<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
FEDERAL-MOGUL CORPORATION
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
(5) Total fee paid:
[_] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
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[FEDERAL MOGUL LOGO]
March 15, 1995
To Our Shareholders:
You are invited to attend the 1995 Annual Meeting of Shareholders which will
be held at the Corporation's World Headquarters, 26555 Northwestern Highway
(southwest corner of Northwestern Highway and Lahser Road), Southfield,
Michigan, on Wednesday, April 26, 1995. The meeting will start promptly at
10:30 a.m., local time. After the formal business session there will be a
report to the shareholders on the progress of the Corporation. A discussion
period will follow the report.
The attached notice of the meeting and Proxy Statement describe the items of
business to be transacted: (i) the election of seven directors; (ii) the
approval of the appointment of Ernst & Young as independent accountants for the
Corporation for 1995; and (iii) such other business as may properly come before
the meeting.
Whether or not you plan to attend the meeting, we urge you to sign, date and
return your Proxy in the addressed envelope enclosed for your convenience so
that as many shares as possible may be represented at the meeting. No postage
is required if the envelope is mailed in the United States. The giving of the
Proxy will not affect your right to attend the meeting, nor, if you choose to
revoke the Proxy, your right to vote in person.
[SIGNATURE OF DENNIS J. GORMLEY LOGO]
Dennis J. Gormley
Chairman of the Board,
President and Chief Executive
Officer
<PAGE>
- --------------------------------------------------------------------------------
[FEDERAL MOGUL LOGO]
P.O. Box 1966, Detroit, Michigan 48235
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 26, 1995
Southfield, Michigan
March 15, 1995
To the Shareholders of Federal-Mogul Corporation:
Notice is hereby given that the Annual Meeting of Shareholders of Federal-Mogul
Corporation will be held at the World Headquarters of the Corporation at 26555
Northwestern Highway (southwest corner of Northwestern Highway and Lahser Road)
Southfield, Michigan on Wednesday, April 26, 1995, at 10:30 a.m., local time,
for the following purposes:
1. To elect seven directors of the Corporation to hold office until the next
Annual Meeting of Shareholders or until their successors are elected and
qualified;
2. To approve the appointment by the Board of Directors of Ernst & Young as
independent accountants to audit the financial statements of the Corporation
and its consolidated subsidiaries for the year 1995; and
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Shareholders of record on March 1, 1995 will be eligible to vote at this
meeting. The stock transfer books of the Corporation will not be closed, but
only shareholders of record at the close of business on such date will be
entitled to notice of and to vote at the meeting.
By order of the Board of Directors,
[SIGNATURE OF STEPHANIE G. HEIM LOGO]
Stephanie G. Heim
Assistant Secretary
- --------------------------------------------------------------------------------
YOU ARE URGED TO DATE, SIGN AND MAIL THE ENCLOSED FORM OF PROXY IN THE
ACCOMPANYING ADDRESSED ENVELOPE AT YOUR EARLIEST OPPORTUNITY, THEREBY SAVING
YOUR CORPORATION THE EXPENSE OF FURTHER SOLICITATION OF PROXIES.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
[FEDERAL MOGUL LOGO]
P.O. Box 1966, Detroit, Michigan 48235 March 15, 1995
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors of Federal-Mogul Corporation to be used at
the Annual Meeting of Shareholders, and at any adjournment thereof, to be held
on Wednesday, April 26, 1995, at the World Headquarters of the Corporation at
26555 Northwestern Highway, Southfield, Michigan beginning at 10:30 a.m., local
time. The mailing address of the principal executive offices of the Corporation
is P.O. Box 1966, Detroit, Michigan 48235.
This Proxy Statement and the accompanying form of Proxy, which is being
solicited by the Corporation, will be first sent or given to shareholders on or
about March 15, 1995.
I. NOMINEES FOR ELECTION AS DIRECTORS
The nominees proposed herein for election as directors are willing to be
elected as such, and it is intended that the persons named in the accompanying
form of Proxy will vote for the election of such nominees unless shareholders
specify otherwise in their proxies. The term of office of directors elected at
the Annual Meeting will continue until the next Annual Meeting. If any nominee
at the time of election is unable to serve, or otherwise is unavailable for
election, and if other nominees are designated, the persons named in such proxy
will have discretionary authority to vote or refrain from voting in accordance
with their judgment on such other nominees. If any nominees are substituted by
the Board of Directors, the persons named in the accompanying form of Proxy
intend to vote for such nominees. Management is not aware of the existence of
any circumstances which would render any nominee named hereunder unavailable
for election. All nominees are currently directors of the Corporation. Mr.
Walter J. McCarthy, Jr., a director since 1982, is retiring from the Board and
will not stand for re-election.
DENNIS J. GORMLEY, 55, Chairman of the Board, President and
Chief Executive Officer, Federal-Mogul Corporation.
Mr. Gormley has served as a director of the Corporation since
1988 and as Chairman of the Board since May 1990. He is
Chairman of the Executive Committee and a member of the Pension
and Finance Committees.
[PHOTO] Mr. Gormley served as the Corporation's Vice President and
Group Executive--Materials Processing Group from 1980 until
1982 when he became Vice President and Group Executive--
Worldwide Marketing. He became Executive Vice President of the
Corporation in 1986 and held that position until he became
President and Chief Operating Officer of the Corporation in
1988. Mr. Gormley was appointed President and Chief Executive
Officer of the Corporation in May 1989 and Chairman of the
Board in May 1990.
Mr. Gormley is also a member of the Board of Directors of
Cooper Tire and Rubber Company and NBD Bancorp, Inc. and its
subsidiary, NBD Bank.
<PAGE>
RODERICK M. HILLS, 64, Partner, Mudge Rose Guthrie Alexander &
Ferdon; Counsellor, Hills & Company.
[PHOTO] Mr. Hills has served as a director of the Corporation since
1977. He is Chairman of the Compensation Committee and a member
of the Audit, Nominating and Pension Committees.
From 1975 to 1977, Mr. Hills was Chairman of the Securities and
Exchange Commission. He was Chairman and Chief Executive
Officer of Peabody Coal Company from 1977 to 1978. Mr. Hills
was a partner in the law firm of Latham, Watkins and Hills from
1978 to 1982. He was Chairman and Chief Executive Officer of
Sears World Trade, Inc. from 1982 to 1984, when he returned to
his former law firm as counsel. In 1985, he left that firm to
assume his position at Yale University as Distinguished Faculty
Fellow and Lecturer, School of Organization and Management. On
January 1, 1987, he was named Managing Director--Chairman of
The Manchester Group Ltd. In May 1989, he joined the
Washington, D.C. office of the law firm of Donovan Leisure
Rogovin Huge & Schiller as the Managing Partner. From June 1992
until early 1994, he was Chairman of the International Practice
Group of Shea & Gould in Washington, D.C. In 1994, he joined
the Washington, D.C. office of Mudge Rose Guthrie Alexander &
Ferdon.
Mr. Hills is also Vice Chairman of the Board of Directors of
Oak Industries, Inc., as well as a member of the Board of
Directors of Sunbeam-Oster, Inc., and Mayflower Group, Inc.
JOHN J. FANNON, 61, Vice Chairman of Simpson Paper Company.
Mr. Fannon has served as a director of the Corporation since
[PHOTO] 1986. He is Chairman of the Pension Committee and a member of
the Compensation and Nominating Committees.
Mr. Fannon has held his present position since 1993. From 1980
until 1993, Mr. Fannon was a director and president of Simpson
Paper. Simpson Paper is privately owned with annual sales
exceeding $1 billion. It manufactures and sells bleached and
unbleached pulp and a variety of paper grades on a global
basis.
JOHN C. POPE, 45, Former President, Chief Operating Officer and
Director, UAL Corporation and United Air Lines, Inc.
[PHOTO] Mr. Pope has served as a director of the Corporation since
1987. He is Chairman of the Audit Committee and a member of the
Nominating, Compensation, Executive and Finance Committees.
Mr. Pope was President, Chief Operating Officer and Director of
UAL Corporation and United Air Lines from May 1, 1992 until
July 12, 1994. Previously, Mr. Pope was appointed Executive
Vice President, Chief Financial Officer and Treasurer of UAL
Corporation, and Executive Vice President and Chief Financial
Officer of United Air Lines in January 1988. He was elected to
the additional position of Executive Vice President--Marketing
and Planning of United Air Lines on May 7, 1989 which he held
until October 22, 1990, when he was elected Executive Vice
President--Marketing and Finance, and Chief Financial Officer
of United Air Lines. In 1990, Mr. Pope was appointed Vice
Chairman, Chief Financial Officer and Treasurer of UAL
Corporation, and Vice Chairman and Chief Financial Officer of
United Air Lines until May 1992. Prior to his service with UAL
Corporation and United Air Lines, Mr. Pope was Senior Vice
President of Finance, Chief Financial Officer and Treasurer of
AMR Corporation and American Air Lines (1987-1988), and Senior
Vice President of Finance and Chief Financial Officer of
American Air Lines (1985-1987).
2
<PAGE>
H. MICHAEL SEKYRA, 53, Chairman of the Supervisory Board of
Bohler Uddeholm AG.
[PHOTO] Dr. Sekyra has served as a director of the Corporation since
1991. He is a member of the Nominating, Compensation and
Pension Committees.
Dr. Sekyra, a native of Austria, has been Chairman of the
Supervisory Board of Bohler Uddeholm AG, an Austrian company,
since 1994. He previously served as Chief Executive Officer and
Chairman of the Managing Board of Austrian Industries AG,
headquartered in Vienna, Austria, from 1986 until December
1993. He now conducts a major privatization program in the
Austrian specialty steel industry and holds a number of
Supervisory Board positions in banking and industrial
enterprises.
ROBERT S. MILLER, JR., 53, Vice President and Treasurer of
Moore Mill and Lumber Company.
[PHOTO] Mr. Miller has served as a director of the Corporation since
1993. He is Chairman of the Finance Committee and a member of
the Audit, Compensation and Nominating Committees.
Mr. Miller was Executive Vice President and Chief Financial
Officer of Chrysler Corporation from 1981 until 1990 and Vice
Chairman of the Board of Chrysler from 1990 until 1992. In
1992, Mr. Miller joined the investment banking firm of James D.
Wolfensohn in New York City as Senior Partner until 1993 when
he left to join Moore Mill and Lumber Company, a privately held
timber business in Oregon, as Vice President and Treasurer and
as a member of the Board of Directors.
Mr. Miller is also a member of the Board of Directors of U.S.
Bancorp, Fluke Corporation, Pope & Talbot, Inc., Coleman
Company, and Symantec Corp.
ANTONIO MADERO, 57, Founder, Chairman of the Board and Chief
Executive Officer, Corporacion Industrial Sanluis, S.A. de C.V.
[PHOTO] Mr. Madero has served as a director of the Corporation since
February 1994. He is a member of the Audit, Nominating and
Pension Committees.
Mr. Madero founded Corporacion Industrial Sanluis, S.A. de C.V.
and has served as its Chairman of the Board and Chief Executive
Officer since 1979. Corporacion Industrial Sanluis is a Mexican
holding company with interests in gold, silver, mining and auto
parts.
Mr. Madero is also a member of the Boards of Directors of Grupo
Financiero Inverlat-Comermex, S.A., of Cydsa, S.A. de C.V.,
Grupo Embotelladoras Unidas, S.A. de C.V., Alfa, S.A. de C.V.,
Grupo Industrial Saltillo, S.A. de C.V., Fondo Opcion, S.A. de
C.V., Seguros Comercial America, S.A., Grupo Posadas, S.A. de
C.V., Hard Rock Cafe, S.A. (Mexico), Banca Quadrum, S.A. de
C.V., and Banca Chase (Mexico) S.A.
The Corporation's Board of Directors met eight times during 1994. The Board has
standing Audit, Compensation and Nominating Committees. During 1994, all
directors attended more than 75% of the aggregate number of meetings of the
Board of Directors and the standing committees on which they served during the
period in which they served as directors.
AUDIT COMMITTEE. The Audit Committee, which consists of Messrs. Pope
(Chairman), Hills, Madero, McCarthy, and Miller, held three meetings in 1994.
This Committee (a) annually recommends to the Board independent accountants to
serve as auditors of the corporation and its consolidated subsidiaries, (b)
reviews the scope of the independent accountants' audits, (c) reviews the
independent
3
<PAGE>
accountants' audit reports, management letters and fees, (d) reviews the annual
program of the internal auditing staff, and (e) reviews such special reports
and comments as may be submitted by management or the internal auditing staff.
COMPENSATION COMMITTEE. The Compensation Committee consists of Messrs. Hills
(Chairman), Fannon, McCarthy, Miller, Pope and Sekyra. The Compensation
Committee met five times in 1994. This Committee (a) recommends to the Board
the remuneration of officers of the Corporation, (b) establishes the formula
used to determine the amount available for awards for members of the
Corporation's Advisory Board under the 1977 Supplemental Compensation Plan and
recommends to the Board amounts to be paid under such Plan as supplemental
compensation to officers, (c) recommends to the Board the granting of stock
options and stock awards to officers and other employees, (d) recommends to the
Board changes in the various compensation, benefit and stock option plans of
the Corporation, (e) periodically examines the compensation and benefit
structure of the Corporation for key employees to determine that the
Corporation is rewarding executive personnel in a manner consistent with sound
business practices, and (f) performs such other duties as are its
responsibility under the various compensation, benefit and stock option plans
of the Corporation that are applicable to officers.
NOMINATING COMMITTEE. The Nominating Committee, which consists of Messrs.
McCarthy (Chairman), Fannon, Hills, Madero, Miller, Pope, and Sekyra met three
times in 1994. This Committee (a) recommends, when it deems appropriate,
increasing or decreasing the number of members of the Board, (b) recommends to
the Board the persons who should be considered for election as directors, (c)
maintains for future use a current list of qualified candidates for nomination
to the Board, (d) reviews and recommends to the Board the annual compensation
to be paid to non-employee directors, (e) recommends to the Board the names of
directors to serve each year on the standing committees of the Board and (f)
reviews periodically with the Chief Executive Officer the plan for management's
succession. The Committee will consider shareholder nominees for election at
the 1996 Annual Meeting provided that such nominations are submitted in writing
to the Secretary of the Corporation during the period beginning January 26,
1996 and ending February 25, 1996 together with the written consent of such
nominees, the name, address and number of shares owned by the proponent, and
all information required to be disclosed in solicitations of proxies for
election of directors pursuant to Regulation 14A under the Securities and
Exchange Act of 1934, as amended. Such dates are subject to change if the date
of the 1996 Annual Meeting is significantly different than the date of the 1995
Annual Meeting. Reference is made to the Corporation's bylaws for a complete
description of the procedures to be followed by shareholders in submitting
nominations for the Board of Directors.
COMPENSATION OF DIRECTORS. Directors who are not employees of the Corporation
(currently seven directors) are paid retainers of $4,000 for each calendar
quarter. In addition, they are paid fees for attending Board meetings of $1,000
per meeting. They also are paid fees for attending meetings of Committees of
the Board of $700 per Committee meeting, if such meeting is held on the same
day as a Board meeting, and $800 if it is not. Committee chairmen receive an
additional $250 for each Committee meeting attended. A plan permitting
directors to defer compensation is available to all directors who are not
employees of the Corporation. Any deferred compensation remains part of the
general funds of the Corporation and, until paid to the director or his
beneficiary, will earn interest at a rate equal to the ten-year U.S. Treasury
Bill rate plus 1% or, at the director's option, will be valued as though
invested in the Corporation's Common Stock.
During 1993, the Corporation implemented the Non-Employee Director Stock Award
Plan (the "Award Plan"), which was approved by shareholders in 1994. Under the
Award Plan, current directors who are not employees of the Corporation received
a one-time grant of 1,000 shares of Common Stock (subject to transfer
restrictions lapsing over five years) on the date the Board approved the Award
Plan and future directors who are not employees of the Corporation will receive
a similar grant at the time they first become a director. The Award Plan also
permits non-employee directors to elect to receive all or a portion of their
annual retainer fee in Common Stock in lieu of cash.
4
<PAGE>
Under the Corporation's Directors' Retirement Income Plan as amended, a former
director who was a member of the Board on or after January 1, 1985 and who has
never been an employee of the Corporation, is entitled to receive quarterly an
amount equal to the amount of the quarterly retainer payable to the
Corporation's nonemployee directors as established by the Board and in effect
on the date such person ceases to be a director. A director will be credited
with a quarter-year of service for each three-month period or part thereof
during which the director served continuously as a member of the Board. Such
amount is payable to the retired director or his surviving spouse over a period
of time which commences on such date and expires on the expiration of a period
of time equal to the number of quarter-years of the director's service on the
Board. In the event a director with five or more years of service on the Board
dies before retiring, the director's surviving spouse will receive a lump sum
payment equal to five times the annual retainer in effect on the date of death.
Certain Transactions. In May 1994, the Company extended a non-interest bearing
bridge loan in the amount of $69,000 to J.O. Davis, Vice President,
Distribution and Logistics, in connection with his relocation. The entire
outstanding balance was repaid by Mr. Davis on December 16, 1994.
Pursuant to the Federal-Mogul Corporation Key Executive Stock Retention Loan
Program ("the Program"), in March 1994, the Company loaned F. J. Musone, former
President of the Company's Worldwide Manufacturing Operations, $73,165 to
assist with the payment of certain tax liabilities resulting from the vesting
of a restricted share grant. Mr. Musone repaid the loan in full September 7,
1994. Also in March 1994, the Company loaned W.G. Smith, President of the
Company's Worldwide Aftermarket Operations, $300,000, which was outstanding as
of December 31, 1994, in part, to assist with the payment of certain tax
liabilities resulting from the vesting of a restricted share grant. In
addition, G. N. Bashara, Jr., former Vice President, General Counsel and
Secretary of the Company, borrowed an aggregate total under the Program of
$205,000, which was outstanding as of December 31, 1994.
The purpose of the Program is to encourage executives to retain ownership of
Federal-Mogul stock and stock options by providing liquidity. Loans under the
Program are evidenced by promissory notes and are secured by an assignment of
any proceeds from the sale of shares of Federal-Mogul common stock acquired
upon the exercise of employee stock options or the sale of restricted share
grants. The maximum term of the loans is five years (assuming continued
employment). The Program also provides that interest on the outstanding
principal balance of the loans is variable and is reset quarterly based on
current broker margin account rates; at December 31, 1994, the interest rate on
any outstanding principal balance was 7.63%.
II. APPROVAL OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors recommends that the shareholders approve the Board's
appointment of the accounting firm of Ernst & Young as independent accountants
to audit the financial statements of the Corporation and its consolidated
subsidiaries for the year 1995. The firm has conducted the audits for the
Corporation for many years. If the appointment is not approved, the Board of
Directors will appoint another independent accounting firm to audit the
financial statements of the Corporation and its consolidated subsidiaries for
the year 1995 without further action by the shareholders.
Representatives of Ernst & Young are expected to be at the Annual Meeting and
to be available to respond to appropriate questions. Such representatives will
have the opportunity to make a statement if they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE APPOINTMENT OF
ERNST & YOUNG AS INDEPENDENT ACCOUNTANTS TO AUDIT THE FINANCIAL STATEMENTS OF
THE CORPORATION AND ITS CONSOLIDATED SUBSIDIARIES FOR THE YEAR 1995. PROXIES
SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS
SPECIFY A DIFFERENT CHOICE IN THEIR PROXIES.
5
<PAGE>
III. INFORMATION ON EXECUTIVE COMPENSATION
Set forth below is information concerning the annual and long-term
compensation for services rendered in all capacities to the Corporation and
its subsidiaries for the fiscal years ended December 31, 1994, 1993 and 1992,
for each person who was as of December 31, 1994, the chief executive officer
and the other four most highly compensated executive officers of the
Corporation.
SUMMARY COMPENSATION TABLE
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<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards(D)
- ------------------------------------------------------------------------- -----------------------
Restricted Securities
Other Annual Stock Underlying All Other
Salary Bonus Compensation Awards Options/SARs Compensation
Name and Principal Position Year ($) ($) ($) ($)(F) (#) ($)(A)
- ------------------------------------- ---- ------- -------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
D. J. Gormley (B)(C)................. 1994 557,388 400,000 -- 100,000 0 87,118
Chairman of the Board, 1993 469,597 450,000 -- 0 160,000 80,505
President and Chief Executive Officer 1992 432,366 400,000 -- 0 0 43,609
F. J. Musone (B)(C)(G)............... 1994 287,893 132,000 -- 33,000 0 40,096
Vice President; President--Worldwide 1993 240,076 150,000 -- 0 52,000 21,816
Manufacturing Operation 1992 219,447 125,000 -- 0 0 17,490
W. G. Smith (B)(C)................... 1994 287,402 132,000 -- 33,000 0 31,878
Vice President; President--Worldwide 1993 239,588 150,000 -- 0 52,000 27,159
Aftermarket Operation 1992 220,044 125,000 -- 0 0 23,366
M. E. Welch III (B).................. 1994 262,313 120,000 75,565(D) 30,000 0 32,533
Senior Vice President 1993 224,750 137,000 -- 0 52,000 26,134
and Chief Financial Officer 1992 211,579 115,000 -- 0 0 10,134
G. N. Bashara, Jr. (B)(G)............ 1994 196,236 75,000 36,218(E) 0 0 49,149
Vice President, General Counsel & 1993 188,880 75,000 -- 0 16,000 43,246
Secretary 1992 179,895 75,000 -- 0 0 42,886
</TABLE>
- -----------
(A) INCLUDES (I) CORPORATION MATCH AND ESOP CONTRIBUTIONS TO THE SALARIED
EMPLOYEE'S INVESTMENT PROGRAM, (II) CONTRIBUTIONS UNDER THE SUPPLEMENTAL
EXECUTIVE PROGRAM, AND (III) CONTRIBUTIONS OR ALLOCATIONS FOR SPLIT LIFE
INSURANCE RESPECTIVELY FOR D.J. GORMLEY ($11,653, $64,125, $11,340); F.J.
MUSONE ($14,461, $22,500, $3,135); W.G. SMITH ($9,979, $15,000, $6,899); M.E.
WELCH III ($14,461, $13,000, $5,072); G.N. BASHARA, JR. ($11,213, $14,460,
$23,476).
(B) THE CORPORATION WAS A PARTY AT DECEMBER 31, 1994 TO EXECUTIVE SEVERANCE
AGREEMENTS WITH MESSRS. GORMLEY, MUSONE, SMITH, WELCH AND BASHARA. BENEFITS
THEREUNDER WILL BE PAYABLE ONLY IF AN ACTUAL OR CONSTRUCTIVE TERMINATION OF
EMPLOYMENT OCCURS WITHIN 30 MONTHS FOLLOWING A CHANGE IN CONTROL OF THE
CORPORATION. SUCH CONTRACTUAL BENEFITS WILL CONSIST OF AMOUNTS UP TO 2.999
TIMES THE ANNUALIZED REPORTED TAXABLE INCOME DURING THE FIVE-YEAR PERIOD
PRECEDING THE CHANGE IN CONTROL (OR, IF HIGHER, THE HIGHEST ANNUAL BASE SALARY
IN EFFECT IN THE THREE-YEAR PERIOD PRECEDING SUCH OCCURRENCE), FOR THOSE YEARS
IN WHICH SERVICES WERE PERFORMED FOR THE CORPORATION.
(C) AGGREGATE RESTRICTED STOCK HOLDINGS AT DECEMBER 31, 1994 AND THE MARKET
VALUE OF SUCH HOLDINGS AT SUCH DATE OF $19.75 PER SHARE ARE AS FOLLOWS: D.J.
GORMLEY--40,000 SHARES/$790,000. DIVIDENDS ARE PAYABLE ON SUCH SHARES TO SUCH
INDIVIDUALS WHEN AND AS DECLARED. RESTRICTIONS LAPSED DURING 1994 WITH RESPECT
TO 6,000 SHARES OF RESTRICTED STOCK AWARDED IN 1989 TO EACH OF MESSRS. MUSONE
AND SMITH.
(D) INCLUDES CLUB INITIATION FEES OF $55,091. AMOUNTS FOR ALL OTHER NAMED
OFFICERS WERE LESS THAN THE REQUIRED REPORTING LEVEL.
(E) THE AMOUNT SHOWN IS A PAYMENT IN LIEU OF VACATION.
(F) RESTRICTED SHARES AWARDED AS PART OF 1994 SUPPLEMENTAL COMPENSATION. ONE-
THIRD OF TOTAL SHARES AWARDED VEST EACH YEAR FOLLOWING THE DATE OF GRANT (2-8-
95). DIVIDENDS ARE PAYABLE TO THE RECIPIENTS WHEN AND AS DECLARED.
(G) MR. MUSONE RESIGNED FROM THE CORPORATION EFFECTIVE FEBRUARY 28, 1995; MR.
BASHARA RETIRED FROM THE CORPORATION EFFECTIVEDECEMBER 31, 1994.
6
<PAGE>
STOCK OPTIONS/STOCK APPRECIATION RIGHTS. The following table summarizes option
grants during fiscal year 1994 to the executive officers named in the
Compensation Table and the potential realizable value of such options
determined by formulas proscribed by the Securities Exchange Commission. The
assumed rates of stock price appreciation are hypothetical; the actual value of
the options will depend on the future performance of the Company's stock. No
stock appreciation rights were granted or exercised (nor were any outstanding)
during fiscal 1994.
The following table summarizes information with respect to options held by each
of the named executive officers as of December 31, 1994. The values shown are
hypothetical and depend on the future performance of the Company's stock.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1994 OPTION/SAR VALUE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARs
Options/SARs at 12/31/94
Value at 12/31/94 at $19.75
Shares Acquired Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
- ---- --------------- -------- ------------- -------------
<S> <C> <C> <C> <C>
D. J. Gormley.............. 0 0 278,500/ $34,843/
310,000 0
F. J. Musone............... 26,850 $422,450 75,350/ $ 0/
108,250 0
W. G. Smith................ 0 0 95,200/ $ 8,063/
108,250 0
M. E. Welch III............ 0 0 56,250/ $ 0/
108,250 0
G. N. Bashara, Jr.......... 0 0 47,100/ $ 2,688/
46,000 0
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Pursuant to rules adopted by the Securities & Exchange Commission, the
Compensation Committee of the Company's Board of Directors has furnished the
following report on executive compensation.
Role of Compensation Committee
The Compensation Committee is composed entirely of independent, non-employee
directors of the Company. The Compensation Committee has supervised the
development and implementation of the Company's compensation plans and
programs. As appropriate, the Committee has, with the assistance of independent
compensation consultants, initiated new or significantly changed compensation
policies as well as determined periodic measurements of overall compensation
for the purpose of more closely aligning the rewards to senior managers with an
increase in the value of the Corporation's stock.
The Compensation Committee makes recommendations to the Board on compensation
actions involving its executive officers, selected senior management, and the
Chief Executive Officer. In all instances, the Compensation Committee, which
meets at least three times each year, recommends what compensation decisions
are to be taken to the Corporation's full Board of Directors which has final
authority on such matters.
In addition to the senior executive positions previously described, a number of
managers and other key employees of the Corporation are eligible under the
Corporation's compensation programs to receive incentive compensation and stock
option awards. The Compensation Committee monitors the policies
7
<PAGE>
that grant such compensation but specifically reviews only grants and awards to
the Corporation's executive officers.
Compensation Philosophy
Salary ranges of senior managers are set below the median salary ranges of the
general industry labor markets in which the Corporation operates. These salary
ranges are validated by independent consultants who review the standards of
similar medium to large United States based industrial corporations.
Supplemental compensation policies, consisting of annual incentives and long-
term stock option and stock award programs are designed to provide senior
managers with a total compensation package that meets or exceeds industry
averages only if well defined business objectives primarily based on earnings
or stock prices are reached or exceeded. In 1994 the primary goal was based on
targeted earnings per share for annual incentive based awards.
Base Salary
In keeping with the Compensation Committee's philosophy, the base salary of
executive management is set somewhat below the described median as determined
by market based surveys provided by an independent consultant and is further
based on the individual executive's performance, relevant experience and
demonstrated capabilities in meeting the requirements of the position. The
Chief Executive Officer's base salary was determined by the Committee
evaluating his attainment of stated overall goals and targets for the Company
and his individual contribution and performance.
Supplemental Compensation
The Corporation's "Supplemental Compensation" program provides the opportunity
for annual incentive awards to its senior managers and executive officers,
including the Chief Executive Officer. Each year targeted goals are set with
the recommendation of the Compensation Committee and, if met, such goals create
a plan fund of a certain amount. The fund increases if the target is exceeded,
and reduces if the target is not met. If the minimum goal is not achieved,
there is no fund at all. In 1994, the targeted goal was based on a projection
by Company management of increased earnings of $1.50 a share (absent any
extraordinary event that increases or decreases that number). There would have
been no supplemental compensation fund if earnings of at least $1.10 a share
had not been reached.
Each manager participating in the program is eligible to share in the fund
pursuant to pre-established percentages for their position. In 1994, these
targeted percentages ranged from 30% to 62.5% for executive officers and up to
100% for the Chief Executive Officer. After year end, the Compensation
Committee reviews recommendations of the Chief Executive Officer for all other
executive officer positions and makes a final recommendation as to the exact
amount to be granted each individual. The Committee makes an independent
determination as to what supplemental compensation should be recommended for
the Chief Executive Officer. In order to increase executive stock ownership in
1994, a significant portion, approximating twenty percent of the approved
amount was payable in restricted shares. One-third of the restricted shares
awarded vests at the end of each subsequent twelve-month period of continuous
employment with the Corporation.
Long-Term Incentive Compensation
The Long-Term Incentive Compensation for the Corporation's executive officers
is created with stock options and awards of restricted stock. Periodic grants
of stock options are made to executive officers based on their position and on
their contribution to the long-term direction and success of the organization.
The grant price is regularly set at the price average on the day of the grant.
Such options
8
<PAGE>
have vested after a minimum of 6 months and been exercisable over a subsequent
period of 10 years. The basis for this program is reviewed each year by the
Compensation Committee.
In 1991, at the request of management, the Compensation Committee with
assistance from an independent consultant and the advice and participation of
management, designed a new stock option program for the Corporation's most
senior officers, including the Chief Executive Officer, keyed more dramatically
to the price of the Corporation's stock. The 1991 grants were substantially
larger than previously awarded, but certain unique conditions designed to
enhance shareholder value were placed upon them:
--The exercise price of these options was set at $22 per share, approximately
50% above the price at which the Corporation's stock was then trading. The
exercise price of $22 was reached on May 26, 1993.
--Currently, 100% of the options granted may be exercised, with no more than
one-half of the proceeds payable in cash. The remaining proceeds will be
paid in shares of restricted stock which must be held for up to an
additional 24 months before they can be sold or transferred.
On November 23, 1993, following the achievement of the $22 per share threshold
requirement of the 1991 grants, the Committee, with assistance from an
independent consultant and with the advice and participation of management,
presented a new stock option program, designed to set new goals for management
to enhance shareholder value. The program provided for grants of stock options
to senior executives of the Company at $24.125, the average listed price of the
Company's common stock listed on the New York Stock Exchange on November 23,
1993. The options granted may not be exercised before January 1, 1997. Twenty-
five percent of the options granted under the program were vested as of January
1, 1994. Options granted vest incrementally as the market price for the stock
rises incrementally and as of this date, 45% of the options awarded have
vested. The full number of options granted will vest only when the common stock
of the Company attains a market price of $55 per share.
1994 Results
1994 earnings of $1.46 per share were somewhat less than the targeted standard
goal of $1.50. Although recognizing that the 1994 goal was not fully achieved,
the Committee also considered the fact that 1994 earnings represented a 58%
improvement over 1993 earnings and were the Company's best results per share
since 1988. In addition, the Committee considered the fact that Company
management had successfully integrated the Sealed Power Replacement Business as
well as the favorable impact on operating margins of the Company's global
sourcing efforts, increased sales to original equipment customers and
productivity gains in manufacturing.
After considering all these factors, the Committee, at its February 7, 1995
meeting, recommended supplemental compensation awards to the participating
executives. The awards were reduced because the targeted goal was not fully
achieved. The Committee further determined that 47% of Mr. Gormley's
compensation for fiscal 1994 would come from the Supplemental Compensation
Program.
New goals have been targeted by the Committee for the Company's executive
officers for 1995.
THE COMPENSATION COMMITTEE
R. M. Hills, Chairman
J. J. Fannon R. S. Miller, Jr.
W. J. McCarthy, Jr. J. C. Pope
H. M. Sekrya
February 8, 1995
9
<PAGE>
STOCK PERFORMANCE CHART
The graphs below compare the cumulative total shareholder return on the
Corporation's Common Stock for each of the Company's last five fiscal years and
the Company's last three fiscal years, respectively, with the cumulative total
return of the S & P Composite-500 Stock Index and the Dow Jones Total Return
Index-Automobile Parts and Equipment, excluding rubber and tire companies. Both
graphs assume a $100 investment made at the beginning of the respective period
and reinvestment of all dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG FEDERAL MOGUL CORPORATION, S&P 500 INDEX AND DOW JONES AUTO AFT.
<CAPTION>
FEDERAL
Measurement Period MOGUL S&P DOW JONES
(Fiscal Year Covered) CORPORATION 500 INDEX AUTO AFT.
- ------------------- ----------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-
12/31/89 $100 $100 $100
FYE 12/31/90 $ 68 $ 97 $ 88
FYE 12/31/91 $ 78 $126 $108
FYE 12/31/92 $ 89 $136 $138
FYE 12/31/93 $163 $149 $181
FYE 12/31/94 $115 $152 $159
</TABLE>
*Excludes rubber & tire companies.
10
<PAGE>
COMPARISON OF THREE-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF THREE YEAR CUMULATIVE TOTAL RETURN
AMONG FEDERAL MOGUL CORPORATION, S&P 500 INDEX AND DOW JONES AUTO AFT.
<CAPTION>
FEDERAL
Measurement Period MOGUL S&P DOW JONES
(Fiscal Year Covered) CORPORATION 500 INDEX AUTO AFT.
- ------------------- ----------- --------- ---------
<S> <C> <C> <C>
Measurement Pt-
12/31/91 $100 $100 $100
FYE 12/31/92 $114 $108 $128
FYE 12/31/93 $208 $119 $168
FYE 12/31/94 $147 $121 $147
</TABLE>
*Excludes rubber & tire companies.
RETIREMENT PLANS. Under the Corporation's Personal Retirement Account Plan (the
"PRA"), benefits are payable upon retirement to salaried employees in the form
of a lump-sum or annuity at the employee's election. The PRA is a defined
benefit pension plan. Accrued pension benefits for participants are expressed
as an account balance. Annual credits of 2, 3, 4, 6 or 8% of earnings are made
to participants' accounts based on the employee's age. Earnings are defined as
an employee's annualized salary in effect on January 1 of such year. Benefits
vest based on a graded five-year schedule.
Estimated annual retirement benefits that may be provided by the PRA upon
retirement at age 65, assuming the employee converts the combined account
balances into a single monthly life annuity, are as follows: D. J. Gormley-
$131,832; F. J. Musone-$103,979; W. G. Smith-$128,426; M. E. Welch III-$80,840
and G. N. Bashara, Jr.-$28,141.
VI. INFORMATION ON SECURITIES
Only holders of the Corporation's Common Stock and of its Series C ESOP
Convertible Preferred Stock of record at the close of business on March 1, 1995
will be entitled to vote at the Annual Meeting or any adjournment thereof. On
such date there were outstanding 34,951,059 shares of Common Stock and 943,160
shares (with two votes per share) of Series C ESOP Convertible Preferred Stock
which constitute all of the outstanding voting securities of the Corporation.
The holders of shares of Common Stock at the close of business on the record
date are entitled to one vote per share on all matters to be acted upon, and
each share of Series C ESOP Convertible Preferred Stock is entitled to two
votes, voting together with the Common Stock.
STOCK OWNERSHIP OF MANAGEMENT. As of February 15, 1995, shares of the
Corporation's Common Stock and Series C ESOP Convertible Preferred Stock were
owned beneficially by its directors and officers as a group as set forth in the
following tables.
11
<PAGE>
COMMON STOCK
<TABLE>
<CAPTION>
Deferred
Number of Stock
Shares Beneficially Units
Name Owned (A) (B) (C) (F) Total
- ---- ------------------- -------- ---------
<S> <C> <C> <C>
D. J. Gormley............................ 570,439 (D) -- 570,439
G. N. Bashara, Jr........................ 81,769 (E) -- 81,769
J. J. Fannon............................. 1,210 4,958 6,168
R. M. Hills.............................. 14,000 34,015 48,015
A. Madero ............................... 1,009 584 1,593
W. J. McCarthy, Jr....................... 2,475 -- 2,475
R. S. Miller, Jr......................... 2,000 (E) -- 2,000
F. J. Musone............................. 135,527 (D) -- 135,527
J. C. Pope............................... 3,900 (E) 1,308 5,208
H. M. Sekyra............................. 2,159 -- 2,159
W. G. Smith.............................. 193,494 (D) -- 193,494
M. E. Welch III.......................... 101,613 (D) -- 101,613
All directors and officers as
a group (25 persons, including
those named above)...................... 1,672,036 40,865 1,712,901
</TABLE>
- ------------
(A) Unless otherwise indicated, beneficial owners have sole voting power and
sole investment power with respect to all shares.
(B) Includes shares which may be acquired by the exercise of stock options
granted by the Corporation and exercisable on or before April 1, 1995: D. J.
Gormley-421,500 shares; F. J. Musone-131,600 shares; W. G. Smith-151,450
shares; M. E. Welch III-56,250 shares; G. N. Bashara, Jr.-77,100 shares; all
officers, including Mr. Gormley-1,193,550 shares. The shares issuable to each
of the foregoing individuals upon exercise of their options were regarded as
outstanding for calculating the percentage of Common Stock beneficially owned
by such individual.
(C) Mr. Gormley beneficially owns 1.6% of the outstanding shares and the
officers and directors as a group beneficially own 4.8%; each other individual
officer and director owns less than 1%.
(D) Includes 145,479 shares of restricted stock granted under the 1989
Performance Incentive Stock Plan to D. J. Gormley, 41,644 shares to M. E.
Welch III; 41,808 shares to W. G. Smith; 1,808 shares to F. J. Musone; and
161,710 shares to all other officers.
(E) Mr. Miller shares voting power with respect to 1,000 such shares; Mr. Pope
shares voting power with respect to 200 such shares. Mr. Bashara shares voting
power with respect to 67 such shares and disclaims beneficial ownership with
respect to 2,010 shares which are registered in the name of his wife.
(F) Deferred stock units--Under a plan adopted by the Board of Directors, non-
employee directors may elect to defer receipt of all or a portion of their
compensation by converting amounts deferred into units of common stock of the
Corporation. These stock units are credited with dividend equivalents in the
form of additional stock units.
SERIES C ESOP CONVERTIBLE PREFERRED STOCK
<TABLE>
<CAPTION>
Number of
Shares Beneficially
Name Owned (A) (B)
- ---- -------------------
<S> <C>
D. J. Gormley .............................................. 1,026
F. J. Musone ............................................... 1,059
W. G. Smith ................................................ 164
M. E. Welch III ............................................ 433
G. N. Bashara, Jr........................................... 1,135
All other directors......................................... -0-
All directors and officers as
a group (25 persons, including
those named above)......................................... 12,380
</TABLE>
- ------------
(A) Shares allocated to personal accounts under the Salaried Employees'
Investment Program of the Corporation. Participants share dispositive power
over such shares with the Trustee. (See Program description). Such shares are
voted (at the rate of two votes per share) by the Trustee in accordance with
instruction from participants. Only directors who are employees of the
Corporation (or were at the time such shares were issued) are eligible to
receive Series C ESOP Convertible Preferred Stock.
(B) Less than 1% of the class of Series C ESOP Convertible Preferred shares
for any one director or officer.
12
<PAGE>
OTHER BENEFICIAL OWNERS. Each person listed in the table below has filed a
Schedule 13G or Schedule 13D with the Securities and Exchange Commission or
otherwise has informed the Corporation that it "beneficially owned" or acted
as Trustee for holders of more than 5% of the Corporation's Common Stock as of
December 31, 1994 or such other date as indicated. The Corporation knows of no
person or group beneficially owning more than 5% of the Corporation's Common
Stock, except as noted below.
<TABLE>
<CAPTION>
Percent
Name and Address of Beneficial Owners Number of Shares of Class (A)
- ------------------------------------- ---------------- ------------
<S> <C> <C>
The Capital Group, Inc............................ 3,408,120 9.9%
333 South Hope Street
Los Angeles, CA 90071 (B)
John A. Levin & Co., Inc.......................... 2,861,221 8.3%
One Rockefeller Plaza
New York, NY 10020 (C)
State Treasurer,.................................. 2,169,000 6.3%
State of Michigan
Treasury Building
P.O. Box 15128
Lansing, MI 48901 (D)
State Street Bank and Trust Company............... 2,091,232 6%
One Enterprise Drive
North Quincy, MA 02171 (E)
FMR Corp.......................................... 1,984,525 5.7%
82 Devonshire Street
Boston, MA 02109 (F)
Arnhold and S. Bleichroeder, Inc.................. 1,959,000 5.7%
45 Broadway
New York, NY 10006 (G)
Comerica Bank..................................... 1,886,320 5.2%
411 W. Lafayette, 4th Floor
Detroit, MI 48226 (H)
</TABLE>
- ------------
(A) Percentages are calculated based on outstanding shares of Common Stock as
of February 1, 1995 of 34,595,910 shares. Does not assume conversion of the
Corporation's Series C ESOP Convertible Preferred Stock or $3.875 Series D
Convertible Exchangeable Preferred Stock except as noted.
(B) According to a Schedule 13G filed by the Capital Group, Inc., as of
December 31, 1994, certain operating subsidiaries of The Capital Group, Inc.,
exercised investment discretion over various institutional accounts which, as
of December 31, 1994, held 3,408,120 shares of the issuer. Capital Guardian
Trust Company, a bank, and one of such operating companies, exercised
investment discretion over 2,139,990 of said shares. Capital Research and
Management Company and Capital International, Inc., registered investment
advisers, and Capital International Limited and Capital International, S.A.,
other operating subsidiaries, had investment discretion with respect to
615,000, 20,060, 605,830, and 27,220 shares, respectively, of the above
shares. This information assumes conversion of shares of the Corporation's
$3.875 Series D Convertible Exchangeable Preferred Stock held in institutional
accounts of certain affiliates.
(C) According to a Schedule 13G filed by John A. Levin & Co., Inc. ("Levin &
Co."), Levin & Co. and its sole shareholder and president, John Levin,
registered as an investment advisor, filed with respect to Common Stock
purchased on behalf of Levin & Co.'s investment advisory clients. The number
of shares of Common Stock reported included 38,900 shares which Levin & Co.
has sole power to vote and dispose of, and 1,696,560 shares with shared power
to vote and 2,821,871 shares with shared power to dispose of such shares.
(D) The Corporation has been advised by the State Treasurer of the State of
Michigan that such shares are presently held for investment purposes only. The
Corporation is also advised that the State Treasurer of the State of Michigan
is the investment fiduciary for five State-sponsored retirement systems for
State employees and holds sole voting and dispositive powers with respect to
such shares.
(E) Shares that State Street Bank and Trust Company holds as of February 1,
1995 in its fiduciary capacity as Trustee for the Corporation's Salaried
Employees' Investment Program and the Corporation's Employee Savings Program.
13
<PAGE>
(F) According to a Schedule 13G filed by FMR Corp., a parent holding company,
FMR Corp. through its subsidiary investment companies, has sole power to vote
13,500 shares of Common Stock and has sole power to dispose of 1,984,525
shares of Common Stock. The number of shares of Common Stock beneficially
owned by these Fidelity investment companies at December 31, 1994 included
1,845,425 shares of Common Stock resulting from the assumed conversion of
664,300 shares of the Corporation's $3.875 Series D Convertible Exchangeable
Preferred Stock (at an exchange rate of 2.778 shares of Common Stock for each
share of preferred stock).
(G) According to a Schedule 13G filed by Arnhold and S. Bleichroeder, Inc.,
("A&SB"), as of December 31, 1994, A&SB held 1,959,000 shares with sole
dispositive power, including 179,800 shares which A&SB had sole power to vote
and 1,779,200 shares which A&SB shared voting power with its discretionary
account owners.
(H) Comerica Bank serves as Trustee for participants in the ESOP part of the
Program and shares beneficial ownership of all 1,886,320 of the Series C ESOP
Convertible Preferred Stock of the Corporation constituting all of the
outstanding shares of that class. The Trustee is required by the terms of the
Program to vote the 750,394 allocated shares according to the instructions
received by participants and is required to vote 1,134,926 unallocated shares
of Preferred Stock and allocated shares for which no instructions are received
in the same proportion (with two votes per share) as the allocated shares for
which it has received instructions. The Trustee has the right under the terms
of the Program under certain circumstances, to convert the allocated and
unallocated shares of Preferred Stock subject to the Program into Common Stock
at the rate of two shares of Common Stock for each share of Preferred Stock
and thereafter dispose of such shares of Common Stock.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. Section 16(a) of the
Securities Exchange Act of 1934 requires the Corporation's officers and
directors, and persons who own more than 10% of a registered class of the
Corporation's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and the New York
and Pacific Stock Exchanges. Officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish the Corporation with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it since
January 1, 1994, or written representations from certain reporting persons
that no Forms 5 were required for those persons, the Corporation believes that
its officers, directors, and greater than 10% beneficial owners complied with
all applicable filing requirements.
VI. OTHER INFORMATION
A Proxy may be revoked at any time before it is exercised upon written notice
to the Secretary of the Corporation. Unless revoked, the shares represented by
the Proxy will be voted in accordance with the specifications made. If no
specifications are made, such shares will be voted for the election of
directors as proposed in this Proxy Statement and in favor of the approval of
the appointment of Ernst & Young as independent accountants to audit the
financial statements of the Corporation and its consolidated subsidiaries for
1995.
The form of Proxy used in the Board of Directors' solicitation names D. J.
Gormley, R. M. Hills and J. J. Fannon, and each of them, with power of
substitution, as proxy holders. The Board of Directors does not intend to
present any other matters at the meeting. However, should any other matters
properly come before the meeting, it is the intention of such proxy holders to
vote the Proxy in accordance with their best judgment.
All costs of solicitation of proxies will be borne by the Corporation. In
addition to solicitation by mail, the officers and employees of the
Corporation, who will receive no extra compensation therefore, may solicit
proxies personally or by telephone. Also, the Corporation has engaged the firm
of Georgeson & Co., Inc. to solicit proxies for an approximate charge of
$7,000. The Corporation will reimburse brokerage houses, custodians, nominees
and fiduciaries for their expense in mailing proxy material to principals.
The Annual Report of the Corporation to shareholders, including financial
statements, for the fiscal year ended December 31, 1994, has been forwarded to
all shareholders. The Annual Report does not form any part of the material for
the solicitation of Proxies.
14
<PAGE>
SHAREHOLDER PROPOSALS. Proposals of shareholders intended to be presented at
the 1996 Annual Meeting of Shareholders must be received by the Secretary of
the Corporation at the Corporation's principal executive offices on or before
November 21, 1995.
By order of the Board of Directors,
[SIGNATURE OF STEPHANIE G. HEIM]
Stephanie G. Heim
Assistant Secretary
15
<PAGE>
Federal-Mogul Corporation
WORLD HEADQUARTERS
P.O. Box 1966
Detroit, Michigan 48235
[RECYCLED PAPER LOGO]
Printed on Recycled Paper
[FEDERAL MOGUL LOGO]
<PAGE>
[FEDERAL MOGUL LOGO]
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 26, 1995
The signer(s) hereby appoints D. J. GORMLEY, R. M. HILLS, and J. J. FANNON
and each or any of them, the Proxy for the signer(s), with power of
substitution, to represent and to vote with the same force and effect as the
signer(s) at the Annual Meeting of Shareholders of Federal-Mogul Corporation to
be held on April 26, 1995, and at any adjournment or adjournments thereof, as
specified on the reverse side hereof with respect to the matters there
indicated. In their discretion the Proxies are authorized to vote upon such
other business as may properly come before the meeting. Receipt is acknowledged
of the Notice of Meeting and Proxy Statement dated March 15, 1995.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER ON THE REVERSE SIDE HEREOF. IF NO DIRECTION IS INDICATED, SUCH
SHARES WILL BE VOTED FOR THE ELECTION OF DIRECTORS NAMED IN THE PROXY STATEMENT
DATED MARCH 15, 1995, AND FOR THE APPOINTMENT OF ERNST & YOUNG AS INDEPENDENT
ACCOUNTANTS.
(Continued and to be dated and signed on the reverse side)
FEDERAL MOGUL
P.O. BOX 11519
NEW YORK, N.Y.10203-0519
<PAGE>
The Board of Directors recommends a vote FOR Items 1 and 2.
1. ELECTION OF DIRECTORS FOR all nominees listed below [_]
(except as marked to the contrary)
WITHHOLD vote from [_]
all nominees listed below
*EXCEPTIONS [_]
To withhold vote from any Nominee, write the nominee's name on the line below:
D. J. GORMLEY, R. M. HILLS, J. J. FANNON, J. C. POPE, H. M. SEKYRA,
R. S. MILLER, JR., A. MADERO
*EXCEPTIONS
--------------------------------------------------------------------
2. APPROVE APPOINTMENT OF ERNST & YOUNG FOR [_]
AGAINST [_]
ABSTAIN [_]
Address Change Mark Here [_]
Please sign exactly as name appears at left.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such. If
a corporation please sign in full corporate
name by president or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
Dated , 1995
------------------------------
------------------------------------------
Signature
------------------------------------------
Signature, if held jointly
Votes must be indicated [X]
(x) in Black or Blue ink.
Please mark with an "X", sign, date and return this proxy promptly.
