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
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[ ] 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)
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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 commence 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 a Demand. Your Board
urges you to act quickly to revoke any Demand you may have previously
delivered to SPX.
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 16, 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 commence
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 commence 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.
Your Board Believes that SPX is Attempting to Use the Special Meeting
Process in an Opportunistic Manner
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. 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 commence
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. Your Board believes this an opportunistic tactic to enhance
the chances of SPX obtaining control of Echlin quickly, cheaply, and on
terms that SPX dictates, 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."(**)
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(*) 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 certain events,
including an announcement (such as the announcement of the Proposed Offer)
of a plan, proposal or intention to pursue a transaction which would result
in a person becoming an interested shareholder of the company, (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. Echlin has retained advisers in
connection with its efforts in support of the Bill. Based on published
press reports, it is Echlin's understanding that SPX has also retained
advisers to assist SPX with its efforts in opposition to the Bill
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 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.
Echlin believes that the statements made in Mr. Blystone's letter are
inaccurate. For example, Mr. Blystone's letter to the Echlin Board (which
was publicly released by SPX) stated in connection with the proposed
legislation: "Even if 100% of Echlin shareholders voted to remove
directors, they could not be removed for a year." In fact the proposed
legislation does not prevent any changes in the Echlin Board for a period
of one year: it prevents only removal of directors without cause at special
meetings and does not restrict removals for cause at any time or removals
without cause at any annual general meeting.
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. The Company intends to give effect to all
valid Revocations (including GREEN revocation cards), whether such valid
revocations are received before or after receipt of the requisite Demands.
The Company believes it is required to call the Special Meeting within
thirty days of receiving the requisite Demands if such Demands are not
revoked prior to the call of such meeting. At the present time the Company
has not determined at what time during this period it will call for a
Special Meeting.
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. YOUR BOARD URGES YOU TO ACT
QUICKLY TO REVOKE ANY DEMAND YOU MAY HAVE PREVIOUSLY DELIVERED TO SPX.
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 $50,000, 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 identified in Schedule A.
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
$1,000,000. The Company to date has incurred estimated total expenses of
approximately $600,000. 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>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percentage of Class
- ------------------------------------ -------------------- -------------------
<S> <C> <C>
Scudder Kemper Investments, Inc.
Two International Place
Boston, MA 02110-4103 4,579,317 (1) 7.24%
McKay-Shields Financial Corporation
Investment Advisors
9 West 57th Street
New York, New York 10019 4,349,380 (2) 6.88%
The Capital Group Companies, Inc
333 South Hope Street
Los Angeles, California 90071 3,582,400 (3) 5.66%
________________
(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.
</TABLE>
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.
<TABLE>
<CAPTION>
Number of Shares of
Common Stock Percentage of
Name Beneficially Owned Class
- ---------------------------- ------------------- -------------
<S> <C> <C>
John F. Creamer, Jr.(1)..... 21,750 shares
Richard E. Dauch ......... 1,135 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 6,050 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 21,814 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.
</TABLE>
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 settled a claim for adjustment of the purchase price by
approximately $1,000,000 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").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION 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 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, 1995 164,000 65,000 6,300 192,465 2,612
General 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 1995 145,000 65,000 6,300 192,465 2,610
Officer
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, 1996 150,700 32,700 1,400 47,282 1,608
Associate General 1995 143,500 39,200 2,050 131,040 2,624
Counsel and 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 $247,000 paid to Mr. Mancheski under the Supplemental
Executive Retirement Plan and the Supplemental Senior Executive
Retirement Plan.
(5) Under the Company's 1976 Deferred Compensation Plan, as amended,
directors can defer up to 100 percent of their directors' fees and
designated officers and key executives can defer up to 25 percent of
their salary and bonus and up to 100 percent of their performance unit
plan award payment each year. Interest is accrued on deferred
accounts at the greater of the average rate of interest paid by the
Company on its commercial paper borrowings or the Company's return on
assets. The amount shown is the interest accrued on deferred
compensation accounts equal to the Company's return on assets but in
excess of 120 percent of the Federal long-term interest rate on
December 31, 1995 (5.982 percent).
Option/SAR Grants in Fiscal Year 1997
Shown below is further information on grants of stock options
pursuant to the Company's 1992 Executive Stock Option Plan, and in the case
of Mr. Jones, options granted under the Echlin Inc. 1996 Non-Executive
Director Stock Option Plan during the fiscal year ended August 31, 1997 to
the Named Executive Officers. Such grants are reflected in the Summary
Compensation Table.
Option/SAR Grants in FY 1997 and FY 1997 Grant Date Value
<TABLE>
<CAPTION>
Individual Grants Grant Date Value
-------------------------------------------------------- ----------------------------
Grant Date
(December 18
1996, March 7,
1997 and
% of Total December 20,
% of Total Options Granted Expiration 1996)
Options Granted Options Granted to Employees Date Present Value
Name (#)(A) to Employees in Fiscal Year (C) ($)(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
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-memory Options at
Shares Value Options at FY End (#) FY Ends ($)(B)
Acquired on Realized ---------------------------- ----------------------------
Name Exercise (#) ($)(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 Payments under Non-Stock Price-Based Plans
- ------------------------------------------------------------------------------------------------------
Performance
Period Until
Number of Maturation or Threshold Target Maximum
of Units(#) Payout (A) ($)(C) ($)(C) ($)(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
group (12) including those
above......................... 86,325 8/31/99 87,279 395,697 899,271
All employees who are not
Executive Officers, as a
group......................... 526,100 8/31/99 870,078 3,944,682 8,964,744
- -------------------
* 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.
</TABLE>
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 12, 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.
<TABLE>
<CAPTION>
Directors of Echlin Inc.
<S> <C> <C>
Director
Name Since Business Activites 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 Chairman of the Board (since December 17, 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.
Name Age Business Activities since September 1, 1992
---- ---- -------------------------------------------
Larry W. McCurdy............................ 62 Chairman, President and Chief Executive Officer since
Chairman, President and Chief Executive 1997; Executive Vice President - Operations, Cooper
Officer Industries, Inc. from 1994-1997; President and Chief
Executive Officer, Moog Automotive, Inc. from 1985-
1994
Jon P. Leckerling........................... 49 Senior Vice President, General Counsel and Company
Executive Vice President, General Counsel Secretary since 1997; Vice President, General Counsel
and Corporate Secretary and Corporate Secretary from 1990-1997
Milton J. Makoski........................... 51 Senior Vice President, Human Resources, since 1997;
Senior Vice President-Human Resources Vice President - Human Resources since 1986
Joseph A. Onorato........................... 48 Senior Vice President and Chief Financial Officer since
Senior Vice President and Chief Financial 1997; Vice President and Treasurer from 1994-1997;
Officer Treasurer from 1990-1994
Robert F. Tobey............................. 52 Senior Vice President - Corporate Development, since
Senior Vice President-Corporate 1997; Various managerial positions within Echlin's
Development International Group from 1991 to 1997
Edward D. Toole Jr.......................... 67 Vice President, Associate General Counsel and Assistant
Vice President, Associate General Counsel Secretary since 1997; Associate General Counsel and
and Assistant Secretary Assistant Secretary since 1990
Kenneth T. Flynn Jr......................... 48 Vice President and Corporate Controller since 1997;
Vice President and Corporate Controller Assistant Corporate Controller from 1985-1997
Paul R. Ryder............................... 47 Vice President, Investor Relations, since 1997; Director -
Vice President-Investor Relations Investor Relations from 1984-1997.
Edward C. Shalagan.......................... 45 Treasurer since 1997; Assistant Treasurer from 1988-1997
Treasurer
Thomas P. Marchese.......................... 54 Assistant Vice President - Corporate Development, since
Assistant Vice President-Corporate 1994; Director Business Development U.S. from 1991-
Development 1994
Charles W. O'Connor......................... 67 Assistant General Counsel and Assistant Secretary since
Assistant General Counsel and Assistant 1990
Secretary
Stephen D. Vivier........................... 45 Assistant Treasurer, Tax, since 1997; Director Taxes from
Assistant Treasurer-Tax 1990-1997
</TABLE>
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 Smith Barney
Name Present Principal Occupation or Employment
----- ------------------------------------------
Michael J. Carr Managing Director and Co-Head of Mergers and
Acquisitions, Salomon Smith Barney
Michael Tedesco Vice President, Mergers and Acquisitions,
Salomon Smith Barney
Gregory J. Dalvito Associate, Mergers and Acquisitions,
Salomon Smith Barney
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 individuals
identified in Schedule A with respect to the Company's shares.
Number of shares Acquired
Name Transaction date (A) or Sold (S)
---- ---------------- --------------------------
Dauch, Richard E. 10/22/97 1,135 (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 Disposed (Gift)
12/16/96 850 (A)
12/16/96 575 (A)
12/16/96 100 Disposed (Gift)
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 (A)
Marchese, Thomas P. 10/04/96 800 (A)
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.
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
