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. )
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Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
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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
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and 0-11
(1) Title of each class of securities to which transaction
applies:
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applies:
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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):
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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 23,
1999, 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,
PricewaterhouseCoopers 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 1,
1999 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 9, 1999
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 15, 1999.
As of March 1, 1999, 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 10,186,420 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 9, 1999 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 51. 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 66.
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 January 1997. Age 66.
William B. Mitchell Director, Mitre Corporation since May 1997; Director, Primex 1996
Technologies, Inc. since January 1997; 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 63.
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; Age 61.
William W. Sihler Professor of Business Administration, Darden Graduate School of Business 1991
Administration, University of Virginia. Age 61.
J. McLain Stewart Director, McKinsey & Company, Management Consultants, until 1997. Age 1989
82.
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 9, 1999. 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 and 13).
% OF
NUMBER OF SHARES OUTSTANDING
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK
- ----------------------------------------------------------------------------- ------------------ ------------
Martin R. Benante............................................................ 10,535(1) (2)
Thomas R. Berner............................................................. 1,778(3) (2)
Robert A. Bosi............................................................... 17,947(4) (2)
James B. Busey IV............................................................ 916(5) (2)
David Lasky.................................................................. 98,141(6) (2)
William B. Mitchell.......................................................... 516(7) (2)
John R. Myers................................................................ 516(8) (2)
Gerald Nachman............................................................... 58,445(9) (2)
William W. Sihler............................................................ 916(10) (2)
J. McLain Stewart............................................................ 916(11) (2)
George J. Yohrling........................................................... 17,660(12) (2)
Directors and Executive Officers as a group (14 persons)..................... 238,412(13) 2.3%
(footnotes on next page)
2
(footnotes from previous page)
(1) Of the total number of shares, 9,601 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.
(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) Of the total number of shares, 14,413 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.
(5) Includes 516 shares of restricted common stock issued pursuant to the
Corporation's 1996 Stock Plan for Non-Employee Directors.
(6) Of the total number of shares, 46,299 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.
(7) This consists of 516 shares of restricted common stock issued pursuant to
the Corporation's 1996 Stock Plan for Non-Employee Directors.
(8) This consists of 516 shares of restricted common stock issued pursuant to
the Corporation's 1996 Stock Plan for Non-Employee Directors.
(9) Of the total number of shares, 24,459 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.
(10) Includes 516 shares of restricted common stock issued pursuant to the
Corporation's 1996 Stock Plan for Non-Employee Directors.
(11) 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.
(12) Of the total number of shares, 10,941 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, 129,846 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
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Dana M. Taylor, Jr., Secretary and General Counsel of the Corporation, did
not timely file a Form 4 report to report the grant of options in November 1998
pursuant to the Corporation's 1995 Long-Term Incentive Plan to purchase 2,935
shares of the Corporation's common stock.
OPERATION OF BOARD OF DIRECTORS AND COMMITTEES
During 1998 the Board of Directors held nine meetings. All of the directors
attended at least 75% of the aggregate of all meetings in 1998 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 1998. 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 three times during 1998.
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 twice in 1998. 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 PricewaterhouseCoopers 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, 1999, subject to the approval of its
appointment by stockholders at the Annual Meeting. The firm of
PricewaterhouseCoopers LLP was engaged in 1992 and has served in this capacity
for the Corporation through the fiscal year ended December 31, 1998. The
selection of PricewaterhouseCoopers 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
PricewaterhouseCoopers 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 PricewaterhouseCoopers 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 2000
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 1998 the compensation of the executive officers of the Corporation
consisted of salary, cash bonus awards under the Modified Incentive Compensation
Plan (the 'Bonus 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.
SALARY
Officer 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 officers' contributions to the Corporation. Also
considered in 1998 were survey data related to compensation of officers in the
Corporation's peer group of companies and the recommendations of the
Corporation's compensation consultant as to appropriate target salary levels for
the Corporation's officers and each officer's years of service and total
compensation received in 1996 and 1997. A number of objective financial measures
of performance, corporate or business unit, as appropriate, were also
considered. The recommendations of the Committee as to salary adjustments are
acted upon by the Board.
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 1997 and 1996, and on a year-to-date basis, for 1998. In
1998 Mr. Lasky's salary was not increased, as the Committee determined to
increase the proportion of his total compensation derived from annual bonus and
long term incentive awards.
BONUS
Payments under the Bonus 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 1998 bonus payments to officers totaled less than thirteen
percent of the amount available under the formula. The 1998 round of bonus
awards was made early in the year, and was based on performance during 1997. In
making those awards, including Mr. Lasky's bonus, 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 1996 and 1997. 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 1997 were compared to the results achieved in 1996. In addition, the
returns on assets, capital, and equity and the sales of the Corporation in 1997
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. Also considered were both recommendations of the
Corporation's compensation consultant with respect to the typical bonus to
salary ratios at various salary levels and the performance of individual
officers as against objectives that had been set for them a year earlier.
5
LONG TERM INCENTIVE AWARDS
In 1998 the Awards made under the Long Term Incentive Plan consisted of
stock options and performance units. Made to a broad group of other key
employees in addition to corporate officers, they 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 making the 1998 long term incentive target awards the Committee
considered the effect that the efforts of the recipients could have on the
growth of the Corporation and their value to the business. Target awards were
keyed to specific objectives relating to the average annual sales of the
individual business unit or the Corporation as a whole, as appropriate, over the
three year period ending December 31, 2001 and to the average annual return on
capital, as defined, during the same period for the respective organizations.
The Committee also considered the amount of 1997 and 1998 base pay, the annual
bonus received by the awardees in each of those years and the 1997 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
1998 the Committee continued the practice, initiated a year earlier, of having
Long Term Incentive Plan awards bear a relationship to base salary, based on the
target percentages previously suggested by the Corporation's compensation
consultant. Recommendations previously supplied by the Corporation's
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.
In making a target award of long term incentive compensation to Mr. Lasky,
the Committee considered factors beyond those applicable to other officers. Mr.
Lasky's implementation of a strategic planning process and the progress that
continues to be made in identifying and exploring growth opportunities were
considered, as was the impact Mr. Lasky's efforts could have on future growth.
The Committee made these awards to Mr. Lasky to provide a further incentive for
him 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.
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 SECIRITIES (i)
NAME AND PRINCIPAL (b) (c) (d) STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY(1) BONUS AWARDS OPTIONS COMPENSATION(2)
- --------------------------------------------------- ---- --------- -------- --------- -------------- ---------------
(NUMBER OF SHARES)
David Lasky, Chairman and President 1998 $441,300 $275,000 15,941 $4,634
1997 $416,300 $198,000 13,422 $5,012
1996 $382,500 $220,000 10,358 $5,751
Gerald Nachman, Executive 1998 $337,200 $170,000 7,844 $2,942
V.P. of Curtiss-Wright Corp; 1997 $308,500 $135,000 6,040 $3,400
President, Metal Improvement 1996 $292,500 $120,000 5,368 $3,995
Company, Inc.
George J. Yohrling, V.P. of 1998 $223,400 $ 68,000 5,061 $1,251
Curtiss-Wright Corp.; 1997 $193,100 $ 60,000 3,132 $1,261
President, Curtiss-Wright 1996 $177,200 $ 56,000 2,966 $1,441
Flight Systems, Inc.
Martin R. Benante, V.P. of 1998 $181,000 $ 66,000 4,150 $2,537
Curtiss-Wright Corp.; 1997 $163,700 $ 56,000 2,908 $2,609
President, Curtiss-Wright Flow 1996 $154,100 $ 48,000 2,048 $2,432
Control Corp.
Robert A. Bosi, V.P. - Finance 1998 $170,000 $ 70,000 3,543 $3,424
of Curtiss-Wright Corporatiton 1997 $157,000 $ 58,000 1,454 $3,639
1996 $149,000 $ 60,000 1,483 $3,853
- ------------
(1) Includes salaries and amounts deferred under the Corporation's Savings and
Investment Plan.
(2) These amounts consist of the dollar value of insurance premiums paid by the
Corporation during the covered fiscal year for term life insurance.
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 1998 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, or units with which the
employees are affiliated. 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.................................... 1998 - 157,500 $0 $157,500 $315,000 1999 - 2001
1997 - 150,000 $0 $150,000 $300,000 1998 - 2000
1996 - 110,000 $0 $110,000 $220,000 1997 - 1999
G. Nachman.................................. 1998 - 77,500 $0 $ 77,500 $155,000 1999 - 2001
1997 - 67,500 $0 $ 67,500 $135,000 1998 - 2000
1996 - 57,000 $0 $ 57,000 $114,000 1997 - 1999
G. Yohrling................................. 1998 - 50,000 $0 $ 50,000 $100,000 1999 - 2001
1997 - 35,000 $0 $ 35,000 $ 70,000 1998 - 2000
1996 - 31,500 $0 $ 31,500 $ 63,000 1997 - 1999
M. Benante.................................. 1998 - 41,000 $0 $ 41,000 $ 82,000 1999 - 2001
1997 - 32,500 $0 $ 32,500 $ 65,000 1998 - 2000
1996 - 21,750 $0 $ 21,750 $ 43,500 1997 - 1999
R. Bosi..................................... 1998 - 35,000 $0 $ 35,000 $ 70,000 1999 - 2001
1997 - 32,500 $0 $ 32,500 $ 65,000 1998 - 2000
1996 - 31,500 $0 $ 31,500 $ 63,000 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.......................... 15,941 13.4% $37.65 Nov. 2, 2008 $157,500
Gerald Nachman....................... 7,844 6.59% $37.65 Nov. 2, 2007 $ 77,500
George J. Yohrling................... 5,061 4.25% $37.65 Nov. 2, 2007 $ 50,000
Martin R. Benante.................... 4,150 3.49% $37.65 Nov. 2, 2007 $ 41,000
Robert A. Bosi....................... 3,543 2.98% $37.65 Nov. 2, 2007 $ 35,000
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 74,641/46,299 $756,913/$53,118
Gerald Nachman............................ 0 $0 38,118/24,459 $407,098/$27,255
George J. Yohrling........................ 0 $0 19,079/10,941 $179,044/$15,387
Martin R. Benante......................... 0 $0 16,372/9,601 $157,034/$10,989
Robert A. Bosi............................ 0 $0 20,883/14,413 $245,099/$14,664
- ------------
(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 upon the death of
the optionee, in which case they are transferrable pursuant to a designation
of the optionee, or 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 early retirement under a
retirement plan of the Corporation, the option may be exercised within three
months following the date of retirement. If retirement occurs at age
sixty-five or thereafter, the option may be exercised within three years of
the date of retirement but no later than ten years following the option
grant date.
(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 (1.38 percent, the current yield of the
Corporation's common shares on the grant date), expected stock price
volatility (18.80 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 (4.80 percent equal to the yield on a 7-year
U.S. Treasury bond on the option grant date).
(footnotes continued on next page)
9
(footnotes continued from previous page)
(3) Calculated by determining the difference between the fair market value of
the common stock underlying the options on December 31, 1998 ($38.12, the
closing price on the New York Stock Exchange Composite Transactions) and the
exercise price of the options on that date.
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, Bosi 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.
Consistent with the Company's policy designed to retain key employees, the
Corporation also has severance protection agreements with Messrs. Lasky,
Nachman, Yohrling, Benante and Bosi, which provide for payment of severance pay
equal to two times the sum of the executive's base salary and average annual
bonus over a three-year period and the continued availability of certain
employee benefits for a period of two years following termination of employment,
in each case if employment is terminated within twenty-four months following a
change in control of the Corporation. The agreements further provide for the
vesting of all benefits accrued through the termination of employment in the
Company's Retirement and Retirement Benefits Restoration Plans; provided
however, that if vesting under any such Plan is not permitted by applicable law,
an actuarially determined lump sum shall be paid in an amount equalling the
nonvested benefit under the applicable plan. The agreements further provide that
upon a change in control any previously awarded performance units under the
Corporation's 1995 Long-Term Incentive Plan shall be paid on a pro-rata basis
for the period of employment and that previously awarded stock options shall
become fully vested and exercisable. The severance pay and benefits under the
severance protection agreements are in lieu of any that would have been provided
under the immediately preceding paragraph of this Proxy Statement.
RETIREMENT PLAN
The Corporation's Retirement Plan is a tax qualified, defined benefit,
trusteed plan. The Plan is non-contributory and covers most employees, including
the Corporation's executive officers. On September 1, 1994 the Corporation
amended this Plan. Benefits accrued as of August 31, 1994 were carried over in
the amended Plan. 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; Martin R. Benante, $137; and Robert A. Bosi, $972. These
benefits are indexed to reflect increases in compensation, as defined, from that
date forward. The Plan as amended provides for an annual benefit at age 65 of
1.5% times five year final average compensation in excess of social security
covered compensation (currently $33,060) plus 1% of the five year final average
compensation up to social security covered compensation, in each case multiplied
by the participant's years of service after September 1, 1994, not to exceed 35.
In addition, a participant earns a pay-based cash balance credit equal to 3% of
his or her compensation.
10
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 that would 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. 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.
YEARS OF SERVICE
--------------------------------------------------------
COMPENSATION 15 20 25 30 35
- ------------ -------- -------- -------- -------- --------
$125,000 ........................................... $ 25,646 $ 34,194 $ 42,743 $ 51,291 $ 59,840
150,000 ........................................... 31,271 41,694 52,118 62,541 72,965
175,000 ........................................... 36,896 49,194 61,493 73,791 86,090
200,000 ........................................... 42,521 56,694 70,868 85,041 99,215
225,000 ........................................... 48,146 64,194 80,243 96,291 112,340
250,000 ........................................... 53,771 71,694 89,618 107,541 125,465
300,000 ........................................... 65,021 86,694 108,368 130,041 151,715
400,000 ........................................... 87,521 116,694 145,868 175,041 204,215
450,000 ........................................... 98,771 131,694 164,618 197,541 230,465
500,000 ........................................... 110,021 146,694 183,368 220,041 256,715
550,000 ........................................... 121,271 161,694 202,118 242,541 282,965
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, 1999 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, 1998 are as follows: David Lasky, 36 years;
Gerald Nachman, 24 years; George J. Yohrling, 22 years; Martin R. Benante, 20
years; and Robert A. Bosi, 9 years. For each of these persons as of said date,
credited service for purposes of the pay based credit referred to above includes
four years and four months under the preceding chart.
In the event of a change in control, the Company has agreed to fund a
'Rabbi' trust agreement between the Corporation and PNC Bank, N.A. dated January
30, 1998, which provides for the payment of the Company's obligation under the
Restoration Plan referred to in the preceding paragraph.
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.
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 7,449 as of
December 31, 1998. They are not included in the table on page 2 as no shares
have been
11
issued. In addition, 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.
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 December
31, 1993 in stock of the Corporation and the companies on each of these indices.
[PERFORMANCE GRAPH]
DATE Curtiss-Wright Corp. Peer Group Russell 2000
---- ------------------- ---------- ------------
12/31/93 100 100 100
12/31/94 104 108 98
12/31/95 157 179 126
12/31/96 150 239 147
12/31/97 220 246 180
12/31/98 234 189 179
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 1, 1999.
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 43.0%
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. 817,000 shares 8.0%
Direct
12
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 2,118,984 shares of Curtiss-Wright Corporation common stock
representing all of Trinity's holdings of Curtiss-Wright's common stock. The
amendment stated that Unitrin had used 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 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 822,200 shares
of common stock 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 five
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, and sole voting power over 764,640 shares, GFI exercises sole voting and
dispositive power over 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 January 6, 1999 amended Schedule 13G filed by Royce & Associates, Inc.
('ROYCE'), described as an investment advisor, reported that it had increased
its beneficial ownership from 720,000 shares to 817,000 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 as such may be deemed to
beneficially own the shares of common stock of the Corporation beneficially
owned by ROYCE but that he disclaimed beneficial ownership of the shares held by
ROYCE. 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, Suite 501, Lyndhurst, New Jersey 07071 no
later than November 15, 1999 for inclusion in the Corporation's Proxy Statement
and form of proxy relating to that Meeting. Pursuant to amended SEC Rule
14a-4(c)(1), the Corporation shall exercise discretionary voting authority to
the extent conferred by proxy with respect to shareholder proposals received
after January 27, 1999.
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 9, 1999
14
Appendix I
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 BRIAN D.
O'NEILL, 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 23, 1999, 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.
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.
PLEASE MARK, SIGN, DATE AND MAIL IN ENCLOSED ENVELOPE.
NO POSTAGE REQUIRED IN UNITED STATES.
(CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
A VOTE FOR ITEMS 1 AND 2 IS RECOMMENDED.
Please mark
your votes as [X]
indicated in
this example
FOR all nominees (1) ELECTION OF DIRECTORS
listed to the right
(except as marked Nominees: T.R. Berner, J.B. Busey IV, D. Lasky, W.B. Mitchell, J.R.
to the contrary) Myers, W.W. Sihler, J.M. Stewart
[ ]
WITHHOLD
AUTHORITY
to vote for all nominees
listed to the right
[ ]
(INSTRUCTION: To withhold authority to vote for any dividual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
(2) PROPOSAL TO APPROVE THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP as
independent public accountants of the Corporation.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
SIGNATURE________________________ SIGNATURE ________________________DATE ______
(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.)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE