SCHEDULE 14A
(RULE 14a-101)
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
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Breeze-Eastern Corporation
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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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):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.
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Filing Party:
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Date Filed:
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TABLE OF CONTENTS
BREEZE-EASTERN
CORPORATION
engineered products for global
partners
TM
NOTICE OF THE ANNUAL MEETING OF
STOCKHOLDERS
To Be Held September 18,
2008
To the Stockholders
of
Breeze-Eastern Corporation:
The Annual Meeting of Stockholders (the Meeting) of
Breeze-Eastern Corporation (the Company) will be
held at 10:00 a.m., local time, on Thursday,
September 18, 2008 at its principal executive offices
located at 700 Liberty Avenue, Union, New Jersey 07083, to
consider and act upon the following matters:
1. To elect eight (8) directors of the Company;
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2.
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To ratify the Audit Committees selection of
Margolis & Company P.C. as the independent registered
public accounting firm for the fiscal year ending March 31,
2009; and
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3.
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To transact such other business as may properly come before the
Meeting.
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Only the stockholders of record at the close of business on
July 21, 2008 will be entitled to notice of and to vote at
the Meeting or any adjournment or adjournments thereof. A copy
of the Companys Annual Report on
Form 10-K,
including financial statements for the fiscal year ended
March 31, 2008, is enclosed with this Notice of Annual
Meeting.
Whether or not you expect to attend the Meeting, you are urged
to sign, date and return the enclosed proxy in the prepaid
envelope provided. All shares represented by the enclosed proxy,
if the proxy is properly executed and returned, will be voted as
you direct. Your proxy will not be used if you attend the
Meeting and vote in person.
By Order of the Board of Directors
GERALD C. HARVEY
Executive Vice President, General Counsel and Secretary
Union, New Jersey
July 25, 2008
BREEZE-EASTERN
CORPORATION
engineered products for global
partners
TM
700 Liberty Avenue, Union, New
Jersey 07083
GENERAL
INFORMATION
This Proxy Statement (first mailed to stockholders on or about
July 25, 2008) is furnished in connection with the
solicitation of proxies by the Board of Directors (the
Board) of Breeze-Eastern Corporation (the
Company) for use at the Annual Meeting of
Stockholders of the Company (the Meeting) to be held
on Thursday, September 18, 2008, at 10:00 a.m., local
time, at 700 Liberty Avenue, Union, New Jersey, and any
adjournment or adjournments thereof. All proxies which are
properly completed, signed and returned to the Company prior to
the Meeting will be voted as provided therein. Any proxy given
by a stockholder may be revoked at any time before it is
exercised by filing an instrument revoking it with the Secretary
of the Company, by submitting to the Company a duly executed
proxy bearing a later date, or by voting in person at the
Meeting. The only voting securities of the Company consist of
its common stock, $0.01 par value per share (the
Common Stock). The close of business on
July 21, 2008, has been fixed as the record date for the
determination of holders of shares of Common Stock entitled to
vote at the Meeting, and any adjournments thereof. As of that
date, the Company had 9,345,367 shares of Common Stock
outstanding. The holders of shares of Common Stock on the record
date are entitled to vote at the Meeting.
The holders of record of a majority of the outstanding shares of
Common Stock will constitute a quorum for the transaction of
business at the Meeting. As to all matters to be considered at
the Meeting and any adjournments thereof, each stockholder is
entitled to one vote for each share of Common Stock he or she
holds. The director nominees who receive the greatest number of
votes at the Meeting will be elected to the Board. Votes against
a candidate have no legal effect. Abstentions and broker
non-votes are counted for purposes of determining the presence
or absence of a quorum for the transaction of business.
Abstentions are counted in tabulations of the votes cast on
proposals presented to stockholders, whereas broker non-votes
are not counted for purposes of determining whether a proposal
has been approved. Stockholders are not entitled to cumulate
votes.
The cost of preparing, assembling, printing and mailing this
Proxy Statement and the accompanying form of proxy, and the cost
of soliciting proxies relating to the Meeting will be paid by
the Company. The original solicitation of proxies by mail may be
supplemented by telephone and personal solicitation. The Company
has engaged D.F. King & Co., Inc. to assist in the
solicitation of proxies. It is expected that such firm will be
paid approximately $7,000 for such services. In addition, the
Company may request banks and brokers to solicit their customers
who beneficially own Common Stock listed of record in names of
nominees, and will reimburse such banks and brokers for their
reasonable out-of-pocket expenses of such solicitation.
1
For purposes of this Proxy Statement, the fiscal year of the
Company ended March 31, 2008, may also be referred to as
fiscal year 2008 or fiscal 2008.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of the Company is elected annually. The Certificate of
Incorporation, as amended, and Bylaws of the Company provide
that the number of directors of the Company shall be not less
than five nor more than fifteen, with the exact number to be
fixed by the Bylaws. The exact number of directors is currently
fixed at eight. Unless otherwise instructed, the proxies
received will be voted for the election of the nominees named
below. Although it is not anticipated that any of the nominees
will be unable to serve, in the event any nominee is unable or
declines to serve as a director at the time of the Meeting, the
proxy holders may vote for substitute nominees at their
discretion. Except as provided in the Settlement Agreement
described below, no arrangement or understanding exists between
any nominee (Nominee) for the Board of Directors of
the Company at the Meeting and any other person or persons
pursuant to which any Nominee was or is to be selected as a
director or Nominee. None of the Nominees has any family
relationship among themselves or with any executive officer of
the Company.
The Company is a party to a Settlement Agreement dated as of
July 31, 2007, by and among the Company, Tinicum Capital
Partners II, L.P., and Tinicum Capital Partners II Parallel
Fund, L.P. (collectively Tinicum) and a stockholder
group comprised of the following persons and entities:
Wynnefield Partners Small Cap Value, L.P., Wynnefield Partners
Small Cap Value, L.P. I, Wynnefield Small Cap Value
Offshore Fund, Ltd., Wynnefield Capital Management, LLC,
Stockholder Capital, Inc., Channel Partnership II, L.P., Nelson
Obus, Joshua H. Landes, Goldsmith & Harris
Incorporated, Goldsmith & Harris Asset Management,
LLC, Goldsmith & Harris Capital Appreciation, Philip
W. Goldsmith, Jay R. Harris and Armand B. Erpf (collectively,
the Stockholder Group). A copy of the Settlement
Agreement was filed by the Company with the Securities and
Exchange Commission (SEC) on July 31, 2007, as
an exhibit to its Current Report on
Form 8-K,
and which is also available free of charge by directing a
request to the Company at its corporate headquarters, 700
Liberty Avenue, Union, New Jersey, 07083, Attention: Secretary
or on the SEC website at www.sec.gov.
Pursuant to the Settlement Agreement the Stockholder Group and
Tinicum agreed to refrain from submitting any stockholder
proposal or director nominations at the 2007 annual meeting of
stockholders or at any other meetings of stockholders which may
be held prior to the end of the No Solicitation Period (as
defined below) and shall vote all of shares of Common Stock, or
other Company voting securities held of record or beneficially
owned by them, in favor of the Nominees at the 2007 annual
meeting of stockholders and at any other meetings of
stockholders which may be held prior to the end of a period
following the 2007 annual meeting of stockholders known as the
No Solicitation Period. The No Solicitation
Period is the period which commenced on the date of the
execution of the Settlement Agreement, and which will end on the
earlier to occur of (a) the date of the Meeting, and
(b) a material breach by the Company or Tinicum of their
respective obligations under the Settlement Agreement.
The Settlement Agreement also provides that, during the No
Solicitation Period, none of the Company, Tinicum or the
Stockholder Group, nor any of their respective affiliates will,
directly
2
or indirectly, make or issue or cause to be made or issued any
disclosure, announcement or statement (including without
limitation the filing of any document or report with the SEC or
any other governmental agency or any disclosure to any
journalist, member of the media or securities analyst)
concerning the other parties or any of their controlled
affiliates, which disparages such other party or any of its
controlled affiliates as individuals (provided that each party,
after consultation with counsel, may make any disclosure that it
determines in good faith is required to be made under applicable
law).
Information
Concerning Nominees to the Board of Directors
Set out below is information about each Nominee for election as
a director. The information was obtained from the Companys
records or from information furnished directly by the individual.
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR EACH DIRECTOR
NOMINEE
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Director
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Name
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Position with the Company
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Age
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Since
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William H. Alderman
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Director
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46
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2007
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Charles W. Grigg
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Chairman of the Board
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69
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2007
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Jay R. Harris
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Director
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73
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2007
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William J. Recker
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Director
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65
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1997
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Russell M. Sarachek
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Director
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45
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2007
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William M. Shockley
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Director
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47
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2006
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Frederick Wasserman
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Director
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54
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2007
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Robert L.G. White
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Director, President and Chief Executive Officer
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66
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2003
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3
Mr. Alderman
has been President of
Alderman & Company Capital, LLC and its affiliates
since 2001. Alderman & Company Capital, LLC is a
securities broker dealer specializing in the aerospace and
defense industries. He was Managing Director of the aviation
investment banking practice of Fieldstone Investments from 1999
to 2001. He was a registered Securities Representative and
Senior Associate at GE Capital from 1991 to 1995 and Senior Vice
President at Aviation Sales Company from 1996 to 1999. He is
currently a director of TeamStaff, Inc.
Mr. Grigg
has been a member of the General Partner
of Tinicum Capital Partners since 2002 and was Chairman of the
Board and Chief Executive Officer of SPS Technologies, Inc. from
1993 to 2002. Mr. Grigg is Chairman of the following
Tinicum Capital Partners portfolio companies: Penn
Engineering & Manufacturing Corp. and Western
Pneumatic Tube Holdings, LLC.
Mr. Harris
has served as President and co-founder of
Goldsmith & Harris, Incorporated, a broker-dealer,
since 1982. From 2000 to 2006, he served as a director of
American Vanguard Corporation, an agricultural chemical company.
Mr. Recker
is currently retired. He
serves on the boards of directors of several private high
technology start up companies and non-profit organizations.
Mr. Sarachek
has been Managing Director of Contra
Capital Management since 2002. From 1992 to 2002, he held
various positions, including Executive Vice President and
director of mergers and acquisitions with Groupe Schneider, a
global manufacturer and distributor of electrical equipment and
industrial controls.
Mr. Shockley
has been a member of the general
partner of Tinicum Capital Partners II, L.P. since 2004. From
May 2005 through June 2006 he was the President and Chief
Executive Officer of Penn Engineering & Manufacturing
Corporation, a leading manufacturer of specialty fasteners and a
portfolio company of Tinicum Capital Partners. Mr. Shockley
was Chief Financial Officer of SPS Technologies, Inc., a leading
manufacturer of specialty fasteners, materials and components
for the aerospace, industrial and automotive markets, from 1995
to
2003.
(1)
Mr. Wasserman
is currently a financial management
consultant. Until December 31, 2006, Mr. Wasserman was
the Chief Operating/Financial Officer of Mitchell &
Ness Nostalgia Co., a privately-held manufacturer and
distributor of licensed sportswear and authentic team apparel.
Prior to Mitchell & Ness, Mr. Wasserman served as
the President of Goebel of North America, a U.S. subsidiary
of the German specialty gift maker, from 2002 to 2005 and as its
Chief Financial Officer from 2001 to 2005. Mr. Wasserman
also serves as a director of Acme Communications, Inc.,
TeamStaff, Inc., Allied Defense Group, Inc., The Aftersoft
Group, Inc., Gilman Coca Inc. and Crown Crafts, Inc.
Mr. White
has been the Companys President and
Chief Executive Officer since February 2003. He was President of
the Companys Aerospace Group
(1) Mr. Shockley
was elected as a director by the Board in February 2006, was
nominated for election to the Board by stockholders at the 2006
Annual Meeting, was nominated for reelection to the Board at the
2007 Annual Meeting, and has been nominated for reelection to
the Board at the 2008 Annual Meeting, pursuant to the provisions
of a Stock Purchase Agreement (the Tinicum
Agreement) dated February 17, 2006, by and among the
Company, Tinicum Capital Partners II, L.P and Tinicum Capital
Partners II Parallel Fund, L.P. (together,
Tinicum), pursuant to which Tinicum purchased
1,666,667 unregistered shares of Common Stock (the Tinicum
Shares) in a private placement. The Tinicum Agreement
provides that Tinicum shall have the right to nominate one
director to the Board so long as it continues to hold 50% of the
Tinicum Shares.
4
from 1998 to 2003 and has been President of the Companys
Breeze-Eastern division since 1994.
THE BOARD OF
DIRECTORS
Meetings and
Remuneration
During fiscal 2008, the Board held sixteen (16) meetings.
Each incumbent director attended at least 75% of the aggregate
of (i) the total number of meetings held by the Board
during fiscal 2008 (held during the period for which he has been
a director) and (ii) the total number of meetings held by
all committees of the Board on which he or she served during
that period.
Director
Attendance at Annual Meetings
The policy of the Companys Board is that all directors
should attend annual meetings of stockholders (Annual
Meetings) and are not separately compensated for their
attendance, although out-of-pocket expenses are reimbursed. At
the Companys 2007 Annual Meeting, held on Wednesday,
September 12, 2007, all members of the Board were in
attendance.
DIRECTOR
COMPENSATION
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Non-Equity
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Change in Pension
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Fees
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Incentive
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Value and Non-
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Earned or
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Stock
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Plan
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Qualified Deferred
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All Other
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Paid in
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Awards
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Option
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Compensation
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Compensation
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Compensation
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Total
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Name
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Cash ($)
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($) (1)
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Awards ($)
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($)
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Earnings ($)
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($)
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($)
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William H. Alderman
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0
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30,000
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0
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0
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0
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0
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30,000
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Charles W. Grigg
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0
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30,000
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0
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0
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0
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0
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30,000
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Jay R. Harris
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0
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30,000
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0
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0
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0
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0
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30,000
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William J. Recker
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0
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30,000
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0
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0
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0
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0
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30,000
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Russell M. Sarachek
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0
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30,000
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0
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0
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0
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0
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30,000
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William M. Shockley
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0
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30,000
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0
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0
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0
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0
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30,000
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Frederick Wasserman
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0
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30,000
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0
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0
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0
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0
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30,000
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Robert L.G. White
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0
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0
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0
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0
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0
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0
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0
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(1)
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As any stock awarded to
directors as part of their compensation since July 17,
2003, carries a restriction on transfer or sale until six months
after the director ceases to be a member of the Board, all such
restricted stock awards are considered by the Company to be
outstanding. Those awards are as follows: Mr. Alderman,
award of September 13, 2007 of 2,381 shares at $12.60
per share; Mr. Grigg, award of September 13, 2007 of
2,381 shares at $12.60 per share; Mr. Harris, award of
September 13, 2007 of 2,381 shares at $12.60 per
share; Mr. Recker, award of July 17, 2003 of
4,219 shares at $7.11 per share, award of
September 10, 2004 of 3,484 shares at $8.61 per share,
award of October 21, 2005 of 4,207 shares at $7.13 per
share, award of July 19, 2006 of 2,575 shares at
$11.65 per share, and award of September 13, 2007 of
2,381 shares at $12.60 per share; Mr. Sarachek, award
of September 13, 2007 of 2,381 shares at $12.60 per
share; Mr. Shockley, award of July 19, 2006 of
2,575 shares at $11.65 per share, and award of
September 13, 2007 of 2,381 shares at $12.60 per
share; and, Mr. Wasserman, award of September 13, 2007
of 2,381 shares at $12.60 per share. Mr. White, as an
employee of the Company, receives no compensation in his
capacity as a director
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5
Directors who are not employees of the Company or any of its
subsidiaries receive an annual retainer of $30,000 in Common
Stock in the form of a restricted stock award. The number of
shares awarded is determined by dividing $30,000 by the closing
price of the Common Stock on the date of the annual meeting of
stockholders of each year. The stock is awarded to the directors
in advance for the balance of their term within a reasonable
time following election or re-election to the Board. Such shares
carry restrictions on transfer or sale, but not as to dividend
and voting rights, until six months after the director ceases to
be a member of the Board. If a director ceases to be a director
before the next annual meeting of stockholders, the restricted
shares awarded during the fiscal year in which the director
ceases to be a member of the Board will be forfeited and shall
revert to the 1999 Long Term Incentive Plan, the 2004 Long Term
Incentive Plan, or the 2006 Long Term Incentive Plan, as
applicable. Certificates for the shares of restricted stock
awarded in prior fiscal years are delivered to the director
after the six-month period following cessation of service on the
Board, fully tradable and without restriction.
Director
Nomination Process
The Governance & Nominating Committee of the Board is
comprised entirely of directors who meet applicable independence
requirements and is responsible for overseeing the process of
nominating individuals to stand for election as directors. A
copy of the Governance & Nominating Committee Charter
is available on the Companys website
(www.breeze-eastern.com) under the heading Corporate
Governance, which can be accessed by clicking on
Investor Relations on the home page of the site. The
Governance & Nominating Committee is comprised
entirely of independent Board members: Mr. Sarachek, who
serves as its chair, and Messrs. Recker, Shockley and
Wasserman.
The Companys process of director nominations takes into
consideration individuals recommended by members of the Board as
well as from other sources. The Governance &
Nominating Committee Charter provides that the committee may
retain a professional search firm for such purpose if it is
deemed necessary, and further provides that the committee shall
select such firm in its sole discretion. The Company has no
specific process for reviewing candidates recommended by
security holders, although, in accordance with the
Companys Bylaws, security holders are permitted to
nominate candidates for director in person at each annual
meeting of stockholders.
The Governance & Nominating Committees process
for identifying and evaluating director candidates is as
follows: The committee may retain a professional search firm to
assist the committee in managing the overall process, including
the identification of director candidates who meet certain
criteria set from time to time by the committee. All potential
candidates, from whatever source identified, are reviewed by the
Governance & Nominating Committee, and by the search
firm, if one has been engaged. In the course of this review,
some candidates are eliminated from further consideration
because of conflicts of interest, unavailability to attend Board
or committee meetings or other relevant reasons. The
Governance & Nominating Committee then decides which
of the remaining candidates most closely match the established
criteria and are therefore deserving of further consideration.
The Governance & Nominating Committee then discusses
these candidates, decides which of them, if any, should be
pursued, gathers additional information if desired, conducts
interviews and decides whether to recommend one or more
candidates to the Board for nomination.
6
The Board discusses the Governance & Nominating
Committees recommended candidates, decides if any
additional interviews or further background information is
desirable and, if not, decides whether to nominate one or more
candidates. Those nominees are named in the proxy statement for
election by the stockholders at the Annual Meeting (or, if
between Annual Meetings, the nominees may be elected by the
Board itself).
In order to be recommended by the Governance &
Nominating Committee, a candidate must meet the following
minimum qualifications: independence (for this purpose, the
Governance & Nominating Committee is guided by the
requirements of the American Stock Exchange (AMEX)),
personal ability, integrity, intelligence, relevant business
background, expertise in areas of importance to the
Companys objectives, and a sensitivity to the
Companys corporate responsibilities.
Security Holder
Recommendations of Director Candidates
As discussed above under the heading Director Nomination
Process, the Governance & Nominating Committee
currently has no specific policy regarding recommendations for
nominees to the Board from security holders. Security holders
are permitted to nominate candidates for director in person at
each annual meeting of stockholders.
Director
Independence
The Board governance policies provide that all outside directors
should be independent. On August 14, 2006, the AMEX listed
the Companys Common Stock for trading. As a result of such
listing, the Company maintains compliance with the American
Stock Exchange Listing Standards and has adopted the
independence criteria of the AMEX for purposes of determining
director independence for the Board and its committees.
The Board has affirmatively determined that none of the current
members of the Board, except for Mr. White, has a material
relationship with the Company, and that each director, except
Mr. White, qualifies as independent under the AMEX
independence criteria.
Committees
The Board has a standing Audit Committee, Governance &
Nominating Committee, and Incentive & Compensation
Committee.
As set forth in the Audit Committee Charter, a copy of which is
available on the Companys website (www.breeze-eastern.com)
under the heading Corporate Governance, which can be
accessed by clicking on Investor Relations on the
home page of the site, the Audit Committee reviews with the
Companys independent auditing firm the results of the
firms annual examination, advises the full Board regarding
its findings and provides assistance to the full Board in
matters involving financial statements and financial controls.
The Audit Committee reviews and reassesses the adequacy of the
Audit Committee Charter on an annual basis. The Audit Committee
is comprised entirely of independent Board members:
Messrs. Wasserman, Harris and Recker. Mr. Wasserman,
who serves as the Committees Chair, has been determined by
the Board to possess the qualifications of a financial
expert, in accordance with the rules of the SEC. The Audit
Committee held six meetings during fiscal 2008.
As described above, the Governance & Nominating
Committee establishes the criteria for, and reviews the
qualifications of individuals with respect to, nomination to the
Board and to committees of the Board. In addition, the
Governance &
7
Nominating Committee presents recommendations for replacement
directors when vacancies occur on the Board or committees
thereof. The Governance & Nominating Committee may
consider nominees recommended by stockholders in writing to the
Secretary of the Company. The committee is comprised entirely of
independent Board members. This committee, which consists of
Mr. Sarachek, who serves as its Chair, and
Messrs. Recker, Shockley and Wasserman, held three meetings
during fiscal 2008.
As set forth in the Incentive & Compensation Committee
Charter, a copy of which is available on the Companys
website (www.breeze-eastern.com) under the heading
Corporate Governance, which can be accessed by
clicking on Investor Relations on the home page of
the site, the Incentive & Compensation Committee
oversees the Companys long term incentive plans and annual
incentive compensation plan and approves bonuses, grants stock
options and awards restricted stock under the terms of such
plans. The Committee also approves the compensation of
department heads reporting to the Chief Executive Officer and of
employees earning, or proposed to earn, more than $125,000 per
year. The Committee recommends for approval by the Board of
Directors the compensation of the Chief Executive Officer, the
Chief Financial Officer and the General Counsel, being the named
executives identified in the Summary Compensation Table set
forth below. All long term incentive plans were approved by the
stockholders and the provisions of the annual incentive
compensation plan were approved by the Board. The Committee is
composed entirely of independent outside directors. Additional
discussion of the Incentive & Compensation
Committees role is set forth in the Compensation
Discussion and Analysis section of this Proxy Statement. This
committee is comprised entirely of independent directors. The
Incentive & Compensation Committee, which consists of
Mr. Shockley, who serves as its Chair, and
Messrs. Grigg, Harris and Wasserman, held four meetings
during fiscal 2008.
Security Holder
Communications to The Board
The Companys Board provides the following process for
security holders to send communications to the Board:
In general, the Executive Vice President, General Counsel and
Secretary forwards those communications that appear to be from
security holders and are addressed to the Board to the Chair of
the Audit Committee, who in turn determines whether a particular
communication should be forwarded to other members of the Board
and, if so, forwards it accordingly. With respect to
communications received by the Company that are addressed to a
particular member of the Board or the Chair of a particular
Board Committee, the Executive Vice President, General Counsel
and Secretary forwards those communications directly to the
Board member in question.
Security holders may send communications to the Board by mail or
courier delivery addressed as follows:
Gerald C. Harvey
Executive Vice President, General Counsel and Secretary
Breeze-Eastern Corporation
700 Liberty Avenue
Union, New Jersey
07083-8198
Code of
Ethics
The Board has approved a Code of Business Conduct for the
Company. The Company has provided training for all employees on
the Code
8
of Business Conduct and requires that all directors, officers
and employees abide by the Code of Business Conduct, which is
available under the heading Corporate Governance on
the Companys website at www.breeze-eastern.com. The
Corporate Governance tab can be accessed by clicking
on Investor Relations on the home page of the site.
SECURITY
OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS, NOMINEES FOR
DIRECTOR AND EXECUTIVE OFFICERS
The following table sets out certain information regarding the
beneficial ownership of the Common Stock as of June 30,
2008 (except as referenced in the footnotes) by (i) each
person who is known by the Company to be the beneficial owner of
5% or more of the Common Stock, (ii) each director and
nominee for director of the Company, individually,
(iii) the Chief Executive Officer of the Company,
(iv) each of the other three most highly compensated
executive officers of the Company whose compensation exceeded
$100,000 in fiscal 2008, and (v) all directors, nominees
for director and executive officers as a group:
|
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|
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|
|
|
|
|
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Number of
|
|
|
|
|
Shares of
|
|
Percentage of
|
Name
|
|
Common Stock (1)
|
|
Common Stock (1)
|
|
|
Beck, Mack & Oliver LLC
|
|
|
604,200
|
(2)
|
|
|
6.47
|
%
|
360 Madison Avenue
|
|
|
|
|
|
|
|
|
New York, NY 10017
|
|
|
|
|
|
|
|
|
Tinicum Capital Partners II, L.P.
|
|
|
2,458,184
|
(3)
|
|
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26.30
|
%
|
800 Third Avenue
40
th
Floor
New York, NY 10022
|
|
|
|
|
|
|
|
|
T. Rowe Price Associates, Inc.
|
|
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1,237,407
|
(4)
|
|
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13.24
|
%
|
100 East Pratt Street,
Baltimore, MD 21202
|
|
|
|
|
|
|
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Goldsmith & Harris Incorporated
|
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890,714
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(5)
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|
|
9.53
|
%
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80 Pine Street
New York, NY 10005
|
|
|
|
|
|
|
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Wynnefield Partners Small Cap Value, L.P.
|
|
|
2,071,033
|
(6)
|
|
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22.16
|
%
|
450 Seventh Avenue, Suite 509
New York, NY 10123
|
|
|
|
|
|
|
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Directors, Nominees and Executive Officers
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|
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|
|
|
|
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William H. Alderman
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2,381
|
|
|
|
*
|
|
Charles W. Grigg
|
|
|
2,381
|
(7)
|
|
|
*
|
|
Jay R. Harris
|
|
|
1,090,924
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(8)
|
|
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11.67
|
%
|
Gerald C. Harvey
|
|
|
109,584
|
(9)
|
|
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1.17
|
%
|
William J. Recker
|
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291,833
|
|
|
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3.12
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%
|
Russell M. Sarachek
|
|
|
158,177
|
(10)
|
|
|
1.69
|
%
|
William M. Shockley
|
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4,956
|
(11)
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|
|
*
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|
Joseph F. Spanier
|
|
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121,817
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(12)
|
|
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1.30
|
%
|
Frederick Wasserman
|
|
|
2,381
|
|
|
|
*
|
|
Robert L. G. White
|
|
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201,052
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(13)
|
|
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2.15
|
%
|
Directors, nominees and executive officers as a group
(10 persons)
|
|
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1,985,486
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(14)
|
|
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21.25
|
%
|
|
|
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(1)
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|
Except as set out in these
footnotes, the persons named in this table have sole voting
power and investment power with respect to all shares of Common
Stock shown as beneficially owned by them, subject to community
property laws where applicable and the information contained in
this table and these notes. References in these footnotes to
shares, unless otherwise specified, are to shares of
Common Stock. The percentages of Common Stock shown are based
upon the 9,345,367 shares of Common Stock outstanding as of
June 30, 2008.
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(2)
|
|
Based on a Schedule 13G
filed with the Securities and Exchange Commission
(SEC) on January 31, 2008 by Beck,
Mack & Oliver LLC, which has sole voting power and
shared investment power with respect to these shares, which are
owned by investment advisory clients of Beck, Mack &
Oliver LLC. Mr. Robert C. Beck, as a Managing Member of
Beck, Mack & Oliver LLC, is a natural control person
of said entity.
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(3)
|
|
Based on a Schedule 13D
filed with the SEC on
August
1, 2007
jointly by Tinicum Capital Partners II, L.P. (TCP)
Tinicum Capital Partners II Parallel Fund, L.P.
(TPP). For purposes of the reporting requirements of
the Securities Exchange Act of 1934, TCP
|
10
|
|
|
|
|
(and TPP with respect to
12,883 shares) is deemed to be a beneficial owner of such
securities; TCP and TPP each disclaim beneficial ownership of
shares held by the other, respectively. If TCP and TPP are each
deemed to beneficially own shares held by the other, TCP and
TPPs aggregate beneficial ownership would be
2,471,067 shares or 26.44%. Messrs. Eric Ruttenberg
and Terence OToole are Co-Managing Members of Tinicum
Lantern II, L.L.C. and are the natural control persons of TCP
and TPP.
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(4)
|
|
Based on a Schedule 13G
filed with the SEC on February 12, 2008 jointly by T. Rowe
Price Associates, Inc. (Price Associates) and T.
Rowe Price Small Cap Value Fund, Inc. (Price
Small-Cap). These shares are owned by various individual
and institutional investors with respect to which Price
Associates or Price Small-Cap serves as investment advisor. For
purposes of the reporting requirements of the Securities
Exchange Act of 1934, Price Associates (and Price Small-Cap with
respect to 566,677 shares) is deemed to be a beneficial
owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such
securities. Mr. Henry H. Hopkins is a natural control
person of each of said entities.
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(5)
|
|
Based on a Schedule 13G
filed with the SEC on
February 11
, 2008 by
Goldsmith & Harris Incorporated
(G&H), a broker-dealer registered under
Section 15 of the Securities Exchange Act of 1934 and an
investment adviser registered under Section 203 of the
Investment Advisers Act of 1940, which is deemed to have
beneficial ownership of 743,023 shares based on shared
investment power over certain accounts of its clients holding
such shares. Philip W. Goldsmith, Chairman of G&H, also
filed a Schedule 13G with the SEC on February 11,
2008, reflecting his beneficial ownership of the following
shares: (i) 743,023 shares of which Mr. Goldsmith
is the beneficial owner through his position as Chairman of
G&H; (ii) 128,501 shares of which
Mr. Goldsmith is the beneficial owner through his position
as Managing Director of Goldsmith & Harris Asset
Management LLC (GHAM), an investment adviser
registered under Section 203 of the Investment Advisers Act
of 1940, through which he exercises investment discretion and
voting control over the 128,501 shares held by
Goldsmith & Harris Capital Appreciation LLC;
(iii) 13,190 shares of which Mr. Goldsmith is the
beneficial owner through his personal accounts over which
neither G&H nor GHAM has investment discretion or voting
control; and (iv) 6,000 shares of which
Mr. Goldsmith is the beneficial owner through
family-related accounts over which neither G&H nor GHAM has
investment discretion or voting control. Mr. Jay R. Harris,
a director of the Company and Mr. Philip W. Goldsmith are
the natural control persons of Goldsmith & Harris
Incorporated.
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(6)
|
|
Based on a Schedule 13D
filed with the SEC on August 9, 2007, by Wynnefield
Partners Small Cap Value, L.P., Wynnefield Partners Small Cap
Value, L.P. I.; Wynnefield Small Cap Value Offshore Fund, Ltd.;
Channel Partnership II, L.P.; Nelson Obus; Joshua Landes;
Wynnefield Capital Management, LLC; and Wynnefield Capital,
Inc,. Wynnefield Capital Management, LLC reported that it holds
an indirect beneficial interest in 1,248,378 shares which
are directly beneficially owned by Wynnefield Partners Small Cap
Value, L.P. and Wynnefield Partners Small Cap Value, L.P. I.
Wynnefield Capital, Inc. reported that it holds an indirect
beneficial interest in the 784,255 shares which are
directly beneficially owned by Wynnefield Small Cap Value
Offshore Fund, Ltd. Nelson Obus reported that he holds an
indirect beneficial interest in 38,400 shares which are
directly beneficially owned by Channel Partnership II, L.P.
Nelson Obus and Joshua Landes are the natural control persons of
each of said entities.
|
|
(7)
|
|
Mr. Grigg is a member of
Tinicum Lantern II, L.L.C., the general partner of Tinicum
Capital Partners II, L.P. and Tinicum Capital Partners II
Parallel Fund, L.P., and, as such, may have an indirect interest
in 2,471,067 shares owned by Tinicum Capital Partners II,
L.P. and Tinicum Capital Partners II Parallel Fund, L.P.,
as reported in Schedule 13D, as amended, filed with the SEC
on August 1, 2007.
|
|
(8)
|
|
Based on a Form 4 filed
with the SEC on behalf of Mr. Harris on February 25,
2008, and includes (i) 2,381 shares of restricted
stock; (ii) 743,023 shares of which Mr. Harris
may be deemed to be the indirect beneficial owner through his
position as President of Goldsmith & Harris
Incorporated by virtue of shared investment discretion over and
the power to dispose or to direct the disposition of accounts of
its clients that own such shares; (iii) 128,501 shares
of which Mr. Harris may be deemed to be the indirect
beneficial owner through his position as Managing Director of
Goldsmith & Harris Asset Management, LLC, through
which he shares investment discretion and voting control over
the 128,501 shares held by Goldsmith & Harris
Capital Appreciation, LLC; and (iv) 22,800 shares of
which Mr. Harris may be deemed to be the indirect
beneficial owner of family-related accounts, over which
Mr. Harris exercises investment discretion and voting
control.
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|
(9)
|
|
Includes 85,199 shares
issuable with respect to options exercisable within 60 days
of June 30, 2008.
|
|
|
|
(10)
|
|
Based on a Form 4 filed on
behalf of Mr. Sarachek with the SEC on February 13,
2008 and includes (i) 53,386 shares of which
Mr. Sarachek may be deemed to be the indirect beneficial
owner by virtue of his having sole investment discretion and
voting control over the shares held by Contra Capital
Management, LLC, of which he is the sole managing member; and
(ii) 101,510 shares of which Mr. Sarachek may be
deemed to be the indirect beneficial owner by virtue of his
having sole investment discretion and voting control over the
shares held by UT Special Opportunities Fund, L.P., of which he
is the sole investment manager.
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|
(11)
|
|
Mr. Shockley is a member of
Tinicum Lantern II, L.L.C., the general partner of Tinicum
Capital Partners II, L.P. and Tinicum Capital Partners II
Parallel Fund, L.P., and, as such, may have an indirect interest
in 2,471,067 shares owned by Tinicum Capital Partners II,
L.P. and Tinicum Capital Partners II Parallel Fund, L.P.,
as reported in Schedule 13D, as amended, filed with the SEC
on August 1, 2007.
|
|
(12)
|
|
Includes 79,998 shares
issuable with respect to options exercisable within 60 days
of June 30, 2008 and 2,000 shares owned by
Mr. Spaniers children.
|
|
(13)
|
|
Includes 99,878 shares
issuable with respect to options exercisable within 60 days
of June 30, 2008.
|
|
(14)
|
|
Includes 265,075 shares
issuable with respect to options exercisable within 60 days
of June 30, 2008.
|
11
COMPLIANCE WITH
SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1934 (the
Act) requires the Companys directors and
certain of its officers, and persons who own more than
10 percent of a registered class of the Companys
equity securities, to file reports of ownership and changes in
ownership with the SEC. Officers, directors and greater than
10 percent stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms
they file.
To the Companys knowledge, based solely on its review of
the copies of such forms received by it, the Company believes
that from April 1, 2007 to March 31, 2008, all persons
subject to the reporting requirements of Section 16(a) with
respect to the Company filed the required reports on a timely
basis, except that Messrs. White, Spanier and Harvey did
not file reports on Form 4 until June 4, 2007, for
grants of stock options on May 24, 2007, under the 1999
Long Term Incentive Plan for respectively 25,000; 12,500 and
12,500 shares; William Recker did not file a report on
Form 4 until June 27, 2007 for 57,000 shares of
common stock acquired on June 21, 2007 and
43,000 shares of common stock acquired on June 22,
2007; and William Shockley did not file a report on Form 4
until August 15, 2007 for 739,000 shares acquired by
Tinicum Capital Partners II, L.P. (TCP) and Tinicum
Capital Partners II Parallel Fund, L.P. (TCPP)
on June 5, 2007 in the respective amounts set out in the
Form 4, and 2,100 shares acquired by TCP and TCPP on
June 8, 2007 in the respective amounts set out in the
Form 4, in which Mr. Shockley may have an indirect
interest in the shares of common stock owned by TCP and TCPP, as
reported in Amendment No. 3 to Schedule 13D, filed
with the SEC on June 14, 2007; however, Mr. Shockley
stated in the Form 4 filing that the filing shall not be
deemed an admission that he is, for purposes of Section 16
of the Act or otherwise, the beneficial owner of the shares of
common stock of the Company owned by TCP or TCPP.
EXECUTIVE
OFFICERS, COMPENSATION AND OTHER INFORMATION
Executive
Officers
Set out in the table below are the names, ages and positions
held of all persons who were executive officers of the Company
as of March 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
|
|
|
Officer
|
Name
|
|
Position with the Company
|
|
Age
|
|
Since
|
|
|
Robert L. G. White
|
|
President and Chief Executive Officer
|
|
|
66
|
|
|
|
1998
|
|
Joseph F. Spanier
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
|
|
62
|
|
|
|
1996
|
|
Gerald C. Harvey
|
|
Executive Vice President, General Counsel and Secretary
|
|
|
58
|
|
|
|
1996
|
|
Executive officers of the Company are elected by and serve at
the discretion of the Board. No arrangement exists between any
executive officer and any other person or persons other than the
Company pursuant to which any executive officer was or is to be
selected as an executive officer.
12
None of the executive officers has any family relationship to
any nominee for director or to any other executive officer of
the Company. Set out below is a brief description of the
business experience for the previous five years of those
executive officers who are not also directors. For information
concerning the business experience of Mr. White, see
Information Concerning Nominees to the Board of
Directors, above.
Mr. Spanier
has been Chief Financial Officer and
Treasurer of the Company since January 1997. Mr. Spanier
was appointed an Executive Vice President of the Company in
October 2006, and had been a Vice President of the Company since
1996.
Mr. Harvey
has been General Counsel and Secretary of
the Company since February 1996. Mr. Harvey was appointed
an Executive Vice President of the Company in October 2006, and
had been a Vice President of the Company since 1996.
Incentive &
Compensation Committee Report
The Incentive & Compensation Committee has reviewed
the Compensation Discussion and Analysis set forth below and has
discussed the analysis with management. Based on its review and
discussions with management, the Committee recommended to our
Board that the Compensation Discussion and Analysis be included
in the Companys Annual Report on
Form 10-K
for fiscal year 2008 and the Companys 2008 annual meeting
proxy statement. The following independent directors comprise
the Committee: Mr. Shockley, Chair; Messrs. Grigg,
Harris and Wasserman.
Compensation
Discussion and Analysis
Role of the Incentive & Compensation
Committee.
As set forth in the
Incentive & Compensation Committee Charter, a copy of
which is available on the Companys website
(www.breeze-eastern.com) under the heading Corporate
Governance, which can be accessed by clicking on
Investor Relations on the home page of the site, the
Incentive & Compensation Committee oversees the
Companys long term incentive plans and annual incentive
compensation plan and approves bonuses, grants stock options and
awards restricted stock under the terms of such plans. The
Committee also approves the compensation of department heads
reporting to the Chief Executive Officer and of employees
earning, or proposed to earn, more than $125,000 per year. The
Committee recommends for approval by the Board the compensation
of the Chief Executive Officer, the Chief Financial Officer and
the General Counsel, being the named executives identified in
the Summary Compensation Table set forth below. All long term
incentive plans were approved by the stockholders and the
provisions of the annual incentive compensation plan were
approved by the Board. The Committee is composed entirely of
independent outside directors.
Determining Compensation.
We rely upon our
judgment in making compensation decisions, after reviewing the
performance of the Company and carefully evaluating an
executives performance during the year against established
goals, leadership qualities, operational performance, business
responsibilities, career with the Company, current compensation
arrangements and long-term potential to enhance stockholder
value. Specific factors affecting compensation decisions for the
named executives include:
|
|
|
|
|
key financial measurements such as revenue, operating profit,
EBITDA, earnings per share, and operating margins;
|
13
|
|
|
|
|
promoting commercial excellence by being a leading market player
and attracting and retaining customers;
|
|
|
|
achieving specific operational goals for the Company;
|
|
|
|
achieving excellence in their organizational structure and among
their employees; and
|
|
|
|
supporting Company values by promoting a culture of unyielding
integrity through compliance with law and our ethics policies,
as well as a commitment to community leadership.
|
We do not attempt to maintain a certain target percentile within
a peer group. We incorporate flexibility into our compensation
programs and in the assessment process to respond to and adjust
for the evolving business environment.
We strive to achieve an appropriate mix between equity incentive
awards and cash payments in order to meet our objectives. Any
apportionment goal is not applied rigidly and does not control
our compensation decisions; we use it as another tool to assess
an executives total pay opportunities and whether we have
provided the appropriate incentives to accomplish our
compensation objectives. Our mix of compensation elements is
designed to reward recent results and motivate long-term
performance through a combination of cash and equity incentive
awards.
Role of Compensation Consultant.
Neither the
Company nor the Committee has any contractual arrangement with
any compensation consultant who has a role in determining or
recommending the amount or form of senior executive or director
compensation. In the past, the Company and the Committee have
discussed with Towers Perrin the design of programs that affect
senior executive officer compensation. The Companys named
executives have not participated in the selection of any
particular compensation consultant. The Company has not used the
services of any other compensation consultant in matters
affecting senior executive or director compensation. In the
future, either the Company or the Committee may engage or seek
the advice of other compensation consultants.
Alignment.
We seek to align the interests of
the named executives with those of our investors by evaluating
executive performance on the basis of key financial measurements
which we believe closely correlate to long-term stockholder
value. The key element of compensation that aligns the interests
of the named executives with stockholders is equity incentive
compensation, which links a portion of compensation to
stockholder value because the total value of those awards
corresponds to stock price appreciation.
Role of the Committee and CEO.
The
Incentive & Compensation Committee has primary
responsibility for overseeing the development of executive
succession plans. As part of this responsibility, the Committee
oversees the design, development and implementation of the
compensation program for the CEO and the other named executives.
The Committee receives from the Governance &
Nominating Committee an evaluation of the performance of the CEO
and determines CEO compensation in light of the goals and
objectives of the compensation program. The CEO and the
Committee together assess the performance of the other named
executives and determine their compensation, based on initial
recommendations from the CEO. The other named executives do not
play a role in their own compensation determination, other than
discussing individual performance objectives with the CEO.
14
Base salary.
Base salaries for our named
executives depend on the scope of their responsibilities, their
performance, and the period over which they have performed those
responsibilities. Decisions regarding salary increases take into
account the executives current salary and the amounts paid
to the executives peers within and outside the Company.
Base salaries are reviewed approximately every two years, but
are not automatically increased if the Committee believes that
other elements of compensation are more appropriate in light of
our stated objectives. This strategy is consistent with the
Companys primary intent of offering compensation that is
contingent on the achievement of performance objectives.
With respect to one of the named executives, the Board
authorized the Company to enter into an Employment Agreement
with Joseph F. Spanier, effective April 1, 2006, and
amended effective April 1, 2008, pursuant to which he
serves as the Companys Chief Financial Officer. The
Agreement follows an earlier Employment Agreement effective
March 28, 2003, that expired March 31, 2006. The
current Agreement as amended expires by its terms on
March 31, 2009, and provides for installment payments of a
minimum annual base salary of $273,620 during the remainder of
the term of the Agreement. The Agreement also provides that
Mr. Spanier shall be eligible for bonuses and employment
related benefits consistent with comparable executives of the
Company.
Bonus.
Each May or June, the CEO reviews with
the Committee the Companys full-year financial results
against the financial, strategic and operational goals
established for the year, and the Companys financial
performance in prior periods. After reviewing the final full
year results, the Committee approves total bonuses to be awarded
from the maximum fund available. Bonuses are generally paid in
June.
The methodology for determining bonuses is set out in an
incentive compensation plan (Incentive Compensation
Plan) reviewed and approved by the Board and which is
consistent with the Committees philosophy regarding
executive compensation. The compensation reflected in this Proxy
Statement reflects the application of the Incentive Compensation
Plan to fiscal 2008.
The Incentive Compensation Plan has an annual bonus feature
which is an important tool in providing incentive both for
short-term and long-term performance. Cash and restricted stock
awards are paid upon achieving or exceeding target levels of
quantitative performance measures. Such performance measures are
tied directly to the Companys annual business plan.
Executive officers earn no bonus unless 80% of the business
plans profit goals are met. For fiscal 2008, if the
Company had achieved Tactical Plan EBITDA of $17,000,000, a
total cash award pool for all senior executives, including the
named executives identified in the Summary Compensation Table,
of $1,020,000 would have been available for distribution.
However, as EBITDA accomplishment was 90% of the Tactical Plan,
the bonus pool was reduced to $658,000 or 65% of the total cash
award pool. Further, a portion of an individuals bonus, up
to 10% of their annual compensation, is dependent upon
satisfying individual performance objectives established at the
beginning of the fiscal year. Thus, the Incentive Compensation
Plan measures performance factors against targets for income
before taxes, and Board approved Tactical Plan objectives such
as profit growth, productivity growth, return on investment,
cash flow, and meeting budgets as well as achievement of the
aforementioned individual performance objectives.
Stock options and restricted stock awards.
The
Companys equity incentive compensation program is designed
to recognize scope of
15
responsibilities, reward demonstrated performance and
leadership, motivate future superior performance, align the
interests of the executives with our stockholders and retain the
executives through the term of the awards. We consider the grant
size and the appropriate combination of stock options and
restricted stock awards when making award decisions. The amount
of equity incentive compensation granted in fiscal 2008 was
based upon the strategic, operational and financial performance
of the Company overall and reflects the executives
expected contributions to the Companys future success.
We believe that providing combined grants of stock options and
restricted stock awards effectively balances our objective of
focusing the named executives on delivering long-term value to
our stockholders, with our objective of providing value to the
executives with the equity awards. Stock options only have value
to the extent the price of the Companys stock on the date
of exercise exceeds the exercise price on grant date, and thus
are an effective compensation element only if the stock price
grows over the term of the award. In this sense, stock options
are a motivational tool. Restricted stock awards offer
executives the opportunity to sell or hold shares of Company
stock on the date the restriction lapses. In this regard,
restricted stock awards serve both to reward and retain
executives, as the value of the restricted stock awards is
linked to the price of the Companys stock as the
restrictions on the restricted stock awards lapse. Each of the
named executives received grants of stock options and restricted
stock awards in fiscal 2008. The restricted stock awards equaled
in value 10% of the cash bonus paid in fiscal 2008. The stock
options granted become exercisable in three equal annual
installments beginning one year after the grant date and have a
maximum ten-year term. We believe that this vesting schedule
aids the Company in retaining executives and motivating
longer-term performance. Provided the executives continue
employment, the restrictions on the restricted stock awarded to
our executives will lapse in three equal annual installments
beginning one year after the award date.
Equity Grant Practices.
The exercise price of
each stock option awarded to our senior executives under our
long-term incentive plan is the closing price of the
Companys stock on the date of grant, which is the date of
the Incentive & Compensation Committee meeting at
which equity awards for senior executives are determined. In
most years this meeting is held in May or June. In years when a
long-term incentive plan or amendment thereto is placed before
the stockholders for approval, the date of grant is the date of
the annual stockholders meeting. Restricted stock awards are
also granted to our named executives at this meeting of the
Committee. The calendar for setting meeting dates of the Board
and of the Committee to consider grants is generally reviewed at
the organization meeting of the Board following the annual
meeting of stockholders. Meeting dates are set without regard to
anticipated earnings or other major announcements by the
Company. The Companys long term incentive plans do not
permit the repricing of stock options.
Pension Plans.
The Company does not offer a
defined benefit plan. All employees of the Company are eligible
to participate in the Companys defined contribution plan,
commonly known as a 401K plan.
Other Compensation.
We provide our named
executives with other benefits, reflected in the All Other
Compensation column in the Summary Compensation Table below.
These benefits are limited to the following: a Company match of
$.50
16
for every $1.00 of compensation saved under the Companys
401K plan up to a maximum of 3% of compensation for plan
purposes, and a 401K match paid following the end of the fiscal
year equal to 3% of eligible earnings, premiums paid on life and
disability policies, and actual expenses paid on medical, dental
and prescriptions net of the named employees contribution.
These benefits are offered to all full-time employees of the
Company.
Potential Impact on Compensation from Executive
Misconduct.
If the Board determines that an
executive officer has engaged in fraudulent or intentional
misconduct, the Board would take action to remedy the
misconduct, prevent its recurrence, and impose such discipline
on the wrongdoers as would be appropriate. Discipline would vary
depending on the facts and circumstances, and may include,
without limitation, (1) termination of employment,
(2) initiating an action for breach of fiduciary duty, and
(3) if the misconduct resulted in a significant restatement
of the Companys financial results, seeking reimbursement
of any portion of performance-based or incentive compensation
paid or awarded to the executive that is greater than would have
been paid or awarded if calculated based on the restated
financial results. These remedies would be in addition to, and
not in lieu of, any actions imposed by law enforcement agencies,
regulators or other authorities.
Executive Severance Agreements.
The Board
authorized the Company to enter into severance agreements,
effective February 10, 2004, with Robert L. G. White and
Gerald C. Harvey (the Severance Agreements), which
provide for payments only in the event of termination of
employment within 24 months after a change in control of
the Company during the term of the Severance Agreements where
such termination is not voluntary or is other than for cause, or
the executive resigns for good reason which includes reduction
in compensation, benefits or responsibilities, relocation by
more than 50 miles of the executives primary
worksite, adverse alteration of the executives office
space and administrative support, or failure by the Company to
obtain an agreement from any successor or assignee corporation
to assume and perform the Severance Agreements. Benefits under
the Severance Agreements are equal to 200% of the
executives annual salary, the executives average
bonuses during the two years preceding the change of control,
earned but unused vacation, comp time, sabbatical leave and sick
time, the fair market value of accrued but unvested restricted
stock and stock options outstanding, and all accrued but unpaid
salary. The benefits due under the Severance Agreements are in
addition to all amounts payable to each of the executives
pursuant to the Companys other agreements and benefit
plans then in effect, except that any amount paid to any of the
executives pursuant to the Companys corporate severance
pay plan shall be credited against amounts due under the
Severance Agreements. The Severance Agreements provide for no
benefits in the event the executive is terminated for cause and
(except in the event that the executive is convicted of a
felony, a crime involving moral turpitude or a crime adverse to
the Companys welfare) fails to cure the alleged breach
within 30 days after the executive has been notified by the
Companys Board. By amendment authorized by the Board of
Directors on January 19, 2006, the Severance Agreements
expire by their terms on January 31, 2010.
The salaries paid and the annual bonuses awarded to the named
executives in fiscal 2008 are shown in the Summary Compensation
Table that follows.
17
Compensation for
the Named Executives
The following table sets forth for each of the named executive
officers: (i) the dollar value of base salary and bonus
earned during the fiscal years ended March 31, 2008, 2007
and 2006; (ii) the aggregate grant date fair value of stock
and option awards granted during the fiscal year covered,
computed in accordance with FAS 123(R); (iii) the
dollar value of earnings for services pursuant to awards granted
during the fiscal year covered under non-equity incentive plans;
(iv) the change in pension value and non-qualified deferred
compensation earnings during the fiscal year covered;
(v) all other compensation for each fiscal year and,
finally, (vi) the dollar value of total compensation for
each fiscal year reported.
SUMMARY
COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Plan
|
|
Deferred
|
|
All Other
|
|
|
Name and
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Compensation
|
|
|
Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($) (1)
|
|
($) (1)
|
|
($)
|
|
Earnings ($)
|
|
($)
|
|
Total ($)
|
|
|
Robert L. G. White
|
|
|
2008
|
|
|
$
|
286,365
|
|
|
|
130,759
|
|
|
|
18,897
|
|
|
|
170,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
24,257
|
|
|
|
630,278
|
|
President and Chief
|
|
|
2007
|
|
|
|
280,550
|
|
|
|
189,000
|
|
|
|
15,510
|
|
|
|
170,750
|
|
|
|
0
|
|
|
|
0
|
|
|
|
70,824
|
|
|
|
729,634
|
|
Executive Officer
|
|
|
2006
|
|
|
|
264,808
|
|
|
|
255,130
|
|
|
|
0
|
|
|
|
103,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
19,611
|
|
|
|
642,549
|
|
Joseph F. Spanier
|
|
|
2008
|
|
|
|
224,504
|
|
|
|
80,180
|
|
|
|
12,713
|
|
|
|
85,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
24,009
|
|
|
|
426,406
|
|
Executive Vice
|
|
|
2007
|
|
|
|
310,000
|
|
|
|
127,204
|
|
|
|
11,470
|
|
|
|
85,375
|
|
|
|
0
|
|
|
|
0
|
|
|
|
24,908
|
|
|
|
558,957
|
|
President, Chief
|
|
|
2006
|
|
|
|
212,649
|
|
|
|
184,686
|
|
|
|
0
|
|
|
|
51,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
105,068
|
|
|
|
553,903
|
|
Financial Officer and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerald C. Harvey
|
|
|
2008
|
|
|
|
247,179
|
|
|
|
93,703
|
|
|
|
14,398
|
|
|
|
85,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
19,597
|
|
|
|
459,877
|
|
Executive Vice
|
|
|
2007
|
|
|
|
242,550
|
|
|
|
144,000
|
|
|
|
11,540
|
|
|
|
85,375
|
|
|
|
0
|
|
|
|
0
|
|
|
|
19,005
|
|
|
|
502,470
|
|
President, General
|
|
|
2006
|
|
|
|
228,981
|
|
|
|
195,362
|
|
|
|
0
|
|
|
|
51,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
18,220
|
|
|
|
494,063
|
|
Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The weighted-average
Black-Scholes value per option granted in fiscal 2008 was $6.80.
See Note 8 to the Financial Statements set forth in the
Companys
Form 10-K
for the year ended March 31, 2008 for the assumptions made
in determining the valuations.
|
18
GRANTS OF
PLAN-BASED AWARDS
The following table sets forth information regarding all
incentive plan awards that were made to the named executive
officer during fiscal year 2008, including incentive plan awards
(equity-based and non-equity based) and other plan-based awards.
Disclosure on a separate line item is provided for each grant of
an award made to a named executive officer during the year. The
information supplements the dollar value disclosure of stock,
option and non-stock awards in the Summary Compensation Table by
providing additional details about such awards. Equity
incentive-based awards are subject to a performance condition or
a market condition as those terms are defined by
FAS 123(R). Non-equity incentive plan awards are awards
that are not subject to FAS 123(R) and are intended to
serve as an incentive for performance to occur over a specified
period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Option
|
|
|
Exercise
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Estimated Future Payouts
|
|
|
Number
|
|
|
Awards:
|
|
|
or Base
|
|
|
|
|
|
|
Under Non-Equity Incentive
|
|
|
Under Equity Incentive Plan
|
|
|
of Shares
|
|
|
Number of
|
|
|
Price
|
|
|
|
|
|
|
Plan Awards
|
|
|
Awards
|
|
|
of Stock
|
|
|
Securities
|
|
|
of Option
|
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
or Units
|
|
|
Underlying
|
|
|
Awards
|
|
Name
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
Options (#)
|
|
|
($/Sh)
|
|
|
|
|
Robert L.G. White
|
|
|
5.24.07
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
12.04
|
|
|
|
|
6.1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,592
|
|
|
|
|
|
|
|
|
|
Joseph F. Spanier
|
|
|
5,24.07
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
12.04
|
|
|
|
|
6.1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,071
|
|
|
|
|
|
|
|
|
|
Gerald C. Harvey
|
|
|
5.24.07
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
12.04
|
|
|
|
|
6.1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,213
|
|
|
|
|
|
|
|
|
|
|
19
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth information on outstanding option
and stock awards held by the named executive officers at fiscal
year end, including the number of shares underlying both
exercisable and unexercisable portions of each stock option as
well as the exercise price and expiration date of each
outstanding option.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
or Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Number
|
|
|
Market
|
|
|
of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
of
|
|
|
Value of
|
|
|
Unearned
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Shares or
|
|
|
Shares,
|
|
|
Shares,
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Awards
|
|
|
|
|
|
|
|
|
or Units
|
|
|
Units of
|
|
|
Units or
|
|
|
Units or
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Number of
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
Stock
|
|
|
Other
|
|
|
Other
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Securities
|
|
|
|
|
|
|
|
|
That
|
|
|
That
|
|
|
Rights
|
|
|
Rights
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Underlying
|
|
|
Option
|
|
|
|
|
|
Have
|
|
|
Have
|
|
|
That
|
|
|
That
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unexercised
|
|
|
Exercise
|
|
|
Option
|
|
|
Not
|
|
|
Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
Grant
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Unearned
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
Name
|
|
Date
|
|
|
(1)
|
|
|
(1)
|
|
|
Options (#)
|
|
|
($)
|
|
|
Date
|
|
|
(#)(2)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
|
|
Robert L.G. White
|
|
|
5.18.99
|
|
|
|
6,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
19.375
|
|
|
|
5.18.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.25.00
|
|
|
|
10,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
8.8438
|
|
|
|
5.25.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.07.01
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
6.55
|
|
|
|
5.07.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.25.02
|
|
|
|
12,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
8.98
|
|
|
|
3.25.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.30.03
|
|
|
|
12,996
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5.38
|
|
|
|
5.30.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.08.04
|
|
|
|
25,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
7.02
|
|
|
|
7.08.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.24.05
|
|
|
|
48
|
|
|
|
8,333
|
|
|
|
0
|
|
|
|
7.05
|
|
|
|
5.24.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.19.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,024
|
|
|
|
11,162
|
|
|
|
|
|
|
|
|
|
|
|
|
7.19.06
|
|
|
|
8,333
|
|
|
|
16,667
|
|
|
|
0
|
|
|
|
11.65
|
|
|
|
7.19.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.24.07
|
|
|
|
0
|
|
|
|
25,000
|
|
|
|
0
|
|
|
|
12.04
|
|
|
|
5.24.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,592
|
|
|
|
17,352
|
|
|
|
|
|
|
|
|
|
Joseph F. Spanier
|
|
|
5.18.99
|
|
|
|
10,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
19.375
|
|
|
|
5.18.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.25.00
|
|
|
|
7,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
8.8438
|
|
|
|
5.25.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.07.01
|
|
|
|
12,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
6.55
|
|
|
|
5.07.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.25.02
|
|
|
|
12,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
8.98
|
|
|
|
3.25.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.30.03
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5.38
|
|
|
|
5.30.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.08.04
|
|
|
|
12,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
7.02
|
|
|
|
7.08.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.24.05
|
|
|
|
8,333
|
|
|
|
4,167
|
|
|
|
0
|
|
|
|
7.05
|
|
|
|
5.24.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.19.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
758
|
|
|
|
8,262
|
|
|
|
|
|
|
|
|
|
|
|
|
7.19.06
|
|
|
|
4,166
|
|
|
|
8,334
|
|
|
|
0
|
|
|
|
11.65
|
|
|
|
7.19.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.24.07
|
|
|
|
0
|
|
|
|
12,500
|
|
|
|
|
|
|
|
12.04
|
|
|
|
5.24.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,071
|
|
|
|
11,674
|
|
|
|
|
|
|
|
|
|
Gerald C. Harvey
|
|
|
5.18.99
|
|
|
|
10,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
19.375
|
|
|
|
5.18.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.25.00
|
|
|
|
7,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
8.8438
|
|
|
|
5.25.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.07.01
|
|
|
|
12,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
6.55
|
|
|
|
5.07.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.25.02
|
|
|
|
12,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
8.98
|
|
|
|
3.25.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.30.03
|
|
|
|
5,200
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5.38
|
|
|
|
5.30.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.08.04
|
|
|
|
12,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
7.02
|
|
|
|
7.08.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.24.05
|
|
|
|
8,333
|
|
|
|
4,167
|
|
|
|
0
|
|
|
|
7.05
|
|
|
|
5.24.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.19.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
762
|
|
|
|
8,306
|
|
|
|
|
|
|
|
|
|
|
|
|
7.19.06
|
|
|
|
4,166
|
|
|
|
8,334
|
|
|
|
0
|
|
|
|
11.65
|
|
|
|
7.19.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.24.07
|
|
|
|
0
|
|
|
|
12,500
|
|
|
|
0
|
|
|
|
12.04
|
|
|
|
5.24.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,213
|
|
|
|
13,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Options become exercisable in
equal amounts on each of the three anniversaries following the
date of grant.
|
|
(2)
|
|
Stock awards restrictions lapse
in equal amounts on each of the three anniversaries following
the date of award.
|
20
OPTION EXERCISES
AND STOCK VESTED
The following table sets forth information regarding each
exercise of stock options and vesting of restricted stock during
fiscal 2008 for each of the named executive officers on an
aggregated basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
Acquired on Exercise
|
|
|
Value Realized on
|
|
|
Acquired
|
|
Value Realized
|
|
Name
|
|
(#)
|
|
|
Exercise ($) (1)
|
|
|
on Vesting (#)
|
|
on Vesting ($)
|
|
|
|
|
Robert L.G. White
|
|
|
6.4.07
|
|
|
$
|
83,095
|
(2)
|
|
5.30.06 1,109@5.38
|
|
|
5,346
|
|
|
|
|
16,619
|
|
|
|
|
|
|
7.08.06 1,044@7.02
|
|
|
3,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph F. Spanier
|
|
|
6.5.07
|
|
|
$
|
88,375
|
(3)
|
|
5.30.06 839@5.38
|
|
|
4,044
|
|
|
|
|
12,500
|
|
|
|
|
|
|
7.08.06 659@7.02
|
|
|
2,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerald C. Harvey
|
|
|
6.5.07
|
|
|
$
|
37,471
|
(4)
|
|
5.30.06 752@5.38
|
|
|
3,624
|
|
|
|
|
5,300
|
|
|
|
|
|
|
7.08.06 725@7.02
|
|
|
2,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
In each instance, the
value realized upon exercise has been determined as
the aggregate difference between: (a) the number of options
exercised times the per share exercise price and (b) the
number of options exercised times the per share market price at
exercise. Information as to whether or not the shares obtained
upon exercise of options were sold and, if so, the amount of
proceeds of such sale, is not disclosed in this table.
|
|
(2)
|
|
$12.05 per share market price at
exercise; $7.05 per share exercise price.
|
|
(3)
|
|
$12.45 per share market price at
exercise; $5.38 per share exercise price.
|
|
(4)
|
|
$12.45 per share market price at
exercise; $5.38 per share exercise price.
|
PENSION
BENEFITS
The Company has no defined benefit pension plan in which the
named executive officers participate.
Retirement Plans.
The executive officers are
participants in the Breeze-Eastern Corporation Retirement
Savings Plan (the Retirement Savings Plan), a
defined contribution plan under Section 401(k) of the
Internal Revenue Code which covers employees who have been
employed by the Company for more than thirty (30) days.
Approximately 189 employees participated in the Retirement
Savings Plan at March 31, 2008. Benefits are payable on
retirement, disability, death, or other separation from service.
Participants in the Retirement Savings Plan may defer receipt
and taxation of up to 15% of their compensation by contributing
such compensation to the Retirement Savings Plan. The Company
contributes a minimum of 3% and a maximum of 6% of
employees compensation to the Retirement Savings Plan,
depending on the level of contribution by each employee.
21
NONQUALIFIED
DEFERRED COMPENSATION
The following table sets forth annual executive and Company
contributions under non-qualified defined contribution and other
deferred compensation plans, as well as each named executive
officers withdrawals, earnings and fiscal-year end
balances in those plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Earnings
|
|
|
Withdrawals/
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
|
Contributions in
|
|
|
in Last
|
|
|
Distributions
|
|
|
Balance at
|
|
Name
|
|
in Last FY ($)
|
|
|
Last FY ($)
|
|
|
FY ($)
|
|
|
($)
|
|
|
Last FYE ($)
|
|
|
|
|
Robert L.G. White
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Joseph F. Spanier
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Gerald C. Harvey
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Potential
Payments Upon Termination or Change of Control
Executive Severance Agreements.
The Board
authorized the Company to enter into severance agreements,
effective February 10, 2004, with each of
Messrs. Harvey and White (the Severance
Agreements), which provide for payments only in the event
of termination of employment within 24 months after a
change in control of the Company during the term of the
Severance Agreements where such termination is not voluntary or
is other than for cause, or the executive resigns for good
reason which includes reduction in compensation, benefits or
responsibilities, relocation by more than 50 miles of the
executives primary worksite, adverse alteration of the
executives office space and administrative support, or
failure by the Company to obtain an agreement from any successor
or assignee corporation to assume and perform the Severance
Agreements. Benefits under the Severance Agreements are equal to
200% of the executives annual salary, the executives
average bonuses during the two years preceding the change of
control, earned but unused vacation, comp time, sick days, and
sabbatical leave plus the fair market value of accrued but
unvested restricted stock and stock options outstanding, and all
accrued but unpaid salary. The benefits due under the Severance
Agreements are in addition to all amounts payable to each of the
executives pursuant to the Companys other agreements and
benefit plans then in effect, except that any amount paid to any
of the executives pursuant to the Companys corporate
severance pay plan shall be credited against amounts due under
the Severance Agreements. The Severance Agreements provide for
no benefits in the event the executive is terminated for cause
and (except in the event that the executive is convicted of a
felony, a crime involving moral turpitude or a crime adverse to
the Companys welfare) fails to cure the alleged breach
within 30 days after the executive has been notified by the
Companys Board. By amendment authorized by the Board of
Directors on January 19, 2006, the Severance Agreements
expire by their terms on January 31, 2010.
Joseph F. Spanier.
The Board authorized the
Company to enter into an Employment Agreement with Joseph F.
Spanier, effective April 1, 2006, and amended effective
April 1, 2008, pursuant to which he serves as the
Companys Chief Financial Officer. The Agreement follows an
earlier Employment Agreement effective March 28, 2003, that
22
expired by its terms on March 31, 2006. The current
Agreement, as amended, expires by its terms on March 31,
2009, provides for installment payments of a minimum annual base
salary of $273,620 during the remainder of the term of the
Agreement, and requires payments upon early termination of the
Agreement in certain circumstances. The Agreement also provides
that Mr. Spanier shall be eligible for bonuses and
employment related benefits consistent with comparable
executives of the Company.
Named Executive
Officer Severance assuming hypothetical March 31, 2008
payment date
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Two Years
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Two Times
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Accrued
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Accrued
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Comp.
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Balance
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Unamortized
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Unvested
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Total
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Average
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Base
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Severance
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Vacation
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Sick
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Sabbatical
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Time
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Due Under
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Stock
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Option
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Cash
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Bonus
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Salary
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Payment
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Amount
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Amount
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Amount
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Amount
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Emp Agt
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Awards
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Value
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Payment
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R. White
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159,880
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580,000
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739,880
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113,394
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85,883
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33,360
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127,151
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19,679
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32,083
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1,151,430
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G. Harvey
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118,852
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499,654
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618,506
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75,545
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62,457
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28,800
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14,886
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16,042
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816,236
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J. Spanier
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72,614
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23,995
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31,680
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62,092
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164,172
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13,642
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16,042
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384,237
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Total
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1,358,386
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261,553
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172,335
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93,840
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189,243
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164,172
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48,207
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64,167
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2,351,903
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As detailed above, Messrs. White and Harvey have severance
agreements that require both a change in control and a
diminution in their positions with the Company for payments to
be made. Upon the happening of both events, Messrs. White
and Harvey become entitled to a change in control payment equal
to twice their respective salaries plus the average of their
respective bonuses for the two prior fiscal years, their accrued
vacation, comp time, sick days and sabbatical leave plus the
fair market value of any accrued but unvested restricted stock
awards and stock options outstanding as of the date of
termination. Mr. Spanier, as explained above, does not have
a severance agreement but does have an employment agreement with
the Company that requires that upon a termination he receive a
payment equal to $273,620 for each year left on his agreement,
which amount is prorated if less than a year remains of the term
of the agreement. He also receives accrued vacation, comp time,
sick days and sabbatical leave plus the fair market value of any
accrued but unvested restricted stock awards and stock options
outstanding as of the date of termination. Vacation, sick, comp
and sabbatical amounts due are based on hourly equivalents of
$139 per hour for Mr. White, $120 per hour for
Mr. Harvey and $132 per hour for Mr. Spanier. The
above hypothetical calculation assumes payment as of
March 31, 2008.
RELATED PARTY
TRANSACTIONS
As discussed above in the Compensation Discussion and Analysis
under the heading Annual Cash Compensation, on
March 28, 2003, the Company entered into an Employment
Agreement with Joseph F. Spanier pursuant to which he served as
the Companys Chief Financial Officer. The Agreement
provided for the payment of certain lump sum payments, which
included the Note executed by the Company in favor of
Mr. Spanier in the principal amount of $237,000. The Note
bore simple interest at a rate per annum equal to 5.25% and was
payable in three annual installments of $79,000, plus interest
accrued on the unpaid principal balance. The first, second and
third installments of the Note were due on respectively
March 31, 2004, March 31, 2005 and March 31, 2006
and were timely paid.
23
PROPOSAL 2
RATIFICATION OF THE AUDIT COMMITTEES SELECTION OF
MARGOLIS & COMPANY P.C. AS THE COMPANYS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL
YEAR ENDING MARCH 31, 2009
The Audit Committee and the Board of the Company believe it
appropriate to submit for action by the stockholders of the
Company the ratification of the Audit Committees
appointment of Margolis & Company P.C. as the
independent registered public accounting firm for Breeze-Eastern
Corporation for fiscal year 2009. The firm has served as the
independent registered public accounting firm for the Company
since July 3, 2007. In the opinion of the Audit Committee
of the Board, the reputation, qualifications and experience of
the firm make appropriate its appointment for fiscal 2009. A
representative of Margolis & Company P.C. is expected
to be present at the Meeting, with the opportunity to make a
statement if such representative desires to do so, and is
expected to be available to respond to appropriate questions. If
the appointment of Margolis & Company P.C. is not
ratified by the stockholders, the Audit Committee may appoint
another independent registered public accounting firm or may
decide to maintain the appointment of Margolis &
Company P.C. Notwithstanding the selection and ratification, the
Board, in its discretion, may direct the appointment of a new
independent registered public accounting firm at any time during
the year if the Board believes that such a change would be in
the best interest of the Company and its stockholders.
Approval by
Stockholders
The proposal for the ratification of the Audit Committees
selection of Margolis & Company P.C. as the
independent registered public accounting firm of the Company for
fiscal 2009 requires for its adoption the favorable vote of the
holders of shares of Common Stock representing at least a
majority of the shares of Common Stock present in person or
represented by proxy and entitled to vote on the matter at the
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
APPROVAL OF THE PROPOSAL TO RATIFY THE SELECTION BY THE
AUDIT COMMITTEE OF MARGOLIS & COMPANY P.C. AS THE
COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
FISCAL 2009.
Report of the
Audit Committee
The Audit Committee has reviewed and discussed with the
Companys management and the Companys independent
auditors, Margolis & Company P.C., the audited
financial statements of the Company contained in the
Companys Annual Report on
Form 10-K
for the fiscal year ended March 31, 2008. The Audit
Committee has also discussed with Margolis & Company
P.C. the matters required to be discussed pursuant to Statement
of Auditing Standards No. 114 The Auditors
Communication with Those Charged with Governance.
The Audit Committee has received and reviewed the written
disclosures and the letter from the Companys independent
auditors required by Independence Standards Board Standard
No. 1 (titled, Independence Discussions with Audit
Committees), has discussed with the Companys
independent auditors such independent auditors
independence, and has considered the compatibility of non-audit
services with the auditors independence.
Margolis & Company P.C. has served as the independent
registered public accounting firm of the
24
Company since July 3, 2007 and its selection as the
Companys independent registered public accounting firm for
the fiscal year ended March 31, 2008, was ratified by the
stockholders of the Company at the annual meeting of
stockholders of the Company held on September 12, 2007. For
the fiscal year ended March 31, 2007, Deloitte &
Touche LLP acted as the Companys independent registered
public accounting firm.
The fees for various types of services to the Company provided
by Deloitte & Touche LLP for fiscal 2007 and for
fiscal 2008 and by Margolis & Company P.C. for fiscal
2008 were billed as shown below:
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2007
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2008
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Deloitte & Touche LLP
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Audit Fees(1)
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$
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556,276
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$
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383,101
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Audit-Related Fees
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0
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0
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Tax Fees(1)
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$
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81,128
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$
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165,343
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Other(2)
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$
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51,479
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0
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Margolis & Company P.C.
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Audit Fees
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0
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$
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178,000
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Audit-Related Fees
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0
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0
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Tax Fees
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0
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0
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Other
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0
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0
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(1)
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The amounts reflected were
billed in fiscal 2007 and fiscal 2008 in connection with the
Companys engagement of Deloitte & Touche LLP for
financial audits during fiscal 2006 and 2007 and corporate tax
services during fiscal 2006, 2007 and 2008.
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(2)
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The Company engaged
Deloitte & Touche LLP for other services related to an
SEC comment letter process ($23,831) and for services related to
the filing of Registration Statements on
Forms S-3
and
S-8
($27,648) during fiscal 2007.
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The Audit Committee approved 100% of the services shown in the
above categories. No hours expended on the independent
auditors engagement to perform the audit for fiscal 2008
were attributed to work performed by persons other than
employees of Margolis & Company P.C.
The Audit Committee has adopted a procedure to pre-approve audit
services and other services to be provided by the Companys
independent auditors. In fiscal 2007 and fiscal 2008, except as
specifically noted above, all services provided by the
Companys independent auditors were associated with the
audit of the Company, and all such services were pre-approved by
the Audit Committee.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board that the audited financial
statements be included in the Companys Annual Report on
Form 10-K
for the fiscal year ended March 31, 2008, as filed with the
SEC.
FREDERICK WASSERMAN, Chair
JAY R. HARRIS
WILLIAM J. RECKER
25
PROPOSALS FOR
SUBMISSION AT NEXT ANNUAL MEETING
If a stockholder desires to submit a proposal to fellow
stockholders at the Companys annual meeting next year and
wishes to have it set forth in the corresponding proxy statement
and identified in the corresponding form of proxy prepared by
management, such stockholder must notify the Company at its
executive offices no later than March 27, 2009.
Additionally, if properly requested, a stockholder may submit a
proposal for consideration at the 2009 Annual Meeting of
Stockholders, but not for inclusion in the Companys Proxy
Statement and proxy for the 2009 Annual Meeting of Stockholders.
For business to be properly requested to be brought before an
annual meeting of stockholders, the Company must receive from
the stockholder a notice in writing of such request not less
than 60 days prior to the annual meeting. In addition, the
stockholder must be a stockholder of record of the Company at
the time of giving such notice and be entitled to vote at such
annual meeting.
ANNUAL
REPORTS
A copy of the Companys Annual Report on
Form 10-K
for the fiscal year ended March 31, 2008 is being mailed to
each stockholder of record together with this Proxy Statement.
The Company has filed with the SEC its Annual Report on
Form 10-K
for the fiscal year ended March 31, 2008. The Annual Report
on
Form 10-K
contains detailed information concerning the Company and its
operations, including financial information. As provided in
footnote (1) to the Summary Compensation Table, Note 8
to the Financial Statements set forth in the Companys
Annual Report on
Form 10-K,
is incorporated herein by reference.
A copy of this report,
without exhibits, will be furnished to stockholders without
charge upon request in writing to Gerald C. Harvey, Executive
Vice President, General Counsel & Secretary of the
Company, at Breeze-Eastern Corporation, 700 Liberty Avenue,
Union, New Jersey
07083-8198.
If requested, the Company will also provide such persons with
copies of any exhibit to the Annual Report on
Form 10-K
upon the payment of a fee limited to the Companys
reasonable expenses in furnishing such exhibits.
OTHER
MATTERS
The Board does not know of any matter to be acted upon at the
Meeting other than the matters described herein. If any other
matter properly comes before the Meeting, the holders of the
proxies will vote thereon in accordance with their best judgment.
By Order of the Board of Directors
GERALD C. HARVEY
Executive Vice President, General Counsel
and Secretary
Union, New Jersey
July 25, 2008
26
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000004
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MR A SAMPLE
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DESIGNATION (IF ANY)
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ADD 1
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ADD 2
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ADD 3
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ADD 4
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ADD 5
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ADD 6
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Using a
black ink
pen, mark your votes with an
X
as shown in
this example. Please do not write outside the designated areas.
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x
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C123456789
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000000000.000000 ext
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000000000.000000 ext
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000000000.000000 ext
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000000000.000000 ext
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000000000.000000 ext
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000000000.000000 ext
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Annual Meeting Proxy Card
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6
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
6
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A
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Proposals The Board of Directors recommends a vote
FOR
all the nominees listed and
FOR
Proposal 2.
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1.
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Election of Directors:
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For
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Withhold
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For
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Withhold
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For
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Withhold
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+
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01 - William H. Alderman
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o
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o
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02 - Charles W. Grigg
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o
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o
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03 - Jay R. Harris
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o
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o
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04 - William J. Recker
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o
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o
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05 - Russell M. Sarachek
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o
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o
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06 - William M. Shockley
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o
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o
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07 - Frederick Wasserman
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o
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o
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08 - Robert L.G. White
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o
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o
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For
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Against
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Abstain
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2.
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To ratify the Audit Committees selection of Margolis & Company P.C. as the independent registered public accounting firm for the fiscal year ending March 31, 2009.
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o
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o
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o
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3.
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In their discretion, the Proxy is authorized to vote upon such other business as may properly come before the Meeting.
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Change of Address
Please print new address below.
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Comments
Please print your comments below.
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C
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Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below
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Please sign exactly as your name(s) appear(s) hereon. When shares are held by joint tenants, both
should sign. When signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in the full corporate name by the President or
other authorized officer. If a partnership, please sign in partnership name by an authorized person.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box.
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/
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/
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n
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C 1234567890
J N T
8 1 B V
0 1 8 6 7 3 1
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MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE
140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND
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+
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6
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
6
Revocable Proxy Breeze-Eastern Corporation
700 Liberty Avenue
Union, NJ 07083-8198
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert L.G. White, Joseph F. Spanier and Gerald C. Harvey, or any
two of them, as Proxy, each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote as designated on the reverse side, all the shares of Common Stock, Par Value
$0.01 per Share, of Breeze-Eastern Corporation held of record by the undersigned on July 21, 2008
at the annual meeting of shareholders to be held on September 18, 2008, or any adjournment or
adjournments thereof (the Meeting). This proxy will be voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this proxy will be voted FOR the election of all
of the nominees and FOR Proposal 2. This proxy will be voted in the discretion of the Proxy upon
such other business as may properly come before the Meeting.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
Breeze-Eastern Corp. (AMEX:BZC)
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