTORS
The Board of Directors is currently comprised of ten directors. Robert T.
Marsh and Joseph A. Rice will not stand for re-election due to their
retirements. By resolution, in accordance with the By-Laws of the Company, the
Board of Directors will reduce the Board membership from ten directors to eight
directors effective October 25, 1994. The Company's Restated Certificate of
Incorporation and By-Laws provide for the Board to be divided into three
classes. Each class serves for a term of three years. At the 1994 Annual
Meeting, L. Dennis Kozlowski and James M. Ringler will stand for election as
nominees for directors for a term to expire at the 1997 Annual Meeting.
The following table shows the class in which each nominee for director and
each director continuing in office serves and the year in which the term of
office for each such class expires.
BOARD OF DIRECTORS
YEAR TERM OF OFFICE EXPIRES
AT THE OCTOBER ANNUAL MEETING
1994 1995 1996 1997
---- ---- ---- ----
NOMINEES FOR DIRECTOR
)) ---------------------------
L. Dennis Kozlowski(/1/) )
James M. Ringler(/1/) ))
)
)) ---------------------------
DIRECTORS CONTINUING IN OFFICE
)) ---------------------
Neil A. Armstrong(/2/) )
Charles S. Locke(/2/) ))
Donald C. Trauscht(/2/) )
)) ---------------------
)) -----------
James R. Burnett(/3/) )
U. Edwin Garrison(/3/) ))
James R. Wilson(/3/) )
)) -----------
- - --------
(/1/) By resolution in accordance with the By-Laws of the Company, the Board of
Directors expanded the Board from eight to ten directors, the vacancies
created thereby were filled by L. Dennis Kozlowski and James M. Ringler
for a term to expire at the 1994 Annual Meeting.
(/2/) Neil A. Armstrong, Charles S. Locke, and Donald C. Trauscht were elected
by stockholders at the 1993 Annual Meeting to terms expiring at the 1996
Annual Meeting.
(/3/) James R. Burnett and U. Edwin Garrison were elected by stockholders at the
1992 Annual Meeting to a term expiring at the 1995 Annual Meeting. James
R. Wilson was elected a director by the Board to a term expiring at the
1995 Annual Meeting to fill the vacancy created by John R. Myers'
resignation from the Board.
2
<PAGE>
The nominees for election as directors at the 1994 Annual Meeting for the
above described terms are listed on the following pages. If any nominee should
become unavailable, an event the Board of Directors does not anticipate, it is
intended that such shares will be voted for such substitute nominee as may be
selected by the Board of Directors, or the Board may reduce the number of
directors. All nominees are presently serving as directors and have consented
to being named herein and to serve if elected.
BOARD MEETING ATTENDANCE AND COMPENSATION OF DIRECTORS
The Company's Board of Directors met six times during fiscal year 1994. All
incumbent directors were present for 75 percent or more of the total meetings
of the Board while they were Board members.
Directors who are employees of the Company receive no compensation for their
service as directors. Other directors are paid an annual retainer of $30,000
plus a fee of $1,000 and travel expenses for each Board meeting attended.
The Company maintains a Deferred Fees Plan where non-employee directors may
elect to have payment of part or all of their directors' compensation deferred
until such time as they cease to be a director. Amounts credited to Plan
participants' deferral balances include increments (similar to interest) at
prevailing market rates. Currently, no director is an active participant in the
Plan. Robert T. Marsh is an inactive Plan participant and consequently only
participates in the Plan to the extent of increments credited on his deferrals
made to the Plan prior to June 30, 1989. Upon retirement as a director of the
Company, participants receive a distribution of their deferred balances from
the Plan. General Marsh receives the directors' fees paid to non-officer
directors.
Effective July 1, 1994, the Company renewed a one year consulting agreement
with U. Edwin Garrison, Chairman of the Board, the retired Chief Executive
Officer of the Company, pursuant to which he provides advice to the President
and Chief Executive Officer and also acts as an advisor to Chairmen of the
Committees of the Board of Directors. During fiscal year 1994 and for the
remainder of the agreement for fiscal year 1995, Mr. Garrison receives a
$150,000 retainer payable quarterly over the term of the agreement. In
addition, Mr. Garrison receives the director's fees paid to non-officer
directors.
Messrs. Garrison and Marsh as retired employees of the Company participate in
the Pension Plan and Excess Plan described on page 12.
NOMINEES FOR DIRECTORS
THREE-YEAR TERMS EXPIRING AT THE 1997 ANNUAL MEETING
[PHOTO OF L. DENNIS KOZLOWSKI, age 47, was elected a director of the
L. DENNIS Company in August 1993. He has served as Chairman of the Board,
KOZLOWSKI President and Chief Executive Officer of Tyco International
APPEARS HERE] Ltd., a manufacturer of fire protection and flow control
products, since 1992, as President since 1989, and President of
Grinnell Corporation, a subsidiary, since 1982. Mr. Kozlowski
holds Bachelor of Science and Master of Business Administration
degrees from Seton Hall University.
3
<PAGE>
[PHOTO OF JAMES M. RINGLER, age 49, was elected a director of the
JAMES M. Company in August 1993. He has served as the President and Chief
RINGLER Operating Officer since 1992 of Premark International, Inc., a
APPEARS diversified manufacturer of premium brand name products such as
HERE] Tupperware, West Bend, Wilsonart, Hobart, Vulcan, Hartco, Precor
and Florida Tile; President of its Food Equipment Group from
1990 to 1992; and as President of the Major Appliance Group,
White Consolidated Industries from 1986 to 1990. He is a
director of Premark International, Inc., and Reynolds Metals
Company. Mr. Ringler holds Bachelor of Science and Master of
Business Administration degrees from the State University of New
York at Buffalo.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERMS EXPIRING AT THE 1996 ANNUAL MEETING
[PHOTO OF NEIL A. ARMSTRONG, age 64, became a director of the Company in
NEIL A. October 1989. He has served as Chairman of AIL Systems, Inc.,
ARMSTRONG subsidiary of Eaton Corporation, an electronics and systems
APPEARS company with sales primarily to the Federal Government. He is a
HERE] director of Cincinnati Gas & Electric Company, Cincinnati
Milacron Inc., Eaton Corporation, RMI Titanium Co., and USX
Corporation. He holds a Bachelor of Science degree in
Aeronautical Engineering from Purdue University and a Master of
Science degree in Aerospace Engineering from the University of
Southern California.
[PHOTO OF CHARLES S. LOCKE, age 65, is the retired Chairman of the Board
CHARLES and Chief Executive Officer of Morton International, Inc., a
S. LOCKE manufacturer and marketer of specialty chemicals, automotive
APPEARS inflatable restraint systems, and salt. He served as Chairman of
HERE] the Board and Chief Executive Officer of the Company from 1980
until July 1, 1989. Since then, he has continued as a non-
employee director of the Company. He is a director of Avon
Products, Inc.; NICOR, Inc., and its subsidiary, Northern
Illinois Gas Company; and Whitman Corporation. Mr. Locke holds
Bachelor of Business Administration and Master of Science
degrees from the University of Mississippi.
[PHOTO OF DONALD C. TRAUSCHT, age 60, was elected a director of the
DONALD C. Company in August 1993. He has served as the Chairman of the
TRAUSCHT Board, President and Chief Executive Officer of Borg-Warner
APPEARS Security Corporation, a supplier of security services since
HERE] 1992; President, Borg-Warner Corporation 1990 to 1992, and as
Vice President Finance and Strategic 1987 to 1990. He is a
director of Borg-Warner Automotive, Inc., Baker Hughes
Incorporated, Blue Bird Corporation, Mannesman Capital
Corporation, and ESCO Electronics Corporation. Mr. Trauscht
holds a Bachelor of Science degree from St. Mary's College and a
Master of Business Administration degree from the University of
Chicago.
4
<PAGE>
TERMS EXPIRING AT THE 1995 ANNUAL MEETING
[PHOTO OF JAMES R. BURNETT, age 68, became a director of the Company in
JAMES R. March 1991. Dr. Burnett joined TRW in 1956, held various senior
BURNETT management positions, and retired in January 1991 as the
APPEARS Executive Vice President and Deputy General Manager of TRW's
HERE] Space & Defense group, a position he held since 1981. He is a
member of the Board of Directors of OEA Inc. Dr. Burnett holds
Bachelor of Science, Master of Science, and Doctor of Philosophy
degrees from Purdue University. He has received national
recognition for his contributions to the aerospace and defense
industry and has authored numerous technical papers.
[PHOTO OF U. EDWIN GARRISON, age 66, Chairman of the Board, retired as
U. EDWIN Chief Executive Officer of the Company June 30, 1993. He served
GARRISON as Chairman of the Board and Chief Executive Officer from July
APPEARS 1992 to June 30, 1993; Chairman of the Board, President and
HERE] Chief Executive Officer from July 1991 to July 1992; and as
President and Chief Executive Officer from July 1989 to June
1991. He has served as director of the Company since July 1989.
He became Group Vice President of the Aerospace Group in 1983,
and President of the Group later that year. He joined a
predecessor to the Company in 1952 as a project engineer, and
subsequently served in various program management and marketing
capacities. Mr. Garrison is a director of Questar Corporation
and First Security Corporation. He holds a Bachelor of Science
degree in Mechanical Engineering from Mississippi State
University.
[PHOTO OF JAMES R. WILSON, age 53, became President and Chief Executive
JAMES R. Officer of the Company October 4, 1993. He has served as a
WILSON director of the Company since October 25, 1993. He joined the
APPEARS Company in 1989 as Vice President and Chief Financial Officer
HERE] and became Executive Vice President and Chief Financial Officer
in 1992. Prior to joining the Company he was Senior Vice
President and Chief Financial Officer of Circuit City Stores
1987-1988; and Executive Vice President and Chief Financial
Officer of Fairchild Industries, Inc., 1982-1987. Mr. Wilson is
a director of Rohr, Inc., advisory director of The First
Security Bank of Northern Utah and Finance Chairman of the Board
of Trustees of the College of Wooster. He holds a Bachelor's
degree from the College of Wooster and a Master of Business
Administration degree from Harvard University.
COMMITTEES OF THE BOARD
There are four standing committees of the Company's Board of Directors: Audit
Committee, Compensation Committee, Nominating Committee, and Executive
Committee.
The Audit Committee recommends to the Board the independent auditors to be
selected to audit the Company's annual financial statements, and reviews the
fees charged for such audits and for any special assignments given the
auditors. The Committee reviews the annual audit and its scope, including the
independent auditors' comment letter and management's responses; possible
violations of the Company's business ethics and conflict of interest policies;
any major accounting changes made
5
<PAGE>
or contemplated; and the effectiveness and efficiency of the Company's internal
audit staff. In addition, the Committee confirms that no restrictions have been
imposed by Company personnel on the scope of the independent auditors' and the
internal auditors' examinations. Members of this Committee are Messrs. Joseph
A. Rice(/1/) (Chairman), Neil A. Armstrong, James R. Burnett, L. Dennis
Kozlowski and Donald C. Trauscht. The Committee met four times in fiscal year
1994. All Committee members attended 75 percent or more of the Committee
meetings while a member of the Committee.
The Compensation Committee annually reviews and reports to the Board on the
investment performance of the fund managers of the Company's retirement plans
and makes recommendations to the Board with respect to the creation and
amendment of compensation, retirement, and other benefit plans of the Company
and its subsidiaries. The Committee also approves compensation actions for
Executive Officers and other key employees, administers the Company's executive
bonus programs, and administers the Company's stock option and awards plans.
Members of the Committee are Messrs. Charles S. Locke (Chairman), James R.
Burnett, Joseph A. Rice, and James M. Ringler. The Committee met three times in
fiscal year 1994. All incumbent members attended 75 percent or more of the
Committee meetings while a member of the Committee. The Committee's report on
Executive Compensation is set forth on page 14.
The Nominating Committee reviews the size and composition of the Board,
evaluates individuals for potential membership on the Board, makes
recommendations to the Board of individuals to fill vacancies or new positions,
makes recommendations to the Board of individuals to be proposed to
shareholders for election to the Board at annual meetings of stockholders, and
makes recommendations to the Board regarding Committee structures and
responsibilities. Members of the Committee are Messrs. Robert T. Marsh(/1/)
(Chairman), James R. Burnett, Charles S. Locke and U. Edwin Garrison. The
Committee had no meetings in fiscal year 1994.
The Executive Committee may exercise all of the powers and authority of the
Company's Board, except that the Committee does not have the power to amend the
Company's By-Laws or Certificate of Incorporation (except to fix the
designations, preferences and other terms of any of its preferred stock),
authorize the issuance of stock, declare dividends, adopt an agreement of
merger or consolidation, adopt a certificate of ownership and merger under
Delaware law, or recommend to Company stockholders the sale, lease or exchange
of all or substantially all of its property and assets, and a dissolution of
the Company or a revocation of a dissolution. Members of this Committee are
Messrs. U. Edwin Garrison (Chairman), Charles S. Locke, Robert T. Marsh(/1/)
and James R. Wilson. The Committee had no meetings in fiscal year 1994.
- - --------
(/1/) Messrs. Rice and Marsh retire from their respective Chairmanships at the
1994 Annual Meeting at which time the Board of Directors will elect their
successors.
6
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information as of August 23, 1994, with
respect to the shares of the Company's common stock which are held by persons
known to the Company to be beneficial owners of more than five percent of such
stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT OF NATURE PERCENT OF
OF BENEFICIAL OWNERS OF BENEFICIAL OWNERSHIP(/1/) CLASS
-------------------- --------------------------------- ----------
<S> <C> <C>
Mellon Bank...................... Aggregate Amount: 1,646,000 8.8%
One Mellon Bank Center Sole Voting Power: 1,086,000 5.8
Pittsburgh, Penn. 15258 Sole Dispositive Power: 1,337,000 7.2
</TABLE>
The following table shows the Company's common stock beneficially owned as of
August 23, 1994, by each director and nominee for director and each of the
Executive Officers named in the table on page 9, and the aggregate number of
such shares beneficially owned by all directors and Executive Officers of the
Company as a group (as used in this Proxy Statement the term "Executive
Officer" means all officers of the Company designated as Executive Officers of
the Board of Directors). Unless otherwise indicated in the footnotes, each
named person and member of the group has sole voting and investment power with
respect to the shares shown.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
NAME OWNED(/2/)
---- ------------
<S> <C>
Neil A. Armstrong.......................................... 1,100(/3/)
William W. Brant........................................... 54,667
James R. Burnett........................................... 1,000
U. Edwin Garrison.......................................... 121,772
R. Robert Harris........................................... 9,303
L. Dennis Kozlowski........................................ 1,000
Joseph A. Lombardo......................................... 28,700
Charles S. Locke........................................... 2,562
Robert T. Marsh............................................ 4,060
James E. McNulty........................................... 24,482
Joseph A. Rice............................................. 5,000
James M. Ringler........................................... 200
Donald C. Trauscht......................................... 400
James R. Wilson............................................ 17,223
All directors, nominees and Executive Officers as a group
(21 persons, including those named)....................... 332,704
</TABLE>
Mr. Garrison's beneficial holdings total .07 percent of the outstanding
shares. No other individual beneficial holdings total more than .07 percent of
the outstanding shares; the holdings of the group represent 1.8 percent of the
outstanding shares. To the Company's knowledge, based on review of copies of
such reports furnished to the Company and written representations, all Forms 4
and 5 required by Section 16(a) of the Securities Exchange Act of 1934 have
been timely filed with respect to the most recently concluded fiscal year. Form
3 for Messrs. Kozlowski, Ringler, and Trauscht were filed by the Company within
ten days after the close of the month in which they became directors rather
than the required ten days after such date.
- - --------
(/1/) As reported on Schedule 13-G.
(/2/) Including shares which may be acquired presently or within 60 days upon
exercise of stock options: Messrs. Brant 51,389 shares, Garrison 54,000
shares, Harris 6,708, Lombardo 28,600, McNulty 23,000, Wilson 15,650
shares, and all directors, nominees and Executive Officers as a group
233,703 shares.
(/3/) Owned by a pension trust in which Mr. Armstrong has sole voting and
investment powers.
7
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The Summary Compensation Table sets forth the compensation for the three
fiscal years ended June 30, 1994, both long-term and short-term, for services
in all capacities earned by those individuals who were as of June 30, 1994, (i)
the Chief Executive Officer; and (ii) the other four most highly compensated
Executive Officers of the Corporation and subsidiaries. Compensation for John
R. Myers, who was the Chief Executive Officer from July 1, 1993 to October 1,
1993, is also shown.
8
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG- TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------------- -----------------------
AWARDS PAYOUTS
---------- ------------
SECURITIES
UNDERLYING
NAME AND OTHER ANNUAL OPTIONS/ LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(/2/) COMPENSATION(/3/)(/4/) SARS # PAYOUTS(/5/) COMPENSATION(/3/)(/6/)
- - ------------------------ ---- -------- ---------- ---------------------- ---------- ------------ ----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
James R. Wilson......... 1994 $320,750 $347,000 0 40,000 $133,936 $ 6,336
President and Chief 1993 230,250 193,410 $243,205 0 272,255 5,810
Executive Officer 1992 218,250 218,250 -- 17,750 300,300 --
John R. Myers........... 1994 60,833(/1/) 0 0 0 0 684,322(/7/)
Former President and 1993 294,231 277,200 0 40,000 0 5,250
Chief Executive Officer 1992 0 0 -- 0 0 --
Joseph A. Lombardo...... 1994 185,000 166,514 0 10,000 0 4,740
Vice President 1993 159,055 93,514 0 0 0 4,536
1992 132,950 69,488 -- 8,500 0 --
James E. McNulty........ 1994 178,375 142,760 126,140 10,000 84,471 4,746
Executive Vice 1993 164,000 110,208 0 0 171,032 4,484
President Human 1992 155,250 124,200 -- 10,800 157,208 --
Resources and
Administration
William W. Brant........ 1994 170,000 136,015 0 8,000 208,000 4,203
Vice President 1993 164,000 131,200 0 0 183,400 3,517
1992 144,000 115,200 -- 10,800 0 --
R. Robert Harris........ 1994 167,475 133,980 104,029 6,000 84,471 4,432
Vice President 1993 160,250 106,406 102,330 0 171,032 4,416
and General Counsel 1992 153,000 120,564 -- 10,800 167,687 --
</TABLE>
- - --------
(/1/) Mr. Myers' base salary reflects the amount of base annual compensation
paid from July 1, 1993, to October 1, 1993, the date of his resignation as
President and Chief Executive Officer and Director of the Company.
(/2/) Bonuses accrued under the Company's Key Executive Bonus Plan are paid
after the fiscal year in which they are accrued.
(/3/) Information for years prior to fiscal year ("FY") 1993 is excluded in
reliance upon applicable Securities and Exchange Commission rules.
(/4/) Amounts paid to Messrs. Wilson, McNulty and Harris represent Supplemental
Cash Payment pursuant to stock options granted prior to FY 1992.
(/5/) The FY 1994 LTIP payouts were made in August 1994 from the Company's Key
Executive Long-Term Incentive Plan for the plan period July 1, 1991,
through June 30, 1994. The FY 1993 and FY 1992 LTIP payouts were made with
regard, respectively, to the three-year Plan periods ending June 30, 1993,
and June 30, 1992. Mr. Lombardo participates in the plan, but will not be
eligible for plan benefits prior to completion of the three-year plan
period ending June 30, 1995.
(/6/) Except as shown for Mr. Myers, amounts are the Company's matching
contributions on behalf of each named individual under the Company's
Employee Savings Incentive Plan, a 401-k plan.
(/7/) Amounts consist of payments to Mr. Myers equal to 21 months of base
compensation and accrued and unused vacation.
9
<PAGE>
STOCK OPTION GRANTS IN FISCAL YEAR 1994
The table below shows the Company's stock option grants in fiscal year 1994
to the named Executive Officers. The 1989 Stock Awards Plan, pursuant to which
these grants were made, authorizes the Compensation Committee to grant stock
options, stock appreciation rights, shares of restricted stock, and other
awards valued by reference to the Company's common stock.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
INDIVIDUAL GRANTS(/1/) APPRECIATION FOR OPTION TERM(/2/)
---------------------------------- ---------------------------------
NUMBER OF % OF TOTAL EXERCISE
SECURITIES OPTIONS/SARS OR BASE
UNDERLYING GRANTED TO PRICE
OPTIONS/SARS EMPLOYEES IN PER EXPIRATION
NAME GRANTED (#) FISCAL YEAR SHARE DATE 0% 5% 10%
- - ---- ------------ ------------ -------- ---------- -------------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
James R. Wilson......... 40,000 23.7% $26.125 10/25/2003 0 $ 1,703,200 $ 2,706,400
John R. Myers........... 0 0 0 N.A. 0 0 0
Joseph A. Lombardo...... 10,000 5.9 26.125 10/25/2003 0 425,800 676,600
James E. McNulty........ 10,000 5.9 26.125 10/25/2003 0 425,800 676,600
William W. Brant........ 8,000 4.7 26.125 10/25/2003 0 340,640 541,280
R. Robert Harris........ 6,000 3.5 26.125 10/25/2003 0 255,480 405,960
</TABLE>
- - --------
(/1/) For Executive Officers named in the table and other key employees, the
stock option grants prior to October 1993 contain limited stock
appreciation rights exercisable immediately only upon the change of
control of the Company as defined by the Committee. Options issued to
Executive Officers and certain key employees prior to June 1992 contain
supplemental cash payments (tax gross-up payments) provisions. No stock
option grants awarded subsequent to June 1992 by the Compensation
Committee contain supplemental cash payments. All stock option grants are
issued at market value on the date of grant. Issued options are
exercisable one year after the date of grant and have a ten year term.
Options lapse three months after the date of termination of employment
except for retirement, death or disability. Mr. Myers no longer
participates in the Plan.
(/2/) No gain will be realized by an optionee without an increase in the price
of the Company's common stock which will correspondingly increase the
value of the common stock outstanding held by all stockholders. A 5
percent and a 10 percent gain would increase the total value of the
Company's outstanding common stock by $796.2 and $1,265.2 million
respectively. There can be no assurance that the gains shown in the table
will be realized since any gain is dependent on the performance of the
Company's common stock price which is attributed to many factors including
but not limited to Company performance and stock market conditions. The
value of the realized gains shown in this Table is provided solely for
illustrative purposes only in compliance with rules promulgated by the
Securities and Exchange Commission.
STOCK OPTIONS EXERCISED DURING FISCAL YEAR 1994
The following table presents information regarding the exercise during fiscal
year 1994 of options held by the named Executive Officers on June 30, 1994, to
purchase shares of the Company's common stock and the value of unexercised
stock options.
10
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT FY-
AT FY-END END(/1/)
(#) ($)
------------- -------------
SHARES ACQUIRED VALUE(/2/) EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- - ---- --------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
James R. Wilson....... 2,100 $ 15,093 15,650/40,000 $137,915/0
John R. Myers......... 40,000 365,625 0 0
Joseph A. Lombardo.... 0 0 28,600/10,000 292,458/0
James E. McNulty...... 13,000 160,875 23,000/10,000 203,455/0
William W. Brant...... 0 0 51,389/8,000 535,514/0
R. Robert Harris...... 20,000 217,012 6,708/6,000 61,260/0
</TABLE>
- - --------
(/1/) Value is calculated based on the closing New York Stock Exchange price of
the Company's common stock as of June 30, 1994, minus the option exercise
price.
(/2/) Value is calculated based on the average of the high and low New York
Stock Exchange price on the day on which the option was exercised minus
the option exercise price.
LONG-TERM COMPENSATION
The following Table sets forth information concerning the named Executive
Officers participating in the Company's Executive Long-Term Incentive Plan for
fiscal year 1994 for the three-year Plan period beginning July 1, 1993, and
ending June 30, 1996.
LONG-TERM INCENTIVE PLAN
AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE -
PERFORMANCES OR BASED PLANS(/1/)
OTHER PERIOD ---------------------------
UNTIL MATURATION $ $ $
NAME OR PAYOUT THRESHOLD TARGET MAXIMUM
- - ---- ---------------- --------- -------- --------
<S> <C> <C> <C> <C>
James R. Wilson.................... 3 Years $46,600 $186,400 $372,800
John R. Myers...................... -- -- -- --
Joseph A. Lombardo................. 3 Years 37,000 148,000 296,000
James E. McNulty................... 3 Years 31,125 124,500 249,000
William W. Brant................... 3 Years 31,875 127,500 255,000
R. Robert Harris................... 3 Years 30,375 121,500 243,000
</TABLE>
- - --------
(/1/) Awards under the Company's Executive Long-Term Incentive Plan are based on
attainment of predetermined earnings per share goals and return on capital
for Executive Officers who are not also operating unit heads. For
Executive Officers and other key employees who are also operating unit
managers participating in the Plan, awards are based on attainment of
predetermined goals, including pretax profit and return on total
investment goals. The Plan provides that bonus payments may be paid in
cash or a combination of cash and stock. The stock is valued at market
value on the last day of the Plan period. Estimated Future Payouts are for
the fiscal year 1994 Plan Period. Mr. Myers no longer participates in the
Plan.
11
<PAGE>
The Plan provides a target bonus opportunity based on a percentage of each
participant's base annual compensation determined by the participant's salary
grade. The opportunity ranges from 60 percent of base annual compensation for
the lowest salary grade covered by the Plan to 100 percent of base annual
compensation for the highest salary grade covered by the Plan. The amount of
the bonus award paid will vary from 25 percent of the target bonus opportunity
being paid if the threshold bonus opportunity goals are achieved; 100 percent
of the target bonus opportunity if the target bonus goals are achieved; and a
maximum bonus of 200 percent of the target bonus opportunity if the maximum
bonus targets are achieved.
RETIREMENT PLAN
The Company maintains a defined benefit Pension Plan for non-bargaining unit
employees and funds its entire cost. The following table shows the estimated
annual benefits payable upon retirement (including amounts attributable to the
defined benefit excess plan) for the specified compensation and years of
service.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40
- - ------------ ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 200,000 $59,278 $80,784 $102,289 $123,788 $145,296 $160,096
400,000 120,941 164,747 208,552 252,345 296,155 325,755
600,000 182,604 248,709 314,815 380,902 447,013 491,413
800,000 244,267 332,672 421,078 509,459 597,872 657,072
1,000,000 305,930 416,635 527,341 638,015 748,731 822,731
</TABLE>
As of June 30, 1994, the named Executive Officers had the following credit
service for determining pension benefits: James R. Wilson, 5 years; Joseph A.
Lombardo, 5 years; James E. McNulty, 5 years; William W. Brant, 36 years; and
R. Robert Harris, 5 years.
All of the Executive Officers named in the Summary Compensation Table
participate in the Plan. Pension benefits are based on the average earnings for
the highest five consecutive years of the final ten years of service.
Compensation included in the final average earnings for pension benefit
computation includes base annual salary and annual bonuses but excludes
payments from the Company's Executive Long-Term Incentive Plan and all other
annual compensation shown in the Summary Compensation Table. Unreduced pension
benefits are calculated pursuant to the Plan's benefit formula as a straight
life annuity payable at age 67. Benefits may be payable in the form of a joint
and survivor or a ten-year certain option. Also, Messrs. Wilson, Lombardo,
McNulty, Brant and Harris participate in an unfunded survivors income benefit
plan which provides benefits to a surviving spouse of approximately 50 percent
of a participant's base pay at death and continues until the participant would
have attained age 65.
Because the Pension Plan is subject to the benefit and compensation limits
under the Internal Revenue Code, the Company has established an unfunded Excess
Benefit Plan that provides for
12
<PAGE>
payment of amounts that would have been paid to employees under the pension
formula absent the benefit limitations of the Code.
The Company also maintains a Supplemental Executive Retirement Plan ("SERP")
designed to provide unfunded supplemental retirement benefits to certain
Executive Officers and key employees of the Company. The SERP is designed to
provide such selected employees a benefit at retirement equal to 60 percent of
the participant's average five highest consecutive years of compensation during
the last ten years. Plan benefits are offset by amounts the participant
receives from the Company's Retirement Plan, Excess Benefit Plan, and any
pension benefits received from other employer plans including military
pensions. A reduced early retirement benefit is available only at the
discretion of the Chairman of the Board or President. The SERP provides
accelerated benefit accrual, vesting, and payment in the event of a change of
control of the Company as defined by the Board of Directors. Messrs. Wilson,
Lombardo and McNulty participate in the SERP. Mr. Myers receives a minimum
guaranteed annual retirement benefit of $15,000.
TERMINATION OF
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
The Company has entered into change of control employment agreements with
Messrs. Wilson, Lombardo, McNulty, Brant and Harris and with certain other key
employees. These agreements are intended to provide for continuity of
employment in the event of a change in control as defined by the agreements,
including the following events; (i) acquisition by any person of 20 percent or
more of the voting securities of the Company; (ii) changes of the "incumbent
Board"; (iii) reorganization, merger or consolidation; or (iv) liquidation or
sale of the Company. Each of the agreements requires continued employment of
the executive following a change of control on a basis equivalent to his
employment immediately before such change. In the event that during the three-
year period following a change of control, the executive terminates his
employment for "good reason" (as defined in the agreements) or for any reason
during the 30-day period commencing one year after the change of control; or
the Company terminates the executive's employment without cause (as defined in
the agreements), the executive would be entitled to receive a lump sum payment
equal to three times the sum of the executive's salary, average long-term bonus
and highest annual bonus plus service and earnings credits under any Company
retirement plan, which would have been earned over, and the continuance of
fringe benefits during the three years after such termination. The agreements
provide that payments from the Company which (a) constitute "parachute
payments" as defined in Section 280G of the Internal Revenue Code of 1986 (the
"Code") and (b) would subject the executive to the 20 percent excise tax (the
"Excise Tax") contained in Section 4999 of the Code, will be "grossed up" by an
additional payment in an amount defined by the agreements which takes into
account the Excise Tax, tax penalties and interest, as the case may be, with
respect to any such "parachute payments." The amounts of such parachute
payments, pursuant to the terms described above, are only determinable with
specificity on the date such payment obligations, if any, are triggered. With
respect to the salary, annual bonuses and long-term bonuses shown in the
Summary Compensation Table, the estimated benefits payable under the foregoing
agreements for Messrs. Wilson, Lombardo, McNulty, Brant and Harris are $12.3;
$5.4; $7.1; $7.9; and $7.1 million respectively. Under an agreement with the
Company, Mr. Myers received $684,322, equal to twenty-one months of base
compensation and accrued vacation. He also receives the retirement benefits
disclosed above on this page.
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
IN COMPENSATION PROCESS
Mr. Charles S. Locke, retired Chairman of the Board and Chief Executive
Officer of Morton International, Inc., and Chairman of the Compensation
Committee, was Chairman of the Board and Chief Executive Officer of Morton
Thiokol, Inc. prior to the spin-off July 1, 1989, of the Company's chemical and
commercial business forming Morton International, Inc. The Company and Morton
International, Inc., are independent public corporations. No member of the
Compensation Committee participates in any of the Company's Executive
Compensation programs or employee benefit plans.
Under agreements in connection with the spin-off of the Company's commercial
businesses, the Company will provide, at fair market value, propellant-related
products and certain services to Morton International's manufacturing facility
which adjoins a Company facility in Promontory, Utah. In addition, Morton
International continues to supply specialty chemical polymers, for use as
rocket motor liners, to the Company on arm's-length terms. During fiscal year
1994, the Company purchased $.8 million in polymer specialty chemicals from
Morton and Morton purchased from the Company $1.4 million in services and
propellant related products.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Compensation Policy
The Committee's Compensation Policy is designed to provide a competitive
compensation program which will attract, retain, motivate, and reward talented
individuals as Executive Officers and as key employees of the Company. The
compensation program is administered by the Committee. The Committee's policies
are implemented by the Company's compensation and benefits staff under the
direction of the Executive Vice President of Human Resources and
Administration. The components of the program include base annual salary, short
and long-term incentives, benefits and perquisites. Compensation grades,
ranges, and midpoints adopted by the Committee are set based upon nationally
recognized compensation databases: (i) the Hewitt Management Compensation
Survey 777 consisting of 342 companies; (ii) Towers Perrin Compensation Data
Bank consisting of 407 companies; and (iii) the Summit (AIA) survey of 60
aerospace companies. Although there are many other companies represented in
these compensation surveys, the Committee considers the compensation of peer
group companies. Base salaries are set to correspond approximately with the
mean of salaries offered for like positions by comparable companies in the
compensation surveys. Short and long-term incentives are designed to provide
above average total compensation when performance of the Company or an
operating unit is above targets set by the Committee. Annual incentives are
related to the Company and operating unit performance and an individual's
achievement of qualitative strategic goals. Long-term incentives are designed
to balance executive management focus between short and long-term goals and to
provide capital accumulation linked to Company or operating unit performance.
The total compensation program is designed to reflect the overall level of the
Company's or operating unit's financial performance and achievement of
strategic goals. Total compensation will vary from year to year depending on
the actual performance achieved against the predetermined goals set both
financially and qualitatively. The Committee deems that specific financial
goals, including earnings per share and return on investment and specific
subjectively measured qualitative goals, are proprietary and confidential
information, the disclosure of which would reveal future strategies and plans
of the Company not otherwise disclosed.
14
<PAGE>
The principal elements of the compensation program administered by the
Committee under the Compensation Policy for the Chief Executive Officer, the
Executive Officers, including the Chief Executive Officer, and other key
employees are as follows:
Base Annual Salary
Base annual salaries are set against established salary grades reflecting the
position, duties, and level of responsibilities of each Executive Officer,
including the Chief Executive Officer, and each other key employee. For each
salary grade, a salary range has been established consisting of maximum and
minimum levels evenly distributed around a midpoint based on the compensation
survey data discussed above. Base annual salaries are reviewed annually and
adjusted within the established salary ranges for each salary grade to reflect
individual performance and profitability of the Company or operating unit.
Periodically, salary grades, compensation ranges, and midpoints are reviewed
and adjusted so as to remain competitive with the marketplace as determined
from the compensation databases.
Annual Bonus Program
The Key Executive Bonus Plan established by the Committee, and approved by
the Board, as an annual incentive compensation plan provides cash incentive
opportunities to Executive Officers and other key employees selected by the
Committee. Each bonus amount is based upon the Company or respective operating
unit achieving predetermined earnings goals and the attainment of individual
qualitative strategic goals relative to the participant's position, duties, and
responsibilities with the Company ("Target Bonus Goals"). The Board of
Directors sets the Company's earnings goals effective the beginning of the
fiscal year. With review and approval by the Compensation Committee, the Chief
Executive Officer sets the earnings and strategic goals for operating unit
participants.
The Target Bonus Opportunity set for each Plan participant is a percentage of
the participant's base annual compensation. The percentage is determined by the
participant's salary grade and ranges from 30 percent of base annual
compensation for the lowest salary grade covered by the Plan, to 60 percent of
base annual compensation for the highest salary grade.
The amount of each actual cash bonus paid is based on the Company's or
operating unit's earnings performance compared to predetermined earnings goals
and the level of attainment of strategic goals. Strategic goals will vary for
each Executive Officer depending on position and responsibility. Fiscal Year
1994 strategic goals included achievement of sales and marketing plans, new
product development, customer satisfaction, quality, cost reduction and safety
and environmental management. The cash bonus percentages range from: (i) 0
percent of the Target Bonus if Target Bonus Goals are not met; (ii) 40 percent
to 100 percent of the Target Bonus if Target Goals are partially or fully
achieved (at least 95 percent of the Target Goals must be achieved); and (iii)
up to a maximum of 200 percent of Target Bonus depending on the level by which
Target Bonus Goals are exceeded by actual performance results. The amount of
the annual bonus paid on achievement of the subjectively measured qualitative
goals will range from 1 percent to 25 percent of the Target Bonus Opportunity.
The amount of the annual bonus paid on achievement of the earnings goal will
range from a threshold of 25 percent of the Target Bonus Opportunity to a
maximum of 200 percent of the Target Bonus Opportunity which is also the
maximum bonus payable under the Plan. If, for example, the earnings target is
achieved and all the qualitative goals are met, a bonus payment will be made of
125 percent of the Target Bonus Opportunity: 100 percent representing the
achievement of the earnings goal and 25 percent representing achievement of the
qualitative goals.
15
<PAGE>
The Plan also permits the Committee to designate employees, including
Executive Officers, as Special Participants to receive discretionary bonus
payments made by the Committee in recognition of outstanding achievements or
accomplishments. No named Executive Officer received such a discretionary
bonus during fiscal year 1994.
Annual bonuses accrued for fiscal year 1994 reflect actual earnings which
exceeded earnings goals set at the beginning of the fiscal year as an
incentive to manage the Company and operating units profitably in an
environment of reduced federal expenditures for defense and aerospace
procurements. Bonus payments also reflect the attainment level of individual
qualitative strategic goals against predetermined criteria as reviewed and
approved by the Compensation Committee. Except for John R. Myers, all
executive officers named in the Summary Compensation Table earned bonuses from
the Plan.
Long-Term Incentive Plan
The Key Executive Long-Term Incentive Plan adopted by the Committee, and
approved by the Board, is designed as a long-term incentive program for
Executive Officers and other key employees in a position to substantially
influence the performance of the Company. The Plan authorizes incentive
bonuses based on achievement over a three-year period of specific financial
goals predetermined by the Committee for the Company and its operating units.
For Plan periods beginning on and after July 1, 1991, the financial goals are
based on earnings per share growth and return on total capital of the Company
for each three-year period. For each operating unit manager of the Company,
the financial goals are growth in operating profits and return on total
investment at that unit. For Plan periods prior to July 1, 1991, financial
goals were based only on earnings per share and operating profit.
The Target Incentive Bonus opportunity is a percentage of each participant's
base annual compensation determined by the participant's salary grade. Targets
range from 60 percent of base annual compensation for the lowest salary grade
covered by the Plan to 100 percent of base annual compensation for the highest
salary grade. The amount of the long term incentive bonus payment is formula
based and is equal to 50 percent of the Target Bonus Opportunity being awarded
on the achievement of earnings per share goals and 50 percent on the
achievement of return on capital or investment goals, as the case may be,
depending if the employee is a corporate or operating unit participant. The
Plan provides that the after tax payment of the bonus award may be cash or a
combination of cash and common stock of the Company. The Committee has
determined that the awards beginning with the fiscal year 1994 payment will be
made in a combination of cash and stock reflecting the Committee's commitment
to encourage ownership of Company stock by Executive Officers and key
employees participating in the Plan.
Upon completion of a three-year performance period, the bonus paid to a
participant, subject to approval by the Committee, is based on the financial
goals achieved by the Company or operating unit, as the case may be, in
relationship to the financial goals set by the Committee at the beginning of
the Plan period. Actual performance, which varies from these goals, results in
individual awards that range from 0 percent to 200 percent of target bonus
opportunity. For the three-year Plan period ending June 30, 1994, the
Company's financial performance (measured in terms of earnings per share and
return on capital or investment) exceeded the goals set at the beginning of
the Plan period commencing July 1, 1991. Messrs. Wilson, McNulty, Brant, and
Harris have earned bonuses from the Plan. Joseph A. Lombardo will be eligible
for a bonus payment, if earned, for the plan period ending June 30, 1995.
Stock Options
Under the Company's 1989 Stock Awards Plan approved by shareholders, the
Committee is authorized to grant stock options, stock appreciation rights,
shares of restricted stock, and other stock
16
<PAGE>
awards. The number of shares granted to an individual is based on Committee
established guidelines relating to the recipient's position, salary grade, and
stock price. An individual's past performance in meeting strategic goals and
the number of shares granted in prior awards may also be considered by the
Committee in its discretion in determining the number of shares in the grant to
be awarded. Stock options granted by the Committee in October 1993 reflect the
results of the Committee's review of its stock option policy. The Committee has
determined that providing stock based compensation awards to Executive Officers
and other key employees who are in a position to impact the future performance
of the Company continues to be an integral part of the compensation package at
this time given industry practice. The Committee, however, has reduced the
number of participants in the plan who are not Executive Officers or other key
employees in a position to impact the long-term financial success of the
Company and the aggregate number of options granted compared to prior years.
Perquisites
The Committee reviews annually the Executive Officers' and the Chief
Executive Officer's perquisites to determine if they are competitive and
reflect the usual and customary industry practices based on compensation survey
data.
Determination of the Chief Executive Officer's Compensation
The fiscal year 1994 compensation for Mr. James R. Wilson, President and
Chief Executive Officer, consists of a base annual salary, an annual bonus,
long-term incentive bonus, stock option grant, employee benefits provided to
salaried employees as a group, and perquisites that are usual and customary for
the position.
With Mr. Wilson's election by the Board of Directors to the position of
President and Chief Executive Officer, the Committee reviewed Mr. Wilson's
compensation program reflecting his new position, duties, and responsibilities.
Considering the size of the Company, the aerospace, defense, fastening systems
industries and the markets the Company serves, the compensation survey data
described above, the Committee determined the salary grade, salary range, and
midpoints for Mr. Wilson's new position. As a result of this review, Mr.
Wilson's salary grade was increased reflecting the new position, and his base
annual salary correspondingly increased from $233,000 to $350,000. Mr. Wilson's
new base annual salary, with a Compa ratio of 71.0 (base compensation in
relationship to the midpoint of the salary range to the corresponding salary
grade), was 29 percent below the comparable salary range for the salary grade.
The Committee undertook a review of Mr. Wilson's compensation based on his
performance in his position and in light of his base compensation being below
the range for the corresponding salary grade for Mr. Wilson's position. As a
result of this review, the Committee increased Mr. Wilson's base annual
compensation from $350,000 to $425,000 effective July 1, 1994. The compensation
increase reflects a new Compa ratio of 86.2 and effectively brings Mr. Wilson's
compensation within the range of salaries for comparable salary grades based on
the salary survey data and reflects the Committee's continuing policy of
providing a competitive compensation program.
Pursuant to the terms of the Key Executive Bonus Plan, Mr. Wilson's target
bonus opportunity is set at 55 percent of his base annual compensation with a
threshold bonus opportunity of 40 percent of target bonus and a maximum bonus
opportunity of 200 percent of target bonus. Under the terms of the Key
Executive Long Term Incentive Bonus Plan for the three-year plan beginning July
1, 1994 and ending June 30, 1997, Mr. Wilson's target bonus opportunity was set
at 100 percent of base annual compensation at July 1, 1994. The threshold bonus
opportunity under this long-term incentive plan is
17
<PAGE>
25 percent of target bonus opportunity and the maximum bonus opportunity is 200
percent of target. For fiscal year 1994, Mr. Wilson received an annual bonus
award of $347,000 or 200 percent of his target bonus opportunity (the maximum
bonus that can be awarded under the Plan); 200 percent which represents
achievement of the earnings per share goals and 25 percent the subjectively
measured qualitative goals. Both the financial and qualitative goals were set
at the beginning of the fiscal year. For fiscal year 1994, Mr. Wilson's
qualitative bonus goals included his successful implementation of management
succession plans and administrative and management reorganization, expanding
the fastening systems product line base, and hiring a new Chief Financial
Officer. Under the terms of the annual bonus plan, Mr. Wilson's target bonus
was appropriately adjusted and prorated to reflect his new salary grade and
target bonus opportunity as President and Chief Executive Officer.
Mr. Wilson's Key Executive Long-Term Incentive Plan bonus plan payment of
$133,936 represents the achievement of actual financial results consisting of
earnings per share and return on capital to financial goals exceeding the
target goals established at the beginning of the three-year plan period
beginning July 1, 1991.
The fiscal year 1994 bonus awards for Mr. Wilson and the other named
Executive Officers in the Summary Compensation Table are based on earnings per
share prior to the recognition of the effect of the adoption of the Statement
of Financial Accounting Standards (SFAS) No. 106 "Employer's Accounting for
Postretirement Benefits Other than Pensions" and SFAS No. 112 "Employer's
Accounting for Postemployment Benefits."
Mr. Wilson's compensation and the compensation of the other named Executive
Officers in the Summary Compensation Table reflect the continuing financial
performance of the Company in an environment of declining federal spending on
defense and aerospace programs. Since the beginning of the five year
performance period beginning July 1, 1989 and ending June 30, 1994, total
shareholder value including the assumed reinvestment of dividends, has
increased approximately 215 percent compared to the industry average of 185
percent. During fiscal year 1994, earnings per share were maintained on a
declining sales base and on lower volumes at Company operations serving the
defense markets. The fastening system segment of the business showed improved
results from operations and the product line expanded with the acquisition of
Deutsch Fastener. The Space Shuttle contract continues to be well managed in
terms of motor performance, delivery, and cost management. A new Chief
Financial Officer was hired. Department of Defense and non-Shuttle related
space operations have been reorganized to improve the competitive position of
the Company on lower volumes and to maximize profitability and cash flow on
existing programs. The share repurchase program has been successfully
implemented and the balance sheet further strengthened and debt further
reduced.
1993 Tax Act Compensation Limits
Section 162(m) of the Internal Revenue Code adopted under the 1993 tax law
changes restricts the tax deductibility for certain non-formula performance
based compensation exceeding $1 million. Proposed regulations have been issued
by the Internal Revenue Service that are designed to allow companies to
determine what type of changes to their compensation plans would satisfy the
1993 Tax Act requirements in order for the payments from such plans in excess
of $1 million to be tax deductible. The regulations, however, could change
significantly before they are final. The Committee considers it premature to
consider changing existing compensation programs until the regulations become
final. At that time, the Committee will review the Company's incentive
compensation plans and with the advice of counsel, determine if the performance
based requirements have been satisfied in some plans, but
18
<PAGE>
not in others and which plans, if any, need required stockholder approval. For
the plans which are determined not to meet the performance based requirements,
the Committee will determine if the value of applying discretion in determining
part of, or all of the incentive awards under such plans outweighs the value of
the tax benefit of the tax deduction that might otherwise be received for the
compensation over $1 million.
COMPENSATION COMMITTEE
Charles S. Locke, Chairman
James R. Burnett
Joseph A. Rice
James M. Ringler
The report of the Compensation Committee and the following stock performance
graph are not deemed to be "soliciting material" or to be "filed" with the SEC
or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the
Exchange Act except to the extent the Company specifically requests that such
information be treated as soliciting material or specifically incorporates it
by reference into any filing under the Securities Act of 1933, as amended, or
the Exchange Act.
19
<PAGE>
PERFORMANCE GRAPH
The following graph presents a comparison of the cumulative stockholder
return on the common stock of the Company for the five-year period beginning
July 1, 1989, and ending June 30, 1994, as measured against (i) the Standard &
Poor's 500 Stock Index; and (ii) the Standard & Poor's Aerospace and Defense
Index.
The returns shown assume that $100 was invested in Thiokol Corporation common
stock starting on July 1, 1989. The returns shown also assume that all
dividends paid during the five-year period were reinvested.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
6/89 6/90 6/91 6/92 6/93 6/94
------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Thiokol Corporation................. $100.00 94.28 125.55 135.62 190.25 215.51
Standard & Poor's 500 Index......... $100.00 116.45 125.07 141.94 161.26 163.42
Standard & Poor's Aerospace/Defense
Index.............................. $100.00 120.25 118.22 119.83 155.22 185.57
</TABLE>
20
<PAGE>
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation by the Audit Committee, the Board of Directors has
appointed Ernst & Young LLP ("Ernst & Young") as its independent auditors for
the fiscal year ending June 30, 1995. At the Board's direction, the appointment
of Ernst & Young is being presented to the stockholders for ratification at the
1994 Meeting. While ratification is not required by law or the Company's
Certificate of Incorporation or By-Laws, the Board believes that such
ratification is desirable. In the event this appointment is not ratified by
stockholders, the Board will consider that fact when it appoints independent
auditors for the next fiscal year.
Ernst & Young was the Company's Independent auditor for fiscal year 1994 and
for all prior years since 1969. Audit services provided to the Company by Ernst
& Young during fiscal year 1994 consisted of examination of the financial
statements of the Company and its subsidiaries for that year and the
preparation of various related reports, as well as services relating to filings
with the Securities and Exchange Commission, and pension and ESIP plan audits.
Representatives of Ernst & Young are expected to be present at the 1994
Meeting with the opportunity to make a statement if they so desire and to be
available to respond to appropriate questions relating to that firm's
examination of the Company's financial statements for fiscal year 1994.
The Board of Directors recommends a vote FOR the proposal to ratify the
appointment of Ernst & Young.
DISCRETIONARY VOTING OF PROXIES ON OTHER MATTERS
Management does not now intend to bring before the 1994 Annual Meeting any
matters other than those disclosed in the notice of the meeting. Should any
matter requiring a vote of stockholders be properly brought before the meeting
by or at the direction of the Board of Directors, the proxies in the enclosed
form confer upon the person or persons entitled to vote the shares represented
by such proxies discretionary authority to vote such shares in respect of any
such matter in accordance with their best judgment.
For business to be properly brought before an annual stockholders' meeting by
a stockholder, advance written notice in accordance with the By-Laws of the
Company must be received by the Corporate Secretary of the Company at its
principal executive offices.
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Stockholder proposals intended for the proxy statement for the 1995 Annual
Stockholders' Meeting must be received by the Corporate Secretary of the
Company at its principal executive offices no later than May 26, 1995.
21
<PAGE>
ANNUAL REPORT AND FORM 10-K
The Company will provide, without charge, upon written request from any
person solicited herein, a copy of the Thiokol Corporation Annual Report and
Form 10-K filed with the Securities and Exchange Commission. Requests should be
directed to Director of Investor Relations, Thiokol Corporation, 2475
Washington Blvd., Ogden, Utah 84401-2398.
By Order of the Board of Directors,
Edwin M. North
Secretary
Ogden, Utah
September 23, 1994
22
<PAGE>
THIOKOL CORPORATION PROXY/VOTING INSTRUCTION CARD
Ogden, Utah
---------------------------------------------------------------------------
P
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
R MEETING ON OCTOBER 25, 1994.
O The undersigned hereby appoints JAMES R. BURNETT, U. EDWIN GARRISON, and
CHARLES S. LOCKE, or any of them, each with power of substitution, as
X proxies to vote as specified on this card all shares of common stock of
Thiokol Corporation (the "Company") owned of record by the undersigned on
Y August 23, 1994, at the Company's Annual Meeting of Stockholders on October
25, 1994, and at any adjournment thereof. Said proxies are authorized to
vote in their discretion as to any other business which may properly come
before the meeting. IF A VOTE IS NOT SPECIFIED, SAID PROXIES WILL VOTE FOR
PROPOSALS 1 AND 2.
Receipt is acknowledged of the Company's Annual Report to Stockholders for
the fiscal year-ended June 30, 1994, and notice and Proxy Statement for the
above Annual Meeting.
Nominees for Election as Directors to the Class of Directors whose term
expires with the 1997 Annual Meeting of Stockholders of the Company: L.
DENNIS KOZLOWSKI and JAMES M. RINGLER.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
This card also constitutes voting instructions for Company shares held in
its Employee Savings and Investment Plan.
<PAGE>
[X] PLEASE MARK YOUR ++ + 5262
VOTES AS IN THIS + +
EXAMPLE. + ++++++
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
- - --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
- - --------------------------------------------------------------------------------
FOR WITHHELD AS TO ALL NOMINEES
1. Election of
Directors. (see [_] [_]
reverse side)
To withhold authority to vote for any nominee(s), mark the "FOR" box and write
the name of each such nominee on line provided below:
- - -----------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to ratify appointment of Ernst & Young [_] [_] [_]
LLP as independent auditors for fiscal year 1995.
- - --------------------------------------------------------------------------------
NOTE: Please date and sign as name appears hereon. If shares are
held jointly or by two or more persons, each stockholder
named should sign. Executors, administrators, trustees,
etc. should so indicate when signing. If the signer is a
corporation, please sign full corporate name by duly
authorized officer. If a partnership, please sign in
partnership name by authorized person.
SIGNATURE(S)______________________________________________________
__________________________________________________________________
DATE ______________,1994
<PAGE>
THIOKOL CORPORATION PROXY/VOTING INSTRUCTION CARD
Ogden, Utah
---------------------------------------------------------------------------
P
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
R MEETING ON OCTOBER 25, 1994.
O The undersigned hereby appoints JAMES R. BURNETT, U. EDWIN GARRISON, and
CHARLES S. LOCKE, or any of them, each with power of substitution, as
X proxies to vote as specified on this card all shares of common stock of
Thiokol Corporation (the "Company") owned of record by the undersigned on
Y August 23, 1994, at the Company's Annual Meeting of Stockholders on October
25, 1994, and at any adjournment thereof. Said proxies are authorized to
vote in their discretion as to any other business which may properly come
before the meeting. IF A VOTE IS NOT SPECIFIED, SAID PROXIES WILL VOTE FOR
PROPOSALS 1 AND 2.
Receipt is acknowledged of the Company's Annual Report to Stockholders for
the fiscal year-ended June 30, 1994, and notice and Proxy Statement for
the above Annual Meeting.
Nominees for Election as Directors to the Class of Directors whose term
expires with the 1997 Annual Meeting of Stockholders of the Company: L.
DENNIS KOZLOWSKI and JAMES M. RINGLER.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
This card also constitutes voting instructions for Company shares held in
its Employee Savings and Investment Plan.
<PAGE>
[X] PLEASE MARK YOUR ++ + 8898
VOTES AS IN THIS + +
EXAMPLE. + ++++++
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
- - --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
- - --------------------------------------------------------------------------------
FOR WITHHELD AS TO ALL NOMINEES
1. Election of
Directors. (see [_] [_]
reverse side)
To withhold authority to vote for any nominee(s), mark the "FOR" box and write
the name of each such nominee on line provided below:
- - -----------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to ratify appointment of Ernest & Young [_] [_] [_]
LLP as independent auditors for fiscal year 1995.
- - --------------------------------------------------------------------------------
NOTE: Please date and sign as name appears hereon. If shares are
held jointly or by two or more persons, each stockholder
named should sign. Executors, administrators, trustees,
etc. should so indicate when signing. If the signer is a
corporation, please sign full corporate name by duly
authorized officer. If a partnership, please sign in
partnership name by authorized person.
SIGNATURE(S) _____________________________________________________
__________________________________________________________________
DATE ________________,1994
