-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V9izNq+Aec8wPyVmHHeFlBd1Ph3ANg1csjbcIMzTU8VO8UY/TGOv8HJ7K3pwrHLp KdWCFE5zqsEvL4EytWLwMw== 0001047469-98-045323.txt : 19981230 0001047469-98-045323.hdr.sgml : 19981230 ACCESSION NUMBER: 0001047469-98-045323 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990209 FILED AS OF DATE: 19981229 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CUBIC CORP /DE/ CENTRAL INDEX KEY: 0000026076 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 951678055 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-08931 FILM NUMBER: 98777128 BUSINESS ADDRESS: STREET 1: 9333 BALBOA AVE CITY: SAN DIEGO STATE: CA ZIP: 92123 BUSINESS PHONE: 6192776780 MAIL ADDRESS: STREET 1: PO BOX 85587 CITY: SAN DIEGO STATE: CA ZIP: 92186-5587 DEF 14A 1 PROXY SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant /X/ Check the appropriate box: / / Preliminary Proxy Statement /X/ Definitive Proxy Statement CUBIC CORPORATION ------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) Payment of Filing Fee (Check the appropriate box): /X/ No fee required. [LOGO] .............................................................................. 1999 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND PROXY STATEMENT [LOGO] ------------------------ PRINCIPAL EXECUTIVE OFFICE 9333 BALBOA AVENUE SAN DIEGO, CALIFORNIA 92123 ------------------------ To Cubic Shareholders: Cubic Corporation's 1999 Annual Meeting will be held in the Crystal Room at the Handlery Hotel & Country Club, at 950 Hotel Circle North, San Diego, California 92108, on February 9, 1999, at 10:30 a.m. Pacific Standard Time. The formal notice and proxy statement follow. The Directors and Officers of the Corporation invite your attendance at the meeting. Whether or not you plan to attend the meeting, we would appreciate your completing and returning the accompanying proxy which, of course, may be revoked at any time before it is used. The Corporation's 1998 Annual Report is enclosed herewith. Sincerely yours, [SIG] Walter J. Zable CHAIRMAN OF THE BOARD January 8, 1999 TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY, FOR WHICH A RETURN ENVELOPE IS PROVIDED. [LOGO] ------------------------ NOTICE OF ANNUAL MEETING --------------------- The Annual Meeting of Shareholders of Cubic Corporation will be held in the Crystal Room at the Handlery Hotel & Country Club, at 950 Hotel Circle North, San Diego, California 92108, on February 9, 1999, at 10:30 a.m. Pacific Standard Time, for the following purposes: 1. To elect seven Directors for the ensuing year; 2. To transact such other business as may properly come before the meeting. Shareholders of record at the close of business on January 4, 1999 will be entitled to vote at the meeting. The transfer books will not be closed. By Order of the Board of Directors [SIG] William C. Stewart, Jr. SECRETARY San Diego, California January 8, 1999 [LOGO] ------------------------ PRINCIPAL EXECUTIVE OFFICE 9333 BALBOA AVENUE SAN DIEGO, CALIFORNIA 92123 ------------------------ PROXY STATEMENT Proxies in the form enclosed with this statement are solicited by the Board of Directors of Cubic Corporation for use at the Annual Meeting of Shareholders of the Corporation to be held in San Diego, California, on February 9, 1999. Execution of a proxy will not in any way affect a shareholder's right to attend the meeting and vote in person, and any shareholder giving a proxy has the right to revoke it at any time before it is exercised by filing with the Secretary of the Corporation a written revocation or duly executed proxy bearing a later date. The Proxy will be suspended if the shareholder is present at the meeting and elects to vote in person. OUTSTANDING SHARES AND VOTING RIGHTS The voting securities of the Corporation consist of its Common Stock, without Par Value, of which 8,907,004 shares are outstanding at November 25, 1998 (after deducting 2,981,239 shares held as Treasury Shares). Only shareholders of record on the books of the Corporation at the close of business on January 4, 1999 will be entitled to vote at the meeting. Each such holder of common shares is entitled to one vote for each said share. Votes will be counted by the Inspector of Elections. Abstentions, broker non-votes and proxies without authority to vote will not be counted in votes cast. The approximate date on which the proxy statement and form of proxy are first being sent or given to security holders is January 8, 1999. ELECTION OF DIRECTORS Seven Directors comprise the authorized membership of the Board of Directors of the Corporation. Seven Directors are to be elected by a plurality vote at the Annual Meeting, each to hold office for the term of one year and until his successor is elected. Proxy holders will, unless authorization to do so is withheld, vote the proxies received by them for the reelection of the following Directors, now in office, in accordance with this proxy authorization, reserving the right, however, to distribute, in their discretion, their votes of uncommitted proxies among the management nominees. IDENTIFICATION OF DIRECTORS WALTER J. ZABLE, 83, DIRECTOR SINCE 1951. Chairman of the Board, President and Chief Executive Officer, and Chairman of the Executive Committee. WALTER C. ZABLE, 51, DIRECTOR SINCE 1976. Vice Chairman of the Board, Member of the Executive Committee, and Vice President. Formerly President of Cubic Automatic Revenue Collection Group (now Cubic Transportation Systems, Inc.), a wholly-owned subsidiary. Prior thereto performed various management functions at the Corporation's former subsidiary, United States Elevator Corp. JACKSON D. ARNOLD, 86, DIRECTOR SINCE 1974. Retired Admiral United States Navy, Member of the Audit and Compliance, the Executive, and the Executive Compensation Committees. ROBERT T. MONAGAN, 78, DIRECTOR SINCE 1986. Chairman of the Executive Compensation Committee and Member of the Nominating Committee. Former President of the California Manufacturers Association. Chairman of the California State World Trade Commission. Former Speaker of the California State Assembly. Director of Electronic Medical Management, Inc. RAYMOND E. PEET, 78, DIRECTOR SINCE 1987. Retired Vice Admiral United States Navy, Chairman of the Audit and Compliance Committee, Member of the Executive and the Nominating Committees. Member of Board of Consultants to the Comptroller General of the United States, Director of Urban Trans West, and Chairman of the Board of Directors of the Price Real Estate Investment Trust, Inc. WALTER E. FAIRBANKS, 67, RETIRED GROUP VICE PRESIDENT/DEFENSE, CUBIC CORPORATION. Mr. Fairbanks joined Cubic Corporation in 1992 as a consultant to the Chairman. Subsequently appointed as Vice President/ Defense in charge of the defense product subsidiaries of the Corporation. Prior thereto, Mr. Fairbanks held executive positions with Hughes Aircraft Company, General Dynamics, and ITT Corp. WILLIAM W. BOYLE, 64, DIRECTOR SINCE 1995.Vice President of Finance and Chief Financial Officer. Member of the West Coast Advisory Board of Protection Mutual Insurance Company. Previously, Mr. Boyle held management positions with General Electric, Occidental Petroleum, and the Wickes Corporation. IDENTIFICATION OF EXECUTIVE OFFICERS THOMAS A. BAZ, 65, Vice President and Corporate Controller since 1983. WILLIAM C. STEWART, JR., 69, Vice President and Secretary since 1984. JOHN D. THOMAS, 45, Vice President and Treasurer since 1992. BOARD OF DIRECTORS AND BOARD COMMITTEES During the fiscal year 1998, six meetings of the Board of Directors were held. Each of the incumbent Directors attended 75% or more of the aggregate of (1) the total number of Board meetings and (2) the total number of meetings held by all Board Committees on which he served. Outside Directors, other than Jackson D. Arnold and Raymond E. Peet, are paid fees of $1,500 for attendance at each meeting of the Board and $1,000 for attendance at each meeting of any Committee of which a Director is a Member. Jackson D. Arnold and Raymond E. Peet each receive a flat annual fee of $12,000 because of their more extensive services as Members of the Executive Committee. Salaried employees of the Corporation who are Directors are not separately compensated for their services as Directors, but all Directors are reimbursed for travel expenses, if incurred, for attendance at meetings. AUDIT AND COMPLIANCE COMMITTEE Members of this Committee are Raymond E. Peet, Chairman, Jackson D. Arnold, and Richard G. Duncan. It held two meetings during the fiscal year. The Committee advises and assists the Corporation's Chief Financial Officer in making periodic overall reviews of the Corporation's internal controls and financial statements, reviews legal matters and Hotline activities, meets periodically with the Corporation's independent auditors to discuss their audit activities and recommends to the Board of Directors independent auditors for appointment for the Corporation's annual audit, and advises and provides oversight of the Corporation's Internal Audit activities and other programs. EXECUTIVE COMPENSATION COMMITTEE Members of this Committee are Robert T. Monagan, Chairman, and Jackson D. Arnold. It held one meeting during fiscal 1998. The Committee approves salary and/or other compensation adjustments for the benefit of the Corporation's Officers. 2 NOMINATING COMMITTEE Members of this Committee are Robert T. Monagan, Raymond E. Peet and Richard G. Duncan. No meetings were held during fiscal 1998. The Committee will not consider shareholder nominations. OWNERSHIP OF COMMON STOCK The following table sets forth information with respect to persons known to the Corporation to be the beneficial owner of more than 5% of the Corporation's outstanding Common Stock (after deduction of Treasury Shares):
NAME AMOUNT PERCENT TITLE AND BENEFICIALLY OF CLASS ADDRESS OWNED OWNED - ---------- ------------------- ----------- ----------- Common Walter J. Zable 3,573,847 40.12% P. O. Box 1525 Rancho Santa Fe California 92067
The following table sets forth information with respect to beneficial ownership of the Corporation's Common Stock by Directors and all Officers and Directors as a group as of December 8, 1998. In each case where such number of shares exceeds 1% of the securities of such class outstanding on the record date (after deduction of Treasury Shares), the percentage of such class is indicated in parentheses. Except as indicated, each individual named has sole investment and voting power with respect to the securities shown.
AMOUNT BENEFICIALLY OWNED DIRECTLY OR NAME INDIRECTLY (2) - ------------------------------------------------------------------------------ -------------- Walter J. Zable (40.12%)(1)................................................... 3,573,847(3) Raymond E. Peet............................................................... 6,125 Jackson D. Arnold............................................................. 11,550 Richard G. Duncan............................................................. 1,200 Walter C. Zable (1.67%)....................................................... 148,969(4) Robert T. Monagan............................................................. 1,100 William W. Boyle.............................................................. 600 Walter E. Fairbanks........................................................... 16,100(5) William C. Stewart, Jr........................................................ 502 All Officers and Directors as a Group (18)(42.24%)............................ 3,762,664
- ------------------------ (1) By virtue of his beneficial share ownership, Mr. Zable may be deemed to be a Control person of the Corporation as that term is described under the Securities Exchange Act of 1934. (2) All shares of common stock indicated as being beneficially owned are owned directly except for Walter J. Zable, Walter C. Zable and Walter E. Fairbanks. (3) Walter J. Zable's shares are beneficially owned through Trusts and a public benefit charitable corporation, the terms of which establish sole voting power in Mr. Zable. (4) A portion of the shares of Walter C. Zable are owned indirectly through a Trust, the terms of which establish sole voting power in Mr. Zable. (5) A portion of the shares of Walter E. Fairbanks are owned indirectly through a Trust, the terms of which establish sole voting power in Mr. Fairbanks. Walter C. Zable is the son of Walter J. Zable. 3 Although it is not contemplated that any nominee will be unable to serve as a Director, in such event the proxies will be voted by the proxy holders for such other persons as may be designated by the Board of Directors. EXECUTIVE COMPENSATION AND OTHER INFORMATION The following table sets forth all cash compensation paid for services rendered in all capacities to the Corporation and its subsidiaries during or with respect to the 1998 fiscal year to the Chief Executive Officer and the four most-highly compensated Executive Officers of the Corporation whose compensation exceeded $100,000:
NAME POSITION - ------------------------- --------------------------------- ANNUAL COMPENSATION LONG TERM ------------------------------------ COMPENSATION BASE BONUS OTHER ANNUAL ------------- SALARY --------- COMPENSATION ---------- (B) ------------- (D) (A) (C) W.J. Zable Chairman of the Board 1998 $ 509,619 $ 29,645 $ 39,210 $ 155,000 President and 1997 $ 500,000 $ 95,000 $ 43,061 $ 84,837 Chief Executive Officer 1996 $ 500,000 $ 75,000 $ 42,587 $ 165,000 W.W. Boyle Vice President Finance 1998 $ 345,576 $ 17,279 $ 27,706 Chief Financial 1997 $ 314,423 $ 60,000 $ 34,829 Officer 1996 $ 299,039 $ 35,000 $ 34,009 W.E. Fairbanks Group Vice President 1998 $ 304,615 $ 12,411 $ 18,425 Defense 1997 $ 269,231 $ 50,000 $ 18,823 1996 $ 249,231 $ 30,000 $ 11,155 W.C. Zable Vice Chairman of the 1998 $ 284,808 $ 14,200 $ 21,668 Board & Vice President 1997 $ 264,449 $ 25,000 $ 25,063 of Cubic Corporation 1996 $ 251,615 $ 25,000 $ 24,549 W.C. Stewart Vice President and Secretary 1998 $ 203,269 $ 9,317 $ 21,002 1997 $ 184,615 $ 25,000 $ 30,164 1996 $ 174,309 $ 20,000 $ 22,562
- ------------------------ (A) Amounts shown include cash compensation earned and received as well as earned and deferred at the election of the Officers. (B) Amounts shown include bonus cash compensation earned for each fiscal year whether received or deferred at the election of the Officer. (C) Amounts shown reflect the individual's interest in the Corporation's contribution for fiscal 1998 to the Corporation's Employees' Profit Sharing Plan, premiums for executive life insurance coverage in accordance with I.R.S. tables, and automobile allowances. (D) The split-dollar insurance plan, described below, initiated for the benefit of the shareholders, requires the Officer to make contributions toward acquisition of the life insurance. In October 1992, to offset the cost, including taxes, of the insurance contribution by Mr. Zable, the Board of Directors adopted a supplemental executive compensation program under the terms of which a predetermined sum would be paid annually. The amounts set forth above are the annual payments under this program. Payments may be discontinued at any time by the Board of Directors. The remuneration shown for the named individuals includes deferred compensation under the Corporation's Deferred Compensation Plan. Under the Plan, selected key employees of the Corporation, including Officers, may defer all or any part of their compensation until termination of employment with the Corporation. The deferred compensation is held in the general funds of the Corporation and credited 4 to the account of the employee. Each account is credited with interest at the rate set by the Secretary of the United States Treasury. The Corporation provides all full-time employees with life insurance coverage up to $50,000, depending on their rate of compensation, and executives of the Corporation with $150,000 of life insurance. In addition, executives are provided, at their option, with additional life insurance in an amount of 1, 2, 3, or 4 times the executive's salary, at the executive's option, up to a total maximum of $500,000, all of the premiums for such additional insurance being paid solely by each electing executive. Currently, premiums not paid by the executive for all life insurance coverage are treated as compensation to those executives in accordance with Internal Revenue Service Tables, and are included in the cash compensation shown. For several years, Walter J. Zable has been awarded annual bonuses, as indicated above, which he has not taken in cash except for certain personal expenses which from time to time have been applied against the accumulated bonus amount. Certain legal expenses incurred by Mr. Zable, involving matters unrelated to the Corporation, were applied against his accumulated bonus amount which resulted in an outstanding indebtedness to the Corporation at the end of the fiscal year in the amount of $78,134. The lease of certain manufacturing facilities and space from Walter C. Zable and Karen Zable Cox for use in connection with the manufacture of paramilitary radio equipment has been terminated. Walter C. Zable is a Director of the Corporation and both he and Karen Zable Cox are the children of Walter J. Zable. The remuneration shown for the named individuals includes their interest in the Corporation's contribution for fiscal 1998 to the Corporation's Employees' Profit Sharing Plan. The Plan is for employees of the Corporation and its subsidiaries. The amount of the Corporation's annual contribution is determined by the Board of Directors in its sole discretion. The Plan also allows employees to make voluntary contributions of up to 10% of their compensation to the Plan. Employees, including executives, are permitted, pursuant to the provisions of the Plan, to defer pre-tax up to 10% of their compensation up to a maximum amount allowed by the Internal Revenue Code depending upon the amount of that compensation in addition to the after-tax contributions referred to above. These pre-tax deferrals made by the named individuals are also included in the compensation shown above. The Corporation's annual and the employee's voluntary contributions to the Plan are made to various funds held by an insurance company. Each employee is given investment discretion over the contributions allocated to his or her account. The compensation shown does not include contributions by the Corporation under its defined benefit Employees' Pension Plan because the amount of such contributions in respect to a specified person are not and cannot be readily calculated. Additional information regarding the Corporation's Employees' Pension Plan is set forth below: The Corporation maintains a defined benefit Pension Plan ("Plan") for most of its employees and the employees of its subsidiaries. The Corporation's contributions to the Plan are distributed among various funds held by an insurance company. They are actuarially determined for the total of all participants covered by the Plan. Therefore, the amount of contribution in respect to a specified person is not and cannot be readily calculated. The Corporation's contribution to the Plan for 1997 amounts to approximately 2.3% of the participants' remuneration. Generally, all participants in the Plan earn the right to receive a monthly pension at the Plan's normal retirement date of age 65 in an amount equal to 1/12th of 3/4ths of 1% of their total earnings (including bonuses) since 1974. Most Officers and Directors of the Corporation who are salaried have been participants and have been credited with years of service for each year since the Plan has been in existence. Most regular employees, including Officers, participate in the non-contributory Pension Plan of the Corporation, subject to the terms and conditions of the Plan. The 5 benefits to be paid under the Pension Plan are not subject to adjustments for Social Security benefits or other offsets.
ESTIMATED ANNUAL BENEFITS UNDER THE CUBIC CORPORATION PENSION PLAN - ------------------------------------------------------------------------ AT RETIREMENT AGE OF 65 AVERAGE YEARS OF SERVICE ANNUAL ------------------------------------------- COMPENSATION 10 20 30 40 - --------------------------- ---------- --------- --------- --------- $ 50,000 $ 3,750 $ 7,500 $ 11,250 $ 15,000 100,000 7,500 15,000 22,500 30,000 150,000 11,250 22,500 33,750 45,000
Compensation eligible to the Plan is limited by ERISA regulations to $150,000 during the year ended September 30, 1997. The years of credited service in the Corporation's Pension Plan for the listed individuals are: 49 years for W. J. Zable, 26 years for W. C. Stewart, 36 years for W. C. Zable, 15 years for W. W. Boyle, and 6 years for W. E. Fairbanks. The Corporation also provides to certain Executive Officers certain normal management fringe benefits, including financial counseling and club memberships, which are not included in the above Table. An undetermined part of these benefits might have been used for personal purposes in an amount which is not reasonably determined. It has been concluded that the aggregate amounts of any such benefits are not material and do not, in any event, exceed the lesser of $50,000 or 10% of the compensation reported as to each person specified and, in any case, the aggregate amount of such other compensation is the lesser of $25,000 times the number of persons in the group or 10% of the compensation reported above for the group. In October 1992, a trust established by the principal shareholders of the Corporation, Mr. and Mrs. Walter J. Zable, entered into an agreement with the Corporation whereby the Corporation agreed to make advances of premiums payable on a split-dollar life insurance policy purchased by the trust on the life of Mrs. Zable. The agreement is so designed that if the assumptions made as to mortality experience, policy dividends and other factors are realized, upon the demise of Mrs. Zable the Corporation will recover all of its insurance premium payments as well as other costs associated with the policy. The advances are secured by a collateral assignment of the policy to the Corporation. The agreement is intended to prevent the possibility of a large block of the Corporation's common shares being put on the market, to the detriment of the share price, in order for the beneficiaries to pay estate taxes. The Corporation may cause the agreement to be terminated and the policy to be surrendered at any time. The difference between policy premiums and other payments and the increase in the cash surrender value of the policy has been expensed in the year incurred. The amounts expensed related to the policy were $85,000, $165,000, and $130,000, in 1998, 1997, and 1996, respectively. However, should the policy be held to maturity, all payments advanced to carry the policy will be returned. Further, should the policy be held for ten years, the Corporation estimates that the cash surrender value will exceed all payments made, and amounts previously expensed in the early years of the policy will have been reversed. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE No Director, Officer, or beneficial owner of more than ten percent of the Common Stock of the Corporation failed to file on a timely basis, as disclosed in Form 3, Form 4 and amendments thereto, and Form 5 and amendments thereto, reports required by Section 16(a) of the Exchange Act during the fiscal year 1998. 6 PERFORMANCE GRAPH
FISCAL YEAR ENDING COMPANY 1993 1994 1995 1996 1997 1998 CUBIC CORP PEER GROUP BROAD MARKET
The above graph compares the performance of Cubic Corporation with that of the Media General Composite Index and a peer group comprised of companies in the Federal Trade Commission SIC Codes 3699 and 3829, Electrical Equipment and Supplies (NEC) and Measuring and Controlling Devices (NEC), which are published industry groups. The chart assumes that $100 was invested on October 1, 1993, in each of Cubic Corporation, the S&P 500 Index and the peer group index, and compares the return on investment as of September 30th of each of the following five years. The return on investment represents the change in the fiscal year-end stock price plus reinvested dividends. EXECUTIVE COMPENSATION COMMITTEE REPORT The Executive Compensation Committee of the Board of Directors has the responsibility for executive compensation programs and the evaluation of the Corporation's executive officers. It is the Committee's responsibility to determine the compensation of the Corporation's Chief Executive Officer and the other executive officers taking into consideration individual and corporate performance, performance of competitors and other similar businesses and relevant compensation data. The base salaries of the Corporation's executive officers are set to attract qualified people necessary for the continued successful operation and growth of the Corporation and its subsidiaries. With the assistance of the Human Resources Department, the base salary structure is periodically reviewed in relation to the practices of companies in similar businesses and of similar size and in a reasonable, geographic area. Generally, an annual bonus is given at the end of the fiscal year based on individual, corporate, and business segment performance for the fiscal year and the executive officer's responsibilities and performance, both past and anticipated. The Corporation seeks to encourage individuals to remain with the Corporation and to continue to focus on technical and financial performance of the Corporation. The determination of each executive's compensation by the Committee takes into consideration the Corporate performance, the recommendations of management, and salaries and incentive compensation of executives in similar businesses. During the fiscal year, no executive officer of the Corporation served either as a director or as a member of the compensation committee of any other entity whose executive officers served either as a Director or as a member of the Executive Compensation Committee of the Corporation. No member of the Committee is a former or current Officer or employee of the Corporation or any of its subsidiaries. Robert T. Monagan, Chairman Jackson D. Arnold INDEPENDENT AUDITORS Ernst & Young LLP has audited the Corporation's books and records since 1959 and are continuing as its auditors in addition to providing tax services. No change is contemplated. There is no other relationship. Representatives of Ernst & Young LLP are expected to be present at the shareholders' meeting with the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions. 7 DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS Proposals of shareholders intended to be presented at the next Annual Meeting must be received by the Secretary, Cubic Corporation, 9333 Balboa Avenue, San Diego, California 92123, no later than August 31, 1999. OTHER MATTERS All shareholders of record at the close of business January 4, 1999, the record date for the determination of shareholders entitled to vote at the Annual Meeting, are concurrently being sent a copy of the Corporation's Annual Report, including financial statements for the fiscal year ended September 30, 1998 . The expense of preparing, printing and mailing the Notice of Meeting and Proxy material and all other expenses of soliciting proxies will be borne by the Corporation. In addition to the solicitation of proxies by use of the mails, the Directors, Officers and regular employees of the Corporation, who will receive no compensation in addition to their regular salary, if any, may solicit proxies by mail, telegraph, telephone, or personal interview. The Corporation may also reimburse brokerage firms, banks, trustees, nominees and other persons for their expenses in forwarding proxy material to the beneficial owners of shares held by them of record. Management knows of no business which will be presented for consideration at the Annual Meeting other than that stated in the Notice of Meeting. However, if any such matter shall properly come before the meeting, the persons named in the enclosed proxy form will vote the same in accordance with their best judgment. By Order of the Board of Directors [SIG] William C. Stewart, Jr. SECRETARY 8 PROXY PROXY CUBIC CORPORATION PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF SHAREHOLDERS The undersigned, a shareholder of Cubic Corporation, a Delaware corporation, hereby appoints Walter J. Zable, William W. Boyle and William C. Stewart, Jr., or any of them, the attorneys and proxies of the undersigned, with power of substitution, to vote the Common shares of Cubic Corporation standing in the name of the undersigned at the Annual Meeting of Shareholders of Cubic Corporation to be held in the Crystal Room, at the Handlery Hotel and Country Club, at 950 Hotel Circle North, San Diego, California 92108, on Tuesday, February 9, 1999, at 10:30 a.m. PST, and at any adjournment or adjournments thereof, as follows: THIS PROXY WILL BE VOTED IN ACCORDANCE WITH INSTRUCTIONS INDICATED. HOWEVER, IF NO INSTRUCTIONS ARE GIVEN, THE PROXIES WILL VOTE THE SHARES FOR ITEMS (1), AND, IN THEIR DISCRETION, ON MATTERS DESCRIBED IN ITEM (2). PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. (Continued, and to be signed, on the other side) CUBIC CORPORATION PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY /X/ FOR all Withhold for all 1. Election of Directors - / / / / Nominees: Walter J. Zable, Walter C. Zable, William W. Boyle, Jackson D. Arnold, Walter E. Fairbanks, Robert T. Monagan and Raymond E. Peet (To withhold authority to vote for any nominee, write that nominee's name on the line provided below) - ----------------------------------------------- 2. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement dated January 8, 1999. Dated , 1999 ----------------------------------------------------------------- - ----------------------------------------------------------------------------- Signature - ----------------------------------------------------------------------------- Signature if held jointly Please sign exactly as name (or names) appear on this card. When shares are held by joint tenants, all holders should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. -----END PRIVACY-ENHANCED MESSAGE-----