<PAGE> 1
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 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SPX Corporation
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
SPX Corporation
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $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 transactions applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
[ ] 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 registrations 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:
------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<S> <C> <C>
700 Terrace Point Drive Phone 616-724-5000
SPX CORPORATION P.O. Box 3301 Fax 616-724-5720
Muskegon, MI 49443-3301
</TABLE>
March 25, 1994
Fellow Shareholders:
You are cordially invited to attend the 1994 Annual
Meeting of Shareholders on Wednesday, April 27, 1994 at 9:00
a.m. (Eastern Time), at the Company's headquarters, 700 Terrace
Point Drive, Muskegon, Michigan. The items to be acted upon at
the meeting are listed in the Notice of Annual Meeting and are
described in the Proxy Statement. Shareholders of record at the
close of business on March 11, 1994 are entitled to vote at the
Annual Meeting.
Along with the other members of your Board of
Directors, I look forward to the opportunity of personally
greeting those shareholders who attend this year's meeting. I
urge you to vote, sign, date and return the proxy card in the
enclosed postage-paid envelope, even if you plan to attend the
meeting. All shareholders are welcome to attend the Annual
Meeting and to vote in person, whether or not they have returned
the proxy card.
Sincerely,
[SIG.]
DALE A. JOHNSON
Chairman and Chief
Executive Officer
<PAGE> 3
SPX CORPORATION
700 Terrace Point Drive Muskegon, Michigan 49443-3301
Telephone (616) 724-5000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1994
To the Shareholders:
You are hereby notified that the Annual Meeting of Shareholders of SPX
Corporation will be held at the offices of the Company at 700 Terrace Point
Drive in Muskegon, Michigan, on Wednesday, April 27, 1994 at 9:00 a.m. (Eastern
Time), for the purpose of considering and taking action with respect to the
following matters:
1. The election of four directors of the Company; and
2. Such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 11, 1994 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting of Shareholders. The transfer books of the Company
will not be closed.
Shareholders are requested to execute the enclosed proxy and return it as
promptly as possible in the accompanying stamped envelope. The proxy may be
revoked by a shareholder at any time before it is exercised, and shareholders
who are present at the meeting may withdraw their proxies and vote in person.
A copy of the Company's 1993 Annual Report to Shareholders has been mailed
to each shareholder.
By Order of the Board of Directors,
JAMES M. SHERIDAN
Vice President and Secretary
Muskegon, Michigan
March 25, 1994
IMPORTANT--PLEASE MAIL YOUR SIGNED PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE PROVIDED FOR THIS PURPOSE
<PAGE> 4
SPX CORPORATION
700 TERRACE POINT DRIVE MUSKEGON, MICHIGAN 49443-3301
TELEPHONE (616) 724-5000
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1994
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of
proxies to be voted at the Annual Meeting of Shareholders of SPX Corporation to
be held on Wednesday, April 27, 1994.
The enclosed proxy is solicited by the Board of Directors of the Company
and will be voted at the Annual Meeting and any adjournments thereof. The
enclosed proxy may be revoked at any time before it is exercised. The only
business which the Board of Directors intends to present or knows will be
presented is the election of four directors. The proxy confers discretionary
authority upon the persons named therein, or their substitutes, with respect to
any other business which may properly come before the meeting. Shares
represented by a properly executed proxy in the accompanying form will be voted
at the meeting and, when instructions have been given by the shareholder, will
be voted in accordance with those instructions. If no instructions are given,
the shareholder's shares will be voted according to the recommendations of the
Board of Directors. Those recommendations are described later in this proxy
statement.
This proxy statement and the proxy were first mailed to shareholders on or
about March 25, 1994.
RECORD DATE AND VOTING AT THE MEETING
The holders of record on March 11, 1994, the record date, of Common Stock,
$10 par value, of the Company will be entitled to one vote per share on each
matter submitted to the meeting. At the close of business on the record date,
there were outstanding 13,940,306 shares of Common Stock. No other voting
securities of the Company were outstanding at the close of business on the
record date. The holders of one-third of the total shares issued and
outstanding, whether present in person or represented by proxy, will constitute
a quorum for the transaction of business at the meeting.
The affirmative vote of a majority of the total shares represented in
person or by proxy and entitled to vote at the meeting is required for the
election of directors and the approval of such other business as may properly
come before the meeting or any adjournment thereof.
In accordance with Delaware law, a shareholder entitled to vote for the
election of directors can withhold authority to vote for all nominees for
directors or can withhold authority to vote for certain nominees for directors.
Abstentions from the proposal to elect directors are treated as votes against
the election of the directors. Broker non-votes are treated as shares as to
which voting power has been withheld by the beneficial holders of those shares,
and therefore, as shares not entitled to vote.
ELECTION OF DIRECTORS
At the date of the Annual Meeting, the Board of Directors will consist of
nine members, divided into three classes. At this Annual Meeting, one nominee is
to be elected to serve for a term of two years and three nominees are to be
elected to serve for a term of three years and in each case until their
respective successors are elected and qualified. The remaining five directors
will continue to serve as set forth below, with three directors having terms
expiring in April 1995 and two directors having terms expiring in April 1996.
Each of the nominees is now a director of the Company and has agreed to serve if
elected. The proxy holders will vote
<PAGE> 5
the proxies received by them for the four nominees, or in the event of a
contingency not presently foreseen, for different persons as substitutes
therefor.
The following sets forth with respect to each nominee and each director
continuing to serve, his name, age, principal occupation, the year in which he
first became a director of the Company, directorships in other business
corporations and committee assignments.
NOMINEE FOR ELECTION TO THE BOARD OF DIRECTORS
FOR A TWO YEAR TERM EXPIRING APRIL 1996
<TABLE>
<S> <C>
- ---------------- J. KERMIT CAMPBELL
[Photo] Mr. Campbell, 55, is the President and Chief Executive Officer of Herman
Miller, Inc., a manufacturer of furniture and other products for offices
and other work environments. He joined the SPX Board in 1993. He is a
- ---------------- director of Herman Miller, Inc.
</TABLE>
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR A THREE YEAR TERM EXPIRING APRIL 1997
<TABLE>
<S> <C>
- ---------------- CURTIS T. ATKISSON, JR.
[Photo] Mr. Atkisson, 60, is the President and Chief Operating Officer of the
Company. He joined the SPX Board in 1991 and is a member of the
- ---------------- Executive-Finance Committee.
- ---------------- FRANK A. EHMANN
Mr. Ehmann, 60, is a Partner of RCS Healthcare Partners, L.P., a
management buyout fund focused exclusively on the health care industry.
[Photo] He joined the SPX Board in 1988 and is a member of the Compensation
Committee and Nominating Committee. He is a director of American Health
Corp., Inc., AHA Investment Funds, Kinetic Concepts, Inc., Mark
- ---------------- Controls, Inc. and St. Jude Medical, Inc.
- ---------------- DALE A. JOHNSON
[Photo] Mr. Johnson, 56, is the Chairman and Chief Executive Officer of the
Company. He joined the SPX Board in 1988 and is a member of the
Executive-Finance Committee. He is a director of Douglas and Lomason
- ---------------- Company and MCN Corporation.
</TABLE>
2
<PAGE> 6
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
WHOSE TERMS EXPIRE APRIL 1995
<TABLE>
<S> <C>
- ---------------- EDWARD D. HOPKINS
Mr. Hopkins, 56, is the Chairman, President, Chief Executive Officer and
[Photo] a director of Medalist Industries, Inc., a designer, manufacturer and
distributor of fastener and fastener related products. He joined the SPX
Board in 1986 and is a member of the Executive-Finance Committee and
- ---------------- Retirement Funds Committee.
- ---------------- CHARLES E. JOHNSON II
Mr. Johnson, 58, is President and owner of Almond Corporation, a metal
finisher specializing in electrostatic spray painting and powder coating
[Photo] and anodizing. He joined the SPX Board in 1976 and is a member of the
Executive-Finance Committee and Nominating Committee. He is a director
of First of America Bank-West Michigan, Baker College of Muskegon and
- ---------------- Hackley Hospital.
- ---------------- DAVID P. WILLIAMS
Mr. Williams, 59, is President and Chief Operating Officer of The Budd
Company, a manufacturer of automobile and truck body components, wheel
and brake products, castings, stampings, chassis frame components,
marine equipment, automotive heating accessories and cold weather
[Photo] starting aids. He joined the SPX Board in 1992 and is a member of the
Audit Committee and Compensation Committee. He is a director of The Budd
Company, Budd Canada Inc., Greening Donald Co. Ltd., Standard Federal
Bank, Thyssen Production Systems, Inc. and WTVS Channel 56-Detroit
- ---------------- Public Television.
</TABLE>
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
WHOSE TERMS EXPIRE APRIL 1996
<TABLE>
<S> <C>
- ---------------- RONALD L. KERBER
Mr. Kerber, 50, is the Executive Vice President and Chief Technology
[Photo] Officer of Whirlpool Corporation, a manufacturer of major home
appliances. He joined the SPX Board in 1992 and is a member of the Audit
- ---------------- Committee and Retirement Funds Committee.
- ---------------- PETER H. MERLIN
Mr. Merlin, 65, is a Partner and Chairman - International Department of
[Photo] Gardner, Carton & Douglas, Corporate Counsel for the Company. He joined
the SPX Board in 1975 and is a member of the Compensation Committee and
Executive-Finance Committee. He is a director of Aldi Inc. and Lechler,
- ---------------- Inc.
</TABLE>
3
<PAGE> 7
Each of the nominees and directors of the Company has had the principal
occupation set forth above or has been an executive officer or partner with the
respective organization for the past five years, except for Mr. Campbell who,
prior to joining Herman Miller, Inc. in 1992, was a Group Vice President of Dow
Corning Corporation where he held various executive positions since 1960; Mr.
Atkisson who, prior to his election to the above position on October 1, 1991,
was President and Chief Executive Officer of Sealed Power Technologies, Limited
Partnership, from May 1989 through September 1991, and prior to that was a Group
Vice President of the Company since 1985; Mr. C. E. Johnson II who, prior to
1991, held various executive positions with the Company since 1976, including
President and Chief Operating Officer; and Mr. Kerber who, from 1988 to 1991 was
Vice President, Technology and Business Development at McDonnell Douglas Corp.
and from 1985 to 1988 was a Deputy Undersecretary of Defense and head of
Research and Advanced Technology for the United States Government.
The law firm of Gardner, Carton & Douglas, where Mr. Merlin is a partner,
has been retained by the Company to represent it on various legal matters.
BOARD OF DIRECTORS AND ITS COMMITTEES
There were twelve meetings of the Board of Directors of the Company in
1993. During 1993, each director attended at least 75% of the aggregate of the
total number of Board meetings and meetings of Committees of which he was a
member.
The Board of Directors has established member committees which deal with
certain specific areas of the Board's responsibility. These committees are the
Audit Committee, Compensation Committee, Executive-Finance Committee, Nominating
Committee and Retirement Funds Committee.
The Audit Committee, which held three meetings in 1993, has the primary
responsibility to ensure the integrity of the financial information reported by
the Company. Its functions are: (i) to make recommendations on the selection of
independent auditors; (ii) to review the scope of the annual audit to be
performed by the independent auditors and the audits conducted by the internal
audit staff; (iii) to review the results of those audits; (iv) to meet
periodically with management, the independent public accountants and the
internal audit staff to review financial, accounting and internal control
matters; and (v) to meet periodically with both the independent public
accountants and the internal audit staff and, without management being present,
to discuss the results of their audit work and their opinions as to the adequacy
of internal accounting controls and the quality of financial reporting.
The Compensation Committee, which held five meetings in 1993, reviews and
makes recommendations to the Board on the compensation and benefits payable to
the officers, key employees and directors of the Company and grants stock
options and other awards under the Company's Stock Compensation Plan and
Performance Unit Plan.
The Executive-Finance Committee, which held one meeting in 1993, has
authority to act on most matters during the intervals between Board meetings. It
also has primary responsibility for reviewing long range plans, capital
expenditure programs, acquisitions and general corporate financing matters.
The Nominating Committee, which held two meetings during 1993, (i) conducts
a continuing study of the size, structure and composition of the Board; (ii)
seeks out and interviews possible candidates and reports its recommendations to
the Board; and (iii) determines the criteria for selection and retention of
Board members. Although the Committee has its own procedures for selecting
nominees for Board membership, it will give due consideration to nominees
recommended by shareholders. A shareholder desiring to recommend a person for
nomination to the Board must provide written notice to the Secretary of the
Company no later than 120 days prior to the first anniversary of the 1994 Annual
Meeting of Shareholders and in compliance with the requirements set forth in the
Company's by-laws. In addition, the nominating shareholder should submit a
complete resume of the proposed nominee's qualifications and background together
with a statement setting forth the reasons why such person should be considered
for membership.
4
<PAGE> 8
The Retirement Funds Committee, which met two times in 1993, reviews and
evaluates the investment performance of the various retirement and employee
benefit funds of the Company. It monitors the performance of the administrators,
investment managers and trustees of such funds and also reviews the actuarial
assumptions used in setting the Company's funding policies for such plans.
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of the Company's Common
Stock beneficially owned as of March 11, 1994, or as to which there was a right
to acquire beneficial ownership within 60 days of such date, by each director,
each executive officer named in the Summary Compensation Table and all directors
and executive officers as a group.
<TABLE>
<CAPTION>
NUMBER
OF SHARES PERCENT
BENEFICIALLY OF
OWNED(1)(2)(3) CLASS
-------------- -------
<S> <C> <C>
Curtis T. Atkisson, Jr............................... 57,035(4)(5) *
J. Kermit Campbell................................... 2,000 *
Frank A. Ehmann...................................... 6,600 *
Edward D. Hopkins.................................... 7,500 *
Charles E. Johnson II................................ 72,157(4) *
Dale A. Johnson...................................... 148,972(6) 1.1%
Reuben W. Kaplan..................................... 10,425 *
Ronald L. Kerber..................................... 3,400 *
Peter H. Merlin...................................... 7,936 *
James M. Sheridan.................................... 52,652(4) *
Peter M. Turner...................................... 43,711 *
R. Budd Werner....................................... 53,104 *
David P. Williams.................................... 3,900 *
All directors and executive officers as a group
(18 persons) including the above-named............. 556,464(4) 4.0%
</TABLE>
- ---------------
* Less than 1%.
(1) Included for Messrs. Atkisson, D. A. Johnson, Sheridan, Turner and Werner
are their respective allocated shares held in the SPX Corporation Employee
Stock Ownership Plan. Non-employee directors do not participate in this
plan.
(2) Except as otherwise indicated, each director and executive officer has sole
voting and investment power over the shares he beneficially owns.
(3) Includes shares which may be acquired within 60 days pursuant to options as
follows: Mr. Atkisson, Jr. -- 42,500 shares, Mr. Campbell -- 1,000 shares,
Mr. Ehmann -- 6,300 shares, Mr. Hopkins -- 6,300 shares, Mr. C. E. Johnson
II -- 9,200 shares, Mr. D. A. Johnson -- 115,550 shares, Mr. Kaplan --
6,300 shares, Mr. Kerber -- 3,400 shares, Mr. Merlin -- 6,300 shares, Mr.
Sheridan -- 46,000 shares, Mr. Turner -- 38,750 shares, Mr. Werner --
46,000 shares, Mr. Williams -- 2,400 shares, and for all directors and
executive officers as a group (18 persons) -- 405,600 shares.
(4) Includes shares held by family members of certain directors and executive
officers in which such directors and officers disclaim any beneficial
interest.
(5) Includes 12,000 shares awarded to Mr. Atkisson as a restricted stock award
under the Company's Stock Compensation Plan. These shares vest ratably
based on continued employment to the vesting date, at the rate of 2,400
shares per year beginning October 1, 1992. Mr. Atkisson has the right to
vote such shares.
5
<PAGE> 9
(6) Includes 20,000 shares awarded to Mr. D. A. Johnson as a restricted stock
award under the Company's Stock Compensation Plan. These shares vest ratably
based on continued employment to the vesting date, at the rate of 4,000
shares per year beginning February 24, 1991. Mr. Johnson has the right to
vote such shares.
Mr. Kaplan will retire from the Board of Directors on April 27, 1994.
OTHER PRINCIPAL SHAREHOLDERS
The Company is not aware of any person or group who beneficially owns more
than 5% of the Company's Common Stock except the following:
<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------------------------ --------- -------
<S> <C> <C>
Fidelity Management Trust Company 1,714,382(1) 12.3%
Boston, Mass.
Forstmann-Leff Associates, Inc. 1,504,615(2) 10.8%
55 East 52nd Street
New York, NY 10055
</TABLE>
- ---------------
(1) Fidelity Management Trust Company is the Trustee of the Company's Employee
Stock Ownership Plan and as of March 7, 1994 owned such number of shares
pursuant to the Plan.
(2) Information obtained from an amendment to a report on Schedule 13G filed by
the beneficial owners reporting ownership as of February 9, 1994.
Forstmann-Leff Associates, Inc. ("Forstmann") and its subsidiaries, FLA
Asset Management, Inc. ("FLA") and Stamford Advisers Corp. ("Stamford"),
are all registered investment advisers. Forstmann shares investment and/or
voting power with FLA and Stamford over FLA's and Stamford's accounts. As a
result, the amount of beneficial ownership shown for Forstmann includes the
amounts of beneficial ownership of FLA and Stamford as of February 9, 1994.
Forstmann has sole voting power over 674,715 shares and sole dispositive
power over 906,615 shares. Forstmann shares with FLA voting power with
respect to 90,300 shares and dispositive power over 318,900 shares.
Forstmann shares with Stamford voting and dispositive power over 264,700
shares.
6
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
The following table summarizes compensation received by the Company's Chief
Executive Officer and the four other most highly paid executive officers for the
three fiscal years ended December 31, 1993. None of the five named officers is
employed under any contract or employment agreement.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------------------------
AWARDS PAYOUTS
------------------------------------------------------------------------------------------------------------------
OTHER RESTRICTED
ANNUAL STOCK LTIP ALL OTHER
SALARY BONUS COMPENSATION(3) AWARD(S) OPTIONS PAYOUTS COMPENSATION(6)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (SHARES) ($) ($)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dale A. Johnson
Chairman of the Board and 1993 $465,000 $ 65,872 -- 0 35,000 0 $ 14,819.18(7)
Chief Executive Officer 1992 $400,000 $343,824 0 30,000 0 $ 17,755.86(7)
1991 $367,692 0 0(4) 40,000 0 --
Curtis T. Atkisson, Jr.(1)
President and Chief 1993 $280,000 $ 37,229 -- 0 21,000 0 $ 5,071.14
Operating Officer 1992 $240,000 $196,358 0 17,500 0 $ 7,355.56
1991 $ 70,385 0 $156,000(5) 25,000 0 --
R. Budd Werner
Vice President, Finance and 1993 $208,000 $ 25,424 -- 0 12,000 0 $ 3,640.30
Chief Financial Officer 1992 $191,000 $113,054 0 10,000 0 $ 4,421.98
1991 $180,717 0 0 14,000 0 --
James M. Sheridan
Vice President, Administra- 1993 $200,000 $ 18,000 -- 0 12,000 0 $ 3,557.07
tion and General Counsel 1992 $185,000 $108,743 0 10,000 0 $ 4,319.03
and Corporate Secretary 1991 $175,039 0 0 14,000 0 --
Peter M. Turner (2)
Vice President, Corporate 1993 $180,000 $ 32,958 -- 0 0 0 $ 3,338.63
Planning and Development 1992 $170,000 $108,558 0 8,000 0 $ 4,034.18
1991 $160,847 0 0 10,000 0 --
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Atkisson was elected President and Chief Operating Officer and a
director effective October 1, 1991.
(2) Mr. Turner retired effective February 28, 1994.
(3) No other Annual Compensation other than perquisites is available.
Perquisites are below threshold reporting requirements.
(4) An award of 20,000 shares of restricted stock was made to Mr. Johnson on
April 24, 1990. The value shown is based on that day's closing per share
price of $26.25. These shares vest ratably, based on continued employment to
the vesting date, at the rate of 4,000 shares per year beginning February
24, 1991. Mr. Johnson receives dividends on and has the right to vote
non-vested shares. As of December 31, 1993, Mr. Johnson holds 8,000 unvested
shares with a value of $142,000 based on the closing price of the shares
($17.75) on that date.
(5) An award of 12,000 shares of restricted stock was made to Mr. Atkisson on
October 1, 1991. The value shown is based on that day's closing per share
price of $13.00. These shares vest ratably, based on continued employment to
the vesting date, at the rate of 2,400 shares per year beginning October 1,
1992. Mr. Atkisson receives dividends on and has the right to vote
non-vested shares. As of December 31, 1993, Mr. Atkisson holds 7,200
unvested shares with a value of $127,800 based on the closing price of the
shares ($17.75) on that date.
(6) The amounts reported, except for Mr. Johnson, include only Company
contributions to its qualified and nonqualified defined contribution plans.
(7) Company contributions for Mr. Johnson to qualified and nonqualified defined
contribution plans in 1992 were $10,641.86 and in 1993 were $7,705.18. The
total of all other contributions for Mr. Johnson includes the annual premium
of $7,114 in 1992 and in 1993 for a life insurance policy issued on Mr.
Johnson under a deferred compensation agreement entered into originally by
the Owatonna Tool Company and Mr. Johnson in 1981. This premium amount is
determined by the insurance carrier and is comprised of $6,813.00 for the
base insurance benefit, $129.00 for waiver of premium, and $172.00 for
accidental death benefit coverage. Under the agreement, in the event of Mr.
Johnson's death before retirement, the Company receives a return of the
aggregate premiums it paid and Mr. Johnson's beneficiary receives the
balance of the death benefit. Upon retirement from the Company, the cash
value of the policy is then converted to an annuity payable over Mr.
Johnson's remaining life.
7
<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS % OF TOTAL OPTIONS
GRANTED(1) GRANTED TO EXERCISE OR GRANT DATE
(SHARES) EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE(3)
NAME (#) 1992 ($/SHARE) DATE $
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dale A. Johnson.............. 35,000 22.77% $16.375 12/14/03 $156,100
Curtis T. Atkisson, Jr. ..... 21,000 13.66% $16.375 12/14/03 93,660
R. Budd Werner............... 12,000 7.8% $16.375 12/14/03 53,520
James M. Sheridan............ 12,000 7.8% $16.375 12/14/03 53,520
Peter M. Turner.............. 0(2) n/a n/a n/a n/a
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Each option granted is nonqualified, is for a period of 10 years, becomes
exercisable in full 6 months after the date of grant and was granted
pursuant to the Company's 1992 Stock Compensation Plan. No tandem or
freestanding SARs were granted in 1993. There are no performance-based
conditions to exercisability, reload, or tax reimbursement features
associated with the options granted in 1993. The exercise price is fixed
for the life of the option at the closing price of SPX shares on the grant
date.
(2) Mr. Turner informed the Company early in the fourth quarter of his
intention to retire in the first quarter of 1994. Therefore, no options
were granted to him in 1993.
(3) The estimated grant date present value reflected in the above table is
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the value
of the options reflected in the above table include the following:
- An option exercise price of $16.375 equal to the fair market value of the
underlying stock on the date of grant.
- An option term of ten years.
- An interest rate of 5.77 percent that represents the interest rate on a
U.S. Treasury security with a maturity date corresponding to that of the
option term.
- Volatility of 32 percent calculated using daily stock prices for the
one-year period prior to the grant date.
- Dividends at the rate of $0.40 per share representing the annualized
dividends paid with respect to a share of common stock at the date of
grant.
- A reduction of approximately 29 percent to reflect the probability of
forfeiture due to termination of employment prior to vesting and the
probability of a shortened option term due to termination of employment
prior to the option expiration date.
The ultimate value of the options will depend on the future market price of
SPX Corporation's common stock, which cannot be forecasted with reasonable
accuracy. The actual value, if any, an optionee will realize upon exercise
of an option will depend on the excess of the market value of the Company's
common stock over the exercise price on the date the option is exercised.
8
<PAGE> 12
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in fiscal 1993
by the named executive officers and the value of such officers' unexercised
options at December 31, 1993.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
NUMBER OF UNEXERCISED
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES STOCK OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE FISCAL YEAR END(1) FISCAL YEAR END(1)
ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME (#) ($) (#) ($)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dale A. Johnson................... 5,000 $31,875 115,550/35,000 $332,685/$48,125
Curtis T. Atkisson, Jr............ 0 0 42,500/21,000 $170,313/$28,875
R. Budd Werner.................... 2,148 $1,611 46,000/12,000 $142,650/$16,500
James M. Sheridan................. 2,146 $1,878 46,000/12,000 $142,650/$16,500
Peter M. Turner................... 2,346 $1,760 38,750/ 0 $112,213/$ 0
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All exercisable options were exercisable immediately at December 31, 1992.
All unexercisable options were those granted on December 14, 1993 and were
in-the-money as of December 31, 1993. The value of the options is based
upon the year-end closing price of the Company's Common Stock as reported
on the New York Stock Exchange composite tape ($17.75). No SARs are held by
participants in the Company's 1992 Stock Compensation Plan.
SPX CORPORATION PERFORMANCE UNIT PLAN
The Company sponsors a long-term incentive plan called the SPX Corporation
Performance Unit Plan, which operates on three-year performance periods. At the
beginning of each performance period, a participant is granted a target award
based on a percentage of his current salary. The target award is then divided
equally between cash units of $500 each and shares of the Company's Common
Stock. At the end of the performance period, depending upon the level of the
performance achieved, the cash units earned will be valued from zero to a
maximum of $750 and the number of shares earned will range from zero to 150% of
the target amount.
For the 1993 performance period (January 1, 1993 to December 31, 1995), the
corporate goal is expressed in terms of growth in the Company's share price plus
dividends relative to the growth in the S&P 500 Index as follows:
<TABLE>
<CAPTION>
SPX PERFORMANCE LEVEL OF ACHIEVEMENT
--------------------------------- -----------------------------------------------
<S> <C>
Less than 80% of S&P 500 growth -- No awards earned
80% of S&P 500 growth -- 50% of target award earned (threshold)
100% of S&P 500 growth -- 100% of target award earned (target)
150% of S&P 500 growth -- 150% of target award earned (maximum)
</TABLE>
Cash units and one-third of the shares earned are payable immediately
following the close of a performance period. The remaining two-thirds of the
earned shares vest ratably over the two years following the close of the
performance period based on continued employment.
9
<PAGE> 13
The following table sets forth the awards and opportunities for the three
year performance period January 1, 1993 to December 31, 1995 for the executives
named in the Summary Compensation Table.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F)
- --------------------------------------------------------------------------------------------------------------------
CASH PERFORMANCE OR
UNITS/SHARE OTHER PERIOD UNTIL
UNITS OR OTHER MATURATION OR THRESHOLD(1)(2) TARGET MAXIMUM(3)
NAME RIGHTS (#) PAYOUT ($ OR #) ($ OR #)(2) ($ OR #)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dale A. Johnson 212 cash units/ 1/1/93 $53,000 and $102,000 and Cash and shares
5881 share through 2940.5 shares 8813 shares may not exceed a
units 12/31/95 value of $423,464
Curtis T. Atkisson, Jr. 122 cash units/ 1/1/93 $30,500 and $58,500 and Cash and shares
3377 share through 1688.5 shares 5060 shares may not exceed a
units 12/31/95 value of $243,126
R. Budd Werner 72 cash units/ 1/1/93 $18,500 and $36,000 and Cash and shares
3086 share through 1030 shares 3086 shares may not exceed a
units 12/31/95 value of $148,308
James M. Sheridan 71 cash units/ 1/1/93 $18,500 and $35,500 and Cash and shares
3068 share through 1024 shares 3068 shares may not exceed a
units 12/31/95 value of $147,434
Peter M. Turner 69 cash units/ 1/1/93 $17,750 and $34,500 and Cash and shares
2827 share through 989 shares 2827 shares may not exceed a
units 12/31/95 value of $142,410
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) No awards are paid if the minimum level of achievement is not reached.
(2) Shares earned are valued at the NYSE closing price of SPX Corporation's
shares on the last trading day in 1995.
(3) The maximum award value payable to any participant is 200% of the grant date
dollar value of the total award at target, and if maximum is achieved the
participant's shares earned are reduced accordingly based on their dollar
value at the end of the performance period. The dollar amount shown is the
aggregate maximum value of cash and shares.
PENSION PLANS
The annual pension benefits payable to the executives named in the Summary
Compensation Table can be determined from the following table.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
YEARS OF CREDITED SERVICE
--------------------------------------------------------------------------
FINAL THREE-YEAR
AVERAGE
COMPENSATION 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$200,000 $ 77,333 $116,000 $116,000 $116,000 $116,000 $123,500
300,000 116,000 174,000 174,000 174,000 174,000 185,250
400,000 154,667 232,000 232,000 232,000 232,000 247,000
500,000 193,334 290,000 290,000 290,000 290,000 308,750
600,000 232,000 348,000 348,000 348,000 348,000 370,500
700,000 270,667 406,000 406,000 406,000 406,000 432,250
800,000 309,333 464,000 464,000 464,000 464,000 494,000
900,000 348,000 522,000 522,000 522,000 522,000 555,750
- -----------------------------------------------------------------------------------------------
</TABLE>
Covered compensation is based on salary and bonus as shown in the Summary
Compensation Table.
The estimated years of credited service at normal retirement age for the
persons named in the Summary Compensation Table are: Mr. Johnson -- 29 years;
Mr. Atkisson -- 13 years; Mr. Werner -- 15 years; Mr. Sheridan -- 30 years; and
Mr. Turner -- 18 years.
10
<PAGE> 14
The annual retirement benefits shown in the above table are computed on the
basis of a straight life annuity.
The amounts reported in this Pension Plan Table are payable at normal
retirement age 65 and are payable from the Company's qualified pension plan and
supplemental retirement plan for officers and other key executives. The amounts
shown are subject to reduction by the sum of the executive's primary Social
Security benefit and any pension benefits payable from prior employer plans. A
participant may retire as early as age 55 but benefits payable at early
retirement are subject to reductions that approximate actuarial values.
DIRECTORS' COMPENSATION
Directors of the Company who are employees of the Company or a subsidiary
do not receive directors' fees. Directors who are not employees receive an
annual retainer of $20,000 plus $750 for each regular or special meeting
attended. For service on Committees of the Board, non-employee directors of the
Company receive $750 for each Committee meeting which they attend. The Chairman
of each Committee receives an additional annual retainer of $1,500. In addition
to the payment of such fees, the Company reimburses all directors for expenses
incurred in carrying out their duties.
Under the Directors' Retirement Plan, any director who retires after ten or
more years of service as a director is entitled to an annual pension, payable
for life, equal to the annual retainer adjusted periodically to reflect
increases in such retainer. Directors who retire with more than five years but
less than ten years of service receive a proration of the ten-year amount.
Benefits under the Plan commence on the later of the retired director's
sixty-second birthday or his retirement from the Board of Directors. The
Directors' Retirement Plan provides that upon a change-of-control, as defined
under "Executive Severance Agreements," a director who has less than five years
of service as a director will be deemed to have completed five years of service,
each former director will receive an immediate lump-sum payment of the actuarial
present value of his benefit under the Plan, and each director who does not
receive an immediate lump-sum payment will receive a lump-sum payment which is
the actuarial present value of his Plan benefit upon termination of his
directorship or termination of the Plan. The Company also has established a
trust to ensure payment to all directors of these benefits.
Stock options for the purchase of 1,000 shares of Common Stock were granted
to each non-employee director on February 17, 1988. After that date, each
non-employee director will be granted options for the purchase of 1,000 shares
of Common Stock upon his initial election to the Board of Directors. Options
also will be granted to non-employee directors, after the initial 1,000-share
grant, on the date of each subsequent annual Board meeting, for a number of
shares equivalent in value to the director's annual retainer divided by the
closing price on that date. Each option gives the eligible director the right to
purchase shares of the Company's Common Stock at 100% of the closing price on
the date of grant, to expire three years from the date of termination of
service, but in no event longer than ten years from the date of grant. The
option prices for outstanding options granted to directors range from $15.875 to
$28.00 per share.
EXECUTIVE SEVERANCE AGREEMENTS
In June 1988, the Board of Directors authorized the Company to enter into
severance agreements with certain key employees, including all of the persons
named in the Summary Compensation Table, which provide for the payment of
compensation and benefits in the event of termination of employment following a
change-of-control. A change-of-control is generally defined as (i) the
acquisition by a person or group of 20% or more in voting power of the Company's
securities; (ii) a change in the majority of the Board of Directors over a
two-year period; or (iii) the sale of all or substantially all of the Company's
assets or the merger or consolidation of the Company with any other corporation,
except where the Company's owners continue to hold at least 80% of the voting
power in the new or surviving entity's securities.
Each severance agreement will remain in effect for at least three years
following the date of its execution. Thereafter, each agreement will be extended
annually unless the Company gives proper notice of its election
11
<PAGE> 15
not to extend. If a change-of-control occurs during the term of an agreement, it
will remain in effect for three years following the change-of-control.
An executive whose employment is terminated after a change-of-control will
generally receive additional compensation only if the termination was by the
Company without cause or by the executive because of a diminution in salary,
benefits or responsibilities or related reasons. An executive whose termination
follows a change-of-control, but not because of one of the above reasons, will
generally receive normal severance pay, payment of certain accrued vested
benefits, a prorated bonus, vacation pay and deferred compensation. The
severance agreements provide the following additional benefits payable after a
change-of-control to executives who are terminated without cause or who resign
for the reasons described above: (i) three times the sum of the executive's base
salary and annual target bonus; (ii) continued health care coverage for three
years; (iii) continued life insurance coverage for a period of three years in
the amount of twice the executive's base salary and thereafter at one times base
salary for the remainder of his or her life; (iv) full vesting and three
additional years of credit under the Company's qualified pension plan, excess
pension plan and supplemental retirement plan; (v) a lump-sum payment under the
Company's supplemental retirement savings plan; (vi) a prorated award under the
Performance Unit Plan; (vii) the removal of any restrictions placed on shares of
restricted stock granted pursuant to the 1992 Stock Compensation Plan; (viii)
the payment of any federal excise taxes; and (ix) the reimbursement of legal and
tax audit fees, if any, incurred as a result of the termination. The Company has
established a trust to ensure payment to all executives whose employment is
terminated after a change-of-control of the compensation and benefits described
herein.
DEATH BENEFIT PLAN FOR KEY MANAGERS
As part of the total compensation package developed to assist the Company
in attracting and retaining top quality managers, the Company in 1985 adopted a
death benefit plan for certain key managers designated as eligible by the
Company's Board of Directors. As of January, 1994, 26 active key managers,
including all of the persons named in the Summary Compensation Table, together
with 22 retired managers were participating. Under this plan, if death occurs
before retirement, the participant's beneficiary will receive a payment which,
when adjusted for income taxes, will equal two times the amount of the
individual's base salary as of the date of death. If death occurs after
retirement, the amount paid to the beneficiary after adjustment for income taxes
will equal one times final base salary. The Company has purchased life insurance
contracts on the lives of the participants, with the Company as owner and
beneficiary, to indemnify the Company for the cost of such benefits. The cost
incurred by the Company for this Plan during 1993 was not significant.
Irrespective of any statement to the contrary included in any Company
filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate by reference
future filings, including this Proxy Statement, in whole or in part,
the following report of the Compensation Committee and the Performance
Graph on page 16 shall not be incorporated by reference into any such
filings.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE OFFICERS' COMPENSATION
COMMITTEE APPROACH TO COMPENSATION EVALUATION
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for determining the base salary, annual performance compensation
(bonus), long-term performance compensation (stock options and performance
units) and other compensation of the executive officers, including the executive
officers named in the Summary Compensation Table (the "named executive
officers"). This report describes the policies and rationales of the Committee
in establishing the principal components of executive compensation during 1993.
In its deliberations regarding compensation of executive officers, the Committee
considers the following factors: (a) Company performance, both separately and in
relation to other companies, (b) the individual performance of each executive
officer, (c) a number of comparative compensation surveys (supplied by
professional compensation consultants approved by the Committee and retained by
the Company for this purpose) and other materials concerning compensation levels
and stock grants at other companies,
12
<PAGE> 16
such as compensation and stock award information disclosed in the proxy
statements of other companies, (d) historical compensation levels and stock
awards at the Company, (e) the overall competitive environment for executives
and the level of compensation necessary to attract and retain talented
executives, and (f) the recommendations of professional compensation consultants
and management.
The Company uses two general surveys of industrial organizations published
by the Hay Group and Hewitt Associates as reference points to establish
executive compensation levels (salary ranges, target bonus levels, and actual
salaries). These surveys allow the Company to establish pay levels that are
competitive for positions of similar job content, and competitive with
industrial organizations of generally equivalent size (by annual revenues) with
executive positions similar to those in the Company. The Hay Group survey, which
included over 400 manufacturing and service companies in its 1993 compensation
analysis, is also used to verify that the Company's annual incentive
compensation award levels are appropriate and competitive.
The Company measures its total pay competitiveness for executives by
comparing its executive pay practices (salary midpoint, target bonus, target
performance unit plan performance, and target stock options award levels) to the
Hewitt Associates Total Compensation Data Base, Core Group III, a group of 24
"middle market" industrial companies (one of which is the Company). The
Company's policy is to be competitive (50th percentile) when measuring the total
value of its compensation against this Hewitt Associates Core Group III data
base as opposed to being competitive on each separate component of compensation.
The Hay Group survey and the Hewitt data base and other surveys subscribed to
and participated in by the Company are reviewed by the Compensation Committee at
least annually to verify to its satisfaction the appropriateness of compensation
levels within the Company. The Committee looks at these larger survey groups
which have data from companies in various industries for comparative analysis of
executive compensation because the Committee believes that the Company's
competitors for executive talent are more varied than the Peer Group chosen for
comparing shareholder return in the Performance Graph. Only one of the companies
in the S&P Auto Parts-Aftermarket Index used in the Performance Graph is
included among the companies in the Hewitt Associates and Hay Group surveys used
by the Company as reference points for executive compensation levels.
EXECUTIVE OFFICERS GENERALLY
Generally, total 1993 compensation for executive officers (other than D.A.
Johnson, discussed separately below), including salary, short and long-term
incentive compensation opportunity and the projected value of stock awards (as
described in the table "Option Grants in Last Fiscal Year" under the "Grant Date
Present Value" column and the accompanying footnote 3 on page 8), was at
approximately the 45th percentile of total compensation amounts for executive
officers of companies in the Hewitt Associates Core Group III data base. The
Company's pay package for executive officers, including D.A. Johnson, is
structured so that a significant portion (between 55% and 60%, depending on the
level of responsibility of the executive officer) of targeted annual cash
compensation (salary, plus annual and long-term incentive compensation) is
linked to Company performance, because it is paid only if certain performance
goals are achieved. Additionally, stock option awards are also affected by
Company performance, because the value of any such award is directly tied to the
Company's stock price performance.
Salary
The 1993 salaries of executive officers were determined primarily on the
basis of each executive officer's performance and responsibility, Company
performance and competitive market data on salary levels. Increases in 1993
salaries reflected the Committee's determination, based in part on
recommendations of compensation consultants, that compensation levels should be
increased to remain competitive, given each executive officer's performance, the
Company's performance in 1992, which exceeded its plan by more than 20% in terms
of both net income and return on net assets, and the competitive environment for
executive talent. Salary increases for 1993 averaged 8.2% for executive officers
(other than D.A. Johnson). These salaries had not been increased since the
beginning of 1991. The Company does not assign relative weighting factors of
performance in establishing the salaries of its executive officers.
13
<PAGE> 17
Annual and Long-Term Incentive Compensation
Both the Annual Incentive Compensation Plan (the "Annual Plan") and the
Performance Unit Plan awards granted in 1992 and 1993 (the "Long-Term Awards")
tie payouts to Company performance. Under the Annual Plan and the Long-Term
Awards, potential payout amounts and related performance goals were established
at the beginning of the relevant performance period by the Committee, after
assessing recommendations of management and professional compensation
consultants.
With respect to corporate executive officers, Company performance under the
Annual Plan was measured by return on average net assets (75% of opportunity)
and performance against personal performance goals (25% of opportunity).
Individual performance goals are established each year for executive officers
based on the individual's area of responsibility. These goals are generally
measured subjectively rather than quantitatively and include managing divisional
integration efforts, succession and organizational plans and productivity and
quality improvement projects.
Under the Long-Term Awards granted to corporate executive officers, Company
performance was measured by the Company's total return to shareholders (share
price plus dividends) versus the Standard & Poor's 500 Index averaged over the
three-year period.
The Company's return on average net assets in 1993 did not meet the
threshold levels and the executive officers received no payment on the 75%
portion of the Annual Plan opportunity. The Committee awarded payments averaging
95% of target for personal goal achievement by the executive officers in 1993
and these amounts are shown for the named executive officers in the Summary
Compensation Table.
There were no performance periods ending in 1993 under the Company's
Performance Unit Plan and thus no payments were earned or paid in 1993. See
pages 9 and 10 for a description of the Performance Unit Plan and the awards
granted in 1993.
Stock Options
The stock options awarded to executive officers are designed to align the
interests of management more closely with those of the shareholders of the
Company by increasing stock ownership by management. To emphasize the importance
of stock ownership by management, the Board of Directors recently approved stock
ownership guidelines for all directors and officers which require all directors
and officers to hold Company stock acquired through the Company's stock programs
and progress over a period of years toward ownership of shares having a market
value relative to salary; the minimum ownership guideline is owning Company
stock having a market value at least equal to annual salary (annual retainer for
directors), with the level of target ownership increasing as levels of
responsibility increase, up to two times annual salary which is the ownership
guideline for the Chief Executive Officer.
In determining the size and terms of stock grants, the Committee considers
comparative information regarding stock grants made by the surveyed group of
companies, historical stock grants made by the Company and the recommendations
of professional compensation consultants and management. Stock option awards
focus executives on the Company's stock price performance, provide incentives to
remain with the Company and align the interests of executive officers more
closely with shareholders. These factors, along with the recommendations of
compensation consultants, are considered by the Committee in determining the
number of options awarded to executive officers. The number of option shares
awarded to an executive officer is determined by dividing the current share
price into a percentage (90% to 120% depending on the level of responsibility)
of the executive's salary.
Tax Law Changes
In 1993, the tax laws were amended to limit the deduction a publicly-held
company is allowed for compensation paid in 1994 and thereafter to the chief
executive officer and to the four most highly compensated executive officers
other than the chief executive officer. Generally, the amounts paid in excess of
$1 million to a covered executive, other than performance-based compensation,
cannot be deducted. In order to be performance-based compensation for purposes
of the new tax law, the performance measures must be
14
<PAGE> 18
approved by the shareholders. The Committee will consider ways to maximize the
deductibility of executive compensation, while retaining the discretion the
Committee deems necessary to compensate executive officers in a manner
commensurate with performance and the competitive environment for executive
talent.
COMPENSATION OF DALE A. JOHNSON, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
The Committee established the 1993 compensation of Dale A. Johnson, the
Chairman and Chief Executive Officer, using substantially the same criteria that
were used to determine compensation levels for other executive officers
discussed earlier in this report. Mr. Johnson's compensation is reviewed against
the compensation paid to chief executive officers in the comparison groups
referred to earlier in this report. His 1993 total compensation package
(including salary, short and long-term incentive opportunity and the projected
value of stock awards) places him at the 45th percentile of the total
compensation amounts paid to chief executive officers in the Hewitt Associates
Core Group III. In the Committee's view, this level of opportunity provides
adequate and necessary incentives for Mr. Johnson in meeting the challenges he
faces in leading the Company to success in the future.
Mr. Johnson's 1993 salary was determined based on Company performance in
1992, Mr. Johnson's performance and competitive market data on salary levels.
The Committee increased Mr. Johnson's salary from $400,000 to $465,000
commencing January 1, 1993 in recognition of the fact that his salary at the end
of 1992 was at the level set in January 1991 and restored in January 1992
following a 15% mid-year cut in 1991, and in recognition of the Company's
positive performance under Mr. Johnson's direction during 1992. The Company's
performance in 1992 exceeded its plan by more than 20% in terms of both net
income and return on net assets. The Company does not assign relative weighting
factors of performance in establishing the salary of Mr. Johnson.
Mr. Johnson's target opportunity under the Company's Annual Plan for 1993
was $282,310. Of the total target opportunity, 75% was dependent upon
achievement of the corporate goal for return on average net assets. No payment
was made as the actual return for 1993 was below threshold levels. Mr. Johnson
was awarded $65,872 for his performance against personal performance goals (25%
of opportunity) which the Committee, after review, concluded represented close
to target performance. Mr. Johnson's personal performance goals pertained to
completing the acquisition of Allen Testproducts, initiating a restructuring of
Sealed Power Technologies, L.P. and succession planning.
Mr. Johnson, like the other corporate executive officers, received no
payout under the Company's Performance Unit Plan since no performance period
ended in 1993. Mr. Johnson received a stock option award for 35,000 shares which
was determined by dividing the current share price into 120% of his base salary
following the guidelines described above.
The foregoing report has been approved by all members of the Committee.
The Compensation Committee
Frank A. Ehmann, Chairman
Peter H. Merlin
David P. Williams
15
<PAGE> 19
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Common Stock of the Company for the last five fiscal years with the cumulative
total return on the S&P 500 Composite Index and the S&P Auto Parts-Aftermarket
Index over the same period (assuming the investment of $100 in the Company's
Common Stock, the S&P 500 Index and the S&P Auto Parts-Aftermarket Index on
December 31, 1988, and reinvestment of all dividends). The Companies included in
the S&P Auto Parts-Aftermarket Index are Cooper Tire and Rubber Co.; Echlin,
Inc.; Genuine Parts Co.; Goodyear Tire and Rubber Co.; and SPX Corporation.
[INSERT CAMERA READY GRAPH]
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 1993 were Frank A. Ehmann
(Chairman), Peter H. Merlin and David P. Williams. All Committee members are
outside directors and no committee member is or has ever been an officer or
employee of the Company. Mr. Merlin is a senior partner with the law firm of
Gardner, Carton & Douglas, which the Company has engaged from time to time to
provide legal services.
SHAREHOLDER PROPOSALS FOR 1994 ANNUAL MEETING
If any shareholder desires to submit a proposal to be included in the proxy
materials for the next annual meeting, such proposal must be submitted in
writing to the Secretary of the Company no later than November 26, 1994.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen & Co., the Company's independent auditors since 1952, has
been appointed by the Board of Directors as the Company's independent auditors
for the current year. Representatives of Arthur
16
<PAGE> 20
Andersen & Co. are expected to be present at the Annual Meeting to be available
to answer appropriate questions and to make a statement if they so desire.
GENERAL
The cost of preparing, assembling and mailing this proxy statement and
accompanying papers will be borne by the Company. Solicitations will be made by
mail but in some cases may also be made by telephone or personal call by
officers, directors or regular employees of the Company who will not be
specially compensated for such solicitation. The Company has retained the Kissel
Blake Organization, Inc. to assist in the solicitation of proxies for a fee of
$7,500 plus expenses. The entire cost of such solicitation will be borne by the
Company, which will include the cost of supplying necessary additional copies of
the solicitation materials for beneficial owners of shares held of record by
brokers, dealers, banks and voting trustees, and their nominees and, upon
request, the reasonable expenses of such record holders for completing the
mailing of the solicitation materials to those beneficial owners.
By Order of the Board of Directors,
JAMES M. SHERIDAN
Vice President and Secretary
Muskegon, Michigan
March 25, 1994
17
<PAGE> 21
SPX Corporation
Proxy Materials
Graphics Appendix
Pictures of the nominees to and the members of the Board of Directors
of the Company have been omitted from pages 2 and 3 of the Proxy
Statement.
The Performance Graph has been omitted from page 16 of the Proxy
Statement.
<PAGE> 22
SPX CORPORATION PROXY
MUSKEGON, MICHIGAN
ANNUAL MEETING APRIL 27, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD Of DIRECTORS
The undersigned shareholder of SPX Corporation, a Delaware corporation,
hereby appoints Dale A. Johnson, Curtis T. Atkisson, Jr. and James M. Sheridan,
or any one of them, with full power of substitution, to act as his agents and
proxies at the Annual Meeting of Shareholders of the Company to be held in
Muskegon, Michigan, on April 27, 1994 at 9 a.m. (Eastern Time) with authority
to vote at said meeting, and any and all adjournments thereof, as indicated
below, all shares of stock of the Company standing in the name of the
undersigned on the books of the Company.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ITEM 1.
(Continued and to be signed and dated on the other side.)
<PAGE> 23
1. Election of all Directors Nominees: J. Kermit Campbell, Curtis T.
Atkisson, Jr., Frank A. Ehmann
and Dale A. Johnson
For / / Withhold / / Exceptions* / /
2. In their discretion , the Proxies are
*Exceptions ------------------------- authorized vote upon such other
business as may properly come before
- ------------------------------------- the meeting.
To vote your shares for all Director
nominees, mark the "For" box on
Item 1. To Withhold voting for all Address Change / /
nominees, mark the "Withhold" and/or Comments Mark Here
box. If you do not wish your shares
voted "for" a particular nominee, mark
the "Exceptions" box and enter the
name(s) of the exceptions(s) in the
space provided.
PROXY DEPARTMENT
NEW YORK, N.Y. 10203-0158
If you sign as agent or in any
other representative capacity,
please state the capacity in
which you sign. If shares are
registered in the names of two
or more persons, each such
person should sign this proxy.
DATES
-------------------------
SIGNATURE
---------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Votes MUST be indicated
(x) in Black of Blue ink / /
