SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Echlin Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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<S> <C> <C>
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: ______________
(2) Aggregate number of securities to which transaction applies: ______________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): ______________
(4) Proposed maximum aggregate value of transaction: ______________
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ______________
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(4) Date Filed: ______________
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PRELIMINARY REVOCATION SOLICITATION MATERIALS
DATED MARCH 9, 1998
SUBJECT TO COMPLETION
REVOCATION SOLICITATION STATEMENT BY ECHLIN INC. IN OPPOSITION TO THE
SOLICITATION OF DEMANDS BY SPX CORPORATION TO HOLD
A SPECIAL MEETING OF SHAREHOLDERS OF ECHLIN INC.
This Revocation Solicitation Statement is being furnished to shareholders
of Echlin Inc., a Connecticut corporation ("Echlin," or the "Company"), by the
Board of Directors of the Company (the "Board"). Your Board is seeking
revocations ("Revocations") of demands ("Demands") from the Company's
shareholders previously given to SPX Corporation, a Delaware corporation ("SPX")
in connection with SPX's purported solicitation of Demands (the "SPX
Solicitation") to call a special meeting of the Company's shareholders (the
"Special Meeting") to vote on the following proposals ("SPX Proposals"):
(i) to repeal any By-laws adopted by the Company subsequent to
April 3, 1997;
(ii) to remove from office all members of the Board;
(iii) to amend the By-laws of the Company to fix the number of
members of the Board at five; and
(iv) to fill the newly created vacancies on the Board by electing
to the Board five persons whom SPX has purported to nominate
as its designees (the "SPX Designees").
Section 33-696 of the Connecticut Business Corporation Act states that a
corporation which has a class of voting stock registered pursuant to Section 12
of the Securities Exchange Act of 1934 shall hold a special meeting of
shareholders if the holders of at least thirty-five percent of all the votes
entitled to be cast on any issue proposed to be considered at the proposed
special meeting sign, date and deliver to the corporation's secretary one or
more written demands for the meeting describing the purpose or purposes for
which it is to be held. The Company's By-laws contain a substantially similar
provision. The Company's By-laws further provide that each holder of shares of
common stock, par value $1.00 per share, of the Company (the "Common Stock") is
entitled to one vote per share of Common Stock held. The record date for
determining shareholders entitled to demand the Special Meeting and submit
Demands in connection therewith is February 17, 1998. As of February 17, 1998,
there were 63,248,939 shares of the Company's Common Stock outstanding.
Accordingly, SPX would need to deliver to the Company unrevoked Demands from
holders of 22,137,129 shares of Common Stock to satisfy the thirty-five percent
requirement under Section 33-696.
SPX has announced an intention to make an unsolicited exchange offer (the
"Proposed Offer") for shares of Common Stock, and the associated preferred stock
purchase rights (the "Rights"), in which shareholders of the Company would
receive $12 in cash and 0.4796 shares of SPX common stock, par value $10.00 per
share, for each share of Common Stock exchanged. SPX has stated that the
Proposed Offer is intended to be the first step of a transaction in which a
subsidiary of SPX would be merged into the Company (the "Proposed Combination").
Your Board, with the assistance of its advisors, is carefully and deliberately
considering the Proposed Offer and the Proposed Combination in accordance with
its fiduciary duties under Connecticut law. However, at this time SPX has not
commenced the Proposed Offer to the Company's shareholders and is not legally
bound to commence the Proposed Offer, or any other offer, now or in the future.
Your Board believes SPX's purpose in attempting to call the Special Meeting at
this time is to try to dismantle the shareholder protections contained in the
Connecticut Business Corporation Act and the Company's Rights Plan so that SPX
can acquire the Company at the lowest possible cost to SPX and at the lowest
possible price to the Company's shareholders. SPX is asking you to help it
accomplish this objective before your Board can properly consider the Proposed
Offer and the Proposed Combination -- indeed before SPX has even commenced any
formal offer at all to the Company's shareholders.
Your Board unanimously opposes the SPX Solicitation, unanimously recommends
that you DO NOT deliver any Demands (including any Gold demand card) to SPX
pursuant to the SPX Solicitation, and is soliciting from you a Revocation of any
Demand previously delivered by you to SPX. There will be no meeting at which to
revoke any Demand you may have previously delivered to SPX, and accordingly you
must act quickly.
If you have previously signed and returned any Demand (including any Gold
demand card), you have every right to change your mind and revoke your Demand by
signing, dating and returning the enclosed GREEN revocation card. A
shareholder's Revocation of a previously executed Gold demand card will have the
effect of opposing SPX's attempt to compel the Company to call the Special
Meeting. If you have not previously executed a Demand, your GREEN revocation
card will have no legal effect in determining whether the Company must call the
Special Meeting.
The Company is not currently seeking your proxy with respect to any merger
or other business combination, the election or removal of any person to or from
the Board, or any other matter.
Whether or not you have previously executed a Demand, the Company urges you
to complete, sign, date and deliver the enclosed GREEN revocation card as
promptly as possible by mail (using the postage-paid envelope provided) to
Morrow & Co.
The first date this Revocation Solicitation Statement and GREEN revocation
card with respect thereto are being sent or given to shareholders is on or about
March [__], 1998.
If your shares are held of record by your bank or brokerage firm, only that
firm can execute your GREEN revocation card. Call your bank or broker with your
instructions to execute your GREEN revocation card.
If you have any questions or need any assistance in revoking any Demand
(including any Gold demand card) you may have given to SPX, please contact our
proxy solicitor, Morrow & Co., Inc. at (800) 566-9061 toll free.
Why You Should Deliver a Green Revocation Card to the Company and Not
Deliver a Gold Demand Card to SPX
Shareholders Should Maintain a Board That Is Independent from SPX
Your Board believes that the interests of the Company and all of its
shareholders will be best served by retaining the Company's current directors
(the "Directors"), who will continue to act on behalf of the Company and all of
its shareholders. If the Directors are removed and replaced with the SPX
Designees (three of whom are SPX employees), the Board believes the SPX
Designees will act in a manner which will serve the interests of SPX and not the
Company's shareholders. Since the interest of SPX consists in acquiring the
Company at the lowest possible cost to SPX and at the lowest possible price to
the Company's shareholders, the interests of an SPX-controlled Board will by
definition be directly contrary to your interests as shareholders of the
Company.
SPX claims the SPX Designees will promote SPX's interests "subject to their
fiduciary duties as directors of the Company". Your Board, however, does not
believe it is realistic to expect the SPX Designees to consider carefully and
objectively the attractiveness of the Proposed Offer compared to other
alternatives, to pursue actively alternatives that would frustrate an SPX
business strategy personally crafted by a majority of the SPX Designees, to
negotiate forcefully for better terms with SPX, or to pursue remedies if SPX
were to breach any agreement that SPX might enter into with the Company. Indeed,
SPX is doing its best to insulate the SPX Designees from their duties to the
Company's shareholders by indemnifying each of them for potential wrong-doing
related to his possible future service as a Company director. Even if the SPX
Designees control the Company, SPX will not have any obligation to make or
complete the Proposed Offer (or any other offer) or to complete the Proposed
Combination. In effect, SPX is asking you to put the SPX Designees in a position
where they will determine, together with SPX, whether and on what terms your
Company will be sold to SPX. Although the approval of Echlin's shareholders will
be required to consummate the Proposed Combination, it is the Board of Directors
of Echlin which must set the terms of any transaction that will be presented to
Echlin's shareholders. If SPX chooses not to make or complete the Proposed Offer
(or any other offer) or not to complete the Proposed Combination, no vote of the
Echlin shareholders can compel it to do so.
SPX is Attempting to Use the Special Meeting Process in an Improper Manner
At this time, SPX has not commenced the Proposed Offer to the Company's
shareholders and is not legally bound to make the Proposed Offer, or any other
offer, now or in the future. All SPX has done is to float a proposal which lacks
financing commitments and any apparent strategic rationale, and which contains
numerous conditions which are within SPX's sole discretion. Even if SPX
ultimately decides to make the Proposed Offer, SPX has reserved the right to
amend its terms, including the number of shares SPX might purchase and the
nature and amount of the consideration SPX might pay.
Your Board, with the assistance of its advisors, is carefully and
deliberately considering the Proposed Offer and the Proposed Combination in
accordance with its fiduciary duties under Connecticut law. SPX wants you to
think that quick action on its Proposed Offer is in your best interest. But your
Board believes SPX knows that undue haste only helps SPX. SPX's attempt to
compel the Company to call the Special Meeting at this time to consider the SPX
Proposals cannot be separated from SPX's wider goals: to acquire the Company at
the lowest possible cost to SPX and at the lowest possible price to the
Company's shareholders.
Your Board believes that SPX is attempting to exploit the right to call a
special meeting so that it can take advantage of what Mr. Blystone has described
as a "major weakness in its [the Company's] takeover defenses" to dismantle the
protections which you as Echlin shareholders enjoy under the Connecticut
Business Corporation Act and the Company's Rights Plan. This is an opportunistic
tactic to enhance the chances of SPX obtaining control of Echlin quickly,
cheaply, and on terms that SPX dictates. Your Board believes this is a highly
improper use of the special meeting process, and urges you to protect the
Company and your interests by refusing to deliver a Demand to SPX, or, if you
have already delivered a Demand, by revoking it as soon as possible.
The Company's Board is Committed to Delivering Value to the
Company's Shareholders
Your Board is fully committed to delivering value to its shareholders. In
furtherance of its commitment to shareholder value, Echlin has instituted a
strategic repositioning plan that includes divestiture of underperforming or
non-strategic businesses, factory rationalizations, aggressive cost cutting
aimed at profit improvements, heightened asset management and cash flows gains,
and a steadfast commitment to incorporating the EVA framework. Since the
initiation of this plan in fiscal 1997, seven non-core or under performing
businesses have been identified and either sold, or placed under contract to be
sold, resulting in proceeds to the Company of $281 million. Fourteen facilities
have been identified for closure and/or rationalization as part of the Company's
repositioning plan. Of the fourteen, four have been completed, eight are
currently being processed in accordance with the action plans which have been
established and the remaining two facilities are in the final stages of
completing their action plans for approval and implementation.
The Board believes that the prospects for the Company are extremely bright,
and that the Company's repositioning strategy is the right strategy for the
future. Indeed, in a recent conference call with industry analysts, Mr. Blystone
agreed that "the road map that they've [the Company has] tried to lay out
including the sale of one of their businesses they announced this morning is
fundamentally the right track." This Board has never precluded any alternative
that it believes would further the interests of the Company and its
shareholders.
SPX Has Not Explained How the SPX Designees Can Deliver Greater Value to
the Company's Shareholders than the Current Board.
In light of the Board's proven commitment to delivering value to the
Company's shareholders, SPX must explain how the SPX Designees and SPX's
combination plan would provide any greater value before you permit SPX to take
the first steps to control the Company.
Your Board believes that SPX has not yet given any objective support for
its assertion that the combination of SPX and Echlin "represents a tremendous
opportunity to the shareholders, customers, suppliers, communities and employees
of both companies." The Board has noted skepticism among independent analysts
about whether there is any strategic rationale or potential to realize synergies
underlying SPX's plan to combine Echlin's broad range of aftermarket and OE
components with SPX's businesses. According to one research report: "Echlin and
SPX operate in very different markets. The importance of long-term customer
relationships and brand strength in the parts side of the business would
probably be the most significant challenge for an SPX takeover."* Another
analyst has noted: "There appear to be little operational synergies that would
aid in achieving these cost savings. SPX is a manufacturer of shop tools and
diagnostic equipment, while ECH [Echlin] is a manufacturer of aftermarket brake
systems, ignition parts and OEM fluid delivery tubing."**
- --------
*Quote taken from a Lehman Brothers report by Joseph S. Phillippi
dated February 18, 1998. No permission has been sought or received to
quote from, or refer to, published materials cited in this proxy statement.
**Quote taken from a Morgan Stanley Dean Witter report by John G.
Inch/Stephen J. Ginsberg dated February 17, 1998.
SPX claims it will achieve annual cost savings of $125 million in the first
year after the closing of a combination with Echlin and appears to view those
savings as central to the financial rationale for the combination. However, the
Board notes that to date very little detail about the basis for achieving these
claimed savings, or the increased associated costs that will necessarily be
incurred, has been provided. The Board also notes that SPX has not made any
attempt to explain how the SPX Designees would go about performing the
wide-ranging duties of directors to manage the Company's ongoing businesses, nor
has SPX given the Company's shareholders any meaningful information on the
experience or qualifications of the SPX Designees to manage the operations of
the Company. The Board believes that if the SPX Designees were to obtain control
of the Company, the Company's suppliers, employees and customers would be faced
with a significant degree of uncertainty, which could create great risks for the
Company and its shareholders in the future.
You should not permit SPX to take the first steps to control of Echlin
without these questions and concerns being answered.
Accordingly, the Board unanimously opposes the SPX Solicitation,
unanimously recommends that you DO NOT deliver any Demands (including any Gold
demand card) to SPX pursuant to the SPX Solicitation, and is soliciting from you
a Revocation of any Demand previously delivered by you to SPX. Whether or not
you have previously executed any Demand, the Board urges you to sign, date and
deliver the enclosed GREEN revocation card as promptly as possible by mail
(using the postage-paid envelope provided) to Morrow & Co. There will be no
meeting at which to revoke any Demand you may have previously delivered to SPX,
and accordingly you must act quickly.
Background
In February 1997, Trevor O. Jones, then Chairman and interim Chief
Executive Officer of the Company, met informally with John B. Blystone, Chairman
and Chief Executive Officer of SPX to discuss a number of general topics
concerning the vehicle industry. No specific proposal regarding a business
combination between the two companies was made at the meeting.
In November 1997, Larry W. McCurdy, who had succeeded Mr. Jones as
President and Chief Executive Officer of the Company, met with Mr. Blystone to
discuss business in general. A possible business combination between the two
companies was discussed at the meeting. General discussion regarding a business
combination also took place on November 24, 1997, between Robert F. Tobey, the
Company's Vice President - Corporate Development and Patrick J. O'Leary, SPX's
Vice President - Finance and Chief Financial Officer. However, SPX did not come
forward in either meeting with any specific proposal regarding any business
combination or with specific evidence of synergies that would result from a
business combination. During the course of his meeting with Mr. O'Leary, Mr.
Tobey stated that in order to understand SPX's views regarding potential
synergies, the parties should exchange confidential information subject to
appropriate protections. Mr. O'Leary categorically rejected the suggestion.
Accordingly, Mr. Tobey advised that in these circumstances further discussions
would not be fruitful.
On December 12, 1997, following a conversation between Mr. McCurdy and Mr.
Blystone, Mr. McCurdy received a letter from Mr. Blystone setting out Mr.
Blystone's thoughts on a business combination of the two companies. The letter
stated that SPX was thinking about a price "in the $40's range", and contained a
suggestion that the letter itself be shared with the Board.
On December 17, 1997, the Board had a full discussion of the views
expressed in Mr. Blystone's letter. Based on all of the information available to
the Board at the time, including the contents of Mr. Blystone's letter, the
Board determined that it had no interest in pursuing further discussions with
SPX regarding a business combination. That same day, Mr. McCurdy wrote a letter
to Mr. Blystone stating that Mr. McCurdy had shared Mr. Blystone's views with
the Board, and that the Company's position remained that the Company had no
interest in further discussions with SPX regarding a business combination.
On December 18, 1997, each member of the Board received a letter from Mr.
Blystone enclosing a copy of his December 12 letter and reiterating his views on
the merits of a business combination.
On December 23, 1997, Mr. McCurdy discussed by telephone Mr. Blystone's
letters of December 12 and December 18 with each member of the Board. Following
these discussions, Mr. McCurdy sent a letter to Mr. Blystone stating that the
Board was of the unanimous view that the Company did not have an interest in
pursuing discussions with SPX.
On January 6, 1998, the Company was notified by SPX that it was filing a
Premerger Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 ("HSR") seeking to acquire up to 100% of the voting
securities of the Company.
On January 8, 1998, Mr. McCurdy wrote to Mr. Blystone acknowledging receipt
of notice of SPX's HSR filing and advising SPX that the Company and its advisors
stood ready to aggressively defend Echlin's shareholders' interests.
On February 17, 1998, the Board of Directors of the Company received a
letter from SPX indicating that it was prepared to make an unsolicited offer to
acquire all of the outstanding shares of Echlin and stating that SPX desired to
enter into negotiations with the Company regarding a business combination, as
well as offer materials in connection with the Proposed Offer, preliminary
solicitation materials to solicit demands that a special meeting be called and
held, and certain other materials which were filed by SPX with the Securities
and Exchange Commission that day. On the same day SPX publicly announced details
of its Proposed Offer and the Company issued the following press release:
"ECHLIN INC. COMMENTS ON HOSTILE TAKEOVER PROPOSAL
BY SPX CORPORATION
-- Auto Parts Company Says It Will Continue To Implement Its Own
Strategic Plan To Build Economic Value --
BRANFORD, Conn., February 17, 1998--Echlin Inc. (NYSE: ECH) confirmed
today, in response to SPX Corporation's unsolicited takeover proposal
and consistent with its fiduciary responsibilities, that its board of
directors will review the SPX proposal in due course. To that end,
Echlin has retained Salomon Smith Barney and Davis Polk & Wardwell to
assist it in its review of the proposal.
Echlin stated that stockholders need not take any action at this
time with respect to the proposal, and requested they await the
recommendation of Echlin's board.
Echlin Chairman, President and CEO Larry McCurdy said, "Echlin's
management and board of directors had previously been contacted by
SPX, and after careful evaluation of a proposed combination,
unanimously rejected the idea based upon two major concerns: the lack
of market synergies between the two companies, and, our significantly
different views on the future of the automotive parts business and how
it may best be served. At that time, Echlin's board communicated to
SPX that such a combination did not make good business sense, and that
it was clearly not in the best interests of Echlin's stockholders,
customers or employees. Echlin informed SPX that it had no interest in
pursuing the matter."
"The board and management of Echlin reiterated their conviction
that prospects for the company are extremely bright. Echlin is making
significant progress in implementing its previously announced,
strategic repositioning plan," Mr. McCurdy continued. "Key elements of
the plan include divestiture of underperforming or non-strategic
businesses; factory rationalizations; aggressive cost cutting aimed at
profit improvements; heightened asset management and cash flows gains;
and, a steadfast commitment to incorporating the EVA framework to
enhance value."
Mr. McCurdy concluded, "Echlin will continue to implement its
well-conceived strategic plan to build economic value."
Echlin, with annual sales of $3.6 billion, manufactures a wide
scope of safety- and efficiency-related products for the world's 650
million motor vehicles. It employs 30,000 associates in over 150
operations spread across six continents.
Certain statements included above are forward-looking, and
involve risks and uncertainties which could cause actual results to
differ materially from those implied. Information about potential
factors identified by the company, which could affect its actual
financial results, is included in the company's Form 10-K filed in
November 1997 with the SEC."
On March 4, 1998, Raised Bill No. 5695 (the "Bill") was introduced into the
Connecticut House of Representatives by the Judiciary Committee of the
Connecticut General Assembly. The Bill has been filed with the Clerk of the
General Assembly and is available to the public. If enacted, the Bill would (i)
amend the Connecticut Business Corporation Act to prevent shareholders of a
public company from removing directors without cause at a special meeting held
within twelve months after the making of certain announcements, including an
announcement of an unsolicited takeover proposal (such as the SPX Proposal),
(ii) amend Section 844 of the Connecticut Business Corporation Act to require
approval for certain transactions (such as the Proposed Combination) from a
majority of directors in office at the date of the announcement of the proposal
for the transaction ("Continuing Directors"), and (iii) amend Section 842 of the
Connecticut Business Corporation Act to provide that the failure to obtain
approval of a majority of Continuing Directors for certain transactions (such as
the Proposed Combination) would trigger the requirements of Section 842 of the
Connecticut Business Corporation Act. The Company fully supports the Bill which
it believes would address a loophole in the current version of the Connecticut
Business Corporation Act which SPX is attempting to exploit.
On March 6, 1998, SPX filed definitive proxy materials with the Securities
and Exchange Commission. On that same day, Mr. Blystone wrote a further letter
to the Company's Board of Directors describing SPX's objection to the Bill and
requesting negotiations with respect to the Proposed Combination, and released a
press release to the same effect. In response, the Company issued a press
release stating that some of the attacks by Mr. Blystone against the Company
were false and misleading and pointing out that even after passage of the Bill,
Echlin's corporate governance would provide shareholders with more voice in
Echlin than SPX shareholders have in SPX.
Certain Litigation Against the Company
On or about February 18, 1998, Geoffrey and Jordana Miller filed a
complaint (the "Miller Complaint") in the Superior Court of Connecticut,
Judicial District of New Haven, against Echlin and certain directors of Echlin.
The Miller Complaint is brought on behalf of a purported class of all
shareholders of Echlin and alleges that Echlin and the director defendants have
breached their fiduciary duties to Echlin shareholders by failing to negotiate
with SPX concerning its acquisition overtures and failing to take steps to
maximize shareholder value and Echlin's attractiveness as a potential
acquisition candidate. The Complaint seeks to enjoin defendants from taking any
action that does not maximize the shareholder value of Echlin and unspecified
monetary damages.
On or about February 19, 1998, Park East, Inc. filed a complaint (the "Park
East Complaint") in the United States District Court for the District of
Connecticut against Echlin and certain directors of Echlin. The Park East
Complaint is brought on behalf of a purported class of all shareholders of
Echlin and alleges the same fiduciary duty claims as are alleged in the Miller
Complaint, as well as claims that the Connecticut Anti-Takeover Statutes are
unconstitutional. The Park East Complaint seeks to order the defendants to
cooperate fully with any entity proposing a transaction, as well as unspecified
monetary damages and a declaration that the Connecticut Anti-Takeover Statutes
are unconstitutional.
The Company and the Board believe that the allegations in both the Miller
Complaint and the Park East Complaint are without merit.
Effect of Execution and Delivery of Gold Demand Cards and Green Revocation
Cards; Revocations
Section 33-696 of the Connecticut Business Corporation Act states that a
corporation which has a class of voting stock registered pursuant to Section 12
of the Securities Exchange Act of 1934 shall hold a special meeting of
shareholders if the holders of at least thirty-five percent of all the votes
entitled to be cast on any issue proposed to be considered at the proposed
special meeting sign, date and deliver to the corporation's secretary one or
more written demands for the meeting describing the purpose or purposes for
which it is to be held. Section 33-696 of the Connecticut Business Corporation
Act provides that, if not otherwise fixed by a company's By-laws or its board of
directors, the record date for determining shareholders entitled to demand a
special meeting is the date the first shareholder signs the demand. The record
date ("Record Date") with respect to the Special Meeting is February 17, 1998.
As of February 17, 1998, there were 63,248,939 shares of the Company's Common
Stock outstanding. Accordingly, SPX would need to deliver to the Company
unrevoked Demands from holders of 22,137,129 shares of Common Stock to satisfy
the thirty-five percent requirement under Section 33-696.
The By-laws of the Company state that, upon written request of the
requisite holders, the President of the Company shall call a special meeting.
SPX has indicated that following receipt of the requisite Demands, it will
deliver the Demands to the Secretary of the Company and request the Secretary to
cause notice of the Special Meeting to be given to the Company's shareholders.
Section 33-697 of the Connecticut Business Corporation Act states that the
Connecticut Superior Court may summarily order a special meeting of a
corporation to be held if notice of the special meeting is not given within
thirty days after the date the demand is delivered to the corporation's
secretary or if the special meeting is not held in accordance with the notice.
Section 33-699 of the Connecticut Business Corporation Act states that
corporation shall notify shareholders of the date, time and place of a special
meeting no fewer than ten nor more than sixty days before the meeting date. The
Company's By-laws contain a substantially similar provision.
A Demand (including a Gold demand card) may be revoked by filing with the
Secretary of the Company a signed and dated GREEN revocation card or any other
form of written notice of revocation which is signed and dated and clearly
expresses your intention to revoke your previously executed Demand. A
shareholder's revocation of a previously executed Demand will have the effect of
opposing SPX's request for the Special Meeting. If you have not previously
executed a Demand, your GREEN revocation card will have no legal effect in
determining whether the Company must call the Special Meeting. Whether or not
you have previously executed a Demand, the Company urges you to complete, sign,
date and deliver the enclosed GREEN revocation card, or any other form of
written notice revoking a Demand, as promptly as possible by mail (using the
postage-paid envelope provided) to Morrow & Co.
You may also revoke a Revocation (including a GREEN revocation card) by
filing with the Secretary of the Company a form of written notice of revocation
which is signed and dated and clearly expresses your intention to revoke your
previously executed Revocation. Your latest dated submission will supersede any
earlier-dated Demand, Revocation or other written notice of revocation. THERE
WILL BE NO MEETING AT WHICH TO REVOKE ANY DEMAND OR REVOCATION, AND ACCORDINGLY
YOU MUST ACT QUICKLY.
Participants in The Revocation Solicitation
Revocations are being solicited by and on behalf of the Company. All
expenses of this solicitation, including the cost of preparing and mailing this
Revocation Solicitation Statement, will be borne by the Company. In addition to
solicitation by use of the mails, Revocations may be solicited by directors,
certain officers, and employees of the Company in person or by telephone,
telegram, telex, telecopier, facsimile, advertisement, courier service, or other
means of communication. Such directors, officers and employees will not be
additionally compensated, but may be reimbursed for out-of-pocket expenses in
connection with such solicitation. In addition, the Company has retained Morrow
& Co., Inc. ("Morrow") to assist in the solicitation of Revocations. The Company
has agreed that Morrow will be paid a solicitation fee not to exceed $________,
plus reimbursement for their reasonable out-of-pocket expenses. The Company has
also agreed to indemnify Morrow against certain liabilities and expenses,
including certain liabilities and expenses under the federal securities laws. It
is anticipated that Morrow will employ approximately 60 persons to solicit
shareholders.
The Company has engaged Salomon Brothers Inc and Smith Barney Inc.
(collectively doing business as Salomon Smith Barney) ("Salomon") to act as its
financial advisor in connection with the Proposed Offer and related matters,
including this solicitation. Salomon may assist in the solicitation of
Revocations. Pursuant to the terms of an engagement letter dated February 26,
1997, the Company has agreed to pay Salomon for its financial advisory services
(i) an initial retainer fee of $50,000, (ii) additional quarterly fees of
$50,000 during the term of Salomon's engagement, (iii) additional customary fees
as the Company and Salomon may agree on from time to time, and (iv) reasonable
expenses arising from the engagement. The Company will also indemnify Salomon
against certain liabilities, including liabilities under the Federal Securities
laws. Salomon will not receive any fee for, or in connection with, any
solicitation activities apart from the fees it is otherwise entitled to receive
under its engagement. Salomon does not admit or deny that any of its directors,
officers or employees is a "participant" as defined in Schedule 14A promulgated
by the Commission under the Securities Exchange Act of 1934, as amended, or that
such Schedule 14A requires the disclosure of certain information concerning such
persons. In the normal course of its business, Salomon regularly buys and sells
the Common Stock and other securities for its own account and for the accounts
of its customers, which transactions may result from time to time in Salomon and
its associates having a net "long" or net "short" position in the Common Stock
or other securities or option contracts or derivatives in or relating to the
Company's securities. As of February 20, 1998 Salomon beneficially held a "net
long" position of 241,678.36 shares of Common Stock. If Salomon assists the
Company in connection with the solicitation of Revocations, such activity will
be carried out by a team of individuals consisting of officers and employees of
Salomon.
The Company estimates that its total expenditures relating to the
solicitation (excluding costs representing salaries and wages of regular
employees and officers of the Company) will be approximately $________. The
Company to date has incurred estimated total expenses of approximately
$________. In addition to the members of the Board (which consists of Messrs.
Creamer, Dauch, DeVane, Echlin, Jensen, Jones, McCurdy, Nusbaum and Rivard),
Company's executive officers and certain officers of its subsidiaries may
solicit Revocations. The business address for each of the members of the Board
and the officers named above is, and the Company's executive offices are located
at, 100 Double Beach Road, Branford, Connecticut 06405. For further information
with respect to participants in the solicitation, including the names of its
executive officers and certain officers of its subsidiaries who may solicit
Revocations, and certain transactions by those participants in the Company's
shares of Common Stock, see Schedules A and B.
Change in Control Severance Policy
The Company has established a Change In Control Severance Policy covering
some 350 designated employees of Echlin Inc. and its domestic U.S. subsidiaries,
including the Named Executive Officers. A "change in control" event of Echlin
Inc. is defined as: (i) more than 30 percent of Echlin's outstanding Common
Stock being beneficially held or acquired by any person or entity; (ii) more
than 20 percent of Echlin's outstanding Common Stock being purchased pursuant to
a tender or exchange offer; (iii) Echlin Inc. merging or consolidating with or
selling substantially all of its assets to another entity and Echlin Inc. not
being the surviving corporation; or (iv) during any two year period, a majority
of individuals who are Directors of Echlin Inc. at the beginning of the period
ceasing to be Directors by the end of the period, unless the nomination of each
new Director is approved by a two-thirds majority of those who are Directors at
the beginning of the period. If the Special Meeting is held, removal of the
Board of Directors from office would constitute a "change of control" event. The
Board of Directors must declare whether such an event qualifies as a change in
control event under the Echlin Inc. Change In Control Severance Policy.
Employees covered by the policy receive special severance benefits if,
within two years after a qualified change in control, the employee terminates
for "good reason" because (i) there has been an adverse change in the employee's
duties, responsibilities, title, position, compensation, benefits or general
status; (ii) the employee is required to relocate to a place of business more
than 50 miles from the location where the employee works at the time of the
change in control; (iii) the employee is terminated for reasons other than for
cause; or (iv) for Echlin Inc. corporate officers, including the Named Executive
Officers other than Mr. Jones and Mr. Mancheski (who has retired), the employee
elects to terminate his or her employment during the 30-day period commencing
one year after the change in control.
Severance benefits are payable within 30 days of termination and consist of
a lump sum payment equivalent to the sum of the higher of the employee's annual
base salary and most recent executive bonus, if applicable, either as of the
date of the change in control or the date of the termination for a period
varying from 7.5 months to 36 months depending upon the employee's employment
level. The Named Executive Officers other than Mr. Jones and Mr. Mancheski
qualify for the payment equivalent to 36 months. Employees covered by the policy
continue to receive other benefits such as medical insurance for a period
equivalent to the period associated with their severance payment. The policy
also provides that all outstanding performance units under the Company's
long-term incentive plan immediately vest on the date of the change in control.
Performance units are valued at 100 percent of their original targeted value
multiplied by a fraction representing the number of months lapsed in the
three-year vesting cycle. Further, if the Board of Directors declares a
qualifying change in control event, all options will be deemed to have stock
appreciation rights attached. In some cases, such severance payments are
increased to compensate for any excise taxes resulting from the payment and any
other benefits extended based upon the change in control.
If a covered employee's employment ends after a change in control because
of death, disability or for cause, or if the employee voluntarily terminates
employment, other than as provided in the severance policy, the employee will
get no special severance benefits.
Security Ownership of Certain Beneficial Owners and Management
The following shareholders are beneficial owners of more than five percent
(5%) of the shares of Common Stock as of February 17, 1998. The Company has no
other class of equity security outstanding:
The following table sets forth information as to the only persons known to
the Company to be the beneficial owner of more than five percent of the
Company's Common Stock:
<TABLE>
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percentage of Class
- ------------------------------------ -------------------- -------------------
<S> <C> <C>
Scudder Kemper Investments, Inc. 4,579,317(1) 7.24%
Two International Place
Boston, MA 02110-4103
McKay-Shields Financial Corporation 4,349,380(2) 6.88%
Investment Advisors
9 West 57th Street
New York, New York 10019
The Capital Group Companies, Inc 3,582,400(3) 5.66%
333 South Hope Street
Los Angeles, California 90071
</TABLE>
_____________
(1) Scudder Kemper Investments, Inc., has sole voting power with respect to
969,650 shares, shares voting power with respect to 3,358,544, sole
dispositive power with respect to 4,549,973 and shares dispositive power
with respect to 29,344 shares as reported on Schedule 13G filed with the
Securities and Exchange Commission on February 12, 1998.
(2) McKay-Shields Financial Corporation, Investment Advisors, has shared voting
and shared dispositive power with respect to 4,349,380 shares as reported
on Schedule 13F filed with the Securities and Exchange Commission on
February 13, 1998.
(3) The Capital Group Companies, Inc., through its wholly-owned subsidiaries,
including Capital Research and Management Company (acting as investment
advisor), has sole voting power with respect to 491,400 shares and sole
dispositive power with respect to 3,582,400 as reported on Schedule 13G
filed with the Securities and Exchange Commission on February 10, 1998.
The following table sets forth information with respect to beneficial
ownership as of February 17, 1998 by the Company's current directors, the
Company's "named executive officers" for 1997 fiscal year, the Company's chief
executive officer, the Company's "named executive officers" for the 1998 fiscal
year and by all directors and current executive officers as a group, together
with the percentage of the outstanding shares of Common Stock which such
ownership represents. Unless otherwise indicated, the beneficial ownership
consists of sole voting and investment power with respect to the shares
indicated, except to the extent that authority is shared by spouses under
applicable law.
Number of Shares of
Common Stock Percentage of
Name Beneficially Owned Class
- ---------------------------------- ------------------- ---------------
John F. Creamer, Jr.(1) .......... 21,750 shares
Richard E. Dauch ................. 1,142 shares *
Milton P. DeVane(2) .............. 13,600 shares *
John E. Echlin, Jr.(3) ........... 634,392 shares 1.00%
Donald C. Jensen(4) .............. 9,050 shares *
Trevor O. Jones(5) ............... 118,350 shares *
Jon P. Leckerling(6) ............. 34,589 shares *
Milton J. Makoski(7) ............. 41,395 shares *
Larry W. McCurdy(8) .............. 108,000 shares *
William P. Nusbaum ............... 3,000 shares *
Joseph A. Onorato(9) ............. 40,880 shares *
Jerome G. Rivard(10) ............. 6,800 shares *
Edward D. Toole(11) .............. 27,264 shares *
______________
* Less than 1 percent of class.
(1) Includes 6,750 shares exercisable currently or within 60 days of February
17, 1998, under the Echlin Inc. 1996 Non-Executive Director Stock Option
Plan.
(2) Includes 12,600 shares exercisable currently or within 60 days of February
17, 1998, under the Echlin Inc. 1996 Non-Executive Director Stock Option
Plan.
(3) Includes 125,200 shares held in an irrevocable charitable foundation of
which Mr. Echlin is a trustee with shared voting rights over such shares
and 61,907 shares owned by Mrs. John E. Echlin, Jr. and 12,900 shares
exercisable currently or within 60 days of February 17, 1998 under the
Echlin Inc. 1996 Non-Executive Director Stock Option Plan.
(4) Shares held indirectly by the Donald C. Jensen Revocable Living Trust dated
September 6, 1990. Includes 6,650 shares exercisable currently or within 60
days of February 17, 1998 under the Echlin Inc. 1996 Non-Executive Director
Stock Option Plan.
(5) Includes 100,000 shares exercisable within 60 days of February 17, 1998
under the Echlin Inc. 1992 Executive Stock Option Plan and 10,850 shares
exercisable currently or within 60 days of February 17, 1998 under the
Echlin Inc. 1996 Non-Executive Director Stock Option Plan.
(6) Includes 29,029 shares either exercisable currently or within 60 days of
February 17, 1998 under the Echlin Inc. 1992 Executive Stock Option Plan or
credited to Mr. Leckerling's account in the Echlin Incentive Savings and
Investment Plan as of August 31, 1997.
(7) Includes 35,045 shares either exercisable currently or within 60 days of
February 17, 1998 under the Echlin Inc. 1992 Executive Stock Option Plan or
credited to Mr. Makoski's account in the Echlin Incentive Savings and
Investment Plan as of August 31, 1997.
(8) Includes 100,000 shares either exercisable currently or within 60 days of
February 17, 1998 under the Echlin Inc., 1992 Executive Stock Option Plan.
(9) Includes 32,780 shares either exercisable currently or within 60 days of
February 17, 1998 under the Echlin Inc. 1992 Executive Stock Option Plan or
credited to Mr. Onorato's account in the Echlin Incentive Savings and
Investment Plan as of August 31, 1997.
(10) Includes 3,800 shares exercisable currently or within 60 days of February
17, 1998, under the Echlin Inc. 1996 Non-Executive Director Stock Option
Plan.
(11) Includes 22,914 shares either exercisable currently or within 60 days of
February 17, 1998 under the Echlin Inc. 1992 Executive Stock Option Plan or
credited to Mr. Toole's account in the Echlin Incentive Savings and
Investment Plan as of August 31, 1997.
Committees and Meetings of the Board of Directors
During the fiscal year ended August 31, 1997, there were ten meetings of
the Board of Directors (four of which were telephone meetings). Each director
attended at least 75 percent of the aggregate of (i) the total number of
meetings of the Board and (ii) the total number of meetings held by all
Committees of the Board on which the director served.
The Board of Directors has established the following committees with
responsibilities as described:
The Executive Committee may exercise all powers that the Board of Directors
possesses except those powers delineated in the By-Laws including the power to
change the Certificate of Incorporation or By-Laws and the power to declare any
dividend or other distribution with respect to the stock of the Company. During
the fiscal year, seven meetings of the Executive Committee were held. Messrs.
Jones (Chairman), Creamer, DeVane, Echlin, Jensen and McCurdy are members of
this Committee.
The Audit Committee reviews the accounting policies and procedures of the
Company and the performance of the internal audit staff, monitors compliance
with such policies and procedures and makes recommendations thereon to the full
Board. The Audit Committee meets with the Company's independent accountants and
reviews and approves in advance the scope of the annual audit and other audits
and the type and scope of each non-audit professional service rendered by the
Company's independent accountants. The Committee also considers the possible
effect that rendering such services might have on the independence of such
accountants. The Committee recommends to the Board the appointment of
independent accountants for ratification by the shareholders at the Annual
Meeting. During the fiscal year, five meetings of the Audit Committee were held.
Messrs. Jensen (Chairman), Dauch, DeVane, Echlin and Gustafson are members of
this Committee.
The Compensation and Management Development Committee reviews and approves
the Company's basic compensation philosophy covering executive officers and
senior management employees as well as the competitiveness of the Company's
total compensation practices. The Committee reviews and recommends to the Board
the compensation package and employee benefits of the President and Chief
Executive Officer and any other officers who are also directors. It also reviews
and approves base salaries and short-term incentive awards of officers and key
management executives, sets performance measures for the Echlin Inc. Performance
Unit Plan (see page 16) and makes recommendations to the Board with respect to
the granting of options under the Echlin Inc. 1992 Executive Stock Option Plan.
This Committee also reviews and reports to the Board on the status of the
Company's organization and succession plans for all key executive positions and
the continuity for such positions. During the fiscal year, seven meetings of the
Compensation and Management Development Committee were held. Messrs.
Jensen (Chairman) and DeVane are members of this Committee.
The Corporate Governance Committee advises and makes recommendations to the
Board on all matters concerning directorships and corporate governance
practices, including the structure and membership of all committees of the
Board, compensation of directors and the review and recommendation of candidates
for election as directors. The Committee will consider shareholder nominations
for director sent in accordance with the procedures set forth in the By-Laws to
the Corporate Governance Committee, c/o Jon P. Leckerling, Secretary, Echlin
Inc., 100 Double Beach Road, Branford, Connecticut 06405. The Committee also
reviews and makes recommendations to the Board concerning succession planning
for the positions of Chairman of the Board and President and Chief Executive
Officer. During the fiscal year, four meetings of the Corporate Governance
Committee were held. Messrs. DeVane (Chairman), Creamer, Echlin and Jensen are
members of this Committee.
The Finance Committee reviews periodically the capital structure,
financing, dividend and risk management strategies of the Company. The Committee
also monitors the performance of management's Investment Advisory Committee and
Benefits Committee as to the management and administration of the Company's
various defined benefit and defined contribution retirement plans. During the
fiscal year, two meetings of the Finance Committee were held. Messrs. Echlin
(Chairman) and Nusbaum are members of this Committee.
The Board established three advisory committees which were discontinued as
Board committees as of December 31, 1997. The Scientific Advisory Committee
reviewed production and research activities of the various units of the Company
and reported on scientific and technological developments with potential impact
on the Company's operations. During the fiscal year, four meetings of the
Scientific Advisory Committee were held. Phillip S. Myers (Chairman), who has
retired as a director as of the Annual Meeting of Stockholders, and Mr. Rivard
were members of this Committee. The Asian Development Advisory Council was a
Committee of the Board with membership comprised of experienced business
executives who had conducted business over a period of years within various
countries in the Asian region, and which assisted and advised corporate and
Asian-based management and the Board on the conduct and expansion of the
Company's business in Asia. During the fiscal year, the Council had one meeting.
Dr. Myers served as Chairman of this Council. The European Advisory Council was
comprised of experienced automotive industry executives from various countries
within the region and assisted and advised corporate and European-based
management and the Board on developments and strategic opportunities in Europe.
During the fiscal year, the Council had two meetings. Mr. Jones served as
Chairman of this Council.
Compensation of Directors
The annual retainer paid to outside directors is $25,000. Mr. Jones, as
Non-Executive Chairman of the Board, received a monthly retainer of $30,000 and
for service as Non-Executive Vice-Chairman of the Board receives a retainer of
$25,000 per month for Fiscal Year 1998, in lieu of all other Board and Committee
fees and retainers. Mr. Creamer served as Non-Executive Vice Chairman of the
Board until December 31, 1997, received a special retainer of $57,777 for Board
service from February 20, 1997 through June 30, 1997 and thereafter received
Board fees and retainers at twice the normal rate for service as Vice Chairman
which ended December 31, 1997. The fee for attendance at each meeting of the
Board is $1,200 and $800 is payable for participation in telephone meetings. The
standard fee for attendance at each Committee meeting, other than the European
Advisory Council and the Asian Development Advisory Council, is $1,000. Chairmen
of each Committee, other than the European Advisory Council and the Asian
Development Advisory Council are paid an annual retainer of $6,000 and a per
meeting fee of $2,000. Scientific Advisory Committee members received a $3,000
annual retainer. European Advisory Council and Asian Development Advisory
Council members received an annual retainer of $24,000 and each Council's
Chairman received a $36,000 annual retainer.
Under the 1996 Non-Executive Director Stock Option Plan, directors who are
not employees of the Company, annually receive 2,000 options for Board service,
500 options for service as a Board committee chairman, 1,000 options for service
on the Executive Committee, 4,000 options for service as Vice Chairman of the
Board and 8,000 options for service as Chairman of the Board. The Board also
established Non-Executive Director Stock Ownership Guidelines on June 18, 1997
which require outside directors to own Common Stock equal in value to four times
the annual retainer. These guidelines are phased in over three years for then
current directors and five years for new directors. Options held under the 1996
Non-Executive Director Stock Option Plan do not count as shares held under the
guidelines.
Mr. Creamer is President of Distribution Marketing Services, Inc.
Distribution Marketing Services, Inc. provides advice regarding distribution and
marketing strategies to various subsidiaries of the Company at a cost in Fiscal
Year 1997 of $108,200.
Dr. Myers provides consulting services to the Company in regard to existing
and new technologies within the automotive industry. He was paid a total of
$4,289 in Fiscal Year 1997 for these services.
Mr. Rivard is President of Global Technology and Business Development.
Global Technology and Business Development provides consulting services to the
Company in regard to patented technologies and business opportunities and was
paid a total of $51,581 in Fiscal Year 1997 for these services.
Mr. DeVane is a former partner in the law firm of Tyler Cooper & Alcorn.
Tyler Cooper & Alcorn has been retained by the Company on various legal matters
and it is expected that this relationship will continue. Legal fees paid under
this arrangement did not exceed five percent of the gross revenues of Tyler
Cooper & Alcorn.
Certain Transactions
In September, 1996, the Company purchased Long Manufacturing Ltd. ("Long")
for approximately $173,000,000 from Long's shareholders. Mr. Nusbaum was the
principal shareholder of Long, controlling some 40 percent of the shares
acquired by the Company. The Company has made a claim for adjustment of the
purchase price by approximately $2,000,000 against an escrow provided by the
selling shareholders in connection with certain contingencies. Mr. Nusbaum is
currently a director of the Company.
As of February 17, 1998, the directors and twelve executive officers of the
Company (including the Named Executive Officers other than Mr. Mancheski, who is
neither a director nor executive officer of the Company) as a group owned
beneficially 1,161,089 shares of Common Stock or 1.84 percent thereof. Such
shares include 441,075 shares either exercisable currently or within 60 days of
February 17, 1998 under the Echlin Inc. 1992 Executive Stock Option Plan and the
Echlin Inc. 1996 Non-Executive Director Stock Option Plan or, with respect to
officers of the Company, held in their respective accounts in the Echlin
Incentive Savings and Investment Plan as of February 17, 1998.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who own more than ten
percent of Echlin's common stock to file initial stock ownership reports and
reports of changes in ownership with the Securities and Exchange Commission and
the New York Stock Exchange. SEC regulations require that the Company be
furnished with a copy of these reports. Based on its review of these reports and
on written representations from the reporting persons that no other reports were
required, the Company believes that all applicable Section 16(a) reporting
requirements have been met.
Compensation Committee Interlocks And Insider Participation
The members of the Compensation and Management Development Committee during
Fiscal Year 1997 were Donald C. Jensen (Chairman), Milton P. DeVane and Trevor
O. Jones until his election as Chairman and Interim Chief Executive Officer in
February, 1997. All Committee members are outside directors and no Committee
member has ever been an officer or employee of the Company or any of its
subsidiaries.
Summary Compensation Table
The following table summarizes the annual and long-term compensation for
services to the Company for Fiscal Years 1997, 1996 and 1995 paid to the
executives serving as Chief Executive Officer during Fiscal Year 1997 and to
each of the four other most highly compensated officers of the Company at August
31, 1997 (such officers being referred to as the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
Long-Term Compensation
-------------------------------------------
Annual Compensation Awards Payouts
-------------------------------------------------- ------------ ------------
Long-Term
Incentive
Other Annual Securities Plan All Other
Bonus Compensation Underlying Payouts Compensation
Name and Principal Position Year Year Salary ($) (A)($) (B)($) Options(#)(C) ($)(D) (E)($)
- -------------------------------- ---- ---------- ------ ------ ------------- ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
L.W. McCurdy (*) ............. 1997 283,330 300,000 3,200,000(1) 100,000 0 0
President and Chief
Executive Officer
T.O. Jones (**) .............. 1997 869,900(2) 0 110,850(3) 0 0
Chairman and Interim
Chief Executive Officer
F.J. Mancheski (***) ......... 1997 360,577 0 12,975 0 248,600(4)
Chairman and Chief 1996 700,000 264,000 1,446(5) 50,000 788,163 900
Executive Officer 1995 625,000 600,000 57,000 1,702,575 2,610
(retired)
J.P. Leckerling .............. 1997 202,500 58,300 1,700 0 1,146
Executive Vice President 1996 172,500 34,700 131(5) 3,000 72,443 1,445
Administration, General 1995 164,000 65,000 6,300 192,465 2,612
Counsel and Corporate
Secretary
J.A. Onorato ................. 1997 184,000 53,700 1,775 0 1,148
Vice President and 1996 152,500 37,200 3,000 72,443 1,538
Chief Financial Officer 1995 145,000 65,000 6,300 192,465 2,610
M.J. Makoski ................. 1997 178,000 38,200 1,700 0 1,046
Vice President--Human 1996 164,100 34,700 3,000 79,770 1,445
Resources 1995 157,000 65,000 6,300 211,995 2,612
E.D. Toole ................... 1997 158,200 32,300 1,250 0 938
Vice President, Associate 1996 150,700 32,700 1,400 47,282 1,608
General Counsel and 1995 143,500 39,200 2,050 131,040 2,624
Assistant Secretary
</TABLE>
__________
* Mr. McCurdy was elected President and Chief Executive Officer on March
7, 1997.
** Mr. Jones was elected Chairman and Interim Chief Executive Officer on
February 20, 1997. He became Non-Executive Chairman upon the election of Mr.
McCurdy as President and Chief Executive Officer.
*** Mr. Mancheski retired as Chairman and Chief Executive Officer on February
20, 1997.
(A) Annual bonuses received under the Company's Executive Bonus Plan are
reported in the year earned, although paid in the subsequent year.
(B) Except as noted, no amounts of "Other Annual Compensation" were paid to each
Named Executive Officer, except for perquisites and other personal benefits,
securities or properties which for each executive officer did not exceed the
lesser of $50,000 or 10% of such individual's salary plus bonus.
(C) Options may have stock appreciation rights attached in accordance with the
provisions of the Change in Control Severance Policy described below (see
page 19).
(D) Long-term incentive payouts received for three-year performance periods
under the Company's Performance Unit Plan are reported in the last year of
the performance period during which they were earned, although paid in the
subsequent year. Performance unit payouts may be accelerated in accordance
with the provisions with the Change in Control Severance Policy described
below (see page 19).
(E) Except as noted, the Company contribution under the Echlin Inc. Incentive
and Savings Investment Plan (a qualified salary deferral plan under Section
401(k) of the Internal Revenue Code).
(1) Includes amount awarded to Mr. McCurdy to replace unvested long-term
compensation benefits forfeited with his prior employer when he joined the
Company as President and Chief Executive Officer in March, 1997 which was
deferred by Mr. McCurdy under the Company's 1976 Deferred Compensation Plan
until the year 2001 and thereafter and $200,000 paid in lieu of Mr.
McCurdy's participation in the Performance Unit Plan during Fiscal Year
1997.
(2) Includes $179,900 in Board fees earned by Mr. Jones from September 1, 1996
through February 20, 1997; $630,000 in Chairman and Interim Chief Executive
Officer's fees paid February 20, 1997 through June 30, 1997; and $60,000
Non-Executive Chairman's fees paid July 1, 1997 through August 31, 1997.
(3) Includes 100,000 options granted in March, 1997 under the Echlin Inc. 1992
Executive Stock Option Plan when Mr. Jones became Chairman of the Board and
Interim Chief Executive Officer and 10,850 options granted in December, 1996
under the 1996 Non-Executive Director Stock Option Plan.
(4) Includes $247,000 paid to Mr. Mancheski under the Supplemental Executive
Retirement Plan and the Supplemental Senior Executive Retirement Plan.
(5) Under the Company's 1976 Deferred Compensation Plan, as amended, directors
can defer up to 100 percent of their directors' fees and designated officers
and key executives can defer up to 25 percent of their salary and bonus and
up to 100 percent of their performance unit plan award payment each year.
Interest is accrued on deferred accounts at the greater of the average rate
of interest paid by the Company on its commercial paper borrowings or the
Company's return on assets. The amount shown is the interest accrued on
deferred compensation accounts equal to the Company's return on assets but
in excess of 120 percent of the Federal long-term interest rate on December
31, 1995 (5.982 percent).
Option/SAR Grants in Fiscal Year 1997
Shown below is further information on grants of stock options pursuant to
the Company's 1992 Executive Stock Option Plan, and in the case of Mr. Jones,
options granted under the Echlin Inc. 1996 Non-Executive Director Stock Option
Plan during the fiscal year ended August 31, 1997 to the Named Executive
Officers. Such grants are reflected in the Summary Compensation Table.
Option/SAR Grants in Fiscal Year 1997
Shown below is further information on grants of stock options pursuant to
the Company's 1992 Executive Stock Option Plan, and in the case of Mr. Jones,
options granted under the Echlin Inc. 1996 Non-Executive Director Stock Option
Plan during the fiscal year ended August 31, 1997 to the Named Executive
Officers. Such grants are reflected in the Summary Compensation Table.
Option/SAR Grants in FY 1997 and FY 1997 Grant Date Value
<TABLE>
<CAPTION>
Individual Grants Grant Date Value
----------------------------------------------------------------------------------
Grant Date
(December 18,
1996, March 7,
1997 and
% of Total December 20,
Options Granted 1996)
Options Granted to Employees in Exercise Price Expiration Present Value
Name (#)(A) Fiscal Year ($/SH)(B) Date(C) ($)(D)
- --------------------- --------------- --------------- ------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Larry W. McCurdy 100,000 29.2453 34.8750 3/07/07 1,100,000
Trevor O. Jones 10,850* 3.1731 31.1250 12/20/06 108,066
100,000 29.2453 34.8750 3/07/07 1,100,000
Frederick J. Mancheski 12,975 3.7645 30.7500 12/18/06 127,674
Jon P. Leckerling 1,700 0.4971 30.7500 12/18/06 16,728
Milton J. Makoski 1,700 0.4971 30.7500 12/18/06 16,728
Joseph A. Onorato 1,775 0.5191 30.7500 12/18/06 17,466
Edward D. Toole 1,250 0.3655 30.7500 12/18/06 12,300
</TABLE>
* 1996 Non-Executive Director Stock Option Plan.
(A) No stock appreciation rights ("SAR") were granted in Fiscal Year 1997.
(B) The exercise price is based on the fair market value of the Company's
common stock on the date of the grant of the option.
(C) Options may be exercised during a period that begins one year after the
date of grant and ends ten years after the date of the grant of the option.
(D) Valuation based on Black-Scholes option pricing model. The Company
does not advocate or necessarily agree that the Black-Scholes model
can properly determine the value of an option. The actual value, if
any, a Named Executive Officer may realize will depend on the excess
of the stock price over the exercise price on the date the option is
exercised so that there is no assurance the value realized by a Named
Executive Officer will be at or near the value estimated by the Black-
Scholes model. The value calculations for the options listed above
are based on the following assumptions for the December 18, 1996 and
December 20, 1996 stock option grants: interest rate of 6.3%; annual
dividend yield of 2.6%; and volatility as measured by the standard
deviation of .212. For the March 7, 1997 stock option grant, the
assumptions were: interest rate of 6.42%; annual dividend yield of
2.6% and volatility as measured by the standard deviation of
.207.
Aggregate Option Exercises in Fiscal Year 1997 and Fiscal Year-End
Option Value
Shown below is information with respect to options exercised by the Named
Executive Officers during Fiscal Year 1997 and unexercised options to purchase
the Company's Common Stock granted in Fiscal Year 1997 and prior years under the
Echlin Inc. 1992 Executive Stock Option Plan to the Named Executive Officers and
held by them as of August 31, 1997.
Aggregated Option/SAR Exercises in FY 1997 and FY 1997 Year End Option/SAR
Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in-the-money Options at
Shares Value Options at FY End (#) FY End ($) (B)
Acquired on Realized --------------------- -------------------------
Name Exercise (#) ($)(A) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Larry W. McCurdy 0 0 0 100,000 0 218,750
Trevor O. Jones 0 0 0 110,850 0 283,171
Frederick J. Mancheski 23,175 312,862 523,465 12,975 9,009,71 81,904
Jon P. Leckerling 1,425 29,450 27,700 1,700 338,612 10,731
Milton J. Makoski 1,375 18,562 34,720 1,700 491,270 10,731
Joseph A. Onorato 1,625 21,734 31,140 1,775 426,027 11,204
Edward D. Toole 4,350 66,815 21,045 1,250 345,32 7,890
</TABLE>
(A) The Value Realized is ordinary income, before taxes, and represents the
amount equal to the excess of the fair market value of the shares at the
time of exercise over the exercise price.
(B) Represents the fair market value as of August 29, 1997 ($37.0625 per
share closing stock price) of the option shares less the exercise
price of the options.
Performance Unit Plan
The Company sponsors a long-term incentive plan known as the Performance
Unit Plan for certain key employees of the Company, including the Named
Executive Officers other than Mr. Jones, whose responsibilities and job
performance can have an impact upon the growth and performance of the Company.
At the beginning of each fiscal year, the Compensation and Management
Development Committee of the Board, no member of which is a participant under
the plan, may award performance units for a forward three-year cycle period to
eligible employees.
The target value for each participant is based on a percentage of benchmark
total compensation of executives with similar positions and responsibilities at
the Market Median Group. The targeted percentage of total compensation
attributable to performance units for the Named Executive Officers varied for
Fiscal Year 1997 from 56 percent for Mr. Mancheski, who was serving as Chief
Executive Officer at the time of the grant, to 30 percent for Mr. Toole. The
actual number of performance units awarded depends on the then current
performance rating for the individual and his or her business unit and a target
compounded, annual growth rate in earnings per share over the three-year cycle
as established by the Compensation and Management Development Committee. The
value of each unit will equal the actual earnings per share of the Company's
Common Stock over the three-year performance period multiplied by a factor based
upon the compounded annual growth rate in earnings per share over such
three-year period. The value of each unit will be zero if the actual compounded
earnings per share growth rate over the three-year period is less than one-half
the targeted growth rate and will be increased by a factor of two if the
targeted growth rate is exceeded by 50 percent. The value of a performance unit
cannot be determined and does not vest in the participant until the end of the
three-year period following the fiscal year in which the performance unit was
granted, when the actual earnings per share and compound growth rate can be
computed.
The following table shows estimated future threshold, target and maximum
payouts for performance unit awards made during Fiscal Year 1997.
Long-term Incentive Plans--Fiscal 1997 Awards
<TABLE>
<CAPTION>
Estimated Future Payouts under Non-Stock Price-Based Plans
-----------------------------------------------------------------------------------
Performance
Period Until
Number Maturation
Name of Units (#) or Payout (A) Threshold ($)(B) Target($)(C) Maximum ($)(D)
- --------------------------------- ------------ ------------- ---------------- ------------- ------------------
<S> <C> <C> <C> <C> <C>
Larry W. McCurdy 0
Trevor O. Jones 0
Frederick J. Mancheski 44,750 8/31/99 13,276 * 60,189 * 136,786 *
Jon P. Leckerling 5,825 8/31/99 10,369 47,008 106,831
Milton J. Makoski 5,825 8/31/99 10,369 47,008 106,831
Joseph A. Onorato 6,100 8/31/99 10,858 49,227 111,874
Edward D. Toole 4,300 8/31/99 7,654 34,701 78,862
All Executive Officers as a 86,325 8/31/99 87,279 395,697 899,271
group (12) including those above
All employees who are not 526,100 8/31/99 870,078 3,944,682 8,964,744
Executive Officers, as a group
</TABLE>
* Mr. Mancheski, having retired after only six months of the thirty-six month
long-term incentive cycle, is only eligible for one-sixth of the future
payout. The reduced estimated future payout is, therefore, shown.
(A) Performance Unit payouts may be accelerated as a result of a change in
control and the value of such units would then be determined in accordance
with the provisions of the Change in Control Severance Policy described
below.
(B) The threshold amount will be earned if 50 percent of the target compounded
growth rate of earnings per share over the three year cycle is achieved.
(C) The target amount will be earned if 100 percent of the target compounded
growth rate of earnings per share over the three year cycle is achieved.
(D) The maximum amount will be earned if 150 percent of the target compounded
growth rate of earnings per share over the three year cycle is achieved.
Pension Plans
The Company maintains a noncontributory Pension Plan for Echlin Employees
(the "Plan") which includes, among the participants, the Named Executive
Officers of the Company other than Mr. Jones. A director who is not also an
employee is ineligible to participate. The Plan provides that a participant who
retires with 30 years of service will receive a pension of 26 percent of final
average earnings up to the Average Social Security Covered Compensation plus 44
percent of final average earnings in excess of such Average Social Security
Compensation. Final average earnings is based upon cash compensation (comprised
of base salary and annual bonus) computed as of the highest five consecutive
calendar years of the participant's final ten calendar years of service
preceding his or her termination date. Normal retirement occurs at the later of
age 65 or completion of five years of service. Participants vest in pension
benefits after five years of service or, if the Board of Directors declares a
qualifying change in control event (as defined below under the Change In Control
Severance Policy), on the date of a change in control of Echlin. In addition,
employees receiving lump sum payments under the Change In Control Severance
Policy receive credit for years of service equivalent to the period of time
associated with their lump sum payment. The Company has also put into effect two
supplemental executive retirement plans. The Code limits both the annual pension
which may be paid by an employer from plans which are qualified under the Code
for federal income tax purposes and the maximum amount of earnings utilized to
compute benefits under such plans. The Supplemental Executive Retirement Plan
("SERP") was established by the Board of Directors to provide designated
executive employees with the benefits they would have received under the Pension
Plan for Echlin. Employees but for the limitations imposed by the Code. All
Named Executive Officers other than Mr. Jones participate under the SERP. The
second plan, the Supplemental Senior Executive Retirement Plan ("SSERP"), was
established by the Board of Directors to provide designated senior executive
employees with a benefit increasing the Plan benefit from 44 percent of final
average earnings in excess of the Average Social Security Covered Compensation
to 60 percent of such final average earnings. Mr. Mancheski is currently
the only participant under the SSERP.
The following illustrative table provides the total annual pension benefits
under various years of credited service assuming retirement in 1997 at age 65.
Illustrative total annual benefits from both the Echlin Inc. Pension Plan
and the SERP:
Years of Service at Age 65
---------------------------------------------------
Final Average Earnings 15 20 25 30
---------------------- ------- ------- ------- -------
$ 100,000 19,363 25,817 32,271 38,725
200,000 41,363 55,150 68,938 82,725
400,000 85,363 113,817 142,271 170,725
600,000 129,363 172,484 215,604 258,725
800,000 173,363 231,150 298,938 346,725
1,000,000 217,363 289,817 362,271 434,725
1,200,000 261,363 348,484 435,604 522,725
The current covered five-year compensation average and the current years of
credited service for the Named Executive Officers are as follows: Larry W.
McCurdy, (not yet eligible) $0.00 and 1 year; Jon P. Leckerling, $212,580 and 7
years; Milton J. Makoski, $206,907 and 11 years; Joseph A. Onorato, $193,660 and
16 years; Edward D. Toole, $180,577 and 11 years and Frederick J. Mancheski,
$1,041,633 and 34 years. Mr. Jones is not a participant under any of the
Company's pension or retirement plans. In addition to the benefit shown in the
table above, Mr. Mancheski's annual benefit from the SSERP is $164,080.
The Company has also authorized the establishment of a grantor trust with a
trust company for the purpose of paying amounts due under the 1976 Deferred
Compensation Plan and the SERP and SSERP described above.
Deadline for Submission of Shareholder Proposals
Proposals of shareholders intended to be presented at the next Annual
Meeting must be received by the Secretary, Echlin Inc., 100 Double Beach Road,
Branford, Connecticut 06405 no later than July 17, 1998.
The Board of Directors
By: /s/ Jon P. Leckerling
----------------------------------
Name: Jon P. Leckerling
Title: Senior Vice President and
Corporate Secretary
Date: March 9, 1998
PRELIMINARY COPY -- NOT FOR USE
NO GREEN REVOCATION CARD WILL ACCOMPANY THESE
MATERIALS UNTIL DEFINITIVE SOLICITATION MATERIALS
ARE DISTRIBUTED TO SHAREHOLDERS OF THE COMPANY.
ECHLIN INC
REVOCATION CARD SOLICITED ON BEHALF OF
BOARD OF DIRECTORS OF ECHLIN INC.
IN OPPOSITION TO THE SPX SOLICITATION OF DEMANDS
TO HOLD A SPECIAL MEETING
The undersigned shareholder, acting with regard to all shares of common
stock, par value $1.00 per share, of Echlin Inc entitled to vote and held by the
undersigned, hereby REVOKES any previously executed demand requesting the demand
for a special meeting of shareholders (the "Special Meeting") described in the
Demand Solicitation of SPX Corporation and hereby confirms that the undersigned
has the power to deliver a revocation of demand for the number of shares
represented hereby.
The Board of Directors of Echlin Inc. unanimously recommends that you sign,
date and deliver this GREEN revocation card as promptly as possible by mail
(using the postage-paid envelope provided), whether or not you have previously
executed any Demand (including any Gold demand card). There will be no meeting
at which to revoke any Demand, and accordingly you must act quickly.
Please sign this revocation card exactly as your name appears hereon. If
signing as Attorney, Administrator, Executor, Guardian, or Trustee, please give
title as such. If a Corporation, this signature should be that of an Authorized
Officer who should state his or her title. If a Partnership, sign in Partnership
name by authorized person. If your shares are held jointly, this revocation card
should be signed by one or both of the joint owners. Signed but unmarked
revocations will be deemed to revoke all previously given demands for the number
of shares represented hereby by the Undersigned.
SIGNATURE
------------------------------------------
Title(s) (if applicable)
------------------------------------------
SIGNATURE (IF HELD JOINTLY)
------------------------------------------
Title(s) (if applicable)
------------------------------------------
Dated: ____________, 1998
SCHEDULE A
INFORMATION REGARDING PARTICIPANTS
IN THE REVOCATION SOLICITATION
Set forth in the tables below are the present principal occupation or
employment, and the name, principal business and address of any corporation or
organization in which such employment is carried on, for (1) each of the
directors and executive officers of Echlin Inc. and (2) certain employees and
other representatives of Echlin Inc. who may also solicit Revocations from the
shareholders of the Company. The principal business address of Echlin Inc. is
100 Double Beach Road, Branford Connecticut 06405. Unless otherwise indicated,
the principal business address for each individual listed below is the address
of Echlin Inc. Except as otherwise provided in this Revocation Solicitation
Statement (including the Schedules hereto), none of the participants in this
Solicitation, (i) directly or indirectly owns any Shares or any other securities
of the Company, (ii) was in the past ten years convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), (iii) is, or
was within the past year a party to any contracts, arrangements or
understandings with any person with respect to any securities of the Company,
including but not limited to joint ventures, loan or option arrangements, puts
or calls, guarantees against loss or guarantees of profit, division of losses or
profits, or the giving or withholding or proxies.
Directors of Echlin Inc.
Director Business Activities Since
Name Since September 1, 1992
----- -------- -------------------------
John F. Creamer, Jr (Age 67)..... 1986 President and sole shareholder of
Distribution Marketing Services,
Inc., Stamford, Connecticut
(marketing consultants to the
automotive aftermarket); President,
Automotive Warehouse Distributors
Association--AWDA (automotive
aftermarket parts trade
association) (1994 to present);
Director, R&B Inc. (automotive
fasteners supplier); Bonded Motors,
Inc. (automotive engine
rebuilders), HiLite Industries Inc.
(automotive electro magnetic
clutches and stampings); Vice
Chairman of the Board (through
December 31, 1997); member of the
Executive and Corporate Governance
Committees of the Board.
Richard E. Dauch (Age 55)........ 1997 Chairman, President and Chief
Executive Officer, American Axle &
Manufacturing, Inc., Detroit,
Michigan (manufacturer of
automotive driveline systems,
chassis components and forged
products) (1994 to present);
Private Investor (1992-1993);
member of the Executive and
Corporate Governance Committees of
the Board.
Milton P. DeVane (Age 68)........ 1965 Retired; former partner, Tyler
Cooper & Alcorn, LLP, New Haven,
Connecticut (law firm); Chairman of
the Corporate Governance Committee
and member of the Audit,
Compensation and Management
Development and Executive
Committees of the Board.
John E. Echlin, Jr. (Age 62)..... 1964 Retired; former Account Executive,
PaineWebber, Guilford, Connecticut
(1983-1989); Chairman of the
Finance Committee and member of the
Audit, Corporate Governance and
Executive Committees of the Board.
Donald C. Jensen (Age 62)........ 1991 Retired; former Vice Chairman of
Ernst & Young (international
accounting and management
consulting firm) (1981-1990);
Chairman of the Audit and the
Compensation and Management
Development Committees and member
of the corporate Governance and
Executive Committees of the Board.
Trevor O. Jones (Age 67)......... 1991 Chairman and Chief Executive
Officer, International Development
Corporation (management consulting
firm); retired Chairman of the
Board, President and Chief
Executive Officer, Libbey-Owens
Ford Co. (1987- 1994);
Non-Executive Chairman of the
Board; Vice Chairman of the Board
(until February 20, 1997); Chairman
of the Board and Interim Chief
Executive Officer (until March 7,
1997); Chairman of the Executive
Committee, Chairman of the
Compensation and Management
Development Committee (until
February 20, 1997) and Chairman of
the European Advisory Council of
the Board.
Larry W. McCurdy (Age 62)........ 1997 President and Chief Executive
Officer (since March 7, 1997);
former Executive Vice
President-Operations, Cooper
Industries, Inc. (automotive
products manufacturer) (1994-1997);
former President and Chief
Executive Officer, Moog Automotive,
Inc. (automotive products
manufacturer) (1985-1994);
Director, Breed Technologies, Inc.
(automotive safety systems
manufacturer), Lear Corporation
(automotive interiors
manufacturer), Mohawk Industries
Inc. (broadloom carpet
manufacturer).
William P. Nusbaum (Age 52)...... 1996 Principal, Tricap Investors, Inc.
(an investment partnership); former
President, Long Manufacturing Ltd.,
a subsidiary of the Company; former
President and Chief Executive
Officer of Long Manufacturing Ltd.
(1983-1996) (manufacturer of
automotive fluid coolers); member
of the Finance Committee of the
Board.
Jerome G. Rivard (Age 64)........ 1991 President, Global Technology and
Business Development, Inc.
(technology and manufacturing
consultants) (1988 to present);
former Vice President and Group
Executive, Bendix Electronics
division of Allied-Signal Inc.,
(1986-1988); member of the
Scientific Advisory Committee of
the Board.
Executive Officers of Echlin Inc.
Business Activities
Name Age since September 1, 1992
---- --- -----------------------
Larry W. McCurdy................... 62 President and Chief Executive
President and Chief Officer since 1997; Executive Vice
Executive Officer President - Operations, Cooper
Industries, Inc. from 1994-1997;
President and Chief Executive
Officer, Moog Automotive, Inc. from
1985-1994
Jon P. Leckerling.................. 49 Executive Vice President, General
Executive Vice President, Counsel and Company Secretary since
General Counsel and Corporate 1997; Vice President, General
Secretary Counsel and Corporate Secretary
from 1990-1997
Milton J. Makoski.................. 51 Senior Vice President, Human
Senior Vice Resources, since 1997; Vice
President-Human Resources President - Human Resources since
1986
Joseph A. Onorato.................. 48 Senior Vice President and Chief
Senior Vice President Financial Officer sinc 1997; Vice
and Chief Financial President and Treasurer from
Officer 1994-1997; Treasurer from 1990-1994
Robert F. Tobey.................... 52 Senior Vice President - Corporate
Senior Vice Development, sinc 1997; Various
President-Corporate managerial positions within
Development Echlin's International Group from
1991 to 1997
Edward D. Toole Jr................. 67 Vice President, Associate General
Vice President, Counsel and Assistant Secretary
Associate General Counsel since 1997; Associate General
and Assistant Secretary Counsel and Assistant Secretary
since 1990
Kenneth T. Flynn Jr................ 48 Vice President and Corporate
Vice President and Controller since 1997; Assistant
Corporate Controller Corporate Controller from 1985-1997
Paul R. Ryder...................... 47 Vice President, Investor Relations,
Vice President-Investor since 1997; Director - Investor
Relations Relations from 1984-1997.
Edward C. Shalagan................. 45 Treasurer since 1997; Assistant
Treasurer Treasurer from 1988-1997
Thomas P. Marchese................. 54 Assistant Vice President -
Assistant Vice Corporate Development, since 1994;
President-Corporate Director Business Development U.S.
Development from 1991- 1994
Charles W. O'Connor................ 67 Assistant General Counsel and
Assistant General Counsel Assistant Secretary since 1990
and Assistant Secretary
Stephen D. Vivier.................. 45 Assistant Treasurer, Tax, since
Assistant Treasurer-Tax 1997; Director Taxes from 1990-1997
Other Representatives
Officers of Subsidiaries of Echlin Inc.
Name Present Principal Occupation or Employment
---- ------------------------------------------
Allen Cameron President, Echlin Automotive Group
Robert Daley President Echlin Engine Systems Group
Kenneth Collins Managing Director Quinton-Hazell plc.
Salomon Personnel
Name Present Principal Occupation or Employment
---- ------------------------------------------
Michael J. Carr Managing Director and Co-Head of Mergers and
Acquisitions
Michael Tedesco Vice President, Mergers and Acquisitions
Gregory J. Dalvito Associate, Mergers and Acquisitions
SCHEDULE B
TRANSACTIONS OF PARTICIPANTS IN THE COMPANY'S SHARES
SINCE FEBRUARY 17, 1996
Set forth in the table below are the transactions engaged in by
participants with respect to the Company's shares.
Transaction Number of Shares Acquired
Name date (A) or Sold (S)
---- ----------- -------------------------
Dauch, Richard E 10/22/97 1,142 (A)
McCurdy, Larry W 11/12/97 5,000 (A)
10/09/97 2,500 (A)
10/09/97 400 (A)
Nusbaum, William P 10/29/96 1,000 (A)
07/02/97 2,000 (A)
Leckerling, Jon P . 12/16/97 700 (A)
12/16/97 160 (S)
12/16/96 850 (A)
12/16/96 575 (A)
12/16/96 100 (S)
Onorato, Joseph A 10/09/96 1,625 (A)
10/16/97 1,075 (A)
Flynn, Kenneth T 10/09/96 1,625 (A)
10/09/96 950 (S)
10/07/97 975 (A)
10/07/97 340 (S)
Makoski, Milton J 10/08/96 1,375 (A)
10/06/97 1,975 (A)
Ryder, Paul R 08/28/97 475 (A)
08/28/97 400 (A)
08/28/97 1,020 (A)
08/28/97 20 (A)
08/28/97 700 (S)
11/21/97 300 (A)
Shalagan, Edward C 10/09/96 675 (A)
10/01/97 425 (A)
Tobey, Robert F 10/07/96 2,200 (A)
02/11/98 1,400 (A)
02/11/98 3,520 (A)
02/11/98 3,200 (A)
02/11/98 4,775 (A)
Toole, Edward D. 09/19/96 2,375 (A)
01/02/97 1,975 (A)
01/02/98 1,100
Marchese, Thomas P. 10/04/96 800 (A)
12/18/96 725 (A)
Vivier, Stephen 12/18/96 800 (A)
