<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
Standard Motor Products, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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:
- --------------------------------------------------------------------------------
<PAGE> 2
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
MAY 21, 1998
April 21, 1998
To the Shareholders of STANDARD MOTOR PRODUCTS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
STANDARD MOTOR PRODUCTS, INC. (the "Company") will be held in the offices of
The Chase Manhattan Bank, 270 Park Avenue, New York, New York 10017, on
Thursday, the 21st day of May, 1998 at 2:00 o'clock in the afternoon (New York
Time) for the following purposes:
1. To elect eleven directors of the Company, all of whom shall hold office
until the next annual meeting of shareholders and until their successors
are elected and qualified; and
2. To transact such other business as may properly come before the meeting.
Whether or not you plan to attend the Meeting, please vote, date and sign
the enclosed Proxy, which is solicited by the Board of Directors of the Company,
and return it to the Company, in the preaddressed envelope, to which no postage
need be affixed, if mailed in the United States.
By Order of the Board of Directors
SANFORD KAY
Secretary
ONLY SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS
ON APRIL 10, 1998 WILL BE ENTITLED TO NOTICE OF OR TO VOTE AT
THE MEETING, OR ANY ADJOURNMENT THEREOF
<PAGE> 3
STANDARD MOTOR PRODUCTS, INC. 37-18 NORTHERN BOULEVARD -
LONG ISLAND CITY, N.Y. 11011
MANAGEMENT PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, MAY 21,1998
This statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Standard Motor Products, Inc. (the "Company") for
use at the Annual Meeting of Shareholders of the Company to be held on May 21,
1998, or at any adjournment thereof. Proxy material is being mailed on or about
April 21, 1998, to the Company's approximately 775 shareholders of record. The
total number of shares outstanding and entitled to vote on April 10, 1998, is:
Common Stock................................13,076,695
The purposes of the annual meeting are: (1) to elect eleven directors, and (2)
to transact such other business as may properly come before the meeting and at
any adjournment thereof.
PROPOSAL 1: ELECTION OF DIRECTORS
At the annual meeting, eleven directors are to be elected to hold office
until the next annual meeting of shareholders and until their successors are
elected and qualified. Unless otherwise specified in the proxy, the shares
represented by the proxy hereby solicited will be voted by the persons
designated as proxies for the persons named below. Mr. Bernard Fife has decided
not to run for re-election to the Board. The Board has nominated Susan F. Davis,
Mr. Fife's daughter, to fill this vacancy. Should any of these nominees become
unable to accept nomination or election (which is not anticipated), it is the
intention of the persons designated as proxies to vote for the election of the
remaining nominees named and for such substitute nominees as the management may
recommend.
The nominees are: Marilyn F. Cragin, Arthur D. Davis, Susan F. Davis, Robert
M. Gerrity, John L. Kelsey, Andrew M. Massimilla, Arthur S. Sills, Lawrence I.
Sills, Nathaniel L. Sills, Robert J. Swartz and William H. Turner.
INFORMATION WITH RESPECT TO NOMINEES AND MAJOR SHAREHOLDERS
Information with respect to each nominee is set forth in Chart "A" on page
2. Additional information with respect to major shareholders of the Company,
including their percentage ownership in the Company's voting stock is set forth
in Chart "B" on page 3.
Shares of Common Stock owned directly or held as trustee by Fife family
members aggregate 2,457,539 shares (18.8%). Shares of Common Stock owned
directly or held as trustee by Sills family members aggregate 2,561,195 shares
(19.6%). The 251,125 shares of Common Stock owned by charitable foundations of
which various members of the Fife and Sills families are trustees represent 1.9%
of the total outstanding voting securities of the Company.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's Common Stock, to file with the Securities and
Exchange Commission and the New York Stock Exchange initial reports of ownership
and reports of changes in ownership of the Common Stock of the Company.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file. To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and representations that no other reports
were required, during the fiscal year ended December 31, 1997 all Section 16(a)
filing requirements applicable to its officers and directors were complied with.
1
<PAGE> 4
CHART A--INFORMATION ABOUT NOMINEES
<TABLE>
<CAPTION>
HAS
OFFICE WITH COMPANY AND SERVED
PRINCIPAL OCCUPATION AS DIRECTOR
NAME AGE DURING THE PAST FIVE YEARS SINCE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Marilyn F. Cragin........... 46 Director of the Company (5) 1995
Arthur D. Davis............. 50 Director of the Company (6) 1986
Susan F. Davis (7).......... 49 -- -
Robert M. Gerrity........... 60 Director of the Company 1996
Chairman & CEO, Antrim Group, Inc. (8)
John L. Kelsey.............. 72 Director of the Company (9) 1964
Andrew M. Massimilla........ 56 Director of the Company 1996
Business Consultant (10)
Arthur S. Sills............. 54 Director of the Company (11) 1995
Lawrence I. Sills........... 58 President and Director of the Company (12) 1986
Nathaniel L. Sills.......... 90 Co-Chairman and Director of the Company 1946
Robert J. Swartz............ 72 Director of the Company 1992
Former Senior Partner of KPMG Peat Marwick LLP (13)
William H. Turner........... 58 Director of the Company 1990
President, PNC Bank, N. A. New Jersey (14)
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED DIRECTLY
OR INDIRECTLY AS OF
NAME MARCH 15, 1998*
- ------------------------------------------------------------------------------
<S> <C>
Marilyn F. Cragin........... 550,162
72,035 (1)
23,687 (2)
Arthur D. Davis............. 87,369 (3)
64,982 (1)
Susan F. Davis (7).......... 490,636 (
38,560 (1)
43,562 (2)
Robert M. Gerrity........... 662
John L. Kelsey.............. 1,787
Andrew M. Massimilla........ 662
Arthur S. Sills............. 483,147
36,667 (1)
34,724 (2)
Lawrence I. Sills........... 510,385 (3)
36,666 (1)
Nathaniel L. Sills.......... 139,880 (3)
335,507 (1)(4)
Robert J. Swartz............ 662
William H. Turner........... 1,662
</TABLE>
- ---------------------------------------------------------------------------
(1) Shares are subject to family trusts in which beneficial ownership is
disclaimed.
(2) Held as custodian for minor children.
(3) Excludes allocated shares held by Trustee under the Company's ESOP.
(4) Excludes 139,062 shares of Common Stock held in the Sills Family
Foundation.
(5) Marilyn F. Cragin is an adult daughter of Bernard Fife and sister of Susan
F. Davis. She is a co-owner of an art gallery. Prior to that she was a
practicing psychotherapist. She was elected a Director of the Company on
October 18, 1995.
(6) Arthur D. Davis is an adult son-in-law of Bernard Fife and husband of Susan
F. Davis. He was appointed Vice President, Materials Management of the
Company in May 1986 and held that position until January 1989 when he
resigned this position.
(7) Susan F. Davis is an adult daughter of Bernard Fife, wife of Arthur D.
Davis and sister of Marilyn F. Cragin.
(8) Mr. Gerrity has been the Chairman & CEO of the Antrim Group, Inc. since
1996. Prior to that he was the Vice Chairman of New Holland, n. v. He is
also a director of Rubbermaid Inc., Harnischfeger Industries Inc. and
Libralter Engineering Systems Inc. He was elected a Director of the Company
on July 18, 1996.
(9) Mr. Kelsey, now retired, was Advisory Director, PaineWebber Inc. in which
capacity his responsibilities included all facets of investment banking.
(10) Mr. Massimilla is presently a business consultant. He held the positions of
Consultant and Managing Director of the Henley Group & Affiliated Companies
from 1989 to 1995. He was elected a Director of the Company on October 17,
1996.
(11) Arthur S. Sills is an adult son of Nathaniel L. Sills and a brother of
Lawrence I. Sills. He has been an educator and administrator for more than
twenty years. He was elected a Director of the Company on October 18, 1995.
(12) Lawrence I. Sills is an adult son of Nathaniel L. Sills and a brother of
Arthur S. Sills. He was appointed President of the Company in May 1986.
Prior to that, and since 1983, he had been Vice President, Operations of
the Company.
(13) Mr. Swartz was a senior partner in the accounting firm of KPMG Peat Marwick
LLP (and predecessor firms). On March 31, 1991 Mr. Swartz retired from KPMG
Peat Marwick LLP and is currently working as an independent financial
consultant. He is also a director of United Merchants & Manufacturers, Inc.
and Bed Bath & Beyond, Inc.
(14) Mr. Turner assumed his present position on August 1, 1997. Prior to that he
was President & Co-CEO of Franklin Electronic Publishers, Inc. from
October 1, 1996 to July 31, 1997. He was the Vice Chairman, Chase
Manhattan Bank, and its predecessor Chemical Banking Corporation before
his employment with Franklin Electronics Publishers, Inc. He is also a
director of Franklin Electronic Publishers, Inc.
* Mrs. Marilyn Cragin, Mr. Arthur D. Davis, Mrs. Susan F. Davis, Mr. Arthur
S. Sills, Mr. Lawrence I. Sills and Mr. Nathaniel L. Sills disclaim
beneficial ownership of securities with respect to which their ownership is
specified to be indirect.
2
<PAGE> 5
CHART B--HOLDINGS OF MANAGEMENT AND HOLDERS OF 5% OR MORE OF ANY
CLASS OF THE COMPANY'S VOTING SECURITIES
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL
TITLE OF ADDRESS OF OWNERSHIP
CLASS BENEFICIAL OWNER AS OF MARCH 15, 1998
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Marilyn F. Cragin (5) .............................. Common 37-18 Northern Boulevard 550,162
Long Island City, NY 72,035(1)
23,687(2)
Arthur D. Davis (6) ................................ Common 37-18 Northern Boulevard 87,369(3)
Long Island City, NY 64,982(1)
Robert M. Gerrity .................................. Common 114 Division Street 662
Bellaire, MI
John L. Kelsey ..................................... Common 460 Coconut Palm Road 1,787
Vero Beach, FL
Andrew M. Massimilla ............................... Common One Peninsula Dr. 662
Stratham, NH
Arthur S. Sills (7) ................................ Common 37-18 Northern Boulevard 483,147
Long Island City, NY 36,667 (1)
34,724 (2)
Lawrence I. Sills (8) .............................. Common 37-18 Northern Boulevard 510,385 (3)
Long Island City, NY 36,666 (1)
Nathaniel L. Sills ................................. Common 37-18 Northern Boulevard 139,880 (3)
Long Island City, NY 335,507 (1)(4)
Robert J. Swartz ................................... Common 1500 Palisade Avenue 662
Ft. Lee, NJ
William H. Turner .................................. Common 2 Tower Center Blvd 1,662
East Brunswick, NJ
Directors and Officers as a
Group (twenty-one persons).......................... 2,984,954 (3)
Gabelli Funds, Inc.................................. Common One Corporate Center 1,255,700
Rye, NY
Tweedy, Browne Company L. P......................... Common 52 Vanderbilt Avenue 679,951
New York, NY
<CAPTION>
PERCENT OF
CLASS
- -------------------------------------------------------------------------------
<S> <C>
Marilyn F. Cragin (5) .............................. 4.20
.55
.18
Arthur D. Davis (6) ................................ .67
.50
Robert M. Gerrity .................................. -
John L. Kelsey ..................................... .01
Andrew M. Massimilla ............................... -
Arthur S. Sills (7) ................................ 3.69
.28
.27
Lawrence I. Sills (8) .............................. 3.90
.28
Nathaniel L. Sills ................................. 1.07
2.57
Robert J. Swartz ................................... -
William H. Turner .................................. .01
Directors and Officers as a
Group (twenty-one persons).......................... 22.83
Gabelli Funds, Inc.................................. 9.60
Tweedy, Browne Company L. P......................... 5.20
</TABLE>
- --------------------------------------------------------------------------------
(1) Shares are subject to family trusts in which beneficial ownership is
disclaimed.
(2) Held as custodian for minor children.
(3) Excludes allocated shares held by Trustee under the Company's ESOP.
(4) Excludes 139,062 shares of Common Stock held in the Sills Family
Foundation.
(5) Marilyn F. Cragin is an adult daughter of Bernard Fife.
(6) Arthur D. Davis is an adult son-in-law of Bernard Fife.
(7) Arthur S. Sills is an adult son of Nathaniel L. Sills and a brother of
Lawrence I. Sills.
(8) Lawrence I. Sills is an adult son of Nathaniel L. Sills and a brother of
Arthur S. Sills.
* Mrs. Marilyn F. Cragin, Mr. Arthur D. Davis, Mr. Arthur S. Sills, Mr.
Lawrence I. Sills, and Mr. Nathaniel L. Sills disclaim ownership of
securities with respect to which their ownership is specified to be
indirect.
3
<PAGE> 6
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
In the last full fiscal year the total number of meetings of the Board of
Directors, including regularly scheduled and special meetings was seven.
The Company has a Compensation Committee and an Audit Committee of the Board
of Directors, each consisting of all five independent outside directors. The
members of both committees are Robert M. Gerrity, John L. Kelsey, Andrew M.
Massimilla, Robert J. Swartz and William H. Turner. The Compensation Committee's
function is to approve the compensation packages (salary and bonus) of the
Company's executive officers, to administer the Company's Stock Option Plan and
to review the Company's overall compensation policies. The Compensation
Committee was established in late 1992 and held three meetings in 1997. The
Audit Committee recommends to the Board of Directors the engagement of the
independent auditors of the Company and reviews with the independent auditors
the scope and results of the Company's audits, the professional services
furnished by them to the Company and their Management Letter with comments on
the Company's internal accounting controls. The Audit Committee met four times
in 1997. The Company does not have a nominating committee charged with the
search for and recommendation to the Board of potential nominees for Board
positions. This function is performed by the Board as a whole, which considers
all recommendations for potential nominees.
Directors who are not officers or related to officers (the "Outside
Directors") were paid a retainer of $15,000 consisting of cash remuneration of
$10,000 and shares of the Company's Common Stock valued at $5,000 as of the date
of last year's Annual Meeting of Shareholders. In addition, pursuant to the
Company's Independent Outside Directors' Stock Option Plan, the Outside
Directors each receive an annual stock option grant of 1,000 shares of the
Company's Common Stock with an exercise price per share equal to the price of
the stock on the New York Stock Exchange as of the date of each year's Annual
Meeting of Shareholders. Outside Directors also received $1,000 for each
Regular, Audit Committee and Compensation Committee meeting they attended.
Marilyn F. Cragin, Arthur D. Davis and Arthur S. Sills received $500 for each
meeting they attended. All other directors, being officers of the Company,
received no payment for the fulfillment of their directorial responsibilities.
CERTAIN TRANSACTIONS
During 1997 four executive officers, Steven Brown, Vice President and General
Manager, Champ Service Line Division, Joseph G. Forlenza, Vice President and
General Manager, Standard Division, Stanley Davidow, Vice President and General
Manager, Four Seasons Division, and John P. Gethin, Senior Vice
President-Operations were indebted to the Company as a result of loans made to
them by the Company.
Officers who are granted options under the Company's 1994 Omnibus Stock
Option Plan are required to attain a Common Stock ownership position with a
market value equal to 50% of the grantee's base salary. The Compensation
Committee permitted the Company to make available to each grantee a loan for up
to 75% of his stock ownership requirement at a fixed rate of interest equal to
the Company's short-term interest rate the day the loan was made. The Committee
also required that any loan made for the above purpose must be repaid within
four years and must be collateralized by the Common Stock acquired with the loan
proceeds.
In 1996 Mr. Brown borrowed $45,948 for the purchase of the Company's Common
Stock to meet the above-mentioned stock ownership requirement. At March 31,
1998, the amount of this indebtedness was $35,352. In addition, Mr. Brown has an
outstanding loan balance relating to his 1982 relocation upon employment with
the Company. In 1997 the highest amount of this indebtedness was $19,790. At
March 31, 1998, the amount of this indebtedness was $13,201. In August 1997, Mr.
Brown borrowed $174,620 as a bridge loan for his planned relocation. In January
1998 he borrowed an additional $136,260 for this relocation. In accordance with
Company policy on bridge loans, these loans are non-interest bearing. At March
31, 1998 the total amount of indebtedness for these bridge loans was $310,880.
At March 31, 1998, Mr. Brown's total indebtedness to the Company was $359,433.
In 1994 Mr. Forlenza borrowed $88,875 for the purchase of the Company's
Common stock to meet the above-mentioned stock ownership requirement. At March
31, 1998, the amount of this indebtedness was $50,520.
In 1996 Mr. Davidow borrowed $77,916 for the purchase of the Company's Common
stock to meet the above-mentioned stock ownership requirement. At March 31,
1998, the amount of this indebtedness was $63,105.
In 1997 Mr. Gethin borrowed $77,488 for the purchase of the Company's Common
stock to meet the above-mentioned stock ownership requirement.
4
<PAGE> 7
At March 31, 1998, the amount of this indebtedness was $72,951.
During 1997, the Company's Four Seasons Division purchased a portion of its
remanufacturing component requirements (approximately $2,150,000) from Recore
Automotive, Incorporated. The owner of Recore Automotive is a member of the
immediate family of Mr. Stanley Davidow, Vice President and General Manager,
Four Seasons Division. The purchases made from Recore Automotive are within the
Company's guidelines for transactions with related parties, which require that
any such transactions be conducted on an arm's length basis.
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation for the Co-Chief
Executive Officers and the four other most highly compensated executive officers
of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
NAME AND ---------------------------------------------------------------
PRINCIPAL OTHER
POSITION YEAR SALARY BONUS COMPENSATION (1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bernard Fife......................................... 1997 $192,744 --
Co-Chief Executive Officer, 1996 259,000 $ 27,600
Co-Chairman of the Board and Director 1995 259,000 26,490
Nathaniel L. Sills................................... 1997 192,744 --
Co-Chief Executive Officer,........................ 1996 259,000 27,600
Co-Chairman of the Board and Director.............. 1995 259,000 26,490
Lawrence I. Sills.................................... 1997 290,000 --
President, Chief Operating......................... 1996 278,000 92,000
Officer and Director............................... 1995 278,000 79,470
Joseph G. Forlenza................................... 1997 265,000 62,600
Vice President and................................. 1996 260,000 115,875
General Manager Standard Division.................. 1995 250,000 100,938
Stanley Davidow...................................... 1997 265,000 43,988
Vice President and................................. 1996 257,000 89,288
General Manager Four Seasons Division.............. 1995 240,000 79,800
John P. Gethin (4)................................... 1997 240,000 74,025
Senior Vice President-Operations................... 1996 211,000 32,543
1995 37,500 --
<CAPTION>
LONG-TERM
COMPENSATION ALL OTHER
AWARDS COMPENSATION
NAME AND ----------------------------------------------
PRINCIPAL STOCK OPTIONS
POSITION GRANTED (2) (3)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bernard Fife......................................... -- $ 2,286 $ 7,440
Co-Chief Executive Officer, -- 3,514 6,774
Co-Chairman of the Board and Director -- 6,835 8,223
Nathaniel L. Sills................................... -- (5,308) 7,440
Co-Chief Executive Officer,........................ -- (3,727) 6,774
Co-Chairman of the Board and Director.............. -- (3,634) 8,223
Lawrence I. Sills.................................... 40,000 18,426
President, Chief Operating......................... 22,000 14,823
Officer and Director............................... -- 21,381
Joseph G. Forlenza................................... 23,000 18,480
Vice President and................................. 16,000 15,341
General Manager Standard Division.................. -- 20,958
Stanley Davidow...................................... 23,000 18,192
Vice President and................................. 16,000 14,637
General Manager Four Seasons Division.............. -- 18,869
John P. Gethin (4)................................... 35,000 11,648
Senior Vice President-Operations................... 16,000 2,715
-- --
</TABLE>
(1) Does not include compensation associated with perquisites because such
amounts do not exceed the lesser of either $50,000 or 10% of total salary
and bonus disclosed.
(2) Includes accruals to fund a widows death benefit program which provides for
payments of $2,500 per month (as adjusted for cost of living increases from
1977) payable to the widows of Messrs. B. Fife and N. L. Sills.
(3) Company contributions to Profit Sharing, 401K, ESOP and SERP programs.
(4) Mr. Gethin's date of hire with the Company was October 2, 1995.
5
<PAGE> 8
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------------------------------------------------------
% OF TOTAL
OPTIONS/SARS
OPTIONS/ GRANTED TO EXERCISE OR
SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) (1) DATES (2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lawrence I. Sills............................... 40,000 17.8% $20.59-$23.59 9/18/03-9/18/06
Joseph G. Forlenza.............................. 23,000 10.2% 20.59-$23.59 9/18/03-9/18/06
Stanley Davidow................................. 23,000 10.2% 20.59-$23.59 9/18/03-9/18/06
John P. Gethin.................................. 35,000 15.6% 20.59-$23.59 9/18/03-9/18/06
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK APPRECIATION
FOR OPTION TERM (3)
- ----------------------------------------------------------------------------------------------
NAME 5% 10%
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Lawrence I. Sills............................... $243,962 $539,349
Joseph G. Forlenza.............................. 140,278 310,126
Stanley Davidow................................. 140,278 310,126
John P. Gethin.................................. 213,467 471,931
</TABLE>
(1) Stock options granted in 1997 vest equally over a four year period. The
exercise price in the first year of vesting is $20.59 and increases by
$1.00 each subsequent year.
(2) Stock option grants expire at the rate of 25% of the total grant on
September 18th of each year beginning September 18, 2003.
(3) The dollar amounts under these columns are the result of calculations at
five percent and ten percent rates set by the Securities and Exchange
Commission and therefore are not intended to forecast possible future
appreciation, if any, of the Company's stock price.
OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to option exercises in
1997 by the Named Officers and the value of such Officers' unexercised options
at December 31, 1997.
AGGREGATED OPTION EXERCISES IN 1997
AND DECEMBER 31, 1997 OPTION VALUES
<TABLE>
<CAPTION>
(1) NUMBER OF SHARES UNDERLYING
SHARES UNEXERCISED OPTIONS AT
ACQUIRED ON VALUE FISCAL YEAR-END
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bernard Fife.................................... -- -- 32,500 7,500
Nathaniel L. Sills.............................. -- -- 32,500 7,500
Lawrence I. Sills............................... -- -- 38,000 64,000
Joseph G. Forlenza.............................. -- -- 19,000 40,000
Stanley Davidow................................. -- -- 14,000 40,000
John P. Gethin.................................. -- -- 9,000 52,000
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
VALUE OF UNEXERCISED
IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END (2)
NAME EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Bernard Fife.................................... $178,881 $ 46,294
Nathaniel L. Sills.............................. 178,881 46,294
Lawrence I. Sills............................... 213,600 179,900
Joseph G. Forlenza.............................. 117,838 123,546
Stanley Davidow................................. 86,975 123,546
John P. Gethin.................................. 56,113 132,381
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) No stock options were exercised in 1997 by any of the Named Officers
listed.
(2) Market value of unexercised options is based on the closing price of the
Company's Common Stock on the New York Stock Exchange of $22.5625 per share
on December 31, 1997 (the last trading day of 1997), minus the exercise
price.
6
<PAGE> 9
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Company's Compensation Committee of the Board of Directors was
established in 1992. The Committee is responsible for approving the compensation
packages (base salary and bonus) of the Company's executive officers, for
administering the Company's 1994 Omnibus Stock Option Plan, and for reviewing
the Company's overall compensation policies including the structure of its bonus
program.
Effective January 1, 1998 the company modified its MBO Bonus Program into an
Economic Value Added (EVA) based program. This change was made to more closely
align executive compensation to continuous improvements in corporate performance
and increases in shareholder value. In this regard, the Compensation Committee
endorses the following guidelines for compensation decisions:
- Provide a competitive total compensation package that enables the Company
to attract and retain key executive talent.
- Align all pay programs with the Company's annual and long-term strategies
and objectives.
- Provide variable compensation incentives directly linked to the performance
of the Company and improvement in shareholder return.
Under the EVA bonus program adopted this year, the bonus of the Chief
Operating Officer is based entirely on year-over-year improvement in Company
EVA. The bonuses of the other executive officers are based 80% upon
year-over-year improvement in the Company's EVA and 20% on individual goals
approved by the Chief Operating Officer. A portion of the bonuses earned by each
executive officer is retained by the Company to be paid in future years, based
upon the attainment of specified EVA achievement levels. If such achievement
levels are not attained, a portion (or all) of each executive officer's retained
amount is forfeited. Officers must remain in the employment of the Company to
gain access to any retained bonus.
In connection with the new EVA program, the Compensation Committee has issued
an additional stock option grant to each executive officer under the 1994
Omnibus Stock Option Plan. These grants include proportional vesting over a four
year period at increasing exercise prices. This feature further strengthens the
link between continuous Company improvement and long-term executive
compensation. These stock options require a holding period before they may be
exercised. The exercise price for the initial vesting portion of each grant is
set at the market price of the Company's Common Stock on the date of the grant.
The portions of the grant that vest over years two through four each carry
higher exercise prices. To gain access to the non-vested portions, each officer
must retain ownership of a specified number of shares of the Company's Common
Stock.
Submitted by:
Robert M. Gerrity
John L. Kelsey
Andrew M. Massimilla
Robert J. Swartz
William H. Turner
7
<PAGE> 10
FIVE YEAR PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
FOR STANDARD MOTOR PRODUCTS, INC. S&P 500 INDEX AND A PEER GROUP (1)
[GRAPH]
<TABLE>
<CAPTION>
SMP S&P PEER
GROUP
<S> <C> <C> <C>
1992 100 100 100
1993 200 110 154
1994 152 112 119
1995 119 153 126
1996 113 188 161
1997 181 247 227
</TABLE>
Assumes $100 invested on December 31, 1992 in Standard Motor Products, Inc.
Common stock, S&P 500 Index and a Peer Group (1).
* Total Return assumes reinvestment of dividends.
(1) The Peer Group companies consist of Echlin Inc., Federal-Mogul Corporation,
Dana Corporation, SPX Corporation, MascoTech, Inc., Genuine Parts Company and
Arvin Industries, Inc.
8
<PAGE> 11
INFORMATION AS TO VOTING SECURITIES
Holders of shares of Common Stock have the right to one vote for each share
registered in their names on the books of the Company as of the close of
business on April 10, 1998. On such date 13,076,695 shares of Common Stock were
outstanding and entitled to vote.
The close of business on April 10, 1998 has been fixed by the Board of
Directors as the record date for the determination of shareholders entitled to
notice of, and vote at, the Annual Meeting of Shareholders of the Company to be
held on May 21, 1998.
VOTING AND REVOCATION OF PROXIES
The persons named in the accompanying form of proxy will vote the shares
represented thereby, as directed in the proxy, if the proxy appears to be valid
on its face and is received on time. In the absence of specific instructions,
proxies so received will be voted for the election of the named nominees to the
Company's Board of Directors. Proxies are revocable at any time before they are
exercised by sending in a subsequent proxy (with the same or other
instructions), by appearing at the Annual Meeting of Shareholders and voting in
person or by notifying the Company that it is revoked.
METHOD AND EXPENSE OF PROXY SOLICITATION
The solicitation of proxies will be made primarily by mail. Proxies may also
be solicited personally and by telephone by regular employees of the Company at
nominal cost.
The Company does not expect to pay compensation for any solicitation of
proxies but may pay brokers and other persons holding shares in their names, or
in the name of nominees, their expenses for sending proxy material to
principals for the purpose of obtaining their proxies. The Company will bear
all expenses in connection with the solicitation of proxies.
INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed KPMG Peat Marwick LLP to
audit the accounts of the Company for the fiscal year ending December 31, 1998.
Management does not believe it is necessary for shareholders to ratify this
appointment due to the satisfactory services of KPMG Peat Marwick LLP, in the
prior year. There is no requirement under Federal or New York law that the
appointment of independent auditors be approved by shareholders. Management's
recommendation for the appointment of KMPG Peat Marwick LLP was unanimously
approved by the Audit Committee of the Board of Directors consisting of Messrs.
Gerrity, Kelsey, Massimilla, Swartz and Turner.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the Company's 1999 Annual
Meeting of Shareholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission, promulgated under the Securities Exchange
Act of 1934, as amended, must be received at the Company's offices in Long
Island City, New York, by January 6, 1999 for inclusion in the Company's proxy
statement and form of proxy relating to that meeting.
GENERAL
The Company's 1997 Annual Report has been mailed to shareholders. A copy of
the Company's Annual Report on Form 10-K will be furnished to any shareholder
who requests the same free of charge (except for Exhibits thereto for which a
nominal fee covering reproduction and mailing expenses will be charged.)
OTHER MATTERS
As of the date of this proxy statement, management knows of no matters other
than the election of directors to come before the meeting. However, if any other
matters should properly come before the meeting, it is the intention of the
persons named in the accompanying form of proxy to vote all proxies not marked
to the contrary in accordance with their judgment on such matters.
By Order of the Board of Directors
SANFORD KAY
Secretary
Dated: April 21, 1998
9
<PAGE> 12
[STANDARD MOTOR PRODUCTS LOGO] STANDARD MOTOR PRODUCTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of STANDARD MOTOR PRODUCTS, INC. (the "Company")
hereby appoints LAWRENCE I. SILLS and NATHANIEL L. SILLS, as Proxies, each with
the power to appoint his substitute, and hereby authorizes them to represent and
vote as designated below, all of the shares of the Company's Common Stock held
of record by the undersigned on April 10, 1998 at the annual meeting of the
shareholders of the Company to be held on May 21, 1998, or at any adjournment
thereof.
1. Election of Directors
/ / FOR all nominees listed below (except as marked to the contrary below)
/ / WITHHOLD AUTHORITY to vote for any individual nominee listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)
Marilyn F. Cragin, Arthur D. Davis, Susan F. Davis, Robert M.
Gerrity, John L. Kelsey, Andrew M. Massimilla, Arthur S. Sills,
Lawrence I. Sills, Nathaniel L. Sills, Robert J. Swartz and
William H. Turner
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
PLEASE DATE AND SIGN ON REVERSE SIDE
<PAGE> 13
<TABLE>
<S><C>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER.
IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR THE NOMINEES ON THE REVERSE
SIDE.
DATE :......................................1998
................................................
SIGNATURE
................................................
SIGNATURE IF HELD JOINTLY
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN
SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD
SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY PRESIDENT OR
OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP,
PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED
PERSON.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
</TABLE>
