|
FAIRCHILD CORP - DEF 14A - 20011010 - PERFORMANCE_GRAPH
STOCK PERFORMANCE GRAPHS
The following stock performance graph does not constitute solicitation
material and is not considered filed or incorporated by reference into any
other Company filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, unless we state otherwise.
COMPARISON TO S&P 600 SMALLCAP INDEX/S&P 600 SMALLCAP AEROSPACE/DEFENSE INDEX:
The following graph compares the performance of the Company's Class A Stock
with that of the S&P 600 Smallcap Index and the S&P Smallcap Aerospace/Defense
Index (consisting of five aerospace/defense manufacturers). The graph plots the
growth in value of an initial $100 investment over the indicated five year
period with all dividends reinvested.
Research Data Group Peer Group Total Return Worksheet
FAIRCHILD CORP
Cumulative Total Return
-------------------------------
---------------
6/96 6/97 6/98 6/99 6/00 6/01
FAIRCHILD CORPORATION 100.00 123.08 138.03 87.18 33.33 47.93
S & P SMALLCAP 600 100.00 121.69 145.37 147.81 169.08 187.87
S & P SMALLCAP 600 AEROSPACE/DEFENSE COMPANIES 100.00 138.17 191.76 158.58 91.82 137.20
|
[End of file]
19
STOCK OWNERSHIP
The following table shows the number of shares beneficially owned (as of
August 31, 2001) by:
. each person who we know beneficially owns more than 5% of the common
stock;
. each director;
. each executive officer named in the Summary Compensation Table; and
. the directors and executive officers as a group.
Number of Shares Percent Number of Shares Percent
Name of Class A Stock (1) of Class of Class B Stock (1) of Class
---- -------------------- -------- -------------------- --------
Michael T. Alcox 40,470 * 600 *
Melville R. Barlow 34,000(2) * -- --
Mortimer M. Caplin 126,364(2) * -- --
Philip David 43,856(2) * -- --
Dimensional Fund
Advisors Inc. 1,894,829(3) 8.41% -- --
Robert E. Edwards 1,126,595 5.00% -- --
John L. Flynn 66,496(2)(4) * -- --
Gabelli Funds, LLC 2,444,029(3) 10.85% -- --
Steven L. Gerard 32,818(2) * -- --
Harold J. Harris 81,230(2) (4) * -- --
Daniel Lebard 49,356(2) * -- --
Donald E. Miller 136,793(2) (4) * -- --
Herbert S. Richey 35,730(2) * -- --
Eric I. Steiner 433,396(2) (4) 1.90% 15,000 *
Jeffrey J. Steiner 7,116,479(2) (6) 27.40% 2,938,996(6) 98.08%
The Steiner Group LLC 6,102,684(3) (5) 23.99% 2,908,996(5) 97.08%
All directors and
executive officers as a
group (15 persons) 9,482,482(2) (7) 35.67% 2,954,596(7) 98.60%
|
* Represents less than one percent.
(1) The Class A Stock Column includes shares of Class B Stock, which are
immediately convertible into Class A Stock on a share-for-share basis.
Options that are exercisable immediately or within sixty days after August
31, 2001 appear in the Class A Stock column. Outstanding warrants are
exercisable into shares of either Class A Stock or Class B Stock and
appear in both the Class A Stock and Class B Stock columns.
(2) Includes exercisable stock options to purchase Class A Stock, as follows:
M. Barlow, 34,000 shares; M. Caplin, 6,000 shares; P. David, 6,000 shares;
J. Flynn, 36,250 shares; H. Harris, 6,000 shares; D. Lebard, 34,000
shares; D. Miller, 78,750 shares; H. Richey, 6,000 shares; S. Gerard,
14,018 shares; E. Steiner, 261,011 shares; J. Steiner, 502,997 shares;
Directors and Executive Officers as a group, 1,104,302 shares.
(3) Based on the following information:
Dimensional Fund Advisors Inc., 1299 Ocean Avenue, 11th Floor, Santa
Monica, CA 90401. Information as of December 31, 2000, contained in a
Schedule 13G filed on February 2, 2001 with the SEC by Dimensional Fund
Advisors, Inc.
Gabelli Funds, LLC, One Corporate Center, Rye, NY 10580-1434. Information
contained in a Schedule 13D/A-9, filed on June 5, 2001 with the SEC by
Gabelli Funds, Inc.
The Steiner Group LLC, c/o Faust Rabbach Oppenheim LLP, 488 Madison Avenue,
New York, NY 10022. Information provided to the Company by the shareholder.
20
(4) Includes shares beneficially owned, as follows: H. Harris--24,768 shares
of Class A Stock owned by the Boston Private Profit-Sharing Plan and 7,500
shares held by his wife. D. Miller--300 shares of Class A Stock owned by
Mr. Miller as custodian for his child; Mr. Miller disclaims any beneficial
interest therein. E. Steiner--30,000 shares of Class A Stock held in The
Steiner Children's Trust; 12,115 shares held in 401k Savings Plan; and
10,000 shares held in the E&P Steiner Family Investment LLC. J. Flynn--
5,878 shares held in 401k Savings Plan.
(5) The Steiner Group LLC is a Delaware limited liability company. Jeffrey J.
Steiner is its sole manager. The members are Jeffrey J. Steiner (with a
20% membership interest), and The Jeffrey Steiner Family Trust (with an
80% membership interest). The Jeffrey Steiner Family Trust is a trust
created for the benefit of the issue of Jeffrey J. Steiner. The Steiner
Group LLC holds 3,193,688 shares of Class A Stock, 2,533,996 shares of
Class B Stock, and 375,000 Warrants. 1,100,000 shares of Class B Stock
owned by The Steiner Group LLC have been pledged to banks as collateral
for loans to Jeffrey Steiner. All 3,193,688 shares of Class A Stock owned
by The Steiner Group LLC have been pledged to Bank of America together
with other personal property as collateral for a line of credit and
personal loans to Mr. Steiner.
(6) Mr. Jeffrey Steiner, c/o The Fairchild Corporation, 45025 Aviation Drive,
Suite 400, Dulles, VA 20166. Mr. Steiner is the sole manager of The
Steiner Group LLC, and as such may be deemed to beneficially own the same
shares of Class A Stock and Class B Stock owned directly or beneficially
by The Steiner Group LLC, as discussed in footnote (5) to this table.
Class A Stock shown in the table as owned by Mr. Steiner includes: (i)
6,102,684 shares owned by The Steiner Group LLC (see footnote (5)); (ii)
437,254 shares owned of record by Mr. Steiner; (iii) exercisable stock
options to purchase 502,997 shares of Class A Stock (see footnote (2));
(iv) 38,500 shares of Class A Stock owned by Mr. Steiner as custodian for
his children; (v) 30,000 shares of Class B Stock (convertible on a one-to-
one basis to Class A Stock) owned by Mr. Steiner as custodian for his
children; (vi) 2,400 shares of Class A Stock owned by the Jeffrey Steiner
Family Foundation; and (vii) 2,644 shares of Class A Stock held in his 401k
Savings Plan.
71,700 shares of Class A Stock owned by Mr. Steiner have been pledged as
collateral to Bank of America.
Class B Stock shown in the table as owned by Mr. Jeffrey Steiner include:
(i) 2,533,996 shares and 375,000 Warrants owned by The Steiner Group LLC
(see footnote (5)); and (ii) 30,000 shares of Class B Stock owned by Mr.
Steiner as custodian for his children.
Mr. Steiner disclaims beneficial ownership of shares owned by The Steiner
Group LLC, the Jeffrey Steiner Family Foundation, and shares owned by him
as custodian for his children.
(7) Includes warrants as described in footnotes (1), (5) and (6) above.
21
CERTAIN TRANSACTIONS
. The Company occasionally uses a chartered helicopter owned by an affiliate
of Mr. Jeffrey Steiner. Cost for such flights charged to the Company for
business related travel are comparable to those charged in arm's length
transactions between unaffiliated third parties. Total amount paid by the
Company in fiscal 2001 for such helicopter was approximately $200,000.
. Jeffrey Steiner has a minority ownership interest in Mulberry Phosphates,
Inc. Mulberry subleased from Fairchild approximately 1,650 square feet in
Fairchild's New York office, at a rental equal to the rent paid by
Fairchild to the prime landlord for such space. Due to financial
difficulties, Mulberry failed to make rental payments to Fairchild under
the sublease and has been evicted.
. Pursuant to the Company's officer and director loan program, the Company
has made loans to certain key employees and directors, to be used by such
employees to purchase Fairchild Class A Common Stock. The amount of such
loans to officers and directors in fiscal 2001, and the outstanding balance
(as of June 30, 2001) of all loans to officers and directors under the
stock purchase loan program, are as follows:
Stock Purchase Outstanding Balance
Loans Made in of all Stock Purchase
Fiscal 2001 Loans as of 6/30/01
-------------- ---------------------
Mortimer Caplin....................... $ 0 $ 105,971
Philip David.......................... 0 105,898
John Flynn............................ 0 174,678
Steven Gerard......................... 99,377 99,377
Harold Harris......................... 0 105,898
Natalia Hercot (daughter of J.
Steiner)............................. 0 167,398
Daniel Lebard......................... 0 105,898
Donald Miller......................... 0 220,178
Warren Persavich...................... 0 174,678
Herbert Richey........................ 0 105,963
Eric Steiner.......................... 0 220,178
Jeffrey Steiner....................... 0 174,678
------- ----------
Total................................. $99,377 $1,760,793
======= ==========
|
All such loans are non-interest bearing, have maturity dates ranging from 1
1/2 to 4 years, and become due and payable immediately upon the termination
of employment (for senior management) or director affiliation (for a
director).
. Eric Steiner (son of Jeffrey Steiner) is an executive officer of the
Company. His compensation is set forth in the compensation table of the
proxy statement. Natalia Hercot (daughter of Jeffrey Steiner) is a Vice
President of the Company, for which she was compensated $193,000 in fiscal
2001. Thierry Steiner (son of Jeffrey Steiner) is an employee of the
Company, for which he was compensated $67,000 in fiscal 2001.
22
PROPOSAL NO. 2
APPROVAL OF THE ISSUANCE OF
86,942 STOCK OPTIONS TO
NON-EMPLOYEE DIRECTORS
(Pursuant to the 2001 NED Plan)
At the annual meeting, you will be asked to approve the Company's 2001 Non-
Employee Directors Stock Option Plan (the "2001 NED Plan"). The purpose of the
2001 NED Plan is to issue an aggregate of 86,942 option shares to the
Company's non-employee directors. We recommend that you vote "FOR" this
proposal.
Vote Required. To be approved, this matter must receive the affirmative vote
of a majority of the shares present (in person or by proxy) at the meeting and
entitled to vote on such matter. In addition, under New York Stock Exchange
rules, all votes cast for or against such proposal must (in the aggregate)
represent at least 50% of the outstanding shares of the Company entitled to
vote on such matter.
Because the pool of shares available under the 2001 NED Plan does not exceed
5% of the outstanding common stock of the Company, brokers have discretion to
vote in favor of this proposal. Therefore, broker nonvotes will be counted as
present (for quorum purposes) and entitled to vote on this proposal.
Summary of the Plan
Shares Available for The Company has seven non-employee directors.
Stock Options: On the date of the 2001 Annual Meeting
(assuming this proposal is adopted) each non-
employee director will be issued stock options
|
as follows:
Number of Stock Options
Name for Class A Stock
---- -----------------------
Melville R.
Barlow: 30,000
Mortimer M.
Caplin: 2,000
Philip David: 2,000
Steven L.
Gerard: 3,942
Harold J.
Harris: 17,000
Daniel Lebard: 30,000
Herbert S.
Richey: 2,000
|
The aggregate of all such options is 86,942,
which represents approximately 0.39% of the
Company's issued and outstanding Class A stock
as of October 1, 2001.
All stock options will be granted on the date
of the 2001 Annual Meeting (after obtaining
shareholder approval). No stock options will
be issued under the 2001 NED Plan after such
date.
Exercise Price for The exercise price for the Stock Options shall
Stock Options: be 100% of the fair market value of the shares
on the date of the 2001 Annual Meeting.
|
23
Payment of Stock
Option Exercise Price:
The holder of an option can choose to pay the
exercise price in cash, with the Company's
common stock (valued at the closing price of
the common stock on the date of exercise), or
by cashless exercise. In a cashless exercise,
the option holder irrevocably instructs his or
her broker to sell the shares to be acquired
upon exercise of the option and pay the
exercise price to the Company.
Eligibility: All non-employee directors of the company are
eligible to receive stock options under the
2001 NED Plan. There are seven such directors.
The amount of stock options issued to each
non-employee director is different. (See
caption above, "Shares Available for Stock
Options.")
Administration of the The 2001 NED Plan will be administered by the
Plan: Board (excluding, non-employee directors). The
Board will be authorized to interpret the 2001
NED Plan but will have no discretion with
respect to the selection of directors to
receive options, the date on which stock
options will be issued, the number of shares
subject to the 2001 NED Plan, or the purchase
price for the shares subject to options.
Amendments to the The Board may terminate, amend or modify the
Plan: 2001 NED Plan at any time. However, any
amendment or modification that increases the
total amount of stock on which options may be
granted under the 2001 NED Plan, changes the
manner of determining the option price,
changes the classes of individuals eligible to
receive options, changes the number of options
which may be granted to each director, changes
the times when such options are granted, or
materially increases the benefits under the
2001 NED Plan will require the consent of the
Company's stockholders.
Exercise of Stock All stock options under the 2001 NED Plan will
Options: contain the following vesting schedule: (i)
after one year from the date of grant, the
holder may exercise up to 25% of the stock
options covered by the award; (ii) after two
years from the date of grant, the holder may
exercise up to 50% of the stock options
covered by the award; (iii) after three years
from the date of grant, the holder may
exercise up to 75% of the stock options
covered by the award; and (iv) after four
years from the date of grant, the holder may
exercise up to 100% of the stock options
covered by the award. All options will expire
ten years after the date of grant of the
award.
If a non-employee director ceases to serve as
a member of the Board (other than due to death
or disability), all options granted to such
director under the 2001 NED Plan shall expire
three months thereafter, or on their stated
expiration date, whichever occurs first.
24
|
If a non-employee director ceases to serve as
a member of the Board due to death or
disability, all options granted to such
director under the 2001 NED Plan shall expire
one year thereafter, or on their stated
expiration date, whichever occurs first.
Deferment of Gain: Pursuant to the Company's stock option
deferral plan, directors may elect to defer
the gain upon exercise of any stock options
granted under the 2001 NED Plan. The "gain" is
the difference between the exercise price of a
stock option and the value of the shares on
the date the option is exercised. If a
director elects to defer the gain, he will
receive deferred compensation units from the
Company, equal to the dollar amount of the
gain divided by the fair market value of the
Company's common stock. At the end of the
deferral period, the director will receive the
number of shares of Class A Common Stock equal
to the number of deferred compensation units
previously issued to the director.
|
Tax Consequences. The following discussion addresses certain U.S. federal
income tax consequences in connection with the 2001 NED Plan. State tax
treatment is subject to individual state laws and is not reviewed in this
discussion. Stock Options under the 2001 NED Plan shall be "Non-Qualified
Stock Options." A Non-Qualified Stock Option results in no taxable income to
the optionee or deduction to the Company at the time it is granted. Except for
any director who elects to defer gain as described above under "Deferment of
Gain," an optionee exercising a Non-Qualified Stock Option will, at that time,
realize taxable compensation in the amount of the difference between the
option price and the then market value of the shares. Subject to the
applicable provisions of the Internal Revenue Code, a deduction for federal
income tax purposes will be allowable to the Company in the year of exercise
in an amount equal to the taxable compensation realized by the optionee.
Beneficiaries of Plan. If the 2001 NED Plan is approved at the Annual
Meeting, the non-employee directors will immediately receive stock options in
the amounts set forth above (under the caption "Shares Available for Stock
Options") next to each director's name. Such stock options shall be
exercisable at the fair market value of the Company's Class A Stock as of the
date of the Annual Meeting. As of September 25, 2001, the closing price on the
New York Stock Exchange for the Company's Class A Stock was $3.90 per share.
The stock options issued to the non-employee directors under the 2001 NED
Plan are in addition to (and not in lieu of) stock options issued yearly to
non-employee directors under the 1996 NED Plan. The 1996 NED Plan is described
in this Proxy Statement under the caption "Directors Compensation."
A copy of the 2001 NED Plan is attached hereto as Appendix 1.
25
PROPOSAL NO. 3
APPROVAL OF PERFORMANCE GOALS AND
INCENTIVE COMPENSATION FOR THE SENIOR VICE PRESIDENT, TAX
At the annual meeting, you will be asked to approve one of the performance
goals established by the Compensation and Stock Option Committee with respect
to fiscal 2002 incentive compensation awards for the Company's Senior Vice
President, Tax (Mr. John Flynn).
Section 162(m) of the Internal Revenue Code disallows deductions for
publicly-held corporations with respect to compensation in excess of
$1,000,000 paid to certain executive officers. However, compensation payable
solely on account of attainment of one or more performance goals is not
subject to this deduction limitation if:
. the performance goals are objective, pre-established and determined by a
compensation committee comprised solely of two or more outside
directors,
. the material terms of the performance goals under which the compensation
is to be paid are disclosed to the shareholders and approved by a
majority vote, and
. the compensation committee certifies that the performance goals and
other material terms were in fact satisfied before the compensation is
paid.
The purpose of seeking shareholder approval of the incentive compensation
award for the Senior Vice President, Tax, is to meet the requirements of
Section 162(m). We recommend that you vote "FOR" this proposal.
Vote Required. To be approved, this matter must receive the affirmative vote
of a majority of the shares present (in person or by proxy) at the meeting and
entitled to vote on such matter. Broker nonvotes will not be counted as
present and shall not be entitled to vote on this proposal.
Performance Goals. On September 20, 2001, the Company's Compensation and
Stock Option Committee established performance goals for the Senior Vice
President, Tax's, fiscal 2002 incentive compensation award and the maximum
amount payable to the Senior Vice President, Tax, if the goal is achieved. The
performance goals and maximum amount payable for fiscal 2002 are as follows:
1. If the Company engages in an extraordinary transaction (e.g., purchase
or sale of assets not in the ordinary course, including, without
limitation, through a public offering or private placement of
securities) during fiscal 2002, the Senior Vice President, Tax, may
receive up to 1 percent of the total value of the transaction.
2. Notwithstanding the foregoing, the payment of incentive compensation in
connection with extraordinary transactions is restricted as follows:
. There shall be no cash incentive compensation awards on acquisitions
by the Company;
. There shall be no incentive compensation awards in connection with
the Company's issuance of any debt securities (bonds, credit
agreements, etc.); and
. There shall be no incentive compensation awards in connection with
raising of equity through investment bankers.
The Compensation and Stock Option Committee retains the right to determine
the actual amount of incentive compensation to be awarded to the Senior Vice
President, Tax, in fiscal 2002 based on his individual contribution,
consistent with the foregoing goal and in an amount no greater than the
maximum amount set forth above.
Assuming the shareholders approve the material terms of the performance goal
as described herein, the Company believes that any such incentive compensation
award to the Senior Vice President, Tax, will qualify as performance-based
compensation that will be deductible from the Company's gross income for
federal income tax purposes.
26
PROPOSAL NO. 4
APPROVAL OF PERFORMANCE GOALS AND
INCENTIVE COMPENSATION FOR THE CHIEF FINANCIAL OFFICER
At the annual meeting, you will be asked to approve one of the performance
goals established by the Compensation and Stock Option Committee with respect
to fiscal 2002 incentive compensation awards for the Company's Chief Financial
Officer (Mr. Michael Alcox).
Section 162(m) of the Internal Revenue Code disallows deductions for
publicly-held corporations with respect to compensation in excess of
$1,000,000 paid to certain executive officers. However, compensation payable
solely on account of attainment of one or more performance goals is not
subject to this deduction limitation if:
. the performance goals are objective, pre-established and determined by a
compensation committee comprised solely of two or more outside
directors,
. the material terms of the performance goals under which the compensation
is to be paid are disclosed to the shareholders and approved by a
majority vote, and
. the compensation committee certifies that the performance goals and
other material terms were in fact satisfied before the compensation is
paid.
The purpose of seeking shareholder approval of the incentive compensation
award for the Chief Financial Officer is to meet the requirements of Section
162(m). We recommend that you vote "FOR" this proposal.
Vote Required. To be approved, this matter must receive the affirmative vote
of a majority of the shares present (in person or by proxy) at the meeting and
entitled to vote on such matter. Broker nonvotes will not be counted as
present and shall not be entitled to vote on this proposal.
Performance Goals. On September 20, 2001, the Company's Compensation and
Stock Option Committee established performance goals for the Chief Financial
Officer's fiscal 2002 incentive compensation award and the maximum amount
payable to the Chief Financial Officer if the goal is achieved. The
performance goals and maximum amount payable for fiscal 2002 are as follows:
1. If the Company engages in an extraordinary transaction (e.g., purchase
or sale of assets not in the ordinary course, including, without
limitation, through a public offering or private placement of
securities) during fiscal 2002, the Chief Financial Officer may receive
up to 1/2 of 1 percent of the total value of the transaction.
2. Notwithstanding the foregoing, the payment of incentive compensation in
connection with extraordinary transactions is restricted as follows:
. There shall be no cash incentive compensation awards on acquisitions
by the Company;
. There shall be no incentive compensation awards in connection with
the Company's issuance of any debt securities (bonds, credit
agreements, etc.); and
. There shall be no incentive compensation awards in connection with
raising of equity through investment bankers.
The Compensation and Stock Option Committee retains the right to determine
the actual amount of incentive compensation to be awarded to the Chief
Financial Officer in fiscal 2002 based on his individual contribution,
consistent with the foregoing goal and in an amount no greater than the
maximum amount set forth above.
Assuming the shareholders approve the material terms of the performance goal
as described herein, the Company believes that any such incentive compensation
award to the Chief Financial Officer will qualify as performance-based
compensation that will be deductible from the Company's gross income for
federal income tax purposes.
27
PROPOSAL NO. 5
APPROVAL OF PERFORMANCE GOALS AND INCENTIVE COMPENSATION
FOR THE EXECUTIVE VICE PRESIDENT
At the annual meeting, you will be asked to approve one of the performance
goals established by the Compensation and Stock Option Committee with respect
to fiscal 2002 incentive compensation awards for the Company's Executive Vice
President (Mr. Donald Miller).
Section 162(m) of the Internal Revenue Code disallows deductions for
publicly-held corporations with respect to compensation in excess of
$1,000,000 paid to certain executive officers. However, compensation payable
solely on account of attainment of one or more performance goals is not
subject to this deduction limitation if:
. the performance goals are objective, pre-established and determined by a
compensation committee comprised solely of two or more outside
directors,
. the material terms of the performance goals under which the compensation
is to be paid are disclosed to the shareholders and approved by a
majority vote, and
. the compensation committee certifies that the performance goals and
other material terms were in fact satisfied before the compensation is
paid.
The purpose of seeking shareholder approval of the incentive compensation
award for the Executive Vice President is to meet the requirements of Section
162(m). We recommend that you vote "FOR" this proposal.
Vote Required. To be approved, this matter must receive the affirmative vote
of a majority of the shares present (in person or by proxy) at the meeting and
entitled to vote on such matter. Broker nonvotes will not be counted as
present and shall not be entitled to vote on this proposal.
Performance Goals. On September 20, 2001, the Company's Compensation and
Stock Option Committee established performance goals for the Executive Vice
President's fiscal 2002 incentive compensation award and the maximum amount
payable to the Executive Vice President if the goal is achieved. The
performance goals and maximum amount payable for fiscal 2002 are as follows:
1. If the Company engages in an extraordinary transaction (e.g., purchase
or sale of assets not in the ordinary course, including, without
limitation, through a public offering or private placement of
securities) during fiscal 2002, the Executive Vice President may receive
up to 1 percent of the total value of the transaction.
2. Notwithstanding the foregoing, the payment of incentive compensation in
connection with extraordinary transactions is restricted as follows:
. There shall be no cash incentive compensation awards on acquisitions
by the Company;
. There shall be no incentive compensation awards in connection with
the Company's issuance of any debt securities (bonds, credit
agreements, etc.); and
. There shall be no incentive compensation awards in connection with
raising of equity through investment bankers.
The Compensation and Stock Option Committee retains the right to determine
the actual amount of incentive compensation to be awarded to the Executive
Vice President in fiscal 2002 based on his individual contribution, consistent
with the foregoing goal and in an amount no greater than the maximum amount
set forth above.
Assuming the shareholders approve the material terms of the performance goal
as described herein, the Company believes that any such incentive compensation
award to the Executive Vice President will qualify as performance-based
compensation that will be deductible from the Company's gross income for
federal income tax purposes.
28
PROPOSAL NO. 6
APPROVAL OF
PERFORMANCE GOALS AND
INCENTIVE COMPENSATION FOR
THE PRESIDENT
At the annual meeting, you will be asked to approve the material terms of
the performance goals established by the Compensation and Stock Option
Committee with respect to fiscal 2002 incentive compensation awards for the
Company's President (Dr. Eric Steiner).
Section 162(m) of the Internal Revenue Code disallows deductions for
publicly-held corporations with respect to compensation in excess of
$1,000,000 paid to certain executive officers. However, compensation payable
solely on account of attainment of one or more performance goals is not
subject to this deduction limitation if:
. the performance goals are objective, pre-established and determined by a
compensation committee comprised solely of two or more outside
directors,
. the material terms of the performance goals under which the compensation
is to be paid are disclosed to the shareholders and approved by a
majority vote, and
. the compensation committee certifies that the performance goals and
other material terms were in fact satisfied before the compensation is
paid.
The purpose of seeking shareholder approval of the President's incentive
compensation award is to meet the requirements of Section 162(m). We recommend
that you vote "FOR" this proposal.
Vote Required. To be approved, this matter must receive the affirmative vote
of a majority of the shares present (in person or by proxy) at the meeting and
entitled to vote on such matter. Broker nonvotes will not be counted as
present and shall not be entitled to vote on this proposal.
Performance Goals. On September 20, 2001, the Company's Compensation and
Stock Option Committee established performance goals for the President's
fiscal 2002 incentive compensation award and the maximum amount payable to the
President if the goal is achieved. The performance goals and maximum amount
payable for fiscal 2002 are as follows:
1. If the Earnings before Interest, Taxes, Depreciation and Amortization
(EBITDA) of Fairchild Fasteners in Fiscal 2002, as computed in the same
manner as under the Company's Credit Agreement in effect as of July 1,
2001, is more or less than Fairchild Fasteners planned EBITDA
("Fairchild Fasteners Target EBITDA") as submitted to the Board of
Directors of the Company on September 20, 2001, then the President may
receive an incentive compensation award in accordance with the following
table:
Percentage of
Fairchild Fasteners
Target EBITDA Percentage of Base Salary
------------------- -------------------------
Less than 80% 0%
80% or more, but less
than 90% 35%
90% or more, but less
than 95% 50%
95% or more, but less
than 100% 65%
100% or more, but less
than 105% 80%
105% or more, but less
than 110% 100%
110% or more 125%
|
2. If the Company engages in an extraordinary transaction (e.g., purchase
or sale of assets not in the ordinary course, including, without
limitation, through a public offering or private placement of
securities) during fiscal 2002, the President may receive up to two
percent (2%) of the total value of the transaction.
29
3. Notwithstanding the foregoing, the payment of incentive compensation in
connection with extraordinary transactions is restricted as follows:
. There shall be no cash incentive compensation awards on acquisitions
by the Company;
. There shall be no incentive compensation awards in connection with
the Company's issuance of any debt securities (bonds, credit
agreements, etc.); and
. There shall be no incentive compensation awards in connection with
raising of equity through investment bankers.
All of the foregoing will be computed in such a manner as to avoid
duplication.
The Compensation and Stock Option Committee retains the right to determine
the actual amount of incentive compensation to be awarded to the President in
fiscal 2002 based on his individual contribution, consistent with the
foregoing goal and in an amount no greater than the maximum amount set forth
above.
Assuming the shareholders approve the material terms of the performance goal
as described herein, the Company believes that any such incentive compensation
award to the President will qualify as performance-based compensation that
will be deductible from the Company's gross income for federal income tax
purposes.
30
PROPOSAL NO. 7
APPROVAL OF
PERFORMANCE GOALS AND
INCENTIVE COMPENSATION FOR
THE CHIEF EXECUTIVE OFFICER
At the annual meeting, you will be asked to approve the material terms of
the performance goals established by the Compensation and Stock Option
Committee with respect to fiscal 2002 incentive compensation awards for the
Company's Chief Executive Officer (Mr. Jeffrey Steiner).
Section 162(m) of the Internal Revenue Code disallows deductions for
publicly-held corporations with respect to compensation in excess of
$1,000,000 paid to certain executive officers. However, compensation payable
solely on account of attainment of one or more performance goals is not
subject to this deduction limitation if:
. the performance goals are objective, pre-established and determined by a
compensation committee comprised solely of two or more outside
directors,
. the material terms of the performance goals under which the compensation
is to be paid are disclosed to the shareholders and approved by a
majority vote, and
. the compensation committee certifies that the performance goals and
other material terms were in fact satisfied before the compensation is
paid.
The purpose of seeking shareholder approval of the Chief Executive Officer's
incentive compensation award is to meet the requirements of Section 162(m). We
recommend that you vote "FOR" this proposal.
Vote Required. To be approved, this matter must receive the affirmative vote
of a majority of the shares present (in person or by proxy) at the meeting and
entitled to vote on such matter. Broker nonvotes will not be counted as
present and shall not be entitled to vote on this proposal.
Performance Goals. On September 20, 2001, the Company's Compensation and
Stock Option Committee established performance goals for the Chief Executive
Officer's fiscal 2002 incentive compensation award and the maximum amount
payable to the Chief Executive Officer if the goals are achieved. The
performance goals and maximum amounts payable for fiscal 2002 are as follows:
1. If the Earnings before Interest, Taxes, Depreciation and Amortization
(EBITDA) of The Fairchild Corporation in Fiscal 2002, as computed in the
same manner as under the Company's Credit Agreement in effect as of July
1, 2001, is more or less than the Company's EBITDA ("Fairchild Target
EBITDA") as submitted to the Board of Directors of the Company on
September 20, 2001, then the Chief Executive Officer may receive an
incentive compensation award based on a percentage of aggregate base
salary in accordance with the following table:
Percentage of Fairchild Target Percentage of Aggregate
EBITDA Base Salary
------------------------------ -----------------------
Less than 80% 0%
80% or more, but less than 90% 35%
90% or more, but less than 95% 50%
95% or more, but less than 100% 75%
100% or more, but less than 105% 110%
105% or more, but less than 110% 130%
110% or more 175%
|
2. If the Company engages in an extraordinary transaction (e.g., purchase
or sale of assets not in the ordinary course, including, without
limitation, through a public offering or private placement of
securities) during fiscal 2002, the Chief Executive Officer may receive
up to two and one-half percent (2 1/2) of the total value of the
transaction.
31
3. Notwithstanding the foregoing, the payment of incentive compensation in
connection with extraordinary transactions is restricted as follows:
. There shall be no cash incentive compensation awards on acquisitions
by the Company;
. There shall be no incentive compensation awards in connection with
the Company's issuance of any debt securities (bonds, credit
agreements, etc.); and
. There shall be no incentive compensation awards in connection with
raising of equity through investment bankers.
All of the foregoing will be computed in such a manner as to avoid
duplication.
The Compensation and Stock Option Committee retains the right to determine
the actual amount of incentive compensation to be awarded to the Chief
Executive Officer in fiscal 2002 based on his individual contribution,
consistent with the foregoing goals and in an amount no greater than the
maximum amounts set forth above.
Assuming the shareholders approve the material terms of the performance
goals as described herein, the Company believes that any such incentive
compensation award to the Chief Executive Officer will qualify as performance-
based compensation that will be deductible from the Company's gross income for
federal income tax purposes.
32
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP has served as the Company's independent auditor since
1968. No change is contemplated. Representatives of Arthur Andersen will be
available at the annual meeting to make a statement, if they so desire, and to
respond to appropriate questions.
Audit Fees
The aggregate fees billed by Arthur Andersen LLP, for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended June 30, 2001 and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for that
fiscal year were $610,000. More than 50% of the Fiscal 2001 audit work was
performed by full-time employees of Arthur Andersen.
Financial Information Systems Design and Implementation Fees
For the fiscal year ended June 30, 2001, there were no fees billed by Arthur
Andersen LLP for professional services relating to information technology or
financial information systems design and implementation.
All Other Fees
The aggregate fees billed by Arthur Andersen LLP, for services rendered to
the Company for the fiscal year ended June 31, 2001, other than for services
described above under "Audit Fees," were $150,000.
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the principal accountant's
independence.
SHAREHOLDER PROPOSALS
If you want to include a shareholder proposal in the proxy statement for the
2002 annual meeting, it must be delivered to the Company before June 12, 2002.
If you want to submit a shareholder proposal for the 2002 annual meeting but
you do not require that such proposal be included in the Company's proxy
materials, you must notify the Company of such proposal before August 26,
2002. If such notice is not received by August 26, 2002, the proposal shall be
considered untimely and shall not be presented at the 2002 annual meeting.
All shareholder proposals must conform to the requirements set forth in
Regulation 14A under the Securities Exchange Act of 1934, and should be
submitted to the Company's headquarters, 45025 Aviation Drive, Suite 400,
Dulles, VA 20166-7516, Attention: Secretary.
33
ANNUAL REPORT
The Company's Annual Report to Shareholders for the fiscal year ended June
30, 2001, was mailed to shareholders with or prior to mailing of this proxy
statement. The Company will provide free of charge to any shareholder as of
the record date who so requests in writing, a copy of the Company's annual
report on Form 10-K for fiscal 2001. Requests for such copies should be
directed to Donald E. Miller, Executive Vice President & Secretary, The
Fairchild Corporation, 45025 Aviation Drive, Suite 400, Dulles, VA 20166-7516.
By Order of the Board of Directors
Donald E. Miller
Executive Vice President & Secretary
34
Appendix 1
2001 NON-EMPLOYEE DIRECTORS
STOCK OPTION PLAN OF
THE FAIRCHILD CORPORATION
1.Purpose.
The purpose of this 2001 Non-Employee Directors Stock Option Plan (the
"Plan") is to retain qualified and competent persons to serve as members of
the board of directors (the "Board") of The Fairchild Corporation (the
"Company") by providing a means whereby such persons acquire an equity
interest in the Company thereby securing for the Company and its stockholders
the benefits inherent in such equity ownership by persons whose advice and
counsel are important to the Company's future growth and continued success.
2.Administration.
(a) The Board (excluding participation by Non-Employee Directors) shall (i)
administer the Plan, (ii) establish such rules and regulations as it
may deem appropriate for the proper administration of the Plan, and
(iii) take such actions, make such determinations and issue such
interpretations in connection with the Plan (or the Options issued
thereunder) as it may deem necessary or advisable.
(b) The Board may from time to time appoint a Committee (the "Committee"),
comprised of at least two members of the Board who are not Non-Employee
Directors, and may delegate to the Committee full power and authority
to take any and all action required or permitted to be taken by the
Board under the Plan. The Board or the Committee, as applicable, shall
hereinafter be referred to as the "Administrator."
(c) The Administrator shall have no discretion with respect to the
selection of directors to receive Awards under the Plan, the number of
shares subject to the Plan or to each Award, or the purchase price for
shares subject to Awards. The Administrator shall have no authority to
materially increase benefits under the Plan.
(d) The Administrator may establish from time to time such regulations,
provisions, and procedures within the terms of the Plan as, in its
opinion, may be advisable in the administration of the Plan.
(e) The Administrator may designate the Secretary of the Company or other
employees of the Company to assist the Administrator in the
administration of the Plan and may grant authority to such persons to
execute documents on behalf of the Administrator.
3. Stock.
The common stock (the "Common Stock") to be made the subject of Awards under
the Plan shall be the shares of Class A Common Stock of the Company, $.10 par
value per share. The total amount of Common Stock for which Awards may be
granted under the Plan shall not exceed, in the aggregate, 86,942 shares,
subject to adjustment in accordance with the provisions of Section 12 hereof.
A-1
4.Award of Options.
(a) Awards shall be granted only to the following persons ("Non-Employee
Directors"), in the amounts noted next to each person's name:
Number of Stock Options for
Name Class A Common Stock
---- ---------------------------
Melville R. Barlow: 30,000
Mortimer M. Caplin: 2,000
Philip David: 2,000
Steven L. Gerard: 3,942
Harold J. Harris: 17,000
Daniel Lebard: 30,000
Herbert S. Richey: 2,000
|
Such persons (at the time of Award): (i) are not employees of the Company,
and (ii) have not been employees of the Company for the past three (3) years
("Non-Employee Directors").
(b) All Awards granted under the Plan shall be non-qualified options not
entitled to special tax treatment under Section 422 of the Internal
Revenue Code of 1986, as amended (the "IRC").
(c) All Awards under this Plan shall be granted immediately after
shareholder approval of the Plan, at rates set forth in Section 5
below.
(d) Every recipient of Awards pursuant to this Plan shall be bound by the
terms and provisions of this Plan (including the restriction on
assignability of options set forth in Section 8 below); and, the
acceptance of options pursuant to this Plan shall constitute a binding
agreement between the recipient and the Company.
5.Number of Shares to Be Granted.
Each person who is a Non-Employee Director of the Company at the time of
adoption of the Plan by the stockholders shall be granted stock options (the
"Awards" or "Options") at the rates set forth in Section 4 above (next to each
person's name).
6.Price.
The exercise price of each Option shall be the closing price of the Common
Stock on the New York Stock Exchange (the "NYSE") on the date the stockholders
approve the Plan.
The closing price of the Common Stock, as of any particular day, shall be as
reported by the NYSE; provided, however, that if the Common Stock is not
listed on the NYSE on the date the option price is to be determined, the
option price shall be the last price reported by the NYSE prior to the option
date.
7. Vesting Schedule.
Each Award under the Plan will contain the following vesting schedule: (i)
after one year from the date of grant, the holder may exercise up to 25% of
the Options covered by the Award; (ii) after two years from the date of grant,
the holder may exercise up to 50% of the Options covered by the Award; (iii)
after three years from the date of grant, the holder may exercise up to 75% of
the Options covered by the award; and (iv) after four years from the date of
grant, the holder may exercise up to 100% of the Options covered by the Award.
All Options will expire ten years after the date of grant of the Award.
A-2
8. Transferability.
No Option may be transferable by a holder other than by will or the laws of
descent and distribution. During the lifetime of a holder, the Option may be
exercisable only by such holder. A holder who acquires Common Stock hereunder
may only transfer such Common Stock in compliance with applicable federal and
state securities laws.
9. Termination of Directorship.
If, on or after the date the Awards are granted, a holder ceases to serve as
a director of the Company for any reason other than death or disability
(including: (i) resignation, (ii) removal as a director of the Company by the
stockholders of the Company, with or without cause, or (iii) a holder's
decision not to stand for reelection at the next shareholders meeting), the
holder shall have the right to exercise any remaining Options under the
holder's Award (to the extent such Options shall have vested prior to
resignation, removal or other termination) on the earlier of: (a) three months
after such resignation, removal or other termination, or (b) the expiration
date of the Award. Thereafter, the Award and all Options thereunder shall be
deemed to have expired.
10.Death or Disability.
If, on or after the date the Awards are granted, a holder ceases to serve as
a director of the Company due to death or disability, the holder (or the
personal representative of the holder or the person or persons to whom the
Options shall have been transferred by will or by the laws of decent and
distribution), shall have the right to exercise any remaining Options under
the holder's Award (to the extent such Options shall have vested prior to
death or disability) on the earlier of: (a) one year after termination due to
death or disability, or (b) the expiration date of the Award. Thereafter, the
Award and all Options thereunder shall be deemed to have expired.
11.Payment for Stock.
(a) The purchase price of Common Stock issued upon exercise of options
granted hereunder shall be paid in full on the date of purchase.
Payment shall be made either in cash or such other consideration as the
Administrator deems appropriate, including, without limitation, Common
Stock already owned by the holder or Common Stock to be acquired by the
holder upon exercise of the option having a total fair market value, as
determined by the Administrator, equal to the purchase price, or a
combination of cash and Common Stock having a total fair market value,
as so determined, equal to the purchase price.
(b) Common Stock shall not be issued upon the exercise of options unless
and until the aggregate amount of federal, state or local taxes of any
kind required by law to be withheld, if any, with respect to the
exercise of such options have been paid or satisfied or provision for
their payment and satisfaction has been made upon such terms as the
Administrator may prescribe, including, without limitation, payment of
any such taxes by exchanging shares of Common Stock previously owned by
the holder or acquired upon the exercise of an option.
12.Stock Adjustments.
(a) The total amount of Common Stock for which options shall be granted
under the Plan and option terms (both as to the number of shares of
Common Stock and the price of the option) shall be appropriately
adjusted for any increase or decrease in the number of outstanding
shares of Common Stock resulting from payment of a Common Stock
dividend on the Common Stock, a subdivision or combination of the
Common Stock, or a reclassification of the Common Stock, and (in
accordance with the provisions contained in the following paragraph) in
the event of a consolidation or a merger in which the Company will be
the surviving corporation.
A-3
(b) After the merger of one or more corporations into the Company in which
the Company shall be the surviving corporation, or after any
consolidation of the Company and one or more other corporations, each
holder shall, at no additional cost, be entitled, upon any exercise of
his option, to receive, in lieu of the number of shares of Common Stock
as to which such option shall then be so exercised, the number and
class of shares of Common Stock or other securities to which such
holder would have been entitled pursuant to the terms of the applicable
agreement of merger or consolidation if at the time of such merger or
consolidation such holder had been a holder of record of a number of
shares of Common Stock equal to the number of shares for which such
option may then be so exercised. Comparable rights shall accrue to each
holder in the event of successive mergers or consolidations of the
character described above.
(c) In the event of any sale of all or substantially all of the assets of
the Company, or any merger of the Company into another corporation, or
any dissolution or liquidation of the Company or, in the discretion of
the Board, any consolidation or other reorganization in which it is
impossible or impracticable to continue in effect any options, all
options granted under the Plan (and not previously exercised) shall
immediately vest and shall terminate unless exercised at least one
business day before the scheduled closing of such event; provided that
any such vesting, exercise or termination shall be conditioned on the
closing of such transaction; and provided further that the Board may in
its discretion, require instead that all options granted under the Plan
and not previously exercised shall be assumed by such other corporation
on the basis provided in the preceding paragraph to the extent possible
or practical.
(d) The adjustments described in this Section 12 and the manner of
application of the foregoing provisions shall be determined by the
Board in its sole discretion. Any such adjustment may provide for the
elimination of any fractional share which might otherwise become
subject to an option.
13.Rights as a Stockholder.
A holder or a transferee of an Option shall have no rights as a stockholder
with respect to any share of Common Stock covered by such holder's Option
until such holder has become the holder of record of such share of Common
Stock, and, except for stock dividends as provided in Section 12 hereof, no
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights in
respect of such share for which the record date is prior to the date on which
he or she shall become the holder of record thereof.
14.Amendment and Termination.
The Board may at any time terminate, amend or modify the Plan in any respect
it deems suitable; provided, however, that no such action of the Board,
without the approval of the stockholders of the Company, may: (i) increase the
total amount of Common Stock on which Options may be granted under the Plan,
(ii) change the manner of determining the option price, (iii) change the class
of individuals eligible to receive Awards, (iv) change the number of Options
which may be granted to each director, (v) change the times when such Options
are granted, or (vi) materially increase the benefits under the Plan; provided
further that no amendment, modification or termination of the Plan may in any
manner affect any Option theretofore granted under the Plan without the
consent of the then holder. Notwithstanding the foregoing, the Plan may not be
amended more than once in any six-month period except to comply with changes
in the IRC, the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any rules or regulations promulgated under either the IRC or
ERISA.
A-4
15.Investment Purpose.
At the time of exercise of any option, the Company may, if it shall deem it
necessary or desirable for any reason, require the holder to (i) in the
absence of an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), represent in writing to the Company
that it is such holder's then intention to acquire the Common Stock for
investment and not with a view to the distribution thereof, or (ii) postpone
the date of exercise until such time as the Company has available for delivery
to the holder a prospectus meeting the requirements of all applicable
securities laws.
16.Right to Remove Director.
Nothing contained herein or in any Award shall restrict the right of the
stockholders of the Company to remove any holder as director at any time, with
or without cause, or shall constitute or be evidence of any agreement or
understanding, express or implied, that the Company shall retain a director
for any period of time, or at any particular rate of compensation.
17.Finality of Determinations.
Each determination, interpretation, or other action made or taken pursuant
to the provisions of the Plan by the Administrator shall be final and be
binding and conclusive for all purposes.
18.Indemnification of Directors.
Each director of the Company, solely in his or her capacity as a director,
shall be indemnified by the Company against all costs and expenses reasonably
incurred by such director in connection with any action, suit or proceeding to
which he or she or any of the other directors may be a party by reason of any
action taken or failure to act under or in connection with the Plan, or any
Award thereunder, and against all amounts paid in settlement thereof (provided
such settlement shall be approved by independent legal counsel) or paid in
satisfaction of a judgment in any such action, suit or proceeding, to the
extent permitted by Delaware law. Upon the institution of any such action,
suit or proceeding, a director of the Company shall notify the Company in
writing, giving the Company an opportunity, at its own expense, to handle and
defend the same before such director undertakes to handle it on his or her own
behalf.
19.Governing Law.
The Plan shall be governed by the laws of the State of Delaware.
20.Effective Date.
The Plan shall become effective upon the date of its adoption by the Board
(September 20, 2001), subject to approval by the stockholders of the Company
at the Annual Meeting to be held on November 13, 2001. If the Plan is approved
by the stockholders at such Annual Meeting, Initial Stock Awards (as defined
in Section 5 of the Plan) shall be issued as of such Annual Meeting date, with
the exercise price determined as of such date and the expiration date for such
options being ten years from such date. If the Plan is not approved by the
stockholders at such Annual Meeting, the Plan shall be null and void.
21.Override.
All transactions under the Plan are intended to comply with applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the Plan or any action by the Administrator fails to
so comply, it shall be deemed null and void, to the extent permitted by law
and as deemed advisable by the Administrator.
A-5
22.DEFERRAL OF COMPENSATION
22.1Defined Terms.
22.1.1 "Award" means an award of stock options to a Non-Employee
Director under this Plan.
22.1.2 "Committee" means the full Board of Directors (excluding the
participation of Non-Employee Directors) or a committee of two
or more Directors (excluding Non-Employee Directors).
22.1.3 "Deferral Date" means, in connection with any Deferred
Compensation Unit, the date on which any deferred compensation
with respect thereto would have been paid if no deferral
election had been made.
22.1.4 "Deferred Compensation Plan" means the Company's Stock Option
Deferral Plan dated February 9, 1998 (as amended from time to
time). Generally, participation in the Deferred Compensation
Plan is limited to Executive Officers and Directors who are
deemed "Accredited Investors" for purposes of Federal Securities
Laws.
22.1.5 "Deferred Compensation Units" means the right of a Non-Employee
Director to receive distributions of deferred compensation
pursuant to the Deferred Compensation Plan in the form of
Shares, determined in accordance with the terms of this Plan and
the Deferred Compensation Plan, and based on the Fair Market
Value of Shares on the Deferral Date.
22.1.6 "Dividend Equivalents" means the right of a Non-Employee
Director to receive Shares equal to:
(i) the per Share cash dividends declared by the Company from
time to time,
(ii) multiplied by the number of Deferred Compensation Units
credited to the account of the Non-Employee Director as of
each applicable dividend record date,
(iii) divided by the Fair Market Value on the related dividend
payment date.
22.1.7 "Fair Market Value" means with respect to the Company's Shares
the closing price of the Shares as of the date on which the
value is to be determined, as reported on the New York Stock
Exchange or such other source of quotation for, or reports of,
trading activity in Shares as the Committee may from time to
time select.
22.1.8 "Shares" means shares of the Company's Class A Common Stock.
22.2Deferred Compensation Units
22.2.1 Granting of Deferred Compensation Units: To the extent elected
by any Non-Employee Director and permitted by the Deferred
Compensation Plan, the Committee may award Deferred Compensation
Units to any Non-Employee Director in lieu of all or any portion
of the gain that would otherwise be recognized by such Non-
Employee Director upon exercise of a stock option. All Deferred
Compensation Units shall be subject to the terms of this Plan
and the Deferred Compensation Plan.
22.2.2 Effect of Grants: The number of Shares distributable to Non-
Employee Directors pursuant to each Deferred Compensation Unit
shall be charged against the maximum number of Shares of Common
Stock that may be issued under this Plan
A-6
at any time. The number of Shares distributable to Non-Employee
Directors pursuant to Dividend Equivalents shall not be charged
against the number of Shares issuable under this Plan.
22.2.3 Accounting; Fractional Units:
(a) The number of Deferred Compensation Units credited to the
account of any Non-Employee Director shall be rounded to the
nearest one-thousandth of a Unit. The account to which
Deferred Compensation Units are credited shall be an
unsecured general obligation of the Company. The Company will
maintain records of the number of Deferred Compensation Units
for the account of each Non-Employee Director, in part, to
prevent an issuance of shares of Common Stock in excess of
the authorized shares.
(b) Notwithstanding paragraph (a) above, upon distribution of any
Shares represented by Deferred Compensation Units, the number
of shares shall be rounded downward to the nearest whole share
and no fractional shares shall be issued. Fractional Units
remaining after the final distribution to any Non-Employee
Director shall be cancelled without obligation to the Non-
Employee Director.
22.2.4 Exercise of Rights Under Awards: Shares used to pay the purchase
price on the exercise of Awards subject to the Deferred
Compensation Plan, shall have been held by the Non-Employee
Director for a period of not less than six months (or such
longer period as may be required under the terms of the Award).
A-7
The Fairchild Corporation
This proxy is solicited on behalf of the Board of Directors of The
Fairchild Corporation.
The undersigned hereby appoints Jeffrey J. Steiner, John L. Flynn and
Donald E. Miller as proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of Class A Common Stock, par value $.10 per share, and Class B Common
Stock, par value $.10 per share, of The Fairchild Corporation held of record by
the undersigned on October 1, 2001, at the Annual Meeting of Stockholders to be
held on Tuesday, November 13, 2001, at 10:00 a.m. (local time) and at any
adjournments or postponements thereof.
"Please Mark Inside Boxes so that Data Processing Equipment will Record Your
Votes."
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY.
(Continued and to be signed on the reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ALL LISTED NOMINEES, AND FOR APPROVAL OF THE OTHER PROPOSALS:
1. ELECTION OF DIRECTORS
// FOR all listed nominees // WITHHELD for all.
(except as marked to the contrary
below).
Melville R. Barlow, Mortimer M. Caplin, Philip David, Robert E. Edwards, Steven
L. Gerard, Harold J. Harris, Daniel Lebard, Herbert S. Richey, Eric I. Steiner,
and Jeffrey J. Steiner.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
2. TO APPROVE THE ISSUANCE OF 86,942 STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS;
//FOR //AGAINST //ABSTAIN
3. TO APPROVE ONE OF THE PERFORMANCE GOALS AND INCENTIVE COMPENSATION FOR THE
SENIOR VICE PRESIDENT, TAX;
//FOR //AGAINST //ABSTAIN
4. TO APPROVE ONE OF THE PERFORMANCE GOALS AND INCENTIVE COMPENSATION FOR THE
CHIEF FINANCIAL OFFICER;
//FOR //AGAINST //ABSTAIN
5. TO APPROVE ONE OF THE PERFORMANCE GOALS AND INCENTIVE COMPENSATION FOR THE
EXECUTIVE VICE PRESIDENT;
//FOR //AGAINST //ABSTAIN
6. TO APPROVE THE PERFORMANCE GOALS AND INCENTIVE COMPENSATION FOR THE
PRESIDENT;
//FOR //AGAINST //ABSTAIN
7. TO APPROVE THE PERFORMANCE GOALS AND INCENTIVE COMPENSATION FOR THE CHIEF
EXECUTIVE OFFICER;
//FOR //AGAINST //ABSTAIN
8. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Please sign exactly as name(s) appear hereon.
When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give
full title as such.
Date _________________________
Signature(s)
THE FAIRCHILD CORPORATION
SAVINGS PLAN FOR EMPLOYEES OF
THE FAIRCHILD CORPORATION
VOTING INSTRUCTIONS TO TRUSTEE
These voting instructions are solicited on behalf of the Board of Directors of
The Fairchild Corporation.
To the Trustee:
In accordance with the provisions of the Savings Plan for Employees of The
Fairchild Corporation, I hereby instruct you, as Trustee, to vote or cause to be
voted at the Annual Meeting of Stockholders of The Fairchild Corporation to be
held on November 13, 2001, and any adjournments thereof, all shares of The
Fairchild Corporation standing to my credit in the Master Trust covering the
foregoing Plan in which I may be a participant and which I am entitled to vote
at such meeting as follows:
The shares represented by this proxy will be voted as directed by the
stockholder. If no direction is given by 10:00 a.m. (EST) November 6, 2001,
this proxy will be voted in the same percentage as shares held by participants
for which the Trustee has received timely voting instructions. The Trustee will
hold your voting directions in strict confidence. The Proxy may vote in its
discretion upon any other matters properly coming before the Annual Meeting and
any adjournments thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY
(Continued on the reverse side)
Please sign exactly as name(s) appear hereon.
When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give
full title as such.
Date ______________________, 2001
Signature(s)
"Please Mark Inside Boxes so that Data Processing Equipment will Record Your
Votes."
1. ELECTION OF DIRECTORS
// FOR all listed nominees // WITHHELD for all.
(except as marked to the contrary
below).
Melville R. Barlow, Mortimer M. Caplin, Philip David, Robert E. Edwards, Steven
L. Gerard, Harold J. Harris, Daniel Lebard, Herbert S. Richey, Eric I. Steiner,
and Jeffrey J. Steiner.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
2. TO APPROVE THE ISSUANCE OF 86,942 STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS;
//FOR //AGAINST //ABSTAIN
3. TO APPROVE ONE OF THE PERFORMANCE GOALS AND INCENTIVE COMPENSATION FOR THE
SENIOR VICE PRESIDENT, TAX;
//FOR //AGAINST //ABSTAIN
4. TO APPROVE ONE OF THE PERFORMANCE GOALS AND INCENTIVE COMPENSATION FOR THE
CHIEF FINANCIAL OFFICER;
//FOR //AGAINST //ABSTAIN
5. TO APPROVE ONE OF THE PERFORMANCE GOALS AND INCENTIVE COMPENSATION FOR THE
EXECUTIVE VICE PRESIDENT;
//FOR //AGAINST //ABSTAIN
6. TO APPROVE THE PERFORMANCE GOALS AND INCENTIVE COMPENSATION FOR THE
PRESIDENT;
//FOR //AGAINST //ABSTAIN
7. TO APPROVE THE PERFORMANCE GOALS AND INCENTIVE COMPENSATION FOR THE CHIEF
EXECUTIVE OFFICER;
//FOR //AGAINST //ABSTAIN
8. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
|
Next Section
Previous Section