<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):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(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:
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<PAGE> 2
[SPX CORPORATION LOGO]
700 TERRACE POINT DRIVE
P.O. BOX 3301
MUSKEGON, MICHIGAN 49443-3301
Telephone: 616-724-5000
Facsimile: 616-724-5720
April 2, 1999
Fellow Stockholders:
You are cordially invited to attend the SPX Corporation 1999 Annual Meeting
of Stockholders on Wednesday, April 28, 1999 at 9:00 a.m. (Central Time), at The
Drake Hotel, 140 East Walton, Chicago, Illinois.
The principal business of the Annual Meeting will be to elect two directors
to serve for a three-year term and to amend SPX's employee stock option plan.
All stockholders are welcome to attend the Annual Meeting, but it is
important that your shares are represented at the Annual Meeting whether or not
you plan to attend. To ensure that you will be represented, we ask you to sign,
date and return the enclosed proxy card or proxy voting instruction form as soon
as possible. If your bank or broker offers telephone or Internet voting and you
choose to use one of those forms of voting, it is not necessary for you to
return your proxy card. In any event, please vote as soon as possible.
Along with the other members of your Board of Directors, I look forward to
personally greeting those stockholders who attend this year's meeting. On behalf
of the Board of Directors and management, I would like to express our
appreciation for your continued interest in the affairs of SPX.
Sincerely,
/s/ JOHN B. BLYSTONE
John B. Blystone
Chairman, President and
Chief Executive Officer
<PAGE> 3
SPX CORPORATION
700 TERRACE POINT DRIVE
P.O. BOX 3301
MUSKEGON, MICHIGAN 49443-3301
- - --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
- - --------------------------------------------------------------------------------
WEDNESDAY, APRIL 28, 1999
9:00 A.M.
THE DRAKE HOTEL
CHICAGO, ILLINOIS
The purpose of our Annual Meeting is to:
1. Elect two directors for three-year terms; and
2. Amend our 1992 Stock Compensation Plan to increase the number of
shares that we may issue under the Plan by 2,000,000 shares.
You can vote at the Annual Meeting in person or by proxy if you were a
stockholder of record on March 19, 1999. You may revoke your proxy at any time
prior to its exercise at the Annual Meeting.
We have enclosed with this notice and proxy statement a copy of our Annual
Report to Stockholders for the fiscal year ended December 31, 1998.
By Order of the Board of Directors,
Christopher J. Kearney
Vice President, Secretary
and General Counsel
Muskegon, Michigan
April 2, 1999
<PAGE> 4
SPX CORPORATION
------------------------------------------------------
PROXY STATEMENT
------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Questions and Answers....................................... 1
Election of Directors....................................... 4
Meetings and Committees of the Board of Directors........... 6
Director Compensation....................................... 8
Ownership of SPX Common Stock............................... 9
Section 16(a) Beneficial Ownership Reporting Compliance..... 10
Executive Compensation...................................... 11
Compensation Committee Report on Executive Officers'
Compensation.............................................. 17
Company Performance......................................... 19
Amendment of 1992 Stock Compensation Plan................... 20
Independent Public Auditors................................. 25
Annual Report on Form 10-K.................................. 25
</TABLE>
<PAGE> 5
QUESTIONS AND ANSWERS
WHAT AM I VOTING ON?
We are soliciting your vote on:
- the election of two directors for three-year terms; and
- the amendment of our 1992 Stock Compensation Plan.
WHO IS ENTITLED TO VOTE?
Stockholders at the close of business on March 19, 1999 (the record date)
are entitled to vote. On that date, there were 30,883,521 shares of SPX common
stock outstanding.
HOW MANY VOTES DO I HAVE?
Each share of SPX common stock that you own entitles you to one vote.
HOW DO I VOTE?
All stockholders may vote by mail. You also may vote by telephone or over
the Internet if you hold your shares through a bank or broker that offers either
of those options. To vote by mail, please sign, date and mail your proxy in the
postage paid envelope provided. If you attend the Annual Meeting in person and
would like to vote then, we will give you a ballot. If your shares are held in
the name of your broker, bank or other nominee, you need to bring an account
statement or letter from the nominee indicating that you were the beneficial
owner of the shares on March 19, 1999, the record date for voting.
HOW DOES DISCRETIONARY VOTING AUTHORITY APPLY?
If you sign, date and return your proxy card, your vote will be cast as you
direct. If you do not indicate how you want to vote, you give authority to
Christopher J. Kearney and Patrick J. O'Leary to vote for the items discussed in
these proxy materials and any other matter that is properly brought at the
Annual Meeting. In such a case, your vote will be cast FOR the election of each
director nominee, FOR the amendment of the Stock Compensation Plan and FOR or
AGAINST any other properly raised matters at the discretion of Messrs. Kearney
and O'Leary.
MAY I REVOKE MY PROXY?
You may revoke your proxy at any time before it is exercised in one of four
ways:
1. Notify our Secretary in writing before the Annual Meeting that you
are revoking your proxy.
2. Submit another proxy with a later date.
3. Vote by telephone or Internet after your have given your proxy.
4. Vote in person at the Annual Meeting.
<PAGE> 6
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
Your shares are likely registered differently or are in more than one
account. You should sign and return all proxy cards to guarantee that all of
your shares are voted.
WHAT CONSTITUTES A QUORUM?
The presence, in person or by proxy, of the holders of one-third of the
total number of shares of SPX stock issued and outstanding constitutes a quorum.
You will be considered part of the quorum if you return a signed and dated proxy
card, if you vote by telephone or Internet or if you attend the Annual Meeting.
Abstentions are counted as "shares present" at the Annual Meeting for
purposes of determining whether a quorum exists. In the election of the nominees
for director and the amendment of the Stock Compensation Plan, abstentions will
have the effect of a vote "against" the proposal. Proxies submitted by brokers
that do not indicate a vote for some or all of the proposals because the brokers
do not have voting authority and have not received voting instructions from you
(so-called "broker non-votes") are considered "shares present" for purposes of
determining whether a quorum exists. Broker non-votes are not considered as
shares voted or having the power to vote and will not affect the outcome of any
vote.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
ELECTION OF DIRECTORS: A majority of the shares present or represented by
proxy at the Annual Meeting must approve the election of the directors. If you
do not want to vote your shares for a particular nominee, you may indicate that
in the space provided on the proxy card or withhold authority as prompted during
telephone or Internet voting.
AMENDMENT OF STOCK COMPENSATION PLAN: Amendment of our Stock Compensation
Plan requires that a majority of the shares present or represented by proxy and
having the power to vote at the Annual Meeting vote in its favor.
HOW DO I SUBMIT A STOCKHOLDER PROPOSAL?
You must submit a proposal to be included in our proxy statement for the
April 2000 annual meeting in writing no later than November 29, 1999. Your
proposal must comply with the proxy rules of the Securities and Exchange
Commission (SEC). You should send your proposal to our Secretary at our address
on the cover of this proxy statement.
You also may submit a proposal that you do not want included in the proxy
statement but that you want to raise at the April 2000 annual meeting. We must
receive your proposal in writing after November 30, 1999 but before December 29,
1999. To be properly brought before an annual meeting, our by-laws require that
your proposal give: (1) a brief description of the business you want to bring
before the meeting; (2) your name and address as they appear on our stock
records; (3) the class and number of shares of SPX that you beneficially own;
and (4) any interest you may have in the business you want to bring before the
meeting. You should send your proposal to our Secretary at the address on the
cover of this proxy statement.
2
<PAGE> 7
HOW DO I NOMINATE A DIRECTOR?
If you wish to recommend a nominee for director for the April 2000 annual
meeting, our Secretary must receive your written nomination by December 29,
1999. You should submit your proposal to the Secretary at our address on the
cover of this proxy statement. Our by-laws require that you provide: (1) your
name and address and the name and address of the nominee; (2) a statement that
the nominee is a record holder of SPX entitled to vote at the meeting and that
you plan to appear in person or by proxy at the meeting to make the nomination;
(3) a description of all arrangements or understandings under which you are
making the nominations; (4) any other information that the rules of the SEC
require to be included in a proxy statement; and (5) the nominee's agreement to
serve as a director if elected.
WHO PAYS TO PREPARE, MAIL AND SOLICIT THE PROXIES?
We will pay all of the costs of preparing, mailing and soliciting these
proxies. We will ask brokers, banks, voting trustees and other nominees and
fiduciaries to forward the proxy materials to the beneficial owners of SPX
common stock and to obtain the authority to execute proxies. We will reimburse
them for their reasonable expenses upon request. In addition to mailing proxy
materials, our directors, officers and employees may solicit proxies in person,
by telephone or otherwise. These individuals will not be specially compensated.
We have retained the D.F. King Organization, Inc. to assist us in soliciting
proxies for a fee of $7,500 plus expenses.
3
<PAGE> 8
ELECTION OF DIRECTORS
Ten directors currently serve on our Board of Directors. The Board will
reduce the number of directors to eight on April 28, 1999. The directors are
divided into three classes. At this Annual Meeting, you will elect two
directors. Each director will serve for a term of three years, until a qualified
successor director has been elected, or until he resigns or is removed by the
Board. The remaining six directors will continue to serve on the Board as
described below. The nominees, J. Kermit Campbell and Emerson U. Fullwood, are
currently SPX directors.
Your shares will be voted as you specify on the enclosed proxy card. If you
do not specify how you want your shares voted, we will vote them FOR the
election of Messrs. Campbell and Fullwood. If unforeseen circumstances (such as
death or disability) make it necessary for the Board of Directors to substitute
another person for a nominee, your shares will be voted FOR that other person.
The Board does not anticipate that either nominee will be unable to serve. The
nominees and continuing directors have provided the following information about
themselves.
NOMINEES
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] J. KERMIT CAMPBELL, 60, is the Chief Executive Officer of
The Prince Group, a supplier of products and services,
including die cast machines, to manufacturing firms. From
1992 until joining The Prince Group in 1995, he was
President and Chief Executive Officer of Herman Miller,
Inc., a manufacturer of furniture and other products for
offices and other work environments. He is Chairman and a
principal of Cellar Masters of America and a director of The
Prince Group and Bering Truck Corporation. Mr. Campbell has
been a director of SPX since 1993.
[PHOTO] EMERSON U. FULLWOOD, 51, is a Corporate Vice President of
Xerox Corporation and the President of Worldwide Customer
Service Group for Xerox. He is a director of Threshold, the
United Way of Greater Rochester, the Rochester Urban League
and the Rochester Area Community Foundation. He was formerly
a director of General Signal Corporation. Mr. Fullwood has
been a director of SPX since 1998.
</TABLE>
DIRECTORS CONTINUING UNTIL 2000 ANNUAL MEETING
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] JOHN B. BLYSTONE, 45, is the Chairman, President and Chief
Executive Officer of SPX. Prior to that, he was with General
Electric Company as Vice President and General Manager of GE
Superabrasives from 1991 to 1994 and with Nuovo Pignone and
GE Power Systems Europe as President and Chief Executive
Officer from 1994 until joining SPX in 1995. He is a
director of Worthington Industries, Inc., the Stern Stewart
Advisory Board and the Community Foundation for Muskegon
County. Mr. Blystone joined the Board of SPX in 1995.
</TABLE>
4
<PAGE> 9
<TABLE>
<S> <C>
[PHOTO] FRANK A. EHMANN, 65, is the former President and Chief
Operating Officer of American Hospital Supply Corporation.
He is a director of American Health Corp., Inc. and AHA
Investment Funds, Inc. Mr. Ehmann has been a director of SPX
since 1988.
[PHOTO] H. KENT BOWEN, 57, is a Professor of Technology and
Operations Management at Harvard University Graduate School
of Business Administration. He is a director of Ceramics
Process Systems, Inc. and was previously a director of
General Signal Corporation. Mr. Bowen has been a director of
SPX since 1998.
</TABLE>
DIRECTORS CONTINUING UNTIL 2001 ANNUAL MEETING
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] SARAH R. COFFIN, 46, is Group Vice President of B.F.
Goodrich Performance Materials Company, a manufacturer of
adhesives, sealants, coatings, paints and other specialty
chemicals. Prior to joining B.F. Goodrich in 1998, Ms.
Coffin was a Vice President with the H.B. Fuller Company.
Before that, she held executive positions with G.E.
Plastics, a business unit of General Electric Company. She
has been a director of SPX since 1995.
[PHOTO] CHARLES E. JOHNSON, II, 63, is a private investor and former
President and Chief Operating Officer of SPX. From July
through December 1995, he served as Chairman and Chief
Executive Officer of SPX. Mr. Johnson is a director of
Hackley Hospital and Muskegon Commerce Bank. He has served
on SPX's Board since 1976.
[PHOTO] DAVID P. WILLIAMS, 64, is President and Chief Operating
Officer of The Budd Company, a manufacturer of automobile
and truck body components, castings, stampings, chassis
frame components, air bag components, automotive heating
accessories and cold weather starting aids. He is a director
of The Budd Company, Budd Canada Inc., Standard Federal
Bank, Thyssen Production Systems, Inc. and Thyssen Budd
Automotive. Mr. Williams has served as a director of SPX
since 1992.
</TABLE>
5
<PAGE> 10
MEETINGS AND COMMITTEES OF THE
BOARD OF DIRECTORS
The Board of Directors met seven times during 1998. In addition to meetings
of the full Board, directors attended meetings of Board committees. The Board of
Directors has standing audit, compensation, executive, governance and retirement
funds committees. Each director attended at least 75% of the meetings of the
Board and of the committees on which he or she served.
AUDIT COMMITTEE
Meetings in 1998: 2
Members: Charles E. Johnson, II, Chairman
J. Kermit Campbell
Emerson U. Fullwood (commencing February 24, 1999)
Ronald L. Kerber (through February 23, 1999)
Function: The Audit Committee is responsible for ensuring the integrity
of the financial information reported by SPX. The committee
recommends the independent auditors, determines the scope of
annual audits performed by them and by the internal audit
staff and reviews the results of those audits. The committee
also meets with management, the independent auditors and the
internal audit staff to review audit results and opinions as
well as financial, accounting and internal control matters.
COMPENSATION COMMITTEE
Meetings in 1998: 4
Members: Frank A. Ehmann, Chairman
J. Kermit Campbell
Sarah R. Coffin
David P. Williams
Function: The Compensation Committee approves the compensation program
for SPX's senior management, including executive employment
agreements, stock option grants and other awards under the
Stock Compensation Plan as well as awards under the EVA
Incentive Compensation Plan.
6
<PAGE> 11
EXECUTIVE COMMITTEE
Meetings in 1998: 0
Members: John B. Blystone, Chairman
J. Kermit Campbell (commencing February 24, 1999)
Charles E. Johnson, II
Frank A. Ehmann
Peter H. Merlin (through February 23, 1999)
David P. Williams
Function: The Executive Committee is authorized to act on most
matters that arise during the periods between Board
meetings.
GOVERNANCE COMMITTEE
Meetings in 1998: 3
Members: David P. Williams, Chairman
John B. Blystone
Charles E. Johnson, II
Frank A. Ehmann
Function: The Governance Committee considers the size, structure
and composition of the Board, recommends changes in
director compensation to the Board and determines
selection and retention criteria for directors. The
committee also identifies and recommends possible
candidates for director to the Board.
RETIREMENT FUNDS COMMITTEE
Meetings in 1998: 2
Members: Peter H. Merlin, Chairman (through February 23, 1999)
J. Kermit Campbell, Chairman (commencing February 24,
1999)
H. Kent Bowen
Sarah R. Coffin
Function: The Retirement Funds Committee reviews the investment
performance, actuarial assumptions and funding practices
of SPX's pension, healthcare and defined contribution
plans.
7
<PAGE> 12
DIRECTOR COMPENSATION
Directors who are SPX employees receive no compensation for their services
as directors. Non-employee "outside" directors are compensated under the SPX
Corporation 1997 Non-Employee Directors' Compensation Plan. In addition, we
reimburse non-employee directors for the expenses of carrying out their duties.
Under the Non-Employee Directors' Compensation Plan, each non-employee
director was granted an option to purchase 1,500 shares of SPX common stock in
February 1997, in January 1998 and in January 1999. The exercise price of the
options is the closing stock price on the date they were granted. Each new
non-employee director will be granted an option to purchase 1,500 shares of SPX
common stock when he or she is elected. A maximum of 75,000 shares of SPX stock
is available for option grants under the Directors' Plan. In the future, the
Board may set grant dates for options if shares remain available for issuance.
Directors may exercise these options six months after the grant date, or earlier
upon a change of control as described in the Directors' Plan. After a
non-employee director ceases to be a director, the options remain exercisable
until the earlier of the third-year anniversary (one-year anniversary in the
event of death) of that date or ten years from the grant date.
Under the Directors' Plan, each non-employee director also receives an
annual cash payment of $25,500 plus an additional cash payment determined by
reference to the SPX Corporation EVA Incentive Compensation Plan, which is
described in the Compensation Committee Report on Executive Officers'
Compensation on page 17. The additional payment, if any, equals $5,000 times the
multiple of the target award earned by our Chief Executive Officer for that year
under the EVA Plan. This payment is made to the non-employee director at the
same time and in the same manner as bonuses are paid under the EVA Plan,
including application of the bonus reserve provisions. A non-employee director
will receive his or her bonus bank balance if he or she ceases to be a director.
A non-employee director may defer receipt of the annual cash payment and the
additional cash payment at his or her option.
The corporate EVA Plan bonus multiple for 1998 was 2.7228. The amount of
the additional cash payment (declared bonus) earned by non-employee directors
was $13,614. The amount payable to each non-employee director (earned bonus) was
$10,782, with the $2,832 balance being credited to his or her bonus bank account
established under the Directors' Plan.
Under the Directors' Retirement Plan, which the Board terminated at the end
of 1996, a director retiring with ten or more years of service receives an
annual pension, payable for life, equal to the annual retainer in effect on the
retirement date. A director retiring with more than five but less than ten years
of service receives a proration of the ten-year amount. Benefits begin on the
later of the director's sixty-fifth birthday or retirement from the Board.
Directors will also receive certain lump-sum payments in the event of a change
of control as described in the Retirement Plan. We have established a trust to
ensure payment of benefits under this plan. Current directors who were covered
by the Retirement Plan will receive benefits upon their retirement based on the
value of their vested benefits at the Retirement Plan's termination.
8
<PAGE> 13
OWNERSHIP OF SPX COMMON STOCK
DIRECTORS AND EXECUTIVE OFFICERS
The following table shows how much SPX common stock the directors, the
named executive officers and all executive officers and directors as a group
beneficially owned as of February 28, 1999. The named executive officers include
the Chief Executive Officer and the four other most highly compensated executive
officers based on compensation earned during 1998.
Beneficial ownership is a technical term broadly defined by the SEC to mean
more than ownership in the usual sense. In general, beneficial ownership
includes any shares a director or executive officer can vote or transfer and
stock options that are exercisable currently or become exercisable within 60
days. The numbers of shares beneficially owned by Messrs. Blystone, Kearney,
Ladau, O'Leary and Riordan and by all directors and executive officers as a
group include shares held in the SPX Corporation Retirement Savings and Stock
Ownership Plan. Except as otherwise noted, the stockholders named in this table
have sole voting and investment power for all shares shown as beneficially owned
by them.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------
SHARES OF
COMMON STOCK OPTIONS
NAMED EXECUTIVE BENEFICIALLY EXERCISABLE PERCENT
OFFICERS AND DIRECTORS OWNED WITHIN 60 DAYS TOTAL OF CLASS
- - ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John B. Blystone 196,228(1) 98,996 295,224 *
- - ------------------------------------------------------------------------------------------------------
H. Kent Bowen 0 2,000 2,000 *
- - ------------------------------------------------------------------------------------------------------
J. Kermit Campbell 4,223 7,294 11,517 *
- - ------------------------------------------------------------------------------------------------------
Sarah R. Coffin 1,196 8,600 9,796 *
- - ------------------------------------------------------------------------------------------------------
Frank A. Ehmann 4,658 14,200 18,858 *
- - ------------------------------------------------------------------------------------------------------
Emerson U. Fullwood 0 2,000 2,000 *
- - ------------------------------------------------------------------------------------------------------
Charles E. Johnson II 65,297(2) 8,962 74,259 *
- - ------------------------------------------------------------------------------------------------------
Christopher J. Kearney 2,444 12,500 14,944 *
- - ------------------------------------------------------------------------------------------------------
Ronald L. Kerber 3,848 6,365 10,213 *
- - ------------------------------------------------------------------------------------------------------
Drew T. Ladau 1,786 10,547 12,333 *
- - ------------------------------------------------------------------------------------------------------
Peter H. Merlin 4,236 12,600 16,836 *
- - ------------------------------------------------------------------------------------------------------
Patrick J. O'Leary 21,668 22,661 44,329 *
- - ------------------------------------------------------------------------------------------------------
Thomas J. Riordan 17,178 10,491 27,669 *
- - ------------------------------------------------------------------------------------------------------
David P. Williams 4,297 8,503 12,800 *
- - ------------------------------------------------------------------------------------------------------
All directors and executive 366,083 258,683 624,766 2.0
officers as a group (15 persons)
- - ------------------------------------------------------------------------------------------------------
</TABLE>
* Less than 1%.
(1) Includes 50,000 unvested shares of restricted stock granted to Mr. Blystone
as part of his initial employment contract, which vest in equal installments
at December 1, 1999 and 2000. Mr. Blystone has the right to vote these
shares and to receive all dividends paid on them. Also includes 114,242
shares held by the John B. Blystone Investment Partners LP, a limited family
trust. Does not include 250
9
<PAGE> 14
shares held by The Blystone Foundation as to which Mr. Blystone disclaims
beneficial ownership. Mr. Blystone, his wife and Mr. Kearney are directors of
The Blystone Foundation.
(2) Includes 21,548 shares owned by Mr. Johnson's wife.
OTHER PRINCIPAL STOCKHOLDERS
This table shows, as of February 28, 1999, all stockholders other than
directors and named executive officers that we know to be beneficial owners of
more than 5% of SPX common stock based on information filed with the SEC on
Schedule 13G.
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------
NAME AND ADDRESS AMOUNT OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FMR Corp. (Fidelity Investments) 4,232,778(1) 13.71
82 Devonshire Street
Boston, MA 02109
- - ----------------------------------------------------------------------------------------------------
Tiger Management L.L.C./Tiger Performance L.L.C. 2,401,040(2) 7.78
101 Park Avenue
New York, NY 10178
- - ----------------------------------------------------------------------------------------------------
Harris Associates L.P. 2,392,413(3) 7.75
Two North LaSalle Street, Suite 500
Chicago, IL 60602
- - ----------------------------------------------------------------------------------------------------
</TABLE>
(1) Fidelity Management & Research Company, a wholly-owned subsidiary of FMR
Corp. and an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, is the beneficial owner of 4,113,510 shares
of SPX common stock. FMR Corp. has sole voting power with respect to 116,367
of the shares, shared voting power with respect to none of the shares, sole
dispositive power with respect to 4,232,778 of the shares and shared
dispositive power with respect to none of the shares.
(2) Tiger Management L.L.C. owns 1,501,785 shares and Tiger Performance L.L.C.
owns 899,255 shares. They share voting and dispositive power as to all of
their shares with Julian H. Robertson, who, as the controlling person of
these entities, is deemed to be the beneficial owner of all 2,401,040
shares.
(3) Harris Associates L.P. serves as an investment advisor to the Harris
Associates Investment Trust, which owns 1,275,200 shares through its various
series. Harris Associates L.P. has sole voting power with respect to none of
the shares, shared voting power with respect to 2,392,413 of the shares,
sole dispositive power with respect to 1,115,883 of the shares and shared
dispositive power with respect to 1,276,530 of the shares.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that SPX's
executive officers, directors and 10% stockholders file reports of ownership and
changes of ownership of SPX common stock with the SEC. Based on a review of
copies of these reports provided to us and written representations from
executive officers and directors, we believe that all filing requirements were
met during 1998.
10
<PAGE> 15
EXECUTIVE COMPENSATION
This table summarizes the compensation for the Chief Executive Officer and
the other four most highly compensated executive officers of SPX. The amount
shown in the all other compensation column represents our contribution to the
executive officer's accounts in his qualified and non-qualified defined
contribution plans.
SUMMARY COMPENSATION
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- - -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John B. Blystone 1998 $700,000 $1,411,099 136,890 $102,408
Chairman, President and 1997 650,000 1,356,237 1,065,000 72,614
Chief Executive Officer(1) 1996 450,000 947,396 0(2) 20,250
- - -------------------------------------------------------------------------------------------------------------
Patrick J. O'Leary 1998 $333,333 $479,204 52,251 $34,065
Vice President, Finance, 1997 275,000 352,445 200,000 17,979
Treasurer and Chief 1996 68,751 147,705(3) 50,000 1,428
Financial Officer
(10/14/96 to present)
- - -------------------------------------------------------------------------------------------------------------
Thomas J. Riordan 1998 $275,000 $355,335 27,868 $25,234
Vice President and 1997 225,000 239,487 155,000 21,468
President Service 1996 205,000 236,328 10,000 6,209
Solutions
(2/26/96 to present)
- - -------------------------------------------------------------------------------------------------------------
Christopher J. Kearney 1998 $260,000 $323,579 125,000 $18,500
Vice President, General 1997 212,314 325,437(4) 25,000 5,267
Counsel and Secretary 1996 -- -- -- --
(2/26/97 to present)
- - -------------------------------------------------------------------------------------------------------------
Drew T. Ladau 1998 $185,000 $236,018 115,737 $19,278
Vice President Business 1997 175,000 199,797 12,000 16,412
Development 1996 75,000 108,631(5) 5,000 6,750
(7/1/96 to present)
- - -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) As part of his initial employment contract, on November 24, 1995 Mr.
Blystone was awarded long-term compensation in the form of 125,000 shares of
restricted stock, which vest in five equal annual installments. On December
31, 1998, 50,000 shares were unvested and had a value of $3,350,000 based on
the $67.00 closing price of SPX common stock on that date.
(2) In lieu of a stock option award for 1996, SPX provided Mr. Blystone with a
five-year non-interest bearing loan of $368,000 to fund his open market
purchase of SPX stock. SPX intends to forgive this loan if Mr. Blystone
remains employed by SPX for the five-year term of the loan or if certain
other conditions are met.
(3) Includes a bonus under the EVA Incentive Compensation Plan for the part of
1996 that Mr. O'Leary participated in the plan plus a $50,000 bonus paid
when he accepted employment with SPX.
11
<PAGE> 16
(4) Includes a bonus under the EVA Incentive Compensation Plan for 1997 plus a
$50,000 bonus paid when he accepted employment with SPX.
(5) Includes a bonus under the EVA Incentive Compensation Plan for 1996 plus a
$30,000 bonus paid when he accepted employment with SPX.
OPTION GRANTS IN 1998
This table gives information relating to option grants during 1998 to the
executive officers listed in the Summary Compensation Table.
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
PERCENT OF
TOTAL VESTING
SECURITIES OPTIONS EXERCISE DATE WHEN GRANT
UNDERLYING GRANTED TO PRICE OPTION DATE
OPTIONS EMPLOYEES DATE OF PER FIRST EXPIRATION PRESENT
NAME GRANTED IN 1998 GRANT SHARE EXERCISABLE DATE VALUE(1)
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
John B. Blystone 65,000 7.1 1/2/98 $67.1875 1/2/00 1/1/08 $1,816,766
71,890(2) 7.8 2/26/98 73.625 2/26/98 12/17/05 2,201,867
- - -------------------------------------------------------------------------------------------------------------------------
Patrick J. O'Leary 35,000 3.8 1/2/98 $67.1875 1/2/00 1/1/08 $ 978,259
13,550(2) 1.5 2/27/98 74.6875 2/27/98 10/13/06 421,002
3,701(2) 0.4 11/30/98 58.00 11/30/98 10/13/06 89,299
- - -------------------------------------------------------------------------------------------------------------------------
Thomas J. Riordan 25,000 2.7 1/2/98 $67.1875 1/2/00 1/1/08 $ 698,756
2,868(2) 0.3 6/18/98 64.4375 6/18/98 2/26/06 76,880
- - -------------------------------------------------------------------------------------------------------------------------
Christopher J. Kearney 25,000 2.7 1/2/98 $67.1875 1/2/00 1/1/08 $ 698,756
34,000 3.7 8/26/98 60.00 8/26/03 8/25/08 713,621
33,000 3.6 8/26/98 75.00 8/26/03 8/25/08 548,801
33,000 3.6 8/26/98 90.00 8/26/03 8/25/08 439,231
- - -------------------------------------------------------------------------------------------------------------------------
Drew T. Ladau 15,000 1.6 1/2/98 $67.1875 1/2/00 1/1/08 $ 419,254
34,000 3.7 8/26/98 60.00 8/26/03 8/25/08 713,621
33,000 3.6 8/26/98 75.00 8/26/03 8/25/08 548,801
33,000 3.6 8/26/98 90.00 8/26/03 8/25/08 439,231
737(2) 0.1 11/9/98 60.4375 11/9/98 6/30/06 18,530
- - -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The estimated grant date present value of each option granted is calculated
using the Black-Scholes model. The model assumes: (a) an option term of ten
years and six years expected until exercise; (b) a 6.3% interest rate, which
represents the interest rate on a U.S. Treasury security with a maturity
date corresponding to the expected option term; (c) a 30.6% expected stock
volatility, based on monthly price and dividend data for the five-year
period ending in the grant month; and (d) a 0% dividend yield. The model
does not adjust for vesting requirements, non-transferability or forfeiture
risk.
(2) These options were granted pursuant to our Stock Compensation Plan as
"reload options" to replace shares surrendered in payment of the exercise
price and withholding tax obligations with respect to option exercises.
Under the terms of the plan, the shares surrendered become available for
reissuance. Therefore, the surrender of shares and the corresponding
issuance of "reload options" have no net effect on the number of shares
available for issuance under the plan.
12
<PAGE> 17
The options listed in the preceding table were granted on the dates
indicated. All of the options except those granted to Messrs. Kearney and Ladau
in August of 1998 were granted pursuant to the SPX Corporation 1992 Stock
Compensation Plan. The options granted to Messrs. Kearney and Ladau vest in full
on August 29, 2003. The options granted under the plan are non-qualified options
with a ten-year term. The exercise price equals the fair market value of SPX
stock on the date the options were granted. The options vest as to half of the
shares underlying the option two years after the grant date and as to the
remaining shares three years after the grant date. Upon exercise, the executive
officer may surrender some of the shares of SPX stock he or she received, or may
surrender already owned shares in order to pay the exercise price and
withholding tax obligations and receive a "reload option" for the number of
shares surrendered. A reload option has an exercise price equal to the then
current market value and expires at the same time that the exercised option
would have expired. The grants shown above, other than the grants on January 2,
1998 and the non-plan grants on August 26,1998, were reload options.
OPTION EXERCISES IN 1998 AND
1998 YEAR-END OPTION VALUES
Late in 1997, we amended our Stock Compensation Plan to encourage employees
to exercise their options and convert their options into share ownership. This
table provides information regarding the exercise of options during 1998 by the
CEO and the other four most highly compensated executives. The "value realized"
is calculated using the difference between the option exercise price and the
price of SPX common stock on the date of exercise multiplied by the number of
shares subject to the option. The "value of unexercised in-the-money options at
year end 1998" is calculated using the difference between the option exercise
price and $67.00 (the price of SPX common stock on that date) multiplied by the
number of shares underlying the option. An option is in-the-money if the market
value of the common stock subject to the option is greater than the exercise
price.
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------------------
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE YEAR END 1998 YEAR END 1998
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John B. Blystone 125,000 $7,234,375 71,891 1,130,000 $0 $8,695,625
- - ---------------------------------------------------------------------------------------------------------------------------
Patrick J. O'Leary 25,000 1,030,625 13,550 260,000 0 1,411,875
- - ---------------------------------------------------------------------------------------------------------------------------
Thomas J. Riordan 5,000 249,063 2,868 145,000 7,349 638,750
- - ---------------------------------------------------------------------------------------------------------------------------
Christopher J. Kearney 0 0 0 150,000 0 828,625
- - ---------------------------------------------------------------------------------------------------------------------------
Drew T. Ladau 1,190 41,724 2,047 129,500 59,366 643,563
- - ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 18
PENSION PLANS
You can determine the annual pension benefits payable to the executive
officers named in the Summary Compensation Table from the table below. Their
estimated years of credited service at normal retirement age are as follows: Mr.
Blystone, 24 years; Mr. O'Leary, 27 years; Mr. Riordan, 26 years; Mr. Kearney,
24 years; and Mr. Ladau, 28 years. Covered compensation is based on salary and
bonus as shown in the Summary Compensation Table.
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------
YEARS OF CREDITED SERVICE
FINAL THREE-YEAR ------------------------------------------------------------------------------------------
AVERAGE
COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 200,000 $ 116,000 $ 116,000 $ 116,000 $ 116,000 $ 123,500
300,000 174,000 174,000 174,000 174,000 185,250
400,000 232,000 232,000 232,000 232,000 247,000
500,000 290,000 290,000 290,000 290,000 308,750
600,000 348,000 348,000 348,000 348,000 370,500
700,000 406,000 406,000 406,000 406,000 432,250
800,000 464,000 464,000 464,000 464,000 494,000
900,000 522,000 522,000 522,000 522,000 555,750
1,000,000 580,000 580,000 580,000 580,000 617,500
1,200,000 696,000 696,000 696,000 696,000 741,000
1,400,000 812,000 812,000 812,000 812,000 864,500
1,600,000 928,000 928,000 928,000 928,000 988,000
1,800,000 1,044,000 1,044,000 1,044,000 1,044,000 1,111,500
2,000,000 1,160,000 1,160,000 1,160,000 1,160,000 1,235,000
2,200,000 1,276,000 1,276,000 1,276,000 1,276,000 1,358,500
2,400,000 1,392,000 1,392,000 1,392,000 1,392,000 1,482,000
2,600,000 1,508,000 1,508,000 1,508,000 1,508,000 1,605,500
- - --------------------------------------------------------------------------------------------------------------------
</TABLE>
The annual retirement benefits are computed on the basis of a straight-life
annuity. The amounts shown may be reduced by the sum of the executive's primary
Social Security benefit and any pension benefits payable from prior employer
plans. The benefits shown in the table are payable from SPX's qualified pension
plan and Supplemental Retirement Plan for officers and other key executives at
the normal retirement age of 65. A participant may retire as early as age 55,
but benefits payable at early retirement are subject to reductions from age 62
that approximate actuarial values.
CHANGE-OF-CONTROL SEVERANCE AGREEMENTS
We have entered into change-of-control severance agreements with our
executive officers, including Messrs. Blystone, O'Leary, Riordan, Kearney and
Ladau. The agreements provide for the payment of compensation and benefits if
the executive's employment terminates following a change of control. For Messrs.
O'Leary, Riordan, Kearney and Ladau, a change of control generally includes the
acquisition by another person of 20% or more of the voting power of our
securities (including in an exchange or tender offer), the sale of all or
substantially all of our assets, certain mergers or consolidations (except where
our stockholders continue to hold at least 80% of the voting
14
<PAGE> 19
power of the new or surviving entity), or a change in the majority of the Board
within a two-year period.
The agreements are effective for at least three years after execution.
Thereafter, the agreements will be extended annually unless we give proper
notice of our election not to extend. If a change of control occurs during the
term of an agreement, the agreement will remain in effect for three years
following the change of control.
If an executive's employment is terminated after a change of control, he
will generally receive additional compensation only if the termination was by us
without cause, by his election after 30 days following a change of control, or
because of a reduction in salary, benefits or responsibilities. If an
executive's employment is terminated after a change of control, but not for one
of these reasons, he will generally receive normal severance pay, certain
accrued vested benefits, a prorated bonus, vacation pay, deferred compensation
and amounts payable under the EVA Plan. An executive whose employment is
terminated after a change of control without cause or because of one of the
reasons described above will receive the following additional benefits: (1)
three times his base salary and annual target bonus; (2) continued health care
coverage for three years; (3) continued life insurance coverage for three years
in an amount equal to twice his base salary and thereafter in an amount equal to
one times his base salary for the rest of his life; (4) full vesting and three
additional years of credit under our qualified pension plan, excess pension plan
and supplemental retirement plan; (5) lump-sum payment under our supplemental
retirement savings plan; (6) prorated award under the EVA Plan; (7) removal of
any restrictions on restricted stock; (8) payment of any federal excise taxes;
and (9) reimbursement of legal and tax audit fees incurred as a result of the
termination. We have established a trust to ensure payment of the compensation
and benefits to all executives whose employment is terminated after a change of
control.
EMPLOYMENT AGREEMENTS
We are party to an employment agreement with Mr. Blystone that provides for
his employment through December 31, 2001, with an automatic three-year extension
that is subject to early termination under certain circumstances. This agreement
replaced Mr. Blystone's initial employment agreement, which expired January 31,
1998. Under the agreement, we paid Mr. Blystone $700,000 in 1998. Through 1999,
he is eligible for an annual bonus under our EVA Plan. The terms of the EVA Plan
as they affect Mr. Blystone may not be changed without his consent. After 1999,
Mr. Blystone may receive a bonus under our annual bonus plan in effect for
senior executives at that time. Any annual bonus for Mr. Blystone must be based
on a target award equal to 80% of his annual base salary midpoint.
In connection with entering into this agreement, in February 1997, the
Compensation Committee granted Mr. Blystone an option to purchase a total of
1,000,000 shares of SPX stock, at various exercise prices. The option has a
ten-year term and no portion of the option vests prior to January 1, 2002. The
option grant was not made under the 1992 Stock Compensation Plan. Mr. Blystone
will continue to receive annual option awards under the 1992 Stock Compensation
Plan.
15
<PAGE> 20
If Mr. Blystone voluntarily resigns or his employment is terminated for
cause, he will receive the compensation and benefits earned to date, but will
forfeit any options, restricted stock or other unvested benefits. If Mr.
Blystone dies or is disabled, he will receive compensation and benefits earned
and full payment of his individual bonus reserve balance under the EVA Plan. In
addition, all options, restricted stock and other equity or incentive
compensation awards will fully vest. Mr. Blystone's agreement provides for the
payment of compensation and benefits following a change of control of SPX. For
purposes of Mr. Blystone's agreement, a change of control includes the
acquisition by another person of 15% or more of the voting power of our
securities (including in an exchange or tender offer), the sale of all or
substantially all of our assets, certain mergers or consolidations (except where
our stockholders continue to hold at least 85% of the voting power of the new or
surviving entity), or a change in the majority of the Board within a two-year
period.
If we terminate Mr. Blystone's employment without cause or if he resigns
for good reason, he will receive certain items in addition to those described
above. These items include: (1) a pro rata bonus payment for the year of
termination; (2) a lump sum payment equal to three times his then annual salary
and target bonus; (3) continuation of employee benefits and perquisites for the
lesser of three years or until he obtains those benefits and perquisites from
another employer; (4) vesting of benefits under our supplemental pension plan
with credit for three additional years of service and the salary and bonus
continuation reflected by the lump sum salary and bonus payments; (5)
outplacement services; and (6) a stock depreciation right that obligates us to
pay him the amount by which the average closing price of SPX common stock
exceeds his gross selling price for shares of SPX common stock (including any
shares acquired by option exercises) during the five trading days prior to the
termination of his employment so long as he gives us written notice of his
intention to sell within 20 days after termination. If any amounts or benefits
Mr. Blystone receives are subject to the excise tax imposed under Section 4999
of the Internal Revenue Code, he is also entitled to an additional "gross-up"
payment equal to the amount of the excise tax plus any taxes imposed on the
gross-up payment.
DEATH BENEFIT PLAN FOR KEY MANAGERS
As part of the total compensation package developed to assist us in
attracting and retaining top quality managers, in 1985 we adopted a death
benefit plan for certain key managers. As of February 1999, 15 active key
managers, including the officers named in the Summary Compensation Table, and 39
retired managers were participating in the plan. If a participant dies before
retirement, his or her beneficiary will receive a payment that, when adjusted
for income taxes, equals twice the amount of his or her base salary as of the
date he or she died. If a participant dies after retirement, his or her
beneficiary will receive a payment after adjustment for income taxes equal to
one times his or her base salary as of the date of death.
16
<PAGE> 21
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE OFFICERS' COMPENSATION
The Compensation Committee of the Board of Directors is composed of four
independent non-employee directors. The committee considers and approves SPX's
compensation program for senior management, including executive officers. Key
objectives of the committee are to: (1) attract and retain highly qualified
executives to manage SPX and its operating divisions and (2) provide strong
financial incentives for senior management to maximize value for SPX's
stockholders. The committee believes that the total compensation program
provides strong incentives to maximize stockholder value with a reasonable
balance between SPX's need to retain strong senior management and cost to
stockholders.
Executive compensation consists of base salary, an annual bonus opportunity
under the EVA Incentive Compensation Plan and stock options.
BASE SALARY
Each executive officer has a base salary range and midpoint. Midpoints are
determined on the basis of competitive compensation data derived from
comparative industry survey data. The committee determines an executive
officer's position within his or her range based on experience and performance.
In January 1999, the committee requested a survey of salary midpoints for
executive officers of peer group companies. The survey showed the salary
midpoint for SPX executives to be within 5% of the average midpoints of the
survey group.
ANNUAL BONUSES
The EVA Incentive Compensation Plan provides for awards based on
improvements in Economic Value Added (EVA). EVA is a measure of operating profit
after the deduction of all costs, including the cost of SPX's debt and equity
capital. An EVA Plan bonus has three components: (1) a target bonus; (2) the EVA
improvement in excess of expected EVA improvement; and (3) a bonus bank.
The annual bonus for a participant in the EVA Plan is the sum of his or her
target bonus plus a share of the excess EVA improvement. Target bonuses are a
percentage of the salary midpoint for each of the executive officer positions,
80% for the Chief Executive Officer and 50 to 70% for the other executive
officers. The expected EVA improvement, $4.2 million for 1996 and increasing 10%
each year thereafter, was recalibrated following our merger with General Signal
Corporation. The new expected EVA improvement is $10.7 million for 1999 and
increases 15% a year thereafter. The excess EVA improvement may be a negative
number if the actual amount of EVA improvement falls short of the expected EVA
improvement. The CEO's share of excess EVA improvement was 10.1% in 1998 and
will be 3.8% in 1999. The aggregate share for all other executive officers was
13.7% in 1998 and will be 5.1% in 1999.
The amount of the bonus each executive officer earns is credited to his or
her bonus bank balance. The maximum bonus payable to an executive equals the
amount of his or
17
<PAGE> 22
her bonus bank, up to the amount of the target bonus, plus one-third of the
amount by which the bonus bank balance exceeds the target bonus. He or she
automatically receives 80% of that amount and will receive the remaining 20% if
he or she has attained individual performance goals. Any portion of the 20% that
is not paid is forfeited and not credited back to the bonus bank.
The beginning balance of an executive officer's bonus bank for the
following year equals the previous year's balance less the amount of the maximum
bonus that he or she may receive. The executive officer receives no bonus when
the bonus bank balance is negative. Negative bonus bank balances are carried
forward to offset future bonuses.
STOCK OPTIONS
Executive officers may receive annual stock option grants based on a fixed
number of shares of stock, without regard to the price of the stock at the time
of grant. Under this fixed share approach, the number of shares granted is not
increased to offset a decline in the stock price or decreased to offset an
increase in stock price. In January 1998, the Compensation Committee granted
stock options to the executive officers as shown in the table on page 12.
We made an extraordinary grant of an option on 100,000 shares of SPX stock
to each of Messrs. Kearney and Ladau in August 1998. These options were
out-of-the-money when they were granted, which means that the exercise price of
these options was greater than the current market value of SPX stock on the
grant date. The options vest five years after the grant date.
COMPENSATION OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Mr. Blystone received compensation in 1998 in accordance with the terms of
his employment agreement, which is described on page 15. He received an annual
base salary of $700,000 and a bonus under the EVA Plan. Mr. Blystone's bonus
earned for 1998 was $1,485,831, based on a target bonus of $545,704 and a 10.1%
share of the excess EVA improvement of $9.3 million. The excess EVA improvement
was the excess of the actual EVA improvement, $14.4 million, over the expected
EVA improvement, $5.1 million. His bonus earned was credited to his bonus bank,
which had a balance of $1,656,057 at the beginning of 1998. The maximum amount
of bonus he could receive under the EVA Plan was the amount of his target bonus
plus one-third of the amount by which his bonus bank total exceeded his target
bonus, or $1,411,099. Mr. Blystone received the maximum bonus available to him
under the EVA Plan, 80% of which was paid automatically and 20% of which was
paid upon the Compensation Committee's determination that he attained all of his
personal performance goals for 1998. The remainder of Mr. Blystone's bonus bank
balance, $1,730,789, carried forward to 1999.
18
<PAGE> 23
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Internal Revenue Code Section 162(m) limits the deductibility by SPX of
compensation in excess of $1,000,000 paid to each of the CEO and the other four
most highly compensated executive officers. Certain "performance based
compensation" is not included in compensation counted for purposes of the limit.
The Compensation Committee has attempted to structure SPX's compensation
programs to preserve full deductibility and will continue to assess the impact
of Section 162(m) on its compensation practices.
Compensation Committee
Frank A. Ehmann, Chairman
J. Kermit Campbell
Sarah R. Coffin
David P. Williams
COMPANY PERFORMANCE
This graph shows a five-year comparison of cumulative total returns for
SPX, the S&P 500 Composite Index, the S&P Auto Parts & Equipment Index and the
S&P Hardware & Tools Index. The graph assumes an initial investment of $100 on
December 31, 1993 and the reinvestment of dividends. The companies included in
the S&P Auto Parts & Equipment Index are Cooper Tire & Rubber, Dana Corporation,
Echlin Inc., Goodyear Tire & Rubber, ITT Industries, Inc., Snap-on Inc. and TRW
Inc. The companies included in the S&P Hardware & Tools Index are Black & Decker
Corp. and Stanley Works.
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
AUTO PARTS &
SPX CORPORATION S&P 500 EQUIPMENT HARDWARE & TOOLS
--------------- ------- ------------ ----------------
<S> <C> <C> <C> <C>
'1993' 100.00 100.00 100.00 100.00
'1994' 95.99 101.32 87.21 97.85
'1995' 94.16 139.40 107.82 143.39
'1996' 233.75 171.40 120.97 134.65
'1997' 417.13 228.59 151.30 206.52
'1998' 405.04 293.91 171.30 205.57
</TABLE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SPX Corporation $100.00 $ 95.99 $ 94.16 $233.75 $417.13 $405.04
- - --------------------------------------------------------------------------------------------------------------
S&P 500 100.00 101.32 139.40 171.40 228.59 293.91
- - --------------------------------------------------------------------------------------------------------------
Auto Parts & Equipment 100.00 87.21 107.82 120.97 151.30 171.30
- - --------------------------------------------------------------------------------------------------------------
Hardware & Tools 100.00 97.85 143.39 134.65 206.52 205.57
- - --------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 24
AMENDMENT OF 1992 STOCK COMPENSATION PLAN
The Board of Directors has approved the amendment and restatement of our
1992 Stock Compensation Plan to increase the number of shares reserved for
issuance under the Plan from 3,000,000 to 5,000,000. The Board recommends that
you approve this amendment. The following summary of the Plan is not complete
and, therefore, you should not rely solely on it.
THE STOCK OPTION PLAN GENERALLY
The Board originally adopted, and the stockholders approved, the Plan
effective as of December 15, 1992. The Plan was amended and restated effective
December 11, 1996 and amended effective August 26, 1998. No awards may be
granted under the Plan after December 15, 2002.
Under the Plan, the Compensation Committee may grant stock-based incentives
to key employees, including employees who are officers and members of the Board.
Non-employee directors may not receive options under the Plan; however, prior to
amendment of the Plan in 1996, non-employee directors were eligible to and did
receive option grants under the Plan. Awards under the Plan may be in the form
of incentive stock options, non-qualified stock options, stock appreciation
rights, restricted stock and performance units. The Compensation Committee has
awarded 5,000 stock appreciation rights but has never awarded restricted stock
or performance units under the Plan.
SHARES AVAILABLE FOR THE PLAN
We presently have 3,000,000 shares of common stock reserved for issuance
under the Plan. The Board proposes to amend the Plan to increase the number of
shares that can be issued to 5,000,000. Prior to our merger with General Signal
Corporation, we had approximately 4,500 employees; now we have more than 13,000
employees. We need to increase the number of shares issuable under the Plan in
order to ensure that there are adequate shares available for future grants to
support broad-based participation. The number of shares underlying awards made
to any one participant in a fiscal year may not exceed 100,000 shares. The
number of shares that can be issued and the number of shares subject to
outstanding options may be adjusted in the event of a stock split, stock
dividend, recapitalization or other similar event affecting the number of shares
of SPX's outstanding common stock. In that event, the Compensation Committee may
also make appropriate adjustments to any stock appreciation rights, restricted
stock or performance units outstanding under the Plan.
PLAN ADMINISTRATION
The Compensation Committee administers the Plan. Subject to the specific
provisions of the Plan, the committee determines award eligibility, timing and
the type, amount and terms of the awards. The committee also interprets the
Plan, establishes rules and regulations under the Plan and makes all other
determinations necessary or advisable for the Plan's administration.
20
<PAGE> 25
STOCK OPTIONS
Options under the Plan may be either "incentive stock options," as defined
under the tax laws, or non-qualified stock options. The per share exercise price
may not be less than the fair market value of SPX common stock on the date the
option is granted. The Compensation Committee may specify any period of time
following the date of grant during which options are exercisable, so long as the
exercise period is not more than 10 years. Incentive stock options are subject
to additional limitations relating to such things as employment status, minimum
exercise price, length of exercise period, maximum value of the stock underlying
the options and a required holding period for stock received upon exercise of
the option.
Upon exercise, the option holder may pay the exercise price in several
ways. He or she can pay: (1) in cash; (2) by tendering previously-owned SPX
common stock with a fair market value equal to the exercise price; (3) by
directing us to withhold shares of SPX common stock with a fair market value
equal to the exercise price; (4) by delivering other approved property; or (5)
by a combination of these methods. When a holder exercises options, the
Compensation Committee may grant to him or her replacement options (sometimes
called "reload options") under the Plan to purchase additional shares of SPX
common stock. The number of shares subject to the replacement option would equal
the number of shares delivered by the holder (or withheld by us) in satisfaction
of the exercise price and the tax withholding obligations of the exercised
option. Replacement options are non-qualified options and are subject to the
same terms and conditions as the exercised option, except that the per share
exercise price of the replacement option will equal the fair market value of SPX
stock on the grant date of the replacement option.
If a participant's employment terminates due to death, disability or
retirement, all of his or her options under the Plan vest and become exercisable
and will remain exercisable until their expiration date unless the Compensation
Committee determines that a shorter period is appropriate. If employment
terminates for any other reason, the committee will determine the length of time
that the participant may exercise options that are exercisable at termination,
but that period may not go beyond the expiration dates of the options.
DIRECTOR OPTIONS
Prior to the amendments to the Plan in 1996, each non-employee director
received a grant of a non-qualified option under the Plan upon joining the Board
and, with certain exceptions, once a year thereafter in payment of his or her
annual retainer. Although the grant of director options was eliminated when the
Plan was amended, previously granted options to purchase 38,675 SPX shares are
still outstanding.
STOCK APPRECIATION RIGHTS
A stock appreciation right allows its holder to receive payment from us
equal to the amount by which the fair market value of a share of SPX common
stock exceeds the exercise price of the right on the exercise date. At the time
of grant, we may establish a maximum amount per share payable upon exercise of a
right. If a participant's employment
21
<PAGE> 26
terminates, his or her outstanding rights become exercisable under the
guidelines described above for stock options.
Under the Plan, the Compensation Committee can grant the rights in
conjunction with the awarding of non-qualified stock options or on a stand-alone
basis. If a right is granted with a non-qualified stock option award, then the
holder can exercise the rights at any time during the life of the related
option, but the exercise will proportionately reduce the number of his or her
related non-qualified stock options. The holder can exercise stand-alone stock
appreciation rights during a period no longer than ten years, as determined by
the Compensation Committee. Upon exercise of a stand-alone right, we will pay
the participant in cash.
RESTRICTED STOCK
Restricted stock refers to shares of SPX common stock that are subject to
restrictions on ownership for a certain period of time. During that time, the
holder may not sell or otherwise transfer the shares, but he or she may vote the
shares and is entitled to any dividend or other distribution. The shares become
freely transferable when the restriction period expires. If a participant's
employment terminates during the restriction period due to death, disability or
normal retirement, all restrictions lapse. If employment terminates
involuntarily or due to early retirement, the Compensation Committee can waive
restrictions or add new restrictions on some or all of the participant's
restricted shares. If the committee does not waive the restrictions or if
employment terminated for any other reason, the participant forfeits his or her
shares.
PERFORMANCE UNITS
The Compensation Committee may grant performance units in cash units or
share units. Share units are equal in value to one share of SPX common stock.
The committee sets the terms and conditions of each award, including the
performance goals that its holder must attain and the various percentages of
performance unit value to be paid out upon full or partial attainment of those
goals. The committee also determines the payment that is due to the holder after
the applicable performance period and whether the payment of the cash units and
share units will be made in cash, in shares of SPX common stock, or in a
combination of cash and stock.
22
<PAGE> 27
OUTSTANDING OPTIONS
We cannot determine the number of shares that may be acquired under stock
options that will be awarded under the Plan to the CEO and the other four most
highly compensated executive officers. There are no stock appreciation rights,
restricted stock awards or performance units outstanding under the Plan. On
March 19, 1999, the last reported sale price of SPX common stock on the New York
Stock Exchange was $54.00 per share. As of February 28, 1999, the following
options had been granted under the Plan:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------
NAME NUMBER OF SHARES
<S> <C>
- - ------------------------------------------------------------------------------------
John B. Blystone 293,996
Chairman, President and Chief Executive Officer
- - ------------------------------------------------------------------------------------
Patrick O'Leary 117,661
Vice President, Finance, Treasurer and Chief Financial
Officer
- - ------------------------------------------------------------------------------------
Thomas J. Riordan 85,291
Vice President and President of Service Solutions
- - ------------------------------------------------------------------------------------
Christopher J. Kearney 75,000
Vice President, General Counsel and Corporate Secretary
- - ------------------------------------------------------------------------------------
Drew T. Ladau 42,737
Vice President Business Development
- - ------------------------------------------------------------------------------------
J. Kermit Campbell 5,000
Director Nominee
- - ------------------------------------------------------------------------------------
Emerson U. Fullwood 2,000
Director Nominee
- - ------------------------------------------------------------------------------------
All current executive officers 743,879
- - ------------------------------------------------------------------------------------
All current directors who are not executive officers 55,518
- - ------------------------------------------------------------------------------------
All plan participants (other than current executive
officers) 1,799,224
- - ------------------------------------------------------------------------------------
</TABLE>
TRANSFERABILITY
The recipient of an award under the Plan may not pledge, assign, sell or
otherwise transfer his or her stock options, stock appreciation rights,
restricted stock or performance units other than by will or by the laws of
descent and distribution. The Compensation Committee, however, may adopt rules
and procedures to allow participants in the Plan to transfer options to
immediate family members or to certain trusts or partnerships.
TAX CONSEQUENCES
The holder of an award granted under the Plan may be affected by certain
federal income tax consequences. Special rules may apply to individuals who may
be subject to Section 16(b) of the Securities Exchange Act of 1934. The
following discussion of tax
23
<PAGE> 28
consequences is based on current federal tax laws and regulations and you should
not consider it to be a complete description of the federal income tax
consequences that apply to participants in the Plan. Accordingly, information
relating to tax consequences is qualified by reference to current tax laws.
Incentive Stock Options. There are no federal income tax consequences
associated with the grant or exercise of an incentive stock option, so long as
the holder of the option was our employee at all times during the period
beginning on the grant date and ending on the date three months before the
exercise date. The "spread" between the exercise price and the fair market value
of SPX common stock on the exercise date, however, is an adjustment for purposes
of the alternative minimum tax. A holder of incentive stock options defers
income tax on the stock's appreciation until he or she sells the shares.
Upon the sale of the shares, the holder realizes long-term capital gain (or
loss) if he or she sells the shares at least two years after the grant date and
has held them for at least one year. The capital gain (or loss) equals the
difference between the sales price and the exercise price of the shares. If the
holder disposes of the shares before the expiration of these periods, then he or
she recognizes ordinary income at the time of sale (or other disqualifying
disposition) equal to the lesser of (1) the gain he or she realized on the sale
and (2) the difference between the exercise price and the fair market value of
the shares on the exercise date. This ordinary income is treated as compensation
for tax purposes. The holder will treat any additional gain as short-term or
long-term capital gain, depending on whether he or she has held the shares for
at least one year from the exercise date. If the holder does not satisfy the
employment requirement described above, then he or she recognizes ordinary
income (treated as compensation) at the time he or she exercises the option
under the tax rules applicable to the exercise of a non-qualified stock option.
We are entitled to an income tax deduction to the extent that an option holder
realizes ordinary income.
Non-Qualified Stock Options. There are no federal income tax consequences
to us or to the recipient of a non-qualified stock option upon grant. Upon
exercise, the option holder recognizes ordinary income equal to the spread
between the exercise price and the fair market value of SPX stock on the
exercise date. This ordinary income is treated as compensation for tax purposes.
The basis in shares acquired by an option holder on exercise equals the fair
market value of the shares at that time. The capital gain holding period begins
on the exercise date. We receive an income tax deduction upon the exercise of a
non-qualified stock option in an amount equal to the spread.
Stock Appreciation Rights. There are no tax consequences associated with
the grant of stock appreciation rights. Upon exercise, the holder of stock
appreciation rights recognizes ordinary income in the amount of the appreciation
paid to him or her. This ordinary income is treated as compensation for tax
purposes. We receive a corresponding deduction in the same amount that the
holder recognizes as income.
Restricted Stock. The holder of restricted stock does not recognize any
taxable income on the stock while it is restricted. When the restrictions lapse,
the holder's taxable income (treated as compensation) equals the fair market
value of the shares. The holder may, however, avoid the delay in computing the
amount of taxable gain by filing with the
24
<PAGE> 29
Internal Revenue Service, within 30 days after receiving the shares, an election
to determine the amount of taxable income at the time of receipt of the
restricted shares.
Performance Units. There are no tax consequences associated with the grant
of performance units, but the holder recognizes ordinary income (treated as
compensation) upon a payment on the performance units.
Excise Taxes. Under certain circumstances, the accelerated vesting or
exercise of options in connection with a change in control of SPX might be
deemed an "excess parachute payment" for purposes of the golden parachute tax
provisions of Section 280G of the Internal Revenue Code. To the extent they are
considered excess parachute payments, a participant in the Plan may be subject
to a 20% excise tax and we may be unable to receive a tax deduction.
PLAN AMENDMENT AND TERMINATION
Generally, the Board of Directors may terminate, amend or modify the Plan
at any time without stockholder approval. Without stockholder approval, however,
the Board may not: (1) materially increase the number of shares of SPX stock
subject to the Plan; (2) materially increase the cost of the Plan; (3)
materially increase the benefits to Plan participants; (4) change the provisions
of the Plan relating to the option price; (5) extend the period during which
awards may be granted; or (6) extend the maximum period during which a holder
may exercise his or her stock appreciation rights. In addition, if any action
that the Board proposes to take will have a significant adverse effect on any
options outstanding under the Plan, then the affected option holders must
consent to the action.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
THE AMENDMENT OF THE 1992 STOCK COMPENSATION PLAN.
INDEPENDENT PUBLIC AUDITORS
Arthur Andersen LLP has been our independent auditors since 1952. The Board
has engaged Arthur Andersen as our auditors for 1999. Representatives of Arthur
Andersen will be present at the Annual Meeting and will have the opportunity to
make a statement and to respond to appropriate questions.
ANNUAL REPORT ON FORM 10-K
YOU MAY OBTAIN A FREE COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1998, INCLUDING SCHEDULES, THAT IS ON FILE WITH THE
SECURITIES AND EXCHANGE COMMISSION (SEC). PLEASE CONTACT TINA BETLEJEWSKI,
MANAGER OF CORPORATE COMMUNICATIONS, SPX CORPORATION, 700 TERRACE POINT DRIVE,
MUSKEGON, MICHIGAN 49443-3301.
25
<PAGE> 30
[SPX CORPORATION LOGO]
<PAGE> 31
APPENDIX A-1
AMENDMENT TO
SPX CORPORATION
1992 STOCK COMPENSATION PLAN
----------------------------
(As Amended and Restated Effective December 10, 1997 and
Further Amended Effective August 26th, 1998)
WHEREAS, SPX Corporation (the "Company") maintains the SPX Corporation 1992
Stock Compensation Plan (the "Plan"); and
WHEREAS, it is now deemed desirable and in the best interests of the
Company and its stockholders to increase the number of shares available for
issuance under the Plan, subject to approval of the Company's stockholders;
NOW, THEREFORE, by virtue and in exercise of the amending authority
reserved to the Company under Section 14 of the Plan, the Plan is hereby
amended, subject to the approval of the Company's stockholders, by deleting
Subsection 5.1 of the Plan and substituting the following therefor:
"5.1. Number. The total number of shares of Common Stock of the Company
subject to issuance under the Plan, and subject to adjustment upon occurrence of
any of the events indicated in Subsection 5.3, may not exceed 5,000,000. Of
this total number, up to 200,000 shares of Common Stock may be granted to
Participants in the form of Restricted Stock. The shares to be delivered under
the Plan may consist, in whole or in part, of authorized but unissued stock or
treasury stock not reserved for any other purpose. The maximum aggregate number
of shares of Common Stock (including Options, Restricted Stock, Stock
Appreciation Rights and Performance Units to be paid out in shares of Common
Stock) that may be granted or that may vest with respect to awards granted in
any one fiscal year to a Participant shall be 100,000 subject to adjustment upon
the occurrence of any of the events indicated in Subsection 5.3."
<PAGE> 32
APPENDIX A-2
SPX CORPORATION
1992 STOCK COMPENSATION PLAN
(AMENDED AND RESTATED EFFECTIVE DECEMBER 10, 1997)
(AS FURTHER AMENDED EFFECTIVE AUGUST 26, 1998)
SECTION 1. ESTABLISHMENT, PURPOSES AND EFFECTIVE DATE OF PLAN
1.1. Establishment. SPX Corporation, a Delaware corporation, has established
the "1992 Stock Compensation Plan" (the "Plan"). The Plan, which originally
amended and restated the prior "Stock Compensation Plan," permits the awarding
of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock and Performance Units.
1.2. Purposes. The purpose of the Plan is to advance the interests of the
Company and its Subsidiaries and divisions by (a) encouraging and providing for
the acquisition of equity interests in the Company by Key Employees, thereby
increasing the stake in the future growth and prosperity of the Company, and
furthering Key Employees' identity of interest with those of the Company's
shareholders, and (b) enabling the Company to compete with other organizations
in attracting, retaining, promoting and rewarding the services of Key Employees.
1.3. Effective Dates. On April 28, 1993, the Company's shareholders approved
the adoption of the Plan effective as of December 15, 1992. On December 11,
1996, the Board adopted certain amendments to the Plan, which were approved by
the Company's shareholders on April 23, 1997. Effective December 10, 1997, the
Plan is amended and restated, as set forth herein and as approved by the Board
on December 10, 1997. On August 26, 1998, the Board adopted an amendment to the
Plan, which was approved by the Company's shareholders on, 1998.
SECTION 2. DEFINITIONS
2.1. Definitions. Whenever used herein, the following terms shall have their
respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee of the Board, which
shall consist of not less than three persons appointed by the Board from
among those Board members who are not employees of the Company or any of its
subsidiaries or divisions. The Committee shall administer the Plan pursuant
to the provisions of Section 4.
(d) "Common Stock" means the Common Stock, par value $10.00, of the
Company or such other class of shares or other securities as may be
applicable pursuant to the provisions of Subsection 5.3.
(e) "Company" means SPX Corporation, a Delaware corporation.
(f) "Fair Market Value" means, as to any date, the fair market value of
Common Stock determined by such methods or procedures as shall be
established from time to time by the Committee or, if not otherwise
determined, fair market value means the closing price of a share of Common
Stock as reported in the "NYSE-Composite Transactions" section of the
Midwest Edition of The Wall Street Journal for such date (or, if no prices
are quoted for such date, on the next preceding date on which such prices of
Common Stock are so quoted).
(g) "Key Employee" means an employee of the Company or of a Subsidiary,
including an officer or director, who, in the opinion of the Committee, can
contribute significantly to the growth and profitability of the Company or a
Subsidiary. Key Employees also may include those employees identified by the
Committee to be in situations of extraordinary performance, promotion,
retention or recruitment. The awarding of a grant under this Plan to an
employee by the Committee shall be deemed a determination by the Committee
that such employee is a Key Employee.
A-2-1
<PAGE> 33
(h) "Mature Common Stock" means Common Stock that has been acquired by
the holder thereof on the open market or that has been acquired pursuant to
this Plan or another employee benefit arrangement of the Company and held
for at least six months.
(i) "Options" means the right to purchase stock at a stated price for a
specified period of time. For purposes of the Plan an Option may be either
(a) an "incentive stock option" within the meaning of Code Section 422, or
(b) a "nonqualified stock option" which is intended not to fall under the
provisions of Code Section 422.
(j) "Option Price" means the price at which each share of Common Stock
subject to an Option may be purchased, determined in accordance with
Subsection 7.3.
(k) "Participant" means any individual designated by the Committee to
participate in this Plan pursuant to Subsection 3.1.
(1) "Period of Restriction" means the period during which the transfer
of shares of Restricted Stock is restricted pursuant to Section 9.
(m) "Restricted Stock" means the Common Stock granted to a Participant
pursuant to Section 9.
(n) "Stock Appreciation Right" means the right to receive a cash payment
from the Company equal to the excess of the Fair Market Value of a share of
Common Stock at the date of exercise of the Right over a specified price
fixed by the Committee at grant (exercise price), which shall not be less
than 100% of the Fair Market Value of the Common Stock on the date of grant.
In the case of a Stock Appreciation Right which is granted in conjunction
with an Option, the specified price shall be the Option Price.
(o) "Subsidiary" means a corporation at least 50% or more of the voting
power of which is owned, directly or indirectly, by the Company.
2.2. Gender and Number. Except when otherwise indicated by the context,
words in the masculine gender when used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.
SECTION 3. ELIGIBILITY AND PARTICIPATION
Participants in the Plan shall be selected by the Committee from among those
employees of the Company who are considered Key Employees.
SECTION 4. ADMINISTRATION
4.1. Administration. The Plan shall be administered by a Committee to be
known as the "Compensation Committee," which shall consist of not less than
three directors of the Company designated by the Board; provided, however, that
no director who is an employee of the Company, a Subsidiary or a division shall
be appointed to the Committee. For purposes of any award granted under the Plan
by the Committee that is intended to be exempt from the restrictions of Section
16(b) of the Securities Exchange Act of 1934 (the "Act"), the Committee shall
consist only of directors who qualify as "non-employee directors," as defined in
Rule 16b-3 under the Act. For purposes of any award granted under the Plan by
the Committee that is intended to qualify for the performance-based compensation
exemption to the $1 million deductibility limit under Code Section 162(m), the
Committee shall consist only of directors who qualify as "outside directors," as
defined in Code Section 162(m) and the related regulations. A majority of the
members of the Committee shall constitute a quorum for the transaction of
business, and the vote of the majority of those members present at any meeting
shall decide any question brought before that meeting. In addition, the
Committee may take any action otherwise proper under the Plan by the unanimous
written consent of its members.
The Committee may establish such rules and regulations, not inconsistent
with the provisions of the Plan, as it deems necessary to determine eligibility
to participate in the Plan and for the proper administration of the Plan, and
may amend or revoke any rule or regulation so established. The Committee may
make such
A-2-2
<PAGE> 34
determinations and interpretations under or in connection with the Plan as it
deems necessary or advisable. All such rules, regulations, determinations and
interpretations shall be binding and conclusive upon the Company, its
Subsidiaries and divisions, its stockholders and all employees, and upon their
respective legal representatives, beneficiaries, successors and assigns, and
upon all other persons claiming under or through any of them.
SECTION 5. STOCK SUBJECT TO PLAN
5.1. Number. The total number of shares of Common Stock of the Company
subject to issuance under the Plan, and subject to adjustment upon occurrence of
any of the events indicated in Subsection 5.3, may not exceed 3,000,000. Of this
total number, up to 200,000 shares of Common Stock may be granted to
Participants in the form of Restricted Stock. The shares to be delivered under
the Plan may consist, in whole or in part, of authorized but unissued stock or
treasury stock not reserved for any other purpose. The maximum aggregate number
of shares of Common Stock (including Options, Restricted Stock, Stock
Appreciation Rights and Performance Units to be paid out in shares of Common
Stock) that may be granted or that may vest with respect to awards granted in
any one fiscal year to a Participant shall be 100,000, subject to adjustment
upon the occurrence of any of the events indicated in Subsection 5.3.
5.2. Unused Stock. In the event any shares of Common Stock that are subject
to an Option which, for any reason, expires, terminates or is canceled as to
such shares, or any shares of Common Stock subject to a Restricted Stock award
made under the Plan are reacquired by the Company pursuant to the Plan, or any
Stock Appreciation Right expires unexercised, such shares and rights again shall
become available for issuance under the Plan. Any shares of Common Stock
withheld or tendered to pay withholding taxes pursuant to Subsection 15.2 or
withheld or tendered in full or partial payment of the exercise price of an
Option pursuant to Subsection 7.6 shall again become available for issuance
under the Plan. In addition, all shares which reverted back to the Stock
Compensation Plan due to the expiration or termination of an award under the
terms of the Stock Compensation Plan or the 1982 Stock Option Plan have been
carried forward and are considered available for issuance under the terms of
this Plan.
5.3. Adjustment in Capitalization. In the event of any change in the
outstanding shares of Common Stock that occurs after ratification of the Plan by
the shareholders of the Company by reason of a Common Stock dividend or split,
recapitalization, merger, consolidation, combination, exchange of shares, or
other similar corporate change, the aggregate number of shares of Common Stock
subject to each outstanding Option, and its stated Option Price, shall be
appropriately adjusted by the Committee, whose determination shall be
conclusive; provided, however, that fractional shares shall be rounded to the
nearest whole share. In such event, the Committee also shall have discretion to
make appropriate adjustments in the number and type of shares subject to
Restricted Stock grants then outstanding under the Plan pursuant to the terms of
such grants or otherwise. The Committee also shall make appropriate adjustments
in the number of outstanding Stock Appreciation Rights and Performance Units and
the related grant values.
SECTION 6. DURATION OF PLAN
The Plan shall remain in effect, subject to the Board's right to earlier
terminate the Plan pursuant to Section 14 hereof, until all Common Stock subject
to it shall have been purchased or acquired pursuant to the provisions hereof.
However, no Option, Stock Appreciation Right, Restricted Stock or Performance
Unit may be granted under the Plan on or after December 15, 2002, which is the
tenth anniversary of the Plan's effective date.
SECTION 7. STOCK OPTIONS
7.1. Grant of Options. Subject to the provisions of Sections 5 and 6,
Options may be granted to Participants at any time and from time to time as
shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of Options granted to each Participant. The
Committee also shall determine whether an Option is an incentive stock option
within the meaning of Code Section 422, or a nonqualified stock option. However,
in no event shall the Fair Market Value (determined at the date of grant) of
Common Stock for which incentive stock options become exercisable for the first
time in
A-2-3
<PAGE> 35
any calendar year exceed $100,000, computed in accordance with Code Section
422(b)(7). In addition, no incentive stock option shall be granted to any person
who owns, directly or indirectly, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company. Nothing in this
Section 7 shall be deemed to prevent the grant of nonqualified stock options in
excess of the maximum established by Code Section 422.
7.2. Option Agreement. Each Option shall be evidenced by an Option Agreement
that shall specify the type of Option granted, the Option Price, the duration of
the Option, the number of shares of Common Stock to which the Option pertains,
and such other provisions as the Committee shall determine. The Option Agreement
shall specify whether the Option is intended to be an incentive stock option
within the meaning of Code Section 422, or a nonqualified stock option which is
intended not to fall under the provisions of Code Section 422.
7.3. Option Price. The Option Price shall be determined by the Committee.
However, no Option granted pursuant to the Plan shall have an Option Price that
is less than the Fair Market Value of the Common Stock on the date the Option is
granted.
7.4. Duration of Options. Each option shall expire at such time as the
Committee shall determine at the time it is granted, provided, however, that no
Option shall be exercisable later than the tenth anniversary of its grant date.
7.5. Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for all
Participants.
7.6. Method of Exercise and Payment of Option Price. Options shall be
exercised pursuant to the methods and procedures as shall be established from
time to time by the Committee. The Committee shall determine the acceptable form
or forms and timing of payment of the Option Price. Acceptable forms of paying
the Option Price upon exercise of any Option shall include, but not be limited
to, (a) cash or its equivalent, (b) tendering shares of previously acquired
Common Stock having a Fair Market Value at the time of exercise equal to the
total Option Price, (c) directing the Company to withhold shares of Common
Stock, which may include attesting to the ownership of the equivalent number of
shares of previously-acquired Mature Common Stock having a Fair Market Value at
the time of exercise equal to the total Option Price, (d) other approved
property or (e) by a combination of (a), (b), (c) and/or (d). The proceeds from
such a payment shall be added to the general funds of the Company and shall be
used for general corporate purposes. As soon as practicable, after Option
exercise and payment, the Company shall deliver to the Participant Common Stock
certificates in an appropriate amount based upon the number of Options
exercised, issued in the Participant's name.
7.7. Restrictions on Common Stock Transferability. The Committee shall
impose such restrictions on any shares of Common Stock acquired pursuant to the
exercise of an Option under the Plan as it may deem advisable, including,
without limitation, restrictions under applicable Federal securities law, under
the requirements of any stock exchange upon which such shares of Common Stock
are then listed and under any blue sky or state securities laws applicable to
such shares.
7.8. Termination of Employment Due to Death, Disability or Retirement. In
the event the employment of a Participant is terminated by reason of death, any
outstanding Options shall become immediately fully vested and exercisable within
such period following the Participant's death as shall be determined by the
Committee, but in no event beyond the expiration of the term of the Option, by
such person or persons as shall have acquired the Participant's rights under the
Option by will or by the laws of descent and distribution. In the event the
employment of a Participant is terminated by reason of retirement or disability
(as such terms are defined under the applicable rules of the Company), any
outstanding Options shall become immediately fully vested and exercisable within
such period after such date of termination of employment as shall be determined
by the Committee, but in no event beyond the expiration of the term of the
Option.
7.9. Termination of Employment Other Than for Death, Disability or
Retirement. If the employment of the Participant terminates for any reason
other than death, disability or retirement, the Participant shall
A-2-4
<PAGE> 36
have the right to exercise the Option within such period after the date of his
termination as shall be determined by the Committee, but in no event beyond the
expiration of the term of the Option and only to the extent that the Participant
was entitled to exercise the Option at the date of his termination of
employment. Regardless of the reasons for termination of employment, incentive
stock options must be exercised within the Code Section 422 prescribed time
period in order to receive the favorable tax treatment applicable thereto.
7.10. Nontransferability of Options. Except as provided in this Subsection
7.10, no Option granted under the Plan may be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution, and all Options granted to a Participant under
the Plan shall be exercisable during his lifetime only by such Participant.
Under such rules and procedures as the Committee may establish, the holder of an
Option may transfer such Option to members of the holder's immediate family
(i.e., children, grandchildren and spouse) or to one or more trusts for the
benefit of such family members or to partnerships in which such family members
are the only partners, provided that (i) the agreement, if any, with respect to
such Option, expressly so permits or is amended to so permit, (ii) the holder
does not receive any consideration for such transfer, and (iii) the holder
provides such documentation or information concerning any such transfer or
transferee as the Committee may reasonably request. Any Options held by any
transferees shall be subject to the same terms and conditions that applied
immediately prior to their transfer. The Committee may also amend the agreements
applicable to any outstanding Options to permit such transfers. Any Option not
granted pursuant to any agreement expressly permitting its transfer or amended
expressly to permit its transfer shall not be transferable. Such transfer rights
shall in no event apply to any incentive stock option.
7.11. Non-Qualified Replacement Options. The Committee may grant to any Key
Employee a replacement Option to purchase additional shares of Common Stock
equal to the number of shares delivered by the Key Employee and/or withheld by
the Company in satisfaction of the exercise price and/or tax withholding
obligations with respect to an Option. The terms of a replacement Option shall
be identical to the terms of the exercised Option, except that the exercise
price shall be not less than the Fair Market Value on the grant date of the
replacement Option. At the discretion of the Committee, the Option Agreement for
any Option under the Plan (including any previously granted and outstanding
nonqualified stock option, where the applicable Option Agreement is
appropriately amended) may provide for the automatic grant of such a replacement
Option or for the automatic grants of multiple replacement Options over the term
of the initial Option.
SECTION 8. STOCK APPRECIATION RIGHTS
8.1. Grant of Stock Appreciation Rights. Subject to the terms and provisions
of this Plan, Stock Appreciation Rights may be granted to Participants either
independent of Options or in conjunction with nonqualified stock options at any
time and from time to time as shall be determined by the Committee.
8.2. Exercise of Stock Appreciation Rights Granted in Conjunction with a
Nonqualified Option. Stock Appreciation Rights granted in conjunction with a
nonqualified stock option may be exercised at any time during the life of the
related stock option, with a corresponding reduction in the number of shares
available under the Option. Option shares with respect to which the Stock
Appreciation Right shall have been exercised may not again be subject to an
Option under this Plan.
8.3. Exercise of Stock Appreciation Rights Granted Independent of Options.
Stock Appreciation Rights granted independent of Options may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes on
the Stock Appreciation Right including, but not limited to, a corresponding
proportional reduction in previously granted Options.
8.4. Payment of Stock Appreciation Right Amount. Upon exercise of a Stock
Appreciation Right, the holder shall be entitled to receive payment of an amount
(subject to Subsection 8.5 below) determined by multiplying:
(a) The difference between the Fair Market Value of a share of Common
Stock at the date of exercise over the price fixed by the Committee at the
date of grant, by
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<PAGE> 37
(b) The number of shares with respect to which the Stock Appreciation
Right is exercised.
8.5. Form of Payment. Payment to the Participant, upon the exercise of a
Stock Appreciation Right, will be made in cash.
8.6. Limit on Appreciation. The Committee, in its sole discretion, may
establish (at the time of grant) a maximum amount per share which will be
payable upon exercise of a Stock Appreciation Right.
8.7. Term of Stock Appreciation Right. The term of a Stock Appreciation
Right granted under the Plan shall not exceed ten years.
8.8. Termination of Employment. In the event that the employment of a
Participant is terminated by reason of death, disability or retirement, or for
any other reason, the exercisability of any outstanding Stock Appreciation
Rights granted in conjunction with an Option shall terminate in the same manner
as specified for their related Options under Subsections 7.8 and 7.9. The
exercisability of any outstanding Stock Appreciation Rights granted independent
of Options also shall terminate in the manner provided under Subsections 7.8 and
7.9.
8.9. Nontransferability of Stock Appreciation Rights. No Stock Appreciation
Right granted under the Plan may be sold, transferred, pledged, assigned or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, all Stock Appreciation Rights granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant.
SECTION 9. RESTRICTED STOCK
9.1. Grant of Restricted Stock. Subject to the terms and provisions of this
Plan, the Committee, at any time and from time to time, may grant shares of
Restricted Stock to such Participants and in such amounts as it shall determine.
It is contemplated that Restricted Stock grants will be made only in
extraordinary situations of performance, promotion, retention or recruitment.
9.2. Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Agreement that shall specify the restriction
period or periods, the number of Restricted Stock shares granted, and such other
provisions as the Committee shall determine.
9.3. Transferability. Except as provided in this Section 9, the shares of
Restricted Stock granted hereunder may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated until the termination of the
applicable Period of Restriction or for such period of time as shall be
established by the Committee and as shall be specified in the Restricted Stock
Agreement, or upon earlier satisfaction of other conditions as specified by the
Committee in its sole discretion and set forth in the Restricted Stock
Agreement. All rights with respect to the Restricted Stock granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant.
9.4. Other Restrictions. The Committee shall impose such other restrictions
on any shares of Restricted Stock granted pursuant to the Plan as it may deem
advisable including, without limitation, restrictions under applicable Federal
or state securities laws, and may legend the certificates representing
Restricted Stock to give appropriate notice of such restrictions.
9.5. Certificate Legend. In addition to any legends placed on certificates
pursuant to Subsection 9.4, each certificate representing shares of Restricted
Stock granted pursuant to the Plan shall bear the following legend:
"The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law, is
subject to certain restrictions on transfer set forth in the 1992 Stock
Compensation Plan of SPX Corporation, rules and administration adopted
pursuant to such Plan, and a Restricted Stock grant dated. A copy of the
Plan, such rules and such Restricted Stock grant may be obtained from the
Secretary of SPX Corporation."
9.6. Removal of Restrictions. Except as otherwise provided in this Section,
shares of Restricted Stock covered by each Restricted Stock grant made under the
Plan shall become freely transferable by the
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<PAGE> 38
Participant after the last day of the Period of Restriction. Once the shares are
released from the restrictions, the Participant shall be entitled to have the
legend required by Subsection 9.5 removed from his Common Stock certificate.
9.7. Voting Rights. During the Period of Restriction, Participants holding
shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those shares.
9.8. Dividends and Other Distributions. During the Period of Restriction,
Participants holding shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those shares while they are so held. If any such dividends or distributions are
paid in shares of Common Stock, the shares shall be subject to the same
restrictions on transferability as the shares of Restricted Stock with respect
to which they were paid.
9.9. Termination of Employment Due to Retirement. In the event that a
Participant terminates his employment with the Company because of normal
retirement (as defined under the then established rules of the Company), any
remaining Period of Restriction applicable to the Restricted Stock pursuant to
Subsection 9.3 shall automatically terminate and, except as otherwise provided
in Subsection 9.4, the shares of Restricted Stock shall thereby be free of
restrictions and freely transferable. In the event that a Participant terminates
his employment with the Company because of early retirement (as defined under
the then established rules of the Company), the Committee, in its sole
discretion, may waive the restrictions remaining on any or all shares of
Restricted Stock pursuant to Subsection 9.3 and add such new restrictions to
those shares of Restricted Stock as it deems appropriate.
9.10. Termination of Employment Due to Death or Disability. In the event a
Participant's employment is terminated because of death or disability (as
defined under the then established rules of the Company), any remaining Period
of Restriction applicable to the Restricted Stock pursuant to Subsection 9.3
shall automatically terminate and, except as otherwise provided in Subsection
9.4, the shares of Restricted Stock shall thereby be free of restrictions and
fully transferable.
9.11. Termination of Employment for Reasons Other Than Death, Disability or
Retirement. In the event that a Participant terminates his employment with the
Company for any reason other than those set forth in Subsections 9.9 and 9.10
during the Period of Restrictions, then any shares of Restricted Stock still
subject to restrictions as of the date of such termination shall automatically
be forfeited and returned to the Company; provided, however, that, in the event
of an involuntary termination of the employment of a Participant by the Company,
the Committee, in its sole discretion, may waive the automatic forfeiture of any
or all such shares and may add such new restrictions to such shares of
Restricted Stock as it deems appropriate.
SECTION 10. PERFORMANCE UNITS
Performance units may be granted subject to such terms and conditions as the
Committee in its discretion shall determine. Performance units may be granted
either in the form of cash units or in share units which are equal in value to
one share of Common Stock or a combination thereof. The Committee shall
establish the performance goals to be attained in respect of the performance
units, the various percentages of performance unit value to be distributed upon
the attainment, in whole or in part, of the performance goals and such other
performance unit terms, conditions and restrictions as the Committee shall deem
appropriate. As soon as practicable after the termination of the performance
period, the Committee shall determine the payment, if any, which is due on the
performance unit in accordance with the terms thereof. The Committee shall
determine, among other things, whether the payment shall be made in the form of
cash or shares of Common Stock, or a combination thereof.
SECTION 11. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his death. Each designation will
revoke all prior designations by the same Participant, shall be in a form
prescribed by
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<PAGE> 39
the Committee, and will be effective only when filed by the Participant in
writing with the Committee during his lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to his estate.
SECTION 12. RIGHTS OF EMPLOYEES
12.1. Employment. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Company.
12.2. Participation. No employee shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant.
SECTION 13. MERGER OR CONSOLIDATION
13.1. Treatment of Options and Stock Appreciation Rights. Upon a dissolution
or a liquidation of the Company, each Participant shall have the right to
exercise any unexercised Options or Stock Appreciation Rights, whether or not
then exercisable, subject to the provisions of the Plan immediately prior to
such dissolution or liquidation. If not exercised within a reasonable time
period, of not less than 30 days from the date of such dissolution or
liquidation, as determined by the Committee, all outstanding Options and Stock
Appreciation Rights shall terminate. In the event of a merger or consolidation
in which the Company is not the surviving corporation, each Participant shall be
offered a firm commitment whereby the resulting or surviving corporation will
tender to the Participant new Options and Stock Appreciation Rights in the
surviving corporation, with terms and conditions, both as to number of shares
and otherwise, which will substantially preserve to the Participant the rights
and benefits of the Options and Stock Appreciation Rights outstanding hereunder.
13.2. Treatment of Restricted Stock. In the event of a dissolution or a
liquidation of the Company or a merger or consolidation in which the Company is
not the surviving corporation, all restrictions shall lapse on the shares of
Restricted Stock granted under the Plan and thereafter such shares shall be
freely transferable by the Participant, subject to applicable Federal or state
securities laws.
SECTION 14. AMENDMENT, MODIFICATION AND TERMINATION OF PLAN
The Board may at any time terminate, and from time to time may amend or
modify, the Plan; provided, however, that no such action of the Board, without
approval of the shareholders, may:
(a) Increase the total amount of Common Stock which may be issued under
the Plan, except as provided in Subsections 5.1 and 5.3.
(b) Change the provisions of the Plan regarding the Option Price except
as permitted by Subsection 5.3.
(c) Materially increase the cost of the Plan or materially increase the
benefits to Participants.
(d) Extend the period during which Options, Stock Appreciation Rights,
Restricted Stock or Performance Units may be granted.
(e) Extend the maximum period after the date of grant during which
Options or Stock Appreciation Rights may be exercised.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Options, Stock Appreciation Rights or Restricted Stock
previously granted under the Plan, without the consent of the Participants.
SECTION 15. TAX WITHHOLDING
15.1. Tax Withholding. The Company, as appropriate, shall have the right to
deduct from all payments any Federal, state or local taxes required by law to be
withheld with respect to such payments.
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<PAGE> 40
15.2. Stock Withholding. With respect to withholding required upon the
exercise of nonqualified stock options, or upon the lapse of restrictions on
Restricted Stock, Participants may elect, subject to the approval of the
Committee, to satisfy the withholding required, in whole or in part, by having
the Company withhold shares of Common Stock having a value equal to the amount
required to be withheld. Participants may also elect to satisfy all or a portion
of the tax withholding (up to the maximum legally permissible withholding
amount) by (a) tendering shares of previously acquired Common Stock having a
value equal to the amount of tax to be withheld or (b) by directing the Company
to withhold shares of Common Stock, including attesting to the ownership of
Mature Common Stock having a value equal to the amount of tax to be withheld (in
the manner provided in Subsection 7.6). The value of the shares to be withheld,
tendered or attested is to be determined by such methods or procedures as shall
be established from time to time by the Committee. All elections shall be
irrevocable and shall be made in writing, signed by the Participant, and shall
satisfy such other requirements as the Committee shall deem appropriate.
SECTION 16. INDEMNIFICATION
Each person who is or shall have been a member of the Committee or of the
Board shall be indemnified and held harmless by the Company against and from any
loss, cost, liability or expense that may be imposed upon or reasonably incurred
by him in connection with or resulting from any claim, action, suit or
proceeding to which he may be a party or in which he may be involved by reason
of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him in settlement thereof, with the Company's approval,
or paid by him in satisfaction of any judgment in any such action, suit or
proceeding against him, provided he shall give the Company an opportunity, at
its expense, to handle and defend the same before he undertakes to handle and
defend it on his own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Certificate of Incorporation or Bylaws, as a matter
of law or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.
SECTION 17. REQUIREMENTS OF LAW
17.1. Requirements of Law. The granting of Options, Stock Appreciation
Rights, Restricted Stock or Performance Units, and the issuance of shares of
Common Stock with respect to an Option exercise or Performance Unit award, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.
17.2. Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Michigan.
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<PAGE> 41
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[SPX CORPORATION LOGO]
FOR SHAREHOLDERS WITH COMMON SHARES HELD IN THE COMPANY'S KSOP TRUST:
1. Please notice the number of shares held in the KSOP Trust is
indicated separately on the proxy card.
2. It is important to remember that your specific voting directions
to the Trustee are strictly confidential and may not be divulged
by the Trustee to anyone, including the company or any director,
officer, employee or agent of the company. The Trustee will vote
the shares being held by the Trust and not yet allocated to
participants' accounts in the same manner and proportion as the
shares for which the Trustee has received timely voting
instructions. Shares in participant accounts for which no timely
voting instructions are received by the Trustee will be voted in
the same manner.
- - --------------------------------------------------------------------------------
PROXY/VOTING INSTRUCTION CARD
SPX CORPORATION
MUSKEGON, MICHIGAN
ANNUAL MEETING APRIL 28, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of SPX Corporation, a Delaware corporation,
hereby appoints Christopher J. Kearney and Patrick J. O'Leary, or either one of
them, with full power of substitution, to act as his or her agents and proxies
at the Annual Meeting of Shareholders of the Company to be held in Chicago,
Illinois, on April 28, 1999 at 9 a.m. (Central Time) with authority to vote at
said meeting, and any 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 BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ITEM 1 AND ITEM 2.
(Continued and to be signed and dated on the other side.)
SPX CORPORATION
P.O. BOX 11135
NEW YORK, N.Y. 10203-0135
<PAGE> 42
[SPX CORPORATION LOGO]
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1999
Dear Shareholder:
The Annual Meeting of Shareholders of SPX Corporation will be held at 9:00 a.m.
Central Time on Wednesday, April 28, 1999 at The Drake Hotel, 140 East Walton,
Chicago, Illinois, for the following purposes:
1. To elect two directors to the Board of Directors.
2. To amend the 1992 Stock Compensation Plan.
3. To address such other business as may properly come before the meeting.
Only holders of Common Stock of SPX Corporation of record at the close of
business on March 19, 1999 will be entitled to vote at the meeting or any
adjournment thereof.
TO BE SURE THAT YOUR VOTE IS COUNTED, WE URGE YOU TO COMPLETE AND SIGN THE
PROXY/VOTING INSTRUCTION CARD BELOW, DETACH IT FROM THIS LETTER AND RETURN IT
IN THE POSTAGE PAID ENVELOPE ENCLOSED IN THIS PACKAGE. The giving of such
proxy does not affect your right to vote in person if you attend the meeting.
The prompt return of your signed proxy will aid the company in reducing the
expense of additional proxy solicitation.
For shareholders with common shares held in the company's KSOP Trust, please
read the reverse side of this letter.
BY ORDER OF THE BOARD OF DIRECTORS
CHRISTOPHER J. KEARNEY
Vice President, Secretary
and General Counsel
* DETACH PROXY CARD HERE*
- - --------------------------------------------------------------------------------
[ ]
<TABLE>
<CAPTION>
<S> <C>
1. Election of two Directors 2. Approval of Amendment of the 1992 Stock Compensation Plan.
For [ ] Withhold [ ] Exceptions [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ]
Nominees: J. Kermit Campbell and Emerson U. Fullwood
*Exceptions
----------------------------------------- 3. In their discretion, the Proxies are authorized to 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 nominees,
mark the "WITHHOLD" box. If you do not wish your shares
voted "for" a particular nominee, mark the "Exceptions"
box and enter the name(s) of the exception(s) in the
space provided.
Change of Address and
or Comments Mark Here [ ]
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 , 1999
---------------------------------------
SIGNATURE
----------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING VOTES MUST BE INDICATED
THE ENCLOSED ENVELOPE. [X] IN BLACK OR BLUE INK. [X]
</TABLE>
PLEASE DETACH HERE
V YOU MUST DETACH THIS PORTION OF THE PROXY CARD V
BEFORE RETURNING IT IN THE ENCLOSED ENVELOPE
