SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CIRCOR INTERNATIONAL, INC.
----------------------------------------------------
(Name of Registrant as Specified In Its Certificate)
CIRCOR INTERNATIONAL, INC.
----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
3) Filing Party:
-------------------------------------------------------------------------
4) Date Filed:
-------------------------------------------------------------------------
[LOGO]
CIRCOR
International, Inc.
35 Corporate Drive
Burlington, MA 01803
(781) 270-1200
March 27, 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting (the "Annual
Meeting") of CIRCOR International, Inc., a Delaware corporation (the "CIRCOR"),
to be held on Thursday, April 25, 2002, at 9:00 a.m., Central Time, at the
offices of the Company's subsidiary, KF Industries, Inc., 1500 S.E. 89th
Street, Oklahoma City, Oklahoma.
The Annual Meeting has been called for the purpose of (i) electing one Class
III Director for a term of three years, (ii) ratifying the selection of KPMG
LLP as the independent auditors for the fiscal year ending December 31, 2002
and (iii) considering and voting upon such other business as may properly come
before the Annual Meeting or any adjournments or postponements thereof.
Regarding the election of Directors, the enclosed Proxy Statement indicates
that Mr. Timothy P. Horne, who has served as a Class III Director, has decided
for personal reasons not to stand for re-election. Mr. Horne also serves as
Chairman, President and Chief Executive Officer of Watts Industries, Inc. from
which CIRCOR was spun-off over two years ago. We appreciate the many
contributions that Mr. Horne has made in assisting CIRCOR through its formative
period and helping us establish a solid foundation. As a result, the Company's
Board of Directors has voted to reduce the size of the Board from six to five
members--and the number of Class III Directors from two to one--effective with
the Annual Meeting.
The Board of Directors has fixed the close of business on March 18, 2002 as
the record date for determining stockholders entitled to notice of, and to vote
at, the Annual Meeting and any adjournments or postponements thereof.
The Board of Directors of the Company recommends that you vote "FOR" the
election of the nominee of the Board of Directors as Director of the Company
and that you vote "FOR" the ratification of the Company's independent auditors.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. YOUR PROXY
IS REVOCABLE UP TO THE TIME IT IS VOTED, AND, IF YOU ATTEND THE ANNUAL MEETING,
YOU MAY VOTE IN PERSON, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
Sincerely,
/s/ David A. Bloss, Sr.
David A. Bloss, Sr.
Chairman, President and Chief
Executive Officer
[LOGO]
CIRCOR
International, Inc.
35 Corporate Drive
Burlington, MA 01803
(781) 270-1200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Thursday, April 25, 2002
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of CIRCOR
International, Inc. (the "Company") will be held on Thursday, April 25, 2002,
at 9:00 a.m., Central Time, at the offices of the Company's subsidiary, KF
Industries, Inc., 1500 S.E. 89th Street, Oklahoma City, Oklahoma (the "Annual
Meeting") for the purpose of considering and voting upon:
1. The election of one Class III Director for a term of three years;
2. The ratification of the selection of KPMG LLP as the Company's
independent auditors for the fiscal year ending December 31, 2002; and
3. Such other business as may properly come before the Annual Meeting and
any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 18, 2002 as
the record date for determination of stockholders entitled to notice of, and to
vote at, the Annual Meeting and any adjournments or postponements thereof. Only
holders of record of the Company's Common Stock, par value $.01 per share, at
the close of business on that date will be entitled to notice of, and to vote
at, the Annual Meeting and any adjournments or postponements thereof.
In the event there are not sufficient shares to be voted in favor of any of
the foregoing proposals at the time of the Annual Meeting, the Annual Meeting
may be adjourned in order to permit further solicitation of proxies.
Directions to the offices of KF Industries, Inc. are included on the inside
back cover of this Proxy Statement.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
YOUR PROXY IS REVOCABLE UP TO THE TIME IT IS VOTED, AND, IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON EVEN IF YOU HAVE PREVIOUSLY RETURNED
YOUR PROXY CARD.
By Order of the Board of Directors
/s/ Alan J. Glass
Alan J. Glass
Assistant Secretary
Burlington, Massachusetts
March 27, 2002
[LOGO]
CIRCOR
International, Inc.
35 Corporate Drive
Burlington, MA 01803
-----------------
PROXY STATEMENT
-----------------
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Thursday, April 25, 2002
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of CIRCOR International, Inc. (the "Company")
for use at the Annual Meeting of Stockholders of the Company to be held on
Thursday, April 25, 2002 at 9:00 a.m., Central Time, at the offices of the
Company's subsidiary, KF Industries, Inc., 1500 S.E. 89th Street, Oklahoma
City, Oklahoma, and any adjournments or postponements thereof (the "Annual
Meeting").
At the Annual Meeting, the stockholders of the Company will be asked to
consider and vote upon the following matters:
1. The election of one Class III Director for a three-year term, such term
to continue until the Annual Meeting of Stockholders in 2005 and until
such Director's successor is duly elected and qualified;
2. The ratification of the selection of KPMG LLP as the Company's
independent auditors for the fiscal year ending December 31, 2002
("Fiscal 2002"); and
3. Such other business as may properly come before the meeting and any
adjournments or postponements thereof.
The Notice of Annual Meeting, Proxy Statement and Proxy Card are first being
mailed to stockholders of the Company on or about March 27, 2002 in connection
with the solicitation of proxies for the Annual Meeting. The Board of Directors
has fixed the close of business on March 18, 2002 as the record date for the
determination of stockholders entitled to notice of, and to vote at, the Annual
Meeting (the "Record Date"). Only holders of record of the Company's commons
stock, par value $.01 per share (the "Common Stock"), at the close of business
on the Record Date will be entitled to notice of, and to vote at, the Annual
Meeting. As of the Record Date, there were 14,866,950 shares of Common Stock
outstanding and entitled to vote at the Annual Meeting and approximately 135
stockholders of record. Each holder of a share of Common Stock outstanding as
of the close of business on the Record Date will be entitled to one vote for
each share held of record with respect to each matter submitted at the Annual
Meeting.
The presence, in person or by proxy, of holders of at least a majority of
the total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. A quorum being present, the affirmative vote of a plurality of the
votes cast is necessary to elect the nominee as a Director of the Company and a
majority of the votes cast is necessary to ratify the selection of the
independent auditors.
Shares that reflect abstentions or "broker non-votes" (i.e., shares
represented at the meeting held by brokers or nominees as to which instructions
have not been received from the beneficial owners or persons entitled to vote
such shares and with respect to which the broker or nominee does not have
discretionary voting power to vote such shares) will be counted for purposes of
determining whether a quorum is present for the transaction of
1
business at the Annual Meeting. With respect to the election of the Director,
votes may be cast for or withheld from the nominee. Votes cast for the nominee
will count as "yes" votes; votes that are withheld from the nominee will not be
voted with respect to the election of Director although they will be counted
when determining whether there is a quorum. Broker non-votes will have no
effect on the outcome of the election of Director.
Stockholders of the Company are requested to complete, date, sign and return
the accompanying Proxy Card in the enclosed envelope. Common Stock represented
by properly executed proxies received by the Company and not revoked will be
voted at the Annual Meeting in accordance with the instructions contained
therein. If instructions are not given therein, properly executed proxies will
be voted "FOR" the election of the nominee for Director listed in this Proxy
Statement and "FOR" the ratification of the selection of the independent
auditors. It is not anticipated that any matters other than the election of the
Director and the ratification of the selection of independent auditors will be
presented at the Annual Meeting. If other matters are presented, proxies will
be voted in accordance with the discretion of the proxy holders.
Any properly completed proxy may be revoked at any time before it is voted
on any matter (without, however, affecting any vote taken prior to such
revocation) by giving written notice of such revocation to the Secretary or
Assistant Secretary of the Company, or by signing and duly delivering a proxy
bearing a later date, or by attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not, by itself, revoke a proxy.
The Annual Report to stockholders of the Company, which includes the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2001 ("Fiscal 2001") is being mailed to stockholders of the Company
concurrently with this Proxy Statement. Except where otherwise incorporated by
reference, the Annual Report and Annual Report on Form 10-K, are not a part of
the proxy solicitation material.
PROPOSAL 1
ELECTION OF DIRECTOR
The Board of Directors of the Company currently consists of six members who
are divided into three classes, with two Directors in Class I, two Directors in
Class II and two Directors in Class III. Directors serve for three-year terms
with one class of Directors being elected by the Company's stockholders at each
annual meeting.
Recently, however, one of the Class III Directors, Timothy P. Horne, the
Chairman and Chief Executive Officer of Watts Industries, Inc., decided for
personal reasons not to stand for re-election. As a result, the Board of
Directors has voted to reduce the size of the Board from six members to five
members effective as of the Annual Meeting. At the Annual Meeting, therefore,
one Class III Director will be elected to serve until the annual meeting of
stockholders in 2005 and until such Director's successor is duly elected and
qualified. The Board of Directors has nominated David A. Bloss, Sr., a current
Class III Director, for re-election. Mr. Bloss is the Company's current
Chairman, President and Chief Executive Officer. Unless otherwise specified in
the proxy, it is the intention of the persons named in the proxy to vote the
shares represented by each properly executed proxy for the election of David A.
Bloss, Sr. as Director. Mr. Bloss has agreed to stand for election and to
serve, if elected, as Director. However, if the person nominated by the Board
of Directors fails to stand for election or is unable to accept election, the
proxies will be voted for the election of such other person as the Board of
Directors may recommend.
Vote Required For Approval
A quorum being present, the affirmative vote of a plurality of the votes
cast is necessary to elect the nominee as Director of the Company.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE ELECTION OF
THE NOMINEE OF THE BOARD OF DIRECTORS AS DIRECTOR OF THE COMPANY.
2
MANAGEMENT
Executive Officers, Directors and Key Employees
Our executive officers, directors and key employees, and their respective
ages and positions as of March 15, 2002, are as follows:
Name Age Position
---- --- --------
David A. Bloss, Sr....... 51 Chairman, President and Chief Executive Officer
Kenneth W. Smith......... 51 Vice President, Chief Financial Officer and
Treasurer
Alan R. Carlsen.......... 54 Executive Vice President, Operations
Stephen J. Carriere...... 46 Vice President, Corporate Controller and
Assistant Treasurer
Alan J. Glass............ 38 Corporate Counsel and Assistant Secretary
Paul M. Coppinger........ 40 Vice President, Petrochemical Products
Douglas E. Frank......... 53 Vice President, Thermal Fluid Controls Products
Carl J. Nasca............ 50 Vice President, Instrumentation Products
Barry L. Taylor, Sr...... 46 Vice President and General Manager, Hoke
Operations
Dewain K. Cross (1)(2)... 64 Director
David F. Dietz (2)....... 52 Director
Timothy P. Horne......... 63 Director
Daniel J. Murphy, III (1) 60 Director
Thomas N. Tullo (1)(2)... 44 Director
- --------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
David A. Bloss, Sr. Mr. Bloss has been employed by the Company since June
1993 and assumed his present position as our Chairman, President and Chief
Executive Officer in August 1999. He joined Watts Industries, Inc. ("Watts") as
Executive Vice President in June 1993 and served as President and Chief
Operating Officer from April 1997 until CIRCOR was spun off from Watts in
October 1999. Prior to joining Watts, Mr. Bloss was associated for five years
with the Norton Company, a manufacturer of abrasives and cutting tools, serving
as President of the Superabrasives Division.
Kenneth W. Smith. Mr. Smith has served as the Company's Vice President,
Chief Financial Officer and Treasurer since April 2000. Mr. Smith served as the
Vice President of Finance at North Safety Products, a division of Invensys plc,
from January 1997 to April 2000. From 1986 through December 1996, he served in
a variety of senior financial positions for Digital Equipment Corporation.
Prior to 1986, Mr. Smith was a certified public accountant for Ernst & Young.
Alan R. Carlsen. Mr. Carlsen assumed his present position as Executive Vice
President, Operations in November 2000. Mr. Carlsen had previously served as
Group Vice President, Instrumentation and Fluid Regulation Products from August
1999 until October 2000. Mr. Carlsen served as Group Vice President of Steam
Products for Watts from September 1998 until August 1999. Prior to that time,
Mr. Carlsen was the Vice President and General Manager of Leslie Controls, Inc.
from July 1997 to September 1998, was the corporate Vice President of
Manufacturing of Watts from June 1995 to July 1997 and prior to that was
Director of Manufacturing for Senior Flexonics, Inc., a manufacturer of tubular
goods.
Stephen J. Carriere. Mr. Carriere has served the Company as Vice President,
Corporate Controller and Assistant Treasurer since March 2000 and as Corporate
Controller since shortly after we were created in July 1999. He joined Watts as
Assistant Corporate Controller in January 1997 and served in that position
until we
3
were spun off in October 1999. From September 1982 to January 1997, he worked
at Wang Laboratories, Inc. where he held a variety of U.S. and international
controllership and senior corporate finance positions. Prior to 1982, Mr.
Carriere was associated with Child World, Inc. and served as a certified public
accountant for KPMG LLP.
Alan J. Glass. Mr. Glass has served the Company as Corporate Counsel and
Assistant Secretary since February 2000. Mr. Glass served as Corporate Counsel
and Assistant Secretary of Wyman-Gordon Company, an aerospace manufacturer,
from June 1996 to February 2000. Prior to that time, he spent seven years in
private practice as a general corporate attorney.
Paul M. Coppinger. Mr. Coppinger joined the Company in July 2001 as Vice
President--Petrochemical Products. From October 1999 until July 2001, Mr.
Coppinger was an owner and President of Copprex, Inc., a manufacturer of
commercial appliances. Prior to that, he spent 13 years with Baker Hughes, most
recently serving as Vice President Sales & Marketing of EIMCO, its $200-million
process equipment division. While at Baker Hughes, Mr. Coppinger had
significant international experience, spending five years in Singapore and
Indonesia in support of the Pacific Rim activities of the Baker Tools division.
Carl J. Nasca. Mr. Nasca joined the Company in December 1999 as Vice
President of Industrial Sales and Marketing, Circle Seal Controls. He served as
Vice President and General Manager, Circle Seal Controls from November 2000
until November 2001 at which time he became Vice President, Instrumentation
Products. From April 1999 to November 1999, he was the Vice President and
Regional Manager for Ingersoll-Rand. Prior to that time, Mr. Nasca served as
the General Manager of the Portable Air Compressor Division of Ingersoll-Rand
from January 1997 to April 1999 and Business Unit Manager for the Rock Drill
Division of Ingersoll-Rand from March 1995 to December 1996.
Barry L. Taylor, Sr. Mr. Taylor has served as Vice President and General
Manager, Hoke Operations since November 2000. Previously he served as Vice
President, Operations, Hoke, Inc. from April 1997 to October 2000. From June
1993 to March 1997, Mr. Taylor served as Vice President of Worldwide
Manufacturing for Hoke, Inc. Prior to that time, he served as Vice President of
U.S. Manufacturing, Plant Manager and Materials Manager at Hoke, Inc.
Douglas E. Frank. Mr. Frank has served the Company as Vice President,
Thermal Fluid Controls Products since September 1999. From August 1997 through
August 1999, he held executive marketing and sales roles with Spence
Engineering and Leslie Controls. From June 1995 through July 1997, Mr. Frank
served as Vice President and a member of the board of directors of Mikron
Instrument Company, a manufacturer of infrared instrumentation equipment, and
from December 1983 through May 1995 he served as Vice President, Sales and
Marketing and then, General Manager and Chief Operating Officer of Thermo
Electric, a manufacturer of temperature instrumentation.
Dewain K. Cross. Mr. Cross has served as a member of the Company's Board of
Directors since its inception in July 1999. Mr. Cross joined Cooper Industries,
Inc. in 1966 as Director, Accounting and Taxation, Assistant Controller, and
Treasurer. Mr. Cross was appointed Vice President, Finance of Cooper Industries
in 1972 and was named Senior Vice President, Finance of Cooper Industries in
1980. He was the Senior Vice President, Finance for Cooper Industries from 1980
until he retired in April 1995. Mr. Cross is also a director of Magnetek, Inc.
David F. Dietz. Mr. Dietz has served as a member of the Company's Board of
Directors since its inception in July 1999. Mr. Dietz or his professional
corporation has been a partner of the law firm of Goodwin Procter LLP since
1984. Mr. Dietz is also a director of the Andover Companies, a property and
casualty insurance company, and High Liner Foods (USA), Inc., a frozen food
company.
Timothy P. Horne. Mr. Horne has served as a member of the Company's Board
of Directors since its inception in July 1999. He has been the Chief Executive
Officer of Watts since 1978 and Chairman of the Board of Watts since 1986.
Prior to that, Mr. Horne served as the President of Watts from 1976 to 1978 and
again from 1994 to April 1997. Mr. Horne joined Watts in September 1959 and has
been a director of Watts since 1962.
4
Daniel J. Murphy, III. Mr. Murphy has served as a member of the Company's
Board of Directors since its inception in July 1999. He has been the Chairman
of Northmark Bank since August 1987. Prior to joining Northmark Bank in 1987,
Mr. Murphy was a Managing Director of Knightsbridge Partners, Inc., a venture
capital firm, from January to August 1987, and President and Director of Arltru
Bancorporation, a bank holding company, and its wholly owned subsidiary,
Arlington Trust Company, from 1980 to 1986. Mr. Murphy is also a director of
Bay State Gas Company and has been a director of Watts since 1986.
Thomas N. Tullo. Mr. Tullo has served as a member of the Company's Board of
Directors since February 2001. Since June 2001, he has served as a Managing
Director of Needham & Company, Inc. From January 2001 through May 2001, he was
a private investor, and prior to that, from 2000 through January 2001, he
served as Senior Managing Director of Equity Capital Network, a venture capital
and private equity firm. From 1998 to 2000, Mr. Tullo was a Managing Director
of ING Barings, and from 1997 to 1998, he was a Managing Director of Furman
Selz. From 1995 to 1997, Mr. Tullo served as a Managing Director of Schroder &
Co. From 1986 to 1995, Mr. Tullo served in various senior roles at Goldman
Sachs & Co. and S.G. Warburg & Co.
Board Composition
The number of directors currently is fixed at six. CIRCOR's Board of
Directors is divided into three classes, each of whose members serve for a
staggered three-year term. The Board of Directors consists of two directors in
Class I, whose terms of office will continue until the annual meeting of
stockholders in 2003, two Class II directors, whose terms of office will
continue until the annual meeting of stockholders in 2004, and two Class III
directors, whose terms of office will continue until the annual meeting of
stockholders in 2002. The Class I directors are David F. Dietz and Thomas N.
Tullo, the Class II directors are Dewain K. Cross and Daniel J. Murphy, III,
and the Class III directors are David A. Bloss, Sr. and Timothy P. Horne. At
each annual meeting of stockholders, a class of directors will be elected for a
three-year term to succeed the directors of the same class whose terms are then
expiring. As noted previously, however, Mr. Horne recently announced his
decision to not stand for re-election when his term expires at this year's
Annual Meeting. As a result, the Board of Directors has voted to reduce the
number of directors from six to five when Mr. Horne's term expires at the
Annual Meeting, which will result in there being one Class III director.
There are no family relationships among any of our directors or executive
officers.
Board Meetings and Committees
The Board of Directors of the Company held five (5) meetings during the year
ended December 31, 2001 ("Fiscal 2001"), and each of the Directors attended at
least 75% of the total number of meetings of the Board and of the committees of
which he was a member. The Board of Directors has established an Audit
Committee and a Compensation Committee. It has not established a nominating
committee; instead, the full Board of Directors performs the functions of such
a committee.
Audit Committee. The Audit Committee, which held four (4) meetings during
Fiscal 2001, consists of Messrs. Cross, Murphy and Tullo. Each member of the
Audit Committee is "independent" as that term is defined in the rules of the
SEC and the applicable listing standards of the New York Stock Exchange
("NYSE"). Each member also meets the financial literacy requirements of the
NYSE.
The Audit Committee recommends the firm to be appointed as independent
auditors to audit the Company's financial statements and to perform services
related to the audit. The Audit Committee also reviews the scope and results of
the audit with the independent auditors, reviews with management and the
independent auditors the Company's annual operating results, considers the
adequacy of the Company's internal accounting procedures and controls, and
considers the effect of such procedures on the auditors' independence. In
accordance with the requirements of the NYSE, the Board of Directors, during
the year ended December 31, 2000, adopted an Audit Committee Charter. A copy of
the Audit Committee Charter was appended to the Company's Proxy Statement for
last year's annual meeting of stockholders.
5
Compensation Committee. Until July 2001, the Compensation Committee
consisted of Messrs. Cross, Dietz and Murphy, all of whom are independent
Directors. In July 2001, Mr. Tullo, who is independent, replaced Mr. Murphy on
the Compensation Committee. The Compensation Committee currently consists of
Messrs. Cross, Dietz and Tullo, all of whom remain independent. The
Compensation Committee, which held three (3) meetings during Fiscal 2001,
reviews and recommends the compensation arrangements for officers and other
senior level employees, reviews general compensation levels for other employees
as a group, determines the awards to be granted to eligible persons under the
Company's 1999 Stock Option and Incentive Plan and takes such other action as
may be required in connection with the Company's compensation and incentive
plans.
Director Compensation
Directors receive such compensation for their services as the Board of
Directors may from time to time determine. Further, each director is reimbursed
for reasonable travel and other expenses incurred in attending meetings.
Currently, each non-employee director receives annual remuneration of $27,500
and an annual grant of a non-qualified option to acquire 2,000 shares of Common
Stock. At his election, each director, under our Management Stock Purchase
Plan, may elect to defer all or part of such director's cash remuneration for
the purchase of restricted stock units at a 33% discount from the closing price
of our Common Stock on the date of the fee payments. Additionally, each
non-employee director has received a non-qualified option to acquire 10,000
shares of Common Stock in connection with his initial appointment to serve on
the Board of Directors. Those directors who are our employees do not receive
compensation for their services as directors.
Executive Compensation
The following table sets forth the compensation paid in Fiscal 2001, Fiscal
2000 and for the six months ended December 31, 1999 to our Chief Executive
Officer and our four most highly compensated executive officers who were
serving as executive officers at the end of 2001, each of whose total salary
and bonus exceeded $100,000 during 2001. We refer to each of these people in
this Proxy Statement as our ''named executive officers.'' From July 1, 1999
(the date on which we were incorporated in the State of Delaware) through
October 18, 1999, the date of the Company's spin-off from Watts, Watts made
payments of compensation to certain named executive officers on our behalf. The
following table, therefore, reflects compensation paid to each named executive
officer, regardless of whether such compensation was actually paid by us or by
Watts.
6
Summary Compensation Table
Annual Long-Term
Compensation Compensation
---------------- ------------------------------
Restricted Securities All Other
Salary Bonus Stock Unit(s) Underlying Compensation
Name and Principal Position Year (1) (2) (2)(3)(4) Options Granted (5)
- --------------------------- ---- -------- ------- ------------- --------------- ------------
David A. Bloss, Sr.................. 2001 $420,000 $ 0 $409,956(6) 70,000 $ 15,600
Chairman, President and Chief 2000 400,000 0 218,832(6) 105,000 15,600
Executive Officer 1999 182,500 0 34,629(6) 131,500 5,569
Kenneth W. Smith.................... 2001 195,700 59,738 38,189(7) 25,000 12,000
Vice President, Chief Financial 2000 134,436 23,083 14,749(7) 80,000 8,000
Officer and Treasurer 1999 -- -- -- -- --
Alan R. Carlsen..................... 2001 240,000 0 187,412(8) 25,000 222,314
Executive Vice President, Operations 2000 206,667 0 179,098(8) 30,000 178,224
1999 93,333 0 39,071(8) 39,500 4,410
Douglas E. Frank.................... 2001 177,328 45,612 36,651(9) 8,000 8,400
Vice President, Thermal Fluid 2000 153,742 22,374 17,978(9) 8,000 58,260
Controls Products 1999 65,000 12,572 4,681(9) 8,000 3,455
Carl J. Nasca....................... 2001 175,000 11,897 17,737(10) 8,000 8,400
Vice President, Instrumentation 2000 158,383 17,503 78,354(10) 8,000 36,647
Products 1999 13,199 -- -- 8,000 700
- --------
(1) As a result of changing our fiscal year end from June 30th to December
31st of each year, the salary and bonus amounts for the six months ended
December 31, 1999 represent the actual amounts earned for that period.
(2) Bonuses are awarded under our Executive Incentive Bonus Plan (the "Bonus
Plan"). Under the Bonus Plan, executives are eligible to receive a bonus
up to a specified maximum percentage of base salary based on performance
goals assigned by the Compensation Committee. Our named executive officers
also are eligible to participate in our Management Stock Purchase Plan
(the "MSPP"). Under the MSPP, executives may make an advance election to
receive restricted stock units, or RSUs, in lieu of a specified percentage
or dollar amount of the executive's annual incentive cash bonus under the
Bonus Plan. RSUs are issued in whole units only (fractional RSUs are
returned to the participant in the form of cash) on the basis of a 33%
discount to the fair market value of our Common Stock on the date the
underlying bonus is paid or otherwise would be paid and generally vest
three years after the date of grant, at which time they are converted into
shares of our Common Stock unless the executive has previously elected a
longer deferral period. The "Bonus" column on the table lists that portion
of each named executive officer's bonus that was not deferred into the
receipt of RSUs. The following percentage of their bonus for the fiscal
year ended December 31, 2001 was deferred into the acquisition of RSUs:
Mr. Bloss--100%; Mr. Smith--30%; Mr. Carlsen--100%; Mr. Frank--35%; and
Mr. Nasca--50%.
(3) Represents the dollar value (net of any consideration paid by the named
executive officer) of RSUs received under the MSPP determined by
multiplying the number of RSUs received by the closing market price of our
Common Stock of $13.69, $14.10 and $18.99, respectively on the RSU grant
dates of April 6, 2000, March 16, 2001 and February 13, 2002.
(4) For the year ended December 31, 2001, RSUs were awarded as of February 13,
2002 by dividing the named executive officer's election amount by $12.72
which was 67% of $18.99, the closing market price of our Common Stock on
February 13, 2002 (the "2001 RSU Cost"). For the year ended December 31,
2000, RSUs were awarded as of March 16, 2001 by dividing the named
executive officer's election amount by $9.45, which was 67% of $14.10, the
closing market price of our Common Stock on March 16, 2001 (the "2000 RSU
Cost"). For the six months ended December 31, 1999, RSUs were awarded as
of April 6, 2000, (the date actual annual incentive bonuses were
determined) by dividing the named
7
executive officer's election amount by $9.17, which was 67% of $13.69, the
closing market price of our Common Stock on April 6, 2000 ("1999 RSU
Cost"). Each RSU is 100% vested three years after the date of grant, and
at the end of a deferral period, if one had been specified by the named
executive officer or upon the named executive officer's termination of
employment under the MSPP, we will issue one share of Common Stock for
each vested RSU. Cash dividends, equivalent to those paid on the our
Common Stock, will be credited to the named executive officer's account
for each nonvested RSU and will be paid in cash to such person when the
RSUs become vested. Such dividends will also be paid in cash to
individuals for each vested RSU held during any deferral period.
(5) Consists of car allowance, except that Mr. Carlsen's amount for 2001
includes $36,248 of housing allowance and $174,067 in moving expenses and
allowances; Mr. Carlsen's amount for 2000 also includes $58,451 of housing
allowance and $108,038 in moving expenses and allowances. Mr. Nasca's
amount for 2000 includes $28,047 of moving expenses; and Mr. Frank's
amount for 2000 includes $50,000 of moving expenses.
(6) For the year ended December 31, 2001, Mr. Bloss received 21,588 RSUs in
lieu of receiving all of his incentive bonus of $274,681. This number of
RSUs was determined by dividing $274,681 by the 2001 RSU cost. For the
year ended December 31, 2000, Mr. Bloss received 15,520 RSUs in lieu of
receiving all of his incentive bonus of $146,621. This number of RSUs was
determined by dividing $146,621 by the 2000 RSU Cost. For the six months
ended December 31, 1999, Mr. Bloss received 2,530 RSUs in lieu of
receiving all of his incentive bonus of $23,203. This number of RSUs was
determined by dividing $23,203 by the 1999 RSU Cost. Mr. Bloss held 69,922
RSUs at December 31, 2001 with a value of $1,290,061 based on a closing
price of our Common Stock of $18.45 on December 31, 2001.
(7) For the year ended December 31, 2001, Mr. Smith received 2,011 RSUs in
lieu of receiving 30% of his bonus of $85,325. This number of RSUs was
determined by dividing $25,598 by the 2001 RSU Cost. For the year ended
December 31, 2000, Mr. Smith received 1,046 RSUs in lieu of receiving 30%
of his bonus of $32,965. This number of RSUs was determined by dividing
$9,890 by the 2000 RSU Cost. Mr. Smith held 1,046 RSUs at December 31,
2001 with a value of $19,299 based on a closing price of our Common Stock
of $18.45 on December 31, 2001.
(8) For the year ended December 31, 2001, Mr. Carlsen received 9,869 RSUs in
lieu of receiving all of his incentive bonus of $125,566. This number of
RSUs was determined by dividing $125,568 by the 2001 RSU Cost. For the
year ended December 31, 2000, Mr. Carlsen received 12,702 RSUs in lieu of
receiving all of his incentive bonus of $120,000. This number of RSUs was
determined by dividing $120,000 by the 2000 RSU Cost. For the six months
ended December 31, 1999, Mr. Carlsen received 2,854 RSUs in lieu of
receiving all of his incentive bonus of $26,180. The number of RSUs was
determined by dividing $26,180 by the 1999 RSU Cost. In addition, Mr.
Carlsen was required to purchase 2,598 restricted stock units due to his
prior election to defer a fixed amount ($50,000) of bonus (which exceeded
his actual earned bonus by $23,820) into the receipt of RSUs. Mr. Carlsen
held 59,252 RSUs at December 31, 2001 with a value of $1,093,199 based on
a closing price of our Common Stock of $18.45 on December 31, 2001.
(9) For the year ended December 31, 2001, Mr. Frank received 1,930 RSUs in
lieu of receiving 35% of his incentive bonus of $70,168. This number of
RSUs was determined by dividing $24,559 by the 2001 RSU Cost. For the year
ended December 31, 2000, Mr. Frank received 1,275 RSUs in lieu of
receiving 35% of his incentive bonus of $34,419. This number of RSUs was
determined by dividing $12,047 by the 2000 RSU Cost. For the six months
ended December 31, 1999, Mr. Frank received 342 RSUs in lieu of receiving
20% of his incentive bonus of $15,708. This number of RSUs was determined
by dividing $3,142 by the 1999 RSU Cost. Mr. Frank held 1,617 RSUs at
December 31, 2001 with a value of $29,834 based on a closing price of our
Common Stock of $18.45 on December 31, 2001.
(10) For the year ended December 31, 2001, Mr. Nasca received 934 RSUs in lieu
of receiving 50% of his bonus of $23,781. This number of RSUs was
determined by dividing $11,891 by the 2001 RSU Cost. For the year ended
December 31, 2000, Mr. Nasca received 5,557 RSUs in lieu of 75% of his
bonus of $70,000. This number of RSUs was determined by dividing $52,500
by the 2000 RSU Cost. Mr. Nasca held 5,557 RSUs at December 31, 2001 with
a value of $102,557 based on a closing price of our Common Stock of $18.45
on December 31, 2001.
8
Option Grants in Fiscal Year 2001
In Fiscal 2001, 279,500 options were granted to our employees and directors.
The following table sets forth certain information concerning the individual
grant of options to purchase our Common Stock to our named executive officers
who received such grants during the fiscal year ended December 31, 2001.
Option Grants in Fiscal Year 2001
Potential Realizable
Value of Assumed
Percent of Annual Rates of Stock
Number of Shares Total Options Price Appreciation for
of Common Stock Granted to Option Term (3)
Underlying Options Employees in Exercise Price Expiration ----------------------
Name Granted (1) Fiscal Year Per Share (2) Date 5% 10%
- ---- ------------------ ------------- -------------- ---------- -------- ---------
David A. Bloss, Sr 70,000 25.0% $16.32 10/29/11 $718,449 1,820,691
Kenneth W. Smith.. 25,000 8.9 16.32 10/29/11 256,589 650,247
Alan R. Carlsen... 25,000 8.9 16.32 10/29/11 256,589 650,247
Douglas E. Frank.. 8,000 2.9 16.32 10/29/11 82,108 208,079
Carl J. Nasca..... 8,000 2.9 16.32 10/29/11 82,108 208,079
- --------
(1) The options terminate ten years after the grant date, subject to earlier
termination in accordance with the 1999 Stock Option and Incentive Plan
and the applicable option agreement. Options granted to Messrs. Bloss,
Smith and Carlsen vest over 5 years at the rate of 20% per year on
successive anniversaries of the date on which the options were granted.
Options granted to Messrs. Frank and Nasca vest over 5 years at the rate
of 20% per year commencing upon the later of one year from the date of
grant or the date on which the Company's stock price has closed for the
10/th/ consecutive trading day at a level equal to or greater than 130% of
the exercise price. In any event, the options granted to Messrs. Frank and
Nasca vest at the latest 7 years from the date of grant.
(2) The exercise price equals the fair market value of the stock as of the
grant date.
(3) This column shows the hypothetical gain or option spreads of the options
granted based on assumed annual compound stock appreciation rates of 5%
and 10% over the full 10-year term of the options. The 5% and 10% assumed
rates of appreciation are mandated by the rules of the Securities and
Exchange Commission and do not represent our estimate or projection of
future Common Stock prices. The gains shown are net of the option exercise
price, but do not include deductions for taxes or other expenses
associated with the exercise of the option or the sale of the underlying
shares, or reflect nontransferability, vesting or termination provisions.
The actual gains, if any, on the exercises of stock options will depend on
the future performance of our Common Stock.
9
Option Exercises and Option Values
The following table sets forth information concerning the aggregate number
of options exercised in 2001 and the number and value of unexercised options to
purchase our Common Stock held by our named executive officers who held such
options at December 31, 2001.
Aggregated Option Exercises in Fiscal Year 2001 and Fiscal Year-End Option
Values
Number of Shares
of Common Stock Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year-End Fiscal Year End (2)
Shares Acquired Value -------------------------- -------------------------
Name on Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ------------ ----------- ------------- ----------- -------------
David A. Bloss, Sr 39,106 $389,496 421,645 285,694 $3,278,837 $2,119,746
Kenneth W. Smith.. -- -- 16,000 89,000 127,200 562,050
Alan R. Carlsen... -- -- 101,966 85,411 828,789 604,725
Douglas E. Frank.. -- -- 5,200 18,800 46,160 130,080
Carl J. Nasca..... -- -- 3,200 18,800 41,360 122,880
- --------
(1) The transaction occurred through a broker-arranged cashless exercise of
options. The value realized consists of the difference between the
aggregate sale price for the underlying shares of $703,908 less the
aggregate exercise price of $314,412 and excludes brokerage fees and taxes.
(2) Based on the last reported sale price of our Common Stock on the NYSE on
December 31, 2001 less the option exercise price
Report of the Compensation Committee of the Board of Directors on Executive
Compensation
Overall Policy. The Compensation Committee of the Board of Directors (the
"Committee") is composed entirely of non-employee directors. The Compensation
Committee reviews and approves the cash and non-cash compensation policies and
programs and major changes in the Company's benefit plans that are applicable
to the Chief Executive Officer, those individuals who directly report to the
Chief Executive Officer, and any other individuals or groups the Committee
deems appropriate based on the recommendation of the Chief Executive Officer.
The Company's executive compensation philosophy is to provide direct
compensation programs and potential earnings opportunities which reflect the
relative size and performance of the Company and which are aligned with
increasing stockholder value. The compensation programs, therefore, are
designed to attract, retain and motivate key executives to achieve strategic
business initiatives that are adopted to increase stockholder value and reward
them for their achievement. In formulating and implementing its compensation
philosophy, the Committee has obtained advice from Watson Wyatt, a compensation
consulting firm.
Implementing Guidelines. In implementing its compensation philosophy for
executives, the Committee acts according to the following guidelines:
. Determining relevant market data for the positions it reviews as set forth
in published surveys of the broader general industry
. Considering specific information on pay practices about key executive
positions in peer organizations
. Setting base salaries in light of both market data and the individual's
performance, background, experiences and personal skills
. Providing competitive and leveraged annual incentive opportunities based
on achieving performance goals that reflect stockholder value creation,
the strategic direction of the Company for the year and the individual's
performance during the year
. Providing competitive and leveraged long-term incentive opportunities
which will provide rewards for increasing stockholder value, achieving
long-term performance goals of the Company and assuring that executives
have earnings opportunities similar to their peers at comparable
organizations
10
Stock Ownership Guidelines. The Committee believes that executives, as
owners, will act in a manner consistent with the best interests of the
stockholders. As such, the Committee believes that executives should hold
prescribed amounts of Company stock and has established targets for each
executive.
Specific Programs. Executive compensation packages generally consist of
three components: (1) base salary; (2) annual incentive pursuant to the Bonus
Plan; and (3) long-term incentives pursuant to the 1999 Stock Option and
Incentive Plan. Under the Bonus Plan, executives are eligible to receive a
bonus up to a specified maximum percentage of base salary based on four goals
assigned by the Committee for the particular year. Each goal carries equal
weight. In addition, if 100% of each of the four goals is achieved, the
executive may achieve a bonus up to twice the maximum percentage based on the
extent to which each objective is exceeded. Under the 1999 Stock Option and
Incentive Plan, the Committee may grant to key personnel options with respect
to the Company's Common Stock as well as other stock-based awards such as
restricted and unrestricted shares, performance shares, deferred stock awards,
and dividend equivalent rights. Such stock-based awards are designed to align
the interests of executives with those of the stockholders, since the benefit
of such awards cannot be realized unless the stock price appreciates. In
determining the appropriate level of stock-based compensation to award to each
executive officer for Fiscal 2001, the Committee followed the implementing
guidelines discussed above. The Company's executives are also eligible to
participate in the MSPP. Under the MSPP, which is a component plan to the 1999
Stock Option and Incentive Plan, executives may make an advance election to
receive RSUs in lieu of a specified percentage or dollar amount of such
executive's annual incentive under the Bonus Plan. RSUs are issued on the basis
of a 33% discount to the closing price of the Company's stock on the day the
incentive bonuses are paid or otherwise would be paid and generally vest over a
three year period, at which time they are converted into shares of Common Stock
unless the executive previously has elected a longer deferral period.
Compensation of the CEO. As with other executive officers, the compensation
package for the Chief Executive Officer is comprised of base salary, bonus
opportunity, and stock-based compensation. In determining the base salary for
the CEO, the Committee, with the advice of Watson Wyatt, relied significantly
on comparisons with a select group of specific peer companies as well as
several reputable published compensation surveys for industrial manufacturers.
In addition, the Committee considered the operating results and change in
stockholder value of the Company for Fiscal 2000 in determining the CEO's base
salary for Fiscal 2001. For Fiscal 2001, the Committee established Mr. Bloss'
salary at $420,000. To establish the CEO's bonus opportunity, the Committee
established specific goals consistent with those established for other
corporate executive officers under the Bonus Plan. In determining the maximum
percentage opportunity for the CEO under the Bonus Plan, the Committee
considered comparable data from specific peer companies as well as other
industrial manufacturers. For Fiscal 2001, the Committee set Mr. Bloss' maximum
bonus opportunity under the Bonus Plan at 75%. As a result of the Company's
performance against the established goals, Mr. Bloss received a bonus of
$274,681 for Fiscal 2001. At Mr. Bloss' advance election, his entire bonus was
deferred into the receipt of RSUs. For Fiscal 2001, Mr. Bloss received 70,000
non-qualified options which vest 20% per year from the date of grant.
Policy Regarding Section 162(m) of the Internal Revenue Code. Section
162(m) of the Internal Revenue Code limits the deductibility on the Company's
tax return of compensation over $1 million to any of the named executive
officers unless, in general, the compensation is paid pursuant to a plan which
is performance-related, non-discretionary and has been approved by our
stockholders. The Compensation Committee's policy with respect to Section
162(m) is to make every reasonable effort to ensure that compensation is
deductible to the extent permitted while simultaneously providing our
executives with appropriate rewards for their performance.
Submitted by the Compensation Committee of the Board of Directors
Dewain K. Cross
David F. Dietz
Thomas N. Tullo
11
Report of the Audit Committee of the Board of Directors
The Audit Committee, which consists entirely of non-employee directors
meeting the independence and financial literacy requirements of the NYSE (see
"Board Meetings and Committees" above), has furnished the following report on
Audit Committee matters:
The Audit Committee acts pursuant to a written charter which was adopted by
the Board of Directors of the Company on May 24, 2000. The Audit Committee has
reviewed and discussed the audited financial statements of the Company for the
fiscal year ended December 31, 2001 with management and it has discussed with
KPMG LLP the Company's independent auditors, the matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees) relating to the conduct of the audit. The Audit Committee also has
received written disclosures and a letter from KPMG LLP regarding its
independence from the Company as required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees) and has
discussed with KPMG LLP the independence of that firm. Based upon the above
materials and discussions, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2001.
Submitted by the Audit Committee of the Board of Directors
Dewain K. Cross
Daniel J. Murphy, III
Thomas N. Tullo
12
Stockholder Return Performance Graph
Set forth below is a line graph comparing the percentage change in the
cumulative total stockholder return on the Company's Common Stock, based on the
market price of the Company's Common Stock with the total return of companies
included within the Standard & Poor's 500 Composite Index and a peer group of
companies engaged in the valve, pump and fluid control industry for the period
commencing October 19, 1999 (the date on which the Company's Common Stock
started trading) and ended December 31, 2001. The calculation of total
cumulative return assumes a $100 investment in the Company's Common Stock, the
Standard & Poor's 500 Composite Index and the peer group on October 19, 1999,
the first date trading in the Company's Common Stock commenced following the
pro-rata distribution of all of the Company's Common Stock to the Watts
stockholders, and the reinvestment of all dividends. The historical information
set forth below is not necessarily indicative of future performance.
[CHART]
Circor S&P Market Self-Determined
Company Index Index Peer Index
10/19/1999 100.0 100.0 100.0
10/29/1999 91.56 108.04 98.7
11/30/1999 104.819 110.305 105.436
12/31/1999 99.398 116.867 114.869
01/31/2000 116.867 111.014 102.701
02/29/2000 127.711 109.055 94.184
03/31/2000 128.313 119.832 109.002
04/28/2000 110.241 116.027 120.724
05/31/2000 102.113 113.405 114.614
06/30/2000 79.152 116.285 101.014
07/31/2000 67.672 114.722 103.18
08/31/2000 89.203 121.999 111.226
09/29/2000 100.126 115.567 106.18
10/31/2000 107.408 115.089 109.204
11/30/2000 96.188 105.95 105.427
12/29/2000 97.405 106.46 119.425
01/31/2001 119.808 110.193 118.891
02/28/2001 127.479 100.143 116.433
03/30/2001 144.574 93.761 109.019
04/30/2001 168.507 101.081 126.027
05/31/2001 229.795 101.755 132.032
06/29/2001 176.652 99.28 121.101
07/31/2001 162.951 98.338 117.409
08/31/2001 165.787 92.139 115.33
09/28/2001 147.149 84.734 91.905
10/31/2001 173.145 86.389 101.518
11/30/2001 169.645 93.089 107.176
12/31/2001 181.341 93.915 119.748
Companies in the Self-Determined Peer Group
COOPER CAMERON CORP PARKER HANNIFIN CORP
FLOWSERVE CORP ROBBINS & MYERS INC
GRACO INC ROPER INDUSTRIES INC NEW
IDEX CORP
Notes:
A. The lines represent monthly index levels derived from compounded daily
from returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on 10/19/1999.
13
Employment Agreements
The Company has entered into an Employment Agreement, as amended, with Mr.
Bloss, pursuant to which Mr. Bloss serves as the Chairman, President and Chief
Executive Officer for a term of three years beginning on October 18, 1999. The
Agreement will be automatically extended for additional one-year terms unless
either the Company or Mr. Bloss elects to terminate it by notice in writing at
least 90 days prior to the third anniversary of the Agreement or each
anniversary thereafter. As of January 1, 2002, Mr. Bloss' base salary is
$434,700. Mr. Bloss is also eligible to receive incentive compensation in an
amount to be determined by our Board of Directors.
Upon termination of employment due to the death or disability of Mr. Bloss,
all unexercisable stock options will immediately vest and will be exercisable
for one year and the Company will pay health insurance premiums for Mr. Bloss
and his family for one year.
If employment is terminated by Mr. Bloss for "good reason", or if the
Company terminates his employment without "cause," Mr. Bloss will receive a
severance payment equal to two times the sum of his average base salary and
average incentive compensation (as determined in accordance with the
agreement), payable over 24 months. In addition, certain stock options and
restricted stock units held by Mr. Bloss will become exercisable or
nonforfeitable, and Mr. Bloss will receive additional vesting credit under the
supplemental plan.
If a "change in control" (as defined in the Agreement) occurs and Mr. Bloss'
employment is terminated by the Company without cause or by Mr. Bloss with good
reason within 18 months of such change in control, Mr. Bloss will receive a
lump sum amount in cash equal to three times the sum of his then current base
salary and highest bonus during the three preceding fiscal years, all of his
stock options and stock-based awards will become immediately exercisable, he
will be fully vested in his accrued benefit under the supplemental plan and
will be credited with an additional 36 months of benefit service under the
plan. The Company will pay health insurance premiums for Mr. Bloss and his
family for three years and the Company will continue to pay Mr. Bloss an
automobile leasing allowance for three years. In addition, Mr. Bloss will
receive a tax gross-up payment to cover any excise tax due.
We also have entered into Change of Control Agreements with Messrs. Carlsen,
Carriere, Coppinger, Frank, Glass, Nasca, Smith and Taylor. These agreements
generally provide the same change of control provisions as in Mr. Bloss'
Employment Agreement, except that (i) each of these agreements applies to
terminations within twelve (12) months of the change of control event, (ii) the
agreements with Messrs. Carlsen and Smith provide a lump sum payment equal to
two times the sum of the executive's annual salary and highest bonus during the
past three fiscal years, provide for an additional 24 months of benefit service
under the supplemental plan, and provide for medical insurance and automobile
for a two-year period and (iii) the agreements with Messrs. Carriere,
Coppinger, Frank, Glass, Nasca and Taylor provide for a lump sum payment equal
to one times the sum of the executive's annual salary and highest bonus during
the three preceding fiscal years, provide for medical insurance for one year,
and do not provide for additional credit under the supplemental plan or for
automobile leasing.
Compensation Committee Interlocks and Insider Participation; Certain
Relationships
Messrs. Cross, Dietz and Tullo are members of the Company's Compensation
Committee. Mr. Horne is also a director of Watts and, based on his most recent
public filings, beneficially owns 35.5% of the outstanding Watts Common Stock
and 25.8% of the Company's outstanding Common Stock. Mr. Murphy is also a
director of Watts, and, until Mr. Tullo replaced him on the Company's
Compensation Committee in July 2001, Mr. Murphy served on the compensation
committees of both CIRCOR and Watts. In the event that Mr. Horne ceases to
serve as trustee of the 1997 Voting Trust (as described in footnote 5 of the
section entitled "Principal Shareholders"), then Walter J. Flowers and Messrs.
Murphy and Dietz will become co-trustees of the 1997 Voting Trust. Mr. Dietz is
the sole owner of a professional corporation that is a partner of Goodwin
Procter LLP, a law firm which provides legal services to the Company and to
Watts.
Our policy is that any future transactions with our directors, officers,
employees or affiliates be approved in advance by a majority of our Board of
Directors, including a majority of the disinterested members of our Board of
Directors, and be on terms no less favorable to us than we could obtain from
non-affiliated parties.
14
Pension Plan and Supplemental Plan
The Company sponsors a qualified noncontributory defined benefit pension
plan for eligible salaried employees, including the named executive officers
specified in the Summary Compensation Table above, and maintains a nonqualified
noncontributory defined benefit supplemental plan for certain highly
compensated employees, which also covers the named executive officers specified
in the Summary Compensation Table. The eligibility requirements of the pension
plan are generally the attainment of age 21 and the completion of at least
1,000 hours of service in a specified 12-month period. The assets of the
pension plan are maintained in a trust fund at State Street Bank and Trust
Company. The pension plan is administered by a retirement plan committee
appointed by the Board of Directors. Annual contributions to the pension plan
are computed by an actuarial firm based on normal pension costs and a portion
of past service costs. The pension plan provides for monthly benefits to, or on
behalf of, each participant at age 65 and has provisions for early retirement
after attainment of age 55 and five years of service and surviving spouse
benefits after five years of service. Participants in the pension plan who
terminate employment prior to retirement with at least five years of service
are vested in their accrued retirement benefit. The pension plan is subject to
the Employee Retirement Income Security Act of 1974, as amended.
The normal retirement benefit for participants in the pension plan is an
annuity payable monthly over the participant's life. If the participant is
married, he or she will receive a spousal joint and 50% survivor annuity,
unless an election out is made. Generally, the annual normal retirement benefit
is an amount equal to 1.67% of the participant's final average compensation (as
defined in the pension plan), reduced by the maximum offset allowance (as
defined in the pension plan) multiplied by years of service (maximum 25 years).
Annual compensation in excess of $200,000 per year is disregarded for all
purposes under the pension plan. However, benefits accrued prior to the 1994
plan year may be based on compensation in excess of $200,000. Compensation
recognized under the pension plan generally includes base salary and annual
bonus.
The supplemental plan provides additional monthly benefits to (i) a select
group of key executives, (ii) individuals who were projected to receive reduced
benefits as a result of changes made to the pension plan to comply with the Tax
Reform Act of 1986, (iii) executives who will be affected by Internal Revenue
Service limits on compensation under the Retirement Plan, and (iv) individuals
who deferred compensation under the qualified Retirement Plan. The supplemental
plan is not a tax-qualified plan, and is subject to certain provisions of the
Employee Retirement Income Security Act of 1974, as amended. The supplemental
plan is not funded.
Tier one benefits are provided under the supplemental plan to a select group
of key executives. The annual benefit under tier one payable at normal
retirement is equal to the difference between (x) 2% of the highest three year
average pay multiplied by years of service up to ten years, plus 3% of average
pay times years of service in excess of ten years, to a maximum of 50% of
average pay, less (y) the annual benefit payable under the pension plan formula
described above. Normal retirement age under tier one is age 62.
15
The following table illustrates total annual normal retirement benefits
(payable from both the pension plan and from the supplemental plan and assuming
attainment of age 62 during 2001) for various levels of final average
compensation and years of benefit service under tier one of the supplemental
plan.
Estimated Total Annual Retirement
(Pension Plan Plus Supplemental Plan, Tier One)
Final Average Compensation Based on Years of Service (1)
For Three Highest Consecutive -----------------------------------------------
Years in Last 10 Years 5 Years 10 Years 15 Years 20 Years
----------------------------- ------- -------- -------- --------
$100,000 $10,000 $ 20,000 $ 35,000 $ 50,000
150,000 15,000 30,000 52,500 75,000
200,000 20,000 40,000 70,000 100,000
250,000 25,000 50,000 87,500 125,000
300,000 30,000 60,000 105,000 150,000
350,000 35,000 70,000 122,500 175,000
400,000 40,000 80,000 140,000 200,000
450,000 45,000 90,000 157,500 225,000
500,000 50,000 100,000 175,000 250,000
550,000 55,000 110,000 192,500 275,000
600,000 60,000 120,000 210,000 300,000
- --------
(1) The annual pension plan and supplemental plan benefits are computed on the
basis of a straight life annuity.
Messrs. Bloss, Carlsen, Frank, Nasca and Smith have nine, seven, four, two
and two years, respectively, of benefit service under the pension plan (which
includes years of benefit service credited under the Watts pension plan)
Messrs. Bloss, Carlsen and Smith are eligible for tier one benefits. Eligible
employees are currently limited to a maximum annual benefit under the pension
plan of $160,000 (subject to cost of living adjustments) under Internal Revenue
Code requirements regardless of their years of service or final average
compensation. Accordingly, under current salary levels and law, annual benefits
are limited to such amount under the pension plan.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of Common Stock as of February 28, 2002, by:
. all persons known by us to own beneficially 5% or more of our Common Stock;
. each of our directors;
. our Chief Executive Officer and the other named executive officers; and
. all directors and executive officers as a group.
The number of shares beneficially owned by each stockholder is determined
under rules issued by the Securities and Exchange Commission and includes
voting or investment power with respect to securities. Under these rules,
beneficial ownership includes any shares as to which the individual or entity
has sole or shared voting power or investment power and includes any shares as
to which the individual or entity has the right to acquire beneficial ownership
within sixty (60) days after February 28, 2002 through the exercise of any
warrant, stock option or other right. The inclusion in this Proxy Statement of
such shares, however, does not constitute an admission that the named
stockholder is a direct or indirect beneficial owner of such shares. As of
February 28, 2002 a total of 14,861,890 shares of Common Stock were outstanding.
16
Unless otherwise indicated below, to our knowledge, all persons listed below
have sole voting and investment power with respect to their shares of Common
Stock except to the extent authority is shared by spouses under applicable law.
Shares Beneficially Owned
-----------------------------
Name of Beneficial Owner (1) Number (2) Percent (2)
- ---------------------------- ---------- -----------
Timothy P. Horne (3)............................................ 3,828,758(4)(5)(6) 25.8%
Gabelli Entities (7)............................................ 1,826,150 12.3
Fidelity Entities (8)........................................... 797,000 5.4
Franklin Resources, Inc. (9).................................... 761,150 5.1
George B. Horne (3)(10)......................................... 712,300 4.8
Daniel W. Horne (3)(6).......................................... 667,920 4.5
Deborah Horne (3)(6)............................................ 667,920 4.5
David A. Bloss, Sr. (11)........................................ 438,745 2.9
Alan R. Carlsen (12)............................................ 118,440 *
Kenneth W. Smith (13)........................................... 29,000 *
Dewain K. Cross (14)............................................ 15,267 *
Daniel J. Murphy, III (15)...................................... 11,915 *
David F. Dietz (16)............................................. 10,667 *
Douglas E. Frank (17)........................................... 4,900 *
Carl J. Nasca (18).............................................. 4,800 *
Thomas N. Tullo (19)............................................ 3,334 *
All executive officers and directors as a group (12 persons)(20) 4,478,626 29.0%
- --------
* Less than 1%.
(1) The address of each stockholder in the table is c/o CIRCOR International,
Inc., 35 Corporate Drive, Burlington, Massachusetts 01803, except that the
Fidelity Entities' address is 82 Devonshire Street, Boston, MA 02109;
Franklin Resources' address is One Franklin Parkway, San Mateo, CA 94403,
and the Gabelli Entities' address is One Corporate Center, Rye, NY 10580.
(2) The number of shares of Common Stock outstanding used in calculating the
percentage for each listed person and the directors and executive officers
as a group includes the number of shares of Common Stock underlying
options, warrants and convertible securities held by such person or group
that are exercisable or convertible within 60 days from February 28, 2002,
the date of the above table, but excludes shares of Common Stock
underlying options, warrants or convertible securities held by any other
person.
(3) Timothy P. Horne, George B. Horne, Daniel W. Horne and Deborah Horne,
together with Walter J. Flowers (as trustee for Tiffany R. Horne), as
depositors under the 1997 Voting Trust (see footnote 5), may be deemed a
"group" as that term is used in Section 13(d)(3) of the Exchange Act of
1934.
(4) Includes (i) 1,656,781 shares of Common Stock held by Timothy P. Horne
(for purposes of this footnote, "Mr. Horne"), (ii) 667,920 shares held for
the benefit of Daniel W. Horne, Mr. Horne's brother, under a revocable
trust for which Mr. Horne serves as sole trustee, (iii) 667,920 shares
held for the benefit of Deborah Horne, Mr. Horne's sister, under a trust
for which Mr. Horne serves as sole trustee, which trust is revocable with
the consent of the trustee, (iv) 712,300 shares held for the benefit of
George B. Horne, Mr. Horne's father, under a revocable trust for which Mr.
Horne serves as co-trustee, (v) 11,300 shares held for the benefit of
Tiffany R. Horne, under an irrevocable trust for which Mr. Horne serves as
trustee, (vi) 22,110 shares held for the benefit of Tiffany R. Horne by
Mr. Horne as custodian, and (vii) 103,870 shares held for the benefit of
Tiffany R. Horne, under a revocable trust for which Walter J. Flowers
serves as Trustee. See footnote 5. Also includes 8,667 shares of Common
Stock issuable upon the exercise of currently exercisable options.
(5) 1,475,610 shares of Common Stock held by Timothy P. Horne individually,
and all shares of Common Stock held by trusts for the benefit of Daniel W.
Horne, Deborah Horne and George B. Horne, and all but 103,870 of the
shares held by trusts for the benefit of Tiffany R. Horne (3,535,050
shares in the aggregate) are subject to the terms of The Amended and
Restated George B. Horne Voting Trust Agreement--1997 (the "1997 Voting
Trust"). Under the terms of the 1997 Voting Trust, the trustee (currently
Timothy P.
17
Horne) has sole power to vote all shares subject to the 1997 Voting Trust.
Timothy P. Horne, for so long as he is serving as trustee of the 1997
Voting Trust, has the power to determine in his sole discretion whether or
not proposed actions to be taken by the trustee of the 197 Voting Trust
shall be taken, including the trustee's right to authorize the withdrawl
of shares from the 1997 Voting Trust (for purposes of this footnote, the
"Determinate Power"). In the event that Timothy P. Hone ceases to serve as
trustee of the 1997 Voting Trust, no trustee thereunder shall have the
Determination Power except in accordance with a duly adopted amendment to
the 1997 Voting Trust. Under the terms of the 1997 Voting Trust, in the
event Timothy P. Horne ceases to serve as trustee of the 1997 Voting
Trust, then Walter J. Flowers and Daniel J. Murphy, III (the "Successor
Trustees") will become co-trustees of the 1997 Voting Trust. At any time,
Timothy P. Horne, if then living and not subject to incapacity, may
designate up to two additional persons, one to be designated as the
primary designee (the "Primary Designee") and the other as the secondary
designee (the "Secondary Designee") to serve in the stead of any Successor
Trustee who shall be unable or unwilling to serve as a trustee of the 1997
Voting Trust. Such designations are revocable by Timothy P. Horne at any
time prior to the time at which such designees become trustees. If any of
the Successor Trustees is unable or unwilling or shall otherwise fail to
serve as a trustee of the 1997 Voting Trust, or after becoming a
co-trustee shall cease to serve as such for any reason then there shall
continue to be two trustees and third trustee shall be selected in
accordance with the following line of succession; first, any individual
designated as the Primary Designee, next, any individual designated as the
Secondary Designee, and then, any individual appointed by the holders of a
majority in interest of the voting trust certificates then outstanding. In
the event that the Successor Trustees shall not concur on matters not
specifically contemplated by the terms of the 1997 Voting Trust, the vote
of a majority of the Successor Trustees shall be determinative. No trustee
or Successor Trustee shall possess the Determination Power until it is
specifically conferred upon such trustee by way of an amendment to the
1997 Voting Trust.
The 1997 Voting Trust expires on August 26, 2021, subject to extension on
or after August 26, 2019 by stockholders (including the trustee of any
trust stockholder, whether or not such trust is then in existence) who
deposited shares of Common Stock in the 1997 Voting Trust and are then
living or, in the case of shares in the 1997 Voting Trust the original
depositor of which (or the trustee of the original deposit of which) is
not then living, the holders of voting trust certificates representing
such shares. The 1997 Voting Trust may be amended by vote of the holders
of a majority of the voting trust certificates then outstanding and by the
number of trustees authorized to take action at the relevant time or, if
the trustees (if more than one) do not concur with respect to any proposed
amendment at any time when any trustee holds the Determination Power, then
by the trustee having the Determination Power. In certain cases (i.e.,
changes to the extension, termination and amendment provisions), each
individual depositor must also approve amendments. Shares may not be
removed from the 1997 Voting Trust during its term without the consent of
the requisite number of trustees required to take action under the 1997
Voting Trust. Voting trust certificates are subject to any restrictions on
transfer applicable to the stock that they represent.
Timothy P. Horne holds 41.7% of the total beneficial interest in the 1997
Voting Trust (the "Beneficial Interest") individually, 18.9% of the
Beneficial Interest as trustee of a revocable trust, 18.9% of the
Beneficial Interest as trustee of a trust revocable with the consent of
the trustee, 20.1% of the Beneficial Interest as co-trustee of a
revocable trust, 0.3% of the Beneficial Interest as trustee of an
irrevocable trust (representing an aggregate of 97.9% of the Beneficial
Interest). George B. Horne holds 19.1% of the Beneficial Interest as
co-trustee of a revocable trust.
(6) Shares held in a revocable trust for which Timothy P. Horne serves as a
sole trustee, and are subject to the 1997 Voting Trust. See footnote 5.
(7) The information is based on an amended Schedule 13D filed with the
Securities and Exchange Commission on March 22, 2001 on behalf of Mario J.
Gabelli and Marc J. Gabelli and various entities which either one directly
or indirectly controls or for which either one acts as chief investment
officer including, but not limited to, Gabelli Funds LLC, GAMCO Investors,
Inc. and Gabelli Securities, Inc. (the "Gabelli Entities"). According to
the Schedule 13D, the Gabelli entities engage in various aspects of the
securities business, primarily as investment advisor to various
institutional and individual clients, including registered investment
companies and pension plans, as broker/dealer and as general partner of
18
various private investment partnerships, Certain Gabelli entities may also
make investments for their own accounts. As of March 22, 2001, Gabelli
Funds LLC, GAMCO Investors, Inc., and Gabelli Securities, Inc. held
340,000, 1,484,150 and 2,000 shares, respectively. Subject to certain
limitations, each of the foregoing has all investment and/or voting power
in the shares except that GAMCO Investors does not have the authority to
vote 5,000 of the shares. According to an earlier Schedule 13D filed on
November 15, 2000 the Board of Directors of the Gabelli Value Fund, Inc.,
(one of the funds managed by the Gabelli Entities) voted to transfer to
its proxy voting committee all dispositive and voting power with respect
to 200,000 shares of our Common Stock held by The Gabelli Value Fund, Inc.
As a result, the Gabelli Entities disclaim beneficial ownership of these
shares, and, therefore, those shares are not included in this table.
(8) The information is based on a Schedule 13G filed with the Securities and
Exchange Commission on February 14, 2002 on behalf of FMR Corp. (a parent
holding company), Edward C. Johnson III and Abigail P. Johnson as
Reporting Persons. According to this filing: (i) Fidelity Management &
Research Company, an investment advisor registered under the Investment
Advisers Act of 1940 and a wholly owned subsidiary of FMR Corp., is the
beneficial owner of 302,600 shares as a result of acting as investment
adviser to various investment companies registered under Section 8 of the
Investment Company Act of 1940; and (ii) Fidelity Management Trust
Company, a bank as defined in Section 3(a)(6) of the Securities Exchange
Act of 1934 and also a wholly owned subsidiary of FMR Corp., is the
beneficial owner of 494,400 shares as a result of its serving as
investment manager of various institutional accounts. Edward C. Johnson
III and FMR Corp., through its control of Fidelity Management & Research
Company, each has sole power of disposal with respect to all 797,000
shares and sole voting power with respect to the 494,400 owned by the
institutional accounts. With respect to the 302,600 shares held by the
investment companies for which FMR Corp. serves as investment adviser,
neither FMR nor Edward C. Johnson III has sole voting power which voting
power resided with the Board of Trustees of each investment company.
(9) The information is based on a Schedule 13G filed with the Securities and
Exchange Commission on February 14, 2002 on behalf of Franklin Resources,
Inc. (a parent holding company), Charles B. Johnson and Rupert H. Johnson,
Jr. as principal shareholders of Franklin Resources, Inc., and Franklin
Advisory Services as Reporting Persons. According to this filing, the
761,150 shares reported on are beneficially owned by one or more open or
closed-end investment companies or other managed accounts which are
advised by Franklin Advisory Services, LLC, an investment advisory
subsidiary of Franklin Resources, Inc. Franklin Advisory Services, LLC
holds all voting and disposal power with respect to all 761,500 shares.
(10) Consists of 712,300 shares held in revocable trust for which Timothy P.
Horne and George B. Horne serve as co-trustees. All of such shares are
subject to the 1997 Voting Trust. See footnote 5.
(11) Includes 421,645 shares of Common Stock issuable upon the exercise of
currently exercisable options. With the approval of the Company's
Compensation Committee, Mr. Bloss transferred options for 68,436 of these
421,645 shares to three trusts for the benefit of each of his three adult
children. Mr. Bloss' wife serves as a trustee of each such trust.
(12) Includes 101,966 shares of Common Stock issuable upon the exercise of
currently exercisable options.
(13) Includes 24,000 shares of Common Stock issuable upon the exericise of
currently exercisable options.
(14) Includes 8,667 shares of Common Stock issuable upon the exercise of
currently exercisable options.
(15) Includes 200 shares of Common Stock held under a trust for the benefit of
Mr. Murphy's son. Mr. Murphy serves as the sole trustee. Also includes
8,667 shares of Common Stock issuable upon the exercise of currently
exercisable options.
(16) Includes 8,667 shares of Common Stock issuable upon the exercise of
currently exercisable options.
(17) Includes 4,800 shares of Common Stock issuable upon the exercise of
currently exercisable options.
(18) Includes 4,800 shares of Common Stock issuable upon the exercise of
currently exercisable options.
(19) Includes 3,334 shares of Common Stock issuable upon the exercise of
currently exercisable options.
(20) Includes 605,213 shares of Common Stock issuable upon the exercise of
currently exercisable options. Also includes Mr. Timothy P. Horne's
beneficial ownership as reflected in footnotes (3), (4), (5), and (6).
19
PROPOSAL 2
RATIFICATION OF AUDITORS
The Company's financial statements for the Fiscal 2001 were audited by KPMG
LLP, which has audited the Company's books and records since its inception. The
Board of Directors recommends to the stockholders that they ratify the
selection of KPMG LLP to examine and report upon the financial statements of
the Company for Fiscal 2002. KPMG LLP has no direct or indirect interest in the
Company or any affiliate of the Company. Although the company is not required
to submit the ratification and approval of selection of our independent
accountants to a vote of stockholders, the Board of Directors believes that it
is sound policy to do so. In the event that the vote of the majority of shares
present and entitled to vote on the proposal are against the selection of KPMG
LLP, the directors will consider the vote and the reasons therefore in future
decisions on the selection of independent directors.
Vote Required for Approval
A quorum being present, the affirmative vote of a majority of the votes cast
is necessary to ratify the selection of KPMG LLP as the independent auditors of
the Company for Fiscal 2002.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE SELECTION OF KPMG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR
FISCAL 2002.
Fees Paid to Auditors, Independence
Other Fees
Audit Fees
KPMG LLP has billed the Company an aggregate of $372,800 for professional
services rendered for the audit of the Company's annual financial statements
for Fiscal 2001 and for review of the financial statements included in the
Company's Form 10-Q for that year.
Financial Information Systems Design and Implementation Fees
KPMG LLP did not render any services to the Company during Fiscal 2001 for
financial information systems design and implementation.
Other Fees
KPMG LLP billed the Company an aggregate of $752,724 for all other services
rendered during Fiscal 2001. The additional services provided included (i)
advice related to state, local and international tax strategies and the
preparation of tax returns; (ii) financial statement review in connection with
the Company's secondary offering of Common Stock on Form S-3; (iii) audits of
employee benefit plans; (iv) accounting due diligence and tax advice in
connection with actual and prospective acquisitions; and (v) transfer pricing
studies.
Independence
The Audit Committee has considered whether the provision of non-audit
services by KPMG LLP is compatible with maintaining KPMG's independence and has
determined that these services had no adverse effect on such independence.
MARKET VALUE
On December 31, 2001, the closing price of a share of the Company's Common
Stock on the New York Stock Exchange was $18.45.
20
EXPENSES OF SOLICITATION
The Company will pay the entire expense of soliciting proxies for the Annual
Meeting. In addition to solicitations by mail, certain directors, officers and
regular employees of the Company (who will receive no compensation for their
services other than their regular compensation) may solicit proxies by
telephone, telegram or personal interview. Banks, brokerage houses, custodians,
nominees and other fiduciaries have been requested to forward proxy materials
to the beneficial owners of shares held of record by them and such custodians
will be reimbursed for their expenses.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR ANNUAL MEETING IN 2003
Stockholder proposals intended to be presented at the annual meeting of
stockholders to be held in 2003 must be received by the Company on or before
November 27, 2002 in order to be considered for inclusion in the Company's
proxy statement and form of proxy for that meeting. These proposals must also
comply with the rules of the SEC governing the form and content of proposals in
order to be included in the Company's proxy statement and form of proxy.
In addition, a stockholder who wishes to present a proposal at the annual
meeting of stockholders to be held in 2003 must deliver the proposal to the
Company so that it is received on or after December 5, 2002 and not later than
January 4, 2003 in order to be considered at that annual meeting. The Company's
By-laws provide that any stockholder of record wishing to have a stockholder
proposal considered at an annual meeting must provide written notice of such
proposal and appropriate supporting documentation, as set forth in the By-laws,
to the Company at its principal executive office not less than 90 days nor more
than 120 days prior to the first anniversary of the date of the preceding
year's annual meeting. In the event, however, that the annual meeting is
scheduled to be held more than 30 days before such anniversary date or more
than 60 days after such anniversary date, notice must be so delivered not
earlier than the close of business on the 120th day prior to such annual
meeting and not later than the close of business on the later of the 90th day
prior to such annual meeting or the 10th day after the date of public
disclosure of the date of such meeting is first made. Proxies solicited by the
Board of Directors will confer discretionary voting authority with respect to
these proposals, subject to SEC rules governing the exercise of this authority.
Any stockholder proposals should be mailed to: Secretary, CIRCOR
International, Inc., 35 Corporate Drive, Burlington, MA 01803.
INDEPENDENT ACCOUNTANTS
KPMG LLP has served as the Company's independent public auditors since the
Company's inception in 1999. A representative of KPMG LLP will be present at
the Annual Meeting and will be given the opportunity to make a statement if he
or she so desires. The representative will be available to respond to
appropriate questions.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of the Company's
outstanding shares of Common Stock (collectively, "Section 16 Persons"), to
file initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission and the NYSE. Section 16 Persons are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain Section 16 Persons that no Section 16(a)
reports were required for such persons, the Company believes that during Fiscal
2001, the Section 16 Persons complied with all Section 16(a) filing
requirements applicable to them.
21
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are duly presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
22
Annual Meeting of CIRCOR International, Inc.
Thursday, April 25, 2002
9:00 a.m.
at
KF Industries, Inc.
1500 S.E. 89/th Street /
Oklahoma City, OK 73149
(405) 631-1533
Directions:
From Will Rogers World Airport: Take Meridian north from airport to 2/nd
light (Airport Road -approx. 1 mile); turn right onto Airport Road and continue
to Interstate 44 West (approx. 1 mile); take Interstate 44 West to Interstate
240 East (approx. 2 miles); continue on Interstate 240 East to Interstate 35
South (approx. 4-1/2 miles); take Interstate 35 South to S.E. 89th Street Exit
(1 mile); Bear left onto S I-35 Service Road; Turn Left on SE 89th Street. KF
Industries is on the right side as the road dead ends. /
From Downtown Oklahoma City: Take I-35/I-40 East ramp; Follow the ramp to
Dallas (I-35 S); Continue on I-35 South; Take the S.E. 89/th St. Exit towards S
I-35 Service Road; Bear left onto S I-35 Service Road; Turn Left on SE 89th
Street. KF Industries is on the right side as the road dead ends. /
1925-PS-02
DETACH HERE ZCIR82
PROXY
CIRCOR INTERNATIONAL, INC.
35 Corporate Drive, Burlington, MA 01803
Proxy for Common Stock
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Kenneth W. Smith and Alan J. Glass, and each of
them acting solely, proxies, with power of substitution and with all powers the
undersigned would possess if personally present, to represent and vote, as
designated on the reverse side, all of the shares of Common Stock of CIRCOR
International, Inc. which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of CIRCOR International, Inc. to be held at the offices
of KF Industries, Inc., 1500 S.E. 89th Street, Oklahoma City, Oklahoma, on
Thursday, April 25, 2002 at 9:00 a.m. (local time), and at any adjournment(s) or
postponement(s) thereof, upon the matters set forth on the reverse side hereof
and described in the Notice of Annual Meeting of Stockholders and accompanying
Proxy Statement.
The undersigned hereby revokes any proxy previously given in connection with
such meeting and acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement for the aforesaid meeting and the 2001 Annual Report to Stockholders.
- ------------- -------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------- -------------
CIRCOR INTERNATIONAL, INC.
C/O EQUISERVE
P.O. BOX 43068
PROVIDENCE, RI 02940
DETACH HERE ZCIR81
[X] Please mark votes as in this example.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no instruction is indicated with respect to
items 1 and 2 below, the undersigned's votes will be cast in favor of items 1
and 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
1. To elect one Class III Director to hold office for a 3-year term until the
Annual Meeting of Stockholders in 2005 and until such director's successor is
duly elected and qualified.
Nominees: (01) David A. Bloss, Sr.
FOR THE NOMINEE [ ] WITHHELD FROM THE NOMINEE [ ]
2. To ratify the selection of KPMG LLP as the independent auditors of the
Company for the fiscal year ending December 31, 2002.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Sign exactly as your name appears on this Proxy. If the shares are registered in
the names of two or more persons, each should sign. Executors, administrators,
trustees, partners, custodians, guardians, attorneys and corporate officers
should add their full titles as such.
Signature: ___________________________________________ Date: ________________
Signature: ___________________________________________ Date: ________________