<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
TRANSTECHNOLOGY CORPORATION
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(Name of Registrant as Specified In Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
n/a
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
n/a
------------------------------------------------------------------------
(5) Total fee paid:
n/a
------------------------------------------------------------------------
[ ] 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:
n/a
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
n/a
------------------------------------------------------------------------
(3) Filing Party:
n/a
------------------------------------------------------------------------
(4) Date Filed:
n/a
------------------------------------------------------------------------
<PAGE> 2
[TRANSTECHNOLOGY LOGO]
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 24, 1997
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 Thursday, July
24, 1997 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;
2. To approve an amendment to the Amended and Restated 1992 Long Term
Incentive Plan authorizing an increase in the number of shares of
Company Common Stock issuable under the plan; and
3. 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, 1997
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, 1997, 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, 1997
<PAGE> 3
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[TRANSTECHNOLOGY 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, 1997) 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 Thursday, July 24, 1997 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, 1997 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 5,027,733 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 approximately $3,500 for
such services and will be
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indemnified 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, 1997 shall
be referred to as the fiscal year of 1997 or fiscal 1997.
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, 1997 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.
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<TABLE>
<CAPTION>
POSITION WITH DIRECTOR
NAME THE COMPANY AGE SINCE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Gideon Argov Director 40 1995
Walter Belleville Director 70 1992
Michael J. Berthelot Chairman of the Board of Directors and 47 1991
Chief Executive Officer
Patrick K. Bolger President, Chief Operating Officer and 61 1992
Director
Thomas V. Chema Director 50 1992
Michel Glouchevitch Director 42 1996
James A. Lawrence Director 44 1992
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</TABLE>
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2
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MR. ARGOV has been Chairman, President and Chief Executive Officer of Kollmorgen
Corporation, a $230 million diversified technology company specializing in high
performance electronic motion control components and systems, since 1991. From
1988 to 1991, Mr. Argov was 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, President 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, 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 $150 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 invest-
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ments in middle market companies, since 1992. From 1988 to 1991, he was a
general partner in Riordan Venture Management, making private equity investments
on behalf of Richard J. Riordan, now mayor of Los Angeles.
MR. LAWRENCE has been a director of the Company since September 1992. He is
Executive Vice President and Chief Financial Officer of Northwest Airlines. From
1993 to 1996 he served as President and Chief Executive Officer, Asia/Middle
East/Africa of Pepsi-Cola Company, the unit of Pepsico responsible for soft
drink operations in those geographic regions. 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.
THE BOARD OF DIRECTORS
The incumbent directors, were elected as directors of the Company at the last
annual meeting of stockholders of the Company which was held in July 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 two meetings during fiscal 1997.
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 in writing to the Secretary of the Company. This committee,
which consists of Messrs. Berthelot, Chema and Lawrence, held one meeting during
fiscal 1997.
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, Chema and Glouchevitch held one
meeting during fiscal 1997.
MEETINGS AND REMUNERATION
During the fiscal year ended March 31, 1997, 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
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1997 (held during the period for which he has been a director) and (ii) the
total number of 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 nonemployee 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 and $3,000
for other members. 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.
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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, 1997 (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:
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<TABLE>
<CAPTION>
NUMBER OF
SHARES OF PERCENTAGE OF
NAME COMMON STOCK(1) COMMON STOCK(1)
<S> <C> <C>
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Arch C. Scurlock 1,146,740(2) 22.8
c/o Research Industries, Incorporated
123 North Pitt Street
Alexandria, Virginia 22314
Dimensional Fund Advisors Inc. 356,900(3) 7.0
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
FMR Corp. 333,900(4) 6.6
82 Devonshire Street
Boston, Massachusetts 02109
Kennedy Capital Management, Inc. 403,425(5) 8.0
10829 Olive Blvd.
St. Louis, Missouri 63141
Ryback Management Corporation 319,500(6) 6.3
7711 Carondelet Avenue
Box 16900
St. Louis, Missouri 63105
Gideon Argov 16,519 *
Walter Belleville 8,475 *
Michael J. Berthelot 375,454(7) 7.5
Patrick K. Bolger 103,925(8) 2.1
Thomas V. Chema 2,771 *
Michel Glouchevitch 13,834 *
Gerald C. Harvey 3,877(9) *
Winston Lau 3,170(10) *
James A. Lawrence 59,874 *
Chandler J. Moisen 45,955(11) *
Joseph F. Spanier 1,000 *
Directors and executive officers as a group 634,854 12.6
(11 persons)
</TABLE>
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* Less than 1%.
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(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 5, 1997 filing on Schedule 13G with the Securities and
Exchange Commission, Dimensional Fund Advisors Inc. ("Dimensional"), a
registered investment advisor, is deemed to have beneficial ownership of
356,900 shares of Common Stock as of December 31, 1996, all of which shares
are held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in series of the DFA Investment
Trust Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, and for all of which Dimensional serves as investment
manager. Dimensional has informed the Company in writing that it disclaims
beneficial ownership of all such shares.
(4) Based on a February 14, 1997 filing on Schedule 13G with the Securities and
Exchange Commission, FMR Corp. owned this amount of shares of Common Stock
as of December 31, 1996.
(5) Based on a February 10, 1997 filing on Schedule 13G with the Securities and
Exchange Commission, Kennedy Capital Management, Inc. owned this amount of
shares of Common Stock as of December 31, 1996.
(6) Based on a January 27, 1997 filing on Schedule 13G with the Securities and
Exchange Commission, Ryback Management Corporation owned this amount of
shares of Common Stock as of December 31, 1996.
(7) Includes 129,000 shares issuable with respect to options exercisable within
60 days of May 30, 1997.
(8) Includes 89,000 shares issuable with respect to options exercisable within
60 days of May 30, 1997.
(9) Includes 3,833 shares issuable with respect to options exercisable within
60 days of May 30, 1997.
(10) Includes 3,000 shares issuable with respect to options exercisable within
60 days of May 30, 1997.
(11) Includes 31,000 shares issuable with respect to options exercisable within
60 days of May 30, 1997.
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.
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<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 47 1992
Executive Officer
Patrick K. Bolger President, Chief Operating Officer and Director 61 1990
Chandler J. Moisen Executive Vice President 62 1991
Joseph F. Spanier Vice President, Chief Financial Officer and 51 1996
Treasurer
Winston Lau Vice President of Operations 50 1995
Gerald C. Harvey Vice President, Secretary and General Counsel 47 1996
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</TABLE>
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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 became Executive Vice President of the Company effective January
1997, and previously served as Senior Vice President, Chief Financial Officer
and Treasurer of the Company from October 1992 to December 1996. From August to
October 1992 Mr. Moisen served as one of three executive officers in the
Company's Office of the President.
MR. SPANIER has been Vice President, Chief Financial Officer and Treasurer of
the Company since January 1997. From November 1996 to January 1997 he served as
Vice President of Finance. From November 1994 to 1996, he served as Chief
Financial Officer and Vice President of Financial Administration of MG
Industries, a manufacturer of industrial gases and a subsidiary of Hoechst AG.
From May 1994 to November 1994, Mr. Spanier was Vice President, Corporate
Controller and Treasurer, and from 1990 to May 1994, he served as Vice President
and Corporate Controller of Quaker Chemical Corporation, a manufacturer of
chemical specialties.
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 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, a manufacturer of capital goods, 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.
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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, 1997, 1996 and 1995, of those persons who were, at March 31,
1997 (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 1997. During each fiscal year in the three year period ended March
31, 1997, 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
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<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
---------------------------------
AWARDS
----------
ANNUAL COMPENSATION RESTRICTED SECURITIES PAYOUTS
----------------------------------------- STOCK UNDERLYING ------- ALL OTHER
NAME AND SALARY BONUS OTHER ANNUAL AWARDS OPTIONS LTIP COMPENSATION
PRINCIPAL POSITION YEAR (1) (2) COMPENSATION (3) (#) PAYOUTS (4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Michael J. Berthelot 1997 330,000 193,926 -- 1,177 9,000 -- 23,777
Chairman and Chief 1996 319,904 156,766 -- 3,849 9,000 -- 35,369(5)
Executive Officer 1995 295,000 204,007 -- 4,383 60,000 -- 30,761(6)
Patrick K. Bolger 1997 225,000 129,305 -- 785 9,000 -- 19,293
President and Chief 1996 215,000 104,528 -- 2,566 9,000 -- 19,658
Operating Officer 1995 185,000 136,005 -- 2,922 40,000 -- 12,035
Chandler J. Moisen 1997 175,000 107,722 -- 654 6,000 -- 17,582
Executive Vice 1996 175,000 87,081 -- 2,138 6,000 -- 14,584
President 1995 175,000 113,337 -- 2,631 15,000 -- 11,418
Winston Lau 1997 150,000 55,255 -- 170 6,000 -- 11,867
Vice President 1996 21,923 -- -- -- 3,000 -- 3,547
of Operations 1995 -- -- -- -- -- -- --
Gerald C. Harvey 1997 132,116 9,149 -- 44 6,000 -- 8,222
Vice President, 1996 15,384 -- -- -- 10,000 -- 51
Secretary and 1995 -- -- -- -- -- -- --
General Counsel
</TABLE>
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(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) An aggregate of 10,365 shares of restricted stock 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.
(4) 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.
(5) The amount includes relocation expenses of $24,000 paid to Mr. Berthelot.
(6) The amount includes relocation expenses of $20,000 paid to Mr. Berthelot.
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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 the number of 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 Amended and
Restated 1992 Long Term Incentive Plan, which provides the mechanism for
awarding various kinds of stock based awards.
Change in Control Agreements. In May 1997, the Company entered into severance
agreements with each of Messrs. Bolger, Moisen, Lau and Harvey (the "Severance
Agreements") which provide for payments only in the event of termination of
employment during the term of the Severance Agreements following within 24
months after a change in control of the Company where such termination is other
than for cause or the executive resigns for good reason which includes reduction
in compensation, benefits or responsibilities, relocation by more than 50 miles
of the executive's primary worksite, adverse alternation of the executive's
office space and administrative support, or failure by the Company to obtain an
agreement from any successor or assignee corporation to assume and perform the
Severance Agreements. Benefits under the Severance Agreements are equal to 200%
of the executive's annual salary, the executive's average bonuses during the two
years preceding the change of control, earned but unused vacation and sick time,
the fair market value of accrued but unvested restricted stock and stock options
outstanding, and all accrued but unpaid salary. The benefits due under the
Severance Agreements are in addition to all amounts payable to each of the
executives pursuant to the Company's other agreements and benefit plans then in
effect, except that any amount paid to any of the executives pursuant to the
Corporate Severance Pay Plan shall be credited against amounts due under the
Severance Agreements. The Severance Agreements provide for no benefits in the
event the executive is terminated for cause and (except in the event that the
executive is convicted of a felony, a crime involving moral turpitude or a crime
adverse to the Company's welfare) fails to cure the alleged breach within 30
days after the executive has been notified by the Company's Board of Directors.
The initial term of each of the Severance Agreements is for two years unless
extended in writing by the parties.
Retirement Plans. The Executive Officers are participants in the
TransTechnology Corporation Retirement Savings Plan (the "Retirement
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Savings Plan"), a defined contribution plan under Section 401(k) of the Internal
Revenue Code which covers non-union employees who have been employed by the
Company for more than one year. Approximately 737 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.
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.
- --------------------------------------------------------------------------------
11
<PAGE> 14
- --------------------------------------------------------------------------------
STOCK OPTIONS
The following table sets forth information concerning options granted during
fiscal 1997 to each of the named executive officers of the Company identified in
the Summary Compensation Table.
OPTION/SAR GRANTS IN FISCAL 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------
% OF POTENTIAL
TOTAL REALIZABLE VALUE
OPTIONS/ OF ASSUMED ANNUAL
SARS RATES OF STOCK
GRANTED EXERCISE PRICE
OPTIONS/ TO OR BASE APPRECIATION FOR
SARS EMPLOYEES PRICE EXPIRA- 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 10 16.50 05-09-01 41,028 90,661
Patrick K. Bolger 9,000 10 16.50 05-09-01 41,028 90,661
Chandler J. Moisen 6,000 7 16.50 05-09-01 27,352 60,441
Winston Lau 6,000 7 16.50 05-09-01 27,352 60,441
Gerald C. Harvey 6,000 7 16.50 05-09-01 27,352 60,441
</TABLE>
- --------------------------------------------------------------------------------
(1) Amounts shown represent stock options only. No stock appreciation rights
(SARs) were awarded.
- --------------------------------------------------------------------------------
12
<PAGE> 15
- --------------------------------------------------------------------------------
The following table summarizes option exercises during fiscal 1997 and the total
number and value of exercisable and unexercisable stock options held by each of
the named executive officers on March 31, 1997, the last day of fiscal 1997.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1997 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 -- -- 103,000/35,000 985,000/228,875
Patrick K. Bolger 2,160 23,490 69,666/28,334 666,663/187,213
Chandler J. Moisen -- -- 22,000/15,000 200,000/100,500
Winston Lau -- -- 1,000/8,000 8,875/47,000
Gerald C. Harvey 1,500 10,500 1,833/12,667 13,518/78,419
- -------------------------------------------------------------------------------------------------------
</TABLE>
The following table sets forth information concerning long-term incentive plan
awards in the form of restricted stock awarded during fiscal 1997 to each of the
named executive officers of the Company.
LONG-TERM INCENTIVE PLAN AWARDS IN FISCAL 1997(1)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERFORMANCE
OR OTHER
NUMBER OF PERIOD
SHARES, UNITS UNTIL
OR OTHER MATURATION
NAME RIGHTS(#) OR PAYOUT
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
Michael J. Berthelot 1177 3 years
Patrick K. Bolger 785 3 years
Chandler J. Moisen 654 3 years
Winston Lau 170 3 years
Gerald C. Harvey 44 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.
- --------------------------------------------------------------------------------
13
<PAGE> 16
- --------------------------------------------------------------------------------
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
under the Amended and Restated 1992 Long Term Incentive Plan may be made by the
Committee.
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
includes the results 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 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 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.
- --------------------------------------------------------------------------------
14
<PAGE> 17
- --------------------------------------------------------------------------------
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
MICHEL GLOUCHEVITCH
- --------------------------------------------------------------------------------
15
<PAGE> 18
- --------------------------------------------------------------------------------
PROPOSAL 2 -- RATIFICATION AND APPROVAL OF AMENDMENT TO AMENDED AND RESTATED
1992 LONG TERM INCENTIVE PLAN
BACKGROUND
The Board of Directors of the Company, at its July 8, 1992 meeting, adopted the
original version of the Amended and Restated 1992 Long Term Incentive Plan (the
"Plan"), which was approved by stockholders on September 23, 1992. The Board, at
its July 13, 1994 meeting, adopted an amended and restated version of the Plan
increasing the number of shares of the Common Stock issuable under the Plan,
providing for accelerated vesting of stock based awards upon a change in control
of the Company and providing for participation by directors who are not
employees of the Company. Such amended and restated version of the Plan was
approved by stockholders on September 13, 1994.
PROPOSED AMENDMENT
The Board of Directors of the Company, at its April 11, 1997 meeting, adopted an
amendment to the Plan increasing the number of shares of Common Stock issuable
under the Plan, subject to stockholder ratification and approval as described
herein, and also adopted other technical revisions to the Plan. Pursuant to the
amendment, the number of shares of the Company's Common Stock authorized to be
awarded under the Plan has been increased from 570,000 to 800,000 shares. If the
amendment to the Plan is ratified and approved by the stockholders, the Company
plans to file a registration statement under the Securities Act of 1933
pertaining to the 230,000 additional shares. As of May 30, 1997 the market value
of the Company Common Stock was $20.00 per share.
As of March 31, 1997 there were outstanding options under the Plan to purchase
477,714 shares of the Company's Common Stock at prices ranging from $9.625 to
$16.75 per share.
The following tables set forth the number of shares of Common Stock for which
Stock Options have been granted and the number of shares of Restricted Stock
which have been granted to (a) the Chief Executive Officer, (b) the other four
most highly compensated executive officers, (c) all current executive officers
as a group, (d) all current directors who are not executive officers as a group
and (e) all employees as a group.
- --------------------------------------------------------------------------------
16
<PAGE> 19
- --------------------------------------------------------------------------------
The following table sets forth information regarding the cumulative awards
received under the Plan to the persons and groups indicated from the inception
of the Plan in 1992 through May 30, 1997.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH STOCK RESTRICTED
NAME THE COMPANY OPTIONS STOCK
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Michael J. Berthelot Chairman of the Board and Chief 138,000 10,262
Executive Officer
Patrick K. Bolger President, Chief Operating Officer 98,000 8,940
and Director
Chandler J. Moisen Executive Vice President 42,000 8,024
Winston Lau Vice President of Operations 9,000 391
Gerald C. Harvey Vice President, Secretary and 16,000 281
General Counsel
Executive Group 318,000 28,070
Non-Executive Director Group 48,724 8,514
Non-Executive Officer Employee Group 111,000 12,015
</TABLE>
- --------------------------------------------------------------------------------
The following table sets forth information regarding awards proposed to be
granted under the Plan to the persons and groups indicated contingent upon
shareholder approval of the proposal to amend the Plan described herein:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH STOCK
NAME THE COMPANY OPTIONS
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Michael J. Berthelot Chairman of the Board and Chief 9,000
Executive Officer
Patrick K. Bolger President, Chief Operating Officer and 9,000
Director
Chandler J. Moisen Executive Vice President 6,000
Winston Lau Vice President of Operations 6,000
Gerald C. Harvey Vice President, Secretary and General 6,000
Counsel
Executive Group 42,000
Non-Executive Director Group 0
Non-Executive Officer Employee Group 36,000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
17
<PAGE> 20
- --------------------------------------------------------------------------------
The summary that follows is subject to the actual terms of the Plan as amended,
which is attached hereto as Annex A. The terms of the Plan require the approval
by the stockholders of the Company of the amendment to the Plan increasing the
number of shares of Common Stock authorized to be awarded under the Plan.
DESCRIPTION OF THE AMENDED AND RESTATED 1992 LONG TERM INCENTIVE PLAN
SHARES
Shares awarded under the Plan may be comprised of, in whole or in part,
authorized and unissued shares or treasury shares. If shares subject to an
option under the Plan cease to be subject to such option, or if shares awarded
under the Plan are forfeited, or otherwise terminate without a payment being
made to the participant in the form of the Company's Common Stock, such shares
will again be available for future distribution under the Plan.
PARTICIPATION
Awards under the Plan may be made to key employees, including officers of the
Company and its subsidiaries and those directors of the Company who are not
employees of the Company ("Outside Directors") and its subsidiaries. The Plan
imposes no limit on the number of officers and other key employees to whom
awards may be made.
ADMINISTRATION
The Plan is administered by a Committee of no less than three directors (the
"Committee") who are not employed by the Company and who meet certain other
criteria ("Non-Employee Directors").
AWARDS UNDER THE PLAN
The Committee has the authority to grant the following types of awards under the
Plan: (1) Stock Options; (2) Stock Appreciation Rights; (3) Restricted Stock;
(4) Deferred Stock; and (5) Other Stock-Based Awards.
Stock Options. Incentive Stock Options ("ISOs") and other stock options ("Non-
Qualified Stock Options") may be granted for such number of shares and to such
recipients as the Committee will determine and may be granted alone, in
conjunction with, or in tandem with other awards under the Plan and/or cash
awards outside the Plan, except that ISOs may only be granted to employees.
A Stock Option will be exercisable at such times and subject to such terms and
conditions as the Committee will determine and over a term to be determined by
the Committee at or after grant, which term will be no more than ten years after
the date of grant. Except in the case of an employee's, officer's or Outside
Director's termination or resignation by reason of death or disability, no Stock
Option will be exercisable prior to the first anniversary date of the granting
of the Option. In the event of a Change of Control, Stock Options will be
exercisable immediately if the grant was approved in advance by the Committee.
The option price for any ISO will not be less than 100% of the fair market value
of the Company's Common Stock as of the date of grant. Payment of the option
price for an ISO may be in cash, note or such other instrument as the Committee
may accept. The Committee may
- --------------------------------------------------------------------------------
18
<PAGE> 21
- --------------------------------------------------------------------------------
also authorize the payment of the option price of Non-Qualified Stock Options in
the form of Restricted or Deferred Stock.
If an employee owns more than ten percent of the Company's Stock, then any ISO
issued to that employee must provide for an option price of at least 110% of the
fair market value of the Stock on the date on which the ISO was granted, and the
ISO cannot be exercised more than five years after the date on which it was
granted.
Unless otherwise determined by the Committee, only options which are exercisable
on the date of termination of employment may be subsequently exercised. In
general, options that were exercisable prior to termination of employment may be
exercised for one year following termination of employment. However, in the case
of an ISO, this time period is generally limited to three months. Stock Options
granted under the Plan are not exercisable prior to the first anniversary date
of the granting of the Option; however, in the event of a Change of Control,
Stock Options will be exercisable immediately if the grant was approved in
advance by the Committee or the Board.
CHANGE OF CONTROL
Under the Plan, except as the Board may expressly provide otherwise in
resolutions adopted prior to a Change of Control, as defined below, on the
occurrence of a Change of Control as defined below, (a) all Stock Options and
SARs then outstanding shall become fully exercisable and (b) all outstanding
restrictions and conditions on all grants of Restricted Stock, Deferred Stock,
and Other Stock-Based Awards shall be deemed satisfied, in each case as of the
date of such Change of Control. Under the Plan, a Change of Control is defined
as any event occurring after September 13, 1994 in which (a) any person (an
individual, entity or group) becomes the beneficial owner of shares representing
20% or more of the total number of votes outstanding, (b) as a result of, or in
connection with, a cash tender offer, exchange offer, merger or other business
combination, sale of assets or contested election, or any combination of the
foregoing, persons who were directors of the Company immediately prior to such
event shall cease to constitute a majority of the Board thereafter; (c) Company
stockholders have approved an agreement providing either for a transaction in
which the Company will cease to be an independent, publicly-owned corporation or
for the sale or other disposition of all or substantially all of the assets of
the Company or (d) a tender offer or exchange offer is made by a person other
than the Company for shares of Common Stock, and shares are acquired pursuant
thereto.
Stock Options are not transferable except by will or the laws of descent and
distribution.
Stock Appreciation Rights. Stock Appreciation Rights ("SARs") may be granted in
conjunction with all or part of a Stock Option and will be exercisable only when
the underlying Stock Option is exercisable and in no event shall a SAR be
exercisable within the six-month period subsequent to the date of grant of the
SAR. Once an SAR has been exercised, the related portion of the Stock Option
underlying the SAR will terminate.
Upon the exercise of an SAR, the Committee will pay to the grantee an amount of
money equal to the excess of the fair market value of the Stock on the exercise
date over the option price, multiplied by the number of shares of Stock being
exercised pursuant to the SAR.
- --------------------------------------------------------------------------------
19
<PAGE> 22
- --------------------------------------------------------------------------------
The Committee has the discretion to determine whether the payment will be made
in cash, common stock or a combination thereof.
SARs are transferable only to the extent that the underlying Stock Option is
transferable, that is, upon the holder's death.
Restricted Stock. Restricted Stock may be granted alone, in conjunction with,
or in tandem with other awards under the Plan and/or cash awards outside of the
Plan and may be conditioned upon the attainment of specific performance goals or
such other factors as the Committee may determine. The provisions attendant to a
grant of Restricted Stock may vary from participant to participant.
In making an award of Restricted Stock, the Committee will determine the periods
during which the Stock is subject to forfeiture (the "Restricted Period"), and
may grant such Stock without the payment of any cash consideration by the
participant.
The Committee will establish a Restricted Period during which the grantee may
not sell, transfer, pledge or assign the Restricted Stock. In any event,
Restricted Stock must be held for a minimum of six months prior to disposition.
The certificate evidencing the Restricted Stock will remain in the possession of
the Company until the Restriction Period has expired.
Upon the termination of the employee's employment for any reason during the
Restriction Period, all Restricted Stock either will vest or be subject to
forfeiture, in accordance with the terms and conditions of the award. During the
Restriction Period the employee will have the right to vote the Restricted Stock
and to receive any cash dividends. At the time of award, the Committee may
require the deferral and reinvestment of any cash dividends in the form of
additional shares of Restricted Stock. Stock dividends will be treated as
additional shares of Restricted Stock and will be subject to the same terms and
conditions as the initial grant.
Deferred Stock. Deferred Stock Awards may be granted alone, in conjunction
with, or in tandem with other awards under the Plan and cash awards outside of
the Plan, and may be conditioned upon the attainment of specific performance
goals or such other factors as the Committee may determine. The Committee
determines the periods during which the Deferred Stock is subject to forfeiture,
and may grant such Stock without any cash payment by the participant.
During the deferral period set by the Committee (the "Deferral Period"), the
employee may not sell, transfer, pledge or assign the Deferred Stock Award. In
any event, Deferred Stock must be held for a minimum of six months prior to
disposition. At the end of the Deferral Period, shares of Common Stock equal to
the number specified in the Deferred Stock Award will be delivered to the
employee.
Upon the termination of the employee's employment for any reason during the
Deferral Period, all Deferred Stock either will vest or be subject to forfeiture
in accordance with the terms and conditions of the award.
During the Deferral Period, and as determined by the Committee, amounts
equivalent to any dividends that would have been paid had the shares of Deferred
Stock been issued will be paid to the employee or deemed reinvested in
additional shares of Deferred Stock. Deferred Stock will carry no voting rights
until such time as the Stock is actually issued.
Other Stock-Based Awards. The Committee may also grant other types of awards
that are
- --------------------------------------------------------------------------------
20
<PAGE> 23
- --------------------------------------------------------------------------------
valued, in whole or in part, by reference to or otherwise based on the Company's
Common Stock (the "Other Stock-Based Awards"). These awards may be granted
alone, in addition to, or in tandem with Stock Options, SARs, Restricted Stock,
Deferred Stock, and/or Other Stock-Based Awards. Such awards will be made upon
terms and conditions as the Committee may in its discretion provide. Such Other
Stock-Based Awards must be held for a minimum of six months prior to
disposition.
FEDERAL INCOME TAX ASPECTS
The following is a brief summary of the principal federal income tax aspects of
awards made under the Plan based upon the laws in effect on the date hereof.
This summary is not intended to be exhaustive, and does not describe state or
local tax consequences.
Restricted Stock. A participant in the Plan receiving Restricted Stock
generally will recognize ordinary income in the amount of the fair market value
of the Restricted Stock at the end of the one-year period during which the Stock
is subject to forfeiture ("Restriction Period"). The Company is entitled to
deduct the amount that the participant in the Plan includes in income. With
respect to the sale of the shares after the Restriction Period has expired, the
holding period for determining whether the participant in the Plan has long-term
or short-term capital gain or loss generally begins when the Restriction Period
expires and the tax basis for the shares will generally be based on the fair
market value of the shares on that date.
However, a participant in the Plan may elect, under Section 83(b) of the
Internal Revenue Code ("Section 83(b) Election"), within 30 days of the grant of
the Restricted Stock, to recognize taxable ordinary income on the date of grant
equal to the excess of the fair market value of the shares of Restricted Stock
(determined without regard to the restrictions) over the amount paid (if any)
for the Restricted Stock. The Company will deduct the amount taxable to the
participant in the Plan. However, if the shares are forfeited the participant in
the Plan will not be entitled to a deduction, refund, or loss for the amount
previously included in income by reason of the Section 83(b) Election. Also, if
the participant in the Plan makes a Section 83(b) Election, his or her holding
period commences on the date of grant, and his or her tax basis is the fair
market value of shares on the date on which the Restricted Stock is granted to
the participant in the Plan.
Stock Options. In general, with respect to Stock Options (a) no income is
realized by the participant in the Plan at the time the option is granted; (b)
except in the case of an ISO, upon exercise of the option, the participant in
the Plan realizes ordinary income in an amount equal to the difference between
the option price and the fair market value of the stock on the date of exercise;
(c) the Company will be entitled to a tax deduction in the amount taxable to the
participant in the Plan; and (d) upon disposition, any appreciation (or
depreciation) after the date of exercise is treated either as short-term or
long-term capital gain or loss, depending upon the length of time that the
participant in the Plan has held the shares since the exercise date.
CONCLUSION AND RECOMMENDATION
The Board of Directors believes it is in the interests of the Company and its
stockholders to adopt the amendment to the Plan to help to attract and retain
persons of outstanding com-
- --------------------------------------------------------------------------------
21
<PAGE> 24
- --------------------------------------------------------------------------------
petence as Outside Directors, executive officers and other key employees, and to
further the identity of their interests with those of the Company's
stockholders.
The affirmative vote of a majority of the shares of the Company's Common Stock
present and entitled to vote, in person or by proxy, at the 1997 Annual Meeting
is required for ratification and approval of the proposal to amend the Plan. The
Board of Directors recommends a vote FOR ratification and approval of the
proposal to amend the Plan.
- --------------------------------------------------------------------------------
22
<PAGE> 25
- --------------------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) TransTechnology S & P 500 PEER GROUP
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 150.66 115.23 113.16
1994 225.27 116.93 144.49
1995 170.13 135.13 154.79
1996 229.08 178.51 191.68
1997 330.84 213.89 236.89
</TABLE>
* ASSUMES INITIAL INVESTMENT OF $100.
Peer Group includes: Eaton Co., ITW, Park-Ohio Industries, SPS Technologies,
Stant and Trimas.
- --------------------------------------------------------------------------------
23
<PAGE> 26
- --------------------------------------------------------------------------------
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, 1996 to
March 31, 1997, all persons subject to the reporting requirements of Section
16(a) filed the reports on a timely basis except for (i) one report filed by Mr.
Argov on March 21, 1997, reporting two transactions which occurred in February,
1997 and which should have been reported by March 15, 1997, and (ii) one report
filed by Mr. Belleville on May 29, 1997 reporting one transaction which occurred
in July 1996 and which should have been reported by May 15, 1997.
RELATIONSHIP WITH THE COMPANY'S AUDITORS
The Company is not selecting or recommending a principal accountant to
stockholders for election, approval or ratification for the current year. The
Company is not required to obtain shareholder approval or ratification of its
selection of its auditors under Delaware law, and the Audit Committee and the
Board of Directors reserve the right to make any change in auditors at any time,
and without shareholder approval, which they deem advisable or necessary.
Representatives of Deloitte & Touche LLP, the Company's principal accountant for
the current year, are expected to be present at the Annual Meeting and will have
the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
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 18, 1998.
ANNUAL REPORTS
A copy of the Company's Annual Report for the fiscal year ended March 31, 1997
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, 1997. 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,
SECRETARY OF THE COMPANY, 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
- --------------------------------------------------------------------------------
24
<PAGE> 27
- --------------------------------------------------------------------------------
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, 1997
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25
<PAGE> 28
ANNEX A
TRANSTECHNOLOGY CORPORATION
AMENDED AND RESTATED
1992 LONG TERM INCENTIVE PLAN
SECTION 1. PURPOSE: DEFINITIONS.
The purpose of the TransTechnology Amended and Restated 1992 Long Term Incentive
Plan (the "Plan") is to enable TransTechnology Corporation (the "Company") to
attract, retain and reward key employees and Outside Directors of the Company
and its Subsidiaries and strengthen the mutuality of interests between those
individuals and the Company's shareholders, by offering them performance-based
stock incentives and/or other equity interests or equity-based incentives in the
Company.
For purposes of the Plan, the following terms shall be defined as set forth
below:
(a) "Board" means the Board of Directors of the Company.
(b) "Book Value" means, as of any given date, on a per share basis (i) the
Stockholders' Equity in the Company as of the end of the immediately
preceding fiscal year as reflected in the Company's consolidated
balance sheet, subject to such adjustments as the Committee shall
specify at or after grant, divided by (ii) the number of their
outstanding shares of Stock as of such year-end date (as adjusted by
the Committee for subsequent events).
(c) "Change of Control" shall be deemed to have occurred upon the
occurrence of any one (or more) of the following events after
September 13, 1994:
(i) Any person, including a group as defined in Section 13(d)(3) of
the Exchange Act, becomes the beneficial owner of shares of the
Company with respect to which twenty percent (20%) or more of the
total number of votes for the election of the Board may be cast;
(ii) As a result of, or in connection with, any cash tender offer,
exchange offer, merger or other business combination, sale of
assets or contested election, or combination of the foregoing,
persons who were directors of the Company immediately prior to
such event shall cease to constitute a majority of the Board;
(iii) The stockholders of the Company shall approve an agreement
providing either for a transaction in which the Company will cease
to be an independent publicly owned corporation or for a sale or
other disposition of all or substantially all the assets of the
Company; or
(iv) A tender offer or exchange offer is made for shares of the
Company's Common Stock (other than one made by the Company) and
shares of Common Stock are acquired thereunder ("Offer"). However,
the acceleration of the exercisability of outstanding
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Stock Options upon the occurrence of an Offer shall be within the
discretion of the Board.
(d) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
(e) "Committee" means the Committee referred to in Section 2 of the Plan.
(f) "Company" means TransTechnology Corporation, a corporation organized
under the laws of the State of Delaware, or any successor corporation.
(g) "Deferred Stock" means an award made pursuant to Section 8 below of
the right to receive Stock at the end of a specified deferral period.
(h) "Disability" means the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or that has lasted
or can be expected to last for a continuous period of not less than
twelve months.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934.
(j) "Fair Market Value" means, as of any given date, the mean between the
highest and lowest quoted selling price, of the Stock on the New York
Stock Exchange or, if no such sale of Stock occurs on the New York
Stock Exchange on such date, the fair market value of the Stock as
determined by the Committee in good faith. In the case of an Incentive
Stock Option, "Fair Market Value" shall be determined without regard
to any restriction, other than a restriction which by its terms will
never lapse.
(k) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of
Section 422 of the Code.
(l) "Non-Employee Director" shall have the meaning set forth in Rule
16b-3(b)(3)(I) promulgated by the Securities and Exchange Commission
under the Securities and Exchange Act of 1934, or any successor
definition adopted by the Commission, which definition currently means
a director who:
(A) is not currently an officer of or employed by the issuer or a
parent or subsidiary of the issuer; and
(B) does not receive compensation from the issuer, a parent or
subsidiary for consulting services or in any capacity other than as
a director, except if the amount would not require disclosure
pursuant to Item 404(a) of Regulation S-K (if the amount exceeds
$60,000); and
(C) does not possess an interest in any other transaction for which
disclosure would be required pursuant to Item 404(a) of Regulation
S-K; and
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(D) is not engaged in a business relationship for which disclosure
would be required by Item 404(b) of Regulation S-K (amount exceeds
5% of revenue of issuer or another entity).
(m) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(n) "Outside Director" means any Director who is not an employee of the
Company or of a Subsidiary.
(o) "Other Stock-Based Award" means an award under Section 9 below that is
valued in whole or in part by reference to, or is otherwise based on
Stock.
(p) "Plan" means this TransTechnology Corporation 1992 Long Term Incentive
Plan, as amended from time to time.
(q) "Restricted Stock" means an award of shares of Stock that is subject to
restrictions under Section 7 below.
(r) "Stock" means the Common Stock, $.01 par value per share, of the
Company.
(s) "Stock Appreciation Right" means the right pursuant to an award
granted under Section 6 below to surrender to the Company all (or a
portion) of a Stock Option in exchange for an amount equal to the
difference between --
(i) the Fair Market Value, as of the date such Stock Option (or such
portion thereof) is surrendered, of the shares of Stock covered by
such Stock Option (or such portion thereof), subject, where
applicable, to the pricing provisions in Section 6, and
(ii) the aggregate exercise price of such Stock Option (or such portion
thereof).
(t) "Stock Option" or "Option" means any option to purchase shares of
Stock (including Restricted Stock and Deferred Stock, if the Committee
so determines) granted pursuant to Section 5 below.
(u) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of
the corporations (other than the last corporation in the unbroken
chain) owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the
chain.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Committee of not less than three members of
the Board of Directors of the Company (the "Board") all of whom shall be
Non-Employee Directors within the meaning of Rule 16b-3 under the Exchange Act.
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The Committee shall have full authority to grant, pursuant to the terms of the
Plan, to officers, key employees, and Outside Directors eligible under Section
4 --
(i) Stock Options,
(ii) Stock Appreciation Rights,
(iii) Restricted Stock,
(iv) Deferred Stock, and/or
(v) Other Stock-Based Awards.
In particular, the Committee shall have the authority:
(a) to select the officers and other key employees of the Company and its
Subsidiaries to whom Stock Options, Stock Appreciation Rights,
Restricted Stock, Deferred Stock, and/or Other Stock-Based Awards may
from time to time be granted hereunder.
(b) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted
Stock, Deferred Stock, and/or Other Stock-Based Awards, or any
combination thereof, are to be granted hereunder to one or more
eligible employees;
(c) to determine the number of shares to be covered by each such award
granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation, or any
vesting acceleration or waiver of forfeiture restrictions regarding
any Stock Option or other award and/or the shares of Stock relating
thereto, based in each case on such factors as the Committee shall
determine, in its sole discretion);
(e) to determine whether and under what circumstances a Stock Option may
be settled in cash, Restricted Stock and/or Deferred Stock under
Section 5(j) or (k), as applicable, instead of Stock;
(f) to determine whether, to what extent and under what circumstances
Stock and other amounts payable with respect to an award under this
Plan shall be deferred either automatically or at the election of the
participant (including providing for and determining the amount (if
any) of any deemed earnings on any deferred amount during any deferral
period);
(g) to adopt, alter and repeal such rules, guidelines and practices
governing the Plan as it shall, from time to time, deem advisable;
(h) to interpret the terms and provisions of the Plan and any award issued
under the Plan (and any agreements relating thereto); and
(i) to otherwise supervise the administration of the Plan.
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All decisions made by the Committee pursuant to the provisions of the Plan shall
be made in the Committee's sole discretion and shall be final and binding on all
persons, including the Company and Plan participants.
SECTION 3. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for distribution
under the Plan shall be 800,000 shares. Such shares may consist, in whole or in
part, of authorized and unissued shares or treasury shares.
Subject to Section 6(b)(iv) below, if any shares of Stock that have been
optioned cease to be subject to a Stock Option, or if any such shares of Stock
that are subject to any Restricted Stock, or Deferred Stock, or Other
Stock-Based Award granted hereunder and forfeited or any such award otherwise
terminates without a payment being made to the participant in the form of Stock,
such shares shall again be available for distribution in connection with future
awards under the Plan.
In the event of any merger, reorganization, consolidation, recapitalization,
Stock dividend, Stock split or other change in corporate structure affecting the
Stock, such adjustment shall be made in the aggregate number of shares reserved
for issuance under the Plan, in the number and option price of shares subject to
outstanding Options granted under the Plan, in the number and purchase price of
shares subject to outstanding awards granted under the Plan as may be determined
to be appropriate by the Committee, in its sole discretion, provided that the
number of shares subject to any award shall always be a whole number. Such
adjusted option price shall also be used to determine the amount payable by the
Company upon the exercise of any Stock Appreciation Right associated with any
Stock Option.
SECTION 4. ELIGIBILITY.
Officers and other key employees of the Company and its Subsidiaries (but
excluding members of the Committee) who are responsible for or contribute to the
management, growth and/or profitability of the business of the Company and/or
its Subsidiaries are eligible to be granted awards under the Plan.
Notwithstanding the preceding sentence, Outside Directors may participate to the
extent specified in Section 10.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone, in addition to or in tandem with other
awards granted under the Plan and/or cash awards made outside of the Plan. Any
Stock Option granted under the Plan shall be in such form as the Committee may
from time to time approve. The provisions of Stock Options need not be the same
with respect to each recipient.
Stock Options granted under the Plan may be of two types; (i) Incentive Stock
Options and (ii) Non-Qualified Stock Options. However, Incentive Stock Options
may only be granted to employees.
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The Committee shall have the authority to grant to any optionee Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options (in each
case with or without Stock Appreciation Rights).
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a) Option Price. The option price per share of Stock purchasable under
an Incentive Stock Option shall be determined by the Committee at the
time of grant but shall be not less than (i) 110% of the Fair Market
Value of the Stock at grant in the case of an individual who owns more
than 10% of the Stock, determined under the rules of Section 424(d) of
the Code ("Ten Percent Shareholder"), and (ii) 100% of the Fair Market
Value of the Stock at grant in all other cases. The option price of a
Non-Qualified Stock Option need not comply with the restrictions in
the preceding sentence.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than (i) five
years after the date the Option is granted in the case of an Incentive
Stock Option granted to a Ten Percent Shareholder, and (ii) ten years
after the date the Option is granted in all other cases.
(c) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined
by the Committee at or after grant; provided, however, that, except as
provided in Section 5(f) and (g), or unless otherwise determined by
the Committee at or after grant, no Stock Option shall be exercisable
prior to the first anniversary date of the granting of the Option;
provided, further, that, notwithstanding anything in the foregoing to
the contrary, no Stock Option shall be exercisable prior to the date
which is six months subsequent to the grant of said Stock Option. If
the Committee provides, in its sole discretion, that any Stock Option
is exercisable only in installments, the Committee may waive such
installment exercise provisions at any time at or after grant in whole
or in part, based on such factors as the Committee shall determine in
its sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise
provisions apply under Section 5(c), Stock Options may be exercised in
whole or in part at any time during the option period, by giving
written notice of exercise to the Company specifying the number of
shares to be purchased. Participants may exercise Stock Options only
with respect to whole number of shares.
Such notice shall be accompanied by payment in full of the purchase
price, either by check, note or such other instrument as the Committee
may accept. As determined by the Committee, in its sole discretion, at
or after grant, payment in full or in part may also be made in the
form of unrestricted Stock already owned by the optionee or, in the
case of the exercise of a Non-Qualified Stock Option, Restricted Stock
or Deferred Stock subject to an award hereunder (based in each case,
on the Fair Market Value of the Stock on the date the option is
exercised, as determined by the Committee).
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If payment of the option exercise price of a Non-Qualified Stock
Option is made in whole or in part in the form of Restricted Stock or
Deferred Stock, such Restricted Stock or Deferred Stock (and any
replacement shares relating thereto) shall remain (or be) restricted
or deferred, as the case may be, in accordance with the original terms
of the Restricted Stock Award or Deferred Stock Award in question, and
any additional Stock received upon the exercise shall be subject to
the same forfeiture restrictions or deferral limitations, unless
otherwise determined by the Committee, in its sole discretion, at or
after grant.
No shares of Stock shall be issued until full payment therefor has
been made. An optionee shall generally have the rights to dividends or
other rights of a shareholder with respect to shares subject to the
Option when the optionee has given written notice of exercise, has
paid in full for such shares, and, if requested, has given the
representation described in Section 14(a).
(e) Non-Transferability of Options. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable during the
optionee's lifetime only by the optionee.
(f) Termination by Death. Subject to Section 5(I), if an optionee's
employment by the Company and any Subsidiary terminates by reason of
death, any Stock Option held by such optionee may thereafter be
exercised, to the extent such option was exercisable at the time of
death or on such accelerated basis as the Committee may determine at
or after grant (or as may be determined in accordance with procedures
established by the Committee), by the legal representative of the
estate or by the legatee of the optionee under the will of the
optionee, for a period of one year (or such other period as the
Committee may specify at grant) from the date of such death or until
the expiration of the stated term of such Stock Option, whichever
period is the shorter.
(g) Termination by Reason of Disability. Subject to Section 5(I), if an
optionee's employment by the Company and any Subsidiary terminates by
reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was
exercisable at the time of termination or on such accelerated basis as
the Committee may determine, at or after grant (or as may be
determined in accordance with procedures established by the
Committee), for a period of one year (or such other period as the
Committee may specify at grant) from the date of such termination of
employment or until the expiration of the stated term of such Stock
Option, whichever period is the shorter. However, if the optionee dies
within such one year period (or such other period as the Committee
shall specify at grant), any unexercised Stock Option held by such
optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of twelve months from
the date of such death or until the expiration of the stated term of
such Stock Option, whichever period is the shorter.
(h) Other Termination. Unless otherwise determined by the Committee (or
pursuant to procedures established by the Committee) at or after
grant, if an optionee's employment
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by the Company and any Subsidiary terminates for any reason other than
death or Disability, the Stock Option may be exercised, to the extent
otherwise than exercisable, for the lesser of three months or the
balance of such Stock Option's term.
(i) Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock
Options shall be interpreted, amended or modified, nor shall any
discretion or authority granted under the Plan be so exercised, or,
without the consent of the optionee(s) affected, to disqualify any
Incentive Stock Option under such Section 422 of the Code.
To the extent required for "Incentive Stock Option" status under
Section 422(b)(7) of the Code (taking into account applicable Internal
Revenue Service regulations and pronouncements), the aggregate Fair
Market Value (determined as of the time of grant) of the Stock with
respect to which Incentive Stock Options granted are exercisable for
the first time by the optionee during any calendar year under the Plan
and/or any other stock option plan of the Company or any Subsidiary or
parent corporation (within the meaning of Section 424 of the Code)
shall not exceed $100,000. If Section 422 is hereafter amended to
delete the requirement that the plan must expressly provide for the
$100,000 limitation, then this second paragraph of Section 5(i) shall
no longer be operative.
To the extent permitted under Section 422 of the Code or the
applicable regulations thereunder or any applicable Internal Revenue
Service pronouncement:
(i) an Incentive Stock Option shall be exercisable no later than three
months following termination of employment with the Company or a
Subsidiary;
(ii) in the event the optionee's employment is terminated by reason of
disability, the three month period of Section 5(I)(I) is extended
to twelve months; and
(iii) in the event the optionee's employment is terminated by reason of
death, the three month period of Section 5(I)(I) is waived
entirely.
(j) Buyout Provisions. The Committee may at any time offer to buy out for
a payment in cash, Stock, Deferred Stock or Restricted Stock an option
previously granted, based on such terms and conditions as the
Committee shall establish and communicate to the optionee at the time
that such offer is made.
(k) Settlement Provisions. If the option agreement so provides at grant
or is amended after grant and prior to exercise to so provide (with
the optionee's consent), the Committee may require that all or part of
the shares to be issued with respect to the spread value of an
exercised Stock Option take the form of Deferred or Restricted Stock,
which shall be valued on the date of exercise on the basis of the Fair
Market Value (as determined by the Committee) of such Deferred or
Restricted Stock determined without regard to the deferral limitations
and/or forfeiture restrictions involved, other than those restrictions
which, by their terms, will never lapse.
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SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the
Plan. In the case of a Non-Qualified Stock Option, such rights may be
granted either at or after the time of the grant of such Stock Option.
In the case of an Incentive Stock Option, such rights may be granted
only at the time of the grant of such Stock Option.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock
Option, subject to such provisions as the Committee may specify at
grant where a Stock Appreciation Right is granted with respect to less
than the full number of shares by a related Stock Option.
A Stock Appreciation Right may be exercised by an optionee, subject to
Section 6(b), in accordance with the procedures established by the
Committee for such purpose. Upon such exercise, the optionee shall be
entitled to receive an amount determined in the manner prescribed in
Section 6(b). Stock Options relating to exercised Stock Appreciation
Rights shall no longer be exercisable to the extent that the related
Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the
Plan, as shall be determined from time to time by the Committee,
including the following:
(i) Stock Appreciation Rights shall be exercisable only at such time
and to the extent that the Stock Options to which they relate
shall be exercisable in accordance with the provisions of Section
5 and this Section 6 of the Plan. Notwithstanding anything to the
contrary in this Section 6, no Stock Appreciation Right shall be
exercisable prior to the date which is six months subsequent to
the date of grant of said Stock Appreciation Right.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee shall
be entitled to receive an amount in cash and/or shares of Stock
equal in value to the excess of the Fair Market Value of one share
of Stock over the option price per share specified in the related
Stock Option multiplied by the number of shares in respect of
which the Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of payment.
When payment is to be made in shares, the number of shares to be
paid shall be calculated on the basis of the Fair Market Value of
the shares on the date of exercise. When payment is to be made in
cash, such amount shall be calculated on the basis of the mean
between the highest and lowest quoted selling price, of the Stock
on the New York Stock Exchange during the applicable period
referred to in Rule 16b-3(e) under the Exchange Act.
(iii) Stock Appreciation Rights shall be transferable only when and to
the extent that the underlying Stock Option would be transferable
under Section 5(e) of the Plan.
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(iv) Upon the exercise of a Stock Appreciation Right, the Stock Option
or part thereof to which such Stock Appreciation Right is related
shall be deemed to have been exercised for the purpose of the
limitation set forth in Section 3 of the Plan for the number of
shares of Stock to be issued under the Plan, but only to the extent
of the number of shares issued under the Stock Appreciation Right
at the time of exercise based on the value of the Stock
Appreciation Right at such time.
(v) The provisions of Stock Appreciation Rights need not be the same
with respect to each recipient.
SECTION 7. RESTRICTED STOCK.
(a) Administration. Shares of Restricted Stock may be issued either
alone, in addition to or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. The Committee shall
determine the eligible persons to whom, and the time or times at
which, grants of Restricted Stock will be made, the number of shares
to be awarded, the price (if any) to be paid by the recipient of
Restricted Stock (subject to Section 7(b)), the time or times within
which such awards may be subject to forfeiture, and all other terms
and conditions of the awards.
The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors as the
Committee may determine, in its sole discretion.
The provisions of Restricted Stock Awards need not be the same with
respect to each recipient.
(b) Awards and Certificates. The prospective recipient of a Restricted
Stock Award shall not have any rights with respect to such award
unless and until such recipient has executed an agreement evidencing
the award and has delivered a fully executed copy thereof to the
Company, and has otherwise complied with the applicable terms and
conditions of such award.
(i) Shares of Restricted Stock may be issued for no cash
consideration.
(ii) In order to receive an award of Restricted Stock, the Participant
must first execute a Restricted Stock Award Agreement and pay
whatever price (if any) is required under Section 7(b)(I).
(iii) Each participant receiving a Restricted Stock Award shall be
issued a stock certificate in respect of such shares of Restricted
Stock. Such certificate shall be registered in the name of such
participant, and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such award.
(iv) The Committee shall require that the stock certificates evidencing
such shares be held in custody by the Company until the
restrictions thereon shall have lapsed.
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(c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following
restrictions and conditions:
(i) Subject to the provisions of this Plan and the award agreement
during a period set by the Committee commencing with the date of
such award (the "Restriction Period"), the participant shall not be
permitted to sell, transfer, pledge or assign shares of Restricted
Stock awarded under the Plan. Within these limits, the Committee,
in its sole discretion, may provide for the lapse of such
restrictions in installments and may accelerate or waive such
restrictions in whole or in part, based on service, performance
and/or such other factors or criteria as the Committee may
determine, in its sole discretion.
(ii) Except as provided in this Paragraph (ii) and Section 7(c)(I), the
participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a shareholder of the Company,
including the right to vote the shares, and the right to receive
any cash dividends. The Committee, in its sole discretion, as
determined at the time of award, may permit or require the
payments of cash dividends to be deferred and, if the Committee so
determines, reinvested, subject to Section 14(e), in additional
Restricted Stock to the extent shares are available under Section
3, or otherwise reinvested. Stock dividends issued with respect to
Restricted Stock shall be treated as additional shares of
Restricted Stock that are subject to the same restrictions and
other terms and conditions that apply to the shares with respect
to which such dividends are issued.
(iii) Subject to the applicable provisions of the award agreement and
this Section 7, upon termination of a participant's employment
with the Company and any Subsidiary for any reason during the
Restriction Period, all shares still subject to restriction will
vest or be forfeited, in accordance with the terms and conditions
established by the Committee at or after grant.
(iv) If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction
Period, certificates for an appropriate number of unrestricted
shares shall be delivered to the participant promptly.
(v) A participant may elect to further extend the Restriction Period
for a specified period or until a specified event, subject in each
case to the Committee's approval and to such terms as are
determined by the Committee, all in its sole discretion. Subject to
any exceptions adopted by the Committee, each election must be made
prior to the first day of the calendar year in which the
Restriction Period (or installment thereof) ends.
(c) Rules and Procedures. The Committee shall develop such rules and
procedures, not inconsistent with the provisions of this Section 7, as
it deems necessary or appropriate relating to awards of Restricted
Stock under the Plan.
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(d) Notwithstanding anything in this Section 7 to the contrary, Restricted
Stock granted hereunder shall be required to be held for a minimum of
six months prior to disposition.
SECTION 8. DEFERRED STOCK.
(a) Administration. Deferred Stock may be awarded either alone, in
addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. The Committee shall
determine the eligible persons to whom and the time or times at which
Deferred Stock shall be awarded, the number of shares of Deferred
Stock to be awarded to any person, the duration of the period (the
"Deferral Period") during which, and the conditions under which
receipt of the Stock will be deferred, and the other terms and
conditions of the award in addition to those set forth in Section
8(b).
The Committee may condition the grant of Deferred Stock upon the
attainment of specified performance goals or such other factors or
criteria as the Committee shall determine, in its sole discretion.
The provisions of Deferred Stock Awards need not be the same with
respect to each recipient.
(b) Terms and Conditions. The shares of Deferred Stock awarded pursuant
to this Section 8 shall be subject to the following terms and
conditions:
(i) Subject to the provisions of this Plan and the award agreement
referred to in Section 8(b)(vi) below, Deferred Stock Awards may
not be sold, assigned, transferred, pledged or otherwise encumbered
during the Deferral Period. At the expiration of the Deferral
Period (or the Elective Deferral Period referred to in Section
8(b)(v), where applicable), share certificates shall be delivered
to the participant, or his legal representative, in a number equal
to the shares covered by the Deferred Stock Award.
(ii) Unless otherwise determined by the Committee at grant, amounts
equal to any dividends declared during the Deferral Period with
respect to the number of shares covered by a Deferred Stock Award
will be paid to the participant currently, or deferred and deemed
to be reinvested in additional Deferred Stock, or otherwise
reinvested, all as determined at or after the time of the award by
the Committee, in its sole discretion.
(iii) Subject to the provisions of the award agreement and this Section
8, upon termination of a participant's employment with the Company
or any Subsidiary for any reason during the Deferral Period for a
given award, the Deferred Stock in question will vest, or be
forfeited, in accordance with the terms and conditions established
by the Committee at or after grant.
(iv) Based on service, performance and/or such other factors or criteria
as the Committee may determine, the Committee may, at or after
grant, accelerate the vesting of all or any part of any Deferred
Stock Award and/or waive the deferral limitations for all or any
part of such award.
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(v) A participant may elect to further defer receipt of an award (or an
installment of an award) for a specified period or until a
specified event (the "Elective Deferral Period"), subject in each
case to the Committee's approval and to such terms as are
determined by the Committee, all in its sole discretion. Subject to
any exceptions adopted by the Committee, each election must be made
prior to the first day of the calendar year in which the
Restriction Period (or installment thereof) ends.
(vi) Each award shall be confirmed by, and subject to the terms of, a
Deferred Stock agreement executed by the Company and the
participants.
(c) Notwithstanding anything to the contrary in this Section 8, Deferred
Stock granted hereunder shall be required to be held for a minimum of
six months prior to disposition.
SECTION 9. OTHER STOCK-BASED AWARDS.
(a) Administration. Other awards of Stock and other awards that are
valued in whole or in part by reference to, or are otherwise based on
Stock ("Other Stock-Based Awards"), including, without limitation,
performance shares, convertible preferred stock, convertible
debentures, exchangeable securities and Stock awards or options valued
by reference to Book Value or subsidiary performance, may be granted
either alone or in addition to or in tandem with Stock Options, Stock
Appreciation Rights, Restricted Stock, or Deferred Stock granted under
the Plan and/or cash awards made outside of the Plan.
Subject to the provisions of the Plan, the Committee shall have
authority to determine the persons to whom and the time or times at
which such awards shall be made, the number of shares of Stock to be
awarded pursuant to such awards, and all other conditions of the
awards. The Committee may also provide for the grant of Stock upon the
completion of a specified performance period.
The provisions of Other Stock-Based Awards need not be the same with
respect to each recipient.
(b) Terms and Conditions. Other Stock-Based Awards made pursuant to this
Section 9 shall be subject to the following terms and conditions:
(i) Subject to the provisions of this Plan and the award agreement
referred to in Section 9(b)(v) below, shares subject to awards made
under this Section 9 may not be sold, assigned, transferred,
pledged or otherwise encumbered prior to the date on which the
shares are issued, or, if later, the date on which any applicable
restriction, performance or deferral period lapses.
(ii) Subject to the provisions of this Plan and the award agreement and
unless otherwise determined by the Committee at grant, the
recipient of an award under this Section 9 shall be entitled to
receive, currently or on a deferred basis, interest or dividends
or interest or dividend equivalents with respect to the number of
shares covered by the award, as determined at the time of the
award by the Committee, in its sole discretion,
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<PAGE> 41
and the Committee may provide that such amounts (if any) shall be
deemed to have been reinvested in additional Stock or otherwise
reinvested.
(iii) Any award under Section 9 and any Stock covered by any such award
shall vest or be forfeited to the extent so provided in the award
agreement, as determined by the Committee, in its sole discretion.
(iv) In the event of the participant's Disability or death, or in cases
of special circumstances, the Committee may, in its sole
discretion, waive in whole or in part any or all of the remaining
limitations imposed hereunder (if any) with respect to any or all
of an award under this Section 9.
(v) Each award under this Section 9 shall be confirmed by, and subject
to the terms of an agreement or other instrument by the Company
and by the participant.
(vi) Stock (including securities convertible into Stock) issued on a
bonus basis under this Section 9 may be issued for no cash
consideration.
(c) Notwithstanding anything to the contrary in this Section 9, Other
Stock-Based Awards granted hereunder shall be required to be held for
a minimum of six months prior to disposition.
SECTION 10. OUTSIDE DIRECTORS.
Notwithstanding anything herein to the contrary, Outside Directors may
participate in the Plan in accordance with this Section 10.
(a) All annual retainer fees for service as a Director and as a member of
any committee of the Board shall be paid in the form of Stock.
However, payments made for attendance at a meeting (whether in person
or by telephone) will be paid in cash. Stock payments will be made
within ten (10) business days following the date of the election of
the Board.
(i) Any Stock issued to an Outside Director will contain a legend
restricting its resale for a twelve (12) month period.
(ii) Should the individual's service as a Director terminate prior to
the expiration of the twelve (12) month period for a reason other
than death or Disability, the Stock shall be forfeited.
(iii) The Company shall cause a new share certificate to be issued to
each Outside Director following the lapse of the twelve (12) month
period.
(b) Each Outside Director shall be granted a Stock Option to purchase the
same number of shares of Stock that the Outside Director owned (i)
sixty (60) days after the date of his or her election to the Board if
that date occurs after September 11, 1994, or (ii) on September 12,
1994, if the Outside Director had served on the Board prior to that
date ("Entitlement Date").
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<PAGE> 42
(i) In no event may the maximum number of shares issued to an Outside
Director pursuant to this Paragraph (b) exceed twenty-five thousand
(25,000).
(ii) Stock Options issued pursuant to this Paragraph (b) shall be:
(A) Issued within ten (10) business days after the individual's
Entitlement Date:
(B) At an option price equal to the fair market value of the Stock on
the individual's Entitlement Date;
(C) Exercisable upon the earlier of (i) a Change of Control, or (ii)
one (1) year after the individual's Entitlement Date; and
(D) Continue to be exercisable for a period of four (4) years while
serving as a Director;
(E) Exercisable for a period of ninety (90) days following
termination of service as a Director, unless such termination is
due to the individual's death or Disability, in which case the
Stock Option shall be exercisable for one (1) year following
termination of service.
(c) Notwithstanding anything in the foregoing to the contrary, any Stock
Option granted pursuant to this Section 10 shall not be exercisable
prior to the date which is six months subsequent to the date of grant
of such Stock Option; provided, however, that upon the occurrence of a
Change of Control, the Stock Option shall be exercisable immediately
if the grant of such Stock Option was approved by the Board or the
Committee provided for in Section 2 hereof.
SECTION 11. CHANGE OF CONTROL.
In the event of a Change of Control, except as the Board may expressly provide
otherwise in resolutions adopted prior to the Change of Control:
(a) All Stock Options or Stock Appreciation Rights then outstanding shall
become fully exercisable as of the date of the Change of Control; and
(b) All restrictions and conditions of all grants of Restricted Stock
(including Restricted Stock granted pursuant to Section 10 above)
Deferred Stock and Other Stock-Based Awards then outstanding shall be
deemed satisfied as of the date of the Change of Control.
Subject to the limitation that, notwithstanding anything in this Plan to the
contrary, any Stock Option which has been outstanding for less than six months
on the date of such Change of Control shall be exercisable immediately if the
grant of such Stock Option was approved by the Board or the Committee provided
for in Section 2 hereof.
SECTION 12. AMENDMENTS AND TERMINATIONS.
The Board may amend, modify, or discontinue the Plan, but no amendment,
modification, or discontinuation shall be made which would impair the rights of
an optionee or participant under a
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<PAGE> 43
Stock Option, Stock Appreciation Right, Restricted or Deferred Stock Award, or
Other Stock-Based Award theretofore granted, without the participant's consent.
Furthermore, in addition to such limitations upon amendments as may be imposed
by any stock exchange on which the Stock is traded, no amendment may be adopted
without the consent of the Company's shareholders that would:
(a) increase the aggregate number of shares that may be issued under the
Plan,
(b) modify the requirements affecting eligibility to participate in the
Plan, or
(c) materially increase the benefits accruing to Insiders under the Plan.
The preceding sentence is intended solely to satisfy the requirements
of Code Section 422, and it not intended to confer upon participants
any rights to have the Plan continued without amendment.
The Committee may amend the terms of any Stock Option or other award theretofore
granted, prospectively or retroactively, but no such amendment shall impair the
rights of any participant without the participant's consent. The Committee may
also substitute new Stock Options for previously granted Stock Options (on a one
for one or other basis), including previously granted Stock Options having
higher option exercise prices.
Subject to the above provisions, the Board shall have broad authority to amend
the Plan to take into account changes in applicable securities and tax laws and
accounting rates, as well as other developments.
SECTION 13. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a participant or
optionee by the Company, nothing contained herein shall give any such
participant or optionee any rights that are greater than those of a general
creditor of the Company.
SECTION 14. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares pursuant to a
Stock Option or other award under the Plan to represent to and agree
with the Company in writing that the optionee or participant is
acquiring the shares without a view to distribution thereof. The
certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to stop stock transfer orders and
other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities and
Exchange Committee, any stock exchange upon which the Stock is then
listed, and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
A-16
<PAGE> 44
(b) Nothing contained in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any employee of the
Company or any Subsidiary any right to continued employment with the
Company or a Subsidiary, as the case may be, nor shall it interfere in
any way with the right of the Company or a Subsidiary to terminate the
employment of any of its employees at any time.
(d) No later than the date as of which an amount first becomes includible
in the gross income of the participant for federal income tax purposes
with respect to any award under the Plan, the participant shall pay to
the Company, or make arrangements satisfactory to the Committee
regarding the payment of, any federal, state, or local taxes of any
kind required by law to be withheld with respect to such amount.
Unless otherwise determined by the Committee, withholding obligations
may be settled with Stock, including Stock that is part of the award
that gives rise to the withholding requirement. The obligations of the
Company under the Plan shall be conditional on such payment or
arrangements and the Company and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
(e) The actual or deemed reinvestment of dividends or dividend equivalents
in additional Restricted Stock (or in Deferred Stock or Other
Stock-Based Awards) at the time of any dividend payment shall only be
permissible if sufficient shares of Stock are available under Section
3 for such reinvestment (taking into account then outstanding Stock
Options, and other Stock-Based Awards).
(f) The plan and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
Delaware.
SECTION 15. EFFECTIVE DATE OF PLAN.
The provisions of Section 10 shall be effective as of September 13, 1994,
provided that this Plan, as amended is approved by the Company's shareholders on
that date.
SECTION 16. TERM OF PLAN.
No Stock Option, Stock Appreciation Right, Restricted Stock Award, Deferred
Stock Award, or Other Stock-Based Award shall be granted pursuant to the Plan on
or after the tenth anniversary of the date of shareholder approval, but awards
granted prior to such tenth anniversary may extend beyond that date.
A-17
<PAGE> 45
/x/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
<TABLE>
<S> <C>
--------------------------- 1. ELECTION OF DIRECTORS
TRANSTECHNOLOGY CORPORATION For Withhold For All
--------------------------- GIDEON ARGOV THOMAS V. CHEMA All All Except
WALTER BELLEVILLE MICHEL GLOUCHEVITOH
MICHAEL J. BERTHELOT JAMES A. LAWRENCE / / / / / /
PATRICK K. BOLGER
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
the "For All Except" box and strike a line through the nominee'(s') name(s).
The undersigned hereby confer(s) upon the Proxy discretionary authority
RECORD DATE SHARES: 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.
For Against Abstain
2. Proposal to approve amendment to the Amended
and Restated 1992 Long Term Incentive Plan / / / / / /
to increase the number of shares issuable
under the plan.
3. In its discretion, the Proxy is authorized to vote upon such other business
as may properly come before the meeting.
</TABLE>
Please be sure to sign and date this Proxy. Date
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Signature Signature, if held jointly
- --- ------------------------------- ----------
Mark box at right if an address change or
comment has been noted on the reverse side
of this card. / /
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DETACH CARD DETACH CARD
<PAGE> 46
PROXY TRANSTECHNOLOGY CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael J. Berthelot, Joseph F. Spanier and
Monica Aguirre, 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 on the reverse side, all the shares of common stock of
TransTechnology Corporation held of record by the undersigned on May 30, 1997,
at the annual meeting of shareholders to be held on July 24, 1997, 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 and FOR
approval of an amendment to the Amended and Restated 1992 Long Term Incentive
Plan. 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.
- --------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) hereon. 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.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
</TABLE>
