Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] 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
CURTISS-WRIGHT CORPORATION
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
.......................................................
CURTISS-WRIGHT CORPORATION
1200 WALL STREET WEST, LYNDHURST, NEW JERSEY 07071
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
CURTISS-WRIGHT CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of
Curtiss-Wright Corporation, a Delaware corporation, will be held at the Novotel
Meadowlands Hotel, One Polito Avenue, Lyndhurst, New Jersey on Friday, April 24,
1998, at 2:00 p.m., for the following purposes:
(1) To elect seven directors, each to hold office until the next
Annual Meeting of Stockholders and until his or her successor shall have
been elected and shall qualify;
(2) To appoint independent accountants for the current year, Price
Waterhouse LLP having been nominated as such by the Board of Directors; and
(3) To consider and transact such other business as may properly come
before the meeting.
Only holders of common stock of record at the close of business on March 2,
1998 are entitled to notice of and to vote at the meeting. A list of such
holders will be available for examination by any stockholder at the meeting and
at the offices of the Corporation, 1200 Wall Street West, Lyndhurst, N.J. 07071,
during the ten days preceding the meeting date.
PLEASE FILL IN, SIGN AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. Stockholders who plan to attend the meeting in person are
nevertheless requested to sign and return their proxies to make certain that
their stock will be represented at the meeting should they be prevented
unexpectedly from attending.
By Order of the Board of Directors,
DANA M. TAYLOR, JR.
Secretary
March 6, 1998
CURTISS-WRIGHT CORPORATION
1200 WALL STREET WEST, LYNDHURST, NEW JERSEY 07071
PROXY STATEMENT
This Proxy Statement is furnished by Curtiss-Wright Corporation
(hereinafter called the 'Corporation' or the 'Company') in connection with the
solicitation of proxies for use at the Annual Meeting of Stockholders to be held
at the time and place and for the purposes set forth in the foregoing Notice of
Annual Meeting of Stockholders. The Proxy Statement and accompanying proxy will
be first mailed to stockholders on or about March 13, 1998.
ON DECEMBER 23, 1997 A TWO FOR ONE STOCK SPLIT IN THE FORM OF A DIVIDEND
WAS PAID TO ALL STOCKHOLDERS OF RECORD ON DECEMBER 3, 1997. ALL INFORMATION
CONTAINED IN THIS PROXY STATEMENT REFLECTS THAT SPLIT.
As of March 2, 1998, the record date for determining the holders of common
stock entitled to notice of and to vote at the Annual Meeting, there were
outstanding and entitled to vote at the Annual Meeting 10,176,800 shares of
common stock. Each share of stock is entitled to one vote.
The proxy card provides space for a stockholder to withhold voting for any
or all nominees for the Board of Directors, and to abstain from voting for the
appointment of independent accountants. The election of directors requires a
plurality of the votes cast while the approval of the appointment of independent
accountants requires the affirmative vote of a majority in interest of the
stockholders present in person or by proxy and entitled to vote. Abstentions and
broker non-votes are counted for purposes of determining whether a quorum is
present at the meeting. An abstention will be treated as a negative vote with
respect to each matter other than the election of a director as to whom the
stockholder abstained. As to broker non-votes, if a broker indicates on the
proxy that it does not have discretionary authority to vote on a particular
matter, the shares represented by the non-votes will not be considered as
present and entitled to vote with respect to that matter.
Where a specific designation is given in the proxy with respect to the vote
on the election of directors or the appointment of independent accountants, the
proxy will be voted in accordance with such designation. If no such designation
is made, the proxy will be voted in favor of the directors named below and in
favor of the appointment of independent accountants. Anyone giving a proxy may
revoke it at any time before its use at the Meeting by personally appearing at
the Meeting and casting a contrary vote, or by giving a later proxy indicating a
desire to vote differently than is indicated by his earlier proxy.
ELECTION OF DIRECTORS
At this Annual Meeting seven directors are to be elected, each to hold
office until the next Annual Meeting of Stockholders and until his or her
successor shall have been duly elected and shall qualify. Each nominee has been
recommended for election by the Nominating Committee of the Board of Directors
and by the Board. In the event that any such nominee should become unavailable
for election, the persons named in the proxy may vote for the election of a
substitute nominee. However, the Board of Directors has no reason to believe
that any of the nominees described below will be unavailable for election.
The following information is provided as of March 6, 1998 with respect to
each nominee for election as a director.
YEAR
BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATION FOR LAST FIVE FIRST
YEARS; DIRECTORSHIPS IN PUBLIC CORPORATIONS AND ELECTED
NAME INVESTMENT COMPANIES; AGE DIRECTOR
- ---------------------------- ------------------------------------------------------------------------ --------
Thomas R. Berner Partner in Berner & Berner, P.C., attorneys. Age 50. 1990
James B. Busey IV Aviation safety and security consultant, April 1996-present; Director, 1995
Mitre Corporation since February 1995; Director, Texas Instruments,
Incorporated since July 1993; President and chief executive officer of
Armed Forces Communications and Electronics Association, September
1993-April 1996; Age 65.
David Lasky Chairman of the Board of Directors of Curtiss-Wright Corporation since 1993
May 1995 and President since May 1993; formerly Senior Vice President,
General Counsel and Secretary of the Corporation; Director, Primex
Technologies, Inc. since December 1996. Age 65.
William B. Mitchell Director, Mitre Corporation since May 1997; Director, Primex 1996
Technologies, Inc. since December 1996; Vice Chairman, 1993-1996,
Director, 1990-1996 and Executive Vice President, 1987-1993 of Texas
Instruments Incorporated; Chairman, American Electronics Association,
September 1995-September 1996; Age 62.
John R. Myers Director, Iomega Corporation since 1994; limited partner of Carlisle 1996
Enterprises, a venture capital group, since 1993; Consultant, UNC, Inc.,
August-December 1996; Chairman of the Board of Garrett Aviation
Services, 1994-1996; President, Chief Operating Officer and Chief
Executive Officer and Director of Thiokol Corporation, 1992-1993; Age
60.
William W. Sihler Professor of Business Administration, Darden Graduate School of Business 1991
Administration, University of Virginia. Age 60.
J. McLain Stewart Director, McKinsey & Company, Management Consultants, until 1997. Age 1989
81.
The following table sets forth information concerning the ownership of
common stock of the Corporation by each director and nominee, each of the
executive officers named in the Summary Compensation Table below and all
directors and executive officers as a group, as of March 6, 1998. Except as
noted in footnote 3 to this table, the shares were owned directly and the owner
had the sole voting and investment power in respect thereof. None of those
individuals owned any common stock of Unitrin, Inc. or Argonaut Group, Inc. (For
information in respect of the relationship among Unitrin, Inc., Argonaut Group,
Inc., and the Corporation, see pages 12 through 13).
% OF
NUMBER OF SHARES OUTSTANDING
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK
- ----------------------------------------------------------------------------- ------------------ ------------
Martin R. Benante............................................................ 8,261(1) (2)
Thomas R. Berner............................................................. 1,492(3) (2)
James B. Busey IV............................................................ 916(4) (2)
David Lasky.................................................................. 87,175(5) (2)
William B. Mitchell.......................................................... 516(6) (2)
John R. Myers................................................................ 516(7) (2)
Gerald Nachman............................................................... 52,953(8) (2)
William W. Sihler............................................................ 916(9) (2)
J. McLain Stewart............................................................ 916(10) (2)
Dana M. Taylor, Jr........................................................... 14,082(11) (2)
George J. Yohrling........................................................... 15,461(12) (2)
Directors and Executive Officers as a group (15 persons)..................... 237,008(13) 2.3%
(footnotes on next page)
2
(footnotes from previous page)
(1) Of the total number of shares, 7,327 represent the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan and 1995 Long-Term Incentive Plan.
(2) Less than one percent.
(3) Includes 516 shares of restricted common stock issued pursuant to the
Corporation's 1996 Stock Plan for Non-Employee Directors and 380 shares
owned by Nancy Berner, wife of Mr. Berner. Mr. Berner denies that he is the
beneficial owner of the shares owned by his wife.
(4) Includes 516 shares of restricted common stock issued pursuant to the
Corporation's 1996 Stock Plan for Non-Employee Directors.
(5) Of the total number of shares, 35,333 represents the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan and 1995 Long-Term Incentive Plan.
(6) This consists of 516 shares of restricted common stock issued pursuant to
the Corporation's 1996 Stock Plan for Non-Employee Directors.
(7) This consists of 516 shares of restricted common stock issued pursuant to
the Corporation's 1996 Stock Plan for Non-Employee Directors.
(8) Of the total number of shares, 18,967 represents the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan and 1995 Long-Term Incentive Plan.
(9) Includes 516 shares of restricted common stock issued pursuant to the
Corporation's 1996 Stock Plan for Non-Employee Directors.
(10) This consists of 516 shares of restricted common stock issued pursuant to
the Corporation's 1996 Stock Plan for Non-Employee Directors and 400 shares
which are indirectly beneficially owned as custodian pursuant to the
Uniform Gift to Minors Act.
(11) Of the total number of shares, 9,048 represents the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan and 1995 Long-Term Incentive Plan.
(12) Of the total number of shares, 8,309 represents the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan and 1995 Long-Term Incentive Plan.
(13) Of the total number of shares 117,404 represents the number of shares that
may be acquired within 60 days upon the exercise of options granted under
the Corporation's 1985 Stock Option Plan and 1995 Long-Term Incentive Plan.
3
OPERATION OF BOARD OF DIRECTORS AND COMMITTEES
During 1997 the Board of Directors held six meetings. All of the directors
attended at least 75% of the aggregate of all meetings in 1997 of the Board of
Directors and Committees on which they served.
The Audit Committee of the Board of Directors, presently consisting of
Messrs. William W. Sihler, James B. Busey IV and William B. Mitchell, met two
times during 1997. The Committee's functions include the following: making
recommendations to the Board as to the nomination of independent accountants for
appointment by the stockholders; reviewing annual financial statements of the
Corporation prior to their publication; reviewing the report by the independent
accountants concerning the prior year's audit and management's response thereto;
and consulting with the independent accountants and management concerning
internal accounting controls.
The Executive Compensation Committee, presently consisting of Messrs. John
R. Myers, Thomas R. Berner, and J. McLain Stewart met seven times during 1997.
This Committee reviews compensation of elected officers prior to submission to
the Board; establishes specific awards to be made to individuals under the
Corporation's Modified Incentive Compensation Plan and the Corporation's 1995
Long-Term Incentive Plan; and reviews the establishment and/or amendment of
executive compensation plans, including the Savings and Investment Plan.
The Nominating Committee, presently consisting of Messrs. J. McLain
Stewart, James B. Busey IV and John R. Myers, met once in 1997. Its
responsibilities include the following: (i) recommending to the Board of
Directors nominees for election as directors; (ii) establishing procedures for
identifying candidates for the Board and periodically reviewing potential
candidates; and (iii) recommending to the Board criteria for Board membership.
Any stockholder may recommend nominees to the Committee for consideration by
writing to the Secretary of the Corporation. Such submission should include the
full name and address of each proposed nominee, a statement of his or her
business experience and qualifications and a written statement from the proposed
nominee consenting to his or her nomination and agreeing to serve if elected.
INDEPENDENT ACCOUNTANTS
The Board of Directors has nominated the firm of Price Waterhouse LLP for
appointment by the stockholders as independent accountants for the purpose of
auditing and reporting upon the financial statements of the Corporation for its
fiscal year ending December 31, 1998, subject to the approval of its appointment
by stockholders at the Annual Meeting. The firm of Price Waterhouse LLP was
engaged in 1992 and has served in this capacity for the Corporation through the
fiscal year ended December 31, 1997. The selection of Price Waterhouse LLP to
serve as independent accountants of the Corporation was based upon a
recommendation by the Audit Committee of the Board of Directors and was approved
by the full Board. Representatives of Price Waterhouse LLP are expected to be
present at the Annual Meeting of Stockholders to make such statements and answer
such questions as are appropriate.
If the stockholders fail to so appoint Price Waterhouse LLP, the Board of
Directors, pursuant to the By-Laws of the Corporation, will appoint other
independent accountants to perform such duties for the current fiscal year. It
is not contemplated that such appointment of other independent accountants would
be submitted to the stockholders for ratification. The appointment of
independent accountants to serve with respect to the year 1999 would be acted
upon by the stockholders at their Annual Meeting early in that year.
4
EXECUTIVE COMPENSATION
REPORT OF EXECUTIVE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Executive Compensation Committee (the 'Committee') of the Board of
Directors is responsible for the administration of the executive compensation
program of the Corporation. The Committee is composed of three independent
non-employee directors who are not eligible to participate in the Corporation's
compensation plans for employees.
In 1997 the compensation of the executive officers of the Corporation
consisted of salary, cash awards under the Modified Incentive Compensation Plan
(the 'I.C. Plan') of the Corporation and non-qualified stock options and
performance units pursuant to the Corporation's 1995 Long-Term Incentive Plan.
The amount of compensation for each of these elements is arrived at through
consideration of a number of objective and subjective factors.
Salaries are subject to annual review by the Committee and are adjusted on
the basis of competitive salary ranges for the officers' positions, individual
performance and the officer's contributions to the Corporation. The
recommendations of the Committee as to salary adjustments are acted upon by the
Board.
Payments under the I.C. Plan are made both to officers and a broad group of
other key employees. The maximum amount available each year for awards under
that Plan is based solely on a formula tied to the earnings of the Corporation
as a whole. In 1997 I.C. Plan payments to officers totaled less than fifteen
percent of the amount available under the formula.
Payments under the Long Term Incentive Plan are also made to a broad group
of other key employees in addition to corporate officers, and are intended to
attract and retain highly qualified key employees and to provide those employees
with an additional incentive to work over a longer period toward increasing the
value of the Corporation and improving the results of the business units with
which they are associated.
In determining Mr. Lasky's salary the Committee took into account the
compensation paid by other corporations of similar size and nature and Mr.
Lasky's years of service and other non-salary compensation. The Committee also
considered specific measures of corporate performance, including return on
assets, return on capital employed, return on equity, and operating cash flow,
both for the full years 1996 and 1995, and on a year-to-date basis, for 1997.
The Committee also took into consideration various indicators of corporate
performance in making an award to Mr. Lasky under the I.C. Plan.
In awarding stock options and performance units to Mr. Lasky, the Committee
considered Mr. Lasky's implementation of a strategic planning process and the
progress that continues to be made in identifying and exploring growth
opportunities. The Committee also considered the potential impact Mr. Lasky's
efforts could have on future growth, and made these awards to provide a further
incentive to continue his efforts to advance the interests of the Corporation.
The Committee also considered the compensation awarded other chief executive
officers, as reported by a compensation consultant advising the Corporation with
respect to its overall executive compensation program. A number of objective
financial measures of corporate performance were also considered as were
subjective factors relating to Mr. Lasky.
With respect to considering the increase of salaries of its other executive
officers the Committee considered the salaries paid by other corporations for
comparable positions and each person's years of service and total compensation
received in 1995 and 1996. A number of objective financial measures of
performance, corporate or business unit, as appropriate, were also considered.
The Committee also considered factors relating to the performance of the
individual officers.
In making awards to its executive officers under the I.C. Plan, the
Committee took into consideration the individual contributions each made to the
success of the Corporation, through personal ability, industry, loyalty and
service, as well as total compensation received in 1995 and 1996.
5
The Committee considered the relationship of various indicators of corporate
performance to the proposed awards of incentive compensation. Sales and earnings
of the Corporation for the year 1996 were compared to the results achieved in
1995. In addition, the returns on assets, capital, and equity and the sales of
the Corporation in 1996 were contrasted favorably to the same measures for a
peer group of companies. The financial and other performance of the business
unit or executive department for which each officer was responsible were also
considered in deciding on award amounts to such officers as well as for the
other key employees who work with such units or departments.
In awarding stock options and performance units to key employees and
executive officers the Committee considered the effect such persons' efforts
could have on the growth of the Corporation and their value to the business.
Awards were keyed to specific objectives relating to the growth of the
individual business unit or the Corporation as a whole, as appropriate, over the
three year period ending December 31, 2000 and to the return on capital, as
defined, during that period for the respective organizations. The Committee also
considered the amount of 1996 and 1997 base pay, the incentive compensation
received in each of those years and the 1996 stock options and performance unit
awards that each had received. While to some degree grants were based on
subjective factors relating to the performance of individuals, in 1997 the
Committee adopted the practice of having Long Term Incentive Plan awards bear a
pre-set percentage relationship to base salary, based on the target percentage
suggested by the Corporation's compensation consultant. The compensation
consultant also confirmed that awards of the size granted under the 1995
Long-Term Incentive Plan were fair and reasonable and consistent with
corresponding awards made by other corporations.
JOHN R. MYERS, Chairman
THOMAS R. BERNER
J. McLAIN STEWART
6
SUMMARY COMPENSATION TABLE
The following table contains information concerning the five most highly
compensated executive officers of the Corporation.
LONG TERM AWARDS
-----------------------------
ANNUAL COMPENSATION (f) (g)
(a) --------------------------- RESTRICTED SECURITIES (i)
NAME AND PRINCIPAL (b) (c) (d) STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY(1) BONUS AWARDS(2) OPTIONS COMPENSATION(3)
- --------------------------------------------------- ---- --------- -------- --------- ------------------ ---------------
(NUMBER OF SHARES)
David Lasky, Chairman and President 1997 $416,300 $198,000 $109,440 13,422 $5,012
1996 $382,500 $220,000 10,358 $5,751
1995 $338,000 $200,000 9,120 $6,406
Gerald Nachman, Executive 1997 $308,500 $135,000 $ 60,816 6,040 $3,400
V.P. of Curtiss-Wright Corp; 1996 $292,500 $120,000 5,368 $3,995
President, Metal Improvement 1995 $276,000 $105,000 5,066 $4,603
Company, Inc.
George J. Yohrling, V.P. of Curtiss-Wright Corp.; 1997 $193,100 $ 60,000 $ 21,600 3,132 $1,261
Exec. V.P., Curtiss-Wright Flight Systems, Inc. 1996 $177,200 $ 56,000 2,966 $1,441
1995 $165,200 $ 50,000 1,800 $1,529
Dana M. Taylor, Jr., General Counsel & Secretary 1997 $184,900 $ 37,000 $ 27,216 2,506 $2,653
1996 $177,600 $ 35,000 2,212 $3,238
1995 $170,000 $ 35,000 2,266 $3,534
Martin R. Benante V.P. of Curtiss-Wright Corp.; 1997 $163,700 $ 56,000 $ 22,416 2,908 $2,609
President, Curtiss-Wright Flow Control Corp. 1996 $154,100 $ 48,000 2,048 $2,432
1995 $144,200 $ 48,000 1,866 $2,949
- ------------
(1) Includes salaries and amounts deferred under the Corporation's Savings and
Investment Plan.
(2) The values of the restricted stock awards shown in the Summary Compensation
Table are based upon the stock price of $24.00 on the date of grant. These
shares were awarded pursuant to the Corporation's 1995 Long-Term Incentive
Plan. These shares however do not have a current realizable value since they
were received subject to restrictions against sale, transfer or pledge and
are subject to rights of repurchase for three years from the date of grant.
Holders of restricted stock receive dividends at the same time and at the
same rate as other common stock owners. The number and dollar value of
shares of restricted stock held on December 31, 1997 based on a closing
market price of $36.31 were David Lasky-4,560 shares ($165,573); Gerald
Nachman-2,534 shares ($92,009); George J. Yohrling-900 shares ($32,679);
Dana M. Taylor-1,134 shares ($41,175) and Martin R. Benante-934 shares
($33,913).
(3) These amounts consist of the dollar value of insurance premiums paid by the
Corporation during the covered fiscal year for term life insurance and
contributions by the Corporation prior to September 1, 1994 which have
become vested pursuant to the Corporation's Employees' Savings Plan.
7
PERFORMANCE UNITS
Pursuant to the Corporation's 1995 Long-Term Incentive Plan, the Executive
Compensation Committee of the Board of Directors awarded performance units in
November 1997 to its executive officers, senior managers and other key
employees.
Performance units are denominated in dollars and payable in cash three
years after their award date, contingent upon attaining an average annual return
on capital and an average annual growth rate based upon objectives established
by the Executive Compensation Committee of the Board of Directors. Awards to
employees of the Corporation's business units are based on the extent to which
these objectives are achieved by the business unit by which the employee is
employed. Awards to employees of the corporate office are based on the extent to
which these objectives are achieved by the Corporation as a whole.
The values shown below reflect the potential value at a target value of one
dollar per unit payable at the end of the three year performance period if the
Company's average return on capital and average annual growth rate objectives
are attained. The chart also reflects the fact that each unit may prove to be
worth approximately two dollars if both performance targets are substantially
exceeded or nothing at all depending upon the extent to which the performance
targets are not met.
AWARD OF PERFORMANCE UNITS
NUMBER OF MINIMUM MAXIMUM PERFORMANCE
NAME UNITS VALUE TARGET VALUE VALUE PERIOD
- -------------------------------------------- ---------------- ------- ------------ -------- -----------
D. Lasky.................................... 1997 - 150,000 $0 $150,000 $300,000 1998-2000
1996 - 110,000 $0 $110,000 $220,000 1997-1999
G. Nachman.................................. 1997 - 67,500 $0 $ 67,500 $135,000 1998-2000
1996 - 57,000 $0 $ 57,000 $114,000 1997-1999
G. Yohrling................................. 1997 - 35,000 $0 $ 35,000 $ 70,000 1998-2000
1996 - 31,500 $0 $ 31,500 $ 63,000 1997-1999
D. Taylor................................... 1997 - 28,000 $0 $ 28,000 $ 56,000 1998-2000
1996 - 23,500 $0 $ 23,500 $ 47,000 1997-1999
M. Benante.................................. 1997 - 32,500 $0 $ 32,500 $ 65,000 1998-2000
1996 - 21,750 $0 $ 21,750 $ 43,500 1997-1999
8
OPTIONS GRANTED IN LAST FISCAL YEAR
PURSUANT TO THE CORPORATION'S 1995 LONG-TERM INCENTIVE PLAN
% OF TOTAL
SHARES OPTIONS
COVERED BY GRANTED EXERCISE
OPTIONS TO EMPLOYEES PRICE EXPIRATION GRANT DATE
NAME GRANTED(1) IN 1997 PER SHARE DATE PRESENT VALUE(2)
- ------------------------------------- ---------- ------------ --------- -------------- ----------------
David Lasky.......................... 13,422 15.03% $ 38.00 Nov. 18, 2007 $154,285
Gerald Nachman....................... 6,040 6.76 38.00 Nov. 18, 2007 69,429
George J. Yohrling................... 3,132 3.50 38.00 Nov. 18, 2007 36,002
Dana M. Taylor, Jr................... 2,506 2.80 38.00 Nov. 18, 2007 28,806
Martin R. Benante.................... 2,908 3.25 38.00 Nov. 18, 2007 33,427
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
(d)
NUMBER OF (e)
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
(b) YEAR-END YEAR-END(3)
SHARES (c) ----------------- -----------------
(a) ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------- ----------- ----------- ----------------- -----------------
David Lasky.............................. 0 $0 35,333/23,367 $604,860/$114,210
Gerald Nachman........................... 0 0 18,967/11,307 325,542/ 60,582
George J. Yohrling....................... 0 0 8,309/ 5,709 142,629/ 29,374
Dana M. Taylor, Jr....................... 0 0 9,048/ 4,736 156,999/ 25,696
Martin R. Benante........................ 0 0 7,327/ 4,895 126,051/ 22,839
- ------------
(1) Options were granted with an exercise price of 100% of the market price on
the date of grant. The options are exercisable to the extent of one third of
the total number of shares covered beginning on the first anniversary of the
grant, two thirds from the second anniversary and in full after the third
anniversary. The options are not transferrable other than by will or by the
laws of descent and distribution. If the optionee terminates his or her
employment the option expires upon such event; however, if employment is
terminated by retirement under a retirement plan of the Corporation, the
option may be exercised within three months following the date of
retirement.
(2) These values were calculated using the Black-Scholes option pricing model.
The Black-Scholes model is a complicated mathematical formula which is
widely used and accepted for valuing traded stock options. The model is
premised on immediate exercisability and transferability of the options.
This is not true for the Corporation's options granted to executive officers
and other employees. Therefore, the values shown are theoretical and are not
intended to reflect the actual values the recipients may eventually realize.
Any ultimate value will depend on the market value of the Corporation's
stock at a future date. In addition to the stock price at time of grant and
the exercise price, which are identical, and the ten-year term of each
option, the following assumptions were used to calculate the values shown:
expected dividend yield (1.37 percent, the current yield of the
Corporation's common shares on the grant date), expected stock price
volatility (18.18 percent, the most recent volatility for the month-end
stock prices of the Corporation's common shares for the preceding 3 years),
and risk-free rate of return (5.88 percent equal to the yield on a 7-year
U.S. Treasury bond on the option grant date).
(3) Calculated by determining the difference between the fair market value of
the common stock underlying the options on December 31, 1997 ($36.31, the
closing price on the New York Stock Exchange Composite Transactions) and the
exercise price of the options on that date.
9
TERMINATION OF EMPLOYMENT
Pursuant to a policy designed to retain key employees established by the
Corporation's Board of Directors in 1977, the Corporation has agreements with
Messrs. Lasky, Nachman, Yohrling, Taylor and Benante which provide for the
payment by the Corporation of severance pay, in the case of involuntary
termination of employment other than for cause, in an amount equal to one year's
base salary at the time of termination, as well as the continued availability of
certain employee benefits, for a period of one year following termination. The
agreements provide that such severance pay and benefits also would be made
available in the case of voluntary retirement or termination of employment which
is the direct result of a change in the terms or conditions of employment,
including a reduction in compensation or in job responsibilities. At the option
of the employee, said amount of severance pay may be paid over the two year
period following such termination, in which case such employee benefits would
continue in effect for the same period. Under the agreements, the payment of
severance pay, and the availability of benefits, is contingent upon a number of
conditions, including the employee's performance of his agreements with respect
to providing consulting services and not entering into competition with the
Corporation.
RETIREMENT PLAN
The Corporation's Retirement Plan is a tax qualified, defined benefit,
trusteed plan. On September 1, 1994 the Corporation substantially revised this
Plan. The revised Plan provides that employees are to receive their benefit
accrued to September 1, 1994, adjusted for increases in compensation between
that date and retirement or other termination, together with the benefit
accruing under the new Plan. The revised Plan also provides that an employee age
55 or older on September 1, 1994 with five years of contributory service as of
August 31, 1994 shall not receive a lesser benefit than he would have received
under the Plan as in effect prior to the amendment, adjusted for the value of
contributions that would have been made subsequent to September 1, 1994. As of
September 1, 1994 the following monthly pension benefits had been accrued: David
Lasky, $12,909; Gerald Nachman, $11,885; George J. Yohrling, $2,559; Dana M.
Taylor, Jr., $4,961; and Martin R. Benante $137. These amounts would be less if
retirement occurred prior to age 65, or more if retirement occurred after said
age.
The Plan as revised on September 1, 1994 provides benefits computed
prospectively under a formula which is integrated with Social Security and which
provides for an annual benefit at age 65 equal to 1% of the employee's five-year
final average compensation up to the social security covered compensation
(currently $31,129) times years of service on and after September 1, 1994, plus
1.5% of compensation in excess of social security covered compensation times
years of service on or after September 1, 1994. The chart below illustrates the
estimated aggregate amount of annual benefits on a straight life annuity basis
attributable to service on or after September 1, 1994 under the new formula that
will be payable on retirement at age 65 to an employee in the compensation
classification specified, under various assumptions as to compensation and years
of service.
YEARS OF SERVICE
--------------------------------------------------------
COMPENSATION 15 20 25 30 35
- ------------ -------- -------- -------- -------- --------
$125,000 ........................................... $ 25,790 $ 34,387 $ 42,984 $ 51,581 $ 60,177
150,000 ........................................... 31,415 41,887 52,359 62,831 73,302
175,000 ........................................... 37,040 49,387 61,734 74,081 86,427
200,000 ........................................... 42,665 56,887 71,109 85,331 99,552
225,000 ........................................... 48,290 64,387 80,484 96,581 112,677
250,000 ........................................... 53,915 71,887 89,859 107,831 125,802
300,000 ........................................... 65,165 86,887 108,609 130,331 152,052
400,000 ........................................... 87,665 116,887 146,109 175,331 204,552
450,000 ........................................... 98,915 131,887 164,859 197,831 230,802
500,000 ........................................... 110,165 146,887 183,609 220,331 257,052
550,000 ........................................... 121,415 161,887 202,359 242,831 283,302
10
For the above chart, the current compensation covered by the Retirement
Plan is substantially equivalent to the cash compensation reported under the
headings entitled 'Salary' and 'Bonus' on page 7 of this Proxy Statement for the
executive officers listed there.
In addition, a cash balance component was added to the Plan on September 1,
1994 under which during each year of participation in the Plan a participant
earns a pay-based credit equal to 3% of his or her compensation.
Under the Employee Retirement Income Security Act of 1974 ('ERISA'), many
employees elect a survivor option payable to the employee's spouse and, as a
consequence, the amount actually received on retirement by such employee would
be less than indicated above. The Internal Revenue Code provides that effective
January 1, 1998 the maximum allowable annual benefit under the Retirement Plan
is $130,000 (adjusted for each year of employment beyond age 65) and the maximum
allowable annual compensation that may be included in the calculation of a
benefit under the Retirement Plan is $160,000. These limits are substantially
lower than the maximum amounts shown above. Accordingly, the Corporation
maintains a Retirement Benefits Restoration Plan (the 'Restoration Plan')
whereby all participants in the Retirement Plan whose benefits or compensation
under the Retirement Plan would exceed the limitations imposed by the Internal
Revenue Code will receive a supplemental retirement benefit equal to the excess
of the benefit which would have been payable to them under the Retirement Plan
but for said limitations, over the amount payable under the Retirement Plan,
given said limitations. Such supplemental benefit is not funded. The amounts set
forth above include amounts payable pursuant to the Restoration Plan. Benefit
amounts are not subject to reduction for any Social Security benefits to which
Plan participants may be entitled. Credited years of service under the
Retirement Plan at December 31, 1997 are as follows: David Lasky, 35 years;
Gerald Nachman, 23 years; George J. Yohrling, 21 years; Dana M. Taylor, Jr., 24
years; and Martin R. Benante, 19 years. For each of these persons as of said
date, credited service for purposes of the pay based credit referred to above
includes three years and four months under the preceding chart.
COMPENSATION OF DIRECTORS
Currently all directors who are not also employees of the Corporation
receive an annual director's fee of $20,000. Each non-employee director receives
a fee of $900 for every Board and Committee meeting attended. Pursuant to the
1996 Stock Plan for Non-Employee Directors (the 'Stock Plan for Directors')
non-employee directors may elect to receive their annual director's fees and
meeting fees in the form of common stock of the Corporation or in cash or both.
In addition, elections have been made to receive shares in lieu of cash fees and
to defer receipt of said shares. The aggregate balance of said shares was 4,468
as of December 31, 1997. They are not included in the table on page 2 as no
shares have been issued. In accordance with the terms of the Stock Plan for
Directors each non-employee director received 516 shares of common stock in
1996. These shares are restricted for a period of five years from the date of
grant and during that period may not be sold or transferred and are subject to
forfeiture if the director resigns or declines to continue serving as such
during that period. These shares are included in the table on page 2. For each
director who is not an employee, the Corporation also provides group term life
insurance coverage of $50,000.
11
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total stockholder
returns (assuming the reinvestment of dividends) on common stock of the
Corporation with such returns of companies listed on the Russell 2000 Index and
the S&P Aerospace/Defense Index. The graph assumes $100 invested on January 1,
1993 in stock of the Corporation and the companies on each of these indices.
[PERFORMANCE GRAPH]
Curtiss-Wright Corp. Total Return
DATE Curtiss-Wright Corp.
1/93 100.00
12/93 120.02
12/94 124.80
12/95 188.73
12/96 180.31
12/97 264.03
S&P Aerospace and Defense Index
DATE Peer Group
1/93 100.00
12/93 130.07
12/94 140.69
12/95 232.82
12/96 311.42
12/97 320.39
Russell 2000 Index
DATE Russell 2000
1/93 100.00
12/93 118.83
12/94 116.66
12/95 149.79
12/96 174.50
12/97 213.65
SECURITY OWNERSHIP AND TRANSACTIONS WITH CERTAIN BENEFICIAL OWNERS
The following information is given with respect to the persons who, to the
knowledge of the Corporation, own beneficially more than 5% of any class of the
voting securities of the Corporation outstanding as of March 2, 1998.
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------------------------------------ --------------------------------- ----------------- --------
Common Stock.................................... Unitrin, Inc. 4,382,400 shares 43.1%
One East Wacker Drive Direct
Chicago, Illinois 60601
Common Stock.................................... Argonaut Group, Inc. 822,200 shares 8.1
1800 Avenue of the Stars Indirect
Los Angeles, Cal. 90067
Common Stock.................................... GAMCO Investors, Inc. 764,640 shares 7.5
and Direct 3.7
Gabelli Funds, Inc. 376,000 shares
Corporate Center at Rye Direct
Rye, NY 10580
Common Stock.................................... Royce & Associates, Inc. 720,800 shares 7.9
and Direct .3
Royce Management Co. 28,000 shares
1414 Ave. of the Americas Direct
New York, NY 10019
Amendment No. 3 dated December 12, 1996 to the Schedule 13D of Unitrin,
Inc. ('Unitrin') and Trinity Universal Insurance Company ('Trinity'), a
wholly-owned subsidiary of Unitrin, reported that on December 4, 1996 Unitrin
had purchased 1,059,492 shares of Curtiss-Wright Corporation common stock (now
2,118,984 shares after giving effect to the previously described stock split)
representing all of Trinity's holdings of Curtiss-Wright's common stock. The
amendment stated that Unitrin had used
12
general corporate funds to effect the purchase, that the shares acquired were
being held for investment, and that future investment considerations by Unitrin
might or might not result in the acquisition of additional securities or the
disposition of these securities. The amendment further reported that Unitrin had
sole voting and dispositive power as to the 2,191,200 shares (now 4,382,400
shares) of Curtiss-Wright common stock which it owned. According to Unitrin's
proxy statement dated April 9, 1997, three of the seven Unitrin directors are
also directors of the Argonaut Group, Inc. ('Argonaut'), which is referred to
below, and beneficially own in the aggregate 29.2% of Unitrin's outstanding
common stock.
A Schedule 13D dated October 9, 1986 of Argonaut and three of its
subsidiaries reported: (i) ownership by those subsidiaries of the 411,100 shares
of common stock (now 822,200 shares) shown above; (ii) that the stock had been
acquired for investment; (iii) that each of those subsidiaries shares with
Argonaut voting and dispositive power with respect to the stock owned by that
subsidiary and (iv) that Argonaut might be deemed a beneficial owner of this
stock. According to the proxy statement of Argonaut, dated March 14, 1997, three
of its eight directors are also directors of Unitrin and beneficially own in the
aggregate 27.1% of the outstanding common stock of the Argonaut. The three
Unitrin directors and the three Argonaut directors referred to above are the
same persons.
If Unitrin and Argonaut acted jointly, the aggregate total of 5,204,600
shares of common stock owned by them would constitute over 51% of the
outstanding stock of the Corporation. Under those circumstances, they might be
deemed to be in 'control' of the Corporation (as the term control is defined in
the regulations promulgated pursuant to the Securities Exchange Act of 1934).
However, to date no attempt has been made to obtain representation on the Board
of Directors of the Corporation, to direct its management or policies or
otherwise to exercise 'control' over it.
In their Schedule 13D as amended through August 12, 1997, GAMCO Investors,
Inc. ('GAMCO') and Gabelli Funds, Inc. ('GFI') reported that (i) they
beneficially own the shares set forth in the above table; (ii) GAMCO and GFI are
investment advisors but have no economic interest in their shares (such interest
presumably residing in their investment advisory clients); (iii) the GAMCO and
GFI shares were purchased for investment; (iv) GAMCO exercises sole dispositive
power over 382,320 shares (now 764,640 shares), and sole voting power over
382,320 shares (now 764,640 shares), GFI exercises sole voting and dispositive
power over 188,000 shares (now 376,000 shares); (v) that Gabelli International
Limited ('GIL') no longer was the beneficial owner of shares of the
Corporation's common stock; (vi) GAMCO and GFI were formerly wholly-owned
subsidiaries of The Gabelli Group, Inc. ('TGGI') which, effective August 31,
1990, merged into GFI, and GAMCO is a wholly-owned subsidiary of GFI; (vii)
Mario J. Gabelli is the majority stockholder, Chairman of the Board and Chief
Executive Officer of GFI, the sole director and Chairman and Chief Executive
Officer of GAMCO, and Chief Investment Officer of GAMCO and GFI; (viii) Mr.
Gabelli is deemed to have beneficial ownership of the shares beneficially owned
by GAMCO and GFI and GFI is deemed to have beneficial ownership of the
securities owned beneficially by each of the foregoing entities other than Mr.
Gabelli and (ix) the power of Mr. Gabelli and GFI is indirect with respect to
stock beneficially owned directly by GAMCO.
A February 4, 1998 amended Schedule 13G filed by Royce & Associates, Inc.
('Royce'), formerly Quest Advisory Corp. and Royce Management Company ('RMC'),
formerly Quest Management Company, both described as investment advisors,
reported that Royce had decreased its beneficial ownership from 730,400 shares
to 720,800 shares and that RMC had increased its beneficial ownership from
27,200 shares to 28,000 shares of common stock of the Corporation. The amended
report stated that Charles M. Royce may be deemed to be a controlling person of
Royce and RMC and as such may be deemed to beneficially own the shares of common
stock of the Corporation beneficially owned by Royce and RMC but that he
disclaimed beneficial ownership of the shares held by Royce and RMC. The amended
report further stated that these shares had been acquired in the ordinary course
of business and not for the purposes of control of the Corporation.
13
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
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.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next Annual
Meeting must be received by the Office of the Secretary, Curtiss-Wright
Corporation, 1200 Wall Street West, Lyndhurst, New Jersey 07071 no later than
November 14, 1998 for inclusion in the Corporation's Proxy Statement and form of
proxy relating to that Meeting.
PERSONS MAKING THE SOLICITATION
This solicitation of proxies is made on behalf of the Board of Directors of
the Corporation, and the cost thereof will be borne by the Corporation. The
Corporation will reimburse brokerage firms and nominees for their expenses in
forwarding proxy material to beneficial owners of the stock of the Corporation.
In addition, a number of employees, officers and directors of the Corporation
(none of whom will receive any compensation therefore in addition to his regular
compensation) may solicit proxies. The solicitation will be made by mail and in
addition, the telephone, telegrams, facsimile and other electronic communication
and personal interviews may be utilized.
By Order of the Board of Directors
DANA M. TAYLOR, JR.
Secretary
Dated: March 6, 1998
14
APPENDIX 1
PROXY
CURTISS-WRIGHT CORPORATION
1200 WALL STREET WEST, LYNDHURST, NEW JERSEY 07071
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints DAVID LASKY, ROBERT A. BOSI and DANA M.
TAYLOR, JR. and each of them as proxies with power of substitution to vote all
shares of the Corporation which the undersigned is entitled to vote at the
Annual Meeting of Stockholders on April 24, 1998, at the Novotel Meadowlands
Hotel, One Polito Avenue, Lyndhurst, New Jersey at 2:00 p.m. or any adjournment
thereof, with all the powers the undersigned would have if personally present,
as specified, respecting the following matters described in the accompanying
Proxy Statement and, in their discretion, on other matters which come before the
meeting.
A VOTE FOR ITEMS 1 AND 2 IS RECOMMENDED.
(1) ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) |_| to vote for all nominees listed below |_|
T. R. Berner, J. B. Busey IV, D. Lasky, W. B. Mitchell, J. R. Myers, W. W.
Sihler, J. M. Stewart
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below)
- -------------------------------------------------------------------------------
(2) PROPOSAL TO APPROVE THE APPOINTMENT OF PRICE WATERHOUSE as independent
public accountants of the Corporation.
FOR |_| AGAINST |_| ABSTAIN |_|
(Continued, and to be Signed, on Reverse Side)
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH STOCKHOLDER SPECIFICATIONS. UNLESS
DIRECTED TO THE CONTRARY, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2. A majority
(or if only one, then that one) of the proxies or substitutes acting at the
meeting may exercise the powers conferred herein. Receipt of the accompanying
Notice of Meeting and Proxy Statement is hereby acknowledged.
1998
--------------------------------------------
(Date)
--------------------------------------------
-------------------------------------------
(Signature)
(Please sign name as fully and exactly as it
appears opposite. When signing in a fiduciary
or representative capacity, please give full
title as such. Where more than one owner,
each owner should sign. Proxies executed by a
corporation should be signed in full
corporate name by duly authorized officer.)
PLEASE MARK, SIGN, DATE AND MAIL IN ENCLOSED ENVELOPE. NO POSTAGE REQUIRED IN
UNITED STATES.