<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:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[_] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
The Fairchild Corporation
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
The Fairchild Corporation
------------------------------------------------------------------------
(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:
Notes:
<PAGE>
THE FAIRCHILD CORPORATION
WASHINGTON DULLES INTERNATIONAL AIRPORT
300 WEST SERVICE ROAD
CHANTILLY, VIRGINIA 22021
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 16, 1995
----------------
TO THE STOCKHOLDERS OF
THE FAIRCHILD CORPORATION
The Annual Meeting of Stockholders of The Fairchild Corporation, a Delaware
corporation (the "Company"), will be held at the Marriott Hotel, Washington
Dulles International Airport, 333 West Service Road, Chantilly, Virginia, on
Thursday, November 16, 1995, at 10:00 a.m. (local time), for the following
purposes:
1. To elect eleven (11) directors of the Company for the ensuing year;
2. To approve the material terms of the performance goals for the fiscal
1996 incentive compensation award for the Company's Chief Executive
Officer; and
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Only stockholders of record as of the close of business on September 25,
1995, will be entitled to notice of and to vote at the Annual Meeting and at
any adjournments or postponements thereof.
By Order of the Board of Directors
Donald E. Miller
Senior Vice President & Secretary
October 6, 1995
KINDLY DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE
ENCLOSED STAMPED, ADDRESSED ENVELOPE. A PROXY MAY BE REVOKED BY DELIVERING A
VALIDLY EXECUTED, LATER DATED PROXY AT ANY TIME PRIOR TO ITS USE. IF YOU
ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY IF YOU WISH AND VOTE IN
PERSON.
<PAGE>
THE FAIRCHILD CORPORATION
WASHINGTON DULLES INTERNATIONAL AIRPORT
300 WEST SERVICE ROAD
CHANTILLY, VIRGINIA 22021
October 6, 1995
PROXY STATEMENT
This statement is furnished in connection with the solicitation of proxies
on behalf of the Board of Directors (the "Board") of The Fairchild Corporation
(the "Company") for use at the Annual Meeting of Stockholders to be held on
Thursday, November 16, 1995, at 10:00 a.m. (local time), and at any
adjournments or postponements thereof (the "Annual Meeting"). Holders of
record of the Company's Class A Common Stock, par value $.10 per share ("Class
A Stock"), and Class B Common Stock, par value $.10 per share ("Class B
Stock"), at the close of business on September 25, 1995, will be entitled to
vote at the Annual Meeting. On September 25, 1995, there were 13,406,109
shares of Class A Stock and 2,696,886 shares of Class B Stock outstanding and
eligible to vote. Each share of Class A Stock entitles the holder thereof to
one vote, and each share of Class B Stock entitles the holder thereof to ten
votes, on each matter scheduled to come before the Annual Meeting. Class A
Stock and Class B Stock are sometimes collectively referred to herein as
"Stock."
All votes represented by the enclosed proxy will be cast FOR the eleven
nominees for director named herein, unless authorization to do so is withheld
by a stockholder for one or more of the ten nominees, and in the manner
specified by that stockholder with respect to approval of proposal (2), except
that in the absence of such instructions, the votes will be cast FOR the
approval of proposal (2). The Board does not know of any matters, other than
those specified herein, which will be presented for action at the Annual
Meeting. In the event that any other matters should properly come before the
Annual Meeting, it is the intention of the persons named in the enclosed proxy
to vote the proxy in accordance with their best judgment on such matters. A
proxy may be revoked by delivery of a validly executed, later dated proxy, by
notice in writing to the Secretary of the Company, at the above address, or in
person at the Annual Meeting any time prior to its use.
The eleven persons receiving the largest number of votes for director will
be elected. Proposal (2) requires the affirmative vote of a majority of the
shares present at the meeting. If a stockholder abstains from voting on a
proposal, his shares are considered present at the meeting, but since they are
not affirmative votes, they will have the same practical effect as a vote
against the proposal. Broker non-votes will have no effect on the vote.
1. ELECTION OF DIRECTORS
Eleven directors are to be elected for the ensuing year to hold office until
the next annual meeting of stockholders and until their successors are elected
and qualified. Except for Mr. Robert Sharpe, who was elected a director by the
Board on September 14, 1995, all nominees were elected to the Board at the
1994 annual meeting of stockholders. All nominees have previously been
designated as "Continuing Directors" as defined in the Company's Certificate
of Incorporation, as amended.
<PAGE>
INFORMATION AS TO NOMINEES
Set forth below is information about each nominee for election as a
director.
MICHAEL T. ALCOX, 47, has served as Senior Vice President and the Chief
Financial Officer of the Company since December 1987. He also served as
Treasurer of the Company from September 1990 until November 1991. Since 1990,
Mr. Alcox also has served as Vice President and the Chief Financial Officer of
RHI Holdings, Inc. ("RHI") and Fairchild Industries, Inc. ("Fairchild
Industries"), two subsidiaries of the Company. He is a director of RHI,
Fairchild Industries, and Banner Aerospace, Inc.* ("Banner Aerospace"). He
became a director of the Company in 1988. (1)(4)(5)
MORTIMER M. CAPLIN, 79, has been a senior member of Caplin & Drysdale
(attorneys) since 1964. Mr. Caplin serves as a director of Fairchild
Industries, Presidential Realty Corporation and Danaher Corporation. He became
a director of the Company in 1990. (1)(2)(6)
PHILIP DAVID, 64, was a consultant to the Company from January 1988 to June
1993. He was also an employee of the Company from January 1988 to December
1989. He was a Professor of Urban Development at Massachusetts Institute of
Technology until June 1988. Dr. David is also a director of Advanced NMR
Systems, Inc. He became a director of the Company in 1985. (3)(4)
THOMAS J. FLAHERTY, 57, joined the Company in April 1993, as the Chief
Operating Officer. Since 1993, he also has served as a director and the Chief
Operating Officer of Fairchild Industries. He was President and the Chief
Operating Officer of IMO Industries, Inc. from 1992 to April 1993. He was the
Chief Executive Officer & President of Transnational Industries, Inc. from
1990 to 1992. From 1977 to 1990, he held various executive positions with the
Hamilton Standard and Pratt & Whitney units of United Technologies
Corporation. He became a director of the Company in 1993.
HAROLD J. HARRIS, 66, is President of Wm. H. Harris, Inc. (retailer). He is
a director of Capital Properties Incorporated of Rhode Island. He became a
director of the Company in 1985. (2)(3)(5)
SAMUEL J. KRASNEY, 70, retired in 1993 as the Chairman of the Board, the
Chief Executive Officer and President of Banner Aerospace*, positions he had
held since June 1990. He continues to serve as a member of the Board of Banner
Aerospace (since June 1990) and also serves as the Vice Chairman of the Board
of the Company (since December 1985). He served as the Chief Operating Officer
of the Company from December 1985 until December 1989. Mr. Krasney has served
as the managing partner of ABBA Capital Enterprises since October 1985. Mr.
Krasney is a director of FabriCenters of America, Inc. and Waxman Industries,
Inc. He became a director of the Company in 1968.
FREDERICK W. MCCARTHY, 53, is the Chairman of the Board of Triumph Capital
Group, Inc. and a Managing Director of Triumph Corporate Finance Group, Inc.
(investment bankers), a position held since March 1990. Prior thereto, he was
a Managing Director of Drexel Burnham Lambert Incorporated ("Drexel Burnham"),
investment bankers, from 1974 until January 1990. Mr. McCarthy serves as a
director of RHI, RC/Arby's Corporation, Nutra Max Products, Inc., and
EnviroWorks, Inc. He became a director of the Company in 1986.** (3)(5)
HERBERT S. RICHEY, 73, served as President of Richey Coal Company (coal
properties-brokerage and consulting) until December 1993. Mr. Richey is a
director of Fairchild Industries and Sifco Industries, Inc. He became a
director of the Company in 1977. (1)(2)(6)
ROBERT A. SHARPE II, 37, joined Smithfield Foods, Inc. as Vice President,
Corporate Development, in July 1994. Prior to that time Mr. Sharpe served as
Senior Vice President of NationsBank Corporation and held other management
positions with NationsBank.
2
<PAGE>
DR. ERIC I. STEINER, 33, has served as Senior Vice President, Operations of
the Company since May 1992, and is currently President of Fairchild Fasteners,
a division of VSI Corporation, a wholly owned subsidiary of Fairchild
Industries. Prior thereto, he served as President of Camloc/RAM Products, one
of the Company's operating units, from September 1993 to February 1995. He
served as Vice President, Business Planning of the Company from March 1991
until May 1992. He has also served as Vice President of Fairchild Industries
since May 1992. He received an M.B.A. from Insead in France in 1990. Prior
thereto, he received an M.D. in 1988 from Faculte de Medicine de Paris and was
a medical doctor at Hospitaux De Paris in France until November 1989. He is a
director of Banner Aerospace.* Dr. Steiner became a director of the Company in
1988. He is the son of Jeffrey J. Steiner.
JEFFREY J. STEINER, 58, has served as the Chairman of the Board and the
Chief Executive Officer of the Company since December 1985, and as President
of the Company since July 1, 1991. Mr. Steiner also served as President of the
Company from November 1988 until January 1990. He has served as the Chairman
of the Board, the Chief Executive Officer and President of Banner Aerospace*
since September 1993. He served as the Vice Chairman of the Board of Rexnord
Corporation*** from July 1992 to December 1993. He has served as the Chairman,
President, and the Chief Executive Officer of Fairchild Industries since July
1991 and of RHI since 1988. Mr. Steiner is and for the past five years has
been President of Cedco Holdings Ltd., a Bermuda corporation (a securities
investor). He serves as a director of The Franklin Corporation and The Copley
Fund. He became a director of the Company in 1985. He is the father of Dr.
Eric I. Steiner. (1)(4)(5)
The persons named in the proxies will vote the proxies for the election of
the aforementioned nominees for director except where the authority to vote
for the nominees is withheld by the stockholder submitting the proxy. In the
event that any nominee refuses or is unable to serve as a director (which is
not now anticipated), the persons named as proxies reserve full discretion to
vote for any other person who may be nominated.
--------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation and Stock Option Committee.
(4) Member of the Investment Committee.
(5) Member of the Nominating Committee.
(6) Member of the Corporate Ethics and Compliance Committee.
* The Company has a significant equity position in this company.
** Drexel Burnham, as agent for the Company in the 1986 private placement of
the $160,000,000 Intermediate Subordinated Debentures due 2001, was given
the right to designate (subject in certain instances to the approval of the
designee by the Board or certain designated members of the Board) a person
to serve on the Board and its Compensation Committee as long as any of such
debentures are outstanding. In 1990, the parent corporation of Drexel
Burnham filed for bankruptcy and was subsequently liquidated. As Mr.
McCarthy was Drexel Burnham's designee on the Board prior to resigning his
position with Drexel Burnham in January 1990, the Company has taken the
position that Mr. McCarthy remains the nominee.
*** Until December 1993, the Company had a significant equity position in this
Company.
3
<PAGE>
BOARD OF DIRECTORS AND CERTAIN COMMITTEE MATTERS
The Board held four meetings during fiscal 1995. No incumbent director
attended less than seventy-five percent of the aggregate number of meetings of
the Board and committees on which he served. During fiscal 1995, directors who
were not employed by the Company or its subsidiaries received a quarterly
retainer of $2,500, plus $2,500 for each Board meeting attended (including as
a part of each such meeting any committee meetings held on the same date), a
$500 stipend for any committee meetings attended that were not held on the
same date as a Board meeting, and reimbursement for travel expenses.
The Board has (i) an Audit Committee whose primary functions are to examine
and consider matters relating to the internal and external audits of the
Company's accounts and its financial affairs and to select the Company's
independent auditor; (ii) a Compensation and Stock Option Committee whose
functions are to review and approve the compensation and other benefits of the
Chief Executive Officer and other executive officers of the Company, to review
and advise management regarding the benefits, including bonuses, and other
terms and conditions of employment of other employees of the Company, to
review and recommend for the approval of the full Board the compensation of
directors, and to advise the Board on matters relating to, and to award,
employee stock options; (iii) an Executive Committee whose functions include
considering pertinent matters and exercising all the powers of the Board,
which by law it may exercise when the Board is not in session; (iv) an
Investment Committee to consider and authorize material investments by the
Company and to advise the Board with respect thereto; (v) a Corporate Ethics
and Compliance Committee to oversee the Company's ethics programs; and (vi) a
Nominating Committee to consider and recommend to the Board candidates for
election to the Board of Directors by the stockholders. During fiscal 1995,
the Audit Committee held two meetings, the Compensation and Stock Option
Committee held two meetings, and the Nominating Committee held one meeting.
The Nominating Committee will consider written recommendations for nominees
for election to the Board at the 1996 Annual Meeting if submitted prior to
June 8, 1996 to the Secretary of the Company. Biographical information and the
written consent of the potential nominee must accompany the recommendation.
INFORMATION AS TO EXECUTIVE OFFICERS
Set forth below is certain information about each executive officer of the
Company who is not a director of the Company. All of the executive officers of
the Company are elected by the Board to serve until the next annual meeting of
the Board or until their successors are elected and qualified.
MEL D. BORER, 52, has served as Vice President of the Company since
September 1993. Mr. Borer has also served as Vice President of Fairchild
Industries since 1991 and as President of Fairchild Communications Services
Company since 1989.
ROBERT D. BUSEY, 52, has served as Vice President of the Company since
September 1992. Mr. Busey has also served as Vice President of Fairchild
Industries since November 1993. Prior to September 1992, Mr. Busey was
Assistant Vice President of the Company and held other management positions
with Fairchild Industries.
CHRISTOPHER COLAVITO, 40, has served as Vice President and Controller of the
Company since November 1990. Mr. Colavito also has served as Vice President
and Controller of Fairchild Industries since August 1989. Prior thereto, Mr.
Colavito, who is a Certified Public Accountant, was Assistant Controller of
Fairchild Industries and held other financial management positions with
Fairchild Industries.
4
<PAGE>
JOHN L. FLYNN, 49, has served as Senior Vice President, Tax of the Company
since September 1994 and as Vice President, Tax since August 1989. Mr. Flynn
also has served as Vice President, Tax of Fairchild Industries since November
1986.
HAROLD R. JOHNSON, 72, Brig. Gen., USAF (Ret.), has served as Senior Vice
President, Business Development of the Company since November 1990. General
Johnson has also served as Vice President of Fairchild Industries since
February 1988.
ROBERT H. KELLEY, 47, has served as Vice President, Employee Benefits of the
Company since November 1993. He also has served as Vice President of Fairchild
Industries since November 1993. Prior thereto, he held other management
positions with Fairchild Industries.
JERRY R. LIRETTE, 47, has served as Vice President of the Company since May
1992. Mr. Lirette also has served as Vice President of Fairchild Industries
since 1988, and has served as President of D-M-E Company since 1983.
DONALD E. MILLER, 48, has served as Senior Vice President and General
Counsel of the Company since January 1991 and Corporate Secretary since
January 1995. Mr. Miller also has served as Vice President and General Counsel
of Fairchild Industries since November 1991. Prior to 1991, Mr. Miller was a
principal of the law firm of Temkin & Miller, Ltd. in Providence, Rhode
Island.
KAREN L. SCHNECKENBURGER, 46, has served as Vice President of the Company
since September 1992 and as Treasurer of the Company since November 1991. Ms.
Schneckenburger also has served as Treasurer of Fairchild Industries since
August 1989. Prior thereto, she served as Director of Finance of Fairchild
Industries from 1986 through 1989.
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth compensation information
for each of the Company's Chairman and Chief Executive Officer and the other
four most highly compensated executive officers of the Company whose salary
and bonus exceeded $100,000 for the most recent fiscal year (the "named
executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
----------------------------- -------------------------
All Other
Name/Position Year Salary Bonus Other Options Compensation
------------- ---- ---------- ---------- ------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey J. Steiner, 1995 $1,550,011 $ 180,000 -- 60,000 $ 23,130(2)
Chairman & CEO 1994 1,550,011 2,728,096 -- -- 26,439(3)
1993 1,448,000 -- -- -- 25,634(4)
Jerry R. Lirette, 1995 218,642 131,639 -- 10,000 3,881(5)
Vice President 1994 217,385 114,376 -- -- 6,329(5)
1993 190,000 143,716 -- 10,000 5,539(5)
Mel D. Borer 1995 178,644 95,697 -- 10,000 3,956(5)
Vice President 1994 164,137 77,587 -- -- 2,901(5)
1993 150,108 75,000 -- 5,000 5,803(5)
Michael T. Alcox, 1995 215,010 53,750 -- 20,000 3,750(5)
Sr. Vice President 1994 240,010 203,750 $14,857(1) -- 5,904(5)
& CFO 1993 203,925 86,000 16,965(1) 5,000 5,976(5)
Donald E. Miller, 1995 185,016 46,250 -- 20,000 6,195(6)
Sr. Vice President 1994 185,016 196,250 -- -- 5,946(5)
and General Counsel 1993 169,266 70,000 -- 5,000 5,216(5)
</TABLE>
5
<PAGE>
--------
(1) Tax gross up payments related to reimbursement of relocation costs.
(2) Includes $19,380 for value of premiums paid by the Company for split-
dollar life insurance coverage and $3,750 for Company contributions under
401(k) savings plan.
(3) Includes $19,493 for value of premiums paid by the Company for split-
dollar life insurance coverage and $3,750 for Company contributions under
401(k) savings plan. Also includes $3,196 in imputed interest on a loan by
the Company to Mr. Steiner.
(4) Includes $19,738 for value of premiums paid by the Company for split-
dollar life insurance coverage and $5,896 for Company contributions under
401(k) savings plan.
(5) Company contributions under 401(k) savings plan.
(6) Includes $2,445 in imputed interest on a loan by the Company to Mr. Miller
and $3,750 for Company contributions under 401(k) savings plan.
The following table sets forth information concerning individual grants of
stock options made during the 1995 fiscal year to each named executive
officer.
OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% Options 5% 10%
Granted Appreci- Appreci-
Shares to all Exercise Expiration ation ation
Name Granted Employees Price Date (2) (2)
---- ------- --------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey J. Steiner 60,000(1) 17.6% $3.875 9/20/99 $64,236 $141,944
Jerry R. Lirette 10,000(1) 2.9% 3.875 9/20/99 10,706 23,657
Mel D. Borer 10,000(1) 2.9% 3.875 9/20/99 10,706 23,657
Michael T. Alcox 20,000(1) 5.9% 3.875 9/20/99 21,412 47,315
Donald E. Miller 20,000(1) 5.9% 3.875 9/20/99 21,412 47,315
</TABLE>
--------
(1) These options were granted on September 21, 1994 and 25% became
exercisable on September 21, 1995, 50% are exercisable on September 21,
1996, 75% are exercisable on September 21, 1997, and 100% are exercisable
on September 21, 1998.
(2) The potential realizable value for each named executive officer reflects
the increase in value of the shares granted based on a beginning price of
$3.875 and assuming rates of stock value appreciation of 5% and 10%,
respectively, over a period of five years. The actual value, if any, an
executive may realize will depend on the excess of the stock price over
the exercise price on the date the option is exercised.
The following table sets forth information concerning the fiscal year-end
value of unexercised stock options of each of the named executive officers.
OPTION YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
Value of In-the-Money
Number of Unexercised Outstanding Options at
Options at 6/30/95 6/30/95
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Jeffrey J. Steiner 282,500 60,000 -- --
Jerry R. Lirette 20,750 16,750 -- --
Mel D. Borer 14,750 14,250 -- --
Michael T. Alcox 91,750 26,750 -- --
Donald E. Miller 25,000 25,000 -- --
</TABLE>
There were no exercises of stock options by the named executive officers
during the 1995 fiscal year.
6
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the performance of the Company's Class A Common
Stock with that of the S & P 500 Stock Index and the S & P Manufacturing
(Diversified Industrials) Index (consisting of 12 industrial manufacturers).
The graph plots the growth in value of an initial $100 investment over the
indicated five year period with all dividends reinvested.
----------------------------------------------------------
Comparison of Five Year Cumulative Total Returns
Total Returns Assume Reinvestment of Dividends
----------------------------------------------------------
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Fiscal Year Ending June 30: 1990 1991 1992 1993 1994 1995
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The Fairchild Corporation-Class A 100 69.52 37.33 28.49 30.45 26.52
------------------------------------------------------------------------------------------
S&P 500 Index 100 107.40 121.80 138.40 140.35 176.94
------------------------------------------------------------------------------------------
S&P Manuf.-Diversified Index 100 106.86 104.76 124.16 138.68 183.38
------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Assumes $100 Invested on July 1, 1990 in The Fairchild Corporation Class A
common stock and in each index
--------------------------------------------------------------------------------
7
<PAGE>
COMPENSATION AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation and Stock Option Committee of the Board of Directors (the
"Committee"), which is composed of three non-employee Directors, has initial
responsibility for all compensation actions affecting the Company's executive
officers, including base salaries, bonus awards, stock option awards and the
terms and conditions of their employment. The Committee administers the
Company's 1986 Non-Qualified and Incentive Stock Option Plan (the "1986
Plan").
The Committee makes appropriate recommendations concerning executive
compensation, and reports to the Board of Directors. Under the supervision,
approval and review of the Committee, the Company's compensation policies and
programs are designed to motivate, retain and attract management with
incentives linked to financial performance of the Company and the value that
is delivered to its shareholders. Specifically, the Company's policies and
programs endeavor to: (i) link executive compensation to sustainable increases
in the financial performance of the Company, where possible, and where not
possible, preservation or realization of shareholder value; (ii) provide
rewards contingent upon Company or business unit performance; (iii)
differentiate compensation based upon individual contribution; (iv) promote
teamwork among executives and other Company employees; and (v) encourage the
retention of a sound management team. During each fiscal year, the Committee
reviews and recommends to the Board, with any modification it deems
appropriate, base salary levels for the Company's executive officers,
including the named executive officers and certain other senior managers.
The Company manages the total cash compensation to provide median levels of
cash compensation at average levels of corporate, business unit, and
individual performance. Cash compensation consists of two components: (i) a
base salary that is competitive with that of other companies paying at the
median level of the market, and (ii) an annual incentive opportunity that is
variable and is reflective of the financial performance of the Company and the
individual performance of the executive officer. When high levels of
performance are achieved, the level of cash compensation may exceed the median
of the market. Conversely, when the Company, business unit, or the individual
falls short of the predetermined goals, the level of cash compensation may be
substantially below the market median. The objective of this mix is to deliver
total annual cash compensation competitive with compensation offered at other
companies facing similar challenges for similar positions, while
simultaneously linking the payment of the annual cash incentive to the
achievement of specific objectives in the Company's annual operating plan as
approved by the Board.
The mix between salary and annual incentive pay is related to an executive's
job grade. Executives at higher grade levels in the Company have a greater
percentage of their total cash compensation contingent on the accomplishment
of business objectives, i.e. the higher the executive grade level, the greater
the proportion of annual compensation that is "at risk". The yearly
performance bonus, when awarded, is generally paid in August with respect to
the preceding fiscal year. The award and size of the performance bonus are
based upon: (i) the executive officer's performance against individual goals;
and (ii) the performance of the executive officer's unit within the Company
against that unit's goals; or (iii) the performance of the Company against
Company goals. Goals vary from year to year and from unit to unit and, with
regard to individual goals of executive officers, usually include both
quantitative and qualitative factors. The Committee also occasionally awards
special bonuses in connection with extraordinary transactions by the Company.
The bonuses generally are awarded to individuals who make significant
contributions towards consummation of the transactions.
In addition, the Committee has considered the impact of a recently enacted
provision of the Internal Revenue Code of 1986, as amended (the "Code"), which
in certain circumstances disallows income tax deductions for compensation in
excess of $1,000,000. This disallowance provision does not apply to
performance-based compensation and certain other forms of compensation. The
Committee
8
<PAGE>
currently intends to structure the Company's incentive compensation awards to
the Company's Chief Executive Officer in a manner that complies with the
Code's requirements for performance-based compensation to ensure that the
Company is entitled to full deductibility of such compensation. One of these
requirements is that the shareholders approve the material terms of
performance goals for such awards. To satisfy this requirement, the
shareholders are being asked elsewhere in this Proxy Statement to approve the
material terms of the performance goals for the fiscal 1996 incentive
compensation award for the Company's Chief Executive Officer.
The Committee believes that stock option grants serve as a desirable long-
term method of compensation because they closely ally the interests of
management with the preservation and enhancement and realization of
stockholder value and serve as an additional incentive to promote the success
of the Company. In fiscal 1995, the Committee approved the grant of 330,000
stock options under the 1986 Plan to the Company's senior management and key
employees. Included in these grants were 120,000 options granted to the named
executive officers.
Jeffrey J. Steiner, has served as the Chairman of the Board and the Chief
Executive Officer of the Company since 1985 and as President since July 1991.
In fixing Mr. Steiner's salary and target bonus levels, as well as determining
the size of stock options, if any, the Compensation Committee and the Board
typically review the financial performance of the Company, including revenue
and profit levels. In addition, the Committee reviews Mr. Steiner's
performance as the Chairman of the Board, the Chief Executive Officer and
President, his importance to the Company and his success in implementing its
strategic goals.
Mr. Steiner has developed and established initiatives aimed at improving the
operating efficiency and financial performance of the Company. Following
several years of record earnings, the Company's earnings from operations
declined sharply in 1991, as a result of the global industrial recession and
an unusual combination of circumstances affecting those businesses of the
Company that serve the aerospace and aviation industry, including, but not
limited to, reductions in commercial air travel and defense spending, as well
as the deregulation of the airline industry. These events required major
changes in the way the Company conducts its business, as well as new and
innovative business strategies. During fiscal years 1993, 1994 and 1995, under
the direction of Mr. Steiner, the Company (i) has implemented extensive and
innovative recapitalization plans for Fairchild Industries, Inc., (ii) through
its communication services division, has grown significantly through strategic
acquisitions and synergistic growth, (iii) has implemented aggressive cost-
reduction and cost-control programs at all organizational and divisional
levels, of such proportion as to fundamentally change the way those
organizations and divisions do business, (iv) has sold its equity position in
Rexnord Corporation at a premium price, (v) has taken important steps towards
implementing a strategy of diversifying into new, high growth industries, (vi)
has established new management structures at all levels of the Company and has
introduced new leadership talent in key positions for the operating units of
the Company, (vii) has implemented a plan of moving the Company into high
technology business serving leading-edge industries with double-digit growth
performance, and (viii) has set the tone for taking aggressive actions to sell
off or otherwise dispose of assets not in the mainstream of the Company's core
businesses. Mr. Steiner's overall leadership and aggressive implementation
efforts related to the recapitalization, restructuring, diversification,
growth, divestiture, cost-reduction, and management enhancement programs of
the Company have proved to be invaluable in progressing toward improved
financial performance and the achievement of long-term goals and objectives.
Nevertheless, despite Mr. Steiner's achievements, the Committee's and the
Board's ability to determine independently Mr. Steiner's compensation has been
constrained by the terms of the stipulation of settlement of the action
entitled Piven, et al. v. Steiner et al.
The Committee believes that the total compensation program for executives of
the Company is on a level with the compensation programs provided by other
companies facing similar challenges. The
9
<PAGE>
Committee believes that any amounts paid under the annual incentive plan will
be appropriately related to corporate and individual performance, yielding
awards that are directly linked to the annual financial and operational
results of the Company within the framework of the challenges faced. The
Committee also believes that the 1986 Plan provides opportunities to
participants that are consistent with the returns that are generated on behalf
of the Company's shareholders.
Compensation and Stock Option
Committee of the Board of Directors
Philip David, Chairman
Harold J. Harris
Frederick W. McCarthy
EMPLOYMENT AGREEMENTS
Mr. Jeffrey Steiner has an amended and restated employment agreement with
the Company dated September 10, 1992. The term of the current agreement, under
which Mr. Steiner is entitled to receive a base salary determined by the
Compensation and Stock Option Committee of the Board ($1,400,000 for the
current fiscal year, subject to the Piven restrictions set forth below), is
five years and is extended annually for additional one-year periods unless
either party gives notice not to extend the agreement. If Mr. Steiner dies
during the term or any extended term of the agreement, his estate will receive
an amount equal to one year's base salary, plus bonus, if any, for the fiscal
year during which death has occurred, and if the Company terminates the
agreement because of Mr. Steiner's disability for more than nine consecutive
months, or shorter periods aggregating nine months during any twelve month
period, he will receive fifty percent of his base salary for two years, plus
bonus, if any, for the fiscal year during which termination of his employment
has occurred. In the event of a "change in control" of the Company or a
"trigger event" such as a merger in which the Company is not the surviving
corporation, or a sale of substantially all of the Company's assets, the term
of employment will terminate upon payment to Mr. Steiner of severance
compensation in an amount equal to the sum of 2.99 times his base salary and
2.99 times the preceding year's bonus paid to him. Mr. Steiner signed a
service agreement on April 6, 1990 with Banner Investments (U.K.) PLC, a
subsidiary of the Company ("Banner U.K."), pursuant to which Mr. Steiner is
entitled to receive pound sterling 204,000 annually for the term of the
agreement. Pursuant to an amendment dated November 18, 1992, Mr. Steiner's
annual compensation from Banner U.K. was adjusted, to avoid currency
fluctuation, to the greater of $400,000 or pound sterling 204,000. Pursuant to
the terms of the stipulation of settlement of the action entitled Piven, et
al. v. Steiner et al. filed in the Court of Chancery of the State of Delaware,
Mr. Steiner (a) was not granted any new stock options for the period from the
effective date of the settlement through June 30, 1993; and (b) will not
receive a bonus from the Company through fiscal year 1995 greater than,
without duplication, (i) one and one-half percent of the total value of any
extraordinary transaction, subject to approval of the Compensation and Stock
Option Committee, and (ii) three percent of Income from Continuing Operations
before Taxes on Income and Extraordinary Items. In addition, Mr. Steiner's
base salary under his employment agreement with the Company will be paid at an
annual rate of $250,000 a year less than its present level of $1,400,000 for
fiscal years 1992 through 1996 and such base salary may not be increased
during that time.
Mr. Flaherty has an employment agreement with the Company that provides that
he will serve as the Chief Operating Officer of the Company for a term through
June 30, 1996, which term will be automatically extended for additional one
year periods unless either party has given at least six months advance notice
of intention not to extend the term beyond June 30, 1996 or any later
anniversary date. Mr. Flaherty is entitled to receive a base salary of not
less than $225,000 per year for the remainder of the term. If Mr. Flaherty's
employment is terminated prior to June 30, 1996, for reasons other than cause,
he will be entitled to a continuation of his base salary, at its then current
rate, for a period of 12 months from date of termination. In addition, in the
event of a change of control of the Company occurring prior to December 21,
1997, Mr. Flaherty will receive a sum equal to two times his then
10
<PAGE>
current annual base salary, payable one-half on the date of change of control
and the balance over a one year period, provided and so long as he remains or
endeavors to remain an employee of the Company and his employment is not
terminated for cause.
Messrs. Alcox, Miller, Borer and Lirette each have a letter agreement with
the Company dated October 21, 1994, as amended December 21, 1994. Each
agreement provides that if the Company terminates their employment for reasons
other than cause prior to October 21, 1997, they each will receive a severance
payment equal to one year of their then current base salary and incentive
compensation (to the extent it could have been earned) based on their then
current bonus target prorated through the date of termination. In addition, in
the event of a change of control of the Company occurring prior to October 21,
1997, Messrs. Alcox and Miller each will receive a sum equal to two times
their then current annual base salary, payable one-half on the date of change
of control and the balance over a one year period, provided and so long as
they remain or endeavor to remain employees of the Company and their
employment is not terminated for cause.
PENSION AND RETIREMENT BENEFITS
The Company and its subsidiaries have a number of defined benefit pension
plans covering substantially all U.S. employees. Effective January 1, 1991,
the Company adopted the Retirement Plan for Employees of Fairchild Industries,
Inc. ("Fairchild Retirement Plan"). The following table illustrates the amount
of estimated annual fixed retirement benefits payable under the Fairchild
Retirement Plan to an employee retiring in 1995, at age 65, at various salary
levels (average of highest five consecutive years out of last ten years of
service) and years of service. The Fairchild Retirement Plan defines salary as
total compensation, subject to the Internal Revenue Service's limit on the
amount of compensation that may be used to compute benefits under qualified
pension plans. This limit is equal to $150,000 for 1995. The benefit amounts
listed in the following table are not subject to any deduction for Social
Security benefits or other offset amounts.
<TABLE>
<CAPTION>
Average 10 Years 20 Years 30 Years 40 Years
Salary of Service of Service of Service of Service
-------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ 25,000 $ 1,963 $ 3,926 $ 5,890 $ 7,184
50,000 4,963 9,926 14,890 17,996
100,000 10,963 21,926 32,890 39,621
150,000 16,963 33,926 50,890 61,246
200,000 20,563 41,126 61,690 74,221
250,000 23,316 46,632 69,948 84,143
</TABLE>
The named executive officers participate in the Fairchild Retirement Plan.
For purposes of determining benefits under the Fairchild Retirement Plan, Mr.
Steiner's average salary is $150,000 with four years and six months of
credited service. Mr. Alcox's average salary is $150,000 with four years and
six months of credited service. Mr. Lirette's average salary is $150,000 with
15 years and six months of credited service. Mr. Miller's average salary is
$150,000 with three years and five months of credited service. Mr. Borer's
average salary is $150,000 with nine years and two months of credited service.
The Company has a Supplemental Executive Retirement Plan for certain key
executives which provides additional retirement benefits based on final
average earnings and years of service. Benefits which may be payable under
this plan are not included in the Summary Compensation Table. This plan
provides a maximum retirement benefit equal to the difference between sixty
percent of the participant's average base salary for the last five years of
employment and the aggregate of the participant's (i) other Company defined
pension benefits, (ii) profit sharing/ESOP benefits, and (iii) primary Social
Security payment. This plan is unfunded, unqualified and is not subject to the
Employee Retirement Income Security Act of 1974, as amended. The plan was
amended in June 1988 to provide
11
<PAGE>
for lump sum pre-retirement advances on an actuarially reduced basis, at the
election of participants age sixty or over, contingent upon approval of the
Compensation and Stock Option Committee. All persons named in the Summary
Compensation Table are eligible for participation in this plan.
The annual contributions under the Retirement Plan and the Supplemental
Executive Retirement Plan attributable to persons named in the Summary
Compensation Table are not shown since they cannot be readily determined by
the regular actuaries of said plans. Directors who are not employees of the
Company or one of its subsidiaries are not eligible to participate in these
retirement plans.
2. APPROVAL OF MATERIAL TERMS OF PERFORMANCE
GOALS FOR FISCAL 1996 INCENTIVE
COMPENSATION AWARD FOR THE COMPANY'S
CHIEF EXECUTIVE OFFICER
At the Annual Meeting, the shareholders will be asked to approve the
material terms of the performance goals for the fiscal 1996 incentive
compensation award for the Company's Chief Executive Officer. Effective for
tax years beginning in 1994, the Code disallows deductions for publicly-held
corporations with respect to compensation in excess of $1,000,000 paid to
certain executive officers. However, compensation payable solely on account of
attainment of one or more performance goals is not subject to this deduction
limitation if the performance goals are objective, pre-established and
determined by a compensation committee comprised solely of two or more outside
directors, the material terms of the performance goals under which the
compensation is to be paid are disclosed to the shareholders and approved by a
majority vote, and the compensation committee certifies that the performance
goals and other material terms were in fact satisfied before the compensation
is paid.
On September 14, 1995, the Company's Compensation and Stock Option Committee
(the "Committee") established performance goals for the Chief Executive
Officer's fiscal 1996 incentive compensation award and the maximum amount
payable to the Chief Executive officer if the goals are achieved.
The performance goals and maximum amounts payable for fiscal 1996 are as
follows:
1. If the Company (including its consolidated subsidiaries) achieves pre-
tax profits for fiscal 1996, the Chief Executive Officer may receive up to
three percent (3%) of such pre-tax profits.
2. If the Company engages in an extraordinary transaction (e.g., purchase
or sale of assets not in the ordinary course, including, without
limitation, through a public offering or private placement of securities)
during fiscal 1996, the Chief Executive Officer may receive up to one and
one-half percent (1 1/2%) of the total value of the transaction.
All of the foregoing will be computed in such a manner to avoid duplication.
The Committee retains the right to determine the actual amount of incentive
compensation to be awarded to the Chief Executive Officer in fiscal 1996 based
on his individual contribution, consistent with the foregoing goals and in an
amount no greater than the maximum amounts set forth above.
Assuming the shareholders approve the material terms of the performance
goals as described herein, the Company believes that any such incentive
compensation award to the Chief Executive Officer will qualify as performance-
based compensation that will be deductible from the Company's gross income for
federal income tax purposes.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL OF THIS
PROPOSAL.
12
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The table below sets forth as of August 31, 1995 the number of shares and
percent of Class A Stock and Class B Stock beneficially owned by (i) each
person known by the Company to own beneficially more than five percent of any
class of Stock, (ii) each director and nominee for director, (iii) each named
executive officer, and (iv) the directors, nominees and officers of the
Company as a group.
<TABLE>
<CAPTION>
Number of Number of
Shares of Percent Shares of Percent
Class A of Class B of
Stock(1) Class Stock(1) Class
--------- ------- --------- -------
<S> <C> <C> <C> <C>
Michael T. Alcox 122,350(2) * 600 *
Bestin Ltd 3,146,388(3) 23.5% -- --
ATC Trustees (BVI) Ltd.
Abbott Building, 2nd Floor
P.O. Box 933
Road Town
Tortola, B.V.I.
Mel D. Borer 17,250(4) * -- *
Mortimer M. Caplin 70,000(5) * -- --
Columbia Savings & Loan
Association(6) 825,000 6.1% -- --
8840 Wilshire Boulevard
Beverly, CA 90211
Philip David 29,500(7) * -- --
Dimensional Fund Advisors(8) 722,000 5.4%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Fairchild Industries Master
Retirement Trust 818,709 6.1% -- --
300 West Service Road
Chantilly, VA 22021
Thomas J. Flaherty 20,000(9) * -- --
Harold J. Harris 106,200(10) * -- --
Samuel J. Krasney 985,040(11) 7.2% -- --
25700 Science Park Drive
Cleveland, OH 44122
Jerry R. Lirette 30,750(12) * -- --
Frederick W. McCarthy 35,000(13) * -- --
Donald E. Miller 46,750(14) * -- --
RHI Holdings Master Trust 966,966 7.2% -- --
300 West Service Road
Chantilly, VA 22021
Herbert S. Richey 23,500(15) * -- --
Robert A. Sharpe -- * -- --
Eric I. Steiner 104,505(16) * 15,000 *
Jeffrey J. Steiner 6,929,884(17) 41.6% 2,944,996(18) 95.9%
110 East 59th Street
New York, NY 10022
Stinbes Limited 3,256,296(19) 20.0% 2,908,996(20) 94.7%
ATC Trustees (Cayman) Ltd.
P.O. Box 30592 SMB
Piccadilly Centre, 2nd Floor
Grand Cayman, Cayman Islands,
B.W.I.
All 19 directors, nominees and
officers as a group 8,643,090(21) 50.0% 2,960,596 96.4%
</TABLE>
13
<PAGE>
--------
*Represents less than one percent.
(1) Shares of Class B Stock, which are immediately convertible into Class A
Stock, are also included in the Class A Stock column on a share-for-share
basis. Options that are exercisable immediately or within sixty days
after August 31, 1995 appear in the Class A Stock column. Warrants are
immediately exercisable into shares of either Class A Stock or Class B
Stock and appear in both the Class A Stock and Class B Stock columns.
(2) Includes exercisable employee stock options to purchase 99,250 shares of
Class A Stock.
(3) Bestin Ltd., a corporation organized under the laws of the Cayman
Islands, is an indirect, wholly-owned subsidiary of Bestin S.A., a
Luxembourg joint stock company whose shares are owned by Paske
Investments Ltd., a corporation organized under the laws of Jersey,
Channel Islands, a wholly owned subsidiary of The Friday Trust ("The
Friday Trust"), a trust organized under the laws of Jersey, Channel
Islands, of which the sole trustee is Lloyds Bank Trust Company (Channel
Islands) Limited, a trust corporation registered in Jersey, Channel
Islands. Bestin Ltd. was formed for the purpose of acquiring and holding
the Company's shares and is not presently engaged in any other
activities.
(4) Includes exercisable employee stock options to purchase 17,250 shares of
Class A Stock.
(5) Includes exercisable employee stock options to purchase 10,000 shares of
Class A Stock.
(6) On March 22, 1991, the assets of Columbia Savings & Loan Association were
taken over by its conservator, Resolution Trust Corporation.
(7) Includes exercisable employee stock options to purchase 15,000 shares of
Class A Stock.
(8) Based on information included on a Schedule 13G dated as of December 31,
1994.
(9) Includes exercisable employee stock options to purchase 20,000 shares of
Class A Stock.
(10) Includes 27,000 shares of Class A Stock owned by the Wm. H. Harris, Inc.
Profit-Sharing Plan and exercisable employee stock options to purchase
15,000 shares of Class A Stock.
(11) Includes exercisable employee stock options to purchase 234,000 shares of
Class A Stock. Also includes 44,100 shares of Class A Stock owned by Mr.
Krasney's wife; Mr. Krasney disclaims beneficial ownership of such
shares.
(12) Includes exercisable employee stock options to purchase 23,250 shares of
class A Stock.
(13) Includes exercisable employee stock options to purchase 15,000 shares of
Class A Stock.
(14) Includes exercisable employee stock options to purchase 31,250 shares of
Class A Stock.
(15) Includes exercisable employee stock options to purchase 17,500 shares of
Class A Stock.
(16) Includes exercisable employee stock options to purchase 49,000 shares of
Class A Stock. Includes 5,000 shares of Class A Stock owned by Mr.
Steiner as custodian for his children.
(17) Mr. Steiner is the settlor and a beneficiary of The Friday Trust, and as
such also may be deemed to beneficially own the Stinbes Limited Shares
and the Bestin Ltd. Shares. See notes (3) and (19) to this table.
Includes exercisable employee stock options to purchase 297,500 shares of
Class A Stock and exercisable warrants to purchase 375,000 shares of
Class A Stock or Class B Stock. Also includes 45,500 shares of Class A
Stock owned by Mr. Steiner as custodian for his children. Also includes
49,500 shares of Class A Stock owned by Mr. Steiner's wife; Mr. Steiner
disclaims beneficial ownership of such shares.
(18) Mr. Steiner is the settlor and a beneficiary of The Friday Trust, and as
such also may be deemed to beneficially own the Stinbes Limited Shares.
See notes (19) and (20) to this table. Includes 30,000 shares of Class B
Stock owned by Mr. Steiner as custodian of his children. Also includes
6,000 shares of Class B Stock owned by Mr. Steiner's wife; Mr. Steiner
disclaims beneficial ownership of such shares. Also includes exercisable
warrants to purchase 375,000 shares of Class A Stock or Class B Stock.
(19) Consists of 347,300 shares of Class A Stock and 2,533,996 shares of Class
B Stock, and exercisable warrants to purchase 375,000 shares of Class A
Stock or Class B Stock, owned by Stinbes Limited, a corporation organized
under the laws of the Cayman Islands, an indirect wholly-owned subsidiary
of Bestin S.A., a Luxembourg joint stock company, whose shares are owned
by Paske Investments Ltd., a corporation organized under the laws of
Jersey, Channel
14
<PAGE>
Islands, a wholly owned subsidiary of The Friday Trust. Stinbes Limited
was formed for the purpose of acquiring and holding the Company's Shares
and is not presently engaged in any other activities.
(20) Includes exercisable warrants to purchase 375,000 shares of Class A or
Class B stock.
(21) Includes exercisable employee stock options to purchase shares of Class A
Stock not otherwise reported above.
CERTAIN TRANSACTIONS
Mortimer M. Caplin, a director of the Company, is a senior member of the law
firm of Caplin & Drysdale, which rendered legal services to the Company during
fiscal 1995. The Company intends to use the services of this firm during
fiscal 1996.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen & Co. has served as the Company's independent auditor since
1968. No change is contemplated. A representative of Arthur Andersen & Co.
will be present at the Annual Meeting, will have an opportunity to make a
statement if he or she desires to do so, and will be available to respond to
any appropriate questions.
EXPENSES OF SOLICITATION
In addition to the use of the mail, proxy solicitation may be made by
telephone, telegraph and personal interviews by regular employees of the
Company. The Company also will reimburse brokerage houses and others
forwarding proxy materials to beneficial owners of stock. The costs of
soliciting proxies will be borne by the Company.
STOCKHOLDER PROPOSALS
Stockholders of the Company who wish to make a proposal to be included in
the Company's proxy materials for its 1996 annual meeting of stockholders must
cause such proposal to be received by the Company at its corporate
headquarters, Washington Dulles International Airport, 300 West Service Road,
P.O. Box 10803, Chantilly, Virginia 22021, Attention: Donald E. Miller, Senior
Vice President & Secretary, not later than June 8, 1996.
ANNUAL REPORT
The Company's Annual Report to Stockholders for the fiscal year ended June
30, 1995, was mailed to stockholders with or prior to mailing of this Proxy
Statement. The Company will provide free of charge to any stockholder as of
the record date who so requests in writing, a copy of the Company's annual
report on Form 10-K for fiscal year 1995. Requests for such copies should be
directed to Donald E. Miller, Senior Vice President & Secretary, The Fairchild
Corporation, Washington Dulles International Airport, 300 West Service Road,
P.O. Box 10803, Chantilly, Virginia 22021.
By Order of the Board of Directors
Donald E. Miller
Senior Vice President
& Secretary
15
<PAGE>
LOGO
THE FAIRCHILD CORPORATION
SAVINGS PLAN FOR EMPLOYEES OF THE FAIRCHILD CORPORATION
VOTING INSTRUCTIONS TO TRUSTEE
THESE VOTING INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE FAIRCHILD CORPORATION.
To the Trustee:
In accordance with the provisions of the Savings Plan for Employees of The
Fairchild Corporation, I hereby instruct you, as Trustee, to vote or cause to
be voted at the Annual Meeting of Stockholders of The Fairchild Corporation to
be held on November 16, 1995 and any adjournments thereof, all shares of The
Fairchild Corporation standing to my credit in the Master Trust covering the
foregoing Plan in which I may be a participant and which I am entitled to vote
at such meeting as follows:
The shares represented by this proxy will be voted as directed by the
stockholder. IF NO DIRECTION IS GIVEN BY 10:00 A.M. (EST) NOVEMBER 14, 1995,
THIS PROXY WILL BE VOTED IN THE SAME PERCENTAGE AS SHARES HELD BY PARTICIPANTS
FOR WHICH THE TRUSTEE HAS RECEIVED TIMELY VOTING INSTRUCTIONS. The Trustee will
hold your voting directions in strict confidence. The Proxy may vote in its
discretion upon any other matters properly coming before the Annual Meeting and
any adjournments thereof.
(CONTINUED, AND TO BE SIGNED ON OTHER SIDE)
<PAGE>
LOGO
[_] _________
ACCOUNT
NUMBER
1. ELECTION OF DIRECTORS
[_] FOR all nominees listed below(except as marked to the contrary below).
[_] WITHHOLD AUTHORITY to vote for all
nominees listed.
Michael T. Alcox, Mortimer M. Caplin, Philip David, Thomas J. Flaherty, Harold
J. Harris, Samuel J. Krasney, Frederick W. McCarthy, Herbert S. Richey, Robert
A. Sharpe, Eric I. Steiner, and Jeffrey J. Steiner.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
------------------------------------------------------------------------------
2. TO APPROVE THE MATERIAL TERMS OF THE PERFORMANCE GOALS FOR THE FISCAL 1996
INCENTIVE COMPENSATION AWARD FOR THE COMPANY'S CHIEF EXECUTIVE OFFICER.
[_] FOR [_] AGAINST [_] ABSTAIN
3. IN ITS DISCRETION, THE PROXY IS AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
Dated: _________________________, 1995
______________________________________
Signature of Stockholder
PLEASE SIGN EXACTLY AS NAME APPEARS
HEREON. EXECUTORS, ADMINISTRATORS,
TRUSTEES, ETC., SHOULD ALSO INDICATE
THEIR CAPACITY WHEN SIGNING. IF
SHARES ARE HELD JOINTLY, EACH HOLDER
SHOULD SIGN.
<PAGE>
THE FAIRCHILD CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE FAIRCHILD CORPORATION
The undersigned hereby appoints Jeffrey J. Steiner, Michael T. Alcox, and
Donald E. Miller as proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated below, all
the shares of Class A Common Stock, par value $.10 per share, and Class B
Common Stock, par value $.10 per share, of The Fairchild Corporation held of
record by the undersigned on September 25, 1995 at the Annual Meeting of
Stockholders to be held on Thursday, November 16, 1995 at 10:00 a.m. (local
time) and at any adjournments or postponements thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>
[X] Please mark
your votes
as this
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ALL LISTED NOMINEES, AND FOR APPROVAL OF THE OTHER PROPOSALS.
1. ELECTION OF DIRECTORS Michael T. Alcox, Mortimer M. Caplin, Philip David,
Thomas J. Flaherty, Harold J. Harris, Samuel J. Krasney, Frederick W. McCarthy,
Herbert S. Richey, Robert A. Sharpe, Eric I. Steiner, and Jeffrey J. Steiner
WITHHELD
FOR FOR ALL
[_] [_]
2. To approve the material terms of the performance goals for the fiscal 1996
incentive compensation award for the Company's Chief Executive Officer.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
--------------------------------------------------------------------------------
Signature(s) ____________________________ Date _______________________________
NOTE: Please sign exactly as name(s) appears hereon. When signing as attorney,
executor, administrator, trustee, guardian or corporate officer, please give
full title as such.
