SEQUA CORP /DE/, DEF 14A, 1995-04-06

SEQUA CORP /DE/
DEF 14A, 1995-04-06
AIRCRAFT ENGINES & ENGINE PARTS

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<PAGE>

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

SEQUA CORPORATION
.................................................................
(Name of Registrant as Specified In Its Charter)

.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction
applies:

.................................................................

2) Aggregate number of securities to which transaction
applies:

.................................................................

3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined):

.................................................................

4) Proposed maximum aggregate value of transaction:

.................................................................

5) Total fee paid:

.................................................................

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

1) Amount Previously Paid:

.................................................................

2) Form, Schedule or Registration Statement No.:

.................................................................

3) Filing Party:

.................................................................

4) Date Filed:

.................................................................

<PAGE>

[Logo]

SEQUA CORPORATION
200 PARK AVENUE
NEW YORK, NEW YORK 10166

-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 11, 1995
-----------------

The annual meeting of stockholders of SEQUA CORPORATION (the 'Company')
will be held in Auditorium B on the 5th floor, 245 Park Avenue, New York, New
York, on Thursday, May 11, 1995, at 11 A.M., for the following purposes:

1. To elect directors;

2. To consider and approve Amendment Number One to the Management
Incentive Bonus Plan for Corporate Executive Officers;

3. To consider and approve the 1994 Corporate Staff Stock Award Plan;

4. To ratify the appointment of Arthur Andersen LLP, independent
public accountants; and

5. To transact such other business as may properly come before the
meeting or any adjournment thereof.

Only stockholders of record at the close of business on March 22, 1995 are
entitled to notice of and to vote at the meeting and any adjournment thereof. A
list of stockholders will be available for examination by any stockholder, for
any purpose germane to such meeting, during the ten days prior to the meeting
date at the Company's address set forth above.

By order of the Board of Directors,

Ira A. Schreger
Secretary

New York, N.Y.
March 24, 1995

IMPORTANT
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS
POSSIBLE IN THE ENCLOSED POSTPAID WHITE ENVELOPE WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON. IF YOU ARE PLANNING TO ATTEND THE MEETING, YOU
MUST RETURN THE ENCLOSED POSTPAID ATTENDANCE CARD AS QUICKLY AS POSSIBLE.

<PAGE>
SEQUA CORPORATION
200 PARK AVENUE
NEW YORK, NEW YORK 10166

ANNUAL MEETING OF STOCKHOLDERS

MAY 11, 1995

PROXY STATEMENT

PERSONS MAKING THE SOLICITATION

The accompanying proxy is being solicited by the Board of Directors of
Sequa Corporation (the 'Company') for use at the annual meeting of stockholders
to be held on Thursday, May 11, 1995, or any adjournment thereof. If such proxy
is properly signed and returned prior to the meeting, the shares with respect to
which the proxy is given will be voted as indicated thereon; provided, however,
that a stockholder may revoke his proxy at any time prior to its use at the
meeting, either by giving written notice addressed to the Secretary of the
Company, at its executive offices located at 200 Park Avenue, New York, New York
10166, or by withdrawing his proxy and voting in person at the meeting. The
entire cost of soliciting proxies will be borne by the Company. Proxies will be
solicited principally through the use of the mails but directors, officers and
regular employees of the Company, without additional compensation, may use their
personal efforts by telephone or otherwise to obtain proxies. The Company will
also request banks, brokers and other nominee holders of the Company's shares to
forward proxy materials to their principals or customers who are beneficial
owners of such shares and will reimburse such holders for their reasonable
expenses incurred in doing so. The Company anticipates that mailing of proxy
material to stockholders will commence the week of April 3, 1995.

VOTING SECURITIES AND OWNERSHIP THEREOF
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Only stockholders of record at the close of business on March 22, 1995, the
record date with respect to this solicitation, will be entitled to notice of,
and to vote at, the meeting. On the record date, there were outstanding
6,535,881 shares of the Company's Class A Common Stock, no par value ('Class A
Common Stock'), 3,330,778 shares of the Company's Class B Common Stock, no par
value ('Class B Common Stock'), and 633,316 shares of the Company's $5.00
Cumulative Convertible Preferred Stock, par value $1.00 per share ('Preferred
Stock'), which constitute the only outstanding voting securities. Each share of
Class B Common Stock is convertible at any time into one share of Class A Common
Stock, and each share of Preferred Stock is convertible at any time into 1.322
shares of Class A Common Stock, subject to certain adjustments. Each share of
Class A Common Stock and each share of Preferred Stock have one vote and, with
respect to all matters to come before the meeting, will vote with the Class B
Common Stock, which has ten votes per share. The presence in person or by proxy
of stockholders of record representing in the aggregate a majority of the
combined outstanding voting rights of all classes of stock of the Company
entitled to vote shall constitute a quorum for the transaction of business.
Broker non-votes and abstentions are counted in determining the existence of a

<PAGE>
quorum. Thereafter, the affirmative vote of the holders of shares of stock
representing a majority of the combined voting rights of all eligible classes of
stock present or represented at the meeting is required for approval of all
matters to be presented at this meeting. Votes are counted preliminarily by the
Company's transfer agent through its automated system and finally, at the Annual
Meeting of Stockholders, by the Inspectors of Election.

SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS

The table below sets forth information with respect to any person (other
than the Company's directors) known to the Company to be the beneficial owner of
more than five percent of any class of the Company's outstanding voting
securities as of March 1, 1995. Except to the extent indicated in the footnotes,
sole voting and investment power with respect to the shares shown is held by the
owner named.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
OF CLASS A PERCENT OF AGGREGATE
NAME AND ADDRESS COMMON STOCK CLASS VOTING POWER
- --------------------------------------------------------- ---------------- ---------- ------------
<S> <C> <C> <C>
Wellington Management Company ........................... 784,700(1) 12.01 1.94
75 State Street
Boston, MA 02109

Gabelli Funds, Inc. ..................................... 337,800(2) 5.17(2) (3)
(and affiliates)
One Corporate Center
Rye, NY 10580-1434

<CAPTION>
NUMBER OF SHARES PERCENT OF
OF CLASS B PERCENT OF AGGREGATE
COMMON STOCK CLASS VOTING POWER
---------------- ---------- ------------
<S> <C> <C> <C>
Gabelli Funds, Inc. ..................................... 812,300(2) 24.39(2) 20.07(2)
(and affiliates)
One Corporate Center
Rye, NY 10580-1434
<CAPTION>
NUMBER OF SHARES PERCENT OF
OF PERCENT OF AGGREGATE
PREFERRED STOCK CLASS VOTING POWER
---------------- ---------- ------------
<S> <C> <C> <C>
Paloma Partners ......................................... 131,200 20.72 (3)
99 River Road
Cos Cob, CT 06807

Gabelli Funds, Inc. ..................................... 268,400(2) 42.38(2) (3)
(and affiliates)
One Corporate Center
Rye, NY 10580-1434

D.E. Shaw Investments, L.P. ............................ 88,600(4) 13.99 (3)
120 West 45th Street
New York, NY 10036
</TABLE>

(1) Wellington Management Company ('WMC') does not have sole voting or sole
dispositive power with respect to any of these shares; it has shared voting
power with respect to 586,000 shares and

(footnotes on next page)

<PAGE>
(footnotes from previous page)
shared dispositive power with respect to all of the shares listed. WMC is an
investment advisor with respect to the reported shares, which are owned by
numerous clients.

(2) Gabelli Funds, Inc. (and affiliates) (collectively, the 'Gabelli Companies')
owns beneficially all classes of the Company's stock. Pursuant to Rule
13d-3(d)(1) under the Securities Exchange Act of 1934, as amended, the total
of the Gabelli Companies' Class A Common Stock, Class B Common Stock (if
converted into Class A Common Stock) and Preferred Stock (if converted into
Class A Common Stock) would give the Gabelli Companies aggregate holdings of
1,504,924 shares of Class A Common Stock, or 23.03 percent of that class.
This would represent 4.53 percent of the total votes then outstanding (after
conversions to Class A of all Gabelli Companies' stock) in all classes. Of
the Class A Common Stock, the Gabelli Companies have no voting power with
respect to 57,500 shares. In connection with its shares of Class B Common
Stock, the Gabelli Companies have no voting power with respect to 74,000
shares.

(3) Less than 1%.

(4) D.E. Shaw Investments, L.P. has shared voting power and shared dispositive
power with respect to all of the shares listed.

--------------------------

SECURITY OWNERSHIP BY MANAGEMENT

The following table provides information as to the Company's voting
securities beneficially owned as of March 1, 1995, by the Company's directors
who are standing for re-election, the named executive officers of the Company
and by all such directors and executive officers as a group. None of the
Company's executive officers or directors is the beneficial owner of any
Preferred Stock (with the exception of 400 shares owned by a trust in which the
children of an executive officer have a partial remainder interest, and as to
which the executive officer disclaims beneficial ownership). Except to the
extent indicated in the footnotes, sole voting and investment power with respect
to the shares shown is held by the owner named.

<TABLE>
<CAPTION>
PERCENT
NUMBER OF NUMBER OF OF
SHARES OF PERCENT SHARES OF PERCENT AGGREGATE
CLASS A OF CLASS B OF VOTING
COMMON STOCK CLASS COMMON STOCK CLASS POWER
------------ ------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C>
Norman E. Alexander................... 2,038,222(a)(b) 31.16 1,886,647 56.64 51.64
Alvin Dworman......................... 413 (c) None -- (c)
A. Leon Fergenson..................... 2,623(d) (c) 2,283(d) (c) (c)
David S. Gottesman.................... 7,500 (c) None -- (c)
Stuart Z. Krinsly..................... 61,042(a)(b) (c) 64,030 1.92 1.73
Donald D. Kummerfeld.................. 200 (c) None -- (c)
</TABLE>

(table continued on next page)

<PAGE>
(table continued from previous page)

<TABLE>
<CAPTION>
PERCENT
NUMBER OF NUMBER OF OF
SHARES OF PERCENT SHARES OF PERCENT AGGREGATE
CLASS A OF CLASS B OF VOTING
COMMON STOCK CLASS COMMON STOCK CLASS POWER
------------ ------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C>
Richard S. LeFrak..................... None -- 500 (c) (c)
John J. Quicke........................ 8,500(e)(b) (c) 1,000 (c) (c)
Antonio L. Savoca..................... 2,500(b) (c) None -- --
Fred R. Sullivan...................... 1,659(f) (c) 648 (c) (c)
Gerald Tsai, Jr....................... 500 (c) None -- (c)
Martin Weinstein...................... 14,657(a)(b) (c) None -- (c)
Ronald H. Wright...................... None -- None -- --
All executive officers and directors
as a group (15 persons including the
above).............................. 2,159,351(a)(b) 32.91 1,968,793 59.11 53.94
</TABLE>

- ------------

(a) Includes certain shares held for the benefit of the named executive officer
in the Company's 401-K Plan.

(b) Includes shares of Class A Common Stock which may be obtained upon the
exercise, within sixty days of the date of this Proxy Statement, of stock
options by Messrs. Alexander, Krinsly, Quicke, Savoca and Weinstein and by
all executive officers as a group, as follows:

<TABLE>
<CAPTION>
NAME SHARES
-------- ------

<S> <C>
Norman E. Alexander.................................................................. 5,000
Stuart Z. Krinsly.................................................................... 4,166
John J. Quicke....................................................................... 7,500
Antonio L. Savoca.................................................................... 2,500
Martin Weinstein..................................................................... 3,666
All executive officers as a group.................................................... 26,164
</TABLE>

With the exception of 3,500 exercisable stock options owned by Mr. Quicke
(which have an average exercise price of $54.125 and expire in 1996), all stock
options owned by the executive officers of the Company have an exercise price of
$32.25 and expire in September 1998. The closing price of the Class A Common
Stock on March 15, 1995 was $30.25.

(d) Includes 1,670 shares of Class A Common Stock and 1,500 shares of Class B
Common Stock owned by Mrs. A. Leon Fergenson, as to which Mr. Fergenson
disclaims beneficial ownership.

(e) Includes 400 shares of Class A Common Stock owned by minor children of Mr.
Quicke, as to which he disclaims beneficial ownership.

(f) Includes 500 shares of Class A Common Stock owned by Mrs. Fred R. Sullivan.

<PAGE>
ELECTION OF DIRECTORS

DIRECTORS

At the meeting, ten directors are to be elected to hold office until the
next annual meeting and until their successors shall have been elected. If no
other instructions are given, the persons named in the enclosed form of proxy
will vote for the election of the nominees named in the table below. In case any
such nominee should become unavailable for any reason, an event not now
anticipated, the proxy holders reserve the right to substitute another person of
their choice in his place. Each of the nominees has previously been elected by
the stockholders.

<TABLE>
<CAPTION>
PRESENT OCCUPATION AND
NAME AND AGE OTHER INFORMATION
--------------- -------------------------

<S> <C>
Norman E. Alexander ...................... Chairman of the Board and Chief Executive Officer of the Company
Age 80 since 1975. Served as President from 1982 to 1983 and from 1957 to
1975. Has been a director of the Company since 1957 and is a member
of the Executive Committee. May be deemed to be a control person of
the Company (see 'Voting Securities and Ownership Thereof by
Certain Beneficial Owners and Management'). Also a director and
Chairman of the Board of Chock Full O' Nuts Corporation and a
director of Richton International Corporation.
Alvin Dworman ............................ Chairman, ADCO Group (a financial services, merchant banking and real
Age 69 estate company) since 1981. Has been a director of the Company
since 1987 and is a member of the Audit Committee.
A. Leon Fergenson ........................ Former Chairman of the Board and Chief Executive Officer, GK
Age 82 Technologies, Inc. (wire and cable products, electronic and
electrical circuits, environmental and other products). Has been a
director of the Company since 1968 and is a member of the Executive
Committee and the Compensation Committee and Chairman of the Audit
Committee. Also a director of Buckeye Management Company, National
Benefit Life Insurance Company, several mutual funds sponsored by
Neuberger and Berman and American Annuity Group, Inc.
David S. Gottesman ....................... Managing Partner, First Manhattan Co. (a research and investment
Age 68 management company) since 1964. Has been a director of the Company
since 1982 and is a member of the Nominating Committee.
Stuart Z. Krinsly ........................ Senior Executive Vice President and General Counsel of the Company
Age 77 since 1982; from 1966 to 1982, served as an officer and General
Counsel of the Company. Has been a director of the Company since
1957 and is a member of the Executive Committee. Also a director of
Chock Full O' Nuts Corporation.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PRESENT OCCUPATION AND
NAME AND AGE OTHER INFORMATION
---------------- ----------------------
<S> <C>
Donald D. Kummerfeld ..................... President, Magazine Publishers of America (a publishing trade
Age 60 organization) since 1987 and Chairman, Kummerfeld Associates (an
investment banking and financial advisory firm) since 1985. From
1978 to 1985, was President and Chief Operating Officer, News
America Publishing, Inc. Has been a director of the Company since
1983 and is a member of the Compensation Committee.
Richard S. LeFrak ........................ President, Lefrak Organization, Inc. (a diversified, privately held
Age 49 company active in major residential and commercial real estate
development projects, oil and gas exploration, finance and
entertainment production) since 1975. Has been a director of the
Company since 1986 and is a member of the Nominating Committee.
John J. Quicke ........................... President and Chief Operating Officer of the Company since March
Age 45 1993. Served as Senior Executive Vice President, Operations, of the
Company from June 1992 to March 1993; from February 1991 to June
1992, served as Vice President, Financial Services, of the Company;
from 1987 to February 1991, served as Vice President, Financial
Projects, of the Company. Held various offices and positions in
Chromalloy American Corporation (which became a subsidiary of the
Company in 1987) from 1979 to 1987. Has been a director of the
Company since March 1993 and is a member of the Executive
Committee.
Fred R. Sullivan ......................... Chairman of the Board and Chief Executive Officer, Richton
Age 80 International Corporation (a holding company) since 1989. From 1987
to 1991, served as Chairman of the Board and President, Interim
Systems Corporation (a temporary personnel and health care service
company). From 1971 to 1988, served as Chairman of the Board and
President, Kidde, Inc. (a multi-market manufacturing and service
company). Has been a director of the Company since 1962 and is a
member of the Audit Committee. Also a director of Midlantic
Corporation and Midlantic National Bank.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PRESENT OCCUPATION AND
NAME AND AGE OTHER INFORMATION
---------------- ----------------------

<S> <C>
Gerald Tsai, Jr. ......................... Chairman, President and Chief Executive Officer, Delta Life
Age 66 Corporation (an insurance company) since February 1993; private
investor from 1991 to 1993; Chairman of the Executive Committee of
the Board of Directors, Primerica Corporation (a diversified
financial services company) from 1988 to 1991; from 1987 to 1988,
was Chairman and Chief Executive Officer of Primerica; and from
1982 to 1987, held several other offices at Primerica. Has been a
director of the Company since 1976 and is a member of the Audit
Committee and Chairman of the Compensation Committee. Also a
director of Rite Aid Corporation, Palm Beach National Bank & Trust
Company, Proffitt's Inc., Triarc Companies, Inc. and Zenith
National Insurance Corp. Also a Trustee of Boston University,
Meditrust and New York University Medical Center.
</TABLE>

During 1994, the Company's Board of Directors held nine regularly scheduled
meetings. All of the directors attended at least 75% of the aggregate of
regularly scheduled Board meetings and meetings of committees of which they are
members, respectively.

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU
VOTE 'FOR' THE ELECTION OF THE ABOVE NOMINEES FOR DIRECTOR.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has an Executive Committee consisting of Messrs. Alexander,
Fergenson, Krinsly and Quicke; an Audit Committee consisting of Messrs. Dworman,
Fergenson, Sullivan and Tsai; a Compensation Committee consisting of Messrs.
Fergenson, Kummerfeld and Tsai; and a Nominating Committee consisting of Messrs.
Gottesman and LeFrak. The Executive Committee acts in place of the full Board of
Directors between meetings thereof, evaluates a variety of projects of the
Company and makes recommendations to the Board. It met four times during 1994.
The activities of the Audit Committee include a review with the independent
auditors of the plans and results of the audit engagement; conferring with
respect to audit activities; consideration of the independence of the auditors;
review of the auditors' fees and the recommendation to the Board as to the
engagement of the auditors. During 1994, the Audit Committee met three times.
The Compensation Committee recommends to the Board the compensation arrangements
for directors and officers. During 1994, the Compensation Committee met four
times. The Nominating Committee selects candidates for election to the Board of
Directors or to fill vacancies thereon, after consideration of nominees proposed
to it in writing, provided that such nominees have agreed in writing to be
candidates for the Board of Directors. The Nominating Committee did not meet
during 1994.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

In June 1992, Fred R. Sullivan settled a claim by the United States
Securities and Exchange Commission that he disclosed material, non-public
information that led to the purchase of stock by another person. No allegation
of personal profit to Mr. Sullivan was made. Mr. Sullivan agreed to the

<PAGE>
entry of a judgment permanently enjoining him from engaging in certain
activities in violation of Section 10(b) of the Securities Exchange Act of 1934,
as amended, and Rule 10b-5 thereunder, in connection with the purchase or sale
of any security and paid a fine of $58,000.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The master trust of the Company's Pension Plan had an investment of
approximately $300,000, as of December 31, 1994, in ADCO Equity Bridge Fund
Limited Partnership, which is managed by the ADCO Group, of which Mr. Dworman, a
Director of the Company, is Chairman and owner. The investment is a mortgage on
an office complex in Pennsylvania, due in 1995 and paying interest at a rate
equal to the prime rate plus 1.5%.

In connection with Mr. Quicke's relocation to New York, the Company made a
$300,000 interest-free loan in 1993, payable on demand, and secured by a second
mortgage on his home, all of which remains outstanding.

In connection with Mr. Weinstein's relocation to New York, the Company made
a $300,000 unsecured, interest-free loan in 1993, payable in June 1997, all of
which remains outstanding.

Alex Alexander, brother of Norman Alexander (Chairman, Chief Executive
Officer and Director of the Company), is being compensated by Chromalloy Men's
Apparel Group, Inc. (a subsidiary of the Company) at the annual rate of $75,000
plus certain employee benefits. This arrangement commenced in early-1994 and the
aggregate cost to the Company of such payments and benefits in 1994 was $62,442.

COMPENSATION OF DIRECTORS

Each director who is not an employee of the Company received an annual
retainer of $27,500 for 1994 and $500 for each meeting attended. Non-employee
members of the Executive Committee, Audit Committee, Nominating Committee and
Compensation Committee receive an additional annual fee of $5,000, $3,500,
$2,500 and $3,500, respectively, and $500 for each committee meeting attended.
The Company also reimburses its non-employee directors for travel, lodging and
related expenses they may incur in attending Board and Committee meetings.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation paid for services rendered
in all capacities to the Company and its subsidiaries during 1992, 1993 and 1994
to the Chief Executive Officer of the Company and to the next four most highly
compensated executive officers. As a consequence of no bonuses being payable
under the applicable bonus plan to any Corporate Executive Officers with respect
to 1994 (see 'Report of the Compensation Committee of the Board on Executive

<PAGE>
Compensation'), John J. Quicke, President and Chief Operating Officer of the
Company does not appear in the table below.

<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------
AWARDS
------------
OTHER SECURITIES ALL
NAME AND ANNUAL UNDERLYING OTHER
PRINCIPAL BONUS COMPENSATION OPTIONS/ COMPENSATION
POSITION YEAR SALARY ($) ($) SARS(#) ($)
- ---------------------------------------- ---- ---------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Norman E. Alexander .................... 1994 $1,043,148 -- -- -- $ 4,500(1)
Chairman and Chief Executive Officer 1993 993,653 -- -- 15,000 4,497(1)
1992 954,200 -- -- -- 4,364(1)

Antonio Savoca ......................... 1994 336,971 238,000 68,753(2) -- 76,916(1)
Senior Vice President, Atlantic 1993 324,250 243,188 66,372(2) 7,500 67,462(1)
Research Operations 1992 324,250 234,000 68,624(2) -- 63,384(1)

Stuart Z. Krinsly ...................... 1994 557,949 -- -- -- 4,899(1)
Senior Executive Vice President and 1993 531,472 -- -- 12,500 4,951(1)
General Counsel 1992 510,380 -- -- -- 4,862(1)

Martin Weinstein ....................... 1994 452,000(3) -- -- -- 4,500(1)
Senior Vice President, Gas Turbine 1993 418,250(3) -- -- 11,000 4,364(1)
Operations 1992 371,000 -- -- -- 4,364(1)

Ronald H. Wright ....................... 1994 263,379 177,800 -- -- 4,500(1)
Senior Vice President, Kollsman 1993 254,453 108,400 -- -- 4,497(1)
1992 264,250(4) 127,200 -- -- 4,364(1)
</TABLE>

- ------------

(1) These amounts consist of a matching contribution by the Company under the
respective 401-K Plan in which each executive officer participates ($4,364
as to each named executive officer in 1992; $4,497 as to Messrs. Alexander,
Krinsly and Wright, $4,364 as to Mr. Weinstein and $5,396 as to Mr. Savoca
in 1993, and $4,500 as to each named executive officer in 1994 (except for
$6,000 with respect to Mr. Savoca)), plus (i) with respect to Mr. Krinsly,
$498, $454 and $399 for executive term life insurance premiums in 1992, 1993
and 1994, respectively; and (ii) with respect to Mr. Savoca, $1,310 for an
executive term life insurance premium in 1994 and $1,200 for same in 1992
and 1993, and $57,820 credited as a benefit (including interest payable at
the prime rate) in 1992 ($60,866 in 1993 and $69,606 in 1994) under a
Supplemental Executive Retirement Plan ('SERP') maintained by Atlantic
Research Corporation, an affiliate of the Company ('ARC') (the SERPs in
which the other named executive officers participate are defined benefit
plans, unlike the ARC plan, and are, therefore, accounted for under 'Pension
Plans').

(2) These amounts consist of the aggregate cost of personal benefits provided by
ARC; the two items that each exceed 25% of the total value of all reported
personal benefits provided to Mr. Savoca are $37,956 in 1994 and 1992
($36,144 in 1993) paid for his residence near the facilities of ARC, and
$23,925 in each of 1992, 1993 and 1994 paid in connection with ARC's
'cafeteria' plan, allowing for reimbursement of certain items with payment
of the unused balance (up to the entire amount) to the executive in cash.

(3) This amount includes $81,000 for additional compensation ($47,250 in 1993,
representing a partial year) in connection with Mr. Weinstein's management
of another Chromalloy Gas Turbine

(footnotes continued on next page)

<PAGE>
(footnotes continued from previous page)
operation, Chromalloy Research and Technology, commencing in June 1993 and
ending upon the termination of this temporary assignment, which shall cease
no later than 1996.

(4) The payroll process resulted in one additional paycheck for the Kollsman
division during calendar year 1992.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES TABLE

During 1994, none of the named executive officers exercised or were granted
any stock options. The following table shows the number of shares of Class A
Common Stock represented by outstanding unexercised stock options (there are no
SARs) held by each of the named executive officers as of December 31, 1994. The
Class A Common Stock had a closing price of $26.00 on December 31, 1994. The
exercise price of the options shown is $32.25; accordingly, none of such options
was 'in-the-money' as of December 31, 1994.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS
AT FISCAL YEAR-END
----------------------------
NAME EXERCISABLE UNEXERCISABLE
------- ----------- -------------

<S> <C> <C>
Norman E. Alexander................................................................... 5,000 10,000
Stuart Z. Krinsly..................................................................... 4,166 8,334
Antonio L. Savoca..................................................................... 2,500 5,000
Martin Weinstein...................................................................... 3,666 7,334
Ronald H. Wright...................................................................... -- --
</TABLE>

PENSION PLANS

The following tables show the estimated annual pension benefits payable to
each covered participant at normal retirement age under the Company's qualified
defined benefit pension plans, taking into account any applicable nonqualified
supplemental pension plans that provide benefits that would otherwise be denied
participants by reason of certain Internal Revenue Code limitations on qualified
plan benefits and any existing individual agreements, based on remuneration that
is covered under the plans and agreements and years of service with the Company
and its subsidiaries. There are separate pension plans within the Company for
various subsidiaries.

<PAGE>
PENSION PLAN TABLE -- A

<TABLE>
<CAPTION>
YEARS OF SERVICE
PLAN --------------------------------------------------------------------------------
COMPENSATION 10 15 20 25 30 35 40
- ----------- -------- -------- -------- -------- -------- -------- --------

Table A applies to Messrs. Alexander, Krinsly and Wright. Mr. Wright has a
minimum benefit of $88,200 per year.

PENSION PLAN TABLE -- B

<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------
PLAN COMPENSATION 5 10
- ----------------- ------- -------

Table B applies to Mr. Savoca. Plan compensation is limited by
SS 401(a)(17) of the Internal Revenue Code, which is $150,000 for 1995. Mr.
Savoca's $14,738 accrued annual benefit as of December 31, 1993 is his minimum
pension. Plan benefits are limited by SS 415 of the Code, which is generally
$120,000 for 1995.

PENSION PLAN TABLE -- C

<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------
PLAN COMPENSATION 30 35 40
- ----------------- -------- -------- --------

Table C applies to Mr. Weinstein.

Compensation covered by the plans is total pay for services, including
elective deferrals to qualified plans, but excluding severance payments, expense
reimbursements, and other non-wage items. Compensation for Mr. Savoca also
excludes bonuses. With respect to Messrs. Alexander, Krinsly, Wright, and
Savoca, benefits are based on their respective highest average annual
compensation in any five consecutive years of employment with the Company. With
respect to Mr. Weinstein, benefits are based on his average compensation for all
years after 1979.

<PAGE>
The credited years of service and plan compensation for the named executive
officers are:

<TABLE>
<CAPTION>
ESTIMATED
CREDITED YEARS PLAN
OF SERVICE* COMPENSATION
-------------- ------------

<S> <C> <C>
Alexander..................................................... 38 $1,366,311
Krinsly....................................................... 38 699,301
Weinstein..................................................... 32 494,993
Savoca........................................................ 5 150,000
Wright........................................................ 14 342,013
</TABLE>

Benefits shown are computed as a straight life annuity beginning at age 65
and are offset by a portion of estimated Social Security benefits, if
applicable.

- ------------
* At normal retirement age or current age if older.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

The Company has entered into employment agreements with the named executive
officers listed below (supplementary retirement agreements with any of the named
executive officers are accounted for in the foregoing section, 'Pension Plans').
In addition, John J. Quicke, President and Chief Operating Officer of the
Company, has an employment agreement pursuant to which he receives a base salary
(1994) of $394,004, which agreement was recently extended through March 1998.

<TABLE>
<CAPTION>
TERM OF ANNUAL
NAME TITLE AGREEMENT COMPENSATION
--------- ---------- ----------- ------------

<S> <C> <C> <C>
Antonio L. Savoca.......... Senior Vice President, Atlantic Research
Operations 3/1/91 - 2/28/97(1) $377,956(2)(3)

Martin Weinstein........... Senior Vice President, Gas Turbine
Operations 10/1/91 - 12/31/96(1) $452,000(2)(4)

Ronald H. Wright........... Senior Vice President, Kollsman Terminable $265,000(2)
upon 60 days
notice
</TABLE>

- ------------

(1) The term may be extended or terminated prior to expiration under certain
circumstances (including death, disability and for cause). Mr. Weinstein's
agreement provides that, in the event of a change in control of the Company,
the term of employment may be extended, at his option, for two years.

(2) These amounts reflect 1994 salaries and do not include additional incentive
compensation which may be payable.

(3) This includes a $37,956 per year housing allowance for Mr. Savoca's
residence near the ARC facilities. It does not include $23,925 paid to Mr.
Savoca through ARC's cafeteria plan.

(footnotes continued on next page)

<PAGE>
(footnotes continued from previous page)

(4) This includes $81,000 per year in connection with a temporary assignment
(for a period ending no earlier than May 31, 1995 nor later than May 31,
1996) to manage another Chromalloy Gas Turbine operation, Chromalloy
Research and Technology.

STOCK PERFORMANCE GRAPH -- 5 YEAR CUMULATIVE INDEX

The graph set forth below compares the annual percentage change in the
cumulative total shareholder return on an investment of $100 in the Company's
Common Stock, on an indexed basis, with the S&P 500 Stock Index and the S&P
Aerospace/Defense Index, for the period of five years ended December 31, 1994.

TOTAL RETURN TO SHAREHOLDERS
REINVESTED DIVIDENDS

[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
BASE
PERIOD RETURN RETURN RETURN RETURN RETURN
COMPANY\INDEX NAME 1989 1990 1991 1992 1993 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SEQUA CORP-CL A........ 100.00 79.60 60.36 45.48 47.26 37.81
SEQUA CORP-CL B........ 100.00 93.98 64.98 44.28 44.68 36.75
S&P 500 COMP-LTD....... 100.00 96.89 126.42 136.05 149.76 151.74
AEROSPACE/DEFENSE...... 100.00 104.39 124.79 131.28 170.75 184.70
</TABLE>

<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD ON EXECUTIVE COMPENSATION

The Company's executive compensation program is developed and implemented
by the Company's Human Resources Department in conjunction with the Compensation
Committee of the Board of Directors. The Compensation Committee, which is
comprised of three outside directors, approves all elements of the program,
which is then ratified by the full Board of Directors. This program is based
upon objectives that seek to attract and retain key executives critical to the
success of the Company, and reward and motivate executives for performance that
maximizes Company success and shareholder value. In order to accomplish these
goals, the Company has designed a competitive base salary program and annual
incentive cash bonus plans which are predominantly geared toward achievement of
stated financial goals. In addition, stock option grants and restricted stock
grants are awarded from time to time in order to emphasize stockholder returns
and focus on long-term goals.

Base salaries for executive officers of the Company are intended to
maintain competitive rates of pay for executives in relation to the market. The
Company competes for executive talent across a broad range of industrial and
non-industrial industry segments. The Company's Human Resources Department
collects and analyzes competitive salary data from a broad range of surveys
produced by leading human resource/compensation consulting firms. In 1994 these
surveys included those published by Towers Perrin, Hewitt Associates, the
Conference Board, William M. Mercer, Inc. and the American Compensation
Association. These surveys disclose salary ranges for executives at corporations
comparable to the Company in size and industry mix, including firms classified
as 'S&P 500.' The Human Resources Department does not limit its comparative
analyses to companies classified as 'Aerospace/Defense,' since it believes that
the Company competes for executive talent beyond these industries.

This analysis is presented to the Compensation Committee in the form of an
'Officer Salary Survey.' In this survey, particular reliance is placed on the
findings of Towers Perrin and Hewitt Associates. Here, definitions of survey
positions, company size and industry mix most closely align with the actual
responsibilities of Sequa's executive officer group. The base salary levels for
certain of Sequa's executive officers fall at the high end of survey ranges,
although percentages are disproportionately affected by salaries paid to those
executives with extensive years of service.

The Compensation Committee's review of the competitive market resulted in
salary increases of 5% being awarded to both Mr. Alexander and Mr. Krinsly in
March 1994. Other executive officers granted increases (ranging from 4.1 to 5.9
percent) in 1994 were found by the Committee to require these adjustments in
order to retain competitive salary levels and the high level of motivation and
contribution associated with this group of executives. The Compensation
Committee has determined that the current base salaries of executive officers
are reasonable. Moreover, they have reached this conclusion in light of the
detailed comparisons described above with respect to Company size, complexity
and industry mix when overlaid by the contributions, experience and tenure of
the Company's executive officers.

Effective January 1, 1994, Section 162(m) of the Internal Revenue Code
imposed new conditions and limitations on the deductibility of the compensation
paid to certain executive officers of public companies. Henceforth, compensation
of an executive officer who is required to be listed in the Summary Compensation
Table (a 'named executive officer') is not deductible by the Company for tax
purposes to the extent that it exceeds $1.0 million, unless specific criteria
have been met. In an effort to

<PAGE>
minimize the adverse consequences of this legislation, the Company obtained
approval at the 1994 Annual Meeting of Shareholders of its Management Incentive
Bonus Plan for Corporate Executive Officers (the 'Bonus Plan'). In 1994, the
Bonus Plan provided for bonuses to be paid to 'Corporate Executive Officers'
(i.e., Chairman/Chief Executive Officer, President/Chief Operating Officer,
Senior Executive Vice President/General Counsel and Executive Vice
President/Finance and Administration) based solely on the Company's achieving or
surpassing certain targets related to budgeted earnings per share from
continuing operations ('EPS'). The approved plan will result in any future bonus
payment pursuant to this Bonus Plan to a Corporate Executive Officer to be tax
deductible even if it were to raise total compensation above $1.0 million.
However, that portion of any named executive officer's base salary that is in
excess of $1.0 million is no longer tax deductible by the Company.

Bonus consideration for the Chief Executive Officer and the other Corporate
Executive Officers with respect to 1994 was based upon the Bonus Plan. For 1994,
the minimum EPS target was not achieved. Accordingly, no bonus was awarded to
the Chief Executive Officer or any other Corporate Executive Officer. At the
Annual Meeting of Shareholders to be held in May 1995, an amendment to the Bonus
Plan will be proposed that seeks to change the President/Chief Operating
Officer's criteria for bonus eligibility from 100% EPS to 33.3% EPS, with the
other 66.7% dependent upon operating income and RONA (return on net assets)
results for the operations under his direction. It will also be proposed to
include in the Bonus Plan the Senior Vice President/Gas Turbine Operations, on
virtually the same terms as the President, i.e. 33.3% EPS, 66.7% for operating
income and RONA results but, in his case, only for Gas Turbine operations.

This amendment is sought so that the Bonus Plan will more accurately
reflect the contributions made by each of the foregoing executive officers not
only to the Company as a whole but also to their respective operations. Mr.
Quicke has responsibility for all of the operating units of the Company except
for the Gas Turbine division which reports to Mr. Weinstein. The operations
under Mr. Quicke's direction enjoyed strong profitability in 1994, and the
Compensation Committee believes that Mr. Quicke's contributions thereto should
have been recognized. Had Mr. Quicke been measured in 1994 by these proposed new
criteria, he would have received a bonus attributable to the positive
performance of the operations reporting to him. However, the current structure
of the Bonus Plan led to Mr. Quicke's bonus being eliminated by the performance
of the Gas Turbine operations and their impact on the Company's performance as a
whole. Accordingly, Mr. Quicke was deleted from the list of named executive
officers as a consequence of his loss of bonus. In further recognition of the
value of Mr. Quicke's efforts, in early 1995, the Board of Directors ratified
the recommendation of the Compensation Committee to extend Mr. Quicke's
employment agreement through March 1998 and to grant him an additional stock
option for 8,500 shares.

In addition to the aforementioned change to the Bonus Plan, shareholders
will be asked to approve an increase in bonus opportunity for the Senior
Executive Vice President/General Counsel and the Executive Vice
President/Finance and Administration from their current 'Minimum', 'Par' and
'Maximum' bonus opportunities of 27.5%, 55% and 82.5% of base compensation to
30%, 60% and 90%, respectively. This shall conform their bonus potential levels
to those of the other Corporate Executive Officers (excluding the Chief
Executive Officer). In addition, there is a proposed amendment to raise the EPS
levels in the Bonus Plan for 1995 only to 100% (Minimum), 200% (Par) and 300%
(Maximum) from 85% (Minimum), 100% (Par) and 115% (Maximum). For 1994, only
those operating

<PAGE>
executive officers whose division results met or exceeded the predetermined
financial performance criteria that had been specifically established for them
were awarded bonuses.

The Company's annual incentive bonus plans seek to motivate and reward
executives by recognizing their accomplishments during the previous year. In the
main, financial performance of the Company or of a particular division and to a
lesser degree achievement of personal or business objectives is used to
establish bonus eligibility for executive officers. Bonus criteria has been
shaped in accordance with attainment of targeted financial objectives, including
operating profit and return on net assets, which fell below anticipated levels
in 1994 on a consolidated basis (but which were achieved by certain operating
units). These measurements are determined at the commencement of each fiscal
year and are approved by senior management and the Compensation Committee. The
Compensation Committee retains discretion within the plans to recognize an
executive's response to unplanned business events or opportunities, with the
exception of Corporate Executive Officers.

During 1994, an effort to retain and motivate certain key corporate
executives of the Company was made through the provisional granting of
restricted stock, although no award was made to any of the named executive
officers or Corporate Executive Officers. The period of restriction is for three
years. These awards were made on a conditional basis in that they are subject to
shareholder approval at this annual meeting. No stock options were awarded in
1994 to any executive officer of the Company.

Although 1994 granted Sequa little relief from the continuing effects of
the decline of the aerospace industry on both its civil and military sides, the
Compensation Committee believes that Sequa's core executive officer group
continues to be equipped to meet the challenges presented to it. The
Compensation Committee holds to the belief that the total compensation packages
provided to the Company's executive officers are competitive without being
excessive and are appropriate to assure the retention and motivation of this
highly-skilled and experienced segment of the Sequa workforce.

Gerald Tsai, Jr., Chairman
A. Leon Fergenson
Donald D. Kummerfeld

PROPOSED AMENDMENT NUMBER ONE TO MANAGEMENT INCENTIVE BONUS
PLAN FOR CORPORATE EXECUTIVE OFFICERS

At the Annual Meeting of Stockholders of the Company held in 1994, a
Management Incentive Bonus Plan for Corporate Executive Officers (the 'Bonus
Plan') was approved.

The Board of Directors has accepted the recommendation of the Compensation
Committee to adopt an amendment to the Bonus Plan, subject to shareholder
approval. The proposed amendment is designed to implement several changes to the
existing Bonus Plan: it would include the Senior Vice President/Gas Turbine
Operations, as a Corporate Executive Officer participating in the Bonus Plan; it
would restructure the bonus calculations applicable to the President/Chief
Operating Officer, the Senior Executive Vice President/General Counsel, the
Executive Vice President/Finance and Administration, and the Senior Vice
President/Gas Turbine Operations; and it would change the required target levels
for Company performance for 1995. The current bonus formula for the
President/Chief Operating Officer is entirely dependent upon the Company as a
whole attaining targeted earnings per share from

<PAGE>

continuing operations ('EPS'), which can have the effect of no recognition being
given to his contribution to those operations under his direction. In 1994,
these operations reported improved profitability and return on investment; yet,
he was not eligible for a bonus for the reason that the performance of the Gas
Turbine division prevented the Company from achieving its budgeted EPS. Thus,
the proposed amendment to the Bonus Plan would change the criteria for bonus
eligibility for the President/Chief Operating Officer from 100% EPS to 33.3%
EPS, with 66.7% measured by operating income and RONA (return on net assets)
results (against budget) for the operations under his direction.

The proposed amendment also seeks to include the Senior Vice President/Gas
Turbine Operations as a Corporate Executive Officer in the Bonus Plan. His bonus
would similarly be calculated in accordance with 33.3% EPS and 66.7% operating
income and RONA results (against budget) for the Gas Turbine division.

Thus, the provisions of the existing Bonus Plan that require the attainment
of EPS before any bonus shall be payable to a Corporate Executive Officer shall
apply only with respect to one-third of the bonus that may be earned by each of
the President/Chief Operating Officer and the Senior Vice President/Gas Turbine
Operations, the remaining two-thirds of their respective bonuses being
determined solely with reference to the performance of those operations of the
Company for which each is responsible.

It is also proposed to amend the Bonus Plan to provide that the target
bonus opportunities for the Senior Executive Vice President/General Counsel and
the Executive Vice President/Finance and Administration shall be increased from
the current 'Minimum', 'Par' and 'Maximum' levels of 27.5%, 55% and 82.5% of
base compensation to 30%, 60% and 90%, respectively, which shall conform their
bonus potential levels to those of the other Corporate Executive Officers
(excluding the Chief Executive Officer).

Finally, it is proposed to amend the Bonus Plan (only for 1995) to raise
the required performance levels for the Company, applicable to all Corporate
Executive Officers, from 85% (Minimum), 100% (Par) and 115% (Maximum) of
budgeted EPS to 100% (Minimum), 200% (Par) and 300% (Maximum), respectively.
This will revert back to current levels in 1996.

<PAGE>
The following table estimates the range of bonus payments under the
proposed amendment to the Bonus Plan for all Corporate Executive Officers in
1995:

AMENDED BONUS PLAN BENEFITS FOR 1995

<TABLE>
<CAPTION>
POTENTIAL BONUS
POTENTIAL BONUS POTENTIAL BONUS PAYMENT AS A
PAYMENT AS A PAYMENT AS A % OF SALARY AT
% OF SALARY AT % OF SALARY AT OUTSTANDING
MINIMUM PAR PERFORMANCE BY
PERFORMANCE BY PERFORMANCE BY THE COMPANY
THE COMPANY THE COMPANY (300% OR MORE
(BUDGETED (200% OF OF BUDGETED
NAME OF INDIVIDUAL POSITION EPS) BUDGETED EPS) EPS)
------------------- ---------- -------------- -------------- --------------

<S> <C> <C> <C> <C>
Norman E. Alexander........ Chairman and Chief Executive 32.5% 65% 97.5%
Officer
John J. Quicke............. President and Chief 30%(1) 60%(1) 90%(1)
Operating Office
Stuart Z. Krinsly.......... Senior Executive Vice 30% 60% 90%
President and General
Counsel
Gerald S. Gutterman........ Executive Vice President, 30% 60% 90%
Finance and Administration
Martin Weinstein........... Senior Vice President, 30%(1) 60%(1) 90%(1)
Gas Turbine Operations
</TABLE>

- ------------

(1) The EPS performance criteria apply only to one-third of the salary for
Messrs. Quicke and Weinstein; the remaining two-thirds of their respective
bonus potential is exclusively determined by the performance of their
respective operations in accordance with the same percentages.

Note: The percentage of salary payable increases incrementally as the EPS moves
from par performance up to 200% of EPS, and likewise, between 200% and
300%. The potential bonus payment shown at 300% of budgeted EPS is the
maximum available regardless of how high the EPS actually goes. These
percentages of EPS will revert back in 1996 to 85%, par, and 115%.

The Bonus Plan may not be substantively amended as it applies to Corporate
Executive Officers except by a vote of the shareholders of the Company.

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE 'FOR'
APPROVAL OF AMENDMENT NUMBER ONE TO THE MANAGEMENT INCENTIVE BONUS PLAN FOR
CORPORATE EXECUTIVE OFFICERS.

PROPOSED 1994 CORPORATE STAFF STOCK AWARD PLAN

Toward the end of 1994, the Board of Directors accepted the recommendation
of the Compensation Committed to adopt a new Corporate Staff Stock Award Plan
(the 'Stock Plan'). The purpose of the Stock Plan was to provide additional
incentive to selected corporate staff officers (one of whom recently became an
executive officer of the Company) and other key corporate staff employees and to
encourage such persons to remain with the Company. Awards of Class A Common
Stock

<PAGE>

aggregating 27,052 shares (with no employee receiving in excess of 2,700 shares)
have been made to approximately twenty corporate staff officers and key
employees, who comprise the class of eligible recipients. No awards were made to
any director or 'named executive officer'.

The stock granted under the Stock Plan is restricted from sale or transfer
until October 1997, at which time the certificates representing such shares
shall be delivered by the Company to the individual recipients. In the event
that any such employee ceases to be employed by the Company prior to October
1997, such shares shall be forfeited and revert to the Company. During the three
year restriction period, the employee shall be entitled to vote the shares and
collect any dividends that may be paid thereon.

The Stock Plan provides for awards not to exceed 50,000 shares in the
aggregate of Class A Common Stock. All shares awarded are taken from the
Company's treasury stock and any shares forfeited shall be returned to the
treasury. While it remains possible to grant additional awards under the Stock
Plan (almost 23,000 shares are available thereunder), no further awards are, in
fact, contemplated.

The Stock Plan is administered by the Compensation Committee, which
determines the recipients, the number of shares to be awarded and the terms and
conditions of such awards. The Compensation Committee determined the number of
shares awarded to each recipient based upon the dollar value of a percentage of
salary divided by $25.19, which represents the average of the closing prices of
the Class A Common Stock for the two week period immediately preceding the date
of grant. The Stock Plan shall terminate in October 1997. The Stock Plan is
subject to approval by the stockholders of the Company. In the event that the
Stock Plan is not approved by a majority of votes cast at this Annual Meeting of
Stockholders, the Stock Plan shall become null and void and all stock
conditionally granted thereunder shall be cancelled.

The following table shows the dollar value (based on the closing price of
$24.00 of the Class A Common Stock on the grant date of October 27, 1994) and
size of award of restricted stock to the two groups participating in the Stock
Plan:

NEW PLAN BENEFITS

<TABLE>
<CAPTION>
NUMBER OF
NAME OF GROUP DOLLAR VALUE(S) SHARES
--------------- --------------- ---------

<S> <C> <C>
Executive Group (1 executive officer)....................................... $ 63,024 2,626
Non-Executive Officer Employee Group........................................ $ 586,224 24,426
</TABLE>

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE 'FOR' APPROVAL OF
THE 1994 CORPORATE STAFF STOCK AWARD PLAN.

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

The stockholders will be asked to ratify the appointment of Arthur Andersen
LLP as independent public accountants of the Company for the fiscal year 1995.
Arthur Andersen LLP has been regularly employed as the independent auditors for
the Company since 1940. Representatives of the firm are

<PAGE>
expected to be present at the stockholders' meeting with the opportunity to make
a statement if they desire to do so, and are expected to be available to respond
to appropriate questions.

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU
VOTE 'FOR' THE RATIFICATION OF THE APPOINTMENT OF THE ABOVE AUDITORS.

OTHER MATTERS

The management of the Company knows of no business other than that referred
to herein to be presented for action at the meeting. If, however, any other
business should properly come before the meeting or any adjournment thereof, it
is intended that all proxies will be voted with respect to such business in
accordance with the best judgment of the persons named in said proxies.

PROPOSALS OF STOCKHOLDERS FOR THE 1996 ANNUAL MEETING

Proposals by stockholders intended to be presented for action at the 1996
annual meeting of stockholders must be received by the Company at its principal
executive offices, 200 Park Avenue, New York, New York 10166, not later than
December 1, 1995. It is suggested that such proposals be submitted by Certified
Mail-Return Receipt Requested.

March 24, 1995

<PAGE>
[LOGO]
PRINTED ON RECYCLED PAPER

<PAGE>

APPENDIX 1
SEQUA CORPORATION UNX CARD

UNX SEQUA CORPORATION

Solicited by the Board of Directors for use at the Annual Meeting of
Stockholders of Sequa Corporation -- May 11, 1995 at 11:00 A.M., in Auditorium B
on the 5th floor, 245 Park Avenue, New York, New York.

The undersigned hereby appoints Norman E. Alexander, Stuart Z. Krinsly and
A. Leon Fergenson, and any one or more of them, attorneys and proxies, with full
power of substitution and revocation in each, for and on behalf of the
undersigned, and with all the powers the undersigned would possess if personally
present, to vote at the above Annual Meeting and any adjournment thereof all
shares of Common and/or Preferred Stock of Sequa Corporation that the
undersigned would be entitled to vote at such meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES IN ITEM 1 AND FOR
ITEMS 2, 3 AND 4.

1. ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS:

[ ] FOR all nominees [ ] WITHHELD for all nominees

Messrs. Alexander, Dworman, Fergenson, Gottesman, Krinsly, Kummerfeld, LeFrak,
Quicke, Sullivan and Tsai

WITHHELD for the following only.
(WRITE THE NAME OF THE NOMINEE(S) IN THE SPACE BELOW).

2. APPROVAL OF AMENDMENT NUMBER ONE TO THE MANAGEMENT INCENTIVE BONUS PLAN FOR
CORPORATE EXECUTIVE OFFICERS.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

------------------------------------------------------------------------------

This proxy is continued on the reverse side. Please sign on the reverse side and
return promptly.
<PAGE>
3. APPROVAL OF THE 1994 CORPORATE STAFF STOCK AWARD PLAN.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. APPOINTMENT OF INDEPENDENT AUDITORS.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED,
SUCH SHARES WILL BE VOTED FOR ALL NOMINEES IN ITEM 1 AND FOR ITEMS 2, 3 AND 4.

DATED: _______________________ , 1995

_____________________________________
Signature(s)
_____________________________________

NOTE: Please sign as name appears
hereon. Joint owners should each
sign. When signing as attorney,
executor, administrator, trustee,
guardian, please give full title as
such. If the signer is a corporation,
please sign the full corporate
name, by duly authorized officer.
If shares are held jointly, each
stockholder named should sign.

<PAGE>

APPENDIX 2
SEQUA CORPORATION
EMPLOYEE PLAN CARD

EMPLOYEE PLANS SEQUA CORPORATION

The undersigned hereby appoints Norman E. Alexander, Stuart Z. Krinsly and
A. Leon Fergenson, and any one or more of them, attorneys and proxies, with full
power of substitution and revocation in each, for and on behalf of the
undersigned, and with all the powers the undersigned would possess if personally
present, to vote at the above Annual Meeting and any adjournment thereof all
shares of Class A Common and/or Preferred Stock of Sequa Corporation that the
undersigned would be entitled to vote at such meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES IN ITEM 1 AND FOR
ITEMS 2, 3 AND 4.

1. ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS:

[ ] FOR all nominees [ ] WITHHELD for all nominees

Messrs. Alexander, Dworman, Fergenson, Gottesman, Krinsly, Kummerfeld, LeFrak,
Quicke, Sullivan and Tsai

WITHHELD for the following only.
(WRITE THE NAME OF THE NOMINEE(S) IN THE SPACE BELOW).

------------------------------------------------------------------------------

2. APPROVAL OF AMENDMENT NUMBER ONE TO THE MANAGEMENT INCENTIVE BONUS PLAN FOR
CORPORATE EXECUTIVE OFFICERS.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

This proxy is continued on the reverse side. Please sign on the reverse side and
return promptly.

<PAGE>
3. APPROVAL OF THE 1994 CORPORATE STAFF STOCK AWARD PLAN.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. APPOINTMENT OF INDEPENDENT AUDITORS.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.

DATED: _______________________ , 1995

_____________________________________
Signature(s)
_____________________________________

<PAGE>
APPENDIX 3
SEQUA CORPORATION CL-B CARD

CL-B SEQUA CORPORATION

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES IN ITEM 1 AND FOR
ITEMS 2, 3 AND 4.

1. ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS:

[ ] FOR all nominees [ ] WITHHELD for all nominees

Messrs. Alexander, Dworman, Fergenson, Gottesman, Krinsly, Kummerfeld, LeFrak,
Quicke, Sullivan and Tsai

WITHHELD for the following only.
(WRITE THE NAME OF THE NOMINEE(S) IN THE SPACE BELOW).

------------------------------------------------------------------------------

2. APPROVAL OF AMENDMENT NUMBER ONE TO THE MANAGEMENT INCENTIVE BONUS PLAN FOR
CORPORATE EXECUTIVE OFFICERS.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

This proxy is continued on the reverse side. Please sign on the reverse side and
return promptly.

<PAGE>
3. APPROVAL OF THE 1994 CORPORATE STAFF STOCK AWARD PLAN.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. APPOINTMENT OF INDEPENDENT AUDITORS.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.

DATED: _______________________ , 1995

_____________________________________
Signature(s)
_____________________________________

<PAGE>

APPENDIX 4
SEQUA CORPORATION A-PF CARD

A-PF SEQUA CORPORATION

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES IN ITEM 1 AND FOR
ITEMS 2, 3 AND 4.

1. ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS:

[ ] FOR all nominees [ ] WITHHELD for all nominees

Messrs. Alexander, Dworman, Fergenson, Gottesman, Krinsly, Kummerfeld, LeFrak,
Quicke, Sullivan and Tsai

WITHHELD for the following only.
(WRITE THE NAME OF THE NOMINEE(S) IN THE SPACE BELOW).

------------------------------------------------------------------------------

2. APPROVAL OF AMENDMENT NUMBER ONE TO THE MANAGEMENT INCENTIVE BONUS PLAN FOR
CORPORATE EXECUTIVE OFFICERS.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

This proxy is continued on the reverse side. Please sign on the reverse side and
return promptly.

<PAGE>
3. APPROVAL OF THE 1994 CORPORATE STAFF STOCK AWARD PLAN.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. APPOINTMENT OF INDEPENDENT AUDITORS.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.

DATED: _______________________ , 1995

_____________________________________
Signature(s)
_____________________________________

<PAGE>

APPENDIX 5
SEQUA CORPORATION REGULAR CARD

SEQUA CORPORATION

The undersigned hereby appoints Norman E. Alexander, Stuart Z. Krinsly and
A. Leon Fergenson, and any one or more of them, attorneys and proxies, with full
power of substitution and revocation in each, for and on behalf of the
undersigned, and with all the powers the undersigned would possess if personally
present, to vote at the above Annual Meeting and any adjournment thereof all
shares of Common and Preferred Stock of Sequa Corporation that the undersigned
would be entitled to vote at such meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES IN ITEM 1 AND FOR
ITEMS 2, 3 AND 4.

1. ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS:

[ ] FOR all nominees [ ] WITHHELD for all nominees

Messrs. Alexander, Dworman, Fergenson, Gottesman, Krinsly, Kummerfeld, LeFrak,
Quicke, Sullivan and Tsai

WITHHELD for the following only.
(WRITE THE NAME OF THE NOMINEE(S) IN THE SPACE BELOW).

------------------------------------------------------------------------------

2. APPROVAL OF AMENDMENT NUMBER ONE TO THE MANAGEMENT INCENTIVE BONUS PLAN FOR
CORPORATE EXECUTIVE OFFICERS.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

This proxy is continued on the reverse side. Please sign on the reverse side and
return promptly.
<PAGE>
3. APPROVAL OF THE 1994 CORPORATE STAFF STOCK AWARD PLAN.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. APPOINTMENT OF INDEPENDENT AUDITORS.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.

DATED: _______________________ , 1995

_____________________________________
Signature(s)
_____________________________________

<PAGE>

APPENDIX 6
SEQUA CORPORATION
BUSINESS REPLY CARD

SEQUA CORPORATION
ANNUAL MEETING OF STOCKHOLDERS

May 11, 1995 11:00 a.m.

245 Park Avenue
Auditorium B, 5th Floor
New York, New York 10017

If you plan to attend the Annual Meeting, please sign and return the
self-addressed, postage paid portion of this card.

You will need to present this portion of the card in order to be admitted to the
Sequa Annual Meeting on May 11, 1995.

I Plan to attend the Annual Meeting of Stockholders of
Sequa Corporation on May 11, 1995.

- ------------------------------------------------------
Signature

- ------------------------------------------------------
Please print/type full name as it appears on proxy
card

Address:

- ------------------------------------------------------

Stock Ownership: Class A__ Class B__ Preferred__________

- ------------------------------------------------------
Please check one

<PAGE>
NO POSTAGE
NECESSARY
IF MAILED
IN THE
UNITED STATES
---------------
BUSINESS REPLY MAIL ---------------
FIRST CLASS PERMIT 02596 NEW YORK, N.Y. ---------------
POSTAGE WILL BE PAID BY ADDRESSEE ---------------
---------------
SEQUA CORPORATION ---------------
ATTN: CORPORATE SECRETARY ---------------
200 PARK AVENUE ---------------
NEW YORK, NY 10166

<PAGE>

APPENDIX 7
CORPORATE STOCK AWARD PLAN

SEQUA CORPORATION
1994 CORPORATE STAFF STOCK AWARD PLAN

1. PURPOSE.

The purpose of the 1994 Corporate Staff Stock Award Plan (the "Plan") is to
provide additional incentive to selected corporate staff officers and other key
corporate staff employees of Sequa Corporation (the "Company") to exert their
best efforts on behalf of the Company through the ownership of Class A Common
Stock, no par value of the Company (the "Stock"). The Company believes that such
ownership will provide such employees with a more direct stake in the future
welfare of the Company and will motivate and encourage them to remain with the
Company.

2. ADMINISTRATION OF THE PLAN.

The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company, which shall consist of
not less than three (3) members of the Board of Directors. The members of the
Committee shall not be eligible to receive Stock under the Plan and shall be
"disinterested persons" as defined in new Rule 16b-3(c)(2)(i) and old Rule
16b-3(d)(3) under the Securities Exchange Act of 1934. The grants of Stock shall
be recommended to the Board of Directors by the Committee for approval.

Subject to the provisions of the Plan and Board of Directors approval, the
Committee shall have full and final authority in its discretion (a) to determine
the employees to be awarded Stock, (b) to determine the number of shares of

Page 1

<PAGE>

Stock to be awarded to each such employee, (c) to prescribe the terms
and conditions attached to such awards, (d) to interpret the provisions of the
Plan and to amend or modify the terms hereof, and (e) to make all other
determinations deemed necessary or advisable for the administration of the Plan.
All decisions made by the Committee and approved by the Board of Directors
pursuant to the provisions of the Plan shall be final, conclusive and binding on
all persons, including the Company, its stockholders, employees and individuals
granted awards under the Plan.

3. SHARES OF STOCK SUBJECT TO THE PLAN.

The number of shares of Stock that may be awarded under the Plan shall not
exceed 50,000 shares. Such shares shall be previously issued shares reacquired
by the Company and held in treasury. The Plan shall provide for one-time awards
of Stock to eligible employees. Any shares which are forfeited as a result of
the failure to satisfy the conditions set forth in paragrah 6 hereof may not be
reissued to any other person under the Plan and shall be returned to the
Company's treasury.

4. ELIGIBILITY.

Stock may be awarded under the Plan only to corporate staff officers and
other key corporate staff employees who are currently employed by the Company.
Individuals to be awarded Stock under the Plan shall be selected by the
Committee, in its sole discretion, from among those eligible.

5. EFFECTIVE DATE AND DURATION OF THE PLAN.

Page 2

<PAGE>

The effective date of the Plan shall be October 27, 1994, subject, however,
to approval of the Plan by a majority of votes cast at the annual meeting of the
stockholders of the Company held in 1995. Subject to the express provisions of
the Plan, Stock may be awarded under the Plan at any time and from time to time
after the adoption of the Plan by the Committee and the Board of Directors on
October 27, 1994 and prior to the termination of the Plan; provided, however,
that in the event that the Plan is not approved by stockholders of the Company
as aforesaid, the Plan shall be and become null and void, all Stock awarded
under the Plan shall be cancelled and all such recipients of awards of Stock
shall have no right or entitlement to such Stock.

Subject to the foregoing paragraph, the Plan shall remain in effect until
October 27, 1997.

6. AWARDS AND CONDITIONS.

Awards of Stock shall be evinced by Stock Award Letter Agreements
containing the terms and conditions of the awards, which shall be agreed to in
writing by the recipients, together with the issuance of Stock certificates
containing the following legend:

The transferability of this certificate and the shares of Stock represented
hereby are subject to the terms and conditions (including forfeiture) of
Sequa Corporation's 1994 Corporate Staff Stock Award Plan and an Agreement
entered into between the registered owner and Sequa Corporation. Copies of
such Plan and Agreement are on file in
Page 3

<PAGE>

the offices of Sequa Corporation, 200 Park Avenue, New York, New York. The
Shares represented by this certificate may not be sold or transferred
unless they are registered under the Securities Act of 1933 or the Company
has been furnished with an opinion of counsel satisfactory to it that no
such registration is required. Notwithstanding the foregoing, in no event
may these shares be sold or transferred prior to October 27, 1997. In the
event that the holder of these shares ceases to be employed by the issuer
for any reason prior to October 27, 1997, then this certificate shall not
be delivered to the person named hereon and this certificate and the shares
represented hereby shall be forfeited and cancelled and of no further force
or effect.

Said awards shall not be transferred, pledged or assigned for a period of three
years from their date of grant and shall be forfeited upon the termination of
any recipient's employment with the Company prior to the expiration of such
period, whether such employment is terminated by the Company (with or without
cause), by the employee or as a result of the employee's extended leave of
absence, disability, death or retirement.

All certificates representing Stock awarded under the Plan shall be kept in
the possession of the Company until the conditions of stockholder approval
described in paragraph 5 hereof and the expiration of the three-year period
described above have been satisfied, and each recipient of an award hereunder

Page 4

<PAGE>

shall be required to deliver a stock power, endorsed in blank, relating to the
Stock covered by such award, to the Company. At such time, the certificates
shall be delivered to the respective recipients thereof without stock transfer
tax to said recipient. A recipient shall, prior and as a condition precedent to
delivery of the subject Stock certificate, pay, or make provisions satisfactory
to the Company for the payment of, any taxes (other than stock transfer taxes)
which the Company is obligated to collect with respect to the delivery of a
Stock certificate. At the expiration of the aforesaid three-year period and upon
delivery of a Stock certificate to an employee under the Plan, such employee
shall be free to transfer or dispose of such Stock, provided that there are no
legal restrictions as described in paragraph 7 hereof. Prior thereto, however,
no employee may assign, pledge, transfer, sell or otherwise dispose of or
encumber his/her right to receive such Stock or such Stock itself. During the
three-year period following issuance of the Stock certificate but prior to
delivery to the employee, the employee shall be entitled to vote such Stock and
to collect any dividends that may be paid thereon.

In the event that there is any change in the Company's shares of Class A
Common Stock resulting from stock splits, stock dividends, combinations or
exchanges of shares, or other similar capital adjustments, equitable
proportionate adjustments shall be made by the Committee in the number of shares
of Stock awarded under the Plan. In addition, in the event the Company shall
merge with or into another entity and the Company shall not be the surviving
entity, the surviving entity shall assume all of the obligations in respect of
this Plan

Page 5

<PAGE>

and the awards granted hereunder and the Shares shall remain subject to all of
the restrictions under, and receive all of the benefits of, the Plan.

7. LEGAL RESTRICTIONS.

Each award under the Plan shall be subject to the requirement that, if at
any time the Board of Directors of the Company or the Committee shall determine,
in its respective discretion, that the listing, registration, or qualification
of the Stock issued under the Plan upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
body is necessary or desirable as a condition of, or in connection with, the
issuance of such Stock, the certificate for such Stock shall not be delivered
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Board of
Directors of the Company or the Committee.

The Board of Directors or the Committee may, in connection with an award of
Stock under the Plan, require the individual to whom the award is made to enter
into an agreement with the Company stating that, as a condition precedent to the
delivery of a Stock certificate hereunder, he/she shall, if then required by the
Company, represent to the Company in writing that such receipt is for investment
only and not with a view to distribution, and also setting forth such other
terms and conditions as the Board of Directors or the Committee may prescribe.

8. NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE.

Neither the Plan nor any action taken thereunder shall be construed as

Page 6

<PAGE>

giving any employee the right to be retained in the employ or service of the
Company, nor shall it interfere in any way with the right of the Company to
terminate any employee's employment or service at any time.

9. AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN.

The Committee or the Board of Directors of the Company may at any time
terminate or amend the Plan in any respect; provided, however, that no such
action, without approval of the stockholders may (a) increase the total amount
of Stock which may be awarded under the Plan, except as contemplated in
paragraph 6 hereof, (b) withdraw the administration of the Plan from the
Committee, or (c) permit any person while a member of the Committee to be
eligible to receive an award under the Plan; and provided further, that no
amendment, modification or termination of the Plan shall in any manner adversely
affect the rights of any recipient of any award theretofore granted under the
Plan without the consent of such recipient. The foregoing authority of the
Committee and the Board of Directors shall include specific authority to amend
the Plan in any respect to satisfy the requirements of the Internal Revenue
Code, federal or state securities laws or regulations, any other applicable
federal, state or local laws or regulations or the requirements or regulations
of any securities exchange upon which the Stock may be listed.

Page 7

<PAGE>

10. GOVERNING LAW.

The validity, construction and effect of the Plan, any rules and
regulations relating to the Plan, and any award agreement shall be construed and
enforced in accordance with the laws of the State of New York, without regard to
principles of conflict of laws.

Page 8

<PAGE>

APPENDIX 8
MANAGEMENT INCENTIVE BONUS PROGRAM

SEQUA CORPORATION

MANAGEMENT INCENTIVE
BONUS PROGRAM
CORPORATE EXECUTIVE OFFICERS
AND
CORPORATE STAFF
(AMENDMENT NUMBER 1 -- REVISED, 1995)

<PAGE>

INDEX

I. General Outline

II. Bonus Program

III. Policies & Procedures

IV. Exhibits

<PAGE>

SEQUA CORPORATION
MANAGEMENT INCENTIVE BONUS PROGRAM
GENERAL OUTLINE

The purpose of implementing Sequa Corporation's Management Incentive Bonus
Program (MIBP) is to improve the Company's performance through the efforts of
key executives and management personnel who are in position to significantly
contribute to operating results.

Specific financial and performance goals will be established in the
beginning of the plan year for all MIBP participants, with the exception of
Corporate Executive Officers, who will be measured exclusively on attainment of
the financial goal.(1)

The MIBP will provide substantial rewards for non-executive officer
participants who accomplish or exceed targeted goals at the end of the plan
year. The bonus paid to each such participant will be based on a combination of
(a) the overall financial performance of the company and (b) performance
consideration by executive management. The Corporate Executive Officers' bonuses
will be certified by the Compensation Committee of The Board of Directors after
completion of the fiscal year provided that the required financial goals (as set
forth in the exhibits to this plan) have been met.

- ----------------

(1) The provisions of the Bonus Plan that require the attainmet of earnings
per share from continuing operations (EPS) before any bonus ahll be payable to a
Corporate Officer shall apply only with respect to one-third of the bonus that
may be earned by each of the President/Chief Operating Officer an the Senior
Vice President/Gas Turbine Operations, the remaining two-thirds of their
respective bonuses being determined solely with reference to the performance of
those operations of the company for which each is responsible.

<PAGE>

I. MIBP PARTICIPANTS AND POTENTIAL PAYOUT LEVELS (PERCENTAGE OF SALARY)

MINIMUM BONUS BONUS LEVEL MAXIMUM BONUS
LEVEL ("PAR" LEVEL
(MINIMUM PERFORMANCE) (OUTSTANDING
PERFORMANCE) (200% OF PERFORMANCE)
PARTICIPANTS (PLAN) PLAN) (300% OF PLAN)
------------ ------------ ---------- --------------

<S> <C> <C> <C>
Chief Executive Officer........ 32.5% 65% 97.5%
President/Chief Operating Officer,
Senior VP/Gas Turbine Operations,
Senior Executive VP and General
Counsel, Executive VP Finance and
Administration................. 30% 60% 90%
Corporate Officers............. 25% 50% 75%
Directors (A-Pool)............. 15% 30% 45%
Managers and Professionals
(B-Pool)............. Up to 15% Up to 15% Up to 15%

</TABLE>

II. PARTICIPANT BONUS FORMULA

Participants' total bonus will be based on the following breakdown:

Corporate Executive Officers
A. 100% - achievement of Company financial goal.

Corporate Officers
A. 75% - achievement of Company financial goal.
B. 25% - achievement of individual performance goals.

Directors (A-Pool)
A. 50% - achievement of Company financial goal.
B. 50% - achievement of individual performance goals.

Managers and Professionals (B-Pool)
A. 25% - achievement of Company financial goal.
B. 75% - achievement of individual performance goals.

4
<PAGE>

CORPORATE
MANAGEMENT INCENTIVE BONUS PROGRAM

I. PARTICIPANTS

A. Corporate Executive Officers

1. For purposes of this plan, Corporate Executive Officers shall
consist of the Chief Executive Officer, the President Chief Operating Officer,
the Senior Vice President, Gas Turbine Operations, the Senior Executive Vice
President and General Counsel, and the Executive Vice President Finance and
Administration and such other senior officers of the Corporation as the Board of
Directors shall designate from time to time.

B. Corporate Officers

These include all corporate officers who are not Corporate Executive
Officers.

C. Corporate Vice Presidents will establish a list of A-Pool (Director) and
B-Pool (Manager and Professional) participants in accordance with the following
guidelines:

1. A-Pool participation shall consist of:

First level managers who are not otherwise Corporate Officers reporting
directly to a Corporate Vice President.

Certain first-level managers may be excluded if the reporting
relationship is due to special circumstances.

Certain second-level managers may be included if the responsibilities
of their position warrant participation at the A-Pool level.

2. B-Pool participation shall consist of:

Select Manager and Professional level employees who are in a position
to influence earnings through sustained performance.

3. Prior to March 1st of each year, the recommended lists of
participants are to be submitted by the Corporate Vice Presidents to the Chief
Executive Officer, President and the Vice President, Human Resources for their
approval.

D. Any organizational changes during the year which impact on participation
will be reviewed and approved by the Chief Executive Officer, President and the
Vice President, Human Resources.

<PAGE>

II. CORPORATE GOALS

A. Financial goal:

1. The financial goal for this Management Incentive Bonus Plan will be
budgeted Earnings Per Share from Continuing Operations of the Company.

2. The achievement of the financial goal will be applied to all
participants according to the participants' bonus formula set forth in the
General Outline at II.

B. Individual Performance Goals:

1. Performance goals for Corporate Vice Presidents will be agreed upon
with the appropriate Corporate Executive Officer.

2. Performance goals for Corporate Officers who are not Corporate Vice
Presidents and for A and B-Pool participants will be agreed upon with the
appropriate Corporate Vice President.

All goals will be reviewed by the Vice President Human Resources and
approved by the Chief Executive Officer or the President.

<PAGE>

POLICIES AND PROCEDURES
MANAGEMENT INCENTIVE BONUS PROGRAM

I. TIME OF PARTICIPATION

A. In order to participate in the MIBP, each participant must be in an
eligible position at the end of the plan year.

B. Any employee promoted or hired to a position included in the MIBP during
the plan year will be eligible to participate in the bonus program on a
pro-rated basis.

C. The plan year is the Company fiscal year.

II. BONUS PLAN REVIEWS

A. Once each quarter, the Chief Executive Officer or President, in
coordination with the Vice President Human Resources, will meet with each
Corporate Vice President to review performance goals for that Vice President and
his/her participant reports. Prior to these meetings the Corporate Vice
President will meet with his/her reports to review their performance goals.

III. DETERMINATION OF FINANCIAL AND PERFORMANCE RATINGS

A. Following the close of the plan year, the Executive Vice President,
Finance and Administration, will report to the Chief Executive Officer and the
President earnings per share from continuing operations. These calculations
shall be based upon the unaudited financial statements of the Company (which
shall contain all adjustments necessary to fairly present the Company's results
for the year then ended). Based on this result, the Executive Vice President,
Finance and Administration will calculate the financial rating for the Plan
using the format contained in Exhibit 1.A. This rating will be used to calculate
bonus awards for Corporate Executive Officers.

B. Performance ratings will be determined by appropriate Corporate
Executive Officers for their direct reports. Corporate Vice Presidents in
coordination with the appropriate Corporate Executive Officers will determine
performance ratings for their reports.

C. The Corporate Vice Presidents shall be advised of the financial rating
which shall be added to the performance rating calculated in III.B. The sum of
these ratings shall be the basis for calculating participant bonus payments.

<PAGE>

IV. AWARD CALCULATION

A. Awards shall be calculated by the Corporate Executive Officers for their
direct reports and by Corporate Vice Presidents for their reports using the
format contained in Exhibit 1.

B. The Compensation Committee of The Board of Directors shall determine and
approve the awards for the Corporate Executive Officers. It shall review and
recommend to the Board of Directors proposed awards for all Corporate Officers.

C. The Board of Directors will approve payments to all other Corporate
Officers pursuant to the Plan.

V. COMPANY PROFIT AND PLAN PAYOUT

Notwithstanding anything contained in this plan to the contrary, if there
is no company profit for the plan year, there will be no awards.

VI. FREQUENCY OF AWARDS

Bonus awards will be generated during the month of February for performance
in the previous plan year.

VII. CONTINGENCIES BEYOND PARTICIPANT'S CONTROL

In those instances where significant events affect the accomplishment of
individual performance goals for a participant, the Chief Executive Officer may
use his judgment regarding the amount of bonus to be awarded for this element of
the plan. Examples of such events could include: Labor disputes, acquisitions,
natural catastrophes. This shall not apply to awards to Corporate Executive
Officers.

VIII. FORFEITURE OF AWARD

A participant will not be eligible for consideration for an award if:

A. The participant is discharged for cause at anytime prior to the end
of the plan year.

B. The participant voluntarily resigns prior to the end of the plan
year.

Any exception to this policy must be approved by the Chief Executive
Officer or President and Vice President, Human Resources.

<PAGE>

IX. RETIREMENT, DISABILITY, NOT FOR CAUSE TERMINATION, OR DEATH
DURING THE PLAN YEAR

Any participant who retires, becomes permanently disabled, is terminated
other than for cause, or dies during the plan year shall be reviewed
individually to determine whether a bonus award is appropriate.

X. BUDGETING

The budget for Earnings Per Share from continuing operations shall include
the cost for "Par" performance on both the financial and performance elements
for all participants in the Plan.

XI. AMENDMENTS

This plan may not be substantively amended except (i) with respect to
Corporate Executive Officers, by a vote of the shareholders of the Company, or
(ii) with respect to all other participants, by the Board of Directors of the
Company.

XII. DISCLAIMER

This plan shall neither create any right to a bonus payment or future
participation therein for any employee, nor limit the right of Sequa Corporation
to modify, amend or rescind this plan for any subsequent plan year. Nor shall it
be construed as creating any right to employment.

<PAGE>

EXHIBIT 1

DETERMINATION OF BONUS POINTS

A. FINANCIAL BONUS POINTS

For the Corporate staff to earn bonus points for financial objectives, the
Company must achieve, at a minimum, its approved budget for Earnings Per Share
(E.P.S.) from continuing operations. For each percentage point actual E.P.S.
results exceed budget, up to 300% of original budget, participants earn
additional bonus points. The following table details bonus points earned upon
achievement of E.P.S. as well as points earned for each 1% over the minimum
level up to par (200% E.P.S.), and for each 1% over par up to maximum (300% of
minimum) for each level of participant:

Financial Points Earned
------------------------------------
For
Each For
1% Over Each 1%
minimum over par
For up up to
Minimum to Par Maximum
------- ------- -------

<S> <C> <C> <C>
Chief Executive Officer.................. 32.5 .325 .325
President/Chief Operating Officer, Senior
Vice President/Gas Turbine Operations,
Sr. Exec. Vice Pres. & General Counsel,
Executive Vice President Finance......... 30 .3 .3
Corporate Officers....................... 18.75 .1875 .375
A-Pool................................... 12.5 .125 .25
B-Pool................................... 6.25 .0625 .125
</TABLE>
10
<PAGE>

EXHIBIT 1

B. EXAMPLES OF FINANCIAL POINT CALCULATIONS AT $.60, $.95 AND $1.25 E.P.S. vs
A HYPOTHETICAL E.P.S. AT PAR OF $1.00 FOLLOW:

Actual
--------------------------

.60 .95 1.25
--- --- ----

<S> <C> <C> <C>
Chief Executive Officer
Minimum points.......................... 32.5 32.5 32.5
% over minimum
.60/.50 = 120% - 100%
20% x .325...................... 6.5
.95/.50 = 190% - 100%
90% x .325...................... 29.25
1.25/.50 = 250% - 100%
150% x .325..................... 48.75

---- ----- -----
Total financial points earned: 39.0 61.75 81.25
</TABLE>

Actual
-------------------------

.60 .95 1.25
--- --- ----

<S> <C> <C> <C>
Corporate Executive Officers
Minimum points......................... 30 30 30
% over minimum
$ .60 = 20% x .3.................. 6
$ .95 = 90% x .3.................. 27
$1.25 = 150% x .3................. 45
---- ---- ----
Total financial points earned: 36 57 75
</TABLE>

Since Corporate Executive Officers are paid on financial performance, the above
results would be the bonus payout percentages.

11
<PAGE>

EXHIBIT 1

Actual
-------------------------------
.60 .95 1.25
--- --- ----
<S> <C> <C> <C>

Corporate Officers*
Minimum points........................ 18.75 18.75 18.75
% over minimum/par
$ .60 = 20% x .1875.............. 3.75
$ .95 = 90% x .1875.............. 16.875
$1.25 = 100% x .1875............. 18.75
50% x .375............... 18.75
----- ------ -----
Total financial points earned: 22.50 35.625 56.25
</TABLE>

<TABLE>
<CAPTION>
Actual
-------------------------

.60 .95 1.25
--- --- ----
<S> <C> <C> <C>
A-Pool*
Minimum points............................ 12.5 12.5 12.5
% over minimum/par
$ .60 = 20% x .125 .................. 2.5
$ .95 = 90% x .125................... 11.25
$1.25 = 100% x .125 ................. 12.5
50% x .25............ 12.5
---- ----- ----
Total financial points earned: 15.0 23.75 37.5
</TABLE>

- -------------
* Based on point allocations as set forth on Exhibit 2

<PAGE>

EXHIBIT 1
C. PERFORMANCE BONUS POINTS

Since Corporate Officers' bonus payments are based 75% on financial results
and 25% on performance, the points calculated above would be combined with the
performance points awarded in determining the bonus award. For example -- if a
Vice President was earning $200,000 and received 12.5 points for performance,
the bonus would be calculated as follows for each of the earnings levels.

@ $.60 22.5 pts. + 12.5 pts. = 35.00 pts.
35.00 pts. x 1% = 35.00%
35.00% x $200,000 = $ 70,000

@ $.95 35.625 pts. + 12.5 pts. = 48.125 pts.
48.125 pts. x 1% = 48.125%
48.125% x $200,000 = $96,250

@ $1.25 56.25 pts. + 12.5 pts. = 68.75 pts.
(50 pts. x 1%) + (18.75 pts x .5%) = 59.375%
59.375% x $200,000 = $118,750

Since A-Pool bonus payments are based 50% on financial results and 50% on
performance, the points calculated above would be combined with the performance
points awarded in determining the bonus award. For example -- if the participant
was earning $100,000 and received 25 points for performance, the bonus would be
calculated as follows for each of the earnings levels.

@ $.60 15 pts + 25 pts = 40 pts
40 pts x .6% = 24%
24% x $100,000 = $24,000

@ $.95 23.75 pts. + 25 pts = 48.75 pts
48.75 pts x .6% = 29.25%
29.25% x $100,000 = $29,250

@ $1.25 37.5 pts. + 25 pts. = 62.5 pts.
(50 pts. x .6%) + (12.5 pts. x .3%) = 33.75%
33.75% x $100,000 = $33,750

<PAGE>

EXHIBIT 2

BONUS POINT CALCULATION
WORK SHEETS

<PAGE>
EXHIBIT 2.1

SEQUA CORPORATION

MANAGEMENT INCENTIVE BONUS PLAN

DIVISION: CORPORATE PERIOD COVERED: 1995
---------------------------- -------

POSITION: CHAIRMAN & CEO APPROVED BY:
---------------------------- -----------

NAME: N. ALEXANDER
----------------------------

POTENTIAL BONUS - PAR PERFORMANCE: 65%
------
MAXIMUM BONUS - OUTSTANDING PERFORMANCE: 97.5%
------

I. FINANCIAL AWARD

<TABLE>
<CAPTION>
Weighting
Minimum Par Out Minimum Par Out Actual Points
Goals Results Earned
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Earnings per share Plan 200% 300% 32.5 65 97.5
from continuing
operations

TOTAL FINANCIAL 32.5 65 97.5

</TABLE>

<PAGE>

EXHIBIT 2.2

SEQUA CORPORATION

MANAGEMENT INCENTIVE BONUS PLAN

DIVISION: CORPORATE PERIOD COVERED: 1995
----------------------- ---------

POSITION: PRESIDENT APPROVED BY:
----------------------- ---------

NAME: J. QUICKE
-----------------------

POTENTIAL BONUS - PAR PERFORMANCE: 60%
----
MAXIMUM BONUS - OUTSTANDING PERFORMANCE: 90%
----

I. FINANCIAL AWARD

Weighting
Goals(1) Minimum Par Out Minimum Par Out Actual Points
Results Earned
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings per Plan 200% 300% 30 60 90
share from
continuing
operations

TOTAL FINANCIAL 30 60 90

</TABLE>

- --------
(1) See footnote (1), page 3 above.

<PAGE>

EXHIBIT 2.3

SEQUA CORPORATION

MANAGEMENT INCENTIVE BONUS PLAN

DIVISION: CORPORATE PERIOD COVERED: 1995
-------------------------- ---------

POSITION: SR. VP GAS TURBINE APPROVED BY:
-------------------------- ----------

NAME: M. WEINSTEIN
--------------------------

POTENTIAL BONUS - PAR PERFORMANCE: 60%
----
MAXIMUM BONUS - OUTSTANDING PERFORMANCE: 90%
----

I. FINANCIAL AWARD

Weighting
Goals(2) Minimum Par Out Minimum Par Out Actual Points
Results Earned
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings per Plan 200% 300% 30 60 90
share from
continuing
operations

TOTAL FINANCIAL 30 60 90

</TABLE>

- --------
(2) See footnote (1), page 3 above.

<PAGE>

EXHIBIT 2.4

SEQUA CORPORATION

MANAGEMENT INCENTIVE BONUS PLAN

DIVISION: CORPORATE PERIOD COVERED: 1995
---------------------------------- ------

POSITION: SENIOR EXEC. VP-GENERAL COUNSEL APPROVED BY:
---------------------------------- -------

NAME: S. KRINSLY
----------------------------------

POTENTIAL BONUS - PAR PERFORMANCE: 60%
----

MAXIMUM BONUS - OUTSTANDING PERFORMANCE: 90%
----

I. FINANCIAL AWARD

Weighting
Goals Minimum Par Out Minimum Par Out Actual Points
Results Earned
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Earnings per share Plan 200% 300% 30 60 90
from continuing
operations

TOTAL FINANCIAL . 30 60 90

</TABLE>

<PAGE>

EXHIBIT 2.5

SEQUA CORPORATION

MANAGEMENT INCENTIVE BONUS PLAN

DIVISION: CORPORATE PERIOD COVERED: 1995
----------------------------- -------

POSITION: EXEC V.P. - FINANCE APPROVED BY:
----------------------------- -------

NAME: G. GUTTERMAN
-----------------------------

POTENTIAL BONUS - PAR PERFORMANCE: 60%
----
MAXIMUM BONUS - OUTSTANDING PERFORMANCE: 90%
----

I. FINANCIAL AWARD

Weighting
Goals Minimum Par Out Minimum Par Out Actual Points
Results Earned
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Earnings per share Plan 200% 300% 30 60 90
from continuing
operations

TOTAL FINANCIAL 30 60 90

</TABLE>

<PAGE>

EXHIBIT 2.6

SEQUA CORPORATION

MANAGEMENT INCENTIVE BONUS PLAN

DIVISION: CORPORATE PERIOD COVERED: 1995
------------------------ -----------------

POSITION: CORPORATE OFFICERS APPROVED BY: EXECUTIVE COMMITTEE
------------------------ -------------------

NAME: ALL
------------------------

POTENTIAL BONUS - PAR PERFORMANCE: 50%
----

MAXIMUM BONUS - OUTSTANDING PERFORMANCE: 75%
----

I. FINANCIAL AWARD
<TABLE>
<CAPTION>

Weighting
Goals Minimum Par Out Minimum Par Out Actual Points
Results Earned
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings per share Plan 200% 300% 18.75 37.5 75
from continuing
operations

TOTAL FINANCIAL 18.75 37.5 75
</TABLE>

II. PERFORMANCE AWARD

Minimum Par Out Points
Earned
<S> <C> <C> <C> <C>

6.25 12.5 25
TOTAL PERFORMANCE

GRAND TOTAL 25 50 100

</TABLE>

<PAGE>

EXHIBIT 2.7

SEQUA CORPORATION

MANAGEMENT INCENTIVE BONUS PLAN

DIVISION: CORPORATE PERIOD COVERED: 1995
----------------------------- --------

POSITION: "A" POOL APPROVED BY:
----------------------------- ---------

NAME:
-----------------------------

POTENTIAL BONUS - PAR PERFORMANCE: 30%
----

MAXIMUM BONUS - OUTSTANDING PERFORMANCE: 45%
----

I. FINANCIAL AWARD
<TABLE>
<CAPTION>

Weighting
Goals Minimum Par Out Minimum Par Out Actual Points
Results Earned
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Earnings per share Plan 200% 300% 12.5 25 50
from continuing
operations

TOTAL FINANCIAL 12.5 25 50
</TABLE>

II. PERFORMANCE AWARD

Minimum Par Out Points
Earned

<S> <C> <C> <C> <C>
TOTAL PERFORMANCE 12.5 25 50

GRAND TOTAL 25 50 100

</TABLE>