SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Soliciting Material Pursuant to §240.14a-12 | ||
CURTISS-WRIGHT CORPORATION
(Name of Registrant as Specified In Its Charter)
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Dear Valued Stockholder:
You are cordially invited to attend the annual meeting of stockholders of Curtiss-Wright Corporation to be held on Thursday, May 10, 2018,4, 2023, at the Homewood Suites by Hilton, 125 Harbour Place Drive, Davidson, North Carolina 28036, commencing at 10:1:00 a.m.p.m. local time.time (the “Annual Meeting”).
We intend to hold the Annual Meeting in person again this year. The proxies that we solicit give you the opportunity to vote on all scheduled matters that come before the annual meeting. Whether or not you plan to attend, you can be sure that your shares are represented by promptly voting and submitting your proxy by phone or by internet as described in the following materials. If you want proxy materials mailed to you, you can make a request by completing, signing, dating and returning your proxy card in the postage-paid envelope provided. Please refer to the accompanying Notice of Annual Meeting and Proxy Statement for further important information about the Annual Meeting.
In addition, the health and well-being of our employees and stockholders is a high priority, and we are sensitive to the public health and travel concerns our stockholders may have. Accordingly, if we determine that it is not possible to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting, which may include a change in venue or holding the meeting virtually. We will announce any such change and the details on how to participate both by press release and by posting details on our website at https://investors.curtisswright.com/governance/annual-meeting, which will also be filed with the SEC as proxy material. If you are planning to attend the Annual Meeting, please check our website the week of the meeting. As always, we encourage you to vote your shares by proxy prior to the Annual Meeting.
The Notice of Annual Meeting and the Proxy Statement, which follow this letter, provide information concerning matters to be considered and acted upon at the annual meeting. We will present a brief report on our business followed by a question and answerquestion-and-answer period at the annual meeting.
In accordance with rules adopted by the U.S. Securities and Exchange Commission, we are using the internet as our primary means of furnishing proxy materials to our stockholders. Accordingly, most stockholders will not receive paper copies of our proxy materials. We will instead send our stockholders a notice with instructions for accessing the proxy materials and voting electronically over the internet or by telephone. The notice also provides information on how stockholders may request paper copies of our proxy materials. We believe electronic delivery of our proxy materials will help us reduce the environmental impact and costs of printing and distributing paper copies and improve the speed and efficiency by which our stockholders can access these materials.
We know that manyare resolutely focused on strengthening our culture and our workplace—putting greater emphasis on diversity, equity and inclusion, talent acquisition and development,
and the employee experience. We’re also continuing to integrate environmental, social and governance (ESG) priorities into the core of youCurtiss-Wright’s culture. We are unablecommitted to attendensuring our business practices are sustainable, and we will do our part to respond to the ongoing environmental and social issues, so the state of our planet and our communities are healthier tomorrow than they are today.
Finally, on behalf of the entire Curtiss-Wright family, I wish to thank David C. Adams and Admiral (Ret.) John B. Nathman, both of whom will retire from the Board just prior to our 2023 annual meeting in person. The proxies that we solicit give you the opportunityof stockholders. Dave is retiring with over 22 years of distinguished service and leadership at Curtiss-Wright, which included more than 7 years as Chairman and CEO and over a year of service as Executive Chairman during my transition to voteCEO. Admiral Nathman is retiring with more than 14 years of distinguished service and leadership. I congratulate both on all scheduled matters that come before the annual meeting. Whether or not you plan to attend, you can be sure that your shares are represented by promptly votingtheir retirement and submitting your proxy by phone or by internet as described in the following materials. If you want proxy materials mailed to you, you can make a request by completing, signing, dating,thank them for their leadership, counsel, and returning your proxy card enclosed with those materials in the postage-paid envelope provided to you.friendship.
On behalf of your Board of Directors, management, and our employees, I would like to express our appreciation for your continued support. I look forward to your participation in the Annual Meeting.
Sincerely, | ||
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CURTISS-WRIGHT CORPORATIONOne
130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the holders of the common stock of Curtiss-Wright Corporation:
Notice is hereby given that the annual meeting of stockholders (the “Annual Meeting”) of Curtiss-Wright Corporation, a Delaware corporation (the “Company”), will be held on Thursday, May 10, 2018,4, 2023, at the Homewood Suites by Hilton, 125 Harbour Place Drive, Davidson, North Carolina 28036, commencing at 10:1:00 a.m.pm local time, for the following purposes:
(1) | To elect the ten | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) | To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) | To approve | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) | To approve on an advisory | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) | To approve on an advisory (non-binding) basis the frequency of future stockholder advisory votes approving the compensation of the Company’s named executive officers; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(6) | To consider and transact such other business as may properly come before the Annual Meeting. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Only record holders of the Company’s common stock at the close of business on March 12, 2018,10, 2023, the record date for the Annual Meeting, are entitled to notice of and to vote at the Annual Meeting. A list of stockholders will be available for examination by any stockholder(s) at the Annual Meeting and during normal business hours at the offices of the Company, One130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036, during the ten days preceding the Annual Meeting date.
The Company cordially invites all stockholders to attend the Annual Meeting in person. Stockholders who plan to attend the Annual Meeting in person are nevertheless requested to vote their shares electronically over the Internet, or by telephone, or if you receive a proxy card in the mail, by mailingsigning, dating and returning the completed proxy card in the postage-paid envelope provided, to make certain that their vote will be represented at the Annual Meeting should they be prevented unexpectedly from attending.
By Order of the Board of Directors, | ||
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March | PAUL J. FERDENZI |
We intend to hold the annual meeting of stockholders in person. As always, we urge you to vote by proxy in advance of the Annual Meeting as described in this Notice of Annual Meeting and Proxy Statement, whether or not you currently plan to attend the Annual Meeting in person.
In addition, the health and well-being of our employees and stockholders is a high priority, and we are sensitive to the public health and travel concerns our stockholders may have. Accordingly, if we determine that it is not possible to hold our annual meeting of stockholders in person, we will announce alternative arrangements for the meeting, which may include a change in venue or holding the meeting virtually. We will announce any such change and the details on how to participate both by press release and by posting details on our website at https://investors.curtisswright.com/governance/annual-meeting, which will also be filed with the SEC as proxy material. If you are planning to attend our
Annual Meeting, please check our website the week of the meeting. As always, we encourage you to vote your shares by proxy prior to the Annual Meeting.
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY SUBMIT YOUR PROXY ELECTRONICALLY OVER THE INTERNET OR BY TELEPHONE, OR IF YOU RECEIVE A PAPER PROXY CARD, PLEASE FILL IN, SIGN AND PROMPTLY RETURN YOUR PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on Thursday, May 10, 2018.4, 2023.A Notice and Proxy Statement and combined Business Review/20172022 Annual Report on Form 10-K to security holders are available at: www.proxyvote.com.www.proxyvote.com.
CURTISS-WRIGHT CORPORATIONOneTABLE OF CONTENTS
PROXY SUMMARY
The following is a summary that highlights information contained elsewhere in this Proxy Statement. This summary does not contain all the information you should consider, and before voting, you are urged to carefully read the entire Proxy Statement.
Voting Matters and Vote Recommendations
The Company currently expects to consider five items of business at the 2023 Annual Meeting. The following table lists those items of business and the Board’s vote recommendation.
Proposal | Board | Reasons for Recommendation | More Information | |||||
(1) | Election of the ten director nominees named herein to a one-year term | FOR ALL | The Board and the Committee on Directors and Governance believe the nominees possess the skills, experience, qualifications, and diversity to effectively monitor performance, provide oversight and support management’s execution of the Company’s long-term strategy. | Page 10 | ||||
(2) | Ratification of the independent registered public accounting firm | FOR | Based on their assessment, the Board and the Audit Committee believes that the appointment of Deloitte & Touche LLP is in the best interests of the Company and its stockholders. | Page 77 | ||||
(3) | Approve an amendment to the Curtiss-Wright Corporation Incentive Compensation Plan to expand the class of employees eligible to receive awards under the plan | FOR | To attract, retain, and motivate key employees who work on a part-time basis, and to allow for a gradual transition for those retiring from the organization. | Page 79 | ||||
(4) | Advisory vote to approve the compensation of the Company’s named executive officers | FOR | The Company’s executive compensation program incorporates several compensation governance best practices and reflects the Company’s commitment to pay for performance. | Page 82 | ||||
(5) | Advisory (non-binding) vote to approve the frequency of future stockholder advisory votes approving the compensation of the Company’s named executive officers | FOR OPTION #1 (EVERY ONE YEAR) | The Company currently conducts annual advisory votes on executive compensation, which is consistent with the views expressed by our stockholders on this proposal when it was most recently voted upon at the 2017 Annual Meeting of Stockholders. | Page 84 | ||||
Director Nominees
Set forth below is summary information concerning the Company’s Director Nominees who are being voted on at the Annual Meeting.
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Name | Age | Director | Principal Occupation | Independent | ||||
Lynn M. Bamford | 59 | 2021 | Chair and Chief Executive Officer, Curtiss-Wright Corporation | No | ||||
Dean M. Flatt | 72 | 2012 | Former President and Chief Operating Officer, Honeywell International’s Defense and Space business | Yes | ||||
S. Marce Fuller | 62 | 2000 | Former President and Chief Executive Officer, Mirant Corporation | Yes | ||||
Bruce D. Hoechner | 63 | 2017 | Former President and Chief Executive Officer, Rogers Corporation | Yes | ||||
Glenda J. Minor | 66 | 2019 | Chief Executive Officer and Principal, Silket Advisory Services | Yes | ||||
Anthony J. Moraco | 63 | 2021 | Former Chief Executive Officer and member of the Board of Directors, Science Applications International Corporation | Yes | ||||
Admiral (Ret.) | 64 | N/A | President, WFM Advisors, LLC; Former Vice Chief of Naval Operations | Yes | ||||
Robert J. Rivet | 69 | 2011 | Former Executive Vice President, Chief Operations and Administrative Officer, Advanced Micro Devices, Inc. | Yes | ||||
Peter C. Wallace | 68 | 2016 | Former Chief Executive Officer, Gardner Denver Inc. | Yes | ||||
Lieutenant General | 65 | N/A | Chief Executive Officer, Wyche Leadership and Supply Chain Consulting; Former Deputy Commanding General, U.S. Army Materiel Command | Yes |
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Corporate Governance Highlights
The Company is committed to good corporate governance, which promotes the long-term interests of stockholders, strengthens Board and executive leadership accountability, and helps build public trust in the Company. As part of this commitment, the Board has adopted best practices in corporate governance, including the following:
Board Independence
• | 9 out of 10 director nominees are independent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | 100% independent Board committees | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Chair and CEO is the only management Director nominee | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lead Independent Director
• | Consults with Chair regarding setting Board meeting agendas, and consults with all Board committees | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Serves as liaison between the Chair and the independent directors | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Facilitates communication between and among the independent directors and management | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Presides at all Board meetings where the Chair is not present, including executive sessions of the independent directors | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Is available, when appropriate, for consultation and direct communication with stockholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Coordinates annual Board performance review of Chief Executive Officer | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Leads the discussion of Board’s self-assessment and evaluation of results | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Board Practices
• | Annual election of directors | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Annual Board and committee evaluations | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Regular executive sessions of non-management directors | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Board participation in executive succession planning | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Annual review of Committee Charters and Corporate Governance Principles | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Robust risk oversight with Board and committee roles | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Best Practices
• | Comprehensive Code of Conduct and Corporate Governance Principles | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Anti-hedging and pledging policy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Annual Say-on-Pay Vote | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Clawback Policy for Incentive Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Robust stock ownership requirements for directors and executive officers | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Strong pay-for-performance philosophy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Succession Planning Process | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 Financial Performance Highlights
Overall, the Company continued to face a challenging business environment during fiscal 2022, particularly with headwinds throughout the year relating primarily to supply chain delivery disruptions, workforce availability issues, and inflationary pressures. The Company continued to take steps to mitigate the impact of these issues on our fiscal 2022 financial performance. Despite these challenges, the Company performed well in fiscal 2022, with increases in sales, profitability, and operating income. In 2022, the Company’s three-year total shareholder return (TSR) ranked 162nd or the 56th percentile against the S&P MidCap 400. TSR is the change in the Company’s Common Stock share price plus dividends from the beginning of the measurement period to the end (three years, 1/1/2020 to 12/31/2022). The Company’s 2022 financial performance for executive compensation included:
• | Adjusted operating income of $437 million. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Organic Sales Growth of 2.7%. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Working capital as a percentage of sales of 25.9%. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company’s financial performance includes adjustments referenced in the Company’s fourth quarter 2022 earnings release furnished to the SEC on February 22, 2023. The Company’s financial performance above excludes the performance of acquisitions consummated during the performance period.
3
Executive Compensation Practices Highlights
The Executive Compensation Committee is firmly committed to implementing a compensation program that aligns management and stockholder interests, encourages executives to drive sustainable stockholder value creation, and helps retain key personnel. In 2022, the Company received over 96% stockholder support for the Company’s “Say-on-Pay” vote, which the Executive Compensation Committee considers to be among the most important items of feedback about the Company’s executive compensation program. The Company recognizes and rewards its executive officers through compensation arrangements that directly link their pay to the Company’s performance, and the Company ensures a strong alignment of interests with its stockholders by including a significant amount of performance-based compensation in the overall mix of pay. The Company’s pay mix includes base salary, an annual incentive cash bonus plan, and a long-term incentive plan under which the Company grants time-based restricted stock units and performance-based cash and stock units. Key elements of the Company’s pay practices are as follows:
What Curtiss-Wright Does | What Curtiss-Wright Does not Do | |||
• | Aligns pay and performance using measures of financial and operating performance including use of relative TSR | • | No NEO employment agreements | |
| • | Does not engage in executive compensation practices that encourage excessive risk | |||
• | Balances short-term and long-term incentives using multiple performance measures that focus on profitable top line growth | • | No short sales, hedging, or pledging of Curtiss-Wright stock permitted | |
| • | No reloading, re-pricing or backdating stock options | |||
• | Places maximum caps on incentive payout consistent with market competitive practice | • | No tax gross-ups on change-in-control benefits for executives hired or promoted after January 2008 | |
• | Establishes rigorous stock ownerships guidelines for NEOs and Board members including a 50% mandatory hold on net shares until ownership guidelines are met for NEOs | • | No dividends on unvested or unearned performance units/shares | |
| • | No excessive perquisites | |||
• | Includes a claw back policy on all incentive compensation | • | No excessive severance and/or change-in-control provisions | |
• | Uses an independent external compensation consultant to review and advise on executive compensation | |||
• | Uses double trigger Change-in-Control Agreements for equity vesting under the Company’s Long Term Incentive Plan | |||
Corporate Sustainability
The Company believes that a commitment to positive environmental, social and governance-related business practices strengthens its businesses, increases the Company’s connection with all stakeholders, and helps the Company better serve its customers and the communities in which the Company operates. The Company’s commitment to social responsibility extends to the environment, trade compliance, responsible sourcing, human rights, labor practices and our employees’ health and safety. More information is available within the Sustainability section of the Company’s website at www.curtisswright.com/company/sustainability/. The Company also sees in these commitments additional ways of creating value for the Company’s stockholders, current and prospective employees, customers and other stakeholders. The Company demonstrates its commitments through its corporate social responsibility program (“CSR”). The CSR program outlines the Company’s commitments, guidelines, and policies, which governs the Company’s behavior and its business practices.
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The CSR program consists of three inter-related activity areas that are mutually supportive of each other:
Business Practice | We conduct business in an environmentally conscious, socially responsible and ethical manner, including efforts to mitigate climate change and promote sustainability, while protecting the health and safety of the Company’s workers and community. | |||||||
| • | We comply with all applicable environmental, health and safety (EHS) laws and regulations. | |||||||
| • | We track total recordable rate (TRR) and days away, restriction and transfer rate (DART) for all sites worldwide. Our TRR and DART rates for 2022 were 1.69 and 1.04, respectively. | |||||||
| • | We encourage environmental and safety certifications for our manufacturing facilities. There are 13 sites across the Company that maintain certifications to either ISO 14001 and/or OHSAS 18001/ISO 45001. | |||||||
| • | We conduct third-party EHS audits to verify that we are meeting our regulatory compliance requirements worldwide. | |||||||
| • | In early 2021, we started to compile utility data (including energy and water consumption) across all global operations to establish a three-year energy baseline. We anticipate disclosing initial climate data by the end of 2023, including energy data. We will use this data to calculate greenhouse gas (GHG) emissions in accordance with industry standards and applicable regulatory reporting requirements. | |||||||
| • | We protect the environment by conserving energy and water, minimizing waste and emissions, and promoting recycling and renewable energy to reduce adverse environmental impacts. | |||||||
| • | In early 2021, we launched a company-wide EHS Management System (EHS MS). The EHS MS details the required practices to maintain a proactive risk- based approach to identify and control risks, comply with regulatory requirements, and continuously improve performance. Implementation of the EHS MS is measured and tracked via leading indicators. | |||||||
| • | We utilize safe technologies, training programs, effective risk management practices, and sound science in our operations to minimize risk to employees. | |||||||
We believe a diverse and inclusive workforce creates a richer culture, enhances performance, and attracts the best talent. | ||||||||
| • | We build a culture of inclusion with a focus on leadership, eliminating systemic barriers and fostering engagement. We partner with a third-party employment engagement survey provider to survey our world-wide employees concerning our work environments. | |||||||
| • | We promote ongoing career development for employees to encourage innovation and engagement through constructive reviews and various talent/leadership development initiatives. | |||||||
| • | We are committed to maintaining a solid pipeline of talent and developing future leaders throughout our organization, including a New Business Leader (NBL) program. | |||||||
| • | We cultivate technical, domain expertise and collaborative thought leadership for early through advanced career levels through our Technical Fellows program and our Innovation Council program. These important programs foster our culture of innovation, fuels collaboration across diverse disciplines, and helps us attract, mentor, and inspire the next generation of talent. | |||||||
| • | We are committed to a global workforce that represents and reflects the communities where we operate. Our Affirmative Action Plans drive our compliance in the U.S., and we use similar programs globally that encourage diversity, equity, and inclusion. In addition, we provide annual training to our global workforce on respect for the individual. | |||||||
| • | We offer a tuition reimbursement program for those employees seeking to improve or complete their education consistent with their career paths. | |||||||
| • | We are committed to providing a safe and healthy work environment for our global employee base, guided by a strong set of core values outlined in our EHS Policy. | |||||||
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We promote the well-being of the communities in which the Company’s employees work and live. | ||||||||
Community Involvement | • | We encourage employee involvement through charitable donations and volunteer programs. | ||||||
| • | We support investment in education by maintaining a Company-sponsored scholarship program for the dependent children of our employees where we fund 90 scholarships awarded to eligible individuals as selected by a third-party provider. Direct reports to the CEO are excluded from this program. | |||||||
Governance | We maintain the highest ethical standards in interactions with employees, customers, suppliers, competitors, and the general public. | |||||||
| • | Our Code of Conduct includes several important provisions on human rights, including prohibitions on human trafficking and the use of child labor or forced, bonded or indentured labor in our operations, as well as compliance with all applicable laws, including environmental. | |||||||
| • | We are committed to responsible sourcing of materials for our products by not directly purchasing conflict minerals and not having direct relationships with mines or smelters that process these minerals. | |||||||
| • | We maintain a strict supplier code of conduct that sets expectations about supplier behavior. | |||||||
| • | We conduct global workforce training programs on ethics and anti-bribery/trade compliance and we offer a global, 24/7 anonymous ethics hotline. | |||||||
| • | We conduct EH&S and financial audits of our facilities worldwide to ensure compliance with all applicable laws, regulations, policies, and procedures. | |||||||
In support of the CSR, the Company maintains the following policies aimed at protecting the environment, health and safety, ethics and compliance with laws, respect for human rights, and supply chain management, all of which are available within the Governance section of the Company’s website at https://curtisswright.com/investor-relations/governance/governance-documents or by sending a request in writing to the Corporate Secretary, Curtiss-Wright Corporation, 130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036:
• | Corporate Social Responsibility | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Code of Conduct | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Code of Conduct - Suppliers and Customers | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Conflict Minerals Policy Statement | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | California Transparency in Supply Chains Act of 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Environmental, Health and Safety Policy, including standards for suppliers regarding EHS and labor/human resources | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Human Trafficking and Slavery, including a Modern Slavery Statement | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
By adhering to the principles contained in the CSR program, the Company enriches the economic, social, and environmental aspects of the communities in which the Company’s employees live and work, which enhances the profitability of the Company and benefits the Company’s stockholders, employees and customers.
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CURTISS-WRIGHT CORPORATION
130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036
PROXY STATEMENT
PURPOSE
This Proxy Statement is being furnished in connection with the solicitation of proxies by the Board of Directors of Curtiss-Wright Corporation, a Delaware corporation (the “Company”), for use at the annual meeting of stockholders of the Company (the “Annual Meeting”) to be held on Thursday, May 10, 2018,4, 2023, at 10:1:00 a.m.p.m. local time, at the Homewood Suites by Hilton, 125 Harbour Place Drive, Davidson, North Carolina 28036, and at any adjournments or postponements thereof.
INTERNET AVAILABILITY OF PROXY MATERIALS
Pursuant to the rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), the Company is furnishing proxy materials to its stockholders primarily via the internet, rather than mailing paper copies of these materials to each stockholder. On or about March 23, 2018,24, 2023, the Company will mail to each stockholder of record as of March 10, 2023 (other than those stockholders who previously had requested paper delivery of proxy materials) a Notice of Internet Availability of Proxy Materials containing instructions on how to access and review the proxy materials, including a Noticenotice and Proxy Statement and the Company’s combined Business Review/20172022 Annual Report on Form 10-K filed with the SEC. The Notice of Internet Availability of Proxy Materials also contains instructions on how to request a paper copy of the proxy materials. If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive a paper copy of the proxy materials unless you request one. If you would like to receive a paper copy of the proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. You can also choose to receive future proxy materials by email by following the instructions included in the Notice of Internet Availability of Proxy Materials. This will help the Company reduce the environmental impact and costs of printing and distributing paper copies and improve the speed and efficiency by which the Company’s stockholders can access these materials. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy-voting site. Your election to receive proxy materials by email will remain in effect until you revoke it. The Company may at its discretion voluntarily choose to mail or deliver a paper copy of the proxy materials, including a Notice and Proxy Statement and the combined Business Review/20172022 Annual Report on Form 10-K filed with the SEC, to one or more stockholders.
INFORMATION CONCERNING THE ANNUAL MEETING
Mailing and Solicitation. A Notice and Proxy Statement and combined Business Review/20172022 Annual Report on Form 10-K and accompanying form of proxy card attached hereto are being distributed or made available via the internet to the Company’s stockholders on or about March 23, 2018.24, 2023. For information about stockholders’ eligibility to vote at the Annual Meeting, please see “Record Date and Outstanding StockStock” ” below. The Company will pay the cost of the solicitation of proxies. The solicitation is to be made primarily by mail but may be supplemented by telephone calls and personal solicitation by officers and other employees of the Company. The Company will reimburse banks and nominees for their expenses in forwarding proxy materials to the Company’s beneficial owners.
Proxies. Whether or not you plan to attend the Annual Meeting, the Company requests that you vote prior to the Annual Meeting: (i) via the internet, by following the instructions provided in the Notice of Internet Availability of Proxy Materials, (ii) via telephone, by following the instructions provided in the Notice of Internet Availability of Proxy Materials, or (iii) via mail, by completing, signing, dating and mailing a paper proxy card in a postage-paid return envelope, which a stockholder can request as outlined in the Notice of Internet Availability of Proxy Materials. A control number, contained in the Notice of Internet Availability of Proxy Materials, is designed to verify your identity, and allow you to vote your shares, and confirm that your voting instructions have been properly recorded.
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If your shares are registered directly in your name, you are the holder of record of these shares and the Company is sending a Notice of Internet Availability of Proxy Materials directly to you. As the holder of record, you have the right to vote by one of the three ways mentioned above or in person at the Annual Meeting. If your shares are held in “street name”, your bank, broker, or other nominee will send to you a Notice of Internet Availability of Proxy Materials. As a holder in street name, you have the right to direct your bank, broker, or other nominee how to vote by submitting voting instructions in the manner directed by your bank, broker, or other nominee. If you hold shares in street name and you wish to vote in person at the Annual Meeting, you must obtain a proxy issued in your name from your bank, broker, or other nominee and bring that proxy to the Annual Meeting.
Broker non-votes.Under the rules of the New York Stock Exchange (“NYSE”), a bank, broker, or other nominee who holds shares in “street name” for customers is precluded from exercising voting discretion with respect to the approval of non-routine matters (so called “broker non-votes”) in the absence of specific instructions from such customers. The (1) election of Directors (see Proposal One), (2) the approval to increase the total number of shares of the Company’s common stock reserved for issuance underan amendment to the Curtiss-Wright Corporation Employee Stock PurchaseIncentive Compensation Plan by 750,000 shares (seeto expand the class of employees eligible to receive awards under the plan (See Proposal Three), and (3) the advisory (non-binding) vote to approve the compensation of the Company’s named executive officers (See Proposal Four), and (4) advisory (non-binding) vote to approve the frequency of future stockholder advisory votes approving the compensation of the Company’s named executive officers (See Proposal Five) are considered “non-routine” matters under applicable NYSE rules. Therefore, a bank, broker, or other nominee is not entitled to vote the shares of Company common stock unless the beneficial owner has given instructions. As such, there may be broker non-votes with respect to these proposals. On the other hand, the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 20182023 (see Proposal Two) is considered a “routine” matter under applicable NYSE rules. Therefore, a bank, broker, or other nominee will have discretionary authority to vote the shares of Company common stock if the beneficial owner has not given instructions and no broker non-votes will occur with respect to this proposal.
Voting In Accordance With Instructions. The shares represented by your properly submitted proxy received by mail, telephone, Internet, or in person will be voted in accordance with your instructions. If you are a registered holder and you do not specify in your properly submitted proxy how the shares represented thereby are to be voted, your shares will be voted:
(1) | “FOR” the election as Directors of the nominees proposed (see Proposal One), | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) | “FOR” the ratification of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) | “FOR” approval of the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) | “FOR” the compensation of the Company’s named executive officers under the proposal regarding the advisory (non-binding) vote to approve the compensation of the Company’s named executive officers (see Proposal Four), and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) | “FOR” “Option #1 (Every One Year)” under the proposal regarding advisory (non-binding) vote to approve the frequency of future stockholder advisory votes approving the compensation of the Company’s named executive officers (see Proposal Five). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
If your shares are held in street name and you do not specify how the shares represented thereby are to be voted, your bank, broker, or other nominee may exercise its discretionary authority to vote on Proposal Two only.
The Board of Directors is not aware of any other matters to be presented for action at the Annual Meeting, but if other matters are properly brought before the Annual Meeting, shares represented by properly completed proxies received by mail, telephone, internet, or in person will be voted in accordance with the judgment of the persons named as proxies.
Signatures in Certain Cases. If a stockholder is a corporation or unincorporated entity such as a partnership or limited liability company, the enclosed proxy should be signed in its corporate or other entity name by an authorized officer or person and his or her title should be indicated. If shares are
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registered in the name of two or more trustees or other persons, the proxy must be signed by a majority of them. If shares are registered in the name of a decedent, the proxy should be signed by the executor or administrator and his or her title should follow the signature.
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Revocation of Proxies. Whether the proxy is submitted via the internet, telephone, or mail, stockholders have the right to revoke their proxies at any time before a vote is taken. If your shares are registered in your name, you may revoke your proxy (1) by notifying the Corporate Secretary of the Company in writing at the Company’s address given above, (2) by executing a new proxy bearing a later date or by submitting a new proxy by telephone or the internet on a later date, provided the new proxy is received by Broadridge Financial Solutions Inc. (which will have a representative present at the Annual Meeting) before the vote, (3) by attending the Annual Meeting and voting in person, or (4) by any other method available to stockholders by law. If your shares are held in street name, you should contact the record holder to obtain instructions if you wish to revoke your vote before the Annual Meeting.
Record Date and Outstanding StockStock.. The close of business on March 12, 201810, 2023 has been fixed as the record date of the Annual Meeting, and only stockholders of record at that time will be entitled to vote. The only capital stock of the Company issued and outstanding is the common stock, par value $1.00 per share (the “Common Stock”). As of March 12, 2018,10, 2023, there were 44,244,22238,306,654 shares of Common Stock issued and outstanding constituting all the capital stock of the Company entitled to vote at the Annual Meeting. Each stockholder is entitled to one vote for each share of Common Stock held.
Quorum. The presence, in person or by properly executed proxy, of the holders of a majority of the issued and outstanding shares of Common Stock entitled to vote at the Annual Meeting is necessary to constitute a quorum at the Annual Meeting.
Required Vote.
Election of Directors: A plurality of the Common Stock present in person or represented by proxy (and eligible to vote), at a meeting in which a quorum is present. This means that a person will be elected who receives the first through tenth highest number of votes, even if he or she receives less than a majority of the votes cast. However, under our corporate governance guidelines, in an uncontested election where the only nominees are those recommended by the Board, any nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election is required to tender his or her resignation following certification of the stockholder vote. The Committee on Directors and Governance is required to make recommendations to the Board with respect to any such letter of resignation. The Board is required to take action with respect to this recommendation and to disclose their decision-making process. Full details of this policy are set out under “Proposal One: Election of Directors” on page 410 of this Proxy Statement.
Ratification of Deloitte & Touche LLP: The affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy (and eligible to vote), at a meeting in which a quorum is present. This means that of the shares represented at the Annual Meeting and entitled to vote, a majority of them must be voted “for” this proposal for it to be approved.
Approval of the amendmentsamendment to the Curtiss-Wright Corporation Employee Stock PurchaseIncentive Compensation Plan as amended, including to increaseexpand the total numberclass of shares of the Company’s common stock reserved for issuanceemployees eligible to receive awards under the plan by 750,000 shares: The affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy (and eligible to vote), at a meeting in which a quorum is present. This means that of the shares represented at the Annual Meeting and entitled to vote, a majority of them must be voted “for” this proposal for it to be approved.
Advisory (non-binding vote) to approve the compensation of the Company’s named executive officers: The affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy (and eligible to vote), at a meeting in which a quorum is present. This means that of the shares represented at the Annual Meeting and entitled to vote, a majority of them must be voted “for” this proposal for it to be approved.
Advisory (non-binding vote) to approve the frequency of future stockholder advisory votes approving the compensation of the Company’s named executive officers: A plurality of the Common Stock present in person or represented by proxy (and eligible to vote), at a meeting in which a quorum
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is present, in that the option of one year, two years, or three years that receives the highest number of votes cast will be deemed to be the frequency selected by the stockholders.
Calculating Votes.Effect of Withhold Authority Votes, Abstentions and Broker Non-Votes.
Under the Delaware General Corporation Law (under which Curtiss-Wright Corporation is incorporated), an abstaining vote and a broker non-vote are counted as present and eligible to vote at the Annual Meeting and are, therefore, included for purposes of determining whether a quorum is present at the Annual Meeting.
With respect to election of directors (see Proposal One), if you “withhold” authority to vote with respect to one or more director nominees, your voteshares will not be voted and will have no effect on the election of such nominees.nominees because, under plurality voting rules, the ten director nominees receiving the highest number of “for” votes will be elected. A “withhold” vote is not considered a vote cast in director elections. Broker non-votes will have no effect on the election of the nominees.
With respect to the ratification of Deloitte & Touche LLP (see Proposal Two), if you “abstain”from voting with respect to this Proposal, your vote will have the same effect as a vote “against” the Proposal.Proposal. A bank, broker, or other nominee may exercise discretion to vote shares as to which instructions are not given on this Proposal and accordingly, no “broker non-votes” will occur with respect to this Proposal.
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With respect to (i) the approval to increase the total number of shares of the Company’s common stock reserved for issuance underamendment to the Curtiss-Wright Corporation Employee Stock PurchaseIncentive Compensation Plan by 750,000 sharesto expand the class of employees eligible to receive awards under the plan (see Proposal Three) and (ii), if you “abstain” from voting with respect to this Proposal, your vote will have the same effect as a vote “against” such Proposal. Broker non-votes will not be counted as having voted either for or against this Proposal.
With respect to the advisory vote to approve executive compensation (see Proposal Four), if you “abstain”from voting with respect to these Proposals,this Proposal, your vote will have the same effect as a vote “against” such Proposals.Proposal. Broker non-votes will not be counted as having voted either for or against anythis Proposal.
With respect to the advisory vote to approve the frequency of these Proposals.future stockholder advisory votes on executive compensation (see Proposal Five), abstentions and broker non-votes will have no effect on the outcome of the vote.
Dissenter’s Rights of AppraisalAppraisal.. The stockholders have no dissenter’s rights of appraisal under the Delaware General Corporation Law, the Company’s Restated Certificate of Incorporation, or the Company’s Amended and Restated By-Laws with respect to the matters to be voted on at the Annual Meeting.
PROPOSAL ONE:ELECTION OF DIRECTORS
General Information
At the date of this Proxy Statement, the Board of Directors of the Company (the “Board” or “Board of Directors”) consists of 10ten members, nine of whom are non-employee Directors.
After extensive discussion, However, David C. Adams, who is presently a Director of the Company, has advised the Board voted on Februaryof his decision to retire from the Board with more than 22 years of distinguished service and leadership at Curtiss-Wright, which included more than 7 2018years as Chairman and CEO and over a year as Executive Chairman during Lynn M. Bamford’s transition to retain Dr. Allen A. Kozinski asCEO. In addition, Admiral (Ret.) John B. Nathman, who is presently a director for an additional one-year term. The Board voted on February 7, 2017 to retain Dr. Kozinski as a director for only one year beyond reaching his 75th birthday but now believes that this action is in the best interestDirector of the Company. This action retains continuity inCompany, has advised the Board experience so thatof his decision to retire from the Board’s operations would not be adversely affected in havingBoard with more than 14 years of service. Both Messrs. Adams’ and Nathman’s terms will expire just prior to replace Dr. Kozinski following the departure of three otherAnnual Meeting. They both served on the Board members over the past two years. It also allows the three new Board members elected within the past two years the benefit of working with Dr. Kozinski for an additional transitional year to learn more about Board practices and culture.great distinction.
The Committee on Directors and Governance of the Board of Directors has recommended and our full Board of Directors has nominated David C. Adams,Lynn M. Bamford, Dean M. Flatt, S. Marce Fuller, Rita J. Heise, Bruce D. Hoechner, Dr. Allen A. Kozinski, John B. Nathman,Glenda J. Minor, Anthony J. Moraco, Robert J. Rivet, Albert E. Smith, and Peter C. Wallace, each currently serving Directors, to be elected to the Board for a one-year term. Each nominee indicated his or her willingnessIn addition, the Committee on Directors and Governance of the Board has recommended, and our full Board has also nominated William F. Moran and Larry D. Wyche to serve.be elected to the Board for a one-year term. Messrs. Moran
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and Wyche are not currently serving as Directors of the Company and have never served in such capacity for the Company in the past. The Committee on Directors and Governance used the services of a third-party executive search firm to assist in identifying and evaluating Messrs. Moran and Wyche as nominees for Directors. In the event that any nominee should become unavailable for election, the persons named in the proxy may vote for the election of a substitute nominee.
Directors will be elected by a plurality of votes properly cast (in person or by proxy) at the Annual Meeting. This means that a person will be elected who receives the first through tenth highest number of votes, even if he or she receives less than a majority of the votes cast. Therefore, stockholders who do not vote or withhold their vote from one or more of the proposed nominees and do not vote for another person, will not affect the outcome of the election provided that a quorum is present at the Annual Meeting. However, under our corporate governance guidelines, in an uncontested election of Directors where the only nominees are those recommended by the Board (which is the case for the election of Directors at this Annual Meeting), any nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election (a “Majority Withheld Vote”) is required to tender his or her resignation following certification of the stockholder vote. The Committee on Directors and Governance must promptly consider the resignation offer and a range of possible responses based on the circumstances that led to the Majority Withheld Vote, if known, and make a recommendation to the Board. The Board will act on the Committee on Directors and Governance recommendation within 90 days following certification of the stockholder vote. Thereafter, the Board will promptly disclose its decision-making process and decision regarding whether to accept the Director’s resignation (or the reason(s) for rejecting the resignation offer, if applicable) in a Form 8-K filed with the SEC. Any Director who tenders his or her resignation pursuant to this provision will not participate in the Committee on Directors and Governance recommendation or the Board action regarding whether to accept or reject the resignation offer.
As further discussed in the section titled “Broker non-votesnon-votes” ” on page 28 of this Proxy Statement, if you own shares of Common Stock through a bank, broker or other holder of record, you must instruct
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your bank, broker, or other holder of record how to vote in order for them to vote your shares of Common Stock so that your vote can be counted on this Proposal One.
Overview of Curtiss-Wright’s Current Board of Directors
The Board believes there are general requirements for service as a member of the Board that are applicable to all directors as laid out below, and other specialized characteristics that should be represented on the Board as a whole but not necessarily by each director. The specific qualifications, skills, experiences, and backgrounds of our director nominees are detailed in the section titled “Director Qualifications, Experiences, Backgrounds, and Diversity” on page 12 of this Proxy Statement.
Our Directors Exhibit: | Board Composition: | |
High integrity | Independent Directors: 9 of 10 | |
Loyalty to the Company and commitment to its success | Average Company Board Tenure: 8.2 years | |
Proven record of success | Average Age: 67 years | |
Knowledge of corporate governance and practices | Diversity of gender, race, ethnicity, or 1 African American 1 LGBTQ community member | |
Our Directors Bring to the Boardroom: High level of leadership experience |
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Director Qualifications, Experiences, Backgrounds, and Diversity
The Company’s director nominees have substantial leadership, management, and industry experience and expertise in various fields. Four of the Company’s ten director nominees self-identify as having diverse characteristics (race, gender, ethnicity or sexual orientation). This diversity of experience and background of our director nominees, illustrated in the skills matrix and director nominees’ biographies that follow, is brought to bear in Board deliberations, during which multiple perspectives are considered in developing dynamic solutions to achieve the Company’s strategic priorities to reduce complexity, drive returns, and advance sustainably.
The skills matrix below summarizes the specific qualifications, skills, experiences, and backgrounds of each director nominee. While each director nominee is generally knowledgeable in each of these areas, an “X” in the skills matrix below indicates that the item is a specific qualification, skill, experience or attribute that the director nominee brings to the Board. The lack of an “X” for a particular item does not mean that the director nominee does not possess that qualification, skill, experience or attribute. Because the skills matrix is only a summary, it does not include all the qualifications, skills, experiences, backgrounds, and diversity that each director nominee offers.
| Qualifications/Experiences/Backgrounds/Diversity | ||||||||||||||||
| Director | Audit Committee Financial Expert | Extensive Knowledge of Company’s Business and Industry | Extensive M&A Experience | Broad International Experience | Other Public Company Board Experience | Current or Former CEO | Senior Leadership Experience | Gender/Ethnic/ Race/Sexual Orientation Diversity (a) | ||||||||
| Lynn M. Bamford | X | X | X | X | ||||||||||||
| Dean M. Flatt | X | X | X | X | ||||||||||||
| S. Marce Fuller | X | X | X | X | X | X | X | |||||||||
| Bruce D. Hoechner | X | X | X | X | X | X | ||||||||||
| Glenda J. Minor | X | X | X | X | X | X | X | |||||||||
| Anthony J. Moraco | X | X | X | X | X | |||||||||||
| William F. Moran | X | X | ||||||||||||||
| Robert J. Rivet | X | X | X | X | X | X | ||||||||||
| Peter C. Wallace | X | X | X | X | X | X | ||||||||||
| Larry D. Wyche | X | X | X | |||||||||||||
(a) | Self-identifies as having diverse characteristics (race, gender, ethnicity, or sexual orientation). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In addition to gender, ethnic, race, and sexual orientation diversity, the Company also recognizes the value of other diverse attributes that directors may bring to the Board, including veterans of the U.S. military. The Company is proud to report that of our ten director nominees, three are also military veterans with over 77 years of combined service.
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Information Regarding Nominees
Set forth below is information with respect to the nominees for Directors. Such information includes the principal occupation of each nominee for Director during, at least, the past five years, as well as a brief description of the particular experience, qualifications, attributes or skills that qualify the nominee to serve as a Director of the Company.
David C. Adams, age 64, has served as Chairman and Chief Executive Officer of the Company since January 1, 2015. Prior to this, he served as President and Chief Executive Officer of the Company from August 2013. He served as President and Chief Operating Officer of the Company from October 2012; Co-Chief Operating Officer from November 2008; President of Curtiss-Wright Controls from June 2005; and Vice President of the Company from November 2005. He has served as a Director of the Company since August 2013. Mr. Adams also serves as a director of Snap-On Incorporated.
Mr. Adams has been an employee of the Company for more than 17 years, serving in increasing levels of strategic, operational, and managerial responsibility, as discussed above. Mr. Adams’ ability to grow the Company and in-depth knowledge of the Company’s business segments and industries in which they operate, as evidenced by the Company’s strong growth during his tenure as Chief Executive Officer provides the Company a competitive advantage in continuing to improve long-term performance and increase stockholder value.
Dean M. Flatt, age 67, served as President and Chief Operating Officer of Honeywell International Inc.’s Defense and Space business from July 2005 to July 2008. Prior to that, he served as President of Honeywell International Inc.’s Aerospace Electronics Systems business from December 2001 to July 2005 and served as President of Honeywell International Inc.’s Specialty Materials and Chemicals business from July 2000 to December 2001. Further, he serves as a director of Ducommun Incorporated and Industrial Container Services, Inc. (also serving as Chairperson of the Compensation Committee) since January 2009 and January 2012, respectively, and serves as non-executive Chairman of National Technical Systems, Inc. since January 2014. He has served as Director of the Company since February 2012 and serves as a member of the Audit Committee and the Executive Compensation Committee.
Mr. Flatt has an in-depth understanding of the aerospace industry, evidenced by his past employment in high-level managerial positions at Honeywell International Inc., a leading global supplier of aerospace products, one of the Company’s major markets. In addition, Mr. Flatt has extensive experience in evaluating new business opportunities gained while serving on the executive board of a private equity firm. Furthermore, Mr. Flatt has extensive managerial experience in operating a business at the director level, serving as a current director of Ducommun Incorporated, Industrial Container Services, Inc., and National Technical Systems, Inc. Mr. Flatt’s ability to lead a company at one of the highest levels of management, coupled with his in-depth knowledge of the aerospace industry and private equity investing provides the Company with a competitive advantage in seeking new opportunities and platforms for its aerospace industry products and services, as well as strengthening the ability of the Company to select strategic acquisitions.
S. Marce Fuller, age 57, was the President and Chief Executive Officer of Mirant Corporation from July 1999 to October 2005, and a Director of Mirant Corporation from July 1999 until January 2006. She served as a Director of Earthlink, Inc., an IT services, network, and communication provider, from January 2002 to April 2014. At Earthlink, she served as Chairperson of the Audit Committee, Leadership and Compensation Committee, and Corporate Governance and Nominating Committee, and as Lead Independent Director. She has served as a Director of the Company since 2000 and serves as Chairperson of the Executive Compensation Committee and as a member of the Audit Committee. She also served as Lead Independent Director of the Company from May 2015 to May 2016.
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Ms. Fuller has an in-depth understanding of the power generation industry, evidenced by her past employment at Southern Energy and Mirant Corporation, both leading power generation companies. At these companies, Ms. Fuller served at times in increasing levels of managerial responsibility, beginning with Vice President at Southern Energy and then as President and Chief Executive Officer of both Southern Energy and Mirant Corporation. Ms. Fuller’s ability to lead a company at the highest level of management, coupled with her in-depth knowledge of the power generation industry, one of the Company’s largest markets, provides the Company a competitive advantage in seeking new opportunities and platforms for its power generation industry products and services.
Rita J. Heise,age 61, has worked as a business consultant since January 2012. From 2002 through her retirement in December 2011, she served as a corporate vice president and chief information officer of Cargill, Incorporated, an international producer and marketer of food, agricultural, financial, and industrial products and services and one of the largest privately owned companies in the world. Prior to joining Cargill, Ms. Heise was the chief information officer for the aerospace business of Honeywell International Inc. and for Honeywell’s Europe, Middle East, and Africa operations. Since 2012, Ms. Heise has been a Director of Fastenal Company and is a member of the Compensation Committee. Ms. Heise has participated in information technology industry committees and currently serves as chair of the board of Blue Cross Blue Shield of Minnesota, a non-profit health services company. She previously served on the board of Adventium Labs, a privately held systems engineering and cyber-security company. She has served as a Director of the Company since 2016 and serves as a member of the Audit Committee and the Committee on Directors and Governance.
Ms. Heise’s information technology background, combined with a diverse operations background, offers the board valuable insight on ways for the Company to maximize the use of advancing technologies in marketing, operations, and distribution.
Bruce D. Hoechner, age 58, has served as President and Chief Executive Officer and as a member of the Board of Directors of Rogers Corporation, a NYSE-listed company, since October 2011. Rogers Corporation is a leading provider of engineered materials and components for mission critical applications serving the telecommunications, electronics, transportation, automotive, consumer, and defense markets. From October 2009 to October 2011, Mr. Hochner served as President, Asia Pacific region, based in Shanghai, China, for Dow Chemical Company, a global diversified chemical and material company. Prior to its acquisition by Dow Chemical Company, Mr. Hoechner held positions of increasing responsibility in the U.S. and internationally with Rohm and Haas Company, a leading manufacturer of specialty chemicals. He has served as a Director of the Company since 2017 and serves as a member of the Committee on Directors and Governance and the Finance Committee.
Mr. Hoechner has many years of broad leadership experience across numerous geographies, businesses, and functions with particularly strong international experience. Mr. Hoechner brings to the Board the perspective of someone familiar with all facets of worldwide business operations, with significant expertise in international marketing and business strategy development as well as the experience of leading a global, NYSE-listed company. This broad and extensive experience in leadership roles, along with his board experience, enhances Mr. Hoechner’s contributions and values to the Company’s Board.
Dr. Allen A. Kozinski, age 76, served as Group Vice President, Global Refining of BP PLC from 1998 through 2002. He has served as a Director of the Company since 2007 and serves as Chairperson of the Committee on Directors and Governance and as a member of the Finance Committee.Since May 2017, he is also serving as Lead Independent Director of the Company for a term of one year expiring in May 2018, or until his successor is appointed.
Dr. Kozinski has an in-depth understanding of the oil and gas industry, evidenced by his past employment at Amoco Corporation and BP, both leading oil and gas companies. At these companies, Dr. Kozinski served at times in increasing levels of managerial responsibility, beginning with business unit manager and then Vice President, Technology, Engineering and International Development at Amoco, and Group Vice President, Global Refining at BP. Dr. Kozinski’s ability to lead a company’s business segment at a high level of management, coupled with his in-depth knowledge of the oil and gas industry, one of the Company’s end markets, provides the Company a competitive advantage in seeking new opportunities and platforms for its industrial products and services.
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Admiral (Ret.) John B. Nathman, age 69, served as commander of U.S. Fleet Forces Command from February 2005 to May 2007. From August 2004 to February 2005, he served as Vice Chief of Naval Operations in the U.S. Navy. From August 2002 to August 2004, he served as Deputy Chief of Naval Operations for Warfare Requirements and Programs at the Pentagon. From October 2001 to August 2002, he served as Commander, Naval Air Forces. From August 2000 to October 2001, he served as Commander of Naval Air Forces, U.S. Pacific Fleet. He has served as a Director of the Company since 2008 and serves as a member of the Audit Committee and the Committee on Directors and Governance.
Admiral Nathman’s strong leadership, coupled with an in-depth understanding of U.S. government spending, especially defense spending and military products, evidenced by 37 years of service in high-level commands in the United States Navy, provides the Company a competitive advantage in seeking new opportunities and platforms for its defense industry products and services.
Robert J. Rivet, age 64, was Executive Vice President, Chief Operations and Administrative Officer of Advanced Micro Devices, Inc., a leading global semiconductor company, from October 2008 to February 2011, and was Executive Vice President, Chief Financial Officer of Advanced Micro Devices, Inc. from September 2000 until October 2009. From 2009 to 2011, he also served as a Director of Globalfoundries Inc., a semiconductor foundry. He has served as a Director of the Company since 2011 and serves as Chairperson of the Audit Committee and as a member of the Executive Compensation Committee.
Mr. Rivet has an in-depth understanding of the preparation and analysis of financial statements based upon his 35 years of financial experience, including nine years as Chief Financial Officer of Advanced Micro Devices. In addition, Mr. Rivet led numerous acquisition and divestiture activities while at Advanced Micro Devices. Mr. Rivet’s extensive financial knowledge will be an invaluable asset to the Board in its oversight of the integrity of the Company’s financial statements and the financial reporting process. Additionally, his in-depth understanding of high-technology industries such as the semiconductor business, and experience in mergers and acquisitions provides the Company a competitive advantage in seeking new strategic business opportunities and acquisitions.
Albert E. Smith, age 68, served as Chairman of Tetra Tech, Inc., a leading provider of consulting and engineering services, from March 2006 to January 2008 and has been a director of Tetra Tech since May 2005. He was a director of CDI Corp., a former provider of engineering and information technology solutions, from October 2008 to September 2017. From 2002 to 2005, he served as a member of the Secretary of Defense’s Science Board. Mr. Smith was employed at Lockheed Martin Corp. from August 1985 to January 2005. Mr. Smith served as an Executive Vice President of Lockheed Martin from September 1999 until June 2005. He has served as a Director of the Company since 2006 and serves as Chairperson of the Finance Committee and as a member of the Committee on Directors and Governance. He also served as Lead Independent Director of the Company from May 2016 to May 2017.
Mr. Smith has an in-depth understanding of the aerospace industry, evidenced by his past employment at Lockheed Martin, a leading aerospace company. At Lockheed, Mr. Smith served in high-level managerial positions. In addition, Mr. Smith has extensive managerial experience in operating a business at the director level, serving as a current director of Tetra Tech, a public company, and past service as a director of CDI Corp., a former public company. Mr. Smith’s experience as a director (both past and present) at other public companies and ability to lead a company at one of the highest levels of management, coupled with his in-depth knowledge of the aerospace industry, one of the Company’s largest markets, provides the Company a competitive advantage in seeking new opportunities and platforms for its aerospace industry products and services.
Peter C. Wallace, age 63, served as Chief Executive Officer and a Director of Gardner Denver Inc. from June 2014 until his retirement as of January 1, 2016. Gardner Denver is an industrial manufacturer of compressors, blowers, pumps, and other fluid control products used in numerous global end markets. Prior to joining Gardner Denver, Mr. Wallace was President and Chief Executive Officer, and a Director, of Robbins & Myers, Inc., from 2004 until it was acquired in February 2013 by National Oilwell Varco, Inc. Robbins & Myers was a leading designer, manufacturer, and marketer of highly engineered, application-critical equipment and systems for energy, chemical, pharmaceutical,
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and industrial markets worldwide. Mr. Wallace is also a Director of Applied Industrial Technologies, Inc., a leading provider of industrial products and fluid power components, and Rogers Corporation, a leading provider of engineered materials and components for mission critical applications across various markets. Mr. Wallace also serves on the board of a private manufacturing firm engaged in packaging equipment and industrial markets. He has served as a Director of the Company since 2016 and serves as a member of the Executive Compensation Committee and the Finance Committee.
Mr. Wallace has a wide and varied background as a senior executive in global industrial equipment manufacturing, one of the Company’s end markets. Mr. Wallace brings to the Board the perspective of someone familiar with all facets of worldwide business operations, including the experience of leading a NYSE-listed company. This broad and extensive experience in leadership roles, along with his board experience, enhances Mr. Wallace’s contributions and values to the Company’s Board.
Directorships at Public Companies
The following table sets forth any directorships at other public companies and registered investment companies held by each nominee for Director at any time during the past five years.
| Lynn M. Bamford | |
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Reasons for Election to the Board of Curtiss-Wright: | ||
Ms. Fuller has an in-depth understanding of the power generation industry, evidenced by her past employment at Southern Energy and Mirant Corporation, both leading power generation companies. At these companies, Ms. Fuller served at times in increasing levels of managerial responsibility, beginning with Vice President at Southern Energy and then as President and Chief Executive Officer of both Southern Energy and Mirant Corporation. Ms. Fuller’s ability to lead a company at the highest level of management, coupled with her in-depth knowledge of the power generation industry, one of the Company’s largest markets, provides the Company a competitive advantage in seeking new opportunities and platforms for its power generation industry products and services. She is also financially literate in accordance with NYSE listing standards. | ||
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| Bruce D. Hoechner | |
Reasons for Election to the Board of Curtiss-Wright: | ||
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| Glenda J. Minor | |
Reasons for Election to the Board of Curtiss-Wright: | ||
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| Anthony J. Moraco | |
Reasons for Election to the Board of Curtiss-Wright: | ||
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| Admiral (Ret.) William F. Moran | |
Reasons for Election to the Board of Curtiss-Wright: | ||
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| Robert J. Rivet | |
Reasons for Election to the Board of Curtiss-Wright: | ||
Mr. Rivet has 35 years of broad financial and international leadership experience across different technology industries, which has provided him an in-depth understanding of the preparation and analysis of financial statements, and an in depth understanding of our supply chain, including nine years as Chief Financial Officer of Advanced Micro Devices. In addition, Mr. Rivet led numerous acquisitions, divestitures, and capital market activities while at Advanced Micro Devices. He is also financially literate in accordance with NYSE listing standards and an “audit committee financial expert” in accordance with SEC regulations. Mr. Rivet’s extensive financial knowledge will be an invaluable asset to the Board providing comprehensive oversight over the integrity of the Company’s financial statements and the financial reporting process. Additionally, his in-depth understanding of high-technology industries such as the semiconductor business, and experience in mergers, acquisitions, and capital markets provides the Company a competitive advantage in addressing supply chain issues and seeking new strategic business opportunities and acquisitions. | ||
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| Peter C. Wallace | |
Reasons for Election to the Board of Curtiss-Wright: | ||
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| Lieutenant General (Ret.) Larry D. Wyche | |
Reasons for Election to the Board of Curtiss-Wright: | ||
Lt. Gen. Wyche has many years of broad leadership and operational experience while serving in the U.S. Army. He is familiar with the U.S. military supply chain, emerging technologies, cyber assurance, human capital management, financial management, operations, and strategic planning. This experience, coupled with an in-depth understanding of U.S. government acquisition, contracting and spending, especially defense and defense products, provides the Company a competitive advantage in addressing supply chain issues, cyber threats, and workforce matters, as well as seeking new strategic business opportunities and platforms for the Company’s defense industry products and services. | ||
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Family Relationships
There are no family relationships between any of the Company’s Directors, executive officers, or persons nominated or chosen by the Company to become a director or executive officer.
Certain Legal Proceedings
None of the Company’s Directors, executive officers, or persons nominated or chosen by the Company to become a director has been, during the past ten years: (i) involved in any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer, either at the time of the bankruptcy or within two years prior to that time; (ii) convicted of any criminal proceeding or subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (iii) subject to any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction or Federal or State authority, permanently or temporarily enjoined, barred, suspended, or otherwise limited from involvement in any type of business, securities, futures, commodities, or banking activities; (iv) found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; (v) subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended, or vacated, related to an alleged violation of securities or commodities law or regulation; any law or regulation respecting financial institutions or insurance companies; or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (vi) the subject of, or a party to, any sanction or order, not subsequently reversed, suspended, or vacated, of any
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self-regulatory organization, any registered entity of the Commodity Exchange Act or any equivalent exchange, association, entity, or organization that has disciplinary authority over its members or persons associated with a member.
Compensation of Directors
For information concerning compensation of our Directors, please see “Compensation of Directors” on page 4573 of this Proxy Statement.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS ATHAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH“FOR ALL” OF THE COMPANY’S DIRECTOR NOMINEES FOR DIRECTORLISTED ABOVE (PROPOSAL 1).
STRUCTURE AND PRACTICES OF THE BOARD OF DIRECTORS
Corporate Governance Guidelines and ComplianceCode of Conduct
The Board of Directors has adopted corporate governance guidelines that provide the framework for the governance of the Company.Company and contains a code of conduct that applies to every Director. The corporate governance guidelines are available within the Corporate Governance section of the Company’s website atwww.curtisswright.comhttps://curtisswright.com/investor-relations/governance/governance-documents or by sending a request in writing to the Corporate Secretary, Curtiss-Wright Corporation, One130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036.
The corporate governance guidelines address, among other things, standards for Director independence, meetings of the Board, executive sessions of the Board, committees of the Board, the compensation of Directors, duties of Directors to the Company and its stockholders, and the Board’s role in management succession.succession, and includes policies on, among other things, conflicts of interest, corporate opportunities, and insider trading. The BoardCommittee on Directors and Governance reviews these principles and other aspects of governance annually.at least annually and is amended as the Board deems appropriate upon the recommendation of the Committee on Directors and Governance for updates in response to changing regulatory requirements and as business circumstances warrant.
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The Company also maintains a code of conduct that applies to every employee, including the Company’s Chair and Chief Executive Officer, Chief Financial Officer, and Corporate Controller. The Company’s code of conduct includes policies on, among other things, employment, conflicts of interest, financial reporting, the protection of confidential information, insider trading and hedging, and requires strict adherence to all laws and regulations applicable to the conduct of the Company’s business. The Company’s code of conduct is available within the Corporate Governance section of the Company’s website at https://curtisswright.com/investor-relations/governance/governance-documents or by sending a request in writing to the Corporate Secretary, Curtiss-Wright Corporation, 130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036. The Company reviews the code of conduct at least annually and it is amended as appropriate for updates to changing regulatory requirements and as business circumstances warrant.
The Company designed the corporate governance guidelines and the code of conduct to ensure that its business is conducted in a consistently legal and ethical manner. The Company will disclose any waivers or amendments of the codes of conduct pertaining to Directors or the Company’s Chief Executive Officer, Chief Financial Officer, and Corporate Controller on its website at www.curtisswright.com in accordance with applicable law and the requirements of the NYSE corporate governance standards. To date, no waivers have been requested or granted and no amendments have been made requiring disclosure.
To enhance understanding of and compliance with the Company’s code of conduct, the Company has undertaken several additional steps. Through a third-party provider, the Company maintains an on-line training program that is annually circulated to all Company employees to enhance the Company’s culture of ethical business practices. In addition, although all employees are encouraged to personally report any ethical concerns without fear of retribution, the Company, through a third-party provider, maintains the Company’s Hotline (the “Hotline”), a global, toll-free telephone and web-based system through which employees may report concerns confidentially and anonymously and is available 24 hours a day, seven days a week. The Hotline facilitates the communication of ethical concerns and serves as the vehicle through which employees may communicate with the Audit Committee confidentially and anonymously regarding any accounting, internal controls or auditing concerns.
The Company continually assesses its ethics program, including training opportunities, and modifies as appropriate. The Company’s managers and supervisors play an important role in reinforcing the Company’s policies and commitment to ethics by setting the example of ethical conduct and providing employees with continuous training, education and resources that support the policies.
Meetings of the Board
The Board has regularly scheduled meetings each year, and also hold special meetings are heldand act by written consent from time to time as necessary. In addition, management and the Directors communicate informally on a variety of topics, including suggestions for Board or committee agenda items, recent developments, and other matters of interest to the Directors. Each Director has full access to management.
A meeting of the Company’s non-employee Directors in executive session without any employee Directors or members of management present is scheduled at every regularly scheduled Board meeting. During 2017,2022, the non-employee Directors met fivethree times in executive session. The Committees of the Board may also meet in executive session at the end of each Committee meeting. In May 2017, Allen A. KozinskiFebruary 2021, S. Marce Fuller was appointed by the Board to serve as Lead Independent Director for such executive sessions for a period of one year expiring ineffective May 2018, or until his successor2021; Ms. Fuller is appointed. The Board will select a new Lead Independent Director in May 2018expected to serve until his or her successor is appointed in or around May 2019. Albert E. Smith served as Lead Independent Director for executive sessions from May 2016 through expiration of hisa three-year term, in May 2017.subject to reappointment on an annual basis. The Lead Independent Director reviews the agenda items from the meeting with all non-employee Directors and leads discussions with the independent Board members and coordinates follow up discussions with management. For a further discussion on the position of Lead Independent Director, please read the section titled“Board Leadership Structure”beginning on page 1228 of this Proxy Statement.
Directors are expected to attend all meetings of the Board and each committee on which they serve. In 2017,2022, the Board held nine meetings and committees of the Board held a total of 1618 meetings. During 2017,2022, no Director attended less than 75% of the aggregate number of meetings of the Board of
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Directors and of the committee or committees on which he or she served, during the period that he or she served.
The Company does not have a formal policy with respect to Director attendance at the annual meeting of stockholders. The Company believes that the potential expense involved with requiring all non-employee Directors are encouraged to attend the annual meeting of stockholders, outweighs the benefit ofalthough such
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attendance because meeting agenda items are generally uncontested, nearly all shares voted are voted by proxy, and stockholder attendance at the meetings is traditionally very low. Accordingly, no non-employee Directors attended the Company’s 2017 annual meeting of stockholders.not mandatory. David C. Adams, the Company’s former Executive Chairman and Ms. Lynn M. Bamford, the Company’s Chair and Chief Executive Officer, did attendattended the Company’s 20172022 annual meeting of stockholders andstockholders. Ms. Bamford will attend the Company’s 20182023 annual meeting of stockholders where heshe will be available for questions.
Communication with the Board
The Company believes communications between the Board and the Company’s stockholders, employees, and other interested parties is an important part of the corporate governance process. Stockholders, employees, and other interested parties wishing to contact the Board directly may initiate in writing any communication with: (i) the Board, (ii) any committee of the Board, (iii) the non-employee Directors as a group, or (iv) any individual non-employee Director by sending the communication to Lead Independent Director, c/o Curtiss-Wright Corporation, One130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036. The name of any specific intended Board recipient should be noted in the communication. However, priorPrior to forwarding any correspondence, the Lead Independent Director will review such correspondencecorrespondence. Any communications received by the Lead Independent Director regarding concerns relating to accounting, internal controls or auditing matters will promptly be brought to the attention of the Audit Committee and will be handled in accordance with the procedures established by the Audit Committee to address these matters. However, the Lead Independent Director, in his or her discretion, will not forward certain items if they are deemed inappropriate for submission, including, without limitation, solicitations, commercial advertisements, communications that do not relate directly or indirectly to be of a commercial naturethe Company’s business or that relate to improper or irrelevant topics, or are sent in bad faith. Directors may at any time review a log of all correspondence received by the Company that is addressed to any director and request copies of any such correspondence.
Director Independence
The corporate governance guidelines provide independence standards generally consistent with the New York Stock Exchange listing standards. These standards specify the criteria by which the independence of the Company’s Directors will be determined and require the Board annually to determine affirmatively that each independent Director has no material relationship with the Company other than as a Director. The Board has adopted the standards set out in the corporate governance guidelines, which are posted within the Corporate Governance section of the Company’s website at https://www.curtisswright.comcurtisswright.com/investor-relations/governance/governance-documents, for its evaluation of the materiality of any Director relationship with the Company. To assist in the Board’s determination, each Director completed a questionnaire designed to identify any relationship that could affect the Director’s independence. Based on the responses received from the Directors to the questionnaires and the standards described above, the Board has determined that the following nominees for Directors are “independent” as required by the New York Stock Exchange listing standards and the Board’s corporate governance guidelines: Dean M. Flatt, S. Marce Fuller, Rita J. Heise, Bruce D. Hoechner, Dr. Allen A. Kozinski, John B. Nathman,Glenda J. Minor, Anthony J. Moraco, Robert J. Rivet, Albert E. Smith, and Peter C. Wallace. Mr. AdamsMs. Bamford does not meet the corporate governance guidelines independence test and NYSE independence listing standards due to hisher current position as ChairmanChair and Chief Executive Officer of the Company. The Board has also determined that William F. Moran and Larry D. Wyche, non-director nominees, are “independent” as required by the New York Stock Exchange listing standards and the Board’s corporate governance guidelines. In making the determination that Ms. Heise and Messrs. Flatt Smith, and Wallace are “independent”, the Board considered the fact that these Directors are presently a director of certain entities in which the Company at various times has purchased goods and/or services. The Board determined that this relationship as a director is not material and, thus, did not affect their independence, because each of them do not participate in the day-to-day management of those entities, and do not receive any remuneration as a result of the goods and/or services being sold. Moreover, the transactions involved payments that are individually
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and in the aggregate immaterial to the revenues of each entity and the expenses of the Company. There were no other transactions, relationships, or arrangements not otherwise disclosed that were considered by the Board of Directors in determining whether any of the Directors are independent.
All members of the Audit Committee, the Executive Compensation Committee, the Finance Committee, and the Committee on Directors and Governance are independent Directors as defined in the New York Stock Exchange listing standards and in the standards in the Company’s corporate governance guidelines.
Code of Conduct
The corporate governance guidelines contain a code of conduct that applies to every Director. The Company also maintains a code of conduct that applies to every employee, including the Company’s Chief Executive Officer, Chief Financial Officer, and Corporate Controller. The Company designed the corporate governance guidelines and the code of conduct to ensure that its business is conducted in a
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consistently legal and ethical manner. The corporate governance guidelines include policies on, among other things, conflicts of interest, corporate opportunities, and insider trading. The Company’s code of conduct applicable to its employees includes policies on, among other things, employment, conflicts of interest, financial reporting, the protection of confidential information, insider trading and hedging, and requires strict adherence to all laws and regulations applicable to the conduct of the Company’s business. The Company will disclose any waivers of the codes of conduct pertaining to Directors or senior financial executives on its website atwww.curtisswright.com in accordance with applicable law and the requirements of the NYSE corporate governance standards. To date, no waivers have been requested or granted. The Company’s code of conduct is available within the Corporate Governance section of the Company’s website atwww.curtisswright.com or by sending a request in writing to the Corporate Secretary, Curtiss-Wright Corporation, One Harbour Place Drive, Davidson, North Carolina 28036.
In order to enhance understanding of and compliance with the Company’s code of conduct, the Company has undertaken a number of additional steps. Through a third-party provider, the Company maintains an on-line training program that is annually circulated to all Company employees in order to enhance the Company’s culture of ethical business practices. In addition, although all employees are encouraged to personally report any ethical concerns without feareach member of retribution, the Company, through a third-party provider, maintains the Company’s Hotline (the "Hotline"), a toll-free telephone and web-based system through which employees may report concerns confidentially and anonymously. The Hotline facilitates the communication of ethical concerns and serves as the vehicle through which employees may communicate with the Audit Committee meets the independence requirements under Rule 10A-3 under the Securities Exchange Act of 1934. Furthermore, all members of the Board confidentially and anonymously regarding any accounting or auditing concerns.Executive Compensation Committee qualify as “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934.
Board Committees
The Board of Directors has an Audit Committee, an Executive Compensation Committee, a Committee on Directors and Governance, and a Finance Committee. The Board may establish other special or standing committees from time to time. The Board has adopted a written charter for each of these committees. In November 2017,four standing committees that satisfies the Boardapplicable standards of Directors approvedthe New York Stock Exchange and the SEC. Each committee reviews its charter at least annually, and as regulatory developments and business circumstances warrant. Each of the committees considers revisions to the charters of the Audit Committee, the Executive Compensation Committee, and the Committee on Directors and Governanceits respective charter from time to more accuratelytime to reflect the roles and responsibilities each committee is performing.evolving best practices. The full text of each charter as revised, is available within the Corporate Governance section of the Company’s website at https://www.curtisswright.comcurtisswright.com/investor-relations/governance/governance-documents or by sending a request in writing to the Corporate Secretary, Curtiss-Wright Corporation, One130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036. The current membership of each committee is as follows:
Director | Audit | Executive | Committee | Finance | ||||||||||||||||||||||||
Dean M. Flatt |
| X |
| X | (1) | |||||||||||||||||||||||
S. Marce Fuller | X |
| X | (1) |
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Bruce D. Hoechner | X | X |
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| X | X |
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Anthony J. Moraco | X | X | ||||||||||||||||||||||||||
| John B. Nathman | X |
| X |
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Robert J. Rivet | X | (1) |
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| X |
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Peter C. Wallace |
| X | (1) | X |
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(1) | Denotes Chairperson | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Audit Committee.The Audit Committee presently consists of fivefour non-employee directors. The Audit Committee met fivesix times during 2017. Each member of the Audit Committee meets the independence requirements of the New York Stock Exchange, Rule 10A-3 under the Securities Exchange Act of 1934, and the Company’s corporate governance guidelines.2022. In accordance with New York Stock Exchange requirements, the Board in its business judgment has determined that each member of the Audit Committee is financially literate, knowledgeable, and qualified to review financial
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statements. The Board has also determined that at least one membertwo members of the Audit Committee, Robert J. Rivet isand Glenda J. Minor, are an “audit committee financial expert” as defined in the rules of the SEC.
The Audit Committee’s primary responsibilities includesinclude assisting the Board in fulfilling its oversight responsibility relating to the integrity of the Company’s financial statements and the financial reporting process; the systems of internal accounting and financial controls; the qualifications and performance of the Company’s internal audit function and internal auditors; the annual independent audit of the Company’s financial statements; the appointment and retention (subject to stockholder ratification), compensation, performance, qualifications, and independence of the Company’s independent registered public accounting firm; enterprise risk assessment and management; review of the Company’s information security and technology program (including cybersecurity); and the Company’s compliance with legal and regulatory requirements (including environmental matters) and ethics program.
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Executive Compensation Committee.The Executive Compensation Committee presently consists of four non-employee directors. The Executive Compensation Committee met sixfive times during 2017. Each member of the Executive Compensation Committee meets the independence requirements of the New York Stock Exchange and the Company’s corporate governance guidelines.2022.
The Executive Compensation Committee’s primary responsibilities includes determining the total compensation, including base salary and shortshort- and long termlong-term incentive compensation and all benefits and perquisites, of the Chief Executive Officer and recommends to the full Board the total compensation levels for the remaining executive officers of the Company.all Named Executive Officers. The Executive Compensation Committee also oversees the administration of the Company’s executive compensation programs, including any compensation actions taken in response to the COVID-19 pandemic, and further reviews and evaluates compensation arrangements to assess whether they could encourage undue risk taking. In fulfilling its responsibilities, the Executive Compensation Committee may retain a consultant and during 2017,2022, the Executive Compensation Committee used the services of Frederic W. Cook & Co., Inc., an independent compensation consultant, to assist and guide the Executive Compensation Committee. For a discussion concerning the process and procedures for the consideration and determination of executive compensation and the role of executive officers and compensation consultants in determining or recommending the amount or form of compensation, see “Compensation“Compensation Discussion and Analysis” beginning on page 1838 of this Proxy Statement.
Committee on Directors and Governance.The Committee on Directors and Governance presently consists of fivefour non-employee directors. The Committee on Directors and Governance met three times during 2017.2022. The Committee on Directors and Governance primary responsibilities includesinclude developing policy on the size and composition of the Board, oversight responsibility relating to the risks associated with the Company’s Environmental, Social, and Governance (ESG) requirements (including the Company’s response to climate change and sustainability, employee safety, and human capital such as diversity, equity and inclusion), criteria for Director nomination,nominations, procedures for the nomination process, procedures for the Board and Committee self-assessment process, and review of compensation paid to non-employee Directors. The committee also identifies and recommends candidates for election to the Board. Further, the committee regularly reviews the Company’s corporate governance guidelines and Committee charters, and provides oversight of the corporate governance affairs of the Board and the Company consistent with the long-term best interests of the Company and its stockholders. Each member of the Committee on Directors and Governance meets the independence requirements of the New York Stock Exchange and the Company’s corporate governance guidelines.
Finance Committee.The Finance Committee presently consists of four non-employee directors. The Finance Committee met twofour times during 2017.2022. The Finance Committee’s primary responsibilities includes advising the Board regarding the capital structure of the Company, balanced capital allocation policy, the Company’s dividend and stock repurchase policies, the Company’s currency risk and hedging programs, and the investment managers and policies relating to the Company’s defined benefit plans. Each member
Board and Board Committees Self-Evaluation Process
The Board recognizes that a thorough, constructive self-evaluation process enhances its effectiveness and is an essential element of good corporate governance. Accordingly, the Committee on Directors and Governance oversees an annual self-evaluation process to ensure that the full Board and each of its committees conducts a thorough self-assessment of its performance and solicits feedback for improvement. In addition, the Board and its committees meet regularly in executive session throughout the year to consider areas that may warrant additional focus and attention. The Committee on Directors and Governance reviews and reassesses the format and effectiveness of the Finance Committee meetsevaluation process each year and makes changes when considered necessary or appropriate.
During 2022, the independence requirementsevaluations were conducted using a detailed on-line survey designed to offer a thoughtful and substantive reflection on the Board and committees’ performance. The survey considers various topics related to Board and committee composition, structure, effectiveness, performance, and responsibilities, as well as the overall mix of director skills, experience, backgrounds, and diversity. The results of the New York Stock Exchangesurvey were aggregated, summarized by the General Counsel, and presented to the Board and each committee for discussion in executive session. In addition to providing an opportunity for directors to discuss a wide range of governance-related topics, the evaluation process is used by the Board and each committee to identify opportunities for improvement, make changes to the
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committee charters, processes, and policies, and is linked to the Board’s succession planning activities.
In response to feedback solicited from the Board and committees over the past several years, the Company continues to:
• | Streamline meeting materials to better highlight important information, while maintaining completeness | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Allow sufficient time during Board and committee meetings for discussion, debate, in-depth reviews, and executive sessions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Enhance discussion about areas of emerging risk at Board and Audit Committee meetings, including deep dives on key topics at Board risk oversight sessions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Provide educational opportunities during regularly scheduled meetings and through third-party programs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Focus on particular skills, background, attributes, and diversity of Board candidates | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors believes that through its annual self-evaluation, the Board of Directors will continue to evolve to meet the Company’s long-term strategic needs and the interests of the Company’s corporate governance guidelines.stockholders.
Board Leadership Structure
The Company is focused on strong corporate governance practices and values independent Board oversight as an essential component of strong corporate performance to enhance stockholder value. The Company’s commitment to independent oversight is demonstrated by the independence of all directors, except for our Chairman.Chair and Chief Executive Officer. In addition, as discussed above, all of the members of the Board’s Audit Committee, Finance Committee, Executive Compensation Committee, and Committee on Directors and Governance are independent.
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The Board does not have a formal policy regarding the separation of the roles of the Chair of the Board and the Chief Executive Officer. The Board believes that each businessevery company is unique, and therefore, the appropriate board leadership structure will depend upon eacha company’s unique circumstances and needs at thea particular time. The positions of Board Chairman andEffective May 5, 2022, Chief Executive Officer Lynn M. Bamford was appointed Chair of the Company currently reside in one individual,Board following the retirement of David C. Adams.Adams as Executive Chairman. The Board believes at this time it is in the best interest of the Company and its stockholders for one personMs. Bamford to serve as Board Chairman and Chief Executive Officer. Mr. Adams has been an employee of the Company for more than 17 years, having served in increasing levels of strategic, operational, and managerial responsibility. He possesses in-depth managerial and operational knowledge of the Company and its industries, as well as the issues, opportunities, and challenges it faces. Thus, he is best positioned to provide direction and highlight issues that ensure the Board of Directors’ time and attention are focused on the most critical matters. In addition, the Board has determined that this leadership structure is optimal because it believes that having one leader serving as both ChairmanChair and Chief Executive Officer, fosters decisive leadership, accountability, effective decision-making, and alignment on corporate strategy. Having one person serve as Chairman and Chief Executive Officer also enhances the Company’s abilityMs. Bamford is well suited to communicate its message and strategy clearly and consistently to its stockholders, employees, customers, and suppliers. In light of Mr. Adams’fill that role given her experience and knowledge of the Company’s business and industries, hisindustries. The Board believes Ms. Bamford’s ability to speakserve as both ChairmanChair and Chief Executive Officer provideswill provide the Company with strong unified leadership. However, consistent with good corporate governance principles, the Committee on Directors and Governance will continue to review periodically this issue to determine whether, based on the relevant facts and circumstances at such future times, separation of the offices of Chair of the Board and Chief Executive Officer would better serve the interests of the Company and its stockholders.
Mr. AdamsThe Board does not believe its independence is compromised by having a single person serve as Chair and Chief Executive Officer. The functions of the Board are carried out by the full Board, and when delegated, by the Board committees. Currently, all of the Company’s Directors (other than Ms. Bamford) and each member of our four Committees meet the independence requirements of the NYSE and our Corporate Governance Guidelines’ categorical standards for determining Director independence. Additionally, the members of the Audit Committee also satisfy SEC regulatory independence requirements for audit committee members. Each Director is a full and equal participant in the major strategic and policy decisions of the Company and the Chair has no greater or lesser vote on matters considered by the Board. Our non-management Directors meet in executive session without management (including the Chair and Chief Executive Officer) on a regularly scheduled basis, with the Lead Independent Director presiding in such sessions. During executive sessions, the Directors may consider such matters as they deem appropriate. Following each executive session, the results of the deliberations and any recommendations are communicated to the full Board of Directors.
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Because Ms. Bamford serves as both Chair and Chief Executive Officer, the Board appoints an independent director to serve as Lead Independent Director. As Chair, Ms. Bamford fulfills hisher responsibilities in chairing the Board through close interaction with the Lead Independent Director. In May 2017, the Board appointed Allen A. Kozinski to serve in that capacity for a period of one year expiring in May 2018, or until his successor is appointed. The Board has structured the role of its Lead Independent Director to strike an appropriate balance between well-focused and independent leadership on the Board. The Lead Independent Director serves as the focal point for independent Directors regarding resolving conflicts with the Chief Executive Officer, or other independent Directors, and coordinating feedback to the Chief Executive Officer on behalf of independent Directors regarding business issues and Board management. The Lead Independent Director isand Chair are expected to foster a cohesive Board that supports and cooperates with the Chief Executive Officer’s ultimate goal of creating stockholder value. In this regard, the Lead Independent Director’s responsibilities include, convening and presiding over executive sessions attended only by non-employee Directors, communicating to the Chief Executive Officer the substance of discussions held during those sessions to the extent requested by the participants, serving as a liaison between the Chairman and the Board’s independent Directors on sensitive issues, consulting with the Chairman on meeting schedules and agendas, including the format and adequacy of information the Directors receive and the effectiveness of the meeting process, overseeing the Board’s self-evaluation process, and presiding at meetings of the Board in the event of the Chairman’s unavailability.among other duties:
• | Convening and presiding over executive sessions attended only by non-employee Directors; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Communicating to the Chief Executive Officer the substance of discussions held during those sessions to the extent requested by the participants; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Serving as a liaison between the Chair and the Board’s independent Directors on sensitive issues; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Consulting with the Chair on meeting schedules and agendas, including the format and adequacy of information the independent Directors receive and the effectiveness of the meeting process; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Overseeing the Board’s self-evaluation process; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Presiding at meetings of the Board in the event of the Chair’s unavailability. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board believes this governance structure and these practices ensure that strong and independent directors will continue to effectively oversee the Company’s management and key issues related to long-term business plans, long-range strategic issues, risks, and integrity.
Board Role in Risk Oversight
General
The Board of Directors oversees risk to help ensure a successful business at the Company. While the ChairmanChair and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and other members of the Company’s senior leadership team are responsible for the assessment and day-to-day management of risk, the Board of Directors is responsible for assessing the Company’s major risks and ensuring that appropriate risk management and control procedures are in place.
The Company relies on a comprehensive enterprise risk management program to aggregate, monitor, measure, and manage risk. The Company’s enterprise risk management program is designed to enable the Board to establish a mutual understanding with management of the effectiveness of the Company’s risk management practices and capabilities, to review the Company’s risk exposure, and to elevate certain key risks for discussion at the Board level. While the Board has the ultimate oversight responsibility for risk management processes, various committees of the Board composed entirely of independent directors, also have responsibility for certain aspects of risk management. The Board and its committees are kept informed by various reports on risk identification and mitigation provided to them on a regular basis, including reports made at the Board and Committee meetings by management and the Company’s independent auditors. The Board and its committees have direct and independent access to management. By fostering increased communication, the Company’s believes the current Board leadership structure and the Board’s risk oversight practices lead to the identification and implementation of effective risk management strategies.
13Key Board Committee Oversight Responsibilities
Audit Committee: The Audit Committee of the Board, acting pursuant to its written charter, serves as the principal agent of the Board in fulfilling the Board’s oversight of risk assessment and management, including with respect to major strategic, operational, financial reporting, legal and
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compliance, information security, data protection and technology risks (including cybersecurity). The Company’s Director of Internal Audit,Vice President, Risk and Compliance, who reports to the Audit Committee, facilitates the enterprise risk management program, in coordination with the Company’s legal department and helps ensure that risk management is integrated into the Company’s strategic and operating planning process. The Director of Internal AuditCompany’s Vice President, Risk and Compliance, regularly updates the Audit Committee on the Company’s risk management program throughout the year through discussions of individual risk areas, as well as an annual summary of the enterprise risk management process. The Audit Committee also reviews with management the risks presented and the steps management has taken to monitor, mitigate, and control such risks. In addition, periodically, but not less than annually, the Audit Committee receives regular briefings concerninga report from the Company’s information securityGeneral Counsel and technologythe Company’s Chief Ethics Officer relating to, (i) the implementation and effectiveness of the Company’s legal and ethical compliance program and adherence to the Company’s Code of Conduct and (ii) all significant compliance investigations undertaken in the past year. Moreover, the Audit Committee also regularly meets in executive session without management present with the Company’s Director of Internal Audit and the Company’s independent registered public accounting firm to discuss areas of concern. In many instances, the discussion of these risks (including cybersecurity), including discussionsis integrated within the topics on the Board and committee agendas.
The Board is also actively engaged in the oversight of the Company’s information security, data protection and risk management programs.technology programs (including cybersecurity). The Company’s Chief Information Officer leads the Company’s cybersecurity risk management program, which is fully integrated into the overall enterprise risk management program and overseen by the Audit Committee. The Audit Committee reviews withand receives regular briefings from the Company’s Chief Information Officer concerning the Company’s cybersecurity risk management suchprogram and data protection practices, including discussions of rapidly evolving cyber security threats, cyber security technologies and solutions deployed, major cyber risk areas, policies, and procedures to address those risks, and the steps management has taken to monitor, mitigate, and control such risks. The Chairperson of the Auditcyber incidents. Program highlights include:
• | Multi-layer strategy of defense in-depth designed to ensure the safety, security and responsible use of information and data. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Security operations center (“SOC”) that monitors all IT assets, resources, and data 24-hours per day, 7-days per week, 365-days per year. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Incorporates external expertise to manage the SOC, perform penetration tests, cyber-attack simulation exercises, and log management to review anomalies indicating a possible breach. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Maintain a business continuity program and cyber insurance. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Compensation Committee then reports to the full Board on the risks associated with the Company’s operations.
: The Executive Compensation Committee considers risks in connection with its design of compensation programs and equity compensation plans for the Company’s employees, including the executive officers, includingwhile incorporating features that mitigate risk without diminishing the incentive nature of the compensation. The conclusions of this assessment are set forth in the Compensation Discussion and Analysis under the heading “Risk“Risk Consideration in the Overall Compensation Program for 2017” 2022” on page 3556 of this Proxy Statement.
Finance Committee: The Finance Committee is responsible for assessing risks related to financing matters such as pension plans, capital structure, capital allocation, currency risk and hedging programs, and equity and debt issuances.issuances, as well as to insurance-related risk management programs.
Committee on Directors and Governance: The Committee on Directors and Governance oversees risk related to the Company’s overall governance, including Board and committee composition, Board size and structure, Directordirector recruitment, director independence, director compensation, ethical and business conduct, and the Company’s corporate environmental, social and governance profileprofiles and ratings.ratings, including reviewing the adequacy of the Company’s strategy, policies, practices, programs, procedures, initiatives and training as they relate to the environment (including climate change and sustainability), and health and safety. The Committee on Directors and Governance receives periodic briefings on the Company’s enterprise-level EHS Management System to identify and understand specific risks within the EHS realm so the Board can stay abreast of both emerging and material EHS risks that could have a material impact on the Company.
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Each Chairperson of the Board committees delivers a report to the Board, no later than the next scheduled board meeting, regarding matters considered at committee meetings that have taken place since the previous board meeting, including any risks associated with the Company’s operations.
Effectiveness of the Company’s Risk Oversight Approach
The Board believes that its leadership structure facilitates its oversight of risk by combining Board committees and majority independent Board composition with an experienced ChairmanChair and Chief Executive Officer who has detailed knowledge of the Company’s business, history, and the complex challenges it faces. The ChairmanChair and Chief Executive Officer’s in-depth understanding of these matters and involvement in the day-to-day management of the Company position himpositions her to promptly identify and raise key risks to the Board and focus the Board’s attention on areas of concern. The independent committee chairs and other Directors also are experienced professionals or executives who can and do raise issues for Board consideration and review and are not hesitant to challenge management. The Board believes there is a well-functioning and effective balance between the non-management Directors and the ChairmanChair and Chief Executive Officer that enhances risk oversight.
Board Role in Strategic Oversight
The Board takes an active role in overseeing senior management’s formulation and implementation of its strategic plan. It receives a comprehensive overview of management’s strategic plan for all the Company’s businesses at least annually, receives regular updates from consultants and other experts on the global capital markets and industrial environment, and receives periodic updates from individual businesses at other regularly scheduled Board meetings throughout the year. The Board provides insight and feedback to senior management, and, if necessary, challenges management on the Company’s strategic direction. The Board also monitors and evaluates, with the assistance of the Chief Executive Officer, the Company’s strategic results, and approves all material capital allocation decisions.
The Board and management are committed to optimizing the allocation of capital resources for future growth. Management regularly evaluates the Company’s portfolio of businesses and potential corporate development opportunities with the input and collaboration of the Board. The Board regularly reviews and assesses the value proposition and risks of any proposed acquisition, as well as whether our existing business segments should be expanded, curtailed, disposed of, or diversified. In addition, the Board’s Finance Committee provides oversight and focuses on the Company’s capital structure, including organic and inorganic investment options aligned with the Company’s strategies, share repurchases, dividends, and capital expenditures. Accordingly, acquisitions and divestitures are part of the Company’s ongoing strategy assessment and execution to maximize long-term stockholder value.
Succession Planning
The Board of Directors recognizes that one of its most important responsibilities is to ensure excellence and continuity in the Company’s senior leadership by overseeing the development of executive talent and planning for the effective succession of the Company’s Chief Executive Officer and the other senior members of the Company’s senior leadership team. This responsibility is reflected in the Company’s Corporate Governance Guidelines, which provide for an annual review of CEO succession planning and management development. The Board oversees the succession planning process by reviewing and evaluating candidates for successor to the Chief Executive Officer and to assure that senior management has established and maintains a succession planning process for senior executive positions other than the Chief Executive Officer. As part of the succession planning process, the Chief Executive Officer, working with the Board, also reviews and maintains an emergency succession plan for the position of Chief Executive Officer.
In furtherance of the foregoing, the Company’s Chief Executive Officer provides a biennial succession planning report to the Board of Directors, which summarizes the overall composition of the Company’s senior leadership team, including their professional qualifications, tenure, and work experience. The report also identifies internal members of the senior leadership team who are viewed
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as potential successors to the Chief Executive Officer. Succession planning is also regularly discussed in executive sessions of the Board of Directors. The Company’s directors become familiar with internal potential successors for key leadership positions through various means, including a biennial succession planning report and Board of Directors and committee meetings, and less formal interactions throughout the course of the year.
Additionally, the Board of Directors, with support and recommendations from the Committee on Directors and Governance, oversees the succession of its members. To this end, at least once a year, in connection with the annual director nomination and re-nomination process, the Committee on Directors and Governance evaluates each director’s performance, relative strengths and weaknesses, and future plans, including any personal retirement objectives and the potential applicability of the Company’s mandatory retirement policy for directors (which is set forth in the Company’s Corporate Governance Guidelines). As part of that evaluation, the Committee on Directors and Governance also identifies areas of overall strength and weakness with respect to its composition and considers whether the Board of Directors as a whole possesses core competencies in the areas of accounting and finance, management experience with mergers and acquisitions, risk management, industry knowledge, knowledge of technology and cyber-security, marketing, digital marketing and social media, international markets, strategic vision, compensation, and corporate governance, among others.
Director Onboarding and Education
All new Directors participate in the Company’s director onboarding program. The onboarding process includes in-person or virtual meetings with senior leaders to familiarize new directors with the Company’s strategic vision, values, and culture; operational and financial reporting structure; and legal, compliance, and governance framework. Our goal is to assist our new Directors in understanding the Company and developing the skills and knowledge that they need to serve the interests of the Company’s stockholders.
It is important for directors to stay current and informed on developments in corporate governance best practices to effectively discharge their duties, as well as be exposed to information regarding conditions in the end markets where the Company operates to increase the Directors understanding of the Company’s risks and opportunities. The Company provides its Directors updates from both internal and outside industry experts on corporate governance trends and developments as well as in the Company’s end markets and other issues of importance to the Company at regularly scheduled board and committee meetings. The Board also encourages all Directors to participate in continuing director education programs, either individually or together with other Committee members, to help them maintain and enhance their skills and knowledge in carrying out their ongoing responsibilities as directors of a public company. The Directors are reimbursed for their expenses for such programs.
Stockholder Recommendations and Nominations for Directors
Stockholder Recommendations.The Committee on Directors and Governance will consider stockholder recommendationsnominations for Director nominees. A stockholder desiring the committee to consider his or her Director recommendationnominations should deliver a written submission in accordance with the Company’s By-laws to the Committee on Directors and Governance in care of the Corporate Secretary, Curtiss-Wright Corporation, One130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036. Such submission must include:
(1) | the name and address of such stockholder, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) | the name of such nominee, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) | the nominee’s written consent to serve if elected, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) | documentation demonstrating that the nominating stockholder is indeed a stockholder of the Company, including the number of shares of stock owned, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) | a representation (i) that the stockholder is a holder of record of the stock of the Company entitled to vote at such meeting and whether he or she intends to appear in person or by proxy at the meeting, and (ii) whether the stockholder intends or is part of a group that | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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intends to deliver a proxy statement to the Company’s stockholders respecting such nominee or otherwise solicit proxies respecting such nominee, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(6) | a description of any derivative instruments the stockholder owns for which the Company’s shares are the underlying security or any other direct or indirect opportunity the stockholder has to profit from any increase or decrease in the value of the Company’s stock, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(7) | a description of the extent to which the stockholder has entered into any transaction or series of transactions, including hedging, short selling, borrowing shares, or lending shares, with the effect or intent to mitigate loss to or manage or share risk or benefit of changes in the value or price of share of stock of the Company for, or to increase or decrease the voting power or economic interest of, such stockholder with respect to any shares of stock of the Company, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(8) | a description of any proxy, contract, arrangement, understanding, or relationship under which the stockholder has a right to vote any of the shares of stock of the Company or influence the voting over any such shares, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(9) | a description of any rights to dividends on the shares of stock of the Company the stockholder has that are separated or separable from the underlying shares of stock of the Company, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(10) | a description of any performance-related fees (other than asset-based fee) the stockholder is entitled to based on any increase or decrease in the value of the shares of stock of the Company or related derivative instruments, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(11) | to the extent known, the name and address of any other stockholder(s) supporting the nomination on the date of the stockholder’s submission of the nomination to the Committee on Directors and Governance, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(12) | any information relating to the nominee and his or her affiliates that would be required to be disclosed in a proxy solicitation for the election of Directors of the Company pursuant to Regulation 14A under the Securities Exchange Act of 1934, and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(13) | a description of all direct and indirect compensation, and other material monetary agreements, arrangements, and understandings during the past three years, and any other material relationships between such nominating stockholder or beneficial owner, if any, on the one hand, and the nominee and his or her respective affiliates or associates, or others acting in concert therewith, on the other hand. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In addition, such submission must be accompanied by a written questionnaire with respect to the background and qualification of the nominee and the background of any other person or entity on whose behalf the nomination is being made. Further, the nominee must also provide a written representation and agreement that such nominee (i) is not and will not become party to (x) any agreement, arrangement, or understanding as to how such prospective nominee will act or vote on any issue or question that has not been disclosed to the Company, or (y) any agreement, arrangement, or understanding as to how such prospective nominee will act or vote on any issue or question that could limit or interfere with such nominee’s ability to comply with such nominee’s fiduciary duties, (ii) is not and will not become party to any agreement, arrangement, or understanding with respect to any direct or indirect compensation, reimbursement, or indemnification in connection with service or action as a director, that has not been disclosed to the Company, and (iii) in such person’s individual capacity and on behalf of any beneficial owner on whose behalf the nomination is being made, would be in compliance with all applicable corporate governance, conflict of interest, confidentiality, and stock ownership and trading policies and guidelines of the Company. The Committee may require additional information from the nominee to perform its evaluation.
Board Membership Criteria and Selection Process for Director Nominees
In its assessment of each potential nominee,addition to stockholder nominations for Directors, the Committee on Directors and Governance takes into account the nominee’s judgment, experience, independence, and understanding of the Company’s business; the range of talent and experience already represented on the Board; and such other factors that the committee determines are pertinent in light of the current needs of the Company. The committee will also take into account the ability of a nominee to devote the time and effort necessary to fulfill hisconsiders candidates for Board membership as recommended by Directors or her responsibilities as a Company Director.
executive management. The Committee on Directors and Governance does not have a formal written policy with regarduses the same criteria to considering diversity in identifying nomineesevaluate all candidates for directors, but when considering director candidatesBoard membership, whether recommended by Directors, executive management, or
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stockholders. As it seeks individuals with backgroundsdeems necessary, the Committee on Directors and qualities that, when combined with those of the Company’s
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other directors, provide a blend of skills, experience, and cultural knowledge that will further enhance the Board’s effectiveness. Diversity considerations for a director nomineeGovernance may vary at any time according to the particular areas of expertise being sought as a complement to the existing Board composition. When the need arises, the Company engages independentengage consultants or third-party search firms to identify potential director nominees according to the criteria set forth by the Committee and assist the Committee in identifying and evaluating potential nominees. The Committee on Directors and Governance seeks candidates with the highest professional and personal ethics and values and who will operate in accordance with the Company’s Code of Conduct. The Committee on Directors and Governance also assesses a diverse poolcandidate’s ability to make independent analytical inquiries, and willingness to devote adequate time to Board duties. Director nominees should possess the following experience, attributes, and characteristics:
Experience (in one or more of qualified candidates.the following):
• | High level leadership experience; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Specialized expertise in the industries in which the Company competes; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Financial expertise; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Breadth of knowledge about issues affecting the Company; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Ability and willingness to contribute special competencies to Board activities; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Expertise and experience that is useful to the Company and complementary to the background and experience of other Board members, so that an optimal balance and diversity of Board members may be achieved and maintained. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Personal attributes and characteristics:
• | Personal integrity; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Loyalty to the Company and concern for its success and welfare, and willingness to apply sound independent business judgment; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Awareness of a director’s vital part in the Company’s good corporate citizenship and corporate image; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Willingness to assume fiduciary responsibilities. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Committee on Directors and Governance annually evaluates the performance of the Board, each of the committees, and each of the members of the Board. It also reviews the size of the Board and whether it would be beneficial to add additional members and/or any new skills or expertise, taking into accountconsidering the overall operating efficiency of the Board and its committees. If the Board has a vacancy, or if the Committee determines that it would be beneficial to add an additional member, the Committee will take into accountconsider the factors identified above and all other factors, which the Committee in its best judgment deems relevant at such time. In this process, the Committee on Directors and Governance will consider potential candidates proposed by other members of the Board, by management or by stockholders.
Once an individual has been identified by the Committee on Directors and Governance as a potential candidate, the Committee, as an initial matter, may collect and review publicly available information regarding the individual to assess whether the individual should be considered further. Generally, if the individual expresses a willingness to be considered and to serve on the Board, and the Committee believes that the individual has the potential to be a good candidate, the Committee would seek to gather information from or about the individual, review the individual’s accomplishments and qualifications in light of any other candidates that the Committee might be considering, and, as appropriate, conduct one or more interviews with the individual. In certain instances, Committee members may contact one or more references provided by the candidate or may contact other members of the business community or other individuals that may have greater first-hand knowledge of the candidate’s accomplishments. The Committee’s evaluation process does not vary based on whether or not a prospective candidate is recommended by a stockholder, although, as stated above in the section titled “Stockholder Nominations for Directors” on page 32 of this Proxy Statement, the Board may take into consideration the number of shares held by the recommending stockholder and the length of time that such shares have been held.
Stockholder Nominations. A stockholder desiring to nominate a person as Director should deliver a written submission in accordance with the Company’s By-laws to the Corporate Secretary, Curtiss-Wright Corporation, One Harbour Place Drive, Davidson, North Carolina 28036. Such submission must include the items listed above under “Stockholder Recommendations and Nominations for Directors.” Stockholder submissions for Director nominees at the 2019 annual meeting of stockholders must be received by the Corporate Secretary of the Company no earlier than January 11, 2019 and no later than February 9, 2019. Nominee recommendations that are made by stockholders in accordance with these procedures will receive the same consideration as recommendations initiated byBoard Diversity
Although the Committee on Directors and Governance.Governance does not have a formal written policy regarding considering diversity in identifying nominees for directors, it does believe that maintaining a diverse membership with varying backgrounds, skills, expertise and other differentiating characteristics
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promotes inclusiveness, enhances the Board’s deliberations and enables the Board to better represent all of the Company’s constituents. Consequently, in its assessment of each potential nominee, the Committee on Directors and Governance considers the skills and characteristics that the Board seeks in its members as well as consideration of the diversity of the Board as a whole. This review includes an assessment of, among other things, a candidate’s knowledge, education, experience, cultural background, including ethnicity, national origin, gender, sexual orientation, and age, and skills in areas critical to understanding the Company and its business, with a commitment to enhancing stockholder value. Diversity considerations for a director nominee may vary at any time according to the particular areas of expertise being sought as a complement to the existing Board composition. The Company believes its nominees for directors at this Annual Meeting appropriately reflect a diversity of experience and skills and of professional, gender, ethnic and personal backgrounds. The Board is committed to maintaining these different facets of diversity among its members.
Board Tenure
The Board strives to maintain an appropriate balance of tenure and refreshment among directors. The Board believes there are significant benefits from the valuable experience and familiarity with the Company and its people and processes that longer-tenured directors bring, as well as significant benefits from the fresh perspectives and ideas that new directors bring. The average tenure of our director nominees is 6 years. Under the Board’s corporate governance guidelines, Directors are expected to retire from the Board effective at the Annual Meeting after reaching the age of 75. We believe the Board strikes the right balance of longer serving and newer directors.
Stockholder Engagement
The Company approaches stockholder engagement as an integrated, year-round process involving senior management and the investor relations team. The Company welcomes the opportunity to openly engage with its stockholders regarding its performance and strategy, and to obtain insights and feedback on matters of mutual interest. The Board’s and senior management’s commitment to understanding the interests and perspectives of stockholders is a key component of the stockholder engagement strategy. The Board and senior management are committed to acting according to the best interests of the Company and its stockholders.
The Company engages with stockholders throughout the year to:
• | Provide visibility and transparency into the Company’s business, including senior management’s perspectives on the financial and operational performance, as well as key trends impacting its end markets and other industry developments; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Discuss and seek feedback on the Company’s communications and disclosures; issues that are important to stockholders; hear stockholder expectations for the Company; and share the Company’s views; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Discuss and seek feedback on the Company’s executive compensation and corporate governance policies and practices; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Convey feedback on critical conversations and issues back to senior management and the Board to enhance future disclosure and decision-making. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Throughout the year, the Company meets with research analysts and institutional investors to inform and share the Company’s perspective on its financial and operational performance through its participation in investor conferences, non-conference roadshows, investor days and other formal events where the Company conducts group and one-on-one meetings. The Company also engages with governance representatives of its major stockholders, through conference calls that occur during and outside of the proxy season.
During 2022, the Company virtually conducted meetings and calls with its top 50 institutional investors representing approximately 41% of the Company’s outstanding stock, resulting in substantive engagements with investors holding a significant portion of the Company’s outstanding stock, in addition to conducting meetings with prospective stockholders. In addition, the Company conducted
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more than 110 meetings with institutional investors and prospects through industry conferences and non-conference events, and conducted in excess of 100 separate conversations by phone. Among the many topics discussed during this ordinary course engagement were the Company’s business, long-term outlook, Pivot to Growth strategy, financial condition, governance, capital allocation preferences and other topics of interest to stockholders and prospective stockholders.
The comments, questions and suggestions offered by the Company’s investors were shared with, and discussed by, the full Board, and their perspectives will inform the Board’s decision-making in 2023 and beyond.
The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report by reference therein.
Audit Committee Report
Management is responsible for the financial reporting process, including its system of internal controls, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. Our independent accountants are responsible for auditing those financial statements and the Company’s internal controls over financial reporting. The Audit Committee is responsible for monitoring and reviewing these processes. The Audit Committee does not have the duty or responsibility to conduct auditing or accounting reviews or procedures. None of the members of the Audit Committee may be employees of the Company. Additionally, the Audit Committee members may not represent themselves to be accountants or auditors for the Company, or to serve as accountants or auditors by profession or experts in the fields of accounting or auditing for the Company. Therefore, the Audit Committee has relied, without
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independent verification, on management’s representation that the financial statements have been prepared with integrity and objectivity and in conformity with generally accepted accounting principles in the United States of America and on the representations of the independent accountants included in their report on the Company’s financial statements.
The oversight performed by the Audit Committee does not provide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles, or policies or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the discussions that the Audit Committee has with management and the independent accountants do not assure that the financial statements are presented in accordance with generally accepted accounting principles, that the audit of the financial statements has been carried out in accordance with generally accepted auditing standards, or that our independent accountants are in fact “independent.”
As more fully described in its charter, the Audit Committee is responsible for, among other items, overseeing the integrity of the Company’s financial statements and the financial reporting process, the systems of internal accounting and financial controls, the qualifications and performance of the internal audit function and internal auditors, and the annual independent audit of the Company’s financial statements by the Company’s independent registered public accounting firm, Deloitte & Touche LLP. As part of fulfilling its responsibilities, the Audit Committee reviewed and discussed with management and Deloitte & Touche LLP the audited consolidated financial statements for fiscal year 2017,2022, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements, as well as the Company’s earnings releases and quarterly and annual reports on Form 10-Q and Form 10-K prior to filing with the SEC. In addition, the Audit Committee reviewed with management, Deloitte & Touche LLP, and the Company’s Director of Internal Audit, the overall audit scope and plans, the results of internal and external audits, evaluations by management and Deloitte & Touche LLP of the Company’s internal controls over financial reporting and the quality of the Company’s financial reporting. The Audit Committee also discussed with Deloitte & Touche LLP the matters required to be discussed by the statement on Auditing Standard No. 1301,Communications with Audit Committees, as adopted byapplicable requirements of the Public Company Accounting Oversight Board (“PCAOB”). and the SEC. The Audit Committee has also discussed and considered the independence of Deloitte & Touche LLP
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with representatives of Deloitte & Touche LLP, reviewing as necessary all relationships and services (including non-audit services) that might bear on the objectivity of Deloitte & Touche LLP, and received the written disclosures and the letter required under Rule 3526 of the PCAOB (Communications with Audit Committees Concerning Independence) from Deloitte & Touche LLP. Based on the forgoing, the Audit Committee concluded that Deloitte & Touche LLP is independent from the Company and its management. The Audit Committee schedules separate private sessions, during its regularly scheduled meetings, with Deloitte & Touche LLP and the Company’s Director of Internal Audit, at which candid discussions regarding financial management, accounting, auditing and internal control issues takes place. Deloitte & Touche LLP is also encouraged to discuss any other matters they desire with the Audit Committee, the Director of Internal Audit, and/or the full Board of Directors.
The opinionopinions of Deloitte & Touche LLP isare filed separately in the 20172022 Annual Report on Form 10-K and should be read in conjunction with the reading of the financial statements.
Based upon the Audit Committee’s review and discussions referred to above, the Audit Committee has recommended to the Board of Directors that the audited consolidated financial statements and footnotes be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017,2022, for filing with the SEC.
| AUDIT COMMITTEE OF THE BOARD OF DIRECTORS Robert J. Rivet, Chairperson |
AUDIT COMMITTEE OFTHE BOARD OF DIRECTORS37
Robert J. Rivet,ChairpersonDean M. FlattS. Marce FullerRita J. HeiseAdmiral (Ret.) John B. Nathman
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COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) details the Executive Compensation Committee’s (“Committee”) decisions regarding the compensation programs and practices as they relate to the Company’s Named Executive Officers (“NEOs”). In 2017, the Company’s NEOs were:These individuals are identified below along with their offices held during fiscal year 2022:
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• | K. Christopher Farkas, Vice President and Chief Financial Officer | ||
• | Paul J. Ferdenzi, Vice President, General Counsel, and Corporate | ||
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(a) | Ms. Bamford assumed the role of Chair of the Board of Directors effective May 5, 2022. | ||
(b) | Mr. Adams retired as Executive Chairman of the Company effective May 5, 2022 and continued as a member of the Board of Directors. Mr. Adams was no longer an employee of the Company after such date. | ||
(c) | Mr. Watts was promoted to Vice President - Strategy and Corporate Development effective May 11, 2022. |
20172022 Company Financial Performance
Historically, Curtiss-Wright grew its portfolio of products and services through acquisitions supplemented by organic growth. In 2013, theThe Company unveiled the One Curtiss-Wright strategy, which it still follows today, focused on the achievement ofstrives to attain top quartile performance compared with its peer group (as later defined herein)in this CD&A), by concentrating on:
• | Leveraging the critical mass and the powerful suite of capabilities it built over the past decade; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Driving operational excellence to improve key financial metrics such as (a) short-term financial metrics, including (i) adjusted operating | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Exercising financial discipline to drive higher free cash flow. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company also unveiledmaintains a newdisciplined and balanced capital allocation strategy—strategy–all part of the Company’s effort to improve competitiveness over the long term and generate stronger returns for stockholders.
Overall, the Company continued to face a challenging business environment during fiscal 2022, particularly with headwinds throughout the year relating primarily to supply chain delivery disruptions, workforce availability issues, and inflationary pressures. The Company continued to take steps to mitigate the impact of these issues on our fiscal 2022 financial performance. Despite these challenges, the Company performed well in fiscal 2022, with increases in sales, profitability, and operating income. However, the Company still fell slightly below target but above threshold requirements against its adjusted operating income and organic sales growth annual performance metrics and fell below threshold against its working capital as a percentage of sales annual performance metric. As a result, bonus payments for the NEOs under the annual incentive program were below target level pay. Moreover, under the long-term incentive plan, the Company was slightly above target on its adjusted earnings-per-share growth performance target and below threshold against its total sales growth target over the past three-year performance period (2020-2022), as average total sales growth over the performance period was pressured due primarily to the significant disruption from the COVID-19 pandemic in 2020 across our end markets. As a result, cash-based performance units payouts for the 2020-2022 performance period were below target level and TSR was at the 56th percentile of the S&P MidCap 400. The Company believes these results demonstrate the rigor of its financial targets and the strong pay-for-performance alignment under its annual and long-term incentive compensation plans.
In 2017,2022, the Company’s performance reinforced its strategy and its financial performance remained strong, resulting in three-year total shareholder return (TSR) which ranked fifth among162nd or the Company’s peer group.56th percentile against the S&P MidCap 400. TSR is the change in the Company’s common stockour Common Stock share price plus
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dividends from the beginning of the measurement period to the end (three years, 1/1/20152020 to 12/31/2017)2022). Highlights of theThe Company’s 20172022 financial performance include:for executive compensation included:
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• | Working capital as a percentage of sales | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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18The Company’s financial performance includes adjustments referenced in the Company’s fourth quarter 2022 earnings release furnished to the SEC on February 22, 2023. The Company’s financial performance above excludes the performance of acquisitions consummated during the performance period.
The following charts illustrate how the Company compares against the peer group usingS&P MidCap 400 measuring one and three-year indexed TSR as of December 29, 2017:31, 2022. Indexed TSR means the value at the end of the 1 and 3-year measurement periods of a hypothetical $100 invested at the beginning of the periods.
20172022 Incentive Payouts
IncentiveAs discussed in the section titled “2022 Company Financial Performance” on page 38 of this CD&A, the Committee believes incentive awards earned by the NEOs for fiscal 20172022 reflect the Company’s strong operating performance and its commitment to pay for performance.
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• | Cash-based performance units for the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Performance Share Units payout for the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Compensation Practices and Policies
The Committee frequently reviews the Company’s executive compensation program to ensure it supports the Company’s compensation philosophy and objectives and continues to drive corporate performance to achieve the Company’s strategic plan. The Committee continues to implement and maintain best practices for executive compensation. Listed below are some of the best practices the
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Company follows for all participants of the incentive plans and the practices that the Company does not include in its program:
What Curtiss-Wright Does | What Curtiss-Wright | ||||||
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| • | No NEO employment agreements | ||||
| • | Does not engage in executive compensation practices that encourage excessive risk | ||||||
• | Ties NEO payouts to publicly released numbers to ensure transparency in incentive plan payouts. | ||||||
| Balances short-term and long-term incentives using multiple performance measures that focus on profitable top line growth | • | No short sales, hedging, or pledging of Curtiss-Wright stock | ||||
| • | No reloading, re-pricing or backdating stock options | ||||||
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| • | No tax gross-ups on change-in-control benefits for executives hired or promoted after January 2008 | ||||
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| • | No dividends on unvested or unearned performance units/shares | ||||
| • | No excessive perquisites | ||||||
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| • | No excessive severance and/or | ||||
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• | Provides incentive-based compensation opportunities throughout most of the organization | ||||||
Consideration of Say on Pay Results
The Company provides its stockholders an annual advisory vote to approve its executive compensation program under Section 14A of the Exchange Act. At the 20172022 Annual Meeting of stockholders, over 96% of shares voted were in favor of the Company’s executive pay programs (commonly known as Say on Pay).
Stockholder input is important to the Committee. The Company regularly solicits input from its major stockholders on the Company’s executive compensation programs. The Company received overall positive feedback regarding the Company’s performance, core compensation structure, and elements of its executive compensation program. The Company’s investors also were enthusiastic about the performance of the Company.
The Committee evaluated these results, considered stockholder feedback received by the Company, and took into account many other factors in evaluating the Company’s executive compensation programs as discussed in this CD&A. The Committee also assessed the interaction of our compensation programs with our business objectives, input from its independent compensation consultant, Frederic W. Cook & Co., Inc. (FW Cook), and review of peer data, each of which is evaluated in the context of the Committee’s fiduciary duty to act as the directors determine to be in the best interests of the Company. While each of these factors bore on the Committee’s decisions regarding our NEOs’ compensation, the Committee did not make any material changes to our 2022 executive compensation program and policies as the Committee believes that the 20172022 voting results
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as well as investor feedback indicate stockholders’ approval of the NEO’s compensation levels, objectives, program design, and rationale.
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Overview of the 20172022 Executive Compensation Program
Compensation Philosophy
The Company’s overall compensation philosophy for all participants and objectives will support and enable:
• | Curtiss-Wright’s vision of achieving top quartile performance compared to its peer group | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Pay outcomes aligned company performance with shareholder interests by targeting NEO total direct compensation opportunities at market median, which provides the opportunity for above median pay for above median performance and below median pay for below median performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Incentive Metrics and Targets dictated by the Company’s strategic goals that are: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
- | Evaluated annually based on financial performance and outlook | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
- | Modified in terms of weighting and mix as Curtiss-Wright’s performance advances towards or enters the top quartile | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
- | Reviewed and assessed as business conditions change with exceptions possible when aligned with strategic purposes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Long-Term Incentives (LTI) including equity as a key component thereby aligning 70% of NEO’s LTI grant value with shareholder interests through 3-year | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Compensation to be a tool for key employee retention and talent development | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Long-Term Incentive Grant Timing
While our compensation philosophy has not changed, the Company did not make long-term incentive grants to our executive officers in November 2017 as was done in previous years. In an effort to simply and condense the compensation decision making process, the Committee decided to change our annual long-term incentives grant date from November to March, effective March 2018. Moving the grant date to March allows the Committee to evaluate all components of total direct compensation (i.e. base salary, annual incentive compensation, and long-term incentives) at the same time. The change in timing does not result in any executive officers receiving more or less pay. However, in accordance with applicable SEC rules, the Company’s Summary Compensation Table set forth in this CD&A will not reflect long-term incentive grants for 2017 because none were awarded during the year. We fully anticipate that 2018 will see a return to the compensation objectives and levels to which our stockholders are accustomed.
Compensation mix
Historically, toTo reinforce the Company’s pay for performance philosophy, target total direct compensation for each NEO was weighted more towards performance-based compensation. For example, in 2016 and 2015, over 60%two-thirds of targettargeted total direct compensation for the CEO and over 50%greater than one-half for the remaining NEOs was contingent upon performance. However, in 2017, becauseeach NEO and all other participants of the shift in timing of granting long-term incentive awards as discussed above, only 51% of target total direct compensation for the CEO and 41% for the remaining NEOsplans is contingent upon performance which consists of annual incentives, and, therefore, fluctuates with the Company’s financial results. In 2018, the Committee fully expects target total direct compensation to be weighted substantially towards performance-based compensation in-line with historical practice as long-term incentives are expected to be granted in March 2018.results and/or share price. The Committee targets total direct compensation opportunities for the executivegeneral participant group on average to the 50th percentile (median) of the Company’s relevant market and peer data with actual upside and downside pay tied to corresponding performance.
2022 Target Compensation Mix and “Pay at Risk”
Performance-based compensation includes: annual incentives, equity-based performance share units, and cash-based performance units, which account for approximately 64% of the CEO’s total target compensation and on average 56% of the total target compensation for the remaining NEOs.
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Mr. Adams is excluded from the “Other Named Executive Officers” chart above as he was not eligible to participate in all Company incentive compensation plans in fiscal year 2022 because he voluntarily retired as an employee of the Company prior to completion of the performance periods under the Company’s annual and long-term incentive compensation plans.
The acronyms PSUs, PUPs, and RSUs in the above pie charts mean equity-based performance share units, cash-based performance units, and time-based restricted stock units, respectively, each of which is discussed more fully later in this CDA.
Competitive market data and peer group data
The Committee analyzed competitive market data from two sources:
1. | Peer group; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2. | Survey data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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The Committee utilizes both peer group and aerospace and defense industry data when evaluating NEO compensation levels. The peer group data is most representative of competitors with similar product lines, markets/markets / industries and relative revenue size. Peer group performance therefore isincentive plan practices are a key relative measure for selecting the Company’s annual incentive plan and performance-based long-term incentive plan metrics. The Committee, with guidance from FW Cook and Management, reviewed but did not changeadjusted the peer group used for competitive market assessments in late 2016,2021, which informed 20172022 pay decisions. Specifically, Cubic Corporation, EnPro Industries, FLIR Systems, Inc., IDEX Corporation, Kaman Corporation, and Spirit AeroSystems were removed from the peer comparator group. Cubic and FLIR Systems were removed because they were acquired and are no longer publicly traded. Kaman was removed because its recent business divestitures significantly reduced its size and Kaman no longer fits within the revenue and market capitalization range used by the Committee to select peer group companies. Finally, EnPro, IDEX, and Spirit AeroSystems were removed because their business mix is not aligned with the Company’s. Ametek, Barnes Group, BWX Technologies, Huntington Ingalls Industries, Kratos Defense & Security Solutions, Maxar Technologies, Mercury Systems, and Parsons
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Corporation were added to the peer group comparator for 2022 because (i) they are in similar industries as the Company, (ii) fit within the revenue and market capitalization ranges used to identify other peers, and (iii) serve the aerospace and defense and/or other industrial markets. The final 20172022 peer group approved by the Committee consists of the following 1718 companies:
• | AAR Corp. | • |
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• | Aerojet Rocketdyne | • |
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• | Ametek, Inc. | • |
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• | Barnes Group Inc. | • |
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• | BWX Technologies, Inc. | • |
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• | Crane Co. | • |
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• | Hexcel Corp. | • |
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• | Huntington Ingalls Industries Inc. | • |
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• | ITT Inc. |
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| Woodward Inc. | |||||
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TheWhile the Committee reviews both peer group data and nationally recognized survey data from third party sources, the Committee primarily relies on peer group data for the CEO and CFO, while placing more focus on nationally recognized executive survey data from third party sources for the other NEOs. The Committee believes that due to the smaller number of peer matches and more robust sample size of the surveys, the latter provides more robust and reliable compensation data.data for roles other than the CEO and CFO.
Roles in determining 20172022 Executive Compensation
Summarized in the table below are roles and responsibilities for executive compensation:
Groups | Roles and Responsibilities | |||
Executive Compensation Committee | • |
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| • | Oversees the administration of the Company’s | |||
| • | Reviews competitiveness and business fit of overall | |||
| • | Oversees cost and design of the Company’s retirement plans and recommends changes to the full Board | |||
| • | Selects, oversees, and directs the activities of the external executive compensation consultant and ensures the independence of such consultant | |||
| • | Reviews and evaluates compensation plans and arrangements to assess whether they could encourage undue risk taking | |||
| • | Reviews and approves the personal and financial annual and | |||
Board Members | • |
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| Provides advice on officer and board of directors compensation matters | |||
| • | Provides information on competitive market trends in general executive compensation as it impacts officers | |||
| • | Provides proposals for officer compensation programs, program design, including measures, goal-setting, and pay and performance alignment and other topics as the Committee deems appropriate | |||
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Groups | Roles and Responsibilities | |||
Independent Committee Consultant | • | Is directly accountable to the Committee, which has sole authority to engage, dismiss, and approve the terms of engagement of the compensation consultant | ||
CEO | • | Evaluates performance of the executive officers other than | ||
| • | Makes recommendations to the Committee regarding base salary, annual incentive compensation targets, long-term cash incentive compensation targets, and long-term equity compensation for the executive officers other than | |||
Other Executives: CFO,GC | • | Makes recommendations to the CEO and Committee regarding officer annual and long-term incentive plan design and performance metrics | ||
| • | Provides officer compensation analysis in collaboration with the Committee’s independent consultant | |||
| • | Provides information and recommendations regarding board of director pay with oversight by the Committee’s independent consultant and the Committee on Directors and Governance | |||
During 2017,2022, FW Cook did not provide any other services to the Company.Company other than services provided to the Committee as an independent advisor on executive and non-employee director compensation matters. The Committee assessed the independence of FW Cook in accordance with applicable rules of the New York Stock Exchange and the Securities and Exchange Commission regarding independence of advisors to compensation committees. As part of this assessment, the Committee reviewed, among others, the independence and conflict of interest policies of FW Cook as well as FW Cook’s relationship with the Company and the members of the Committee. Based on this review and assessment, it is the Committee and the Company’s belief that the services provided by FW Cook were independent and free from any conflict of interest.
20172022 Compensation Components
Except for the long-term incentives that were not granted in 2017 as discussed above, theThe table below summarizes each of the Company’s 20172022 compensation components and its role in the Company’s executive compensation program.
Compensation | Role in the Executive Compensation Program | |||
Base Salary | • | Provides fixed compensation based on responsibility level, position held, job duties performance, years of experience in the position, and market value | ||
Annual Incentive Compensation | • | Motivates and rewards achieving annual financial and operational business objectives that are linked to the Company’s overall | ||
Long-Term Incentive Program | • | Motivates | ||
1. Performance-based restricted stock units (metric = relative | ||||
2. Cash-based performance units (metrics = total sales growth and | ||||
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3. Time-based restricted stock units (provided to all participants) – 30% weighted | ||||
| • | Promotes stock ownership and aligns incentive awards with stockholder interests | |||
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Compensation | Role in the Executive Compensation Program | |||
Long-Term Incentive Program | • | Rewards achievement of longer-term (three year) business objectives that are linked to the Company’s overall | ||
Employee Stock Purchase Plan | • | Allows substantially all full-time employees the ability to set aside money to purchase stock of the Company | ||
| • | Promotes stock ownership and aligns employees with stockholder interests | |||
Executive Deferred Compensation Plan | • | Permits deferral of compensation in excess of 401(k) statutory limits for tax advantaged savings | ||
| • | Provides officers and other executives with a savings opportunity comparable to other employees | |||
Traditional Defined Benefit Pension Plan | • | Promotes the long-term retention and financial health of | ||
| • | Provides a defined benefit taking into consideration years of service, age and compensation | |||
Note: The Company’s traditional defined benefit pension plan is closed to new entrants. It will cease to provide accruals to existing participants at the end of | ||||
Restoration (Pension and Savings) Plans | • | Provides competitive retirement benefit | ||
| • | Promotes long-term retention of key executives by providing an increasing value tied directly to length of service | |||
Note: The Company’s traditional pension plan is closed to new entrants. It will cease to provide accruals to existing participants at the end of | ||||
401(k) Plan | • |
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| • | Provides added retirement benefit by way of a competitive matching contribution to those employees not participating in the Company’s traditional pension plan | |||
Limited Executive Perquisites | • | Provides a competitive | ||
Post-Employment Agreements | • | Delivers temporary income following an NEO’s involuntary termination of employment. In the case of | ||
20172022 Compensation Decisions and the Basis for Decisions
Base Salary
Base salary is intended to compensate theemployees, including our NEOs, for performance of core job responsibilities and duties. Base salary drives other pay components in that it is used to determine target values for annual incentive compensation, long-term incentive compensation, retirement benefit calculations, severance protection, and change-in-control benefits.
The Committee evaluatesdetermines and approves NEO salaries annually and makes recommendations to the Board that reflect the value of the position measured by competitive market data, the NEOs’ individual performance, and the individual’s longer-term intrinsic value to the Company.
24
For 2017, two2022, the NEO’s base salaries were modestly increased as shown in the table below:
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NEO | 2016 Base Salary | 2017 Base Salary | % difference | ||||||||||||||||||
Mr. Adams | $ | 925,000 | $ | 925,000 | 0 | % | |||||||||||||||
Mr. Tynan |
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| $ |
| 542,900 |
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| 559,200 |
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| 3.0 | % |
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Mr. Quinly | $ | 625,000 | $ | 625,000 | 0 | % | |||||||||||||||
Mr. Ferdenzi |
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| $ |
| 426,600 |
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| $ |
| 426,600 |
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| 0 | % |
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Mr. Jakubowitz | $ | 280,000 | $ | 288,400 | 3.0 | % | |||||||||||||||
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NEO | 2021 Base Salary | 2022 Base Salary | % difference | |||||||||
Ms. Bamford | $ | 850,000 | $ | 930,000 | 9.4 | % | ||||||
Mr. Adams* |
| $ | 1,050,000 |
| $ | 1,050,000 | 0.0 | % |
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Mr. Rayment | $ | 550,000 | $ | 600,000 | 9.1 | % | ||||||
Mr. Farkas |
| $ | 500,000 |
| $ | 550,000 | 10.0 | % |
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Mr. Ferdenzi | $ | 500,000 | $ | 515,000 | 3.0 | % | ||||||
Mr. Watts** |
| N/A |
| $ | 370,000 | N/A | ||||||
* | Mr. Adams retired as Executive Chairman of the Company effective May 5, 2022 and, accordingly, no longer received a salary from the Company after such date. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
** | Mr. Watts was not a NEO in 2021. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Compensation
For 2017,2022, the NEOs participated in the Curtiss-Wright Incentive Compensation Plan, as amended (“MICP”ICP”), which is a broad-based management incentive plan that was approved by the CompanyCompany’s stockholders in May 2011.
The Company believes that an important portion of the overall cash compensation for all participants in the NEOsincentive programs should be contingent upon the successful achievement of certain annual corporate financial and individual goals and objectives that contribute to enhanced shareholder value over time. Accordingly, 80% of the NEO’seach participant’s annual incentive target is tied to financial performance, while the remaining 20% is tied to significant individual goals and objectives.
Similar to the process described above to determine annual base salaries, the Committee annually establishes a target bonus opportunity for each NEO. For 2017,2022, each NEO had the following target bonus opportunity:
NEO |
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Mr. Watts | 50 | % | ||||||
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* | Mr. Adams was ineligible to receive an annual incentive bonus for fiscal year 2022 under the ICP because he voluntarily retired from the position of Executive Chairman prior to completion of the performance period. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the 2017 MICP,2022 ICP, the Committee, in consultation with Management and FW Cook selected three financial measures and key individual performance-based objectives for all NEOs as summarized in the table below, which includes respective weightings and rationale for each measure:
Goal | Weighting | Rationale | ||||||
Corporate Operating Income; |
| • | Requires management to increase profitability | |||||
| • | Is easily understood, measurable, and reflects management’s performance | |||||||
| • | Is a key driver of Company business strategy | |||||||
| • | Is correlated with the Company’s TSR | |||||||
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| • | Is easily understood, measurable, and reflects management performance | ||||||
| • | Is a key driver of overall Company success and TSR | ||||||
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Goal |
| Rationale | ||||||
Working Capital; “WC” | 30% | • | Requires management to reduce its working capital as a percentage of sales | |||||
| • |
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Free cash flow enhances shareholder value by allowing Curtiss-Wright for example, to pursue acquisitions, pay dividends, and buy back stock | ||||||||
Individual Objectives | 20% | • | Requires a portion of the annual incentive to be based on performance objectives for which each executive is directly responsible | |||||
| • | Allows for differentiation of awards based on individual contributions | ||||||
| • | Supports leadership development and succession planning | ||||||
(a) | Adjusted metric. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MICPICP Formula
Payout = (20%(30% of Target x OI Performance Rating) + (30%(20% of Target x OMOSG Rating) + (30% of Target x WC Rating)
+ (20% of Target x Individual Rating)
Any adjustments are reviewed by FW Cook, approved by the Committee, and audited by our external and internal audit staff. These adjustments ensure that Management makes decisions based on the best interests of the Company and stockholders. In 2017,2022, the Committee made no adjustments to the financial performance results of the Company.Company other than those that were reflected in the Company’s year-end financial press released furnished to the SEC on February 22, 2023.
Goal Setting Process
Annual MICPICP financial performance goals are developed through a rigorous goal setting process to test the validity of the Company’s performance objectives. In reviewing and setting performance targets, the Committee considers the Company’s five- yearfive-year strategic plan, annual budget, the Company’s compensation structure, historical and forecasted performance for the Company and its peer group, analyst estimates of prospective performance of the Company and its peer group, and the Company’s cost of capital.capital, and industry headwinds and significant uncertainty in the macro-economic environment, including supply chain disruptions and a tight labor market caused by the COVID-19 pandemic. Individual goals are developed independently between the respective NEO and the CEO. Individual’s goals of the CEO and each other NEO are then presented along with their rationale to the Committee for consideration and approval. The CEO’s individual goals are established with the Committee’s input and approval while the Board approves all other NEOs individual goals. All goals are tied to strategic business needs for the coming year and are pushed down through the organization to align all incentive pay participants
26
with Company goals and objectives. The Committee believes that this approach provides consistency and continuity in the execution of the Company’s short-term goals as well as a strategic tie to the accomplishment of the Company’s long-term objectives.
The goals set by the Committee are designed to provide correlating pay for performance while targeting to the 50th percentile. For pay above the 50th percentile, there must be a corresponding level of performance.
47
20172022 Annual Incentive Compensation (MICP)(ICP) Payout
No incentive is paid if performance falls below threshold, and payouts are capped and may not exceed 200% of target.
For 2017,2022, the range of OI ($) performance was:
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OI Range of Performance | Corporate | |||
Threshold | $ | 399,841,000 | ||
Target |
| $ | 438,903,000 | |
Maximum | $ | 460,849,000 | ||
For 2022, the range of OSG (%) performance was:
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For 2017, the target range of OM performance was:
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For 2017,2022, the target range of WC (% of Sales) performance was:
WC Range of Performance | Corporate | ||||||
Threshold |
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Target |
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Maximum |
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Individual objectives are generally measurable and weighted based on their relative importance to the goals of the business unit and the overall success of the Company. Individual objectives can be quantitative or more subjective as long as they support operational success and reflect management’s strategy. The Committee reviews each NEO’s individual performance. The CEO provides a rating between 1 (one) and 5 (five) for each objective for each NEOof the NEOs’ objectives other than himself.herself. A performance rating of 3 (three) equates to 100% of target achievement; a 5 (five) represents 200% of target, or maximum achievement; and a 2 (two) represents 50% of target, or threshold achievement. A participant does not receive an award under the individual component of the ICP for a rating of less than two. Each objective is multiplied by its weighting and then totaled for an overall rating. The overall rating is then multiplied against 20% of the NEO’s MICPICP target award to derive a payout.
27Individual specific goals for NEOs in 2022 related to investor outreach, strategic sales growth, talent management and acquisition, contract risk management, benchmarking of executive perquisites to ensure competitiveness, implementing financial management systems, and shareholder activism.
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Individual Goal | Mr. Adams | Mr. Tynan | Mr. Quinly | Mr. Ferdenzi | Mr. Jakubowitz | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weight | Rating | Weight | Rating | Weight | Rating | Weight | Rating | Weight | Rating | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Plan for Strategic Growth | 50 | % | 4.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior management succession planning |
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Business/Tax Planning | 50 | % | 3.5 | 50 | % | 3.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial management of key metrics—Days Payable Outstanding and Days Sales Outstanding |
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Best practices review of the Legal Department | 50 | % | 4.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Introduce Total Compensation Review |
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Lead Talent organization | 25 | % | 4.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Drive growth initiatives |
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Staff professional development | 25 | % | 4.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reduce effective tax rate |
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Total Score (% of target) | 3.8 (140%) | 3.5 (125%) | 3.7 (135%) | 4.0 (150%) | 3.5 (125%) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In order to assess the NEOs’ individual performance, the Committee is generally provided with detailed supporting documentation. In awarding a rating to each NEO, the Committee analyzes this supporting justification, and also takes into account the Company’s overall performance and the assessment of the Chief Executive Officer.
In assessing each NEO’s performance against his individual goals, the The Committee considered the following:following achievements when determining the individual component payout of each NEO:
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• | The Committee determined that Mr. Rayment achieved a score of 3.9 (145%) based on his successful efforts in (i) planning and executing a strategy to increase organic sales growth, and (ii) developing and implementing plans and procedures to attract, retain, and motivate key employees; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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• | The Committee determined that Mr. Ferdenzi achieved a score of 3.8 (140%) based on his successful efforts in (i) developing policies and procedures in managing contractual risk, and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
48
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The following table details the 2017 MICP2022 ICP payout to each NEO based on actual financial results for the Company versus target and each NEO’s 20172022 individual performance rating. Payouts are based on base salary rate for portions of the year due to any mid-year base salary increases as discussed above. With regard to the financial payout for the Company, the Company exceededfell short of its targets on all three financial measures,targets, which resulted in the payouts in the table below.
28
In no event may MICPICP awards for participants be increased on a discretionary basis; however, the Committee does have the discretion to decrease the amount of any award paid to any participant under the MICP.ICP. For 2017,2022, the Committee exercised no suchdid not exercise any downward discretion.
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NEO | Target % | Goal | Weight | Actual | 2017 MICP | 2017 MICP | ||||||||||||||||
Mr. Adams | 105% | Individual Portion | 20% | 3.8 | 140 | % | $ | 271,950 | ||||||||||||||
| OI Portion | 20% | $333M | 167 | % | $ | 324,398 | |||||||||||||||
| OM Portion | 30% | 15.1% | 163 | % | $ | 474,941 | |||||||||||||||
| WC Portion | 30% | 18.6% | 200 | % | $ | 582,750 | |||||||||||||||
| Total Payout | 100% | $ | 1,654,039 | ||||||||||||||||||
Mr. Tynan | 75% | Individual Portion | 20% | 3.5 |
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| 125 | % |
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| $ |
| 104,027 | ||||||||
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| OI Portion | 20% | $333M |
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| 167 | % |
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| $ |
| 138,980 | |||||||
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| OM Portion | 30% | 15.1% |
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| 163 | % |
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| $ |
| 203,477 | |||||||
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| WC Portion | 30% | 18.6% |
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| 200 | % |
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| 249,665 | |||||||
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| Total Payout | 100% |
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| 696,150 | |||||||||
Mr. Quinly | 75% | Individual Portion | 20% | 3.7 | 135 | % | $ | 126,563 | ||||||||||||||
| OI Portion | 20% | $333M | 167 | % | $ | 156,563 | |||||||||||||||
| OM Portion | 30% | 15.1% | 163 | % | $ | 229,219 | |||||||||||||||
| WC Portion | 30% | 18.6% | 200 | % | $ | 281,250 | |||||||||||||||
| Total Payout | 100% | $ | 793,594 | ||||||||||||||||||
Mr. Ferdenzi | 65% | Individual Portion | 20% | 4.0 |
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| 150 | % |
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| $ |
| 83,187 | ||||||||
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| OI Portion | 20% | $333M |
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| 167 | % |
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| 92,615 | |||||||
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| OM Portion | 30% | 15.1% |
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| 163 | % |
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| 135,595 | |||||||
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| WC Portion | 30% | 18.6% |
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| 166,374 | |||||||
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| Total Payout | 100% |
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| 477,771 | |||||||||
Mr. Jakubowitz | 45% | Individual Portion | 20% | 3.5 | 125 | % | $ | 32,191 | ||||||||||||||
| OI Portion | 20% | $333M | 167 | % | $ | 43,007 | |||||||||||||||
| OM Portion | 30% | 15.1% | 163 | % | $ | 62,965 | |||||||||||||||
| WC Portion | 30% | 18.6% | 200 | % | $ | 77,257 | |||||||||||||||
| Total Payout | 100% | $ | 215,419 | ||||||||||||||||||
| NEO | Target % of Base Salary | Goal | Weight | Actual Result | 2022 ICP Payout as % of Target | 2022 ICP Target ($) | 2022 ICP Payout ($) | ||||||||||||
| Ms. Bamford | 110% | Individual Portion | 20% | 4.5 | 175 | % | $ | 204,600 | $ | 358,050 | |||||||||
| OI Portion | 30% | $437M | 97 | % | $ | 306,900 | $ | 297,693 | |||||||||||
| OSG Portion | 20% | 2.7% | 92 | % | $ | 204,600 | $ | 188,232 | |||||||||||
| WC Portion | 30% | 25.9% | 0 | % | $ | 306,900 | $ | 0 | |||||||||||
| Total Payout | $ | 843,975 | |||||||||||||||||
| Mr. Adams* | Ineligible | ||||||||||||||||||
| Mr. Rayment | 80% | Individual Portion | 20% | 3.9 | 145 | % | $ | 96,000 | $ | 139,200 | |||||||||
| OI Portion | 30% | $437M | 97 | % | $ | 144,000 | $ | 139,680 | |||||||||||
| OSG Portion | 20% | 2.7% | 92 | % | $ | 96,000 | $ | 88,320 | |||||||||||
| WC Portion | 30% | 25.9% | 0 | % | $ | 144,000 | $ | 0 | |||||||||||
| Total Payout | $ | 367,200 | |||||||||||||||||
| Mr. Farkas | 80% | Individual Portion | 20% | 4.0 | 150 | % | $ | 88,000 | $ | 132,000 | |||||||||
| OI Portion | 30% | $437M | 97 | % | $ | 132,000 | $ | 128,040 | |||||||||||
| OSG Portion | 20% | 2.7% | 92 | % | $ | 88,000 | $ | 80,960 | |||||||||||
| WC Portion | 30% | 25.9% | 0 | % | $ | 132,000 | $ | 0 | |||||||||||
| Total Payout | $ | 341,000 | |||||||||||||||||
| Mr. Ferdenzi | 70% | Individual Portion | 20% | 3.8 | 140 | % | $ | 72,100 | $ | 100,940 | |||||||||
| OI Portion | 30% | $437M | 97 | % | $ | 108,150 | $ | 104,906 | |||||||||||
| OSG Portion | 20% | 2.7% | 92 | % | $ | 72,100 | $ | 66,332 | |||||||||||
| WC Portion | 30% | 25.9% | 0 | % | $ | 108,150 | $ | 0 | |||||||||||
| Total Payout | $ | 272,178 | |||||||||||||||||
| Mr. Watts | 50% | Individual Portion | 20% | 3.8 | 140 | % | $ | 37,000 | $ | 51,800 | |||||||||
| OI Portion | 30% | $437M | 97 | % | $ | 55,500 | $ | 53,835 | |||||||||||
| OSG Portion | 20% | 2.7% | 92 | % | $ | 37,000 | $ | 34,040 | |||||||||||
| WC Portion | 30% | 25.9% | 0 | % | $ | 55,500 | $ | 0 | |||||||||||
| Total Payout | $ | 139,675 | |||||||||||||||||
| Aggregate Payout | $ | 1,964,028 | |||||||||||||||||
* | Mr. Adams was ineligible to receive an annual incentive bonus for fiscal year 2022 under the ICP because he voluntarily retired from the position of Executive Chairman prior to completion of the performance period. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
49
Key Changes to the Annual Incentive Compensation Design for 20182023
There were no changes made to the MICP goalsICP metrics and weightings for 2018. However, to emphasize the Company’s focus on growth, weightings will shift 10 percentage points from operating margin to operating income. The revised weightings2023. They will be working capital as a percent of sales (30%), operating income (30%), operating marginorganic sales growth (20%), and individual goals (20%).
Long-Term Incentive Program
The Company’s long-term incentive plan (“LTIP”) is designed to ensure its executive officers and key management employees are focused on longer-term stockholder value creation through incentive compensation that rewards for longer-term (i.e., three years or more) performance. As discussed above, there were no LTIP grants made in 2017.
Historically, inIn determining the 2022 LTIP grants, the Committee considered the following factors:
• | Continued focus on creating stockholder value to | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Targeting executives’ pay opportunities competitively with the market median | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Rewarding each individual for his or her direct contribution to revenue and profitability of the business | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Key Changes toListed below are the 20182022 target LTIP Design and Grants
As discussed above, there were no LTIP grants made in 2017. Historically, the LTIP grants for NEOs consisted of equity-based performance share units (“PSUs”), cash-based performance units
29
(“PUs”), and time-based restricted stock units (“RSUs”). When we resume with our annual granting practice in March of 2018, we fully anticipate using the long-term vehicles and metrics that we have relied upon historically except thatvalues for the 2018-2020NEOs:
NEO | 2022 LTIP Value as | |||||
Ms. Bamford | 375 | % | ||||
Mr. Adams (a) | N/A | |||||
Mr. Rayment | 215 | % | ||||
Mr. Farkas | 200 | % | ||||
Mr. Ferdenzi | 155 | % | ||||
Mr. Watts | 75 | % | ||||
(a) | Mr. Adams was ineligible to receive a long-term incentive award for fiscal year 2022 because he voluntarily retired from the position of Executive Chairman prior to the end of the performance period under the long-term incentive plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
If the NEOs drive Company performance period, to emphasize the Company’s focus on growth, the weighting for PUsthat achieves target levels, payouts will shift 10 percentage points from return on invested capital (ROIC) to total sales growth (organic and inorganic) soresult in values that ROIC and total sales growth are evenly split 50:50. approximate market median LTIP payments.
2022 Long-Term Incentive Compensation
The Committee believes the award mix summarized in the (table below) will providetable below provides the proper amount of leverage in the LTIP program. The LTIP components will balance the multiple interests of 1) significant pay at risk, 2) stockholder interests, 3) retention, and 4) internal and external performance goals. The three components chosen will each accomplish a different “mission” in terms of incenting NEO performance.
50
Long-Term Incentive | Performance Condition/Vesting | Objective of Design | ||||||
PSUs (40%) | • | Three-year relative TSR against the peer group | • | Aligns pay with relative TSR | ||||
| • | Aligns NEOs’ with shareholders’ interests | |||||||
| • | Three-year | • | Focus on internal goals linked to long-term business strategy | ||||
| • | Use of cash to mitigate dilution and burn rate concerns | ||||||
| • | Aligns NEOs’ with shareholders’ interests | ||||||
RSUs (30%) | • | Cliff vest 100% on the third anniversary of the date of grant | • | Retention | ||||
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| • | Strengthens alignment with shareholders | |||||||
Performance Share Units
Historically, theThe target number of PSUs granted is calculated by multiplying the total dollar value of the LTIP grant by the percentage of LTIP grant allocated to PSUs (40% for 2018)2022) and dividing by the closing price of the Company’s common stock as reported on the New York Stock Exchange on the date of the grant.
The payout is determined based on the table below in relation to peer performance. The Company has capped payout at 100% if absolute TSR is negative.
PSUs 2022-2024 Performance Period | ||||||||||||||
TSR vs. Peer | Payout as a % of Target (1) | |||||||||||||
Maximum | ≥ 75th | 200 | % | |||||||||||
Target |
| 50th |
| 100 | % | |||||||||
Threshold | 25th |
| % | |||||||||||
Below Threshold | < 25th |
| 0 | % | ||||||||||
(1) | Linear interpolation will apply for performance between disclosed payout | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash-Based Performance Units
Historically, theThe target number of PUsPUPs granted is calculated by multiplying the total dollar value of the LTIP grant by the percentage of LTIP grant allocated to PUs (30% for 2018)2022).
As discussed above, the performance targets will be based 50% on three-year average total sales growth and 50% on three-year average ROIC. The Company believes that total sales growth and ROIC are long-term drivers of stockholder value.
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The number of units vesting can range from 0% to 200% of target. Performance targets for each goal are established at the beginning of the performance period.
Restricted Stock Units
Historically, theThe number of RSUs granted is calculated inby multiplying the same mannertotal dollar value of the LTIP grant by the percentage of LTIP grant allocated to RSUs (30% for 2022) and dividing by the closing price of the Company’s common stock as target numberreported on the New York Stock Exchange on the date of PSUs andthe grant. RSUs cliff vest in three years.
2015-20172020-2022 Long-Term Incentive Compensation Payouts
Performance Share Units
In February 2018,2023, a PSU payout was made for the November 2014February 2020 PSU grants covering performance for 2015-2017.2020-2022. The payout for PSUs for the performance period 2015-20172020-2022 was a 200%124% payout based on achievement of relative TSR at the peer group’s 81st56th percentile of the S&P MidCap 400, which ranked fifth among peers.162nd against such peer group.
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Cash-Based Performance Units
In February 2018,2023, a cash-based performance unit payout was made to Ms. Bamford and Messrs. Adams, Tynan, Quinly,Rayment, Farkas, Ferdenzi, and JakubowitzWatts based on the 2014 Performance Unitcash-based performance unit grants covering the 2015-20172020-2022 performance period. AwardsThe 2020-2022 performance targets were based upon achievement of the Company’s60% on three-year average total sales growth and its40% on three-year average return on invested capital (ROIC).adjusted earnings per share (EPS) growth. The Company believes that total sales growth and adjusted EPS growth metrics are long-term drivers of stockholder value. No incentive is paid if performance falls below Threshold, and payouts are capped and may not exceed 200% of target.
• | Adjusted EPS is calculated as net earnings from continuing operations as adjusted for the items (which is agreed by the Executive Compensation Committee) described in our publicly available annual earnings release on Form 8-K divided by the number of weighted average diluted shares outstanding. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Total sales growth is calculated by computing the average of the percentage increases in sales in each of the years within the performance period. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the 2015-20172020-2022 performance period, the target range of average total sales growth and ROICadjusted EPS growth performance was:
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| Sales | ROIC (%) | ||||||||||||
Threshold | 0.0 | 7.9 | ||||||||||||
Target |
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| 3.0 |
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| 10.4 | ||||||||
Maximum | 6.0 | 13.5 | ||||||||||||
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| Total Sales | Adjusted EPS | ||||||
Threshold | 4.0 | 4.0 | ||||||
Target |
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| 6.0 |
| 6.0 | |||
Maximum | 7.0 | 8.0 | ||||||
The NEO awards are listed in the Summary Compensation Table in this Proxy Statement under the heading “Non-Equity Incentive Plan Compensation” and detailed below.
The following table details results for the Company’s cash-based performance unit payouts granted in November 2014.February 2020. The performance period 2015-20172020-2022 resulted in performance of 12.6%6.3% for ROICadjusted EPS growth and 0.2%2.7% for total sales growth. This equates to a 170%114% payout based on adjusted EPS growth performance and a 53%0% payout respectively,based on total sales growth performance, for a total payout percentage of 122%46%.
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| Target | Payout | Performance | ||||||||||||||||||
Adams | $ | 765,000 | 122 | % | $ | 933,300 | |||||||||||||||
Tynan |
|
| $ |
| 301,310 |
|
| 122 | % |
|
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| $ |
| 367,598 | ||||||
Quinly | $ | 360,000 | 122 | % | $ | 439,200 | |||||||||||||||
Ferdenzi |
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| $ |
| 140,400 |
|
| 122 | % |
|
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| $ |
| 171,288 | ||||||
Jakubowitz | $ | 54,600 | 122 | % | $ | 66,612 | |||||||||||||||
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NEO | Target | Payout | Performance | |||||||||
Mr. Adams | $ | 990,000 | 46 | % | $ | 455,400 | ||||||
Ms. Bamford |
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| $ | 241,800 |
| 46 | % |
| $ | 111,228 | ||
Mr. Rayment | $ | 223,200 | 46 | % | $ | 102,672 | ||||||
Mr. Farkas |
|
| $ | 163,800 |
| 46 | % |
| $ | 75,348 | ||
Mr. Ferdenzi | $ | 218,690 | 46 | % | $ | 100,597 | ||||||
Mr. Watts |
|
| $ | 56,160 |
| 46 | % |
| $ | 25,834 | ||
Key Changes to the 2023 LTIP Design and Grants
There were no changes made to the LTIP award mix, metrics, and weightings for 2023. LTIP grants consisted of equity-based performance share units (“PSUs”), cash-based performance units (“PUPs”), and time-based restricted stock units (“RSUs”).
Employee Stock Purchase Plan
The Company’s NEOs, along with substantially all other full time Company employees, are eligible to participate in the Curtiss-Wright Corporation Employee Stock Purchase Plan (“ESPP”). The purpose of the ESPP is to encourage employees of the Company and its subsidiaries to increase their ownership in the Company’sour Common Stock. To achieve this purpose, the ESPP provides all
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participating employees with the opportunity to purchase the Company’sour Common Stock through a payroll deduction at a 15% discount of the market value of the stock, unless (i) the employee owns more than 5% of the Company’sour Common Stock or (ii) the employee has the right to purchase under all Company employee stock purchase plans Companyour Common Stock under the plan that would accrue at a rate which exceeds $25,000 in fair market value for each calendar year in which such right
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to purchase is outstanding. The ESPP is offered in six-month“offering periods”commencing on January 1 and ending on June 30 (or if on a weekend the preceding trading day) and commencing on July 1.1 and ending on December 31 (or if on a weekend the preceding trading day) of each year. At the end of each offering period, participant contributions are used to purchase a number of shares of common stockCommon Stock (subject to IRS limits), in an amount equal to 85% of the fair market value of the common stockCommon Stock on the last day of each offering period. An employee who elects to participate in the ESPP will have payroll deductions made on each payday during the six-month period.
During 2017,2022, Ms. Bamford and Messrs. Quinly,Farkas, Ferdenzi, and JakubowitzWatts participated in the ESPP, purchasing 203, 245144, 168, 172, and 25086 shares of Common Stock under the plan, respectively. These share purchases are equivalent to the maximum annual contribution limit under the plan for each participating executive.
Executive Deferred Compensation Plan
The NEOs (except Mr. Adams who retired as Executive Chairman of the Company effective May 5, 2022) are also eligible to participate in the Company’s non-qualified executive deferred compensation plan that allows participants to defer compensation in excess of certain statutory limits that apply to traditional and 401(k) pensionqualified retirement plans. Each participant may defer up to 25% of their base salary; 50% of their annual performance bonus; and 50% of the cash portion of their long-term cash award. The rate of interest is determined each year according to the average rate on 30-year Treasury bonds for November of the previous calendar year, plus 2.0%. Thus, the rate fluctuates annually. The average 30-year Treasury bond rate for November 20162021 was 2.86%1.94% and money in the Plan earned 4.86%3.94% for 2017.2022. Earnings begin accruing upon deposit and are compounded daily. Earnings are posted to the participants account on the final day of each month.See “Deferred“Deferred Compensation Plans” section on page 64 in this Proxy Statement. In 2017, the following NEOs2022, Ms. Bamford and Mr. Ferdenzi participated in the executive deferred compensation plan: Messrs. Adams, Tynan, Quinly, and Ferdenzi.plan. Mr. Adams did not defer any compensation in 2017, but continued to accrue interest in the plan onhas made deferrals in prior years.years while an employee of the Company and continues to earn interest under the plan.
Pension Plans
The NEOs (except Mr. Rayment1) also participate in the Curtiss-Wright Corporation Retirement Plan (“Retirement(the “Retirement Plan”) and the Curtiss-Wright Corporation Retirement Benefits Restoration Plan.Plan (the “Restoration Plan”). This is consistent with the Company’s philosophy that compensation should promote the long-term retention and financial health of key executives andits employees and be competitive with industry peers. The Company’s retirement plans integrate other components of the Company’s executive compensation program by generally including base salary and cash incentive compensation in determining retirement plan benefits.
The Retirement Plan is a tax qualified, defined benefit plan made up of two separate benefits: (1) a traditional, final average pay (FAP) formula component (this benefit was closed to new entrants as of February 1, 2010 and has a 15 year15-year sunset period commencing on January 1, 2014) and (2) a cash balance component (this benefit was closed to future participants and pay credits ceased as of January 1, 2014, although interest continues to accrue on accounts). Both plans are non-contributory and employees hired prior to its close participate in one or both of the benefits, including the NEOs.
On September 1, 1994, the Company amended and restated the Retirement Plan, and any benefits accrued as of August 31, 1994 were transferred into the amended Retirement Plan. The Retirement Plan, as amended, provides for an annual benefit at age 65 of 1.5% times the five yearfive-year final average compensation in excess of social security covered compensation, plus 1% of the five yearfive-year final average compensation up to social security covered compensation, in each case multiplied by the participant’s years of service after September 1, 1994, not to exceed 35. Funds contributed to
1 | Mr. Rayment does not participate in the Retirement Plan and the Restoration Plan because he transferred from the United Kingdom to the United States after those plans were closed to new entrants. |
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the Cash Balance portion of the Plan before it was frozen are credited to a notional cash balance account that grows with interest based on the rates each December for 30-Year Treasury Bonds.
As of January 1, 2015, no NEO had accrued any pension benefits prior to the plan merger in 1994: Mr. Adams, Ms. Bamford, Mr. Tynan,Farkas, Mr. Ferdenzi, Mr. Quinly, and Mr. JakubowitzWatts commenced their employment with the Company after September 1, 1994, and therefore did not accrue a monthly pension under the Retirement Plan prior to September 1, 1994; however, theyall NEOs (except Mr. Adams2 who retired as Executive Chairman of the Company effective May 5, 2022) continue to accrue a
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benefit under the amended Retirement Plan. The Company maintains an unfunded, non-qualified Retirement Benefitsdefined benefit Restoration Plan (the “Restoration Plan”) under which participants in the Retirement Plan whose compensation or benefits exceed the limits imposed by I.R.C. Sections 401(a) (17) and 415 will receive a supplemental retirement benefit that restores the amount that would have been payable under the Retirement Plan except for the application of such limits.
Since the Company provides a traditional final average pay benefit under the Retirement Plan to Ms. Bamford and Messrs. Adams, Farkas, Ferdenzi, and Watts, the Company did not offer any Company-source contributions to these NEO’s under the Company’s 401(k) savings Plan. Because Mr. Rayment transferred to the United States after the FAP component of the Retirement Plan was closed to new entrants, he is eligible for employer matching contributions of 50% on 8% contributed to the Curtiss-Wright Savings and Investment Plan (the “S&I Plan”). The S&I Plan does not match contributions above 8%. Effective January 1, 2014, the S&I Plan provides a 3% non-elective contribution to all non-union, full-time domestic employees hired on or after February 1, 2010 that do not participate in the Retirement Plan.
The Company maintains an unfunded, non-qualified defined contribution Restoration Plan under which participants in the S&I Plan whose compensation or benefits exceed the limits imposed by I.R.C. Sections 401(a) (17) and 415 will receive a supplemental retirement benefit that restores the 3% non-elective contribution amount that would have been payable under the S&I Plan except for the application of such limits.
Since the Restoration Plan benefits are not funded, in the event of a change in control,change-in-control, the Company has agreed to fund a Rabbi Trust in place through an agreement between the Company and PNC Bank, N.A., dated January 30, 1998, which provides for the payment of the Company’s obligation under the Restoration Plan.
SinceNEO’s (except for Mr. Adams who retired as Executive Chairman of the Company provided a traditional final average pay benefit under the Retirement Plan, the Company did not offer any Company-source contributions to NEO’s under the Company’s 401(k) savings Plan. However, NEO’seffective May 5, 2022) can elect to defer up to 75% of their own annual cash compensation per year on a tax-deferred basis subject to the IRS Elective Deferral limit within the Company’s 401(k) savings Plan. For 2017,2022, the combined pre-tax and Roth contribution limit was 9.0%, and the after-tax Plan contribution limit for a highly compensated employee was limited to 2.0%3.0%.
Executive Perquisites
In addition to the standard benefit plans offered to all employees, the NEOs (except for Mr. Adams who retired as Executive Chairman of the Company effective May 5, 2022) are eligible for a conservative levellimited number of executive perquisites, well within market practices.perquisites. Perquisites include financial planning and income tax preparation, a Company automobile or automobile allowance, and executive physicals for the executive and his or her spouse. TheWith the assistance of the Committee’s independent compensation consultant, the Committee and outside Consultant have agreedhas determined that the overall level of perquisites the Company provides to its NEOs is reasonable and consistent with that of its peers.
Limited Use of Retention Agreement
2 | In 2022, Mr. Adams received lump sum payments under the qualified and non-qualified defined benefit pension plans. |
On April 1, 2013, the Company entered into a restricted stock unit agreement with Mr. Quinly. Mr. Quinly received a grant of 28,818 restricted stock units pursuant to the terms and conditions of the LTIP. Each unit is the equivalent of one share of Curtiss-Wright Common Stock, the equivalent of $1,000,000 in value as of the closing price of Curtiss-Wright’s Common Stock on April 1, 2013, the date the Board of Directors approved the material terms of the agreement to be offered to Mr. Quinly. The agreement provides for the entire grant to vest on April 1, 2021 (eight years from the date the agreement was executed), provided that Mr. Quinly does not voluntarily leave the employ of Curtiss-Wright or Mr. Quinly is not otherwise terminated for any reason by the Company. On or prior to December 31, 2020, Mr. Quinly may elect to convert said stock units to an equivalent number of shares of Curtiss-Wright Common Stock or defer the conversion of the stock units in accordance with Section 409A of the Internal Revenue Code for a period not greater than five (5) years. The agreement also provides immediate vesting and conversion of the stock units upon Mr. Quinly’s death or disability and in the event of a Change in Control of Curtiss-Wright. The agreement has been approved by the Committee and is intended to retain Mr. Quinly to maintain operational continuity through 2021.54
Policies concerning equity-based and other long-term incentive compensation
Equity Ownership and Other Requirements for Senior Executives
To further align the linkage between the interests of the NEOs and those of its stockholders, the Company requires the CEO and all other NEOs (except for Mr. Adams who retired as Executive Chairman of the Company effective May 5, 2022) to own Company stock denominated as a multiple of their annual salaries as follows: five times annual salary for the CEO, and three times annual salary for NEOs that directly report to the CEO, and two times annual salary for all other NEOs.
All share-based long-term incentive plan grants, including any vested stock options (post-2005 grants), are subject to the Guidelines, and 50% of the net proceeds of a stock based grant vested or exercised (current market value of shares less the strike price) must be retained in Company stock. There is no fixed timeframe to achieve the Guidelines. However, until the Guidelines are satisfied, the NEO is only permitted to sell 50% of the valuevesting award to cover the NEO’s income tax obligations. Once the
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ownership thresholds are fully met and maintained, the holding limits are removed on any and all earned and vested shares above the ownership guideline.
Clawback Policy
In the event the amount of any incentive compensation award is based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, or if a participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 and has committed an offense subject to forfeiture under such statute, the participant must reimburse the Company that portion of the incentive compensation award that was based on the inaccurate data or as provided for in such statute.
Prohibition of Insider Trading, Hedging, and Pledging
The Company also maintains an insider trading policy for all its employees including(including the NEOs and other officers) and members of the Board of Directors. Directors that prohibits the purchase or sale of Company equity securities while being aware of material, non-public information about the Company as well as the disclosure of such information to others who may trade in equity securities of the Company.
The policy specificallyCompany’s Code of Conduct prohibits all employees (including the NEOs and other officers) from purchasing, selling or otherwise utilizing financial instruments, including but not limited to, prepaid variable forward contracts, instruments for the short sale or purchase or sale of call or put options, equity swaps, collars, or units of exchangeable funds, that are designed to or that may reasonably be expected to have the effect of hedging or offsetting a change in the market price of the Company’s equity securities.
Additionally, the Company’s 2014 Omnibus Incentive Plan prohibits members of the Board of Directors and all employees (including the NEOs and other officers) from engaging in any transaction in which they may profitthe following transactions with respect to Company equity securities from short-term speculative swings inawards under the value of the Company’s securities or those securities of any targeted acquisitions. This includes “short sales” (selling borrowed securities that the seller hopes can be purchased at a lower price in the future) or “short sales against the box” (selling owned, but not delivered securities), and hedging transactions such as zero-cost collars and forward sale contracts.plan:
• | purchasing, selling, or otherwise utilizing financial instruments, including but not limited to, prepaid variable forward contracts, instruments for the short sale or purchase or sale of call or put options, equity swaps, collars, or units of exchangeable funds, that are designed to or that may reasonably be expected to have the effect of hedging or offsetting a change in the market price of Company equity securities; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | pledging Company equity securities (including holding Company equity securities in a margin account or otherwise pledging Company equity securities as collateral for a loan). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Policies
Use of Tax Gross-up
The Company’s existingCompany does not have any NEO Change-in-Control agreements (except for Messrs. Quinlywith tax gross-ups and Ferdenzi who became executive officers after 2008) provide fordoes not expect to enter into any new agreements containing such a supplemental cash paymentprovision.
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Tax Deductibility
Prior to the extent necessary to preserve the level of benefits in the event of the imposition of excise taxes payable by a participant in respect of“excess parachute payments” under Section 280G of the Internal Revenue Code. The Company has not entered into a new agreement that includes tax gross-ups since 2008Tax Cuts and is committed to excluding this provision in any future agreements.
Tax Deductibility
Jobs Act, Section 162(m) of the Internal Revenue Code generally disallowsdisallowed a tax deduction to public corporations for compensation over $1,000,000 paid for any fiscal year to the Company’s CEO and up to three other executive officers other than the CFO. However, certain performance-based compensation iswas exempt from the deduction limit if specific requirements arewere met. The Committee intends to structurestructured awards to executive officers under the Company’s MICPICP and equity awards program to qualify for this exemption. However, the 162(m) exception to the deduction limit for performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered executive officers, including the CFO, in excess of $1,000,000 will not be deductible unless it qualifies for transition relief applicabledeductible. Qualifying compensation that the Company pays pursuant to certain arrangementsa binding contract that was in place as ofeffect on November 2, 2017.
Because of ambiguities2017 and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, including the uncertain scope of the transition relief under the legislation repealing Section 162(m)’s exception to the deduction limit for performance-based compensation, no assurance can be givenis not materially modified after that compensation intended to satisfy the requirements for exception from the Section 162(m) deduction limitdate will in fact, satisfy the exception. Further, the Committee reserves the right to modify compensation that was initially intendedcontinue to be exempt from the deduction limit under a grandfathering rule. While the Company will continue to monitor its compensation programs in light of Section 162(m), as amended, the Committee considers it important to retain the flexibility to design compensation programs that are in the best long-term interests of the Company and its stockholders. As a result, the Committee will continue to take into account the tax and accounting implications (including with respect to the expected lack of deductibility under the revised Section 162(m)) when making compensation decisions, but reserves its right to make compensation decisions based on other factors as well if the Committee determines it determinesis in its best interests to do so. Accordingly, the Company may pay compensation at levels that such modifications are consistent with the Company’s business needs.not deductible under Section 162(m).
The following report of the Executive Compensation Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing
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under the Securities Act or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report by reference therein.
Executive Compensation Committee Report
The Executive Compensation Committee has reviewed and discussed this CD&A (included in this Proxy Statement) with Management. Based upon the Executive Compensation Committee’s review and discussions referred to above, the Executive Compensation Committee recommended that the Board of Directors include this CD&A in the Company’s Proxy Statement for the year ended December 31, 2017,2022, filed with the Securities and Exchange Commission.
EXECUTIVE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS | ||
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S. Marce Fuller,Chairperson |
Risk Consideration in the Overall Compensation Program for 20172022
In 2017,2022, the Executive Compensation Committee, with the assistance of Management and the oversight of FW Cook, assessed the Company’s executive and broad-based compensation and benefits programs to determine if the programs’ provisions and operations create undesired or unintentional risk of a material nature. The Executive Compensation Committee concluded in this risk assessment that these programs have been designed and administered in a manner that discourages undue risk-taking by employees, including a number of features of the programs that are designed to mitigate risk, including:
• | Limits on annual and long-term performance awards, thereby defining and capping potential payouts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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• | Proportionately greater award opportunity derived from the long-term incentive program compared to annual incentive plan, creating a greater focus on sustained Company performance over time, and providing alignment with shareholder interests | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Use of three distinct long-term equity incentive vehicles—restricted stock units, long-term cash-based performance units, and performance shares—that vest over | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Use of balanced measures, including top and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Stock ownership guidelines for senior executives that ensure alignment with stockholder interests over the long term | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Incorporation of an individual performance score, ranging from one 1.0 to five 5.0, as a key factor in the total annual incentive calculation, thereby enabling the Committee to direct a zero payout for the 20% individual-performance component to any executive in any year if the individual executive is deemed to have sufficiently poor performance or is found to have engaged in activities that pose a financial, operational or other undue risk to the Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | A formal clawback policy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Pre-determined commission schedules on sales representatives, thereby defining potential commission payouts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the foregoing reasons, the Committee has concluded that the Company’s compensation policies and practices do not encourage excessive and unnecessary risk-taking, and that the level of risk is appropriate for the best interests of stockholders.
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Post-Employment Agreements
Severance Agreements
The Company has At-will severance agreements with Ms. Bamford and Messrs. Adams, Tynan, Quinly,Rayment, Farkas, Ferdenzi, and Jakubowitz.Watts. Mr. Adams no longer has an At-will severance agreement because he retired as Executive Chairman of the Company effective May 5, 2022. In the case of involuntary termination of employment other than termination for cause (as defined in the agreements), failure to comply with the terms and conditions of the agreement, voluntary resignation of employment by the employee, and voluntary retirement by the employee, these agreements provide in the case of Mr. AdamsMs. Bamford two years’ base salary and annual target bonus as the payment of severance pay, and, in the case of all other NEOs,Messrs. Rayment, Farkas, Ferdenzi and Watts, the equivalent of one year’s base salary and annual target bonus to be paid at the time of termination, as well as the continued availability of certain employee health and welfare benefits for a minimum period of one year following termination. The agreements provide that such pay and benefits also would be made available in the case of voluntary retirement or termination of employment that is the direct result of a significant change in the terms or conditions of employment, including a reduction in compensation or job responsibilities. At the employee’s option, the severance pay may be received over the two-year period following termination, in which case the employee benefits would continue in effect for the same period. The agreements further provide that the payment of severance pay and the availability of benefits are contingent upon a number of conditions, including the employee’s performance of his or her obligations pursuant to the agreement, specifically to provide consulting services, release the Company from any employment related claims, and not compete with the Company for a period of 12 months.
Change-in-Control Agreements
The Company has Change-in-Control severance protection agreements with Ms. Bamford and Messrs. Adams, Tynan, Quinly,Rayment, Farkas, Ferdenzi, and Jakubowitz.Watts. Mr. Adams no longer has a Change-in-Control severance protection agreement because he retired as Executive Chairman of the Company effective May 5, 2022. The agreementsagreement with Messrs. Adams, Tynan, and Quinly, provideMs. Bamford provides for payment of severance pay equal to three times while Mr.Messrs. Rayment, Farkas, Ferdenzi, and Mr. Jakubowitz provideWatts provides for two and one-half times the sum of the executive’s base salary and the greater of (i) the annual target incentive grant in the year the executive is terminated or (ii) the annual incentive paid under the annual incentive plan immediately
57
prior to the executive’s termination. These amounts shall be paid in a single lump sum cash payment within ten (10) days after the executive’s termination date. The agreements also call for the continued availability of certain employee benefits for a period of two to three years following termination of employment.
All agreements have a double trigger, i.e., severance may be paid in the event that (1) there is a change-in-control of the Company, as that term is defined in the agreements, and (2) the covered executive’s employment is formally or constructively terminated by the Company within twenty-four months following the change-in-control. Accordingly, if the Company terminates the employment without “cause” of an NEO during the two-year period following a change-in-control, or if the NEO terminates the NEO’s employment with the Company with “good reason,” then the NEO is entitled to certain compensation and benefits provided for in the agreement. The agreements define “cause” as (a) a conviction of a felony, (b) intentionally engaging in illegal or willful misconduct that demonstrably and materially injures the Company, or (c) intentional and continual failure to substantially perform assigned duties which failure continues after written notice and a 30-day cure period. The agreements also define “good reason” as (a) adverse change in status, title, position, or responsibilities, (b) reduction in salary, (c) relocation of more than 25 miles, (d) the Company’s failure to pay the covered individual in accordance with its compensation policies; or (e) a reduction in benefits. TheAll NEO agreements for all NEOs except Messrs. Quinly and Ferdenzi are “grandfathered” to renew automatically each year.must be renewed on an annual basis by the Executive Compensation Committee. Consistent with best practices, all future executive officer change-in-control agreements elected as executive officers after January 1, 2008, must be approved and renewed annually by the Executive Compensation Committee.
Pay Ratio Disclosure Rule58
In August 2015, pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the
36
principal executive officer (“PEO”). The Company’s PEO is David C. Adams. Registrants must comply with the pay ratio rule for the first fiscal year beginning on or after January 1, 2017. The Committee does not use this ratio as it considers appropriate compensation for the PEO. Management does not use this ratio when determining compensation for the rest of the workforce.EXECUTIVE COMPENSATION
The Company identified the median employee by utilizing base salary as of December 1, 2017 and adding any target bonus to that amount, for all individuals, excluding the PEO, who were employed by the Company on December 1, 2017, the last day of the Company’s payroll year (whether employed on a full-time, part-time, or seasonal basis). In addition, the Company also excluded all independent contractors. The Company further converted all other currencies to U.S. dollars as of December 1, 2017, irrespective of currency fluctuations over the course of the year. Finally, the Company elected to use thede minimis exemption for non-U.S. employees to exclude 4.2% of the Company’s non-U.S. employees. The list of jurisdictions for which these employees are excluded, the approximate number of employees excluded from each jurisdiction, the total number of U.S. and non-U.S. employees irrespective of any exemption (data privacy orde minimis), and the total number of U.S. and non-U.S. employees used for thede minimis calculation are set forth in the table below.
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Jurisdictions | Approximate Number | Total Number of U.S. | Total Number of U.S. | ||||||||||||||||||
France | 72 | 8,901 | 8,901 | ||||||||||||||||||
India |
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| 82 |
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Costa Rica | 66 | ||||||||||||||||||||
Sweden |
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| 50 |
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Singapore | 37 | ||||||||||||||||||||
Spain |
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| 14 |
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Portugal | 19 | ||||||||||||||||||||
Netherlands |
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| 8 |
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Belgium | 9 | ||||||||||||||||||||
Brazil |
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| 5 |
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Taiwan | 5 | ||||||||||||||||||||
Korea |
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| 5 |
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Austria | 1 | ||||||||||||||||||||
Hong Kong |
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| 1 |
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After identifying the median employee, the Company calculated annual total compensation for such employee using the same methodology the Company uses for the named executive officers as set forth in the 2017 Summary Compensation Table in this Proxy Statement. The total compensation amount for the median employee for 2017 was determined to be $56,200. This total compensation amount was then compared to the total compensation of the PEO disclosed in the Summary Compensation Table, of $5,546,130. Based on this information for 2017, the ratio of the PEO’s annual total compensation to the annual total compensation of the median employee was 99:1.
As discussed above in the CD&A, the Company changed the timing of grants of the long-term incentives from November to March of each year, beginning in March of 2018. Accordingly, the PEO was not granted any long-term incentives for 2017, but it is expected in March 2018. As a result, the PEO’s total annual compensation for 2017 and resulting pay ratio compared to the median employee is artificially low. Assuming long-term incentives were granted in November 2017 based on historical grant practices, the resulting ratio of the PEO’s annual total compensation to the annual total compensation of the median employee for fiscal year 2017 would have been approximately 136:1. The Company fully expects the PEO pay ratio for 2018 to be in-line with that ratio as long-term incentives are expected to be granted in March 2018.
37
The following table shows thepotentialincremental value transfer to the NEOs under various employment related scenarios.
Potential Post-Employment Payment
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Termination Scenario | David C. Adams | Glenn E. Tynan | Thomas P. Quinly | Paul J. Ferdenzi | Harry S. Jakubowitz | ||||||||||||||||||||||||||||||
If Retirement or Voluntary Termination Occurred on December 31, 2017 (a) (b) | $ | 7,886,619 | $ | 1,837,206 | $ | 2,263,322 | $ | 0 | $ | 522,142 | |||||||||||||||||||||||||
If Termination for Cause Occurred on December 31, 2017 (c) |
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| $ |
| 0 |
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| $ |
| 404,743 |
|
| $ |
| 577,590 |
|
| $ |
| 0 |
|
| $ |
| 0 | ||||||||||
If Termination Without Cause Occurred on December 31, 2017 (d) | $ | 13,905,644 | $ | 3,163,709 | $ | 3,743,266 | $ | 703,890 | $ | 1,021,048 | |||||||||||||||||||||||||
If “Change In Control” Termination Occurred on December 31, 2017 (e) |
|
| $ |
| 18,466,477 |
|
| $ |
| 7,039,529 |
|
| $ |
| 10,075,709 |
|
| $ |
| 3,696,024 |
|
| $ |
| 2,388,918 | ||||||||||
If Death Occurred on December 31, 2017 (f)(g) | $ | 8,686,620 | $ | 2,942,229 | $ | 5,568,983 | $ | 1,782,911 | $ | 1,099,142 | |||||||||||||||||||||||||
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38
The following table sets forth information concerning the total compensation of the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and the other NEOs of the Company who had the highest aggregate total compensation for the Company’s fiscal year ended December 31, 2017.2022.
For Ms. Bamford and the other NEOs, the amounts shown under the column “Total” are not reflective of the compensation that was awarded to Ms. Bamford and the other NEOs in fiscal year 2022. These amounts include the change in the actuarial present value of Ms. Bamford’s and the other NEOs retirement benefits shown under column “Change in Pension Value and Non-Qualified Deferred Compensation Earnings”. The pension values for fiscal year 2022 reflect the impact of changes in interest rates on actuarial present value calculations.
Summary Compensation Table
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Name and | Year | Salary | Bonus | Stock Awards ($) | Option | Non-Equity Incentive Plan Compensation | Change in | All Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance | Restricted | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual | Long-Term | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David C. Adams – | 2017 | $ | 925,000 | — | — | — | — | $ | 1,654,039 | $ | 933,300 | $ | 1,996,954 | $ | 36,835 | $ | 5,546,128 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chairman and Chief | 2016 | $ | 915,385 | — | $ | 1,202,500 | $ | 901,875 | — | $ | 1,584,943 | $ | 607,500 | $ | 2,076,300 | $ | 39,396 | $ | 7,327,899 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Officer | 2015 | $ | 900,000 | — | $ | 1,170,000 | $ | 877,500 | — | $ | 1,286,145 | $ | 546,128 | $ | 1,401,557 | $ | 48,656 | $ | 6,229,986 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Glenn E. Tynan – |
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| 2017 |
|
| $ |
| 554,812 | — | — | — |
|
| — |
|
| $ |
| 696,150 |
|
| $ |
| 367,598 |
|
| $ |
| 773,096 |
|
| $ |
| 37,354 |
|
| $ |
| 2,429,010 | ||||||||||||||||||||||||||||||||||||||
Vice President and Chief |
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| 2016 |
|
| $ |
| 542,900 | — |
|
| $ |
| 412,604 |
|
| $ |
| 309,453 |
|
| — |
|
| $ |
| 671,432 |
|
| $ |
| 286,935 |
|
| $ |
| 850,893 |
|
| $ |
| 38,583 |
|
| $ |
| 3,112,800 | ||||||||||||||||||||||||||||||
Financial Officer |
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| 2015 |
|
| $ |
| 542,900 | — |
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| $ |
| 412,604 |
|
| $ |
| 309,453 |
|
| — |
|
| $ |
| 554,165 |
|
| $ |
| 335,714 |
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| $ |
| 541,031 |
|
| $ |
| 58,387 |
|
| $ |
| 2,754,254 | ||||||||||||||||||||||||||||||
Thomas P. Quinly – | 2017 | $ | 625,000 | — | — | — | — | $ | 793,594 | $ | 439,200 | $ | 768,731 | $ | 25,189 | $ | 2,651,714 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vice President and Chief | 2016 | $ | 615,385 | $ | 65,000 | $ | 500,000 | $ | 375,000 | — | $ | 761,076 | $ | 239,400 | $ | 766,691 | $ | 19,201 | $ | 3,341,753 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Officer | 2015 | $ | 600,000 | — | $ | 480,000 | $ | 360,000 | — | $ | 621,450 | $ | 293,664 | $ | 494,908 | $ | 34,446 | $ | 2,884,468 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paul J. Ferdenzi – |
|
| 2017 |
|
| $ |
| 426,600 | — | — | — |
|
| — |
|
| $ |
| 477,771 |
|
| $ |
| 171,288 |
|
| $ |
| 555,625 |
|
| $ |
| 30,245 |
|
| $ |
| 1,661,529 | ||||||||||||||||||||||||||||||||||||||
Vice President, General |
|
| 2016 |
|
| $ |
| 421,823 | — |
|
| $ |
| 221,832 |
|
| $ |
| 166,374 |
|
| — |
|
| $ |
| 441,164 |
|
| $ |
| 94,500 |
|
| $ |
| 555,356 |
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| $ |
| 27,990 |
|
| $ |
| 1,929,039 | ||||||||||||||||||||||||||||||
Counsel, and Corporate |
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| 2015 |
|
| $ |
| 404,880 | — |
|
| $ |
| 215,374 |
|
| $ |
| 161,530 |
|
| — |
|
| $ |
| 359,000 |
|
| $ |
| 110,565 |
|
| $ |
| 300,373 |
|
| $ |
| 30,319 |
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| $ |
| 1,582,041 | ||||||||||||||||||||||||||||||
Secretary |
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Harry S. Jakubowitz – | 2017 | $ | 286,138 | — | — | — | — | $ | 215,419 | $ | 66,612 | $ | 201,220 | $ | 28,812 | $ | 798,201 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vice President and | 2016 | $ | 280,000 | — | $ | 78,400 | $ | 58,800 | — | $ | 207,774 | $ | 51,188 | $ | 278,813 | $ | 26,791 | $ | 981,766 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasurer | 2015 | $ | 278,923 | $ | 8,400 | $ | 78,400 | $ | 58,800 | — | $ | 167,706 | $ | 59,890 | $ | 214,867 | $ | 30,399 | $ | 897,385 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Awards ($) | Non-Equity Incentive | Change in Pension Value and Nonqualified | |||||||||||||||||||||||||||||||||||||||||
| Performance | Restricted | Plan Compensation | Deferred | All Other | |||||||||||||||||||||||||||||||||||||||
| Name and Principal Position | Year | Salary (a) | Bonus | Share Units (b) | Stock Units (c) | Option Awards | Annual Plan (d) | Long-Term Plan (e) | Compensation Earnings (f) | Compensation (g) | Total (h) | ||||||||||||||||||||||||||||||||
| Lynn M. Bamford – Chair and Chief Executive Officer | 2022 | $ | 917,692 | $ | 0 | $ | 1,394,984 | $ | 1,046,275 | $ | 0 | $ | 843,975 | $ | 111,228 | $ | 110,837 | $ | 37,707 | $ | 4,462,698 | ||||||||||||||||||||||
| 2021 | $ | 843,654 | $ | 0 | $ | 935,000 | $ | 701,250 | $ | 0 | $ | 1,291,150 | $ | 45,291 | $ | 639,485 | $ | 35,981 | $ | 4,491,811 | |||||||||||||||||||||||
| David C. Adams – Former Executive Chairman (i) | 2022 | $ | 375,577 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 455,400 | $ | 657,215 | $ | 15,781,893 | $ | 17,270,085 | ||||||||||||||||||||||
| 2021 | $ | 1,050,000 | $ | 0 | $ | 1,050,013 | $ | 0 | $ | 0 | $ | 1,754,445 | $ | 193,050 | $ | 0 | $ | 25,910 | $ | 4,073,418 | |||||||||||||||||||||||
| 2020 | $ | 1,080,769 | $ | 0 | $ | 1,319,964 | $ | 990,014 | $ | 0 | $ | 866,250 | $ | 1,163,003 | $ | 3,461,735 | $ | 40,383 | $ | 8,922,118 | |||||||||||||||||||||||
| Kevin M. Rayment – Vice President and Chief Operating Officer | 2022 | $ | 592,308 | $ | 0 | $ | 515,994 | $ | 386,958 | $ | 0 | $ | 367,200 | $ | 102,672 | $ | 0 | $ | 71,114 | $ | 2,036,246 | ||||||||||||||||||||||
| 2021 | $ | 548,654 | $ | 0 | $ | 439,979 | $ | 330,014 | $ | 0 | $ | 626,588 | $ | 37,200 | $ | 0 | $ | 66,404 | $ | 2,048,839 | |||||||||||||||||||||||
| K. Christopher Farkas – Vice President and Chief Financial Officer | 2022 | $ | 542,308 | $ | 0 | $ | 439,941 | $ | 329,956 | $ | 0 | $ | 341,000 | $ | 75,348 | $ | 0 | $ | 29,694 | $ | 1,758,247 | ||||||||||||||||||||||
| 2021 | $ | 496,154 | $ | 0 | $ | 284,947 | $ | 963,800 | $ | 0 | $ | 531,650 | $ | 21,450 | $ | 228,358 | $ | 30,375 | $ | 2,556,734 | |||||||||||||||||||||||
| 2020 | $ | 463,571 | $ | 0 | $ | 218,398 | $ | 163,819 | $ | 0 | $ | 213,750 | $ | 123,825 | $ | 527,328 | $ | 78,925 | $ | 1,789,616 | |||||||||||||||||||||||
| Paul J. Ferdenzi – Vice President, General Counsel, and Corporate Secretary | 2022 | $ | 512,692 | $ | 0 | $ | 319,240 | $ | 239,467 | $ | 0 | $ | 272,178 | $ | 100,597 | $ | 0 | $ | 24,143 | $ | 1,468,317 | ||||||||||||||||||||||
| 2021 | $ | 497,692 | $ | 0 | $ | 300,690 | $ | 975,578 | $ | 0 | $ | 493,675 | $ | 41,655 | $ | 0 | $ | 25,886 | $ | 2,335,176 | |||||||||||||||||||||||
| 2020 | $ | 500,827 | $ | 0 | $ | 291,555 | $ | 218,728 | $ | 0 | $ | 236,438 | $ | 211,295 | $ | 1,408,152 | $ | 31,213 | $ | 2,898,208 | |||||||||||||||||||||||
| John C. Watts – Vice President, Strategy and Corporate Development | 2022 | $ | 362,881 | $ | 0 | $ | 111,027 | $ | 83,196 | $ | 0 | $ | 139,675 | $ | 25,834 | $ | 0 | $ | 18,021 | $ | 740,634 | ||||||||||||||||||||||
(a) | Includes amounts deferred under the Company’s Savings and Investment Plan and Executive Deferred Compensation Plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) |
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| Includes payments made based on the Company’s annual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Includes the maturity of cash-based performance unit grants made under the Company’s Long-Term Incentive Plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
59
| Represents annual change in the actuarial accumulated present value (APV) of accumulated pension benefits. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
39
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| Includes personal use of company car, payments for executive physicals, financial counseling, premium payments for executive life insurance paid by the Company during the covered fiscal year for term life insurance and accidental death and disability insurance. Also includes 2022 Company contributions from the qualified contribution plan for Mr. Rayment and a lump sum distribution of $15,752,628 from the Curtiss-Wright Corporation Retirement Benefits Restoration Plan for Mr. Adams. In fiscal year 2021, the Company paid $29,164 to cover the tax filings related to Mr. Rayment’s transfer from United Kingdom to the United States. Such amount for Mr. Rayment was inadvertently not reported in last year’s Proxy Statement. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(h) | Amounts are rounded to the nearest dollar. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(i) | Mr. Adams retired as Executive Chairman of the Company effective May 5, 2022 and continued as a member of the Board of Directors. Mr. Adams was no longer an employee of the Company after such date. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company’s executive officers are not employed through formal employment agreements. It is the philosophy of the Committee to promote a competitive at-will employment environment, which would be impaired by lengthy employment arrangements. The Committee provides proper long-term compensation incentives with competitive salaries and bonuses to ensure that senior management remains actively and productively employed with the Company.
The Company believes perquisites for executive officers should be limited in scope and value and aligned with peer group practices as described earlier. As a result, the Company has historically given nominal perquisites. The below table generally illustrates the perquisites the Company provides to its NEOs.
The Company also maintains a policy concerning executive automobiles under which certain officers of the Company are eligible to use Company leased automobiles or receive an equivalent automobile allowance. The NEOs participate in this program. The Company maintains the service and insurance on Company leased automobiles. In addition to the Company automobile policy, the Company also provides all executive officers with financial planning and tax preparation services through The Ayco Company, LP and PricewaterhouseCoopers LLP.Ernst & Young Americas LLC. Not all executive officers utilize these services on an annual basis. Finally, all executive officers and their spouses are provided annual physicals through the Mayo Clinic at any one of the clinic’s three locations.
Perquisites and Benefits
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Name | Automobile (a) | Financial | Executive |
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David C. Adams | $ | 19,197 | $ | 10,080 | $ | 2,124 |
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Glenn E. Tynan |
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| $ |
| 20,980 |
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| $ |
| 13,024 |
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| $ |
| 0 |
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| ||||||
Thomas P. Quinly | $ | 7,864 | $ | 12,000 | $ | 1,975 |
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Paul J. Ferdenzi |
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| $ |
| 13,319 |
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| $ |
| 12,000 |
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| $ |
| 3,477 |
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Harry S. Jakubowitz | $ | 13,528 | $ | 10,000 | $ | 480 |
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Name | Automobile (a) | Financial | Executive
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Lynn M. Bamford | $ | 20,609 | $ | 13,165 | $ | 0 | |||||||
David C. Adams |
|
| $ | 10,389 |
| $ | 12,000 |
| $ | 3,491 | |||
Kevin M. Rayment | $ | 16,605 | $ | 27,298 | $ | 4,084 | |||||||
K. Christopher Farkas |
|
| $ | 13,328 |
| $ | 13,165 |
| $ | 921 | |||
Paul J. Ferdenzi | $ | 12,438 | $ | 8,620 | $ | 573 | |||||||
John C. Watts |
|
| $ | 9,600 |
| $ | 6,560 |
| $ | 0 | |||
(a) | Represents the personal use of Company-leased | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company’s executive officers are entitled to receive medical benefits, life and disability insurance benefits, and to participate in the Company’s Savings and Investment Plan, Defined Benefit Plan, Employee Stock Purchase Plan, flexible spending accounts, and disability plans on the same basis as other full-time employees of the Company. Mr. Rayment does not participate in the U.S. defined benefit plans because he transferred from the United Kingdom to the United States after those plans were closed to new entrants.
60
The Company also offers a nonqualified executive deferred compensation plan, in accordance with Section 409A of the Code, whereby eligible executives, including the NEOs, may elect to defer additional cash compensation on a tax-deferred basis. The deferred compensation accounts are maintained on the Company’s financial statements and accrue interest at the rate of (i) the average annual rate of interest payable on United States Treasury Bonds of 30 years maturity as determined by the Federal Reserve Board, plus (ii) 2%. Earnings are credited to executives’ accounts on a monthly basis.
40
Grants of Plan-Based Awards
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|
|
|
|
|
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|
|
|
|
| ||||||||||||||||||||
Name | Plan | Grant | Estimated Future Payouts Under | Estimated Future | All Other | All Other | Exercise | Grant | ||||||||||||||||||||||||||||||||||||||
Number | Threshold | Target | Max | Threshold | Target | Max | ||||||||||||||||||||||||||||||||||||||||
David C. Adams | MICP (a) | 3/14/2017 | $ | 485,625 | $ | 971,250 | $ | 1,942,500 | ||||||||||||||||||||||||||||||||||||||
Glenn E. Tynan | MICP (a) |
|
| 3/14/2017 |
|
|
|
| $ |
| 209,700 |
|
| $ |
| 419,400 |
|
| $ |
| 838,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Thomas P. Quinly | MICP (a) | 3/14/2017 | $ | 234,375 | $ | 468,750 | $ | 937,500 | ||||||||||||||||||||||||||||||||||||||
Paul J. Ferdenzi | MICP (a) |
|
| 3/14/2017 |
|
|
|
| $ |
| 138,645 |
|
| $ |
| 277,290 |
|
| $ |
| 554,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Harry S. Jakubowitz | MICP (a) | 3/14/2017 | $ | 64,890 | $ | 129,780 | $ | 259,560 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Plan | Grant | Estimated Future Payouts Under | Estimated Future | All Other | All Other | Exercise | Grant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Threshold | Target | Max | Threshold | Target | Max | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lynn M. Bamford | ICP (a) | 3/17/2022 | $ | 511,500 | $ | 1,023,000 | $ | 2,046,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (b) | 3/17/2022 | $ | 1,046,250 | $ | 523,125 | $ | 1,046,250 | $ | 2,092,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (c) | 3/17/2022 | 4,687 | 9,373 | 18,746 | $ | 1,394,984 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (d) | 3/17/2022 | 7,030 | $ | 1,046,275 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David C. Adams (e) | — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — | |||||||||||||||||||||||||||||||||||||||||||||||||
Kevin M. Rayment | ICP (a) | 3/17/2022 | $ | 240,000 | $ | 480,000 | $ | 960,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (b) | 3/17/2022 | $ | 387,000 | $ | 193,500 | $ | 387,000 | $ | 774,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (c) | 3/17/2022 | 1,734 | 3,467 | 6,934 | $ | 515,994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (d) | 3/17/2022 | 2,600 | $ | 386,958 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
K. Christopher Farkas | ICP (a) |
|
| 3/17/2022 |
|
|
|
| $ |
| 220,000 |
|
| $ |
| 440,000 |
|
| $ |
| 880,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (b) |
|
| 3/17/2022 |
|
| $ |
| 330,000 |
|
| $ |
| 165,000 |
|
| $ |
| 330,000 |
|
| $ |
| 660,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (c) |
|
| 3/17/2022 |
|
|
|
|
|
|
|
|
|
| 1,478 |
|
| 2,956 |
|
| 5,912 |
|
|
|
|
|
|
|
| $ |
| 439,941 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (d) |
|
| 3/17/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,217 |
|
|
|
|
|
| $ |
| 329,956 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paul J. Ferdenzi | ICP (a) | 3/17/2022 | $ | 180,250 | $ | 360,500 | $ | 721,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (b) | 3/17/2022 | $ | 239,475 | $ | 119,738 | $ | 239,475 | $ | 478,950 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (c) | 3/17/2022 | 1,073 | 2,145 | 4,290 | $ | 319,240 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (d) | 3/17/2022 | 1,609 | $ | 239,467 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John C. Watts | ICP (a) |
|
| 3/17/2022 |
|
|
|
| $ |
| 92,500 |
|
| $ |
| 185,000 |
|
| $ |
| 370,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (b) |
|
| 3/17/2022 |
|
| $ |
| 83,250 |
|
| $ |
| 41,625 |
|
| $ |
| 83,250 |
|
| $ |
| 166,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (c) |
|
| 3/17/2022 |
|
|
|
|
|
|
|
|
|
| 373 |
|
| 746 |
|
| 1,492 |
|
|
|
|
|
|
|
| $ |
| 111,027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTI (d) |
|
| 3/17/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 559 |
|
|
|
|
|
| $ |
| 83,196 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | Values in this row represent the Company’s annual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) | Values in this row represent annual grants of cash-based performance units made under the Company’s Long-Term Incentive Plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) | Values in this row represent annual grants of performance share units as part of the Company’s Long-Term Incentive Plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) | Values in this row represent annual grants of restricted stock units as part of the Company’s Long-Term Incentive Plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(e) | Mr. Adams retired as Executive Chairman of the Company effective May 5, 2022 and continued as a | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As further discussed inThe NEOs are given dividend credits on their restricted stock unit awards only. These dividends credits are reinvested into the CD&Arestricted stock unit awards and are subject to the same limitations and restrictions as the original restricted stock unit award. The plan specifically prohibits the re-pricing of this Proxy Statement,
61
options and requires that any equity-based grants be issued based on the Company did not make long-term incentive grants (cash-basedclosing price of our Common Stock as reported by the NYSE on the date of the grant.
The Committee granted cash-based performance units, performance share units,shares, and restricted stock units)units in March 2022 to the executive officersNEOs with the exception of Mr. Adams who was not eligible to participate in 2017all Company incentive compensation plans in fiscal year 2022 because he voluntarily retired as an employee of the Committee soughtCompany prior to condensecompletion of the performance periods under the Company’s annual and long-term incentive compensation planning activities into a single timeframe, with a total compensation review thatplans. The cash-based performance units and performance shares units will take placemature in December 2024 and will be paid in early 2025, if the financial goals are attained, and the restricted stock units will vest in March 2025. The values shown in the first quarter each year. Intable reflect the past, long-term incentives were generally granted in Novemberpotential value at a target value of one dollar per unit payable at the year prior toend of the three-year performance cycle. Those grants will now take place in Marchperiod and one stock unit convertible into one share of Common Stock if the objectives are attained. The chart also reflects the fact that each year beginning with March 2018.stock unit may be worth a maximum of approximately two dollars or two shares if all performance targets are substantially exceeded, or nothing at all if performance thresholds are not met.
4162
The following table sets forth the outstanding equity awards of the NEOs. Some of the grants disclosed below are not yet vested and are subject to forfeiture under certain conditions.
Outstanding Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||
Name | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Equity | Option | Option | Number | Market | Equity | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David C. Adams | 17,414 | 0 | 0 | $ | 29.88 | 11/15/2020 |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 14,452 | 1,760,976 | (c) |
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 12,366 | 1,506,797 | 16,488 | 2,009,063 | (d) |
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9,114 | 1,110,541 | 12,153 | 1,480,843 | (e) |
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Glenn E. Tynan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,692 |
|
| 693,570 | (c) |
|
|
| |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| 4,361 |
|
| 531,388 |
|
| 5,815 |
|
| 708,558 | (d) |
|
|
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| 3,127 |
|
| 381,025 |
|
| 4,170 |
|
| 508,115 | (e) |
|
|
| |||||||||||||||||||||||||||||||||||||||
Thomas P. Quinly | 28,818 | 3,511,473 | (b) |
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6,801 | 828,702 | (c) |
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5,073 | 618,145 | 6,764 | 824,193 | (d) |
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,790 | 461,812 | 5,053 | 615,708 | (e) |
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paul J. Ferdenzi |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,652 |
|
| 323,146 | (c) |
|
|
| |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| 2,276 |
|
| 277,331 |
|
| 3,035 |
|
| 369,815 | (d) |
|
|
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| 1,681 |
|
| 204,830 |
|
| 2,242 |
|
| 273,188 | (e) |
|
|
| |||||||||||||||||||||||||||||||||||||||
Harry S. Jakubowitz | 1,031 | 125,627 | (c) |
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 829 | 101,014 | 1,105 | 134,644 | (d) |
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 594 | 72,379 | 792 | 96,505 | (e) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||
Name | Stock Awards | |||||||||||||||
Number of | Market | Equity | Equity | |||||||||||||
Lynn M. Bamford | 8,609 | 1,437,617 | (e) | |||||||||||||
| 2,928 | 488,947 | 3,905 | $ | 652,096 | (b) | ||||||||||
| 5,835 | 974,387 | 7,780 | $ | 1,299,182 | (c) | ||||||||||
| 7,030 | 11,173,940 | 9,373 | $ | 1,565,197 | (d) | ||||||||||
David C. Adams |
|
| 11,990 | 2,002,210 | 15,986 |
|
| $ | 2,669,502 | (b) | ||||||
|
|
|
|
|
|
| 8,737 |
|
| $ | 1,458,992 | (c) | ||||
Kevin M. Rayment | 8,609 | 1,437,617 | (e) | |||||||||||||
| 2,703 | 451,374 | 3,604 | $ | 601,832 | (b) | ||||||||||
| 2,746 | 458,555 | 3,661 | $ | 611,350 | (c) | ||||||||||
| 2,600 | 434,174 | 3,467 | $ | 578,954 | (d) | ||||||||||
K. Christopher Farkas |
|
| 1,984 | 331,308 | 2,645 |
|
| $ | 441,689 | (b) | ||||||
|
|
| 1,779 | 297,075 | 2,371 |
|
| $ | 395,933 | (c) | ||||||
|
|
| 5,660 | 945,163 | (e) |
|
| |||||||||
|
|
| 2,217 | 370,217 | 2,956 |
|
| $ | 493,622 | (d) | ||||||
Paul J. Ferdenzi | 2,649 | 442,357 | 3,531 | $ | 589,642 | (b) | ||||||||||
| 1,877 | 313,440 | 2,502 | $ | 417,809 | (c) | ||||||||||
| 5,660 | 945,163 | (e) | |||||||||||||
| 1,609 | 268,687 | 2,145 | $ | 358,194 | (d) | ||||||||||
John C. Watts |
|
| 695 | 116,058 | 927 |
| $ | 154,800 | (b) | |||||||
|
|
| 481 | 80,322 | 642 |
|
| $ | 107,208 | (c) | ||||||
|
|
| 559 | 93,347 | 746 |
|
| $ | 124,575 | (d) | ||||||
(a) | Represents unvested restricted stock units granted as part of the Company’s Long-Term Incentive Plan. Stock price used to determine value is | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Represents cash value at target of outstanding performance-based share units granted | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Represents cash value at target of outstanding performance-based share units granted | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) | Represents cash value at target of outstanding performance-based share units granted March 17, 2022 as part of the Company’s Long Term Incentive Plan. Stock price used to determine value is $166.99, the closing price of Company common stock on December 30, 2022. Performance-based share units will be earned as common stock early in 2025 contingent upon the extent to which | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4263
previously established performance objectives are achieved over the three-year period ending at the close of business on December 31, 2024. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(e) | Represents retention grants of restricted stock units for the noted Executives. Stock price used to determine value is $166.99, the closing price of Company common stock on December 31, 2022. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table sets forth information regarding options exercised and stock vested during calendar year 2017.2022.
Option Exercises and Stock Vested
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Name | Option Awards | Stock Awards (a) | ||||||||||||||||||||||||||
Number of Shares | Value Realized | Number of Shares | Value Realized | |||||||||||||||||||||||||
David C. Adams | 17,000 | $ | 1,515,657 | 42,757 | $ | 4,424,568 | ||||||||||||||||||||||
Glenn E. Tynan |
|
| 0 |
|
| $ |
| 0 |
|
| 19,327 |
|
| $ |
| 1,987,198 | ||||||||||||
Thomas P. Quinly | 0 | $ | 0 | 23,989 | $ | 2,462,526 | ||||||||||||||||||||||
Paul J. Ferdenzi |
|
| 14,549 |
|
| $ |
| 1,144,606 |
|
| 6,960 |
|
| $ |
| 724,783 | ||||||||||||
Harry S. Jakubowitz | 10,043 | $ | 791,107 | 3,461 | $ | 356,048 | ||||||||||||||||||||||
|
|
|
|
| ||||||||||
Name | Option Awards | Stock Awards (a) | ||||||||||||
Number of Shares | Value Realized | Number of Shares | Value Realized | |||||||||||
Lynn M. Bamford | 0 | $ | 0 | 4,498 | $ | 593,441 | ||||||||
David C. Adams |
| 0 | $ | 0 |
| 19,170 | $ | 2,528,908 | ||||||
Kevin M. Rayment | 0 | $ | 0 | 3,693 | $ | 487,187 | ||||||||
K. Christopher Farkas |
| 0 | $ | 0 |
| 2,130 | $ | 281,034 | ||||||
Paul J. Ferdenzi | 0 | $ | 0 | 4,136 | $ | 545,682 | ||||||||
John C. Watts |
| 0 | $ | 0 |
| 1,083 | $ | 142,849 | ||||||
(a) | Stock Awards includes the vesting of the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation Plans
The following table shows the deferred compensation activity for the NEOs during 2017.2022. This table does not include the nonqualified Restoration Plan since these totals are provided separately in the Pension Benefit Table below.
Non-Qualified Deferred Compensation Table
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Name | Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||||||||||||||||||||||
David C. Adams | $ | 0 | $ | 0 | $ | 224,521 | $ | 0 | $ | 4,742,683 | |||||||||||||||||||||||||
Glenn E. Tynan |
|
| $ |
| 94,884 |
|
| $ |
| 0 |
|
| $ |
| 49,684 |
|
| $ |
| 0 |
|
| $ |
| 1,071,703 | ||||||||||
Thomas P. Quinly | $ | 596,638 | $ | 0 | $ | 57,442 | $ | 585,074 | $ | 1,295,958 | |||||||||||||||||||||||||
Paul J. Ferdenzi |
|
| $ |
| 210,704 |
|
| $ |
| 0 |
|
| $ |
| 34,801 |
|
| $ |
| 0 |
|
| $ |
| 790,615 | ||||||||||
Harry S. Jakubowitz | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Name | Executive | Registrant | Aggregate | Aggregate | Aggregate | |||||||||||||||
Lynn M. Bamford | $ | 441,769 | $ | 0 | $ | 40,637 | $ | 0 | $ | 1,188,739 | ||||||||||
David C. Adams |
| $ | 0 |
| $ | 0 |
| $ | 227,888 |
| $ | 0 |
| $ | 5,908,408 | |||||
Kevin M. Rayment | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
K. Christopher Farkas |
| $ | 0 |
| $ | 0 |
| $ | 0 |
| $ | 0 |
| $ | 0 | |||||
Paul J. Ferdenzi | $ | 157,203 | $ | 0 | $ | 79,081 | $ | 0 | $ | 2,102,615 | ||||||||||
John C. Watts |
| $ | 0 |
| $ | 0 |
| $ | 0 |
| $ | 0 |
| $ | 0 | |||||
(a) | Amounts reported in this column represent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Pension Benefit Payable to Executive Officers
The estimated total pension benefit payable under the Curtiss-Wright Retirement Plan and the nonqualified Curtiss-Wright Restoration Plan described above in “Pension Plans” to the NEOs at retirement age 65 is also described in the following table as a total lump sum payable from each of these plans, based on benefits earned through December 31, 2017.2022. Participants must choose to receive benefits under the Retirement Plan and the Restoration Plan either through annuity payments or as a lump sum.
4364
Qualified Pension Benefit
|
|
|
|
|
|
|
|
| |||||||||||||||
Name | Plan | Number of | Present Value | Payments | |||||||||||||||||||
David C. Adams | Curtiss-Wright Corporation | 18 | $ | 2,169,775 | $ | 0 | |||||||||||||||||
Glenn E. Tynan | Curtiss-Wright Corporation |
|
| 18 |
|
| $ |
| 1,253,487 |
|
| $ |
| 0 | |||||||||
Thomas P. Quinly | Curtiss-Wright Corporation | 13 | $ | 878,595 | $ | 0 | |||||||||||||||||
Paul J. Ferdenzi | Curtiss-Wright Corporation |
|
| 19 |
|
| $ |
| 1,058,128 |
|
| $ |
| 0 | |||||||||
Harry S. Jakubowitz | Curtiss-Wright Corporation | 16 | $ | 1,063,540 | $ | 0 | |||||||||||||||||
|
|
|
|
|
| |||||
Name | Plan | Number of | Present Value | Payments | ||||||
Lynn M. Bamford | Curtiss-Wright Corporation | 16 | $ | 881,390 | $0 | |||||
David C. Adams (c) | Curtiss-Wright Corporation | 22 |
| $ | 0 | $2,474,340 | ||||
Kevin M. Rayment (d) | Curtiss-Wright Corporation | N/A | N/A | N/A | ||||||
K. Christopher Farkas | Curtiss-Wright Corporation | 14 |
| $ | 493,537 | $0 | ||||
Paul J. Ferdenzi | Curtiss-Wright Corporation | 24 | $ | 1,371,658 | $0 | |||||
John C. Watts | Curtiss-Wright Corporation | 16 |
| $ | 624,461 | $0 | ||||
(a) | The Curtiss-Wright Corporation Retirement Plan is a defined benefit pension plan providing qualified retirement benefits to eligible employees of the Curtiss-Wright Corporation. Benefits are based on a formula which takes account of service and the average of the highest five years of a participant’s pay within the last 10 years of employment. Normal retirement is the later of age 65 or three years of service. Unreduced early retirement benefits may be payable if age is greater than 55 and the sum of age and service exceeds 80. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) | The present value of the accumulated benefit was determined as of December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) | Mr. Adams received a lump sum distribution from the Curtiss-Wright Corporation Retirement Plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) | Mr. Rayment does not participate in the Curtiss-Wright Corporation Retirement Plan because he transferred from the United Kingdom to the United States after plan was closed to new entrants. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Qualified Pension Benefit
|
|
|
|
|
|
|
|
| |||||||||||||||
Name | Plan Name (a) | Number of | Present Value | Payments | |||||||||||||||||||
David C. Adams | Curtiss-Wright Corporation | 18 | $ | 8,589,250 | $ | 0 | |||||||||||||||||
Glenn E. Tynan | Curtiss-Wright Corporation |
|
| 18 |
|
| $ |
| 4,516,586 |
|
| $ |
| 0 | |||||||||
Thomas P. Quinly | Curtiss-Wright Corporation | 13 | $ | 2,897,113 | $ | 0 | |||||||||||||||||
Paul J. Ferdenzi | Curtiss-Wright Corporation |
|
| 19 |
|
| $ |
| 1,710,965 |
|
| $ |
| 0 | |||||||||
Harry S. Jakubowitz | Curtiss-Wright Corporation | 16 | $ | 728,441 | $ | 0 | |||||||||||||||||
|
|
|
|
|
| |||||
Name | Plan Name (a) | Number of | Present Value | Payments | ||||||
Lynn M. Bamford | Curtiss-Wright Corporation Retirement | 16 | $ | 3,561,798 | $0 | |||||
David C. Adams | Curtiss-Wright Corporation Retirement | 22 |
| $ | 0 | $15,752,628 (c) | ||||
Kevin M. Rayment (d) | Curtiss-Wright Corporation Retirement | N/A | N/A | N/A | ||||||
K. Christopher Farkas | Curtiss-Wright Corporation Retirement | 14 |
| $ | 1,023,296 | $0 | ||||
Paul J. Ferdenzi | Curtiss-Wright Corporation Retirement | 24 | $ | 3,275,607 | $0 | |||||
John C. Watts | Curtiss-Wright Corporation Retirement | 16 |
| $ | 712,399 | $0 | ||||
(a) | The Curtiss-Wright Corporation Restoration Plan is a non-qualified retirement plan established to provide benefits that would have been payable under the C-W Retirement Plan but for the limitations imposed by the provisions of the Internal Revenue Code and Employee Retirement Income Security Act. All participants of the C-W Retirement Plan are eligible to participate in the Restoration Plan. Restoration benefits are payable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
65
(b) | The present value of the accumulated benefit was determined as of December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) | Mr. Adams received a lump sum distribution from the Curtiss-Wright Corporation Retirement Benefits Restoration Plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) | Mr. Rayment does not participate in the Curtiss-Wright Corporation Restoration Plan because he transferred from the United Kingdom to the United States after plan was closed to new entrants. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Plan benefit formula is described earlier. Elements of compensation that are included in the calculation of a benefit are base salary earned and short and long-term cash incentives earned. The Company has not adopted a policy prohibiting special benefits under the plans. However, historically the Company has not provided any additional years of credited service to any participants in the Plan.
44The following table shows the potential incremental value transfer to the NEOs under various employment related scenarios.
|
|
|
|
|
| |||||||||||||||||
Termination Scenario | Lynn M. | David C. | Kevin M. | K. Christopher | Paul J. | John C. | ||||||||||||||||
If Retirement or Voluntary Termination Occurred on December 31, 2022 (a)(b) | $ | 4,063,661 | N/A | $ | 0 | $ | 0 | $ | 1,580,533 | $ | 0 | |||||||||||
If Termination for Cause Occurred on December 31, 2022 (c) |
| $ | 997,681 |
| N/A |
| $ | 0 |
| $ | 0 |
| $ | 702,409 |
| $ | 0 | |||||
If Termination Without Cause Occurred on December 31, 2022 (d) | $ | 8,329,367 | N/A | $ | 1,080,000 | $ | 1,100,189 | $ | 2,682,344 | $ | 565,117 | |||||||||||
If “Change-In-Control” Termination Occurred on December 31, 2022 (e) |
| $ | 13,843,187 |
| N/A |
| $ | 6,119,788 |
| $ | 4,633,437 |
| $ | 5,405,897 |
| $ | 1,663,807 | |||||
If Death Occurred on December 31, 2022 (f)(g) | $ | 7,662,005 | N/A | $ | 4,219,788 | $ | 2,684,382 | $ | 3,235,939 | $ | 1,209,043 | |||||||||||
(a) | Ms. Bamford and Mr. Ferdenzi are eligible for early retirement. Messrs. Rayment, Farkas, and Watts are not yet eligible for Early Retirement. Mr. Adams voluntarily retired as Executive Chairman effective May 5, 2022 and is not eligible for any incremental compensation based upon a termination date of December 31, 2022. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) | Includes (1) intrinsic value of any unvested/unearned cash-based performance units, restricted stock units, and performance shares on December 31, 2022 that would vest after the date of termination or retirement, and (2) incremental value on measurement date (December 31, 2022) of vested benefit under the Curtiss-Wright Retirement Plan and the Curtiss-Wright Restoration Plan, assuming the executive elects immediate payout. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) | Includes incremental value on measurement date (December 31, 2022) of vested benefit under the Curtiss-Wright Retirement Plan and the Curtiss-Wright Restoration Plan, assuming the executive elects immediate payout. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) | Includes (1) intrinsic value of any unvested/unearned cash-based performance units, restricted stock units, and performance shares on December 31, 2022 that would vest after the date of termination for retirement-eligible executives, (2) severance payout (salary plus target bonus), and (3) incremental value on measurement date (December 31, 2022) of vested benefit under the Curtiss-Wright Retirement Plan and the Curtiss-Wright Restoration Plan, assuming the executive elects immediate payout. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(e) | Includes (1) change-in-control severance payout, (2) present value of any accelerated vesting of cash-based performance units, performance shares, and restricted stock units on December 31, 2022, (3) prorated portion of the unvested restricted stock units will accelerate for the retention grants of Ms. Bamford, Mr. Rayment, Mr. Farkas, and Mr. Ferdenzi, and (4) incremental value on measurement date (December 31, 2022) of vested benefit under the Curtiss-Wright Retirement Plan and the Curtiss-Wright Restoration Plan including additional three years of benefit accrual per | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
66
change-in-control agreements for Ms. Bamford, an additional two and one-half years for Messrs. Rayment, Farkas, and Ferdenzi and an additional two years for Mr. Watts, assuming the executive elects immediate payout. Mr. Adams no longer has a change-in-control in effect because he voluntarily retired as Executive Chairman of the Company effective May 5, 2022. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(f) | Includes (1) present value of any accelerated vesting of cash-based performance units, performance shares, and restricted stock units on December 31, 2022, (2) prorated portion of the unvested restricted stock units will accelerate for the retention grants of Ms. Bamford, Mr. Rayment, Mr. Ferdenzi and Mr. Farkas, (3) incremental value on measurement date (December 31, 2022) of vested benefit under the Curtiss-Wright Retirement Plan and the Curtiss-Wright Restoration Plan, assuming the executive elects immediate payout, and (4) value of Company-paid basic life insurance policy. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(g) | Depending on circumstances of death, all employees may also be eligible for Accidental Death and Dismemberment (AD&D) insurance payment and Business Travel Accident insurance payment. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PAY RATIO DISCLOSURE RULE
In accordance with rules adopted by the Securities and Exchange Commission, the Company is providing the following information concerning the ratio of the Company’s median employee’s annual total compensation to the total annual compensation of the Company’s principal executive officer (“PEO”). For fiscal year 2022, the Company’s PEO is Lynn M. Bamford. The Committee does not use this ratio as it considers appropriate compensation for the PEO. Management does not use this ratio when determining compensation for the rest of the workforce.
The Company identified the median employee by utilizing base salary as of December 1, 2022 and adding any target bonus to that amount, for all individuals, excluding the PEO, who were employed by the Company on December 31, 2022, the last day of the Company’s payroll year (whether employed on a full-time, part-time, or seasonal basis). In addition, the Company also excluded all independent contractors. The Company further converted all other currencies to U.S. dollars as of December 1, 2022, irrespective of currency fluctuations over the course of the year. Finally, the Company elected to use the de minimis exemption for non-U.S. employees to exclude 4.5% of the Company’s non-U.S. employees. The list of jurisdictions for which these employees are excluded, the approximate number of employees excluded from each jurisdiction, the total number of U.S. and non-U.S. employees irrespective of any exemption, and the total number of U.S. and non-U.S. employees used for the de minimis calculation are set forth in the table below.
|
|
|
|
|
| |||||
Jurisdictions | Approximate Number of | Total Number of U.S. and | Total Number of U.S. and |
| ||||||
India | 115 | 8,283 | 7,864 |
| ||||||
Costa Rica |
|
| 92 |
|
|
|
| |||
Sweden | 37 |
|
|
| ||||||
Singapore |
|
| 37 |
|
|
|
| |||
Portugal | 29 |
|
|
| ||||||
Spain |
|
| 17 |
|
|
|
| |||
Netherlands | 10 |
|
|
| ||||||
Poland |
|
| 9 |
|
|
|
| |||
Brazil | 7 |
|
|
| ||||||
Korea |
|
| 6 |
|
|
|
| |||
Taiwan | 5 |
|
|
| ||||||
Belgium |
|
| 5 |
|
|
|
| |||
Hong Kong | 1 |
|
|
| ||||||
Hungary |
|
| 1 |
|
|
|
| |||
After identifying the median employee, the Company calculated annual total compensation for such employee using the same methodology the Company uses for the named executive officers as set forth in the 2022 Summary Compensation Table in this Proxy Statement. The total compensation amount for the median employee for 2022 was determined to be $69,294. This total compensation
67
amount was then compared to the total compensation of the PEO disclosed in the Summary Compensation Table, of $4,462,698. Based on this information for 2022, the ratio of the PEO’s annual total compensation to the annual total compensation of the median employee was 64:1.
The Company believes that the ratio calculated above is not reflective of compensation awarded to our PEO in 2022. The total compensation of our PEO disclosed in the Summary Compensation Table includes the change in the actuarial present value of our PEO’s retirement benefits shown under column “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” of the Summary Compensation Table. The pension values for fiscal year 2022 reflect the impact of changes in interest rates on actuarial present value calculations. Excluding this change in actuarial present value of the PEO’s pension benefit, the ratio would be 63:1.
PAY VERSUS PERFORMANCE
The following table shows the total compensation for our NEOs for the past three fiscal years as set forth in the Summary Compensation Table, the “compensation actually paid” to our PEO and prior PEO and, on an average basis, our other NEOs (in each case, as determined under SEC rules), our TSR, the TSR of the Aerospace & Defense Select Industry Index over the same period, our Net Income, and our financial performance measure for compensatory purposes, Adjusted Operating Income.
| Average Summary Compensation Table (SCT) Total for Non- PEO Named Executive Officers (d) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (CAP) (e) | Value of Initial $100 Investment Based On: | Company- Selected Measure | |||||||||||||||||||||||||||||||||||||
| Fiscal Year (a) | Summary Compensation Table (SCT) Total for PEO (b) | Summary Compensation Table (SCT) Total for Prior PEO (b) | Compensation Actually Paid to PEO (CAP) (c) | Compensation Actually Paid to Prior PEO (CAP) (c) | Company Total Shareholder Return ($) (f) | Peer Group Total Shareholder Return ($) (g) | Net Income (in thousands, $) (h) | Adjusted Operating Income (in thousands, $) (i) | ||||||||||||||||||||||||||||||||
| 2022 | $ | 4,462,698 | $ | 7,890,517 | $ | 4,654,705 | $ | 6,383,850 | $ | 120.65 | $ | 104.16 | $ | 294,348 | $ | 443,078 | ||||||||||||||||||||||||
| 2021 | $ | 4,491,811 | $ | 4,925,333 | $ | 2,753,543 | $ | 3,265,294 | $ | 99.69 | $ | 109.35 | $ | 267,159 | $ | 420,423 | ||||||||||||||||||||||||
| 2020 | $ | 8,922,118 | $ | 6,497,412 | $ | 2,138,218 | $ | 1,253,639 | $ | 83.17 | $ | 106.45 | $ | 201,392 | $ | 375,495 | ||||||||||||||||||||||||
(a) | The Pay Versus Performance table reflects required disclosures for fiscal years 2022, 2021 and 2020. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) | For fiscal years 2022 and 2021, Lynn M. Bamford was the Principle Executive Officer (PEO) for the Company. For fiscal year 2020, David C. Adams was the Principle Executive Officer (PEO) for the Company. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) | The Compensation Actually Paid (CAP) was calculated beginning with the PEO’s Summary Compensation Table (SCT) total then deducting the aggregate change in actuarial present value of her/his accumulated benefit under all defined benefit and actuarial pension plans reported in the SCT; deducting the amounts reported in the SCT for performance share and restricted stock unit awards; adding the pension service cost; adding the fair value as of the end of the covered fiscal year of all awards granted during the fiscal year that are outstanding and unvested as of the fiscal year-end; adding the amount equal to the change in fair value as of the end of the covered fiscal year, whether positive or negative, of any awards granted in any prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year; and adding the amount equal to the change in fair value as of the vesting date, whether positive or negative, of any award granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year. Relative to the PEO’s CAP, the following amounts were deducted from and added to SCT total compensation: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
68
PEO SCT Total to CAP Reconciliation:
|
|
|
|
|
|
|
|
| ||||||||||||||||
Fiscal | Summary | Deductions | Deductions | Additions | Additions | CAP | ||||||||||||||||||
2022 | $ | 4,462,698 | -$ | 2,441,259 | -$ | 110,837 | $ | 5,568,041 | $ | 411,874 | $ | 7,890,517 | ||||||||||||
2021 |
| $ | 4,491,811 |
| -$ | 1,636,250 |
| -$ | 639,485 |
| $ | 2,416,502 |
| $ | 292,755 |
| $ | 4,925,333 | ||||||
2020 | $ | 8,922,118 | -$ | 2,309,978 | -$ | 3,461,735 | $ | 2,676,941 | $ | 670,066 | $ | 6,497,412 | ||||||||||||
(i) | Represents the grant date fair value of equity-based awards granted each year. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(ii) | Represents the aggregate change in the actuarial present value of accumulated benefit under pension. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(iii) | The additions to the SCT Total reflect the value of equity calculated in accordance with the SEC methodology for determining CAP for each year shown. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(iv) | The additions to the SCT Total reflect the pension service cost calculated in accordance with the SEC methodology for determining CAP for each year shown. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental
PEO Equity Component of CAP:
|
|
|
|
|
| |||||||||||
Year | Year End Fair Value | Year over Year Change in | Year over Year | Total | ||||||||||||
2022 | $ | 3,680,802 | $ | 1,876,150 | $ | 11,088 | $ | 5,568,041 | ||||||||
2021 |
| $ | 2,283,203 |
| $ | 134,440 | -$ | 1,141 |
| $ | 2,416,502 | |||||
2020 | $ | 3,213,825 | -$ | 1,405,645 | $ | 868,761 | $ | 2,676,941 | ||||||||
(i) | The amounts include both Performance Share and Restricted Stock Unit awards. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(ii) | Total Equity Award Adjustments includes dividend equivalents units earned in each fiscal year. No equity awards failed to meet vesting conditions for the fiscal years. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) | Each of the three fiscal years presented include the average SCT totals of the Non-PEO Named Executive Officers (NEOs) as applicable in each reporting year. For fiscal year 2022, non-PEO Named Executive Officers were: David C. Adams, Kevin M. Rayment, K. Christopher Farkas, Paul J. Ferdenzi, and John C. Watts. For fiscal year 2021, non-PEO Named Executive Officers were: David C. Adams, Kevin M. Rayment, Paul J. Ferdenzi, and K. Christopher Farkas. For fiscal year 2020, non-PEO Named Executive Officers were: Glenn E. Tynan, Thomas P. Quinly, Paul J. Ferdenzi, K. Christopher Farkas, and Harry S. Jakubowitz. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(e) | The Average Compensation Actually Paid was calculated by averaging the following, when applicable, by year, for the non-PEO NEOs: SCT total then deducting the aggregate change in actuarial present value of their accumulated benefit under all defined benefit and actuarial pension plans reported in the SCT; deducting the amounts reported in the SCT for performance share and restricted stock unit awards; adding the pension service cost; adding the fair value as of the end of the covered fiscal year of all awards granted during the fiscal year that are outstanding and unvested as of the fiscal year-end; adding the amount equal to the change in fair value as of the end of the covered fiscal, whether positive or negative, of any awards granted in any prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year; and adding the amount equal to the change in fair value as of the vesting date, whether positive or negative, of any award granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year. Relative to CAP, the following amounts were deducted from and added to SCT total compensation: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
69
Average Non-PEO SCT Total to CAP Reconciliation:
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Fiscal | Summary | Deductions | Deductions | Additions | Additions
| CAP | ||||||||||||||||||
2022 | $ | 4,654,705 | -$ | 485,155 | -$ | 131,443 | $ | 2,106,528 | $ | 239,215 | $ | 6,383,850 | ||||||||||||
2021 |
| $ | 2,753,543 |
| -$ | 1,086,255 |
| -$ | 57,090 |
| $ | 1,381,658 |
| $ | 273,438 |
| $ | 3,265,294 | ||||||
2020 | $ | 2,138,218 | -$ | 360,814 | -$ | 975,281 | $ | 232,461 | $ | 219,055 | $ | 1,253,639 | ||||||||||||
(i) | The amount in 2022 is inflated due to the lump sum distribution from the Curtiss-Wright Corporation Retirement Benefits Restoration Plan for the prior PEO Mr. Adams. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(ii) | Represents the grant date fair value of equity-based awards granted each year. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(iii) | Represents the aggregate change in the actuarial present value of accumulated benefit under pension. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(iv) | The additions to the SCT Total reflect the value of equity calculated in accordance with the SEC methodology for determining CAP for each year shown. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(v) | The additions to the SCT Total reflect the pension service cost calculated in accordance with the SEC methodology for determining CAP for each year shown. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental
Average Non-PEO Equity Component of CAP:
|
|
|
|
|
| |||||||||||
Year | Year End Fair | Year over Year | Year over Year | Total Equity | ||||||||||||
2022 | $ | 731,409 | $ | 1,360,288 | $ | 14,832 | $ | 2,106,529 | ||||||||
2021 |
| $ | 1,431,205 |
| -$ | 47,701 | -$ | 1,846 |
| $ | 1,381,658 | |||||
2020 | $ | 501,969 | -$ | 455,390 | $ | 185,882 | $ | 232,461 | ||||||||
(i) | The amounts include both Performance Shares and Restricted Stock Unit awards. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(ii) | Total Equity Award Adjustments includes dividend equivalents units earned in each fiscal year. No equity awards failed to meet vesting conditions for the fiscal years. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(f) | The amount represents the value of an initial fixed $100 Investment in Curtiss-Wright stock on December 31, 2019 assuming reinvestment of all dividends. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(g) | Peer group companies are the Aerospace & Defense Select Industry Index. The amount represents an initial fixed $100 Investment in the Company’s Peer Group on December 31, 2019 assuming reinvestment of all dividends. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(h) | Reflects net income in the Company’s Consolidated Statement of Earnings included in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, 2022, 2021, and 2020. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(i) | Adjusted Operating Income, a non-GAPP measure, is operating income as adjusted for items referenced in the Company’s fourth quarter 2022, 2021, and 2020 earnings releases, respectively, furnished to the SEC on February 22, 2023, February 24, 2022, and February 25, 2021, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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For the fiscal year ending December 31, 2022, the most important financial performance measures used to link compensation actually paid to our NEOs to Company performance are set forth in the table below:
Most Important Financial Performance Measures |
Adjusted Operating Income |
Adjusted Earnings per Share |
Total Shareholder Return |
Total Sales Growth |
The following graph compares the compensation actually paid to our PEO(s), the average of the compensation actually paid to our non-PEOs and the Company’s TSR performance with the TSR performance of the Aerospace & Defense Select Industry Index. The TSR amount represents the value of an initial fixed $100 Investment in Curtiss-Wright stock on December 31, 2019 assuming reinvestment of all dividends.
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The following graph compares the compensation actually paid to our PEO(s) and the average of the compensation actually paid to our non-PEOs with the Company’s Net Income.
The following graph compares the compensation actually paid to our PEO(s) and the average of the compensation actually paid to our non-PEOs with the Company’s Adjusted Operating Income.
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COMPENSATION OF DIRECTORS
The following table sets forth certain information regarding the compensation earned by or granted to each non-employee director who served on the Company’s Board of Directors in 2017. Mr. Adams,2022. Ms. Bamford, the only current director who is an employee of the Company, is not compensated for hisher services as a Board member.
Director Compensation
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Name | Fees Earned | Stock | Option | Non-Equity | Change in | All Other | Total | ||||||||||||||||||||||||||||||||||||||||||
Dean M. Flatt | $ | 90,000 | $ | 105,000 | — | — | — | $ | 25 | $ | 195,025 | ||||||||||||||||||||||||||||||||||||||
S. Marce Fuller |
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| $ |
| 105,000 |
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| $ |
| 105,000 |
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| — |
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| — |
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| — |
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| $ |
| 25 |
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| $ |
| 210,025 | ||||||||||||||||||||
Rita J. Heise | $ | 90,000 | $ | 105,000 | — | — | — | $ | 25 | $ | 195,025 | ||||||||||||||||||||||||||||||||||||||
Bruce D. Hoechner |
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| $ |
| 67,500 |
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| $ |
| 35,000 |
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| — |
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| — |
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| — |
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| $ |
| 25 |
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| $ |
| 102,525 | ||||||||||||||||||||
Allen A. Kozinski | $ | 120,000 | $ | 105,000 | — | — | — | $ | 25 | $ | 225,025 | ||||||||||||||||||||||||||||||||||||||
John R. Myers (c) |
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| $ |
| 22,500 |
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| $ |
| 105,000 |
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| — |
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| — |
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| — |
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| $ |
| 25 |
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| $ |
| 127,525 | ||||||||||||||||||||
John B. Nathman | $ | 90,000 | $ | 105,000 | — | — | — | $ | 25 | $ | 195,025 | ||||||||||||||||||||||||||||||||||||||
Robert J. Rivet |
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| $ |
| 107,500 |
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| $ |
| 105,000 |
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| — |
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| — |
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| — |
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| $ |
| 13,720 |
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| $ |
| 226,220 | ||||||||||||||||||||
Albert E. Smith | $ | 100,000 | $ | 105,000 | — | — | — | $ | 25 | $ | 205,025 | ||||||||||||||||||||||||||||||||||||||
Peter C. Wallace |
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| $ |
| 90,000 |
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| $ |
| 105,000 |
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| — |
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| — |
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| — |
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| $ |
| 21,911 |
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| $ |
| 216,911 | ||||||||||||||||||||
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Name | Fees Earned | Stock | Option | Non-Equity | Change in | All Other | Total | |||||||||||||
David C. Adams (c) | $ | 56,250 | — | — | — | — | — | $ | 56,250 | |||||||||||
Dean M. Flatt |
| $ | 112,500 |
| $ | 135,000 | — | — | — | — |
| $ | 247,500 | |||||||
S. Marce Fuller | $ | 140,000 | $ | 135,000 | — | — | — | �� | — | $ | 275,000 | |||||||||
Bruce D. Hoechner |
| $ | 100,000 |
| $ | 135,000 | — | — | — | — |
| $ | 235,000 | |||||||
Glenda J. Minor | $ | 100,000 | $ | 135,000 | — | — | — | — | $ | 235,000 | ||||||||||
Anthony J. Moraco |
| $ | 100,000 |
| $ | 135,000 | — | — | — | — |
| $ | 235,000 | |||||||
John B. Nathman | $ | 100,000 | $ | 135,000 | — | — | — | — | $ | 235,000 | ||||||||||
Robert J. Rivet |
| $ | 122,500 |
| $ | 135,000 | — | — | — | — |
| $ | 257,500 | |||||||
Peter C. Wallace | $ | 112,500 | $ | 135,000 | — | — | — | — | $ | 247,500 | ||||||||||
(a) | Represents all fees earned or paid for services as a director, including annual retainer, lead director fee, committee membership fee, and committee chairman retainers, and includes amounts deferred. Directors have a choice to receive all or a portion of their director fees paid in cash, stock, or a combination of the two. Directors also have a choice to defer all or a portion of director fees paid in cash or stock. For fiscal | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Name | Stock Award (#)* | Grant Date Fair Value ($) | Pay Date | ||||||||||||||||||
Heise | 34 | $ | 3,125 | March 31, 2017 | |||||||||||||||||
| 34 | $ | 3,125 | March 31, 2017 | |||||||||||||||||
| 179 | $ | 16,250 | March 31, 2017 | |||||||||||||||||
| 34 | $ | 3,125 | June 30, 2017 | |||||||||||||||||
| 34 | $ | 3,125 | June 30, 2017 | |||||||||||||||||
| 178 | $ | 16,250 | June 30, 2017 | |||||||||||||||||
| 26 | $ | 3,125 | September 30, 2017 | |||||||||||||||||
| 26 | $ | 3,125 | September 30, 2017 | |||||||||||||||||
| 165 | $ | 16,250 | September 30, 2017 | |||||||||||||||||
| 26 | $ | 3,125 | December 31, 2017 | |||||||||||||||||
| 26 | $ | 3,125 | December 31, 2017 | |||||||||||||||||
| 134 | $ | 16,250 | December 31, 2017 | |||||||||||||||||
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Name | Stock Award (#)* | Grant Date Fair Value ($) | Pay Date | ||||||
Mr. Adams | 142 | $ | 18,750 | June 30, 2022 | |||||
| 135 |
| $ | 18,750 | September 30, 2022 | ||||
112 | $ | 18,750 | December 31, 2022 | ||||||
Mr. Moraco | 21 |
| $ | 3,125 | March 31, 2022 | ||||
21 | $ | 3,125 | March 31, 2022 | ||||||
| 125 |
| $ | 18,750 | March 31, 2022 | ||||
24 | $ | 3,125 | June 30, 2022 | ||||||
| 24 |
| $ | 3,125 | June 30, 2022 | ||||
142 | $ | 18,750 | June 30, 2022 | ||||||
| 22 |
| $ | 3,125 | September 30, 2022 | ||||
22 | $ | 3,125 | September 30, 2022 | ||||||
| 135 |
| $ | 18,750 | September 30, 2022 | ||||
19 | $ | 3,125 | December 31, 2022 | ||||||
| 19 |
| $ | 3,125 | December 31, 2022 | ||||
112 | $ | 18,750 | December 31, 2022 | ||||||
* | Shares rounded up to the next whole number of shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) | The values shown represent the aggregate grant date fair value for | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) | Mr. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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In 2017,2022, each non-employee Director of the Company was paid an annual retainer of $65,000$75,000 plus $12,500 for each committee for which such director is a member. The chairpersons of the Audit Committee, Committee on Directors and Governance, Executive Compensation Committee, and Finance Committee of the Board of Directors were paid an additional annual retainer of $17,500, $10,000,$22,500, $12,500, $15,000, and $10,000,$12,500, respectively. The Lead Independent Director was paid an additional annual retainer of $20,000.$25,000. In 2021, the Board elected to review Director compensation every other year. Accordingly, there was no review of Director compensation in 2022 and no changes were made to Director compensation for 2023. The next Director compensation review will occur in November 2023 for compensation to be paid in 2024. Pursuant to the Company’s 2014 Omnibus Incentive Plan, the Company’s non-employee Directors may elect to receive their annual retainer, Chairperson fee, committee membership fees, and Lead Independent Director fee in the form of Companyour Common Stock, cash, or both and may elect to defer the receipt of such stock or cash. Until March 1, 2017, each non-employee Director was also eligible for an executive physical and group term life insurance coverage in the amount of $150,000 for which the Company would pay the premiums. The fees of the executive physicals and the premiums paid on this insurance coverage for each non-employee Director was reported as income to the Director.
In addition to the annual retainer and meeting fees described above, under the Company’s 2014 Omnibus Incentive Plan, the Company, acting through the Committee on Directors and Governance, has the discretionary authority to make equity grants to non-employee Directors. Effective February 2018,With respect to fiscal 2023, each non-employee Director was granted 857787 shares of restricted Common Stock effective February 2023 based on a market value of $105,000$135,000 on the grant date with such shares subject to forfeiture based upon failing to remain on the Board for a three-yearone-year period. The Company grantsIn addition to the foregoing, the Company’s policy is to award each newly-appointednewly appointed Director upon appointment a grant of restricted Common Stock valued at $35,000 based on the market value of the Common Stock on the grant date with such shares subject to forfeiture based upon failing to remain on the Board for a five-year period. Each Director must also accumulate a total position in the Company’s Common Stock with a value of five times the annual retainer.
Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports
Section 16(a) of the Securities Exchange Act and the rules thereunder of the SEC require the Company’s Directors, Officers, and beneficial owners of more than 10% of the Common Stock to file reports of their ownership and changes in ownership of Common Stock with the Commission. SEC regulations require that the Company be furnished with copies of these reports. Personnel of the Company generally prepare these reports on behalf of the Directors and Officers on the basis of information obtained from each Director and Officer. Based solely on a review of these reports filed with the SEC and on such informationthe written representations from the Directors and Officers, the Company believes that all reports required by Section 16(a) of the Securities and Exchange Act to be filed during the year ended December 31, 20172022 were filed on time. A Form 5 for Robert J. RivetPeter C. Wallace reporting exempt transactions covering exempt purchases of Common Stock at various times throughout 20172022 through a dividend reinvestment account was filed on January 18, 2023. A Form 4 for Gary Ogilby originally and timely filed on July 9, 2021, was corrected on a Form 4/A filed on February 1, 2018.2, 2023, for inadvertently omitted shares because of a technical error.
Certain Relationships and Related Transactions
The Company’s legal department is primarily responsible for identifying relationships and transactions in which the Company and a director, any nominee for director, executive officer or more than 5% stockholder of the Company, including any of their immediate family members, and any entity owned or controlled by them, are participants to determine whether any of these related persons had or will have a direct or indirect material interest. In order to identify potential related person transactions, the Company’s legal department annually prepares and distributes to all directors, nominees for directors, and executive officers a written questionnaire, which includes questions intended to elicit information about any related person transactions. Further enhancing the Company’s commitment to identify any transactions with related persons, the Company’s finance department
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adopted a related party transactions policy, which requires each of the business units to identify and disclose to the Company’s corporate controller and general counsel all related person transactions on a quarterly basis or on such shorter intervals as the situation arises.
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The Company’s corporate governance guidelines, applicable to Directors, and the Company’s code of conduct, applicable to all employees of the Company, including executive officers (copies of which may be viewed within the Corporate Governance section of the Company’s website at https://www.curtisswright.comcurtisswright.com/investor-relations/governance/governance-documents and are available in print, without charge, upon written request to the Company’s Corporate Secretary), prohibits such individuals from engaging in specified activities without prior approval. These activities typically relate to conflict of interestconflict-of-interest situations where a director, executive officer, an employee, or member of their immediate family may have significant financial or business interests in another company competing with or doing business with the Company, or who stands to benefit in some way from such a relationship or activity. If a director or executive officer believes that, as a result of a transaction with the Company, he or she has an actual or potential conflict of interest with the Company, he or she must promptly notify the Company’s General Counsel. In case of a transaction involving a director, he or she must also notify the Chairperson of the Committee on Directors and Governance (or in case of a transaction involving the Chairperson of the Committee on Directors and Governance, notify the other members of the Committee on Directors and Governance).
The Board of Directors has responsibility for reviewing and approving or ratifying related person transactions to the extent a director, nominee for director, executive officer or more than 5% stockholder of the Company, including any of their immediate family members, and any entity owned or controlled by them, are participants. To the extent that a proposed related-person transaction may involve a director, such individual may not participate in any decision by the Board that in any way relates to the matter that gives rise to the conflict of interest. The Company’s corporate controller and general counsel has responsibility for reviewing and approving or ratifying all other transactions in which the Company and any other employee (other than an executive officer) or his or her immediate family members has a direct or indirect material interest.
Neither the corporate governance guidelines nor code of conduct specify the standards to be applied by the Board of Directors or the Company’s corporate controller and general counsel, as applicable, in reviewing transactions with related persons. However, the Company expects that in general the Board of Directors or the Company’s corporate controller and general counsel, as applicable, will consider all of the relevant facts and circumstances, including, if applicable, but not limited to: (i) the benefits to the Company; (ii) the impact on a Director’s independence in the event the related person is a Director, an immediate family member of a Director, or an entity in which a Director is a partner, shareholder, or executive officer; (iii) the availability of other sources for comparable products or services; (iv) the terms of the transaction; and (v) the terms available for similar transactions with unrelated third parties.
During fiscal year 2017,2022, there were no proceedings to which any of our Directors, executive officers, affiliates, holders of more than five (5%) percent of our Common Stock, or any associate (as defined in the Proxy Rules) of the foregoing were adverse to the Company or any of its subsidiaries. During fiscal year 2017,2022, none of our Directors, nominees for directors, executive officers, holders of more than five (5%) percent of our Common Stock, or any members of their immediate family had a direct or indirect material interest in any transactions or series of transactions with the Company in which the amount involved exceeded or exceeds $120,000.
Compensation Committee Interlocks and Insider Participation
During fiscal year 2017:
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Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of February 16, 201817, 2023 for the beneficial ownership of common stockCommon Stock by (a) each stockholder who, to the Company’s knowledge, is the beneficial owner of more than 5% of the outstanding shares of any class of Common Stock, (b) each current Director of the Company, (c) each nominee for election as a Director of the Company, (d) each of the executive officers of the Company named in the Summary Compensation Table above (the “Named Executive Officers”), and (e) all current Directors and executive officers of the Company as a group. The percentages in the third column are based on 44,244,01038,321,347 shares of Common Stock issued and outstanding on February 16, 2018.17, 2023. In each case, except as otherwise indicated in the footnotes to the table, the shares shown in the second column are owned directly or indirectly by the individuals or members of the group named in the first column, with sole voting and dispositive power. For purposes of this table, beneficial ownership is determined in accordance with the federal securities laws and
75
regulations. Inclusion in the table of shares not owned directly by the Director or Named Executive Officer does not constitute an admission that such shares are beneficially owned by the Director or Named Executive Officer for any other purpose.
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Name of Beneficial Owner | Number of Shares | Percentage | ||||||||||||
BlackRock, Inc. | 6,019,976 | (a) | 13.6 | % | ||||||||||
Singleton Group LLC |
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| 3,762,960 | (b) |
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| 8.5 | % |
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The Vanguard Group | 3,467,183 | (c) | 7.8 | % | ||||||||||
David C. Adams |
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| 114,300 | (d)(e)(f) |
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| * | ||||||
Paul J. Ferdenzi | 24,940 | (d)(f) | * | |||||||||||
Dean M. Flatt |
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| 8,454 | (d)(g)(h) |
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| * | ||||||
S. Marce Fuller | 14,234 | (d)(j)(h) | * | |||||||||||
Rita J. Heise |
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| 3,922 | (d)(g)(k) |
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| * | ||||||
Bruce D. Hoechner | 417 | (d)(g)(h) | * | |||||||||||
Harry S. Jakubowitz |
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| 20,476 | (d)(f) |
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| * | ||||||
Dr. Allen A. Kozinski | 17,799 | (d)(g)(l) | * | |||||||||||
John B. Nathman |
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| 5,490 | (d)(h) |
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| * | ||||||
Thomas P. Quinly | 81,682 | (d)(f) | * | |||||||||||
Robert J. Rivet |
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| 7,388 | (d)(j)(h) |
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| * | ||||||
Albert E. Smith | 21,016 | (d)(g)(h) | * | |||||||||||
Glenn E. Tynan |
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| 60,845 | (d)(f) |
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Peter C. Wallace | 438 | (d)(g)(h) | * | |||||||||||
Directors and Executive Officers as a group (15 persons) |
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| 384,163 | (i) |
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Name of Beneficial Owner | Number of Shares | Percentage | |||||
BlackRock, Inc. | 4,221,851 | (a | ) | 11.0 | % | ||
The Vanguard Group | 3,512,361 | (b | ) |
| 9.2 | % | |
David C. Adams3 | 58,312 | (c | )(d) | * | |||
Lynn M. Bamford | 41,904 | (c | )(d) |
| * | ||
K. Christopher Farkas | 19,607 | (c | )(d) | * | |||
Paul J. Ferdenzi | 29,443 | (c | )(d) |
| * | ||
Dean M. Flatt | 10,102 | (c | )(f) | * | |||
S. Marce Fuller | 11,446 | (c | )(f)(h) |
| * | ||
Bruce D. Hoechner | 887 | (c | )(f) | * | |||
Glenda J. Minor | 1,661 | (c | )(e)(f) |
| * | ||
Anthony J. Moraco | 3,243 | (c | )(e) | * | |||
William F. Moran | -0- | (c | ) |
| * | ||
John B. Nathman | 9,430 | (c | )(f) | * | |||
Kevin M. Rayment | 31,900 | (c | )(d) |
| * | ||
Robert J. Rivet | 13,485 | (c | )(e)(f)(h) | * | |||
Peter C. Wallace | 4,986 | (c | )(f) |
| * | ||
John C. Watts | 5,107 | (c | )(d) | * | |||
Larry D. Wyche | -0- | (c | ) |
| * | ||
Directors and Executive Officers as a group (16 persons) | 255,377 | (g | ) | * | |||
* | Less than 1%. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | Address is 40 East 52nd Street, New York, New York, 10022. The information as to the beneficial ownership of Common Stock by BlackRock, Inc. was obtained from Amendment No. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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January | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) |
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| Address is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. The information as to the beneficial ownership of Common Stock by The Vanguard Group was obtained from Amendment No. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Address is c/o Curtiss-Wright Corporation, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Includes 47,081 shares held in a revocable trust of Mr. Adams, over which he has sole voting and investment power |
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| Includes shares of time-based restricted Common Stock owned by the Named Executive Officers as follows (and subject to forfeiture under the Company’s 2005 Long-Term Incentive Plan and 2014 Omnibus Incentive Plan, as applicable) that vest on the third anniversary of the date of grant: David C. Adams, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Includes shares of restricted Common Stock owned by the non-employee Directors as follows (and subject to forfeiture under the Company’s 2014 Omnibus Incentive Plan): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Does not include shares of Common Stock granted to the non-employee Directors (under the Company’s 2005 Stock Plan for Non-Employee Directors and 2014 Omnibus Incentive Plan, as applicable) that he or she has elected to defer receipt of until a later period as the Director neither has nor shares voting or investment power with respect to these shares and is not deemed the beneficial owner, as follows: Dean M. Flatt, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Includes shares of Common Stock as indicated in the preceding footnotes. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share total rounded down to the next whole number of shares respecting fractional shares purchased pursuant to a broker-dividend reinvestment plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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PROPOSAL TWO: RATIFICATION OF APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed the firm of Deloitte & Touche LLP (“Deloitte”) to act as the Company’s independent registered public accounting firm for its fiscal year ending December 31, 2018,2023, subject to the ratification by the Company’s stockholders at this Annual Meeting as required by the By-laws of the Company. The Board of Directors requests that stockholders ratify such appointment. If the stockholders fail to ratify the appointment of Deloitte, our Audit Committee will appoint another independent registered public accounting firm to perform such duties for the current fiscal year and submit the name of such firm for ratification by our stockholders at the next Annual Meeting of stockholders. Deloitte has been retained as the Company’s independent registered public accounting firm since 2003.
The Audit Committee annually reviews Deloitte’s performance in deciding whether to retain Deloitte or engage a different independent registered public accounting firm. In making such determination, the Audit Committee considers, among other things, (i) an evaluation of Deloitte’s historical and recent performance on the Company’s audit; (ii) Deloitte’s capability and expertise in handling the breadth and complexity of the Company’s worldwide operations; (iii) recent Public Company Oversight Board (PCAOB) reports on Deloitte and its peer firms; (iv) appropriateness of Deloitte’s fees for audit and non-audit services, on both an absolute basis and as compared to its peer firms; and (v) the benefits of having a long-tenured auditor such as (1) a higher quality audit due to Deloitte’s institutional knowledge and deep understanding of the Company’s business, accounting policies and practices, and internal control over financial reporting; (2) an efficient fee structure as
4 | 8,609 of these shares of time-based restricted stock vest on February 5, 2024 pursuant to a Restricted Stock Unit Agreement entered into between the Company and Ms. Bamford on February 6, 2019. | |||
5 | 5,660 of these shares of time-based restricted stock vest on December 15, 2026 pursuant to a Restricted Stock Unit Agreement entered into between the Company and Mr. Farkas on December 16, 2021. | |||
6 | 5,660 of these shares of time-based restricted stock vest on December 15, 2026 pursuant to a Restricted Stock Unit Agreement entered into between the Company and Mr. Ferdenzi on December 16, 2021. | |||
7 | 8,609 of these shares of time-based restricted stock vest on February 5, 2024 pursuant to a Restricted Stock Unit Agreement entered into between the Company and Mr. Rayment on February 6, 2019. |
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Deloitte’s fees are competitive with peer companies because of Deloitte’s familiarity with the Company’s business and industry; and (3) avoiding the costs and disruptions, including management time and distractions, associated with bringing on a new independent auditor. Based on this evaluation, the Audit Committee believes that the continued retention of Deloitte to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its stockholders.
Representatives of Deloitte are expected to be present at the Annual Meeting to make such statements and answer such questions as are appropriate.
Ratification of the appointment of Deloitte will require the affirmative vote of at least a majority in voting interest of the stockholdersshares of Company Common Stock present in person or represented by proxy (and eligibleand (eligible to vote) and voting at the Annual Meeting, assuming the presence of a quorum. As further discussed in the section titled “Broker non-votesnon-votes” ” on page 28 of this Proxy Statement, if you own shares of Common Stock through a bank, broker or other holder of record and you do not instruct your bank, broker or other holder of record on how to vote on this “routine” proposal, your bank, broker or other holder of record will nevertheless have authority to vote your shares on this “routine” proposal in your banks’, brokers’ or other holders’ of record discretion.
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RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDSRATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP ASTHE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMFOR THE FISCAL YEAR ENDING DECEMBER 31, 2018
Disclosure about Fees
The following table presents the aggregate fees billed by our independent registered public accountants, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates for the audit of our annual financial statements for the calendar years ended December 31, 20172022 and 2016,2021, as well as other services provided during those periods:
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Audit Fees (a) | $ | 4,176,000 | $ | 3,840,000 | ||||||||||
Audit-Related Fees (b) |
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| 633,000 |
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Tax Fees (c) | $ | 278,000 | $ | 132,000 | ||||||||||
All Other Fees(d) |
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| 52,000 |
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Total | $ | 5,139,000 | $ | 4,033,000 | ||||||||||
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Audit Fees (a) | $ | 3,935,000 | $ | 3,820,000 | ||||
Audit-Related Fees (b) |
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Tax Fees (c) | $ | 94,000 | $ | 211,000 | ||||
All Other Fees (d) |
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| $ | 6,000 |
| $ | 6,000 | |
Total | $ | 4,035,000 | $ | 4,037,000 | ||||
(a) | Audit Fees consist of fees billed for services rendered for the annual audit of our consolidated financial statements, audit of the effectiveness of our internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act, review of condensed consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, and services that are normally provided in connection with statutory and regulatory filings or engagements. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) | Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements that are not reported under the caption “Audit Fees”. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) | Tax Fees consist of fees billed for services rendered for tax compliance, tax advice, and tax planning. The fees for | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Pre-Approval Policy for Audit and Non-Audit Services
The Audit Committee has adopted a policy to pre-approve audit and permissible non-audit services, provided by the independent accountants. TheAnnually, the Audit Committee will consider annually and, if appropriate, approve the scope of the audit services to be performed during the fiscal year as outlined in an engagement letter proposed by the independent accountants. To facilitate the prompt handling of certain matters,For permissible non-audit services, the Audit Committee delegates to the Chief Financial Officer the authority to approveapproves in advance all audit and non-audit services below $500,000 to be provided by the independent accountants so long as no individual service exceeds $100,000. ForThe Company’s pre-approval policy includes a detail list of permissible non-audit services we submitand is provided to the Audit Committee, at least quarterly, a list ofCommittee. Non-audit services and a corresponding budget estimate that we recommendgreater than $100,000 or for any service when aggregate services have exceeded the $500,000,
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separate pre-approval by the Audit Committee engage the independent accountant to provide.is obtained. We routinely (at least quarterly) inform the Audit Committee as to the nature, extent, and fees of services provided by the independent accountants in accordance with this pre-approval policy and the fees incurred for the services performed to date. During fiscal year 2017,2022, all of the Audit-Related Fees, Tax Fees, and All Other Fees in the table above were approved by the Audit Committee. The Company believes that none of the time expended on Deloitte & Touche LLP’s engagement to audit the Company’s financial statements for fiscal 20172022 and 20162021 was attributable to work performed by individuals other than Deloitte & Touche
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LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates full-time, permanent employees.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023 (PROPOSAL 2).
PROPOSAL THREE: APPROVAL OF THE AMENDMENTSAN AMENDMENT TO THE
CURTISS-WRIGHT CORPORATION EMPLOYEE STOCK PURCHASEANNUAL INCENTIVE COMPENSATION PLANAS AMENDED, INCLUDING TO INCREASEEXPAND THE TOTAL NUMBERCLASS OF SHARESOF THE COMPANY’S COMMON STOCK RESERVED FOR ISSUANCEEMPLOYEES ELIGIBLE TO RECEIVE AWARDS UNDER
THE PLAN BY 750,000 SHARES
Background and Purpose of the Proposal
The Board of Directors believes it is inOn February 14, 2023, the Company’s best interestsExecutive Compensation Committee voted to encourage stock ownership by its employees. Accordingly, on September 24, 2002, the Board of Directors unanimously approved the adoption ofamend the Curtiss-Wright Corporation Employee Stock PurchaseAnnual Incentive Compensation Plan (“ESPP”(the “Plan”), and the Company’s stockholders approved the ESPP on May 23, 2003. At the 2011 Annual Meeting, the Company’s stockholders approved an amendment of the ESPP to increase the number of shares available for issuance under the ESPP by 1,200,000 (from 2,000,000 to 3,200,000). As of January 31, 2018, the Company had approximately 256,000 shares of its common stock remaining available for issuance under the ESPP.
The Company believes that the ESPP has served the Company well. The convenient and financially attractive opportunity that the ESPP provides for employees to acquire stock in the Company has, in the view of management, provided a significant inducement for employees at all levels of the organization to acquire a proprietary interest in the Company and identify with the financial interests of stockholders. The Company believes that the ESPP has thereby contributed to the Company’s success in the marketplace, to its harmonious relations with its work force, and to its success in attracting, retaining and motivating its employees, including but not limited to, its rank and file and unionized employees.
If the number of shares of Company common stock available for issuance under the ESPP is not increased, the Company estimates based on the historical number of shares purchased under the ESPP in the past two years that the remaining shares could be fully allocated over the next two years, and the ESPP will no longer be able to fulfill its intended purpose thereafter. Accordingly, on February 7, 2018, the Board of Directors unanimously approved an amendment to the ESPP, subject to stockholder approval at this Annual Meeting, to:to expand the class of employees eligible to receive awards under the Plan to include active, part-time employees of the Company.
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The Boardpurpose of Directors continuesthe proposal is to believe that the ESPP has provided material benefits toallow the Company, its subsidiaries, and itsaffiliates to attract, retain, and motivate key employees who work on a part-time basis and deems it prudent to increase the shares available for issuance under the ESPP to allow for future offerings undera gradual transition for those retiring from the ESPP.organization by rewarding superior levels of Company and individual performance using performance-based incentive compensation and to link their interests and efforts to the interests of the Company’s stockholders.
Description of the Plan
The principal terms and provisionsfollowing is a summary of the ESPP are summarized below. The summary, however, is not intendedPlan, as proposed to be a completeamended. This description of all the terms of the ESPP and is qualified in its entirety by reference to the provisionsCurtiss-Wright Annual Incentive Compensation Plan, as proposed to be amended, a copy of the Plan. The full text of the Planwhich is attached to this Proxy Statement as Appendix A.
Purpose
The purpose of the ESPPPlan is to provideencourage and reward participants for superior levels of Company and individual performance; link compensation opportunities to performance and reinforce a convenientpay-for-performance culture; support the Company’s executive recruitment and advantageous way for employees to acquire an equity interest in the Company, thereby further aligning the interests of the employeesretention objectives; and be consistent with market practices and the stockholders. The ESPP is intended to meet the requirements of Section 423 of the Internal Revenue Code. If the requirements of Section 423 are met, participants will have the opportunity toCompany’s executive compensation philosophy.
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take advantage of certain federal income tax benefits. One of the requirements of Section 423 is that the stockholders approve the ESPP.
Stock Subject to ESPP
Subject to stockholder approval, an aggregate of 3,950,000 shares of Common Stock are reserved for issuance under the ESPP.
Eligibility
Generally, any employee who is employed by the Company is eligible for participation, unless the employee owns more than 5% of any class of Company common stock. EligibleActive employees desiring to participate in the ESPP may elect to do so by completing a payroll deduction authorization form prior to the commencement of an offering period. Under the terms of the ESPP, no employee may be granted an option that permits that employee to purchase shares of Company common stock under the ESPP and any other of the Company Section 423 plans at a rate which exceeds $25,000 ofand its subsidiaries and affiliates are eligible to receive awards under the fair market value of the common stock (determined at the time the option is granted) for each calendar year for which the option is outstanding. An employee who elects to participate will be deemed to have elected to participate for all subsequent offering periods at the same rate of payroll deduction unless and until the employee changes his or her rate of payroll deduction or terminates participationPlan.
Manner of Stock PurchasesParticipation
The ESPP is offered in six-month “offering periods” commencing on January 1 and July 1. An eligible employee who elects to participate in the ESPP will have payroll deductions made on each payday during the six-month period. The amount of the payroll deductions shall be at least 1% and shall not exceed 10% of the employee’s base salary; provided that the maximum amount of payroll deductions may not exceed $21,250 for each year. Subject to applicable blackout periods, a participant may terminate his or her participation in the ESPP at any time during an offering period by giving the Company written notice. In the event a participant terminates his or her participation in the ESPP for any reason, the employee may elect to stop further payroll deductions, and the Company shall use any accumulated funds in such employee’s account for the purchase of stock at the end of the offering period. If an employee ceases his or her participation in the ESPP, the employee will not automatically participate in the next offering period, but will have to re-enroll if the employee desires to once again participate. If the participant ceases to be the Company’s employee for any reason, including retirement or death, the participant will be deemed to have withdrawn from the ESPP on the date of his or her termination of employment and all contributions will automatically be returned to the employee. Subject to applicable blackout periods, a participant may reduce the rate of his or her payroll deductions during any offering period; however, a participant may only increase the rate of his or her payroll deductions 15 days in advance to the commencement of an offering period or effective as of the commencement of any subsequent offering period.
At the end of each offering period, all participant contributions will be used to purchase a number of shares of common stock, subject to adjustment, in an amount equal to 85% of the fair market value of the common stock on the last day of such offering period.
Administration
The Board of Directors has appointed an administrative committee (the “Committee”) to administer the ESPP and report to the Executive Compensation Committee of the Board of Directors.Directors (the “Committee”) during the current year will determine the participants (“Participants”) to receive incentive awards for the subsequent year, the amount and form of each award and the terms and conditions applicable to it, all
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at the sole discretion of the Committee. The Committee has themay delegate authority to interpret the ESPP,Company’s Chief Executive Officer (“CEO”) regarding determinations applicable to prescribe, amendnon-officer Participants. Selection as a Participant for one Plan year conveys no right to participate in any subsequent Plan year. In fiscal year end 2022, approximately 1,213 Participants were granted awards under the Plan.
Target Awards
The Committee, based on input from the CEO, will establish guidelines for a potential incentive opportunity based on the achievement of target goals (a “Target Award”) expressed as a percentage of annual base salary for each Participant, provided, however, that the Committee will maintain sole responsibility for annually determining the specific Target Awards for the Named Executive Officers. Target Awards below CEO and rescind rules and regulations relating to it, and to make all other determinations necessary or advisable in administering the ESPP, whose decisions are final and binding upon all parties.
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Restrictions on Transfer
Neither payroll deductions nor a participant’s purchase rightofficer level may be assigned, transferred, pledged,delegated to the CEO and will be established based on each Participant’s role within the organization, consistent with guidelines established and approved by the Committee based upon competitive market practices, the Company’s compensation philosophy, and other relevant considerations.
Annual Awards
At the beginning of each fiscal year, the Executive Compensation Committee approves performance measures, standards, and goals for the CEO and officers for the year. The CEO will approve performance measures, standards, and goals for Participants below the officer level. The degree of achievement of those goals will determine the award earned at the end of the year. For officers, performance achievement will be based on one or otherwise disposedmore of the following performance measures: (i) operating income, net earnings, or net income (before or after taxes); (ii) earnings growth; (iii) earnings per share; (iv) net sales (including net sales growth); (v) gross profits or net operating profit; (vi) return measures (including, but not limited to, return on assets, capital, equity and sales); (vii) cash flow (including, but not limited to, operating cash flow, free cash flow, and cash flow return on capital); (viii) revenue growth; (ix) earnings before or after taxes, interest, depreciation, and/or amortization; (x) productivity ratios; (xi) share price (including, but not limited to, growth measures and total shareholder return); (xii) expense targets; (xiii) margins (including, but not limited to, gross or operating margins); (xiv) operating efficiency; (xv) customer satisfaction or increase in the number of strategic or operational initiatives; (xvi) attainment of budget goals; (xvii) attainment of strategic or operational initiatives; (xviii) market share; (xix) cost containment or reductions; (xx) working capital targets; (xxi) economic value added or other value-added measures; and (xxii) individual goals directly related to business performance. Any performance measure may be used to measure the performance of the Company and/or any of its affiliates as a whole, any business unit thereof or any combination thereof or compared to the performance of a group of comparable companies, or a published or special index, in each case that the Committee, in its sole discretion, deems appropriate. In no event may awards for Participants be increased on a discretionary basis.
Company Minimum Performance Requirements
At the beginning of each fiscal year, the Executive Compensation Committee will establish a threshold level of financial performance for the Company representing the lowest acceptable level of performance for the year below which no awards will be made to any Participant for that specific financial performance target.
Individual Qualification
Each Participant must remain an employee at the last day of the Plan year for an award and in good standing with the Company and satisfy the overall standards of performance generally established for the Participant’s position throughout the year to qualify for an award for that Plan year.
Payment of Awards
Incentive awards for any year may be made in cash. The Committee will review and approve awards and advise the Board of Directors of the awards for the Company’s officers.
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In the discretion of the Committee, awards may be paid either promptly after the award is made or over any period of time, or in any manner other than as providednumber of payments, which need not be uniform in amount. Amounts not paid at the time of an award may be retained by the ESPPCompany and its subsidiaries (without liability for interest) pending payment in accordance with the terms and conditions of such award.
Award Limits
The maximum amount that may be payable with respect to an award granted to a Participant in any one year is $3,500,000.
Voluntary Deferral of Awards and Forfeiture of Deferred Awards
A Participant may choose to defer payment of the earned portion of the award according to whatever provisions the Company may make for deferral of compensation from time to time. Forfeiture of any deferrals will be determined in accordance with the terms of the plan or conditions under which the deferrals were made.
Termination of Employment
A Participant must continue to be an employee of the Company at the last day of the Plan year for an award or such other date as may be specified by the Committee on which a Participant attains a vested interest in all or a portion of the award to receive payment for an award. Any Participant who terminates employment (except in the case of death, disability or retirement) with the Company before the right to an award becomes vested will forfeit such unvested award unless the CEO approves the payment, in whole or in part, for a Participant below the officer level, and the Committee approves the payment, in whole or in part, for a Participant who is or was an executive officer. Upon approval, an award may be paid as part of a separation agreement but only if the employee signs the Company release and settlement. In no event may a payment be made to an employee terminated for cause.
Death or Disability
In the event that any Participant’s employment with the Company terminates by reason of death or disability, that Participant’s pro-rata unvested award will immediately vest at the time of his or her termination and will become payable to the Participant or the Participant’s estate or beneficiary as soon as practicable following termination. Any right to receive an award will not be transferable other than by will or the laws of descent and distribution.
ChangesRetirement
If a Participant’s employment with the Company is terminated by reason of retirement before any award becomes vested, the Committee (for the executive officers) and the CEO (for all other Participants) may, at its sole discretion, accelerate the vesting of all or a portion of the Participant’s unvested award(s) and direct that such award(s) be paid to the Participant at the same time as other awards under the Plan are paid.
Promotions, Transfers, Hires
To the extent that an individual becomes eligible to participate in Capitalization
In the eventPlan, either through a new hire process or through promotion or transfer, after the commencement of a reorganization, recapitalization, stock dividend, extraordinary cash dividend, merger, consolidationPlan year the CEO has the discretion to allow such individual to become a Participant. Participant rights to such an award, if any, shall be prorated based on the portion of the Plan year during which the Participant held the position qualifying them as eligible for participation in the Plan. Conversely, if, through demotion or otherjob change, an individual’s position with the Company changes substantially such that the individual would not otherwise be eligible to participate in corporate structure affecting Company common stock,the Plan, such individual may be removed from participation in the Plan, and the CEO may award a pro rata award to that individual. If the individual in either case described above is an executive officer, the Committee must approve the participation and award.
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Restatement of Financial Statements
If the Committee determines that (1) the amount of an award to a Participant was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria (collectively, “Inaccurate Data”) or (2) if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 (“the Statute”) and has committed an offense subject to forfeiture under such statute, the Participant shall make appropriate changesreimburse the Company that portion of an award that was based on the Inaccurate Data or as provided for in the number of shares of common stock that may be purchased pursuant to the ESPP.Statute.
Effect of Change in Control
In the event of a Change in Control (as defined in the ESPP), the surviving, continuing, successor or purchasing corporation or parent corporation thereof, as the case may be, may assume the Company’s rightsEffective Date and obligations under the ESPP. If the Company’s rights and obligations are not assumed, the current offering period will terminate immediately, unless otherwise provided by the Committee.Term
Term of the ESPP
Contingent upon receipt of stockholder approval, the ESPPamended Plan will be effective as of January 1, 2023 and will remain in effect through, and including December 31, 2023,renew automatically annually unless terminated earlierdiscontinued by the Committee.
Plan Amendment and Termination
The Board of Directors orhas delegated the Committee.
Amendmentadministration of the ESPP
SubjectPlan to Executive Compensation Committee. Accordingly, the provisions of Section 423Committee may amend, alter or discontinue the Plan, in whole or in part, for any reason and without the consent of the Code,Participants but no amendment, alteration or discontinuation may be made that would impair the Committee hasrights of a Participant under an award granted without the power to amend the ESPP in its sole discretion at any time in any respect, except where itParticipant’s consent, or that without stockholder approval would increase the costmaximum amount of the ESPP or retroactively impair or otherwise adversely affect the rights ofan award to any person to benefits that have already accruedParticipant authorized under the ESPP. In addition, no amendment may be made without the approval of the stockholders within 12 months of the adoption of the amendment if the amendment would (i) increase the number of shares issued under the ESPP,Plan or (ii) change the class of employees eligible to participate in the ESPP.Plan.
Federal Income Tax InformationNew Plan Benefits
The following discussionIt is intended to be a general summary only of the federal income tax aspects of purchase rights granted under the ESPP based on current United States federal tax laws and regulations, and not of state or local taxes that may be applicable. Tax consequences may vary depending on the particular circumstances, and administrative and judicial interpretations of the application of the federal income tax laws are subject to change. Participants in the ESPP who are residents of or are employed in a country other than the United States may be subject to taxation in accordance with the tax laws of that particular country in addition to or in lieu of U.S. federal income taxes. A participant should consult his or her own tax advisorpossible to determine the tax consequencesactual amount of any particular transaction.
A participant recognizes no taxable income either as a result of commencing participation in the ESPP or purchasing common stockincentive compensation that will be earned under the terms ofPlan in fiscal year 2023 or in future years because the ESPP. If a participant disposes of shares purchased under the ESPP within either two years from the first day of the applicable offering period or within one year from the purchase date, known as disqualifying dispositions, the participant will realize ordinary income in the year of such disposition equal to the amount by which the fair market value of the shares on the purchase date exceeds the purchase price. The amount of the ordinary income will be added to the participant’s basis in the shares, and any additional gain or resulting loss recognized on the disposition of the shares will be a capital gain or loss, which will be long-term if the participant’s holding period is more than 12 months. If the participant disposes of shares purchased under the ESPP at least two years after the first day of the applicable offering period and at least one year after
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the purchase date, the participant will realize ordinary income in the year of disposition equal to the lesser of (i) the excess of the fair market value of the shares on the date of disposition over the purchase price or (ii) 15% of the fair market value of the shares on the first day of the applicable offering period. The amount of any ordinary income will be added to the participant’s basis in the shares, and any additional gain recognized upon the disposition after such basis adjustment will be a long-term capital gain. If the fair market value of the shares on the date of disposition is less than the purchase price, there will be no ordinary income and any loss recognized will be a long-term capital loss. If the participant still owns the shares at the time of death, the lesser of (i) the excess of the fair market value of the shares on the date of death over the purchase price or (ii) 15% of the fair market value of the shares on the first day of the offering period in which the shares were purchased will constitute ordinary income in the year of death. Any ordinary income recognized by a participant upon the disqualifying disposition of the shares generally should be deductible by the Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code or the regulations thereunder.
New Plan Benefits
Future benefits under the ESPP, as proposed to be amended, are not currently determinable, as theyawards earned will depend on future performance as measured against the actual purchase price of shares inapplicable performance goals established by the Executive Compensation Committee. However, it is the Board and management’s opinion that this amendment will not have a material financial impact on the Company. The Company expects that future offering periods, the market value of the Company’s common stock on various future dates, the amount of contributions eligible employees choose to make in the future, and similar factors.
The following table sets forth information concerning the number of shares of Company common stock purchasedawards under the ESPP during calendar year 2017 byPlan will be granted in a manner substantially consistent with the Named Executive Officers; all current executive officers, as a group; all current directors who are not executive officers, as a group; and all current employees who are not executive officers, as a group. This information may not be indicativehistorical grant of the number of shares of Company common stock purchasedawards under the ESPPPlan. For information regarding past awards, see the disclosure in future years.this Proxy Statement in “Grants of Plan-Based Awards”.
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Required Vote
Approval of the amendmentsamendment to the Plan will require the affirmative vote of at least a majority in voting interest of the stockholdersshares of Company Common Stock present in person or represented by proxy (and eligible to vote) and voting at the Annual Meeting, assuming the presence of a quorum. As further discussed in the section titled “Broker non-votesnon-votes” ” on page 28 of this Proxy Statement, if you own shares of Common Stock through a bank, broker or other holder of record, you must instruct your bank, broker or other holder of record how to vote in order for them to vote your shares of Common Stock so that your vote can be counted on this Proposal Three.
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RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”“FOR” APPROVAL OF THE AMENDMENTSAMENDMENT TO THE CURTISS-WRIGHT CORPORATION EMPLOYEE STOCK PURCHASEINCENTIVE COMPENSATION PLAN AS AMENDED, INCLUDING TO INCREASEEXPAND THE TOTAL NUMBERCLASS OF SHARES OF THE COMPANY’S COMMON STOCK RESERVED FOR ISSUANCEEMPLOYEES ELIGIBLE TO RECEIVE AWARDS UNDER THE PLAN BY 750,000 SHARES(PROPOSAL 3).
PROPOSAL FOUR: ADVISORY (NON-BINDING) VOTE TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS
Overview
The Board of Directors is committed to excellence in governance. As part of that commitment, and as required by Section 14A(a)(1) of the Securities Exchange Act of 1934, as amended, the Board of Directors is providing the stockholders with an opportunity to provide an advisory vote to approve
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executive compensation (commonly known as a “Say-on-Pay” proposal). The Board of Directors recognizes that providing stockholders with an advisory vote to approve executive compensation may produce useful information on investor sentiment with regard to the Company’s executive compensation programs. At the 20172022 Annual Meeting of stockholders, over 96% of the shares voted were in favor of the advisory resolution concerning the compensation of the Named Executive Officers. In accordance with the result of the advisoryThe Company’s next Say-on-Pay vote on the frequency of the say-on-pay vote, which was conductedafter this Annual Meeting is expected to occur at the 20172024 Annual Meeting of stockholders, the Board of Directors has determined that the Company will continue to conduct an executive compensation advisory vote on an annual basis. Accordingly, the next Say-on-Pay vote will occur in 2019 in connection with the 2019 Annual Meeting of stockholdersStockholders and each year thereafter until anotherif the stockholders approve, on an advisory basis, the recommendation of the Board in Proposal Five of this Proxy Statement that the frequency of this Say-on-Pay vote on frequency occurs, which willshould be no later than the 2023 Annual Meeting of stockholders.held every one year. The Company’s executive compensation program and practices are fully described in the “Compensation Discussion and Analysis” section and other table and narrative disclosures in this Proxy Statement.
Compensation Objectives
As generally described in the above “Compensation Discussion and Analysis” section of this Proxy Statement, the Company’s executive compensation program is designed to attract and retain high quality executives and to align the interest of management with the interests of stockholders by rewarding both short and long-term performance.
Company Performance
Overall, the Company continued to face a challenging business environment during fiscal 2022, particularly with headwinds throughout the year relating primarily to supply chain delivery disruptions, workforce availability issues, and inflationary pressures. The Company continued to take steps to mitigate the impact of these issues on our fiscal 2022 financial performance. Despite these challenges, the Company performed strongly once againwell in 2017, includingfiscal 2022, with increases in sales, profitability, and operating income. However, the following results. Company still fell slightly below target but above threshold requirements against its adjusted operating income and organic sales growth annual performance metrics and fell below threshold against its working capital as a percentage of sales annual performance metric. As a result, bonus payments for the NEOs under the annual incentive program were below target level pay. Moreover, under the long-term incentive plan, the Company was slightly above target on its adjusted earnings-per-share growth performance target and below threshold against its total sale growth target over the past three-year performance period (2020-2022), as average total sales growth over the performance period was pressured due primarily to the significant disruption from the COVID-19 pandemic across our end markets. As a result, cash-based performance units payouts for the 2020-2022 performance period were significantly below target level and TSR was at the 56th percentile of the S&P MidCap 400. The Company’s believes these results demonstrate the rigor of its financial targets and the strong pay-for-performance alignment under its annual and long-term incentive compensation plans.
Incentive awards earned by the Named Executive Officers for fiscal 20172022 reflect the Company’s strong operating performance and the Company’s commitment to pay for performance. The Company believes that its performance-orientedCompany’s 2022 financial performance for executive compensation program played an important role in the Company’s 2017 successes.included:
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56The Company’s financial performance above includes adjustments referenced in the Company’s fourth quarter 2022 earnings release furnished to the SEC on February 22, 2023. The Company’s financial performance above excludes the performance of acquisitions consummated during the performance period.
The Company urges its stockholders to read the above “Compensation Discussion and Analysis” section of this Proxy Statement, which describes in more detail how the Company’s executive compensation policies and procedures operate and are designed to achieve the Company’s compensation objectives, as well as the Summary Compensation Table and related compensation tables and narratives which provide detailed information on the compensation of the Named Executive
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Officers. The Executive Compensation Committee believes that the policies and procedures articulated in the above “Compensation Discussion and Analysis” section of this Proxy Statement are effective in achieving the Company’s goals and that the compensation of the Named Executive Officers reported in this Proxy Statement has supported and contributed to the Company’s success.
The Board recommends that stockholders continue to support this compensation program by voting on the following resolution:
“RESOLVED, that the stockholders of Curtiss-Wright Corporation approve, on an advisory basis, the compensation paid to the Company’s Named Executive Officers, as disclosed in the Proxy Statement for the 20182023 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables and accompanying narrative disclosure therein.”
This vote is advisory, and therefore not binding on the Company, the Executive Compensation Committee, or the Board of Directors. It will not overrule any decisions made by the Board of Directors or the Executive Compensation Committee or require the Board of Directors or the Executive Compensation Committee to take any specific action. The Board of Directors and the Executive Compensation Committee value the opinions of the stockholders, and, to the extent there is any significant vote against the Named Executive Officers compensation as disclosed in this Proxy Statement, the Board of Directors will consider the stockholder concerns and the Executive Compensation Committee will evaluate whether any actions are necessary to address those concerns.
Adoption of this resolution will require the affirmative vote of at least a majority in voting interest of the stockholdersshares of Company Common Stock present in person or represented by proxy (and eligibleand (eligible to vote) and voting at the Annual Meeting, assuming the presenceprescence of a quorum. As further discussed in the section titled “Broker non-votesnon-votes” ” on page 28 of this Proxy Statement, if you own shares of Common Stock through a bank, broker or other holder of record, you must instruct your bank, broker or other holder of record how to vote in order for them to vote your shares of Common Stock so that your vote can be counted on this Proposal Four.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”“FOR” APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT (PROPOSAL 4).
PROPOSAL FIVE: ADVISORY (NON-BINDING) VOTE TO APPROVE THE FREQUENCY OF FUTURE STOCKHOLDER ADVISORY VOTES APPROVING THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS
Under the Securities Exchange Act of 1934, as amended, public companies are generally required to include in their proxy solicitations at least once every six years an advisory vote on whether a stockholder advisory vote to approve the compensation paid to the Company’s Named Executive Officers, such as the stockholder vote described in this Proposal Five, should occur every one, two or three years. At the last frequency vote in May 2017, over 81% of the shares voted recommended an advisory vote every one year. Accordingly, the Board decided, as previously disclosed, that the non-binding vote to approve the compensation of the Company’s Named Executive Officers will be held every one year. After careful consideration of the benefits and consequences of each option of this Proposal and given the strong stockholder preference for every one year in the last vote, the Board of Directors, on recommendation of the Committee on Directors and Governance, has determined that holding an advisory vote to approve executive compensation every one year is the most appropriate policy for the Company at this time, and therefore recommends that future stockholders’ advisory votes to approve executive compensation continue to occur every one year.
In formulating its recommendation, the Board of Directors decision was influenced by the fact that the compensation of the Named Executive Officers is evaluated, adjusted, and approved on an annual basis. As part of the annual review process, the Board of Directors believes that stockholder views should be a factor that is taken into consideration by the Board of Directors and the Executive
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Compensation Committee in making decisions with respect to executive compensation. By providing an advisory vote on executive compensation on an annual basis, the stockholders will be able to provide the Board of Directors and the Executive Compensation Committee with direct input on the Company’s executive compensation philosophy, policies, and practices as disclosed in this Proxy Statement every year. The Board of Directors understands that the stockholders may have different views as to what is the best approach for the Company, and the Board of Directors looks forward to hearing from the stockholders on this Proposal.
Stockholders may cast their vote on their preferred voting frequency by choosing among the following three alternative resolutions. You may only choose from “OPTION #1 (Every One Year),” “OPTION #2 (Every Two Years)” or “OPTION #3 (Every Three Years),” or you may abstain from voting.
OPTION #1 (Every One Year)
“RESOLVED, that the stockholders of Curtiss-Wright Corporation determine, on an advisory basis, that the frequency with which the stockholders of Curtiss-Wright Corporation shall have an advisory vote to approve the compensation paid to the Company’s Named Executive Officers, as disclosed in Curtiss-Wright Corporation’s proxy statements pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables and accompanying narrative disclosure therein, should occur every one year.”
OPTION #2 (Every Two Years)
“RESOLVED, that the stockholders of Curtiss-Wright Corporation determine, on an advisory basis, that the frequency with which the stockholders of Curtiss-Wright Corporation shall have an advisory vote to approve the compensation paid to the Company’s Named Executive Officers, as disclosed in Curtiss-Wright Corporation’s proxy statements pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables and accompanying narrative disclosure therein, should occur every two years.”
OPTION #3 (Every Three Years)
“RESOLVED, that the stockholders of Curtiss-Wright Corporation determine, on an advisory basis, that the frequency with which the stockholders of Curtiss-Wright Corporation shall have an advisory vote to approve the compensation paid to the Company’s Named Executive Officers, as disclosed in Curtiss-Wright Corporation’s proxy statements pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables and accompanying narrative disclosure therein, should occur every three years.”
Adoption of one of the three resolutions described above will require a plurality of the Common Stock present in person or represented by proxy (and eligible to vote), at a meeting in which a quorum is present, in that the option of one year, two years or three years that receives the highest number of votes cast will be deemed to be the frequency selected by the stockholders. Stockholders are not voting to approve or disapprove the Board of Directors’ recommendation. Rather, stockholders may choose among the three alternative resolutions set forth above, or they may abstain from voting.
This vote is advisory, and therefore not binding on the Company, the Committee on Directors and Governance or the Board of Directors. It will not overrule any decisions made by the Board of Directors or the Committee on Directors and Governance or require the Board of Directors or the Committee on Directors and Governance to take any specific action. The Board of Directors and the Committee on Directors and Governance value the opinions of the stockholders and will take into consideration the voting results when determining how often a non-binding stockholder advisory vote to approve the compensation paid to the Named Executive Officers should occur.
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As further discussed in the section titled “Broker non-votes” on page 8 of this Proxy Statement, if you own shares of Common Stock through a bank, broker or other holder of record, you must instruct your bank, broker or other holder of record how to vote in order for them to vote your shares of Common Stock so that your vote can be counted on this Proposal Five.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” “OPTION #1 (EVERY ONE YEAR)” (PROPOSAL 5).
HOUSEHOLDING OF ANNUAL DISCLOSURE DOCUMENTS
The SEC has adopted rules governing the delivery of annual disclosure documents that permit us to send a single set of our Notice of Internet Availability of Proxy Materials, and for those stockholders that received a paper copy of the proxy materials in the mail, a single set of our annual report and proxy statement, to any household at which two or more stockholders reside if we believe that the stockholders are members of the same family, unless we have received contrary instructions from one or more of the stockholders. This rule benefits both stockholders and the Company. It reduces the volume of duplicate information received and helps to reduce our expenses. Each stockholder will continue to receive a separate proxy card if they received a paper copy of the proxy materials in the mail. If your household received a single set of such disclosure documents for this year, but you would prefer to receive your own copy now or in the future, please contact our transfer agent, Broadridge Financial Solutions, Inc., by calling their toll-free number, 1-800-542-1061, or writing to Broadridge Financial Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, New York 11717. A separate copy of such disclosure documents will be promptly provided to you upon receipt of your request. Stockholders sharing an address who are receiving multiple copies of the Notice of Internet Availability of Proxy Materials or our proxy statement and annual report, as applicable, and who wish to
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receive a single copy of such materials in the future, please contact Broadridge Financial Solutions, Inc. as indicated above.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
FOR 20192024 ANNUAL MEETING
Pursuant to regulations of the SEC, stockholders who intend to submit proposals for inclusion in our proxy materials for the 20192024 Annual Meeting must do so no later than November 24, 2018.2023. This requirement is separate from the SEC’s other requirements that must be met to have a stockholder proposal included in our proxy statement.Proxy Statement. In addition, this requirement is independent of certain other notice requirements of our Amended and Restated By-laws described below. All stockholder proposals and notices should be submitted to Corporate Secretary, Curtiss-Wright Corporation, One130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036. The attached proxy card grants the proxy holder discretionary authority to vote on any matter raised and presented at the Annual Meeting. Pursuant to amended SEC Rule 14a-4(c)(1), we will exercise discretionary voting authority to the extent conferred by proxy with respect to stockholder proposals received after February 7, 2019.2024.
If a stockholder of record wishes to nominate Directors or bring other business to be considered by stockholders at the 20192024 Annual Meeting, such proposals may only be made in accordance with the following procedure. Under our current Amended and Restated By-laws, nominations of Directors or other proposals by stockholders must be made in writing to our offices no later than February 9, 20192, 2024 and no earlier than January 11, 2019.4, 2024. However, if the date of the 20192024 Annual Meeting is advanced by more than 30 days or delayed by more than 70 days from the anniversary date of the 20182023 Annual Meeting, then such nominations and proposals must be delivered in writing to the Company no earlier than 120 days prior to the 20192024 Annual Meeting and no later than the close of business on the later of (i) the 90th day prior to the 20192024 Annual Meeting, or (ii) if the first public announcement of the date of such advanced or delayed annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of the 20192024 Annual Meeting is first made.
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Please note that these requirements relate only to matters proposed to be considered for the 20192023 Annual Meeting. They are separate from the SEC’s requirements to have stockholder proposals included in the Company’s 20192024 proxy statement.
2017In addition to satisfying the foregoing requirements under our Amended and Restated By-laws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 4, 2024.
2022 ANNUAL REPORT ON FORM 10-K
Any stockholder wishing to receive, without charge, a copy of the Company’s 20172022 Annual Report on Form 10-K (without exhibits) filed with the SEC on February 22, 2023, should write to the Corporate Secretary, Curtiss-Wright Corporation, One130 Harbour Place Drive, Suite 300, Davidson, North Carolina 28036. Exhibits to the Form 10-K will be furnished upon written request and payment of the Company’s expenses in furnishing such documents. The Company’s 20172022 Annual Report on Form 10-K is also available free of charge through the Investor Relations section of the Company’s website atwww.curtisswright.com https://curtisswright.com/investor-relations/financials/sec-filings..
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OTHER MATTERS WHICH MAY BE PRESENTED
FOR ACTION AT THE MEETING
The Board of Directors does not intend to present for action at this Annual Meeting any matter other than those specifically set forth in the Notice of Annual Meeting. If any other matter is properly presented for action at the Annual Meeting, it is the intention of persons named in the proxy to vote thereon in accordance with their judgment pursuant to the discretionary authority conferred by the proxy.
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By Order of the Board of Directors | ||
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Paul J. Ferdenzi |
Dated: March 23, 201824, 2023
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Appendix A
CURTISS-WRIGHTCURTISS WRIGHT CORPORATIONEMPLOYEE STOCK PURCHASE
INCENTIVE COMPENSATION PLAN
(Effective January 1, 2006)
As Amended effective May 10, 2018February 14, 2023
1. General
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| Purpose. The purpose of | |||
| • | Encourage and reward Participants for superior levels of company and individual performance; | ||
| • | Link compensation opportunities to performance, and reinforce a pay-for-performance culture; | ||
| • | Support the Company’s executive recruitment and retention objectives; | ||
| • | Be consistent with market practices and the Company’s executive compensation philosophy; and | |||
| • | Comply with all applicable regulatory requirements. | |||
2. Definitions
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2.4 | Committee “Committee” shall mean the Executive Compensation Committee (“ECC”) of the Board of Directors of the | |
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2.10 | Officer. “Officer” shall mean any employee duly elected by the Corporation’s Board of Directors to a position listed as an officer under the |
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2.11 | Participant. “Participant” shall mean any Eligible Employee selected by the CEO and the Committee to participate in the Plan for a particular Plan Year in accordance with the procedures described in Section 4.2. | |
2.12 | Plan. “Plan” shall mean the Company’s Incentive Compensation (IC) Plan. | |
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2.15 | Threshold. “Threshold” shall mean a base or minimum level of performance, established by the Committee for each Participant, below which no Award shall be made. | |
2.16 | Vested. “Vested” shall mean that a Participant has a nonforfeitable interest in his or her Award. | |
2.17 | Vesting Date. “Vesting Date” |
3. Administration
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3.2 | Amendment, Modification or Termination. The Board of Directors may amend, alter or discontinue the Plan, but no amendment, alteration, or discontinuation shall be made that would impair the rights of a Participant under an Award heretofore granted, without the Participant’s consent, or that without the approval of the stockholders would: | |||
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(b) | change the class of employees eligible to participate in the Plan. | |||
4. Eligibility and Participation
4.1 | Participation. The Committee shall, at such time or times during the current year as it shall elect, determine the Participants to receive incentive awards for the subsequent year, the amount and form of each award and the terms and conditions applicable to it, all at the sole discretion of the Committee. The Committee may delegate such authority to the CEO as it applies to non-Officer Participants. The CEO ex officio shall be an eligible employee for purposes of selection to participate in the Plan. Selection as a Participant for one Plan Year conveys no right to participation in any | |
4.2 | Effect of Participation on Other Bonus Plans. An employee may not participate or receive credit for service under any other annual incentive plan while participating in and/or receiving credit for service under this Plan. |
5. Incentive Awards
5.1 | Target Awards. The Committee, based on input from the CEO, shall establish Target Award guidelines expressed as a percent of annual base salary for each Participant, provided, however, that the Committee shall maintain sole responsibility for annually determining the specific Target Awards for the CEO and | |
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5.2 | Annual Awards. At the beginning of the Plan Year, the Board of Directors approves performance measures, standards and goals for the CEO and Officers for the Plan Year. The CEO will approve performance measures, standards and goals for Participants below the Officer level. The degree of achievement of those goals will determine the Award earned at the end of the Plan Year. For Officers, performance achievement will be based on one or more of the following performance measures: (i) operating income, net earnings or net income (before or after taxes); (ii) earnings growth; (iii) earnings per share; (iv) net sales (including net sales growth); (v) gross profits or net operating profit; (vi) return measures (including, but not limited to, return on assets, capital, equity or sales); (vii) cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on capital); (viii) revenue growth; (ix) earnings before or after taxes, interest, depreciation, and/or amortization; (x) productivity ratios; (xi) share price (including, but not limited to, growth measures and total shareholder return); (xii) expense targets; (xiii) margins (including, but not limited to, gross or operating margins); (xiv) operating efficiency; (xv) customer satisfaction or increase in the number of strategic or operational initiatives; (xvi) attainment of budget goals; (xvii) attainment of strategic or operational initiatives; (xviii) market share; (xix) cost containment or reductions; (xxi) working capital targets; (xxii) EVA or other value-added measures; and (xxi) individual goals directly related to business performance. Any performance measure may be (i) used to measure the performance of the Company and/or any of its | |
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5.4 | Individual Qualification. Each Participant must remain an employee at the Vesting Date and in good standing with the Company and satisfy the overall standards of performance generally established for the Participant’s position throughout the Plan Year to qualify for the payment of an Award for that same Plan Year. | |
5.5 | Payment of Awards. Incentive awards for any year may be made in cash. The Committee shall review and approve awards and advise the Board of Directors of the Awards for the Company’s Officers. |
In the discretion of the Committee, awards may be paid either promptly after the award is made or over any period of time, or in any number of payments, which need not be uniform in amount. Amounts not paid at the time of an award may be retained by the Corporation and its subsidiaries (without liability for interest) pending the payment thereof in accordance with the terms and conditions of such award or may be deferred under the terms and conditions of the Company’s Executive Deferred Compensation Plan (EDCP).
The Committee may also, if something other than the EDCP is used, in its sole discretion establish arrangements, terms and conditions under which portions of awards payable in the future may be invested in securities or other suitable or appropriate property, or earn fair market rate of interest subject only to the approval of the Board of Directors. The amounts of such future payments shall be subject to increase or decrease to reflect income earned on, and gains or losses of principal of, the funds so invested, all without liability on the part of any Director or the Corporation except when such losses are judicially determined to be due to the gross negligence or willful misconduct of the respective parties.
When payments are to be made in installments, the Committee shall fix the time or times of payment, and impose such terms and conditions with respect to the payment and forfeiture of the installments, as in its judgment will best serve the interests of the Corporation and the purposes of the Plan. Each award, or installment thereof, forfeited under the terms and conditions imposed by the Committee, shall be retained by the Corporation.
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6. Deferral of Awards
6.1 | Voluntary Deferral. A Participant may choose to defer payment of the earned portion of the Award according to whatever provisions the Company may make for deferral of compensation from time to time. | |
6.2 | Forfeiture of Deferred Awards. Forfeiture of any |
7. Change of Employment Status
7.1 | Termination of Employment. A Participant must continue to be an employee of the Company | |
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7.3 | Retirement. If a Participant’s employment with the Company is terminated by reason of retirement before any Award becomes Vested, the Committee (for the CEO and Officers) and the CEO (for all other participants) may, | |
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8. General Provisions
8.1 | Not a Binding Contract. Nothing in this document or in any other | |
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8.7 | Governing Law. This Plan and all Awards made hereunder shall be and any actions taken | |
8.8 | Unenforceable Provisions. If any provision of the Plan is held invalid or unenforceable, such invalidity or enforceability shall not affect any other provision of the Plan. | |
8.9 | Administrative Guidelines. The Committee may establish a set of administrative guidelines which identify the rules, procedures and processes according to which it intends to administer the Plan. These guidelines do not supersede any of the provisions of the Plan specified herein. The Committee may, at its sole discretion, modify these guidelines from time to time without | |
8.10 | Committee Liability. No member of the Committee shall be liable for any act or omission in connection with the execution of his duties or the exercise of his discretion hereunder, except when due to his own gross negligence or willful misconduct. The Corporation shall indemnify and hold harmless each member of the Committee from any and all claims, loss, damages, expense (including counsel fees) and liability (including any amounts paid in settlement with the approval of the Board of Directors of the Corporation) arising from any act or omission of such member, except when the same is judicially determined to be due to the |
A-12A-5
CURTISS-WRIGHT CORPORATION
C/O BROADRIDGE
P.O. BOX 1342
BRENTWOOD, NY 11717
  | SCAN TO VIEW MATERIALS & VOTE |   |
VOTE BY INTERNET -www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
VOTE IN PERSON
You may vote these shares in person by attending the annual meeting. Directions to the meeting are available at www.proxyvote.com.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E38571-P01843 KEEP THIS PORTION FOR YOUR RECORDS
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |
| D98643-P87544 | KEEP THIS PORTION FOR YOUR RECORDS |
| DETACH AND RETURN THIS PORTION ONLY |
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| CURTISS-WRIGHT CORPORATION | For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ||||||||||||||
| The Board of Directors recommends you vote FOR the following: | ||||||||||||||||||
| 1. | Election of Directors | o | o | o | ||||||||||||||
| Nominees: | ||||||||||||||||||
| 01) | David C. Adams | 06) | Allen A. Kozinski | |||||||||||||||
| 02) | Dean M. Flatt | 07) | John B. Nathman | |||||||||||||||
| 03) | S. Marce Fuller | 08) | Robert J. Rivet | |||||||||||||||
| 04) | Rita J. Heise | 09) | Albert E. Smith | |||||||||||||||
| 05) | Bruce D. Hoechner | 10) | Peter C. Wallace | |||||||||||||||
| The Board of Directors recommends you vote FOR the following proposals: | For | Against | Abstain | |||||||||||||||
| 2. | To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2018 | o | o | o | ||||||||||||||
| 3. | To approve the amendments to the Curtiss-Wright Corporation Employee Stock Purchase Plan, as amended, including to increase the total number of shares of the Company’s common stock reserved for issuance under the plan by 750,000 shares | o | o | o | ||||||||||||||
| 4. | An advisory (non-binding) vote to approve the compensation of the Company’s named executive officers | o | o | o | ||||||||||||||
| NOTE: Such other business as may properly come before the meeting or any adjournment thereof. | ||||||||||||||||||
| For address changes and/or comments, please check this box and write them on the back where indicated. | o | |||||||||||||||||
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||
| CURTISS-WRIGHT CORPORATION | For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | |||||||||||||||||||
| The Board of Directors recommends you vote FOR the following: | |||||||||||||||||||||||
| 1. | Election of Directors | ☐ | ☐ | ☐ | |||||||||||||||||||
| Nominees: | |||||||||||||||||||||||
| 01) | Lynn M. Bamford | 06) Anthony J. Moraco | |||||||||||||||||||||
| 02) | Dean M. Flatt | 07) William F. Moran | |||||||||||||||||||||
| 03) | S. Marce Fuller | 08) Robert J. Rivet | |||||||||||||||||||||
| 04) | Bruce D. Hoechner | 09) Peter C. Wallace | |||||||||||||||||||||
| 05) | Glenda J. Minor | 10) Larry D. Wyche | |||||||||||||||||||||
| The Board of Directors recommends you vote FOR the following proposals: | For | Against | Abstain | ||||||||||||||||||||
| 2. | To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2023 | ☐ | ☐ | ☐ | |||||||||||||||||||
| 3. | To approve an amendment to the Curtiss-Wright Corporation Incentive Compensation Plan to expand the class of employees eligible to receive awards under the plan | ☐ | ☐ | ☐ | |||||||||||||||||||
| 4. | An advisory (non-binding) vote to approve the compensation of the Company’s named executive officers | ☐ | ☐ | ☐ | |||||||||||||||||||
| The Board of Directors recommends that you vote 1 Year on the following proposal: | 1 Year | 2 Years | 3 Years | Abstain | |||||||||||||||||||
| 5. | To approve on an advisory (non-binding) basis the frequency of future stockholder advisory votes approving the compensation of the Company’s named executive officers | ☐ | ☐ | ☐ | ☐ | ||||||||||||||||||
| NOTE: Such other business as may properly come before the meeting or any adjournment thereof. | |||||||||||||||||||||||
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | |||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on Thursday, May 10, 2018. 4, 2023.
A Notice and Proxy Statement and combinedCombined Business Review/20172022 Annual Report on Form 10-K to security holders are available at www.proxyvote.com.
| D98644-P87544 |
E38572-P01843
CURTISS-WRIGHT CORPORATION
Annual Meeting of Stockholders
May 10, 2018 10:4, 2023 1:00 AM
PM
This proxy is solicited by the Board of Directors
The undersigned hereby constitutes and appoints DAVID C. ADAMS, GLENN E. TYNANLYNN M. BAMFORD, KEVIN M. RAYMENT and HARRY JAKUBOWITZ,K. CHRISTOPHER FARKAS, and each of them, as proxies of the undersigned, with full power to appoint histheir substitute, and authorizes each of them to represent and to vote all shares of common stock, par value $1.00 per share, of Curtiss-Wright Corporation (the “Company”) which the undersigned is entitled to vote at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Thursday, May 10, 2018,4, 2023, at the Homewood Suites by Hilton, 125 Harbour Place Drive, Davidson, North Carolina 28036, commencing at 10:1:00 AMPM local time, or any adjournment or postponement thereof, with all the powers the undersigned would have if personally present, respecting the matters described in the accompanying proxy statement and, in their discretion, on other matters which may properly come before the meeting. When properly executed, this proxy will be voted in the manner directed herein by the undersigned stockholder(s).
If no direction is given, this proxy will be voted FOR the Director nominees listed in Proposal One and FOR Proposals Two, Three, and Four.Four, and 1 Year for Proposal 5. In their discretion, the proxies are each authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof. A stockholder wishing to vote in accordance with the Board of Directors’ recommendations need only sign and date this proxy and return it in the enclosed envelope.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying Notice of Annual Meeting of Stockholders, the proxy statement with respect thereto, the Company’s 20172022 Annual Report on Form 10-K filed with the Securities and Exchange Commission, and Business Review to Stockholders and hereby revoke(s) any proxy or proxies heretofore given. This proxy may be revoked at any time before it is exercised.
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
