<PAGE>
PRECISION CASTPARTS CORP.
4600 S.E. Harney Drive
Portland, Oregon 97206-0898
_________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 7, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of Precision Castparts Corp. (Company) will be
held in the Intermediate Theater of the Portland Center for the
Performing Arts, 1111 SW Broadway, Portland, Oregon, on
Wednesday, August 7, 1996, at 2:00 p.m., Pacific Time, for the
following purposes:
(1) to elect three directors to serve terms of three
years;
(2) to amend the Restated Articles of Incorporation of
the Company to increase the authorized Common Stock of the
Company to 100,000,000 shares;
(3) to ratify the appointment of Price Waterhouse as
auditors of the Company for fiscal year 1997; and
(4) to transact any other business properly brought
before the meeting or any adjournment thereof.
Shareholders of record at the close of business on
June 7, 1996 will be entitled to vote at the meeting. The
meeting is subject to adjournment from time to time as the
shareholders present in person or by proxy may determine.
Your vote is important. Whether or not you plan to
attend the meeting, please promptly sign, date and return the
enclosed proxy card in the return envelope provided. Please
mark the appropriate box on the proxy card if you plan to
attend the meeting in order for the Company to prepare an
accurate admission list. If you attend the meeting and prefer
to vote in person, you will have that privilege.
By Order of the Board of Directors
Ruth A. Beyer
Secretary
Portland, Oregon
June 28, 1996
</Page>
<PAGE>
PRECISION CASTPARTS CORP.
4600 S.E. Harney Drive
Portland, Oregon 97206-0898
______________________
PROXY STATEMENT
______________________
A proxy in the accompanying form is solicited by the
Board of Directors of Precision Castparts Corp. (Company) for
use at the 1996 Annual Meeting of Shareholders to be held in
the Intermediate Theater of the Portland Center for the
Performing Arts, 1111 SW Broadway, Portland, Oregon, on
Wednesday, August 7, 1996, at 2:00 p.m., Pacific Time, or at
any adjournment thereof. The approximate date on which this
proxy statement and the accompanying proxy form are first being
sent to shareholders is June 28, 1996.
The power of the proxy holders will be suspended if
the person executing the proxy is present at the meeting and
elects to vote in person. Any proxy may be revoked prior to
its exercise upon written notice to the Secretary of the
Company. The shares represented by each valid, unrevoked proxy
will be voted in accordance with the instructions specified in
the proxy, if given. If a signed proxy is returned without
instructions, it will be voted for the nominees for directors,
for the approval of the proposals presented and in accordance
with the recommendations of management on any other business
that may properly come before the meeting or matters incident
to the conduct of the meeting.
Page 1
</Page>
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors Recommends a Vote "For" All Nominees
Under the Company's director retirement policy,
Howard W. Hill will retire coincident with the 1996 Annual
Meeting of Shareholders. In May 1996, the Board of Directors
appointed Dean T. DuCray to the Board of Directors, with a term
expiring at the 1996 annual meeting.
The Board of Directors of the Company, pursuant to
the Company's Bylaws, is divided into three classes, and the
term of office of one class expires each year. Don R. Graber,
Roy M. Marvin and Dean T. DuCray are nominees for election at
this meeting for three-year terms expiring in 1999. If any of
the nominees for director becomes unavailable for election for
any reason (none being currently known), the proxy holders will
have discretionary authority to vote pursuant to the proxy for
a suitable substitute or substitutes.
The following table briefly describes the Company's
nominees for director and the directors whose terms will
continue. Except as otherwise noted, each has held his
principal occupation for at least five years.
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Term
and Other Directorships Since Expires
____________________________________________________________
Nominees
<S> <C> <C>
Don R. Graber - 52 1995 1996
President, Black & Decker Worldwide
Household Group, The Black & Decker
Corporation, a marketer and
manufacturer of household products;
from 1992 to 1994, President of
Black & Decker International Group
Roy M. Marvin - 65 1967 1996
Retired; Until June 1996,
Vice President - Administration
and Secretary of the Company
Dean T. DuCray - 55 1996 1996
Vice President and Chief Financial Officer
of York International Corporation,
a manufacturer of heating, air
conditioning, ventilation and
refrigeration equipment
Page 2
</Page>
<PAGE>
Directors Whose Terms Continue
William C. McCormick - 62 1986 1997
Chairman of the Company since October,
1994; President and Chief Executive
Officer of the Company since August
1991; from 1985-91, President and Chief
Operating Officer of the Company
Dwight A. Sangrey - 56 1990 1997
President and Chief Executive Officer,
Fraction Biologies, LLC, a manufacturer
and distributor of pharmaceutical products;
until October, 1994, President and Chief
Executive Officer of Oregon Graduate
Institute of Science & Technology;
Director of Northwest Natural Gas Company
Peter R. Bridenbaugh - 56 1995 1998
Executive Vice President - Automotive,
Aluminum Co. of America, an integrated
producer of aluminum and other products
for the packaging, aerospace, automotive,
building and construction and commercial
and industrial markets; from 1994-1996,
Executive Vice President and Chief
Technical Officer, Aluminum Co. of America;
from 1991-1994, Executive Vice President,
Science and Technology, Engineering,
Environment, Safety & Health,
Aluminum Co. of America
Steven G. Rothmeier - 49 1994 1998
Chairman and Chief Executive Officer of
Great Northern Capital, a private investment
and merchant banking firm, since March 1993;
formerly President of IAI, Inc. Director of
Honeywell, Inc., E.W. Blanch Holdings, Inc.,
and Department 56, Inc.
</TABLE>
Page 3
</Page>
<PAGE>
Directors are elected by a plurality of the votes
cast by the shares entitled to vote if a quorum is present at
the meeting. Abstentions and broker non-votes will be treated
as shares present and not voting.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table, which was prepared on the basis
of information furnished by the persons described, shows
ownership of the Company's Common Stock as of May 1, 1996, by
each director and each person who became a director after May
1, 1996, by the Chief Executive Officer, by each of the other
four most highly compensated executive officers, and by the
directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
Number of Shares Percent of
Name Beneficially Owned Outstanding Shares
______________________________________________________
<S> <C> <C> <C>
Peter R. Bridenbaugh 500 *
Mark Donegan 1,500 *
Dean T. DuCray 0 (1) *
Don R. Graber 4,000 *
Howard W. Hill 12,750 (2) *
William D. Larsson 30,435 (3) *
Roy M. Marvin 54,239 (4) *
William C. McCormick 82,937 (5) *
Steven G. Rothmeier 1,875 (6) *
Dwight A. Sangrey 5,400 (7) *
Peter G. Waite 41,252 (8) *
All directors and
executive officers
as a group
(11 persons) 234,888 (9) 1.1
</TABLE>
[FN]
__________
*Less than 1 percent of the Company's outstanding shares
of Common Stock.
(1) Mr. DuCray was appointed director after May 1,
1996.
Page 4
</Page>
<PAGE>
(2) Includes 7,500 shares held in the Hill Family
Trust and 5,250 shares subject to options that are
exercisable or become exercisable by Mr. Hill within 60
days after May 1, 1996.
(3) Includes 28,185 shares subject to options that
are exercisable or become exercisable by Mr. Larsson
within 60 days after May 1, 1996.
(4) Includes 41,121 shares held jointly with Mrs.
Marvin, and 13,118 shares subject to options that became
exercisable at May 31, 1996, at Mr. Marvin's retirement.
(5) Includes 35,977 shares subject to options that
are exercisable or become exercisable by Mr. McCormick
within 60 days after May 1, 1996.
(6) Includes 375 shares subject to options that are
exercisable or become exercisable by Mr. Rothmeier within
60 days after May 1, 1996.
(7) Includes 5,250 shares subject to options that
are exercisable or become exercisable by Mr. Sangrey
within 60 days after May 1, 1996.
(8) Includes 4,875 shares owned by children of Mr.
Waite. Includes 30,978 shares subject to options that
are exercisable or become exercisable by Mr. Waite within
60 days after May 1, 1996.
(9) Includes 119,133 shares subject to options that
are exercisable or become exercisable within 60 days
after May 1, 1996.
COMPENSATION OF EXECUTIVE OFFICERS
Report of the Compensation Committee on Executive Compensation
The Compensation Committee of the Board of Directors
(Committee) is composed of three non-employee directors.
Pursuant to authority delegated by the Board, the Committee
initially determines the compensation to be paid to the Chief
Executive Officer and to each of the other executive officers
of the Company. Following such determination by the Committee,
issues concerning officer compensation are submitted to the
Board of Directors for approval. Directors who are also
officers of the Company do not participate in this approval
Page 5
</Page>
<PAGE>
process. The Committee also is responsible for developing and
making recommendations to the Board with respect to the
Company's executive compensation policies.
The Company's compensation policies for officers
(including the named executive officers) are designed to
compensate the Company's executives fairly and to provide
incentive for the executives to manage the Company's business
effectively for the benefit of its shareholders. In fiscal
1996, the Company retained the services of an independent
consultant with special expertise in compensation matters to
assist the Compensation Committee and the Board of Directors in
the design and monitoring of compensation arrangements that are
fair and competitive for the executives and consistent with the
objectives of the shareholders.
The key objectives of the Company's executive
compensation policies are to attract and retain key executives
who are important to the long-term success of the Company, and
to provide incentive for these executives to achieve high
levels of job performance and enhancement of shareholder value.
The Company seeks to achieve these objectives by paying its
executives a competitive level of base compensation for
companies of similar size and industry and by providing its
executives an opportunity for further reward for outstanding
performance in both the short term and the long term. It is
the current policy of the Committee to set base salaries
conservatively and to emphasize opportunities for performance-
based rewards through annual cash bonuses and stock option
grants.
Section 162(m) of the Internal Revenue Code of 1986
limits to $1,000,000 per person the amount that the Company may
deduct for compensation paid to any of its most highly
compensated officers in any year. The levels of salary and
bonus paid by the Company generally do not exceed this limit.
However, upon exercise of nonqualified stock options, the
excess of current market price over the option price (option
spread) is treated as compensation. Therefore, it may be
possible for option exercises by an officer in any year to
cause the officer's total compensation to exceed $1,000,000.
Under Internal Revenue Service regulations, the $1,000,000 cap
on deductibility will not apply to option spread compensation
from exercise of a nonqualified stock option that meets certain
requirements. The Company's current policy results in options
that generally meet those requirements.
Page 6
</Page>
<PAGE>
Executive Officer Compensation Program. The
Company's executive officer compensation program is comprised
of three elements: base salary, annual cash bonus and long-
term incentive compensation in the form of stock option grants.
Salary. Base salary ranges for the Company's
executive officers were established in fiscal 1996 relative to
companies of comparable size and to a subset comparator group
that consisted of eleven companies in the aerospace/defense and
machinery/machine tool industries in which the Company competes
for employees, as determined by surveys reported by the
Company's compensation consultant in 1996. In determining
individual salaries within the established ranges, the
Committee took into account individual experience, job
responsibility and individual performance during the prior
year. The Committee did not assign a specific weight to each
of these factors in establishing individual base salaries.
In determining 1996 salaries, the Compensation
Committee compared the 1996 salaries to the ranges established
in fiscal 1996, reviewed salaries of executives of similar
companies, and made specific adjustments to the 1995
compensation levels as determined by the Committee to be
appropriate in the circumstances. As a result, base salaries
paid to the Company's executive officers in fiscal 1996
approximate the 50th percentile of the range of salaries of the
comparator companies considered by the Committee in the 1996
survey. All of the companies included in the Aerospace
Comparator Group in the Return to Shareholders Performance
Graph are part of the subset comparator group considered by the
Compensation Committee.
Cash Bonuses. The purpose of the cash bonus
component of the compensation program is to provide a direct
financial incentive in the form of cash bonuses to executives
and other employees to achieve predetermined Division and
Company performance objectives. For fiscal 1996, the Company
maintained three separate cash bonus plans that included
executive officers of the Company: the Corporate Executive
Bonus Program (in which Messrs. McCormick, Larsson and Marvin
participated), the Structurals Division Executive Bonus Program
(in which Mr. Donegan participated), and the Airfoils Division
Executive Bonus Program (in which Mr. Waite participated). No
executive officer participates in more than one bonus plan;
however, the Corporate Executive Bonus Plan allows for special
awards to non-participants, including Messrs. Waite and
Donegan, under circumstances approved by the Compensation
Committee.
Page 7
</Page>
<PAGE>
Under the Corporate Executive Bonus Program, the
Compensation Committee establishes at the beginning of each
year threshold, target and 100 percent of potential bonus
amounts for each executive officer, expressed as a percentage
of the executive officer's base salary. One hundred percent of
potential bonus amounts under the Corporate Executive Bonus
Program in fiscal 1996 ranged from 80 percent to 100 percent of
base salary. Larger bonuses can be paid for performance in
excess of the 100 percent of potential objectives. Performance
under the Corporate Executive Bonus Program is measured based
on four performance elements: earnings per share, operating
working capital per sales dollar, gross margin percent and
return on equity. An actual return on equity of at least 10
percent is required before an initial bonus is awarded.
Assuming a 10 percent return on equity is achieved, actual
financial results of the Company are measured for each
performance element using a point system and translated to a
"bonus factor" percentage. The bonus factor is applied to the
participant's targeted bonus percent under the plan, and the
product is multiplied by eligible compensation to determine the
initial bonus amount. The final bonus amount paid to an
eligible executive officer is determined by the Compensation
Committee, which has discretion to increase or decrease the
formula-derived initial bonus amount to reflect either a major
unexpected change in operations or an unusual adjustment during
the fiscal year, or to reflect individual performance.
Bonuses under the Airfoils Division Executive Bonus
Program and the Structurals Division Executive Bonus Program
are also formula-derived and principally rely upon formulas
used under the respective divisional quarterly cash bonus
("QCB") programs in which all other Airfoils and Structurals
Division employees participated, as well as formulas to
determine operating working capital performance. Among the
factors included in the formulas are the respective division's
operating profit, expected return on assets, operating working
capital per sales dollar and, in the case of the Structurals
Division Executive Bonus Program, the level of achievement of
pre-determined variable cost goals. The formula also considers
the 100 percent of potential award percentage established by
the Compensation Committee for the executive officers who
participated in the Airfoils Division and Structurals Division
Executive Bonus Programs, which was 95 percent of base salary
for fiscal 1996. As with the Corporate Executive Bonus
Program, the initial bonus award under either the Structurals
Division Executive Bonus Program or the Airfoils Division
Executive Bonus Program may be increased or decreased to
Page 8
</Page>
<PAGE>
reflect either a major unexpected change in operations or an
unusual adjustment during the fiscal year, or to reflect
individual performance.
Fiscal 1996 bonus awards to executive officers were
formula-derived, and no discretionary awards were approved by
the Compensation Committee under its discretionary power,
except with respect to Mr. Donegan, for whom a special award
was made under the Corporate Executive Bonus Program to reflect
individual performance.
Stock Options. Under the Company's compensation
policy, stock options are the primary vehicle for rewarding
long-term achievement of Company goals. The objectives of the
program are to align employee and shareholder long-term
interests by creating a strong and direct link between
compensation and increases in share value. Under the Company's
1994 Stock Incentive Plan, the Board of Directors or the
Compensation Committee may grant options to purchase Common
Stock of the Company to key employees of the Company and its
subsidiaries. Approximately 120 persons, including all of the
Company's executive officers, currently participate in the 1994
Stock Incentive Plan. The Board of Directors makes annual
grants of nonstatutory options to acquire the Company's Common
Stock at an exercise price equal to the fair market value of
the shares on the date of grant (the closing sale price on the
New York Stock Exchange on the grant date). The number of
shares subject to option grants to executive officers is
normally determined by formula, on a basis intended to match
the reward potential of the participant's current 100 percent
bonus opportunity level (the percent of base salary described
under Cash Bonuses, above), if the underlying share price
doubles over the five-year period following the date of grant.
Assuming a current stock price of $40, an employee with a bonus
opportunity level of $125,000 would receive an option to
purchase 3,125 shares ($125,000 divided by the $40 gain
achieved by a doubling of stock value to $80). The options
vest in 25 percent increments over the four-year period
following grant. All nonstatutory stock options granted to
date become fully exercisable upon a change in control of the
Company.
Chief Executive Officer Compensation. The Committee
determined the Chief Executive Officer's compensation for
fiscal 1996, with the final approval of the Board of Directors.
The Chief Executive Officer's base salary was determined based
upon a review of the salaries of chief executive officers for
companies of comparable size and industry identified in the
Page 9
</Page>
<PAGE>
consultant's 1996 comparator group and upon a review of the
Chief Executive Officer's performance. In keeping with the
compensation policies described above, which emphasize both
short-term and long-term performance rewards rather than base
salary, the Chief Executive Officer's salary was set to
approximate the median base salary of the comparator companies
reviewed by the Committee. The Chief Executive Officer's bonus
for fiscal 1996 was determined under the Corporate Executive
Bonus Program formula described under Cash Bonuses, above,
based upon the level of achievement of Company performance
objectives for fiscal 1996, and was not increased or decreased
under the Committee's discretionary powers. Option grants in
fiscal 1996 were determined under the formula described under
Stock Options, above.
Steven G. Rothmeier,
Chairman
Peter R. Bridenbaugh
Don R. Graber
Page 10
</Page>
<PAGE>
Compensation Committee Interlocks and Insider Participation.
There are none.
Summary Compensation Table
The following table sets forth compensation paid to
the Chief Executive Officer and the other four most highly
compensated executive officers of the Company for services in
all capacities to the Company and its subsidiaries during each
of the last three fiscal years.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation(1) Awards
_______________________________________________________________________________
Name and Other Number All
Principal Annual Of Other
Position Year Salary Bonus (2) Compensation (3) Options (4)Compensation(5)
_________________________________________________________________ ___________________________
<S> <C> <C> <C> <C> <C> <C>
William C. McCormick 1996 $431,466 $427,151 $58,053 11,831 $ 6,622
Chairman, President 1995 388,334 313,386 1,031 16,612 4,633
and Chief Executive 1994 328,542 164,886 0 18,000 3,721
Officer
Peter G. Waite 1996 293,130 504,038 57,543 7,761 1,742
Executive Vice 1995 274,167 372,456 659 11,213 1,267
President - Airfoils 1994 242,292 250,893 0 12,757 0
Mark Donegan 1996 226,254 200,018 0 5,887 321
Executive Vice 1995 204,167 91,680 0 8,306 39,016
President - 1994 173,042 85,996 0 7,714 61,984
Structurals
William D. Larsson 1996 188,128 167,622 882 4,690 986
Vice President and 1995 173,125 125,689 0 6,689 418
Chief Financial 1994 155,750 70,350 0 7,383 354
Officer
Roy M. Marvin 1996 161,669 128,042 0 3,606 2,271
Vice President - 1995 152,084 98,246 0 5,246 1,404
Administration and 1994 143,666 57,682 0 6,492 1,292
Secretary
</TABLE>
Page 11
</Page>
<PAGE>
[FN]
__________
(1) Includes compensation deferred at the election of
the executive officers under the Company's 401(k) Plan or
under the Company's Executive Deferred Compensation Plan.
Under the Company's 401(k) Plan, officers and other
employees of the Company may elect to defer a percentage
of their eligible compensation (such percentage to be
selected by the participant from a range selected by the
administrator of the Plan, but subject to limitations
under the Internal Revenue Code). Amounts deferred by an
employee are deposited by the Company in a trust to be
invested for the employee's benefit pending distribution
to the employee after termination of employment or upon
in-service withdrawal at the request of the employee due
to extraordinary hardship. The Company has not made any
contributions under the 401(k) Plan.
(2) These amounts are cash awards under the bonus plans
described under Cash Bonuses in the Report of the
Compensation Committee on Executive Compensation.
(3) Under the Company's Executive Deferred Compensation
Plan, a participant may elect to defer salary and/or
bonus on an unsecured basis and may select one of three
performance options: S&P 500 Index, Company Common
Stock, or Prime Plus 2. The figure shown represents
earnings on amounts deferred at the election of the named
executive officer to the extent earnings exceeded 120% of
the applicable federal long-term rate.
(4) Represents shares of Common Stock issuable upon
exercise of nonstatutory stock options granted under the
Company's 1994 Stock Incentive Plan described under Stock
Options in the Report of the Compensation Committee on
Executive Compensation. Numbers of options for 1994 have
been adjusted for the subsequent 3:2 stock split.
(5) All amounts for named executive officers in 1996
represent term life insurance premiums paid by the
Company.
Page 12
</Page>
<PAGE>
Option Grants in Last Fiscal Year
The following table provides information regarding
stock options granted to executive officers in fiscal 1996.
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term (2)
__________________________________________ ____________________
Percent of
Total
Number of Options
Securities Granted to
Underlying Employees Exercise Expira-
Options in Fiscal Price tion
Name Granted (1) Year per Share Date 5% 10%
__________________________________________________________________________
____________
<S> <C> <C> <C> <C> <C> <C>
William C. McCormick 11,831 6.4 $35.50 11/1/05 $264,136 $669,373
Peter G. Waite 7,761 4.2 35.50 11/1/05 173,270 439,101
Mark Donegan 5,887 3.2 35.50 11/1/05 131,432 333,074
William D. Larsson 4,690 2.5 35.50 11/1/05 104,708 265,350
Roy M. Marvin (3) 3,606 1.9 35.50 11/1/05 80,507 204,020
</TABLE>
Page 13
</Page>
<PAGE>
[FN]
__________
(1) Options are granted at an exercise price equal to fair
market value at the date of grant (the closing sale price on
the New York Stock Exchange on the grant date). Options become
exercisable to the extent of 25 percent of the shares one year
after the date of grant and to the extent of 25 percent of the
shares each year thereafter. Under the terms of the Company's
1994 Stock Incentive Plan, each of the options is subject to
accelerated vesting in the event of a change in control of the
Company. Each of the options is subject to early termination
in the event of termination of employment. Each option
terminates 12 months following death, disability or retirement
at normal retirement age or bona fide early retirement and
six months after termination of employment for any other
reason.
(2) In accordance with rules of the Securities and Exchange
Commission, these amounts are the hypothetical gains or "option
spreads" that would exist for the respective options based on
assumed rates of annual compound stock price appreciation of
five percent and ten percent from the date the options were
granted over the full option term and do not represent the
Company's estimate or projection of the future stock price.
(3) Mr. Marvin retired on May 31, 1996, at normal retirement
age. Under the terms of the Company's 1994 Stock Incentive
Plan, the options granted to Mr. Marvin will expire 12 months
following his retirement. Assuming an expiration date of
May 31, 1997, the potential realizable value at assumed annual
rates of stock appreciation of 5% and 10% for the option term
would be $10,299 and $20,969, respectively.
Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values.
The following table indicates (i) stock options
exercised by executive officers during fiscal 1996, including
the value realized on the date of exercise, (ii) the number of
shares subject to exercisable and unexercisable stock options
as of the Company's fiscal year-end, March 31, 1996, and
(iii) the value of "in-the-money" options at March 31, 1996.
Page 14
</Page>
<PAGE>
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options Held Options
Acquired Value at Fiscal Year-End at Fiscal Year-End
on Realized (Exercisable/ (Exercisable/
Name Exercise (1) Unexercisable) Unexercisable) (2)
__________________________________________________________________________
__________
<S> <C> <C> <C> <C> <C>
William C. McCormick 0 $ 0 35,977/40,089 $825,332/$662,305
Peter G. Waite 19,147 295,492 30,978/26,856 638,270/444,836
Mark Donegan 12,937 212,192 0/18,598 0/294,522
William D. Larsson 4,201 52,959 28,185/16,060 611,677/265,708
Roy M. Marvin 28,224 458,302 0/13,118 0/222,888
</TABLE>
[FN]
__________
(1) Value realized equals fair market value of the
stock on the date of exercise, less the exercise
price, times the number of shares acquired. Taxes
must be paid by the individual on the value
realized.
(2) Value of unexercised options equals the fair
market value of a share into which the option can be
converted at March 29, 1996 (market price $40.00),
less exercise price, times the number of options
outstanding.
Page 15
</Page>
<PAGE>
Return to Shareholders Performance Graph
The following line graph provides a comparison of the
annual percentage change in the Company's cumulative total
shareholder return on its Common Stock to the cumulative total
return of the S&P 500 Index and a peer group consisting of
companies included in the S&P Aerospace Index. In addition, the
graph includes a comparator group selected by the Company. The
comparison assumes that $100 was invested on March 31, 1991 in the
Company's Common Stock and in each of the foregoing indices and,
in each case, assumes the reinvestment of dividends.
The following is a description of graphic material
omitted from the current filing:
Graph title: PRECISION CASTPARTS CORP.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL
RETURN
Type of Graph: Line Graph
X-Axis Information: Years from left to right 1991, 1992,
1993, 1994, 1995, 1996
Y-Axis Information: Dollars from bottom to top 0, 20, 40,
60, 80, 100, 120, 140, 160, 180, 200, 220.
Specific Data Points:
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(by fiscal year)
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
S&P 500 100 111 128 130 150 198
S&P Aerospace 100 105 119 156 187 290
Aerospace
Comparator
Group (1) 100 79 57 58 64 113
PCC 100 69 58 86 101 155
<FN>
__________
(1) The Aerospace Comparator Group consists of Hexcel
Corporation; Rohr, Inc.; Sequa Corporation; SPS Technologies,
Inc.; and Wyman-Gordon Company. The Company believes these
companies to be representative of public companies that have as
predominant portions of their operations the supply of metal parts
for use in the production and/or refurbishment of aerospace
products, as does the Company. Performance information for the
Aerospace Comparator Group is supplied by the Company on a
voluntary basis and is in addition to required performance
disclosure.
Page 16
</Page>
<PAGE>
Retirement Plans
The Company and its subsidiaries maintain two retirement
plans. All eligible domestic employees, including officers and
those directors who are full-time employees, receive benefits at
retirement under one of the retirement plans. The retirement plan
that covers officers (the "Plan") is based on average monthly
salary in the five consecutive years of highest compensation
(exclusive of bonuses) and length of service with the Company.
Employees do not contribute to the Plan, and the amount of the
Company's annual contribution is based on an actuarial
determination. The Plan provides that a participant's accrued
benefit will become 100 percent vested upon the occurrence of a
change in control of the Company and provides for disposition to
participants of any surplus assets in the Plan upon termination of
the Plan following a change in control of the Company.
The Company maintains a Supplemental Executive
Retirement Plan (SERP) to provide supplemental retirement benefits
to certain key employees selected by the Compensation Committee.
The SERP provides participating employees with a supplemental
retirement benefit upon normal retirement at age 65 with 25 years
of service. The supplemental retirement benefit is designed to
pay a basic monthly benefit equal to 55 percent of Final Average
Pay (as defined in the Retirement Plan, but including one-half of
any bonus and all of any deferred compensation) minus both the
amount of any benefit under the Retirement Plan and the Primary
Social Security Benefit (as defined in the Retirement Plan). For
participants retiring with less than 25 years of service at age
65, the basic benefit under the SERP formula before offset is
reduced by 1/25 for each year less than 25. There is a provision
for an actuarially reduced early retirement benefit at or after
age 55 with at least 10 years of service. For participants
retiring with more than 25 years of service at age 65, the benefit
is (a) the basic benefit before offset, plus (b) 0.5 percent of
Final Average Pay times years of service over 25, minus (c) both
the amount of any benefit under the Retirement Plan and the
Primary Social Security Benefit. Service and pay can continue to
accrue if retirement is deferred past age 65, but there is no
actuarial increase for deferred start of benefits after age 65.
The SERP provides for lump-sum payment of an accelerated vested
benefit in the event of termination of employment following a
change in control of the Company. Each of the executive officers
of the Company has been designated as a participant in the SERP.
Page 17
</Page>
<PAGE>
The following table shows the estimated annual benefits
payable under the Company's Retirement Plan and SERP to employees
upon normal retirement (age 65) as of March 31, 1996. The table
assumes, for purposes of calculating the SERP portion of the
estimated annual benefit, that the employee receives an annual
bonus equal to one-third of salary in each year used in computing
the five-year average salary at retirement. Individual variations
in bonus awards will result in adjustments to the SERP component
of the estimated annual benefit. The amounts listed are net of an
actuarially determined offset for estimated Social Security
benefits.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Highest
Five-Year
Average
Salary at ESTIMATED ANNUAL RETIREMENT BENEFITS
Retirement Credited Years of Service at Retirement
__________________________________________________________________________
__
10 15 20 25 30 35
__________________________________________________________________________
__
<S> <C> <C> <C> <C> <C> <C>
$150,000 $ 24,595 $ 42,762 $ 62,012 $ 81,262 $ 85,637 $ 90,012
180,000 31,212 54,312 77,412 100,512 105,762 111,012
240,000 46,612 77,412 108,212 139,012 146,012 153,012
280,000 56,879 92,812 128,745 164,679 172,845 181,012
330,000 69,712 112,062 154,412 196,762 206,387 216,012
350,000 74,845 119,762 164,679 209,595 219,804 230,012
390,000 85,112 135,162 185,212 235,262 246,637 258,012
450,000 100,512 158,262 216,012 273,762 286,887 300,012
500,000 113,345 177,512 241,679 305,845 320,429 335,012
</TABLE>
Benefits payable under the Retirement Plan
are computed on an actuarial basis. The following
table shows the number of credited years of service and
the fiscal 1996 salaries, for purposes of the benefit
table above, for the five officers named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
Credited Years Fiscal 1996
Name of Individual of Service Salary
___________________________________________________________
<S> <C> <C>
William C. McCormick 11 $431,466
Peter G. Waite 15 293,130
Mark Donegan 10 226,254
William D. Larsson 16 188,128
Roy M. Marvin 34 161,669
</TABLE>
Page 18
</Page>
<PAGE>Severance Agreements
The Company's senior executives are parties to
severance agreements with the Company. The agreements generally
provide for the payment upon termination of the executive's
employment by the Company without cause or by the employee for
"good reason" (as defined in the severance agreement) within two
years following a change in control of the Company of an amount
equal to three times that employee's annual salary and bonus (on
an after excise-tax basis), a lump-sum pension payment based
upon three additional years of service and three years of
continued coverage under life, accident and health plans. Each
executive is obligated under the severance agreement to remain
in the employ of the Company for a period of 270 days following
a "potential change in control" (as defined in the severance
agreement). Messrs. McCormick, Waite, Donegan and Larsson have
each entered into a severance agreement.
Page 19
</Page>
<PAGE>
PROPOSAL 2: AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
The Board of Directors recommends a vote "For" Proposal 2.
General
The Board of Directors has approved an amendment to
the Company's Restated Articles of Incorporation to increase the
number of shares of Common Stock which the Company is authorized
to issue from 50 million to 100 million. Under this proposal,
Section 1 of Article II of the Restated Articles of
Incorporation will be amended to provide as follows:
1. "The aggregate number of shares that the corporation
shall have the authority to issue is one hundred one million
(101,000,000) shares, divided into one hundred million
(100,000,000) shares of Common Stock, without par value, and one
million (1,000,000) shares of No Par Serial Preferred Stock,
without par value."
On June 7, 1996, the Company's authorized capital
stock consisted of 1 million shares of No Par Serial Preferred
Stock, without par value, and 50 million shares of Common Stock,
without par value. As of May 31, 1996, none of the shares of
Preferred Stock had been issued, and [20,5__,___] shares of
Common Stock had been issued, all of which were outstanding. A
balance of __________ authorized but unissued shares of Common
Stock remained available for issuance. Of this amount,
3,907,526 shares are reserved for use under various employee
benefit plans. Only __________ shares of Common Stock will
remain available for other uses.
The additional shares of Common Stock for which
authorization is sought would be a part of the existing class of
Common Stock and, if and when issued, would have the same rights
and privileges as the shares of Common Stock currently
outstanding. The shares of Common Stock do not entitle the
holders to cumulative voting rights or to preemptive rights to
purchase additional shares of Common Stock. The amendment would
make no change in either respect. The amendment would have no
effect on the authorized but unissued shares of No Par Serial
Preferred Stock.
Purposes and Effects of the Amendment
The Board of Directors believes that it is desirable
to have the additional authorized shares of Common Stock
available for Common Stock dividends, possible future financing
Page 20
</Page>
<PAGE>
and acquisition transactions, the Company's employee benefit
plans and other general corporate purposes. Having such
additional authorized shares of Common Stock available for
issuance in the future will give the Company greater flexibility
and will allow the Company to issue additional shares without
the expense and delay of a special shareholders' meeting. The
additional shares of Common Stock will be available without
further action by the shareholders, unless such action is
required by applicable law or the rules of any stock exchange on
which the Company's securities may then be listed.
The increase in the number of authorized shares of
Common Stock is not designed to deter or prevent a change in
control; however, under certain circumstances, the Company could
use the additional shares to create voting impediments or to
frustrate persons seeking to effect a takeover or otherwise gain
control of the Company by, for example, privately placing such
shares with purchasers who might side with the Board in opposing
a hostile takeover bid. The Company is not aware of any attempt
to take it over.
The Company has no agreements, commitments or plans
with respect to the issuance or sale of any additional shares of
Common Stock, except in connection with options outstanding
under the Company's 1994 Stock Incentive Plan and shares subject
to issuance under the 1993 Employee Stock Purchase Plan, if
implemented by the Board of Directors. The Company is
interested in pursuing various business acquisitions, which
acquisitions, if consummated, could involve issuance of shares
of Common Stock. At this time, however, the Company has not
identified an acquisition that would involve an issuance of
shares of Common Stock. If such an acquisition were
identified, shareholder approval would be sought if required by
applicable state law (for example, in a merger or share exchange
transaction) or if required by the rules of the New York Stock
Exchange. Depending upon the structure or size of a potential
transaction, shareholder approval may not be required to issue
shares in an acquisition transaction.
Approval requirements
If a majority of the shares entitled to vote is
present at the meeting, the proposal will be adopted if more
votes are cast for the proposal than are cast against the
proposal. Abstentions and broker nonvotes will be treated as
shares present and not voting.
Page 21
</Page>
<PAGE>
PROPOSAL 3: APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends a vote "For" Proposal 3.
On May 15, 1996, the Board of Directors appointed
Price Waterhouse to act as auditors of the Company's financial
statements for the fiscal year ending March 30, 1997, subject to
ratification of the appointment by the shareholders.
Representatives of Price Waterhouse will be present at the
annual meeting, will be given the opportunity to make a
statement if they wish and will be available to respond to
appropriate questions.
If a majority of the shares entitled to vote is
present at the meeting, the proposal will be adopted if more
shares are cast for the proposal than are cast against the
proposal. Abstentions and broker non-votes will be treated as
shares present and not voting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The Company's outstanding voting securities at the
close of business on June 7, 1996 consisted of ___________
shares of common stock, without par value (Common Stock), each
of which is entitled to one vote on all matters to be presented
at the meeting. Only shareholders of record at the close of
business on June 7, 1996 are entitled to notice of and to vote
at the meeting or any adjournment thereof. The Common Stock
does not have cumulative voting rights.
The following table shows information about each
person known to the Company to be the beneficial owner of more
than five percent of the Company's outstanding Common Stock on
May 1, 1996, based on information contained in a Form 13G filed
by the shareholder.
<TABLE>
<CAPTION>
Name and Address of Number of Percent of
Beneficial Owner Shares Owned Outstanding Shares
_______________________________________________________________
<S> <C> <C>
FMR Corp. 2,646,900 13.0
82 Devonshire Street
Boston, MA 02109
Wellington Management Company 2,451,050 12.0
75 State Street
Boston, MA 02109
Page 22
</Page>
<PAGE>
State Farm Mutual Automobile 1,531,100 7.5
Insurance Company
One State Farm Plaza
Bloomington, IL 61710
The Prudential Insurance 1,242,050 6.2
Company of America
751 Broad Street
Newark, NJ 07102-3777
Mario J. Gabelli 1,037,040 5.2
One Corporate Center
Rye, NY 10580
</TABLE>
BOARD COMPENSATION, ATTENDANCE AND COMMITTEES
In fiscal 1996, the Company's Board of Directors met
in person four times and twice via telephone conference call.
The Company's directors, other than full-time employees, were
paid $17,000 per year plus $1,500 for each Board meeting
attended, $750 for each telephonic board meeting attended and
$750 for each committee meeting attended. Nonemployee directors
are also eligible to receive a per diem of up to $1,000 in the
event the director is requested to perform additional service
beyond that normally expected of director. Each director
attended at least 75 percent of the aggregate number of meetings
of the Board of Directors and the committees of which he was a
member.
Any director who is not an employee of the Company and
has not, within two years, been an employee of the Company
(Nonemployee Director) is eligible to receive options under the
1987 Nonemployee Directors' Option Plan (Directors' Plan). The
option price for all options granted under the Directors' Plan
is the fair market value of the Common Stock on the date the
option is granted. On the date of each annual meeting of
shareholders, each new Nonemployee Director is automatically
granted an option to purchase 1,000 shares of Common Stock at
the time of his or her initial election to the Board. Each
Nonemployee Director who is re-elected at such meeting or who
continues in office, serving a term for which such director was
previously elected, is also automatically granted an option to
purchase 1,000 shares of Common Stock. On the date of the 1995
Annual Meeting of Shareholders, Messrs. Graber, Bridenbaugh,
Hill, Sangrey and Rothmeier each were automatically granted an
option for 1,000 shares of Common Stock at an exercise price of
$35.25 per share. All options have a 10-year term from the date
of grant. Each option becomes exercisable for 25 percent of the
Page 23
</Page>
<PAGE>
number of shares covered by the option at the end of each of the
first four years of the option term. Options may be exercised
only while the optionee is a director of the Company, within one
month after the date the optionee terminates service as a
director or within one year after the optionee's death,
disability or retirement under the Company's policy requiring
retirement of directors. Options become fully exercisable upon
normal retirement or in the event a director resigns or is
removed within 12 months of a change in control of the Company.
The Board of Directors has five standing committees.
The Compensation Committee makes recommendations to the Board of
Directors concerning officers' compensation and the granting of
stock options. See, "Report of the Compensation Committee on
Executive Compensation" above. Its members are Messrs.
Rothmeier, Bridenbaugh and Graber. The Nominating Committee
makes recommendations to the Board of Directors concerning
nominees to the Board of Directors. Its members are Messrs.
McCormick, Rothmeier and Sangrey. The Executive Committee has
authority to exercise the power of the Board of Directors, with
certain exceptions, between meetings of the Board of Directors.
Its members are Messrs. Bridenbaugh, Graber, Hill, McCormick and
Rothmeier. The Audit Committee meets with management, internal
auditors and the Company's independent public accountants, who
have access to the Audit Committee with and without the presence
of management representatives. The Audit Committee is composed
of Messrs. Graber, Hill and Sangrey. The Environmental
Committee meets quarterly with the Company's Environmental
Affairs Manager to monitor and advise on environmental matters
concerning the Company. The Environmental Committee is composed
of Messrs. Marvin and Sangrey. The Compensation Committee met
three times separate from Board meetings, the Audit Committee
met two times and the Environmental Committee met four times in
fiscal 1996. The Nominating Committee and the Executive
Committee did not hold meetings separate from Board meetings in
fiscal 1996. Shareholders who wish to submit names to the
Nominating Committee for consideration should do so in writing
between May 24, 1997, and June 18, 1997, addressed to the
Nominating Committee, c/o Corporate Secretary, Precision
Castparts Corp., 4600 S.E. Harney Drive, Portland, Oregon
97206-0898, setting forth (a) as to each nominee whom the
shareholder proposes to nominate for election or reelection as a
director, (i) the name, age, business address and residence
address of the nominee, (ii) the principal occupation or
employment of the nominee, (iii) the class and number of shares
of capital stock of the Company beneficially owned by the
nominee and (iv) any other information concerning the nominee
that would be required, under the rules of the Securities and
Page 24
</Page>
<PAGE>
Exchange Commission, in a proxy statement soliciting proxies for
the election of such nominee; and (b) as to the shareholder
giving the notice, (i) the name and record address of the
shareholder and (ii) the class and number of shares of capital
stock of the Company beneficially owned by the shareholder.
Certain Transactions
Upon Mr. Marvin's retirement as Vice President-
Administration and Secretary of the Company in May 1996, the
Company entered into a consulting arrangement with Mr. Marvin
pursuant to which he will provide advice and counsel to the
Company on matters including transition of certain of his former
responsibilities and special projects. Mr. Marvin's
compensation under this arrangement will be $8,333 per month,
plus automobile mileage and membership dues.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's executive officers and directors, as well
as persons who own more than 10 percent of the Company's Common
Stock, to file initial reports of ownership and reports of
changes in ownership of Common Stock of the Company with the
Securities and Exchange Commission. To the Company's knowledge,
based solely on reports and other information submitted by
executive officers and directors, the Company believes that
during the year ended March 31, 1996, each of its executive
officers, directors and persons who own more than 10 percent of
the Company's Common Stock complied with all applicable
Section 16(a) filing requirements, except that Mr. Bridenbaugh
filed one late report disclosing one transaction, and
Mr. McCormick filed one late report disclosing four separate
transactions.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended
March 31, 1996 is transmitted herewith.
METHOD AND COST OF SOLICITATION
The cost of solicitation of proxies will be paid by
the Company. In addition to solicitation by mail, employees of
the Company may request the return of proxies personally or by
telephone. The Company has also engaged Morrow & Co. to assist
in the solicitation of proxies, at a cost of $______. The
Page 25
</Page>
<PAGE>
Company will, on request, reimburse brokers and other persons
holding shares for the benefit of others for their expenses in
forwarding proxies and accompanying material and in obtaining
authorization from beneficial owners of the Company's Common
Stock to execute proxies.
OTHER BUSINESS/DISCRETIONARY AUTHORITY
The Board of Directors does not intend to present any
business for action at the meeting other than the election of
directors and the proposals set forth herein; neither does it
have knowledge of any matters that may be presented by others.
If any other matter properly comes before the meeting, the
persons named in the accompanying form of proxy intend to vote
in accordance with the recommendations of the Board of
Directors.
SHAREHOLDER PROPOSALS
A shareholder proposal to be considered for inclusion
in proxy material for the Company's 1997 Annual Meeting of
Shareholders must be received at the principal executive offices
of the Company not later than _______________.
Whether or not you expect to be present at the
meeting, please sign the accompanying form of proxy and return
it in the enclosed stamped, return envelope.
Ruth A. Beyer
Secretary
Portland, Oregon
June 28, 1996
Page 26
</Page>
