<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 / / 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 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, if other than the Registrant)
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(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:
- --------------------------------------------------------------------------------
<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, 1995
Fellow Shareholders:
You are cordially invited to attend the 1995 Annual
Meeting of Shareholders on Wednesday, April 26, 1995 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 10, 1995 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 26, 1995
To the Shareholders:
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 26, 1995 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;
2. Such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 10, 1995 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.
Any shareholder who does not expect to attend the meeting in person is
requested to execute the enclosed proxy and return it as promptly as possible in
the accompanying stamped envelope. The proxy may be revoked by the 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 1994 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, 1995
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 26, 1995
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 26, 1995.
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.
RECORD DATE AND VOTING AT THE MEETING
The holders of record on March 10, 1995, 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 14,078,896 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.
This proxy statement and the proxy were first mailed to shareholders on or
about March 25, 1995.
ELECTION OF DIRECTORS
At the date of the Annual Meeting, the Board of Directors will consist of
ten members, divided into three classes. At this Annual Meeting, four nominees
are to be elected to serve for a term of three years and until their respective
successors are elected and qualified. The remaining six directors will continue
to serve as set forth below, with three directors having terms expiring in April
1996 and three directors having terms expiring in April 1997. Each of the
nominees is now a director of the Company and has agreed to serve if elected.
The proxy holders will vote 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.
<PAGE> 5
The following sets forth with respect to each nominee and each director
continuing to serve, his or her name, age, principal occupation, the year in
which he or she first became a director of the Company, committee assignments
and directorships in other business corporations.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR A THREE-YEAR TERM EXPIRING APRIL 1998
<TABLE>
<S> <C>
- ---------------- SARAH R. COFFIN
[Photo]
Ms. Coffin, 42, is the Vice President, Specialty Group Manager of H.B.
- ---------------- Fuller Company, a manufacturer of adhesives, sealants, coatings, paints
and other specialty chemicals. She joined the SPX Board in February,
1995.
- ---------------- EDWARD D. HOPKINS
[Photo]
Mr. Hopkins, 57, is the Chairman, President, Chief Executive Officer and
- ---------------- 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 Committee and the Finance
Committee.
- ---------------- CHARLES E. JOHNSON II
[Photo]
Mr. Johnson, 59, is a private investor and former President and Chief
- ---------------- Operating Officer of the Company. He joined the SPX Board in 1976 and is
a member of the Executive Committee, Audit Committee and Director
Affairs Committee. He is a director of First of America Bank-West
Michigan, Baker College of Muskegon, and Hackley Hospital.
- ---------------- DAVID P. WILLIAMS
[Photo]
Mr. Williams, 60, 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
starting aids. He joined the SPX Board in 1992 and is a member of the
Audit Committee and the 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>
2
<PAGE> 6
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
WHOSE TERMS EXPIRE APRIL 1996
<TABLE>
<S> <C>
- ---------------- J. KERMIT CAMPBELL
[Photo]
Mr. Campbell, 56, 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 and is a
member of the Audit Committee and the Compensation Committee. He is a
director of Herman Miller, Inc.
- ---------------- RONALD L. KERBER
[Photo]
Mr. Kerber, 51, is the Executive Vice President and Chief Technology
- ---------------- 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 the Finance Committee.
- ---------------- PETER H. MERLIN
[Photo]
Mr. Merlin, 66, is a Partner and Chairman-International Department,
- ---------------- Gardner, Carton and Douglas, Corporate Counsel for the Company. He
joined the SPX Board in 1975 and is a member of the Director Affairs
Committee, Finance Committee and Executive Committee. He is a director
of Aldi Inc. and Lechler, Inc.
</TABLE>
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
WHOSE TERMS EXPIRE APRIL 1997
<TABLE>
<S> <C>
- ---------------- CURTIS T. ATKISSON, JR.
[Photo]
Mr. Atkisson, 61, is President and Chief Operating Officer of the
- ---------------- Company. He joined the SPX Board in 1991.
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
- ---------------- FRANK A. EHMANN
[Photo]
Mr. Ehmann, 62, is the former President and Chief Operating Officer of
- ---------------- American Hospital Supply Corporation. He joined the SPX Board in 1988
and is a member of the Compensation Committee, Director Affairs
Committee and Executive Committee. He is a director of American Health
Corp., Inc., AHA Investment Funds, Genderm, Inc., Kinetic Concepts, Inc.
and St. Jude Medical, Inc.
- ---------------- DALE A. JOHNSON
[Photo]
Mr. Johnson, 57, is the Chairman and Chief Executive Officer of the
- ---------------- Company. He joined the SPX Board in 1988 and is a member of the
Executive Committee. He is a director of Douglas and Lomason Company and
MCN Corporation.
</TABLE>
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. 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. 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; Ms. Coffin, who, prior to
joining H.B. Fuller Company in 1994, held executive positions with G.E.
Plastics, a business unit of General Electric Company, for more than five years;
Mr. Charles 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 six meetings of the Board of Directors of the Company in 1994.
During 1994, 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 areas of the Board's responsibility. These committees are the Audit
Committee, Compensation Committee, Director Affairs Committee, Executive
Committee, and Finance Committee.
The Audit Committee, which held three meetings in 1994, 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.
4
<PAGE> 8
The Compensation Committee, which held three meetings in 1994, reviews and
makes recommendations to the Board on the compensation and benefits payable to
the officers and key employees of the Company and grants stock options and other
awards under the Company's Stock Compensation Plan, Annual Performance
Compensation Plan and long-term Performance Unit Plan.
The Director Affairs Committee, which held three meetings during 1994, (i)
conducts a continuing study of the size, structure and composition of the Board;
(ii) makes recommendations to the Board on changes in compensation of directors;
(iii) seeks out and interviews possible candidates for Board membership and
reports its recommendations to the Board; and (iv) 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 1995 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.
The Executive Committee, which held two meetings in 1994, has authority to
act on most matters during the intervals between Board meetings.
The Finance Committee, which met three times in 1994, (i) reviews the
Company's strategic and annual plans and major capital projects; (ii) studies
the Company's capital structure and makes recommendations to the Board on debt
and equity financing; (iii) reviews the investment performance, actuarial
assumptions and funding practices for the Company's pension, healthcare and
defined contribution plans; and (iv) reviews the Company's risk management
practices and its dividend policy.
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 10, 1995, 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............................... 86,311(4)(5) *
J. Kermit Campbell................................... 3,917 *
Sarah R. Coffin...................................... 0 *
Frank A. Ehmann...................................... 8,517 *
Edward D. Hopkins.................................... 9,417 *
Charles E. Johnson II................................ 67,757(4) *
Dale A. Johnson...................................... 197,898(6) 1.4%
Ronald L. Kerber..................................... 5,317 *
Peter H. Merlin...................................... 9,236 *
James M. Sheridan.................................... 69,940(4) *
R. Budd Werner....................................... 70,421 *
David P. Williams.................................... 5,200 *
Albert A. Zagotta.................................... 200 *
All directors and executive officers as a group
(18 persons) including the above-named............. 658,119 4.7%
</TABLE>
- ---------------
* Less than 1%.
5
<PAGE> 9
(1) Included for Messrs. Atkisson, D. A. Johnson, Sheridan, Werner, Zagotta and
all executive officers are their respective allocated shares held in the
SPX Corporation Savings and 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 or she beneficially owns.
(3) Includes shares which may be acquired within 60 days pursuant to options as
follows: Mr. Atkisson -- 63,500 shares, Mr. Campbell -- 2,300 shares, Mr.
Ehmann -- 7,600 shares, Mr. Hopkins -- 7,600 shares, Mr. C. E. Johnson II
-- 4,800 shares, Mr. D. A. Johnson -- 140,550 shares, Mr. Kerber -- 4,700
shares, Mr. Merlin -- 7,600 shares, Mr. Sheridan -- 58,000 shares, Mr.
Werner -- 58,000 shares, Mr. Williams -- 3,700 shares, and all directors
and executive officers as a group (18 persons) -- 465,050 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.
(6) Includes 20,000 shares awarded to Mr. 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.
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 PERCENT
BENEFICIAL OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
--------------------------------------------------- --------- -----
<S> <C> <C>
Fidelity Management Trust Company 1,581,530(1) 11.2%
82 Devonshire Street
Boston, MA 02109
Forstmann-Leff Associates, Inc. 1,227,515(2) 9.7%
55 East 52nd Street
New York, NY 10055
State of Wisconsin Investment Board 1,131,000 8.0%
244 West Washington Avenue
Madison, WI 53701
</TABLE>
- ---------------
(1) Fidelity Management Trust Company is the Trustee of the Company's Savings
and Stock Ownership Plan and as of March 10, 1995 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 13, 1995.
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 13,
1995. Forstmann has sole voting power over 654,515 shares and sole
dispositive power over 893,215 shares. Forstmann shares with FLA voting
power with respect to 60,100 shares and dispositive power over 249,300
shares. Forstmann shares with Stamford voting and dispositive power over
85,000 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, 1994. None of the five named officers is
employed under contract or employment agreement.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------------------------------
AWARDS PAYOUTS
- ------------------------------------------------------------------------------------------------------------------
OTHER NUMBER OF
ANNUAL RESTRICTED SECURITIES ALL OTHER
COMPENSA- STOCK UNDERLYING LTIP COMPENSA-
SALARY BONUS TION(2) AWARD(S) OPTIONS PAYOUTS TION(6)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)(5) ($)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dale A. Johnson
Chairman of the Board and 1994 $475,000 $379,396 -- 0 36,000 $377,944 $ 28,489(7)
Chief Executive Officer 1993 $465,000 $65,872 0 35,000 0 $ 14,819
1992 $400,000 $343,824 0(3) 30,000 0 $ 17,755
Curtis T. Atkisson, Jr.
President and Chief 1994 $292,000 $214,268 -- 0 21,000 $216,882 $ 13,140
Operating Officer 1993 $280,000 $37,229 0 21,000 0 $ 5,071
1992 $260,000 $196,358 0(4) 17,500 0 $ 7,355
Albert A. Zagotta(1)
Executive Vice President 1994 $245,000 $177,680 -- 0 16,000 0 $103,094(8)
R. Budd Werner(1)
Vice President, Finance and 1994 $217,000 $125,260 -- 0 12,000 $132,778 $ 9,765
Chief Financial Officer 1993 $208,000 $25,424 0 12,000 0 $ 3,640
1992 $191,000 $113,054 0 10,000 0 $ 4,421
James M. Sheridan
Vice President, Administra- 1994 $205,000 $127,699 -- 0 12,000 $131,569 $ 9,224
tion and General Counsel 1993 $200,000 $18,000 0 12,000 0 $ 3,557
and Corporate Secretary 1992 $185,000 $108,743 0 10,000 0 $ 4,319
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Zagotta was elected an officer of the company effective February 26,
1994. Mr. Werner was elected Senior Vice President, Corporate Planning and
Development on November 14, 1994 and on that same date William L. Trubeck
was elected Senior Vice President, Finance and Chief Financial Officer.
(2) No other Annual Compensation other than perquisites is available.
Perquisites are below threshold reporting requirements.
(3) An award of 20,000 shares of Restricted Stock was made to Mr. Johnson on
April 25, 1990. The value of the award was $525,000 based on the April 24,
1990 share closing 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, 1994, Mr. Johnson
holds 4,000 unvested shares with a value of $66,500 based on the closing
price of the shares ($16.625) on that date.
(4) An award of 12,000 shares of restricted stock was made to Mr. Atkisson on
October 1, 1991. The value of the award was $156,000 based on the October 1,
1992 closing 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, 1994, Mr. Atkisson holds
4,800 unvested shares with a value of $79,800 based on the closing price of
the shares ($16.625) on that date.
(5) Messrs. Johnson, Atkisson, Werner, and Sheridan were participants in the
1992-1994 Performance Unit Plan which concluded as of December 31, 1994. The
plan paid incentive awards to the four executive officers in the form of
cash (performance units) and shares (performance shares). All of the cash
and 1/3 of the shares awarded vested immediately on the award payment date
(January 17, 1995). The remaining 2/3 of the shares vest, based on continued
employment, 1/3 on January 17, 1996 and 1/3 on January 17, 1997. The total
cash and shares (vested and unvested) earned by each named officer was: Mr.
Johnson, $153,000 and 13,232 shares; Mr. Atkisson, $87,750 and 7,596 shares;
Mr. Werner, $54,000 and 4,634 shares; and Mr. Sheridan, $53,250 and 4,607
shares. The amounts shown above as LTIP Payouts in 1994 include cash
payments and the total value of the vested and unvested shares based on the
January 17, 1995 share closing price of $17.00.
(6) The amounts reported, except for Mr. Johnson and Mr. Zagotta, include only
Company contributions to its qualified and nonqualified defined contribution
plans.
7
<PAGE> 11
(7) Company contributions for Mr. Johnson to qualified and nonqualified defined
contribution plans in 1992 were $10,641.86, in 1993 were $7,705.18 and in
1994 were $21,375.90. The total of all other contributions for Mr. Johnson
includes the annual premium of $7,114 in 1992, in 1993 and in 1994 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.
(8) Represents $4,620 in Company contributions to Mr. Zagotta's account in a
defined contribution plan and $98,474 realized upon the cancellation of his
stock options in Sealed Power Technologies Limited Partnership paid in 1994.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL OPTIONS EXERCISE
OPTIONS GRANTED TO OR GRANT DATE
GRANTED(1) EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE(2)
NAME (#) 1994 ($/SHARE) DATE $
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dale A. Johnson.............. 36,000 15.75% $15.00 12/14/04 $166,680
Curtis T. Atkisson, Jr. ..... 21,000 9.19% $15.00 12/14/04 $ 97,230
Albert A. Zagotta............ 16,000 7.00% $15.00 12/14/04 $ 74,080
R. Budd Werner............... 12,000 5.25% $15.00 12/14/04 $ 55,560
James M. Sheridan............ 12,000 5.25% $15.00 12/14/04 $ 55,560
- ------------------------------------------------------------------------------------------------------------------
</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 1994. There are no performance-based
conditions to exercisability, reload or tax reimbursement features
associated with the options granted in 1994. The exercise price is fixed
for the life of the option at the closing price of SPX Corporation's common
stock on the grant date.
(2) 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 $15.00, 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 7.81 percent, which represents the interest rate on a
U.S. Treasury security with a maturity date corresponding to that of the
option term.
- Volatility of 30 percent calculated using daily stock prices for the
one-year period prior to the grant date.
- Dividends at the rate of $0.40 per share representing the annualized
dividends paid with respect to a share of common stock at the date of
grant.
- A reduction of approximately 24 percent to reflect the probability of a
shortened option term due to termination of employment prior to the
option expiration date.
The ultimate values of the options will depend on the future market price
of SPX Corporation's common stock, which cannot be forecasted with
reasonable accuracy. The actual value, if any, an optionee will realize
upon exercise of an option will depend on the excess of the market value of
the Company's common stock over the exercise price on the date the option
is exercised.
8
<PAGE> 12
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in fiscal 1994
by the named executive officers and the value of such officers' unexercised
options at December 31, 1994.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES STOCK OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE YEAR END(1) FISCAL YEAR END(1)
ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME (#) ($) (#) ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dale A. Johnson................... 10,000 $45,000 140,550/36,000 $193,004/$58,500
Curtis T. Atkisson, Jr............ 0 0 63,500/21,000 $136,500/$34,125
Albert A. Zagotta................. 0 0 0/16,000 $ 0/$26,000
R. Budd Werner.................... 0 0 58,000/12,000 $103,400/$19,500
James M. Sheridan................. 0 0 58,000/12,000 $103,400/$19,500
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All exercisable options were exercisable immediately at December 31, 1994.
All unexercisable options were those granted on December 13, 1994 and were
in-the-money as of December 31, 1994. 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 ($16.625). 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 $750 and the number of shares earned will range from zero to 150% of
the target amount.
For the 1994 performance period (January 1, 1994 to December 31, 1996), the
corporate goal is expressed in terms of growth in the Company's share price plus
dividends relative to the growth in the S&P 500 Index as follows:
<TABLE>
<CAPTION>
SPX PERFORMANCE LEVEL OF ACHIEVEMENT
--------------------------------- -----------------------------------------------
<S> <C> <C>
Less than 80% of S&P 500 growth -- No awards earned
80% of S&P 500 growth -- 50% of target award earned (threshold)
100% of S&P 500 growth -- 100% of target award earned (target)
150% of S&P 500 growth -- 150% of target award earned (maximum)
</TABLE>
Cash units and one-third of the shares earned are payable immediately
following the close of a performance period. The remaining two-thirds of the
earned shares vest ratably over the two years following the close of the
performance period based on continued employment.
The following table sets forth the awards and opportunities for the
three-year performance period January 1, 1994 to December 31, 1996 for the
executives named in the Summary Compensation Table.
9
<PAGE> 13
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
CASH PERFORMANCE OR
UNITS/SHARE OTHER PERIOD UNTIL
UNITS OR OTHER MATURATION OR THRESHOLD(1)(2) TARGET MAXIMUM(3)
NAME RIGHTS (#) PAYOUT ($ OR #) ($ OR #)(2) ($ OR #)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dale A. Johnson 222 cash units/ 1/1/94 $55,500 and $111,000 and Cash and shares
6262 share through 3131 shares 6262 shares may not exceed a
units 12/31/96 value of $444,600
Curtis T. Atkisson, 127 cash units/ 1/1/94 $31,750 and $63,500 and Cash and shares
Jr. 3592 share through 1796 shares 3592 shares may not exceed a
units 12/31/96 value of $255,000
Albert A. Zagotta 106 cash units/ 1/1/94 $26,500 and $53,000 and Cash and shares
2980 share through 1490 shares 2980 shares may not exceed a
units 12/31/96 value of $212,000
R. Budd Werner 78 cash units/ 1/1/94 $19,500 and $39,000 and Cash and shares
2190 share through 1095 shares 2190 shares may not exceed a
units 12/31/96 value of $155,500
James M. Sheridan 77 cash units/ 1/1/94 $19,250 and $38,500 and Cash and shares
2170 share through 1085 shares 2170 shares may not exceed a
units 12/31/96 value of $154,100
- ------------------------------------------------------------------------------------------------------------------
</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 trading day in the first quarter of 1997 when the award
payment, if earned, is made (the award payment date).
(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. Zagotta -- 12 years; Mr. Werner -- 15 years; Mr.
Sheridan -- 30 years.
The annual retirement benefits shown in the above table are computed on the
basis of a straight life annuity.
10
<PAGE> 14
The amounts reported in this Pension Plan Table are payable at the normal
retirement age of 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 plus $1,000 for each regular or special meeting attended. The
annual retainer was increased effective January 1, 1995, from $20,000 to $22,000
and is paid one-half in cash and one-half in SPX shares until the director
achieves total SPX share ownership at least equivalent in value to the annual
retainer amount, after which the entire retainer amount is paid in cash. For
service on Committees of the Board, non-employee directors of the Company
receive $1,000 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 in effect on the retirement date.
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-fifth birthday or
retirement from the Board of Directors. The Directors' Retirement Plan provides
that upon a change-of-control, as defined under "Executive Severance Agreements"
below, 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 their
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 their Plan benefit upon termination of their 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 or her 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 $15.75 to
$28.00 per share.
EXECUTIVE SEVERANCE AGREEMENTS
The Board of Directors authorized the Company to enter into severance
agreements with its executive officers. Executive severance agreements cover all
of the persons named in the Summary Compensation Table, as well as five
additional executive officers, and the agreements 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; (iii) the sale of all or substantially all 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; or (iv) the acquisition by a person,
other than the Company, pursuant to an exchange or tender offer for securities
of the Company representing 25% or more of the combined voting power of the
Company's then outstanding securities.
11
<PAGE> 15
Each amended 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 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, 1995, 32 active key managers,
including all five officers named in the Summary Compensation Table, together
with 24 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 1994 was not significant.
Irrespective of any statement to the contrary included in any Company
filing under 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 1994.
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
12
<PAGE> 16
for this purpose) and other materials concerning compensation levels and stock
grants at other companies, 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 350 manufacturing and service companies in its 1994 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 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 1994 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 2 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 1994 salaries of executive officers were determined primarily on the
basis of each executive officer's performance and level of responsibility,
Company performance and competitive market data on salary levels. Increases in
1994 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, and
the competitive environment for executive talent. Salary increases for 1994
averaged 3.6% for executive officers (other than D.A. Johnson). 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, 1993 and 1994 (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 achievement of actual net income versus target net
income (80% of opportunity) and performance against personal performance goals
(20% 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.
Company income performance in 1994 exceeded initial targets due in large
part to stronger than expected performance from the original equipment business
segment. Executive officers as a group earned total awards averaging 120% of
target for 1994 financial performance and averaged above target for personal
performance. These amounts are shown for the named executive officers in the
Summary Compensation Table.
1994 was the final year of the 1992 to 1994 (Three-Year) Performance Unit
Plan. Executive officer awards were based on the company's three-year average
return to shareholders (share price growth plus dividends) compared to the
growth, including dividends, in the S&P 500 for the same period. Under the plan,
achievement of three-year average shareholder return of more than 150% of the
S&P 500 three-year average return rate is considered maximum performance. The
SPX three-year average shareholder return rate of 16.9% was nearly double the
S&P 500 average award growth rate of 8.7% in the same period. The amounts shown
in the Summary Compensation Table represent Performance Unit Plan payments at
maximum for the named executive officers. See pages 9 and 10 for a description
of the Performance Unit Plan and the awards granted in 1994.
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 certain
market value relative to salary. The minimum ownership guideline is owning
Company stock having a market value at least equal to annual salary, 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.
14
<PAGE> 18
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 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 1994 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 1994 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 1994 salary was determined based on the financial position of
the Company at the end of 1993, Mr. Johnson's performance and competitive market
data on salary levels. The Committee increased Mr. Johnson's salary in
recognition of Mr. Johnson's leadership during 1993 in refocusing the business
of the Company. The Committee commends Mr. Johnson's work in repositioning the
Company to better serve the motor vehicle industry as a global leader in both
the specialty tools and original equipment components markets. The Company does
not assign relative weighting factors of performance in establishing the salary
of Mr. Johnson.
Mr. Johnson's total target opportunity under the Company's Annual Plan for
1994 was $296,403 and he received an award of $379,396. Mr. Johnson's total
opportunity was 80% dependent upon the achievement of the corporate net income
target. The Company's net income was more than 180% above target, resulting in
an award to Mr. Johnson of $316,163 for this component of his performance.
Additionally, 20% of Mr. Johnson's opportunity was based on his performance
against personal performance goals. Mr. Johnson was awarded $63,233 for personal
performance, which is approximately 5% above a target performance award. Mr.
Johnson's performance goals pertained to realizing productivity and cost
improvements at the Automotive Diagnostics Division, integration of Sealed Power
Technologies, L.P. and Sealed Power Europe into SPX Corporation, financing the
debt to accomplish the reintegration effort and succession planning.
Mr. Johnson received a maximum payout from the 1992-1994 Performance Unit
Plan. His award was based on the Company's three-year average return to
shareholders (share price growth plus dividends) compared to the growth,
including dividends, in the S&P 500 for the same period. The SPX three-year
average shareholder return rate of 16.9% was nearly double the S&P 500 average
annual growth of 8.7% in the same period. Mr. Johnson received a stock option
award for 36,000 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
J. Kermit Campbell
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, 1989, 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.
<TABLE>
<CAPTION>
S&P Auto-
Parts
Measurement Period SPX Corpo- S&P 500 In- Aftermarket
(Fiscal Year Covered) ration dex Index
<S> <C> <C> <C>
1989 100 100 100
1990 53.67 96.89 73.74
1991 50.07 126.42 135.29
1992 70.18 136.05 170.15
1993 70.91 149.76 197.77
1994 68.07 151.74 172.47
</TABLE>
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 1994 were Frank A. Ehmann
(Chairman), J. Kermit Campbell 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.
16
<PAGE> 20
SHAREHOLDER PROPOSALS FOR 1996 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 25, 1995.
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 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, 1995
17
<PAGE> 21
SPX CORPORATION PROXY
MUSKEGON, MICHIGAN
ANNUAL MEETING APRIL 26, 1995
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 26, 1995 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.)
SPX CORPORATION
P.O. BOX 11158
NEW YORK, N.Y. 10203-0158
<TABLE>
<S> <C>
1. Election of four Directors 2. In their discretion, the Proxies are authorized to
vote upon such other business as may properly
come before the meeting.
For /X/ Withheld /X/ Exceptions* /X/
Nominees: Sarah R. Collin, Edward D. Hopkins, Charles
E. Johnson II, and David P. Williams
*Exceptions...........................................
......................................................
To vote your shares for all Director nominees, mark the "For"
box on Item 1. To withhold voting for all nominees, mark the Address Change
"Withhold" box. If you do not wish your shares voted "for" a and/or Comments Mark Here /X/
particular nominee, mark the "Exceptions" box and enter the
name(s) of the exception(s) in the space provided.
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.
DATE 19
--------------------------- --
SIGNATURE
-------------------------
VOTES MUST BE INDICATED
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. (X) IN BLACK OR BLUE INK. /X/
</TABLE>
