<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
TRANSTECHNOLOGY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
COMMON STOCK $0.01 PAR VALUE
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
/ / 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:
N/A
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
N/A
- --------------------------------------------------------------------------------
(3) Filing party:
N/A
- --------------------------------------------------------------------------------
(4) Date filed:
N/A
- --------------------------------------------------------------------------------
- ---------------
1Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
LOGO
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 24, 1996
To the Stockholders of
TransTechnology Corporation:
The Annual Meeting of Stockholders (the "Meeting") of TransTechnology
Corporation (the "Company") will be held at 10:00 a.m., EDT, on Wednesday, July
24, 1996 at the Marriott Financial Center, 85 West Street, New York, New York,
to consider and act upon the following matters:
1. To elect seven directors of the Company; and
2. To transact such other business as may properly come before the
meeting.
Only the stockholders of record at the close of business on May 30, 1996
will be entitled to notice of and to vote at the Meeting or any adjournment or
adjournments thereof. A copy of the Company's Annual Report to Stockholders,
including financial statements for the fiscal year ended March 31, 1996, is
enclosed with this Notice of Annual Meeting.
Whether or not you expect to attend the Meeting, you are urged to sign,
date and return the enclosed proxy in the prepaid envelope provided. All shares
represented by the enclosed proxy, if the proxy is properly executed and
returned, will be voted as you direct. Your proxy will not be used if you attend
the Meeting and vote in person.
By Order of the Board of Directors
/s/ GERALD C. HARVEY
-------------------------------------
GERALD C. HARVEY
Vice President, Secretary and General
Counsel
Liberty Corner, New Jersey
June 18, 1996
<PAGE> 3
- --------------------------------------------------------------------------------
LOGO 150 Allen Road, Liberty Corner, New Jersey 07938
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement (first mailed to shareholders on or about June 18, 1996) is
furnished in connection with the solicitation of proxies by the Board of
Directors (the "Board") of TransTechnology Corporation (the "Company") for use
at the Annual Meeting of Stockholders of the Company (the "Meeting") to be held
on Wednesday, July 24, 1996 at 10:00 a.m., EDT, at the Marriott Financial
Center, New York, New York, and any adjournments thereof. All proxies which are
properly completed, signed and returned to the Company prior to the Meeting will
be voted as provided therein. Any proxy given by a shareholder may be revoked at
any time before it is exercised by filing an instrument revoking it with the
Secretary of the Company, by submitting to the Company a duly executed proxy
bearing a later date, or by voting in person at the Meeting.
The only voting securities of the Company consist of its common stock, $0.01 par
value per share (the "Common Stock"). The close of business on May 30, 1996 has
been fixed as the record date for the determination of holders of shares of
Common Stock entitled to vote at the Meeting, and any adjournments thereof. As
of that date, the Company had 5,109,228 shares of Common Stock outstanding. The
holders of shares of Common Stock on the record date are entitled to one vote
for each share on all matters to be considered at the Meeting and any
adjournments thereof.
The holders of record of a majority of the outstanding shares of Common Stock
will constitute a quorum for the transaction of business at the Meeting. As to
all matters, each stockholder is entitled to one vote for each share of Common
Stock he or she holds. The director nominees who receive the greatest number of
votes at the Meeting will be elected to the Board of Directors of the Company.
Votes against a candidate have no legal effect. Abstentions and broker non-votes
are counted for purposes of determining the presence or absence of a quorum for
the transaction of business. Abstentions are counted in tabulations of the votes
cast on proposals presented to stockholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
Stockholders are not entitled to cumulate votes.
The cost of preparing, assembling, printing and mailing this Proxy Statement and
the accompanying form of proxy, and the cost of soliciting proxies relating to
the Meeting will be borne by the Company. The original solicitation of proxies
by mail may be supplemented by telephone, telegram and personal solicitation.
The Company has engaged Beacon Hill Partners, Inc. to assist in the solicitation
of proxies. It is expected that such firm will be paid approxi-
- --------------------------------------------------------------------------------
1
<PAGE> 4
- --------------------------------------------------------------------------------
mately $3,500 for such services and the Company has agreed to indemnify such
firm for matters arising out of this engagement including liabilities arising
under securities laws. In addition, the Company may request banks and brokers to
solicit their customers who beneficially own Common Stock listed of record in
names of nominees, and will reimburse such banks and brokers for their
reasonable out-of-pocket expenses of such solicitation.
For purposes of this Proxy Statement, the fiscal year ended March 31, 1996 shall
be referred to as the fiscal year of 1996 or fiscal 1996.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board of Directors of the Company is elected annually. The Certificate of
Incorporation and Bylaws of the Company provide that the number of directors of
the Company shall be not less than five nor more than fifteen, with the exact
number to be fixed by the Bylaws. The Bylaws provide that the exact number of
directors to be elected on July 24, 1996 is seven. Unless otherwise instructed,
the proxies received will be voted for the election of the nominees named below.
Although it is not anticipated that any of the nominees will be unable to serve,
in the event any nominee is unable or declines to serve as a director at the
time of the Meeting, the proxy holders will vote for substitute nominees at
their discretion.
No arrangement or understanding exists between any nominee and any other person
or persons pursuant to which any nominee was or is to be selected as a director
or nominee. None of the nominees has any family relationship among themselves or
with any executive officer of the Company.
INFORMATION CONCERNING INCUMBENT DIRECTORS AND NOMINEES TO THE BOARD OF
DIRECTORS
Information is set forth below concerning each nominee for election as a
director. The information was obtained from the Company's records or from
information furnished directly by the individual.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH DIRECTOR
NAME THE COMPANY AGE SINCE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------
Gideon Argov Director 39 1995
Walter Belleville Director 69 1992
Michael J. Berthelot Chairman of the Board of Directors and 46 1991
Chief Executive Officer
Patrick K. Bolger President, Chief Operating Officer and 60 1992
Director
Thomas V. Chema Director 49 1992
Michel Glouchevitch Director 41 1996
James A. Lawrence Director 43 1992
</TABLE>
- --------------------------------------------------------------------------------
MR. ARGOV has been Chairman, President and Chief Executive Officer of Kollmorgen
Corporation, a $230 million diversified technology company which manufactures
high performance motion control and electro-optical instruments, since 1991.
From 1988 to 1991, Mr. Argov was
- --------------------------------------------------------------------------------
2
<PAGE> 5
- --------------------------------------------------------------------------------
President, Chief Executive Officer and a principal of High Voltage Engineering
Corporation, a $150 million diversified electrical producer of industrial
controls, instrumentation and industrial machinery.
MR. BELLEVILLE has been a director of the Company since June 1992. From 1983 to
the present, Mr. Belleville has been Chief Executive Officer and Chairman of the
Board of ATI Machinery, Inc., the largest Caterpillar tractor rental and leasing
company in the western United States. Additionally, since 1985 he has been
Chairman of the Board of Sav-Trac of Arizona, Inc., a heavy equipment repair
facility. From 1985 to 1995 Mr. Belleville served as President and Chief
Executive Officer of Happy Horizons, Inc., an aircraft brokerage firm, and
President of Pacific Plus, Inc., a consulting firm specializing in turnarounds
of troubled companies.
MR. BERTHELOT has been a director of the Company since January 1991. In
September 1991, he became Vice Chairman of the Company's Board of Directors and
on January 1, 1992, he became acting President and Chief Executive Officer of
the Company. From July to September 1992, Mr. Berthelot was removed from his
Vice Chairman, acting President and Chief Executive Officer positions. From
October 1992 to July 1995, Mr. Berthelot was the Company's Chairman of the Board
of Directors, President and Chief Executive Officer. Since July 1995, he
continues to serve as Chairman and Chief Executive Officer. Since September
1981, Mr. Berthelot has been Chief Executive Officer of Canterbury Holdings
Corporation, a private investment company, and, from 1989 to 1992, he was a
partner in the certified public accounting/management consulting firm of Barnes,
Wendling, Cook & O'Conner, Inc.
MR. BOLGER joined the Company as Group Vice President -- Aerospace Products in
January 1990 and became Executive Vice President, Chief Operating Officer and a
director in October 1992. From August to October 1992, Mr. Bolger served as one
of three executive officers in the Company's Office of the President. In July
1995 Mr. Bolger was appointed President and Chief Operating Officer. Prior to
joining TransTechnology, Mr. Bolger operated several small businesses as a
private investor and consultant and from 1982 to 1988, he was Group Vice
President of the Hamilton Standard Division of United Technologies, which
manufactures control systems for the aerospace industry.
MR. CHEMA has been a partner in the law firm of Arter & Hadden since 1989,
specializing in energy and telecommunications consulting. From January 1990 to
February 1996, he served as Chairman of the Ohio Building Authority, an
independent state agency that annually issues approximately $650 million of
bonds and is responsible for financing and operating state office buildings and
other facilities for the State of Ohio. From May 1990 to July 1995, Mr. Chema
also served as Executive Director of the Gateway Economic Development
Corporation of Greater Cleveland, a not-for-profit corporation chartered to
build a baseball stadium and arena in downtown Cleveland. Mr. Chema is President
of Gateway Consultants, Inc., a firm he founded in 1995 to provide consulting
services relative to the financing and development of public assembly facilities
such as ballparks, stadiums, and arenas.
MR. GLOUCHEVITCH, has been Managing Director of Triumph Capital Group, Inc., a
manager of institutional funds making private equity investments in middle
market companies, since 1992.
- --------------------------------------------------------------------------------
3
<PAGE> 6
- --------------------------------------------------------------------------------
From 1988 to 1991, he was a general partner in Riordan Venture Management,
managing the personal assets of Richard J. Riordan, now mayor of Los Angeles.
MR. LAWRENCE is President and Chief Executive Officer, Asia/ Middle East/Africa
of Pepsi-Cola Company, the unit of Pepsico responsible for soft drink operations
outside North America. From 1992 to 1993 he served as Executive Vice President
of Pepsi-Cola International. From 1983 to 1992, Mr. Lawrence was a partner of
the LEK Partnership, a general partnership organized in England to provide
management consulting and merger and acquisition advisory services. From 1986 to
1992, he was also the Chairman of LEK Consulting Inc., the United States
operating subsidiary of the partnership. Mr. Lawrence serves on the Boards of
American Re-Insurance Corporation and the reorganized Transworld Airlines.
THE BOARD OF DIRECTORS
The incumbent directors, other than Mr. Glouchevitch, were elected as directors
of the Company at the last annual meeting of stockholders of the Company which
was held in September 1995. Mr. Glouchevitch was appointed by the Board to fill
a new seat on the Board on May 10, 1996.
COMMITTEES
The standing committees of the Board of Directors are the Audit Committee, the
Nominating Committee and the Compensation and Incentives Committee. The Audit
Committee reviews with the Company's independent auditing firm the results of
the firm's annual examination, advises the full Board regarding its findings and
provides assistance to the full Board in matters involving financial statements
and financial controls. The Audit Committee is composed of Board members who are
not officers, employees or affiliates of the Company or its subsidiaries. The
Audit Committee, which consists of Messrs. Argov, Belleville and Lawrence, held
one meeting during fiscal 1996.
The Nominating Committee establishes the criteria for and reviews the
qualifications of individuals for nomination to the Board of Directors and to
committees of the Board. In addition, the Nominating Committee presents
recommendations for replacement directors when vacancies occur on the Board or
committees thereof. The Nominating Committee may consider nominees recommended
by stockholders. This committee, which presently consists of Messrs. Berthelot,
Chema and Lawrence, held one meeting during the fiscal year ended March 31,
1996.
The Compensation and Incentives Committee reviews management's proposals and
makes recommendations to the full Board for compensation and incentives for key
employees and officers of the Company. This committee is comprised solely of
directors who are not eligible to receive cash bonuses or any other type of
incentive compensation. The Compensation and Incentives Committee, which
presently consists of Messrs. Belleville and Chema, held one meeting during the
fiscal year ended March 31, 1996.
MEETINGS AND REMUNERATION
During the fiscal year ended March 31, 1996, the Board of Directors held six
meetings. Each incumbent director attended at least 75% of the aggregate of (i)
the total number of meetings held by the Board of Directors during fiscal 1996
(held during the period for which he has been a director) and (ii) the total
number of
- --------------------------------------------------------------------------------
4
<PAGE> 7
- --------------------------------------------------------------------------------
meetings held by all Committees of the Board of Directors on which he served
during that period.
The Company pays its non-employee directors a $5,000 annual retainer and $2,500
for each Board of Directors meeting attended. Meeting fees are also paid for
attendance via conference telephone if such meetings last longer than thirty
minutes. Directors are paid their $5,000 annual retainer in Company Common Stock
rather than cash. In addition, each non-employee director is granted a Stock
Option to purchase the same number of shares that he owned on (a) the date that
is sixty days after his election to the Board if that date occurs after
September 11, 1994, or (b) on September 12, 1994 if the director had served on
the Board prior to that date. In addition, the Company reimburses its directors
for expenses incurred on behalf of the Company. Non-employee directors are also
paid a retainer (in Company Stock) for serving on committees and fees (in cash)
for attending committee meetings. Annual retainers for the Chairmen of the Audit
Committee and of the Compensation and Incentives Committee are $4,200 while for
other members they are $3,000. Attendance at meetings of these committees is
compensated at $800 per meeting. The Chairman of the Nominating Committee
receives a $3,700 annual retainer while the other committee members receive
$2,500. Attendance at Nominating Committee meetings is compensated at $900 per
meeting.
- --------------------------------------------------------------------------------
5
<PAGE> 8
- --------------------------------------------------------------------------------
SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS, NOMINEES FOR
DIRECTOR AND OFFICERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of May 30, 1996 (except as set forth in the
footnotes) by (i) each person who is known by the Company to be the beneficial
owner of more than 5% of the Common Stock, (ii) each director and nominee for
director of the Company, individually, (iii) each executive officer of the
Company, individually, and (iv) all directors and executive officers as a group:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF PERCENTAGE OF
NAME COMMON STOCK(1) COMMON STOCK(1)
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
Arch C. Scurlock 1,146,740(2) 22.4
c/o Research Industries, Incorporated
123 North Pitt Street
Alexandria, Virginia 22314
Dimensional Fund Advisors Inc. 323,100(3) 6.3
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Gideon Argov 17,581 *
Walter Belleville 7,807 *
Michael J. Berthelot 401,489(4) 7.9
Patrick K. Bolger 85,357(5) 1.7
Michel Glouchevitch 0 *
Chandler J. Moisen 38,400(6) *
Thomas V. Chema 2,757 *
Gerald C. Harvey 44 *
Winston Lau 170 *
James A. Lawrence 59,233 1.2
Directors and executive officers as a group 612,838(7) 12
(10 persons)
</TABLE>
- --------------------------------------------------------------------------------
* Less than 1%.
(1) Except as set forth in these footnotes, the persons named in this table have
sole voting power and investment power with respect to all shares of capital
stock shown as beneficially owned by them, subject to community property
laws where applicable and the information contained in this table and these
notes.
(2) Includes 1,100,000 shares of Common Stock owned by Research Industries,
Incorporated, of which Dr. Scurlock owns 95% of the outstanding shares of
stock.
(3) Based on a February 7, 1996 filing on Schedule 13G with the Securities and
Exchange Commission, Dimensional Fund Advisors, Inc. ("Dimensional") owned
this amount of shares of common stock as of December 31, 1995. Dimensional,
a registered investment advisor, is deemed to have beneficial ownership of
this amount of shares of common stock at such date, all of which are owned
by advisory clients of Dimensional, no one of which, to the knowledge of
Dimensional, owns more than 5% of the class.
- --------------------------------------------------------------------------------
6
<PAGE> 9
- --------------------------------------------------------------------------------
(4) Includes 103,000 shares issuable with respect to options exercisable within
60 days of May 30, 1996.
(5) Includes 71,826 shares issuable with respect to options exercisable within
60 days of May 30, 1996.
(6) Includes 22,000 shares issuable with respect to options exercisable within
60 days of May 30, 1996.
(7) Includes 235,540 shares issuable with respect to options exercisable within
60 days of May 30, 1996.
EXECUTIVE OFFICERS, COMPENSATION AND OTHER INFORMATION
EXECUTIVE OFFICERS
Set forth in the table below are the names, ages and positions held by all
executive officers of the Company.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXECUTIVE
POSITION WITH OFFICER
NAME THE COMPANY AGE SINCE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
Michael J. Berthelot Chairman of the Board of Directors and Chief 46 1992
Executive Officer
Patrick K. Bolger President, Chief Operating Officer 60 1990
and Director
Chandler J. Moisen Senior Vice President, Chief Financial Officer 61 1991
and Treasurer
Winston Lau Vice President of Operations 49 1995
Gerald C. Harvey Vice President, Secretary and General Counsel 46 1996
</TABLE>
- --------------------------------------------------------------------------------
Executive officers of the Company are elected by and serve at the discretion of
the Board of Directors. No arrangement exists between any executive officer and
any other person or persons pursuant to which any executive officer was or is to
be selected as an executive officer. None of the executive officers has any
family relationship to any nominee for director or to any other executive
officer of the Company. Set forth below is a brief description of the business
experience for the previous five years of those executive officers who are not
also directors. For information concerning the business experience of Messrs.
Berthelot and Bolger, see "Information Concerning Incumbent Directors and
Nominees to the Board of Directors."
MR. MOISEN has served as Vice President, Treasurer and Chief Financial Officer
of the Company since August 1991 and as Senior Vice President since October
1992. From August to October 1992 Mr. Moisen served as one of three executive
officers in the Company's Office of the President. From 1989 to 1991, Mr. Moisen
served as Senior Vice President and Chief Financial Officer of G-Tech Corp., a
computer hardware and software manufacturer.
MR. LAU joined the Company as Vice President of Operations in November 1995 and
assumed additional responsibility as President of respectively The Palnut
Company, a division of the Company, Industrial Retaining Ring Company and Seeger
Inc. in April 1996. From June 1994 to November 1995, Mr. Lau held the position
of Vice President, International with Crane Company and, from November 1991
- --------------------------------------------------------------------------------
7
<PAGE> 10
- --------------------------------------------------------------------------------
to May 1994, President and CEO of Crane Canada Inc., a manufacturer of
industrial and commercial valves and plumbing fixtures, as well as a national
distributor of plumbing supplies. In prior years, Mr. Lau held various executive
positions with the Ingersoll-Rand Company in MIS, operations, marketing,
distribution, finance and international operations.
MR. HARVEY has served as Vice President, Secretary and General Counsel of the
Company since February 1996. From 1994 to 1996 Mr. Harvey was a member of the
law firm of Pfaltz & Woller, P.A. From 1988 to 1994 he was a member of the law
firm of Hannoch Weisman, A Professional Corporation.
- --------------------------------------------------------------------------------
8
<PAGE> 11
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended March 31, 1996, 1995 and 1994, of those persons who were, at March 31,
1996 (i) the chief executive officer and (ii) the other executive officers of
the Company who received in excess of $100,000 in total annual salary and bonus
for fiscal 1996. During each fiscal year in the three year period ended March
31, 1996, no executive officer named above received perquisites and other
personal benefits, securities or property in an aggregate amount in excess of
the lesser of $50,000 or 10% of such executive officer's annual salary and
bonus.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
---------------------------------
AWARDS
ANNUAL COMPENSATION ----------
----------------------------------------- RESTRICTED SECURITIES PAYOUTS
OTHER ANNUAL STOCK UNDERLYING ------- ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS LTIP COMPENSATION
PRINCIPAL POSITION YEAR (1) (2) (3) (4) (#) PAYOUTS (5)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Michael J. Berthelot 1996 $319,904 $156,766 $ 1,343 3,849 9,000 -- $ 35,369(6)
Chairman and Chief 1995 295,000 204,007 -- 4,383 60,000 -- 30,761(7)
Executive Officer 1994 295,000 137,088 41,931 -- 60,000 -- 20,824
Patrick K. Bolger 1996 215,000 104,528 1,301 2,566 9,000 -- 19,658
President and Chief 1995 185,000 136,005 -- 2,922 40,000 -- 12,035
Operating Officer 1994 185,000 91,392 28,337 2,127 40,000 -- 14,242
Chandler J. Moisen 1996 175,000 87,081 1,160 2,138 6,000 -- 14,584
Senior Vice 1995 175,000 113,337 -- 2,631 15,000 -- 11,418
President and Chief 1994 175,000 78,872 30,334 2,127 15,000 -- 13,796
Financial Officer
</TABLE>
- --------------------------------------------------------------------------------
(1) Amounts shown include compensation earned and received by executive officers
as well as amounts earned but deferred at the election of those officers
under the Company's 401(K) plan.
(2) Represents payments made to executive officers pursuant to the Company's
Incentive Compensation Plan.
(3) Fiscal 1994 amounts represent (i) fair market value on date of award of
unrestricted stock awards and (ii) dividends paid on restricted stock not
yet vested.
(4) An aggregate of 9,840 shares of restricted shares were held for the benefit
of the executive officers at fiscal year-end. Such shares vest in annual
increments of one-third each year. The executive officers receive dividends
on issued but unvested shares.
(5) These amounts include the Company's contributions to the Retirement Savings
Plan and insurance premiums paid by the Company under the Company's group
benefits plan.
(6) The amount includes relocation expenses of $24,000 paid to Mr. Berthelot.
(7) The amount includes relocation expenses of $20,000 paid to Mr. Berthelot.
- --------------------------------------------------------------------------------
9
<PAGE> 12
- --------------------------------------------------------------------------------
Incentive Compensation Plans. The Fiscal Year '96-'98 Incentive Compensation
Plan (the "Incentive Compensation Plan") provides for the award of cash bonuses
from profits based upon operating results. Results are measured by a wide range
of goals which must be met, including goals for operating income, return on
investment, individual strategic and/or operational issues, cash flow and annual
income growth. The stock feature of the Incentive Compensation Plan provides for
the award of restricted stock and stock options to corporate officers, division
presidents and other key personnel. The number of restricted shares awarded is
equal to shares that could be purchased at the closing price of the stock on the
date the Compensation and Incentives Committee of the Board of Directors
approved the bonus pool for the fiscal year just ended with 10% of the cash
bonus pool. Voting and dividend rights vest immediately. Restrictions on sale
lapse over three years in annual one-third increments. Shares for which
restrictions have not yet expired are forfeited upon termination of employment.
Stock options are awarded at an exercise price equal to the fair market value of
the shares on the date of grant. Options become exercisable in annual equal
installments over three years and expire five years after grant date. Both
restricted stock and stock options are awarded pursuant to the 1992 Long Term
Incentive Plan, which provides the mechanism for awarding various kinds of stock
based awards.
Retirement Plans. The Company maintains four retirement plans covering
substantially all active U.S. employees, two of which are defined contribution
plans and one of which is a defined benefit plan. The TransTechnology
Corporation Retirement Savings Plan (the "Retirement Savings Plan"), a defined
contribution plan under Section 401(k) of the Internal Revenue Code, covers
non-union employees who have been employed by the Company for more than one
year. Approximately 700 employees participate in the Retirement Savings Plan.
Benefits are payable on retirement, disability, death, or other separation from
service. Participants in the Retirement Savings Plan may defer receipt and
taxation of up to 15% of their compensation by contributing such compensation to
the plan. The Company contributes a minimum of 3% and a maximum of 6% of
employees' compensation to the Retirement Savings Plan, depending on the level
of contribution by each employee. The other three plans cover approximately 450
members of collective bargaining units.
Executive Life Insurance Plan. The Company maintains life insurance policies
for its executive officers which supplement the group life policies available to
all salaried employees.
- --------------------------------------------------------------------------------
10
<PAGE> 13
- --------------------------------------------------------------------------------
STOCK OPTIONS
The following table sets forth information concerning options granted during
fiscal 1996 to each of the named executive officers of the Company identified in
the Summary Compensation Table.
OPTION/SAR GRANTS IN FISCAL 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------
% OF POTENTIAL
TOTAL REALIZABLE VALUE
OPTIONS/ OF ASSUMED ANNUAL
SARS EXERCISE RATES OF STOCK
OPTIONS/ GRANTED TO OR BASE PRICE APPRECIATION
SARS EMPLOYEES PRICE EXPIRA- FOR OPTION TERM
GRANTED IN FISCAL $ PER TION ------------------
NAME (#)(1) YEAR SHARE DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------
Michael J. Berthelot 9,000 15 11.375 5-30-00 28,285 62,501
Patrick K. Bolger 9,000 15 11.375 5-30-00 28,285 62,501
Chandler J. Moisen 6,000 10 11.375 5-30-00 18,857 41,668
</TABLE>
- --------------------------------------------------------------------------------
(1) Amounts shown represent stock options only. No stock appreciation rights
(SARs) were awarded.
The following table summarizes option exercises during fiscal 1996 and the total
number and value of exercisable and unexercisable stock options held by each of
the named executive officers on March 31, 1996, the last day of fiscal 1996.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1996 AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
AT FY-END(#) AT FY-END($)
-------------- --------------------
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Michael J. Berthelot -- -- 59,996/69,004 214,979/140,147
Patrick K. Bolger 755 8,400 42,157/49,003 159,519/104,306
Chandler J. Moisen -- -- 9,999/21,001 26,870/48,630
</TABLE>
- --------------------------------------------------------------------------------
11
<PAGE> 14
- --------------------------------------------------------------------------------
The following table sets forth information concerning long-term incentive plan
awards in the form of restricted stock awarded for fiscal 1996 to each of the
named executive officers of the Company.
LONG-TERM INCENTIVE PLAN AWARDS FOR FISCAL 1996(1)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERFORMANCE
NUMBER OF OR OTHER
SHARES, UNITS PERIOD UNTIL
OR OTHER MATURATION
NAME RIGHTS(#) OR PAYOUT
<S> <C> <C>
- ------------------------------------------------------------------------------------------------
Michael J. Berthelot 951 3 years
Patrick K. Bolger 634 3 years
Chandler J. Moisen 528 3 years
</TABLE>
- --------------------------------------------------------------------------------
(1) Restricted stock awards are calculated based upon a cash bonus pool, which
is itself based upon annual profit. The number of restricted shares awarded
is equal to shares that could be purchased at $16.50 (the closing price of
the stock on the date of the award) with 10% of the cash bonus pool. The
cash bonus is described on page 10.
REPORT OF THE COMPENSATION AND INCENTIVES COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation and Incentives Committee of the Board of Directors (the
"Committee") is composed entirely of independent outside directors. The
Committee is responsible for establishing policies and implementing programs
relating to executive compensation. All decisions of the Committee relating to
compensation of the Company's executive officers are reviewed by the entire
Board of Directors, except for decisions relating to stock based awards, which
must be made solely by the Committee in order for the grants or awards to
satisfy Rule 16b-3 of the Securities Exchange Act of 1934.
The Committee's philosophy regarding executive compensation is that a
compensation program should (i) support the achievement of desired Company
performance; (ii) provide compensation that will attract and retain qualified
executives and reward performance; (iii) align the executive officers' interests
with shareholders' interests as well as the overall success of the Company by
placing a portion of pay at risk; and (iv) encourage management's stake in the
long-term performance and success of the Company.
For Fiscal Years 1996-1998, a form of Annual Incentive Plan consistent with this
philosophy is in place. The compensation reflected in this proxy statement is
the result of the Annual Incentive Plan and will be described here briefly.
The methodology for setting base salary of the executive officers consists of
(i) determining marketplace compensation by comparing the corporation to groups
of other corporations with similar characteristics and (ii) evaluating each
executive's performance as well as the performance of the Company as a whole.
Each year the performance of executive officers and division presidents is
evaluated by the Chief Executive Officer and in turn the Chief Executive Officer
is evaluated by the outside members of the Board of Directors. The evaluation is
based upon individualized performance objectives designated at the beginning of
the
- --------------------------------------------------------------------------------
12
<PAGE> 15
- --------------------------------------------------------------------------------
fiscal year and at the time of the last performance evaluation.
The annual cash bonus portion of the executive officers' compensation program is
an important tool in providing incentive both for short-term and long-term
performance. Cash and restricted stock awards are paid upon achieving or
exceeding target levels of quantitative performance measures. Such performance
measures are tied directly to the Company's annual business plan. Executive
officers, including Mr. Berthelot, earn no bonus unless 100% of the business
plan's profit goals are met. The business plan is prepared and approved prior to
the start of the fiscal year. The plan for executive officers and division
presidents measures performance factors against targets for net income before
taxes, profit growth, productivity growth, return on investment, cash flow,
meeting budgets and achievement of individual performance objectives.
In addition to the restricted stock awards described above, executive officers
and division presidents receive incentive stock options. Stock options are based
upon marketplace compensation studies and are awarded individually each year at
an exercise price equal to the stock's fair market value on date of grant. Stock
options vest over a three-year period and have never been repriced.
The long term portion of the plan as structured rewards the achievement of
increased value of the entity over the long term. This latter portion of the
cash bonus will be paid at the end of a three-year period based upon the
increase in the enterprise value of the company, or a division of the company,
as the case may be, which exceeds a compounded rate of 12% per annum. (The 12%
per annum hurdle rate was established to represent the overall return an
investor would seek at the beginning of the three-year measuring period.) It is
the purpose of the Committee and the Board in implementing this feature of the
senior managers' incentive compensation program to encourage and reward long
term growth in the value of the Company.
Mr. Berthelot's compensation, including base compensation, cash bonus and stock
awards is determined by the same methodology as described above for all
executive officers.
WALTER BELLEVILLE
THOMAS V. CHEMA
- --------------------------------------------------------------------------------
13
<PAGE> 16
- --------------------------------------------------------------------------------
COMPANY PERFORMANCE
The following graph shows a comparison of cumulative total returns for the
Company, Standard & Poor's 500 Index and a Company-constructed Peer Group Index
(consisting of public companies which manufacture products that compete with the
Company's products) for the last five fiscal years. Total returns are based on
market capitalization. Peer group indices use beginning of period market
capitalization weighting. Total return assumes reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN*
<TABLE>
<CAPTION>
MEASUREMENT PERIOD TRANS-
(FISCAL YEAR COVERED) TECHNOLOGY S&P 500 PEER GROUP
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 94.12 111.04 125.33
1993 141.79 127.95 141.82
1994 212.02 129.84 181.09
1995 160.12 150.05 194.00
1996 215.61 198.22 240.23
</TABLE>
* ASSUMES INITIAL INVESTMENT OF $100
Peer Group includes: ITW, Eaton Co., Park-Ohio Industries, SPS Technol, Stant
and Trimas.
- --------------------------------------------------------------------------------
14
<PAGE> 17
- --------------------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and certain of its officers, and persons who own more than 10 percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than 10 percent stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that from April 1, 1995 to
March 31, 1996, all persons subject to the reporting requirements of Section
16(a) filed the reports on a timely basis.
PROPOSALS FOR SUBMISSION AT NEXT ANNUAL MEETING
If a stockholder desires to submit a proposal to fellow stockholders at the
Company's annual meeting next year and wishes to have it set forth in the
corresponding proxy statement and identified in the corresponding form of proxy
prepared by management, such stockholder must notify the Company at its
executive offices no later than February 19, 1997.
ANNUAL REPORTS
A copy of the Company's Annual Report for the fiscal year ended March 31, 1996
is being mailed to each stockholder of record together with this Proxy
Statement. The Company has filed with the SEC its Annual Report on Form 10-K for
the fiscal year ended March 31, 1996. This Report contains detailed information
concerning the Company and its operations, supplementary financial information
and certain schedules which are not included in the Annual Report to
Stockholders. A COPY OF THIS REPORT, WITHOUT EXHIBITS, WILL BE FURNISHED TO
STOCKHOLDERS WITHOUT CHARGE UPON REQUEST IN WRITING TO GERALD C. HARVEY AT
TRANSTECHNOLOGY CORPORATION, 150 ALLEN ROAD, LIBERTY CORNER, NEW JERSEY 07938.
If requested, the Company will also provide such persons with copies of any
exhibit to the Annual Report on Form 10-K upon the payment of a fee limited to
the Company's reasonable expenses in furnishing such exhibits. Such Report is
not a part of the Company's soliciting material.
OTHER MATTERS
The Board of Directors does not know of any matter to be acted upon at the
Meeting other than the matters described herein. If any other matter properly
comes before the Meeting, the holders of the proxies will vote thereon in
accordance with their best judgment.
By Order of the Board of Directors
/s/ GERALD C. HARVEY
-----------------------------
GERALD C. HARVEY
Vice President, Secretary and
General Counsel
Liberty Corner, New Jersey
June 18, 1996
- --------------------------------------------------------------------------------
15
<PAGE> 18
PROXY
TRANSTECHNOLOGY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael J. Berthelot, Chandler J. Moisen and
Monica Aquirre, or any two of them, as Proxy, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote as designated
below, all the shares of common stock of TransTechnology Corporation held of
record by the undersigned on May 30, 1996, at the annual meeting of shareholders
to be held on July 24, 1996, or any adjournment thereof. This proxy when
properly executed will be voted in the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will be voted FOR the election
of all of the nominees. This proxy when properly executed will be voted in the
discretion of the Proxy upon such other business as may properly come before the
meeting.
1) ELECTION OF DIRECTORS
/ / FOR ALL NOMINEES listed below (except as written in the space below).
Gideon Argov Walter Belleville Michael J. Berthelot Patrick K. Bolger
Thomas V. Chema Michel Glouchevitch James A. Lawrence
/ / WITHHOLD AUTHORITY to vote for all nominees listed below.
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.
_______________________________________________________________________________
The undersigned hereby confer(s) upon the Proxy discretionary authority with
respect to the election of Directors in the event that any of the above
nominees is unable or unwilling to serve at the meeting.
2) In its discretion, the Proxy is authorized to vote upon such other business
as may properly come before the meeting.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE
ENCLOSED PREPAID ENVELOPE
(Continued and to be signed on other side)
<PAGE> 19
(Continued from the other side)
PROXY -- SOLICITED BY THE BOARD OF DIRECTORS
Please sign exactly as your name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in the full corporate name by the President or other authorized officer.
If a partnership, please sign in the partnership name by an authorized person.
_____________________________
Signature
_____________________________
Signature if held jointly
Dated: _________________, 1996
Please mark, sign, date and return this proxy card promptly using the enclosed
envelope which requires no postage if mailed in the United States.
