SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by 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 ss. 240.14A-11(c) or ss. 240.14a-12
Standard Motor Products, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
<PAGE>
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: Common
Stock.
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):
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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 previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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3) Filing Party:
4) Date Filed:
<PAGE>
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
May 18, 2000
April 18, 2000
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, One Chase Manhattan Plaza, New York, NY 10081, on Thursday, the
18th day of May, 2000 at 2:00 o'clock in the afternoon (New York Time). Please
note that this location is a change from prior years. The meeting will be held
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.
2. To consider and vote upon management's proposal to amend the Company's
1994 Omnibus Stock Option Plan to increase the number of shares of the Company's
Common Stock available for issuance thereunder by 500,000 shares.
3 To consider and vote upon a shareholder proposal concerning preferred share
purchase rights; and
4. 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 in the preaddressed envelope, to which no postage need be affixed,
if mailed in the United States.
By Order of the Board of Directors
/S/ Sanford Kay
---------------
Sanford Kay
Secretary
<PAGE>
ONLY SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS
ON APRIL 7, 2000 WILL BE ENTITLED TO NOTICE OF OR TO VOTE AT
THE MEETING, OR ANY ADJOURNMENT THEREOF
STANDARD MOTOR PRODUCTS, INC.
37-18 NORTHERN BOULEVARD
LONG ISLAND CITY, N.Y. 11101
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 18,
2000, or at any adjournment thereof. Proxy material is being mailed on or about
April 18, 2000, to the Company's approximately 645 shareholders of record. The
total number of shares outstanding and entitled to vote on April 7, 2000, was:
Common Stock 12,902,322
The purposes of the annual meeting are: (1) to elect eleven directors, (2)
to consider and vote upon management's proposal to amend the Company's 1994
Omnibus Stock Option Plan to increase the number of shares available for
issuance thereunder by 500,0000, (3) to consider and vote upon a shareholder
proposal concerning preferred share purchase rights, and (4) to transact such
other business as may properly come before the meeting.
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, all of whom are currently
directors of the Company. 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, Kenneth A. Lehman, Arthur S. Sills, Lawrence
I. Sills, Nathaniel L. Sills, Robert J. Swartz and William H. Turner.
Proposal 2: Management's Proposal to Amend the Company's 1994 Omnibus Stock
Option Plan
The Board of Directors and its Compensation Committee believe that the
Company's long-term success is dependent upon its ability to attract and retain
outstanding individuals and to motivate them to exert their best efforts on
behalf of the Company's shareholders. The Board and the Committee believe that a
stock option plan is instrumental in fulfilling these goals. The Company's 1994
Omnibus Stock Option Plan (the "Plan") was originally approved by shareholders
at the Annual Meeting held in May, 1994. As originally approved, the Plan
authorized 400,000 shares of the Company's Common Stock to be made available for
the grant of stock options thereunder. At the 1997 Annual Meeting, the
shareholders authorized an amendment to the Plan to increase the number of
shares available for the grant of options thereunder by 600,000. At the present
time, except for 37,163 shares, all shares made available for issuance under the
Plan, as previously amended in 1997, have been fully utilized. Accordingly, the
Board and the Compensation Committee have approved, and are proposing to the
Company's shareholders, a further amendment to the Plan increasing the number of
shares available for issuance thereunder by 500,000 shares in addition to the
1,000,000 shares previously approved. Summary of Material Provisions of the
Plan.
<PAGE>
The amended Plan will authorize an additional 500,000 shares of the
Company's Common Stock for the grant of stock options. The amendment, however,
will not extend the duration of the Plan. No options may be granted under the
Plan after May 25, 2004. No individual grant can exceed 50,000 shares. The Plan
is administered by the Compensation Committee, none of the members of which is
eligible to participate in the Plan. The Committee has the power and complete
discretion to determine when to grant option awards, which eligible employees
will receive option awards, and the number of shares to be allocated to each
option award. The Committee may impose conditions on the exercise of options and
may impose such other restrictions and requirements as it may deem appropriate.
Officers and other key management employees of the Company and its subsidiaries
will be eligible to receive grants under the Plan.
If a grant is canceled, terminates or lapses unexercised, any shares
allocable to that grant may be subjected again to a new grant. Adjustments will
be made in the number of shares which may be issued under the Plan in the event
of a future stock dividend, stock split or similar pro rata change in the number
of outstanding shares of Common Stock or the future creation or issuance to
shareholders generally of rights, options or warrants for the purchase of Common
Stock or Preferred Stock. Stock option grants under the Plan may be either
incentive stock options or non-qualified stock options. No more than one grant
may be made to an individual in any calendar year. Incentive stock options
qualify for favorable income tax treatment under the Internal Revenue Code,
while non-qualified stock options do not. The option price of Common Stock
covered by a stock option may not be less than 100% of the fair market value of
the Common Stock on the date of the option grant. The value of incentive stock
options, based on the exercise price, that can be exercisable for the first time
in any calendar year under the Plan is limited by the Internal Revenue Code to
$100,000.
Options may only be exercised at such times as may be specified by the
Compensation Committee. The minimum period of time from date of grant that an
option vests (or becomes exercisable) is twelve months. Option grants may become
fully exercisable (vest) at one point in time or may have graded exerciseability
(vesting) in which case exerciseability will occur over a period of years. No
option may be exercised more than ten years from the date of grant. The
Compensation Committee may require that, for stock option grants in excess of a
specified number of shares, an optionee must directly own shares of the
Company's Common Stock whose fair market value bears a predetermined
relationship to the optionee's base salary, up to a maximum of 50% of the
optionee's base salary. Exercisability may be accelerated by the Compensation
Committee at any time after grant, and is accelerated automatically upon the
death or disability of the optionee. Upon termination of employment other than
for cause, an optionee will have ninety days to exercise any option grant that
is vested. Any option grant not exercised within that time period will be
forfeited. Forfeiture will automatically occur if the optionee's employment with
the Company is terminated for cause. Upon exercise, optionees may acquire their
shares by paying the exercise price to the Company in cash; by delivering or
causing to be withheld from the option shares, shares of the Company's Common
Stock the value of which is equal to the exercise price; or by delivering an
exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale or loan proceeds from the option
shares to pay the exercise price. The Plan provides that options granted
thereunder will become immediately and fully exercisable upon the occurrence of
either an Extraordinary Transaction or a Substantial Change in Ownership, in
each case as defined in the Plan. Generally speaking, an Extraordinary
Transaction would include
<PAGE>
(i) a liquidation or dissolution of the Company,
(ii) a reorganization, merger or consolidation in which the Company would
become a wholly-owned subsidiary of another corporation or would not be
the surviving corporation,
(iii) a sale of all or substantially all of the assets of the Company,
(iv) the commencement of a tender offer for the Common Stock of the Company,
or
(v) a change in a majority of the board of directors during any twelve month
period, subject to certain limitations and conditions. A Substantial
Change in Ownership would be deemed to have occurred if a person or group
unaffiliated with the Company were to acquire, directly or indirectly,
during any twelve month period, ownership of a sufficient number of
shares of Common Stock such that it was the owner of 25% or more of the
then current ordinary voting power of the Company's Common Stock.
No option may be sold, transferred, pledged, or otherwise disposed of,
other than by will or by the laws of descent and distribution. All rights
granted to a participant under the Plan shall be exercisable during his lifetime
only by such participant, or his guardians or legal representatives.
The Compensation Committee may at any time terminate or amend the Plan.
Notwithstanding the foregoing, neither the Compensation Committee, nor the Board
of Directors, may take any of the following actions unless the holders of a
majority of the Company's stock entitled to vote approve the same: (i)
materially increase the total number of shares for which options may be granted
under the Plan in the aggregate or to any one person, (ii) change the minimum
option price, (iii) permit an option to be exercised earlier than one year after
it is granted, (iv) extend the duration of the Plan or (v) take certain other
actions.
Federal Income Tax Consequences
An optionee will not incur Federal income tax liability when he or she is
granted an incentive stock option or a non-qualified stock option.
Upon exercise of an incentive stock option, an optionee generally will not
recognize income, unless he or she is subject to the alternative minimum tax.
Upon exercise of a non-qualified stock option, an optionee generally will
recognize compensation income, which is subject to income tax withholding by the
Company, equal to the difference between the fair market value of the Common
Stock on the date of the exercise and the option price.
The Company usually will be entitled to a tax deduction at the time and in
the amount that the optionee recognizes ordinary compensation income in
connection therewith. As stated above, this usually occurs upon exercise of
non-qualified options. No deduction is allowed in connection with an incentive
stock option, unless the employee disposes of Common Stock received upon
exercise in violation of the holding period requirements.
This summary of Federal income tax consequences of non-qualified stock
options and incentive stock options does not purport to be complete, and is
based upon interpretations of the existing laws, regulations and rulings which
<PAGE>
could be materially altered with enactment of any new tax legislation. There may
also be state and local income taxes applicable to these transactions. The Board
of Directors believes that approval of the amendment to the 1994 Omnibus Stock
Option Plan increasing the number of shares available for issuance thereunder by
500,000 is in the best interests of all shareholders. Your Board of Directors
recommends a vote for the above proposal.
Proposal 3. Shareholder Proposal Concerning Preferred Share Purchase Rights
GAMCO Investors, Inc., One Corporate Center, Rye, New York 10580-1434,
which claims beneficial ownership of 2,559,564 shares of the Company's common
stock (as shown in an amendment filed with the Securities and Exchange
Commission on November 4, 1999 with respect to its earlier Schedule 13D), has
submitted the following proposal:
"RESOLVED: that the shareholders of Standard Motor Products, Inc. (the
"Company") hereby request the Board of Directors to redeem the Preferred Share
Purchase Rights issued pursuant to the Rights Agreement dated as of February 15,
1996, unless said issuance is approved by the affirmative vote of a majority of
the outstanding shares at a meeting of the shareholders held as soon as
practical." The shareholder's statement in support of the proposal is as
follows:
"As of Feburary 15, 1996, the Board of Directors adopted a Rights
Agreement, which authorized the issuance of one Preferred Share Purchase Right
(the "Rights") for each outstanding share of common stock of the Company. These
Rights are a type of corporate anti-takeover device, commonly known as a "poison
pill."
"The Rights generally are exercisable when a person or group acquires a
beneficial interest in 20% or more of the common stock of the Company, or upon
the commencement or public announcement of the intention of any person to
commence a tender or exchange offer that would result in any person becoming the
beneficial owner of 20% or more of the Company's common stock. The result of the
issuance of the Rights is to vastly increase the cost to a potential bidder of
effecting any merger or tender offer that is not approved by the Board of
Directors. The Company may redeem the Rights for $.001 per Right.
"We believe the shareholders are entitled to decide on what is a fair price
for their holdings. However, as a consequence of the poison pill, potential
bidders for the Company's stock are forced to negotiate with management, and are
effectively precluded from taking their offer directly to the shareholders.
"The Board, in an effort to improve shareholder value, should redeem the
Rights or put their continuance to a shareholder vote as soon as practical."
GAMCO Investors, Inc. Urges Shareholders To Vote For This Resolution.
Your Board of Directors Recommends a Vote Against the Above Proposal.
The Board of Directors adopted the Company's Preferred Share Purchase
Rights Agreement in February 1996 to enhance the ability of the Board to
preserve and protect shareholder value in the event of certain unsolicited
takeover attempts. Similar rights plans have been adopted by a majority of the
corporations included in the Standard & Poor's 500.
The Board believes the Rights Agreement allows the Company to more
effectively address situations involving a potential change in control or sale
of our Company. A potential acquiror who obtained beneficial ownership of more
<PAGE>
than 20% of the Company's voting stock, without approval of the Board, would
risk substantial dilution of its holdings through operation of the Rights
Agreement. As a result, the Board believes that the Rights Agreement encourages
a potential acquiror to negotiate directly and in good faith with the Board. By
encouraging negotiation, the Rights Agreement puts the Board in a better
position to defend against unfair offers, such as coercive, partial or
two-tiered bids and stock accumulation programs in which all shareholders may
not share in the premium associated with a change in control. The Rights
Agreement also gives the Board, as elected representatives of the shareholders,
flexibility and a greater period of time within which it can properly evaluate
and determine if an offer reflects the full value of the company and is fair to
all shareholders, and if not, to reject the offer or to seek an alternative that
meets these criteria. The Rights Agreement is not intended to and will not
prevent a takeover on terms determined by the Board to be fair and equitable to
all shareholders. If the Board determines that an offer adequately reflects the
value of the Company and is in the best interests of all stockholders, the Board
may redeem the Rights.
A study released by Georgeson & Co. in November 1997 found that takeover
bids were actually more likely to be completed when the target had a rights
plan. Georgeson also concluded that, from 1992 to 1996, companies with rights
plans received an added $13 billion in additional takeover premiums than did
companies without rights plans. The Board's fiduciary duty to the shareholders
dictates that it evalute the merits of each and every acquisition proposal
presented to it and seek to insure that any proposed business combination or
acquisition delivers full value to the shareholders. The Board believes that the
adoption of a Rights Agreement is appropriately within the scope of
responsibilities of the Board of Directors, acting on behalf of the
shareholders. Redeeming the Rights would remove an important tool that the Board
believes it should have for the protection of shareholders. The Board therefore
believes that any decision to redeem the Rights should be made in the context of
a specific acquisition proposal.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL.
Information With Respect to Nominees and Major Shareholders Information
with respect to each nominee is set forth in Chart "A" on page 5. 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 6. Shares of Common Stock owned directly or held as trustee by Fife family
members aggregate 2,412,539 shares (18.7%). Shares of Common Stock owned
directly or held as trustee by Sills family members aggregate 2,579,570 shares
(20.0%). The 252,125 shares of Common Stock owned by charitable foundations of
which various members of the Fife and Sills families are trustees represent
1.95% 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 upon a 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, 1999 all
Section 16(a) filing requirements applicable to its officers and directors were
complied with.
<PAGE>
CHART A--INFORMATION ABOUT NOMINEES
<TABLE>
<CAPTION>
Has Shares of Common Stock
Office with Company and Served Beneficially Owned Directly
Principal Occupation as Director Indirectly as of
Name Age During the Past Five Years Since March 15, 2000*
---- --- -------------------------- ----- ---------------
<S> <C> <C> <C> <C>
Marilyn F. Cragin 48 Director of the Company (8) 1995 541,162 (
18,560 (1)
28,187 (2)
321,035 (3)
194,520 (4)
Arthur D. Davis 52 Director of the Company (9) 1986 87,369 (5)
182,617 (1)
160,517 (3)
Susan F. Davis 51 Director of the Company (10) 1998 465,036 (
31,600 (2)
160,517 (3)
194,520 (4)
Robert M. Gerrity 62 Director of the Company 1996 4,207 (
Chairman & CEO, Antrim
Group, Inc. (11)
John L. Kelsey 74 Director of the Company (12) 1964 5,888 (
Kenneth A. Lehman 56 Director of the Company 1999 - (
Co-President, KKP Group LLC (13)
Arthur S. Sills 56 Director of the Company (14) 1995 480,444 (
38,976 (1)
38,102 (2)
Lawrence I. Sills 60 Chief Executive Officer, 1986 597,201 (5)
President and Director 38,976 (1)
of the Company (15) 163,667 (6)
Nathaniel L. Sills 92 Chairman and Director (16) 1946 195,701 (5)
of the Company 179,602 (1)(7)
Robert J. Swartz 74 Director of the Company 1992 4,207 (
Former Senior Partner
of KPMG LLP (17)
William H. Turner 60 Director of the Company 1990 5,207 (
Chairman, PNC Bank,
N. A. New Jersey (18)
</TABLE>
- -------------------------
(1) Shares are subject to family trusts in which beneficial ownership is
disclaimed.
<PAGE>
(2) Held as custodian for minor children.
(3) Arthur D. Davis, Susan F. Davis, Marilyn F. Cragin and John Cragin
(Marilyn's husband) are trustees of various Fife family trusts which total
642,069 shares.
(4) Shares in the Estate of Bernard Fife of which Marilyn F. Cragin and Susan
F. Davis are Co-executors.
(5) Includes 4,816 and 4,621 shares allocated to the accounts of Lawrence I.
Sills and Nathaniel L. Sill, respectively, under the Company's ESOP and for
Lawrence I. Sills, 5,500 shares subject to options exercisable within 60
days of March 15, 2000.
(6) Shares in the Estate of Ruth Sills of which Lawrence I. Sills is Executor.
(7) Excludes 143,062 shares held in the Sills Family Foundation.
(8) Marilyn F. Cragin is an adult daughter of Bernard Fife (deceased) 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.
(9) 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.
(10) Susan F. Davis is an adult daughter of Bernard Fife, wife of Arthur D.
Davis and sister of Marilyn F. Cragin. She was elected a Director of the
Company on May 21, 1998.
(11) 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 Harnischfeger Industries Inc., Libralter Engineering
Systems Inc. and Birmingham Steel Inc.He was elected a Director of the
Company on July 18, 1996.
(12) Mr. Kelsey, now retired, was Advisory Director, PaineWebber Inc. in which
capacity his responsibilities included all facets of investment banking.
(13) Mr. Lehman has been the Co-President of the KKP Group LLC since 1999. Prior
to that he was the Co-Chairman and Chief Executive Officer of Fel-Pro
Incorporated from 1990 through December 31, 1998. He is also a Director of
Gold Eagle Co. He was elected a Director of the Company on December
15,1999.
(14) 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.
(15) 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.
(16) Nathaniel L. Sills has been Chairman and/or Co-Chairman of the Board since
1986.
<PAGE>
(17) Mr. Swartz was a senior partner in the accounting firm of KPMG LLP (and
predecessor firms). On March 31, 1991 Mr. Swartz retired from KPMG LLP and
is currently working as an independent financial consultant. He is the
President of 745 Service Corp. and a Vice President of The Alco Capital
Group. He is also a director of Bed Bath & Beyond, Inc.
(18) Mr. Turner assumed his present position on September 8, 1999. Prior to that
he was the President of PNC Bank, N.A. from August 1, 1997. 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., Volt Information Sciences, Inc. and New Jersey
Resources Corporation.
* Mrs. Marilyn F. 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.
<PAGE>
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 Percent of
Beneficial Owner Class as of March 15, 2000 Class
- ---------------- ------------ -------------------- -----
<S> <C> <C> <C>
Marilyn F. Cragin (10) Common
37-18 Northern Boulevard 541,162 ( 4.19
Long Island City, NY 18,560 (1) .14
28,187 (2) .22
321,035 (3) 2.49
194,520 (4) 1.51
Arthur D. Davis (11) Common
37-18 Northern Boulevard 87,369 (5) .68
Long Island City, NY 1 82,617 (1) 1.42
160,517 (3) 1.24
Susan F. Davis (12) Common
37-18 Northern Boulevard 465,036 ( 3.60
Long Island City, NY 31,600 (2) .24
160,517 (3) 1.24
194,520 (4) 1.51
Robert M. Gerrity
Common
114 Division Street 4,207 ( .03
Bellaire, MI .
John L. Kelsey Common
460 Coconut Palm Road 5,888 ( .05
Vero Beach, FL
Kenneth A. Lehman Common
2715 Sheridan Road - -
Evanston, IL
Arthur S. Sills (13) Common
37-18 Northern Boulevard 480,444 ( 3.72
Long Island City, NY 38,976 (1) .30
38,102 (2) .29
Lawrence I. Sills (14) Common
37-18 Northern Boulevard 597,201 (5) 4.63
Long Island City, NY 38,976 (1) .30
163,667 (6) 1.27
Nathaniel L. Sills Common
37-18 Northern Boulevard 195,701 (5) 1.52
Long Island City, NY 179,602 (1)(7) 1.39
Robert J. Swartz Common
1500 Palisade Avenue 4,207 ( .03
Ft. Lee, NJ
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial
Title of Address of Ownership Percent of
Beneficial Owner Class as of March 15, 2000 Class
- ---------------- ------------ -------------------- -----
<S> <C> <C> <C>
William H. Turner Common
2 Tower Center Blvd 5,207 ( .04)
East Brunswick, NJ 07 ( .04)
Directors and Officers as
a Group (nineteen persons) 4,253,209 (8) 32.97
GAMCO Investors, Inc. Common
One Corporate Center 2,559,564 (9) 19.84
Rye, NY
</TABLE>
- -------------------------
(1) Shares are subject to family trusts in which beneficial ownership is
disclaimed.
(2) Held as custodian for minor children.
(3) Arthur D. Davis, Susan F. Davis, Marilyn F. Cragin and John Cragin
(Marilyn's husband) are trustees of various Fife family trusts which total
642,069 shares.
(4) Shares in the Estate of Bernard Fife of which Marilyn F. Cragin and Susan
F. Davis are Co-executors.
(5) Includes 4,816 and 4,621 shares allocated to the accounts of Lawrence I.
Sills and Nathaniel L. Sill, respectively, under the Company's ESOP and for
Lawrence I. Sills, 5,500 shares subject to options exercisable within 60
days of March 15, 2000.
(6) Shares in the Estate of Ruth Sills of which Lawrence I. Sills is Executor.
(7) Excludes 143,062 shares of Common Stock held in the Sills Family
Foundation.
(8) Includes 15,146 shares allocated to all officers under the Company's ESOP
and 20,000 shares subject to options which are held by all officers and
which are exercisable within 60 days of March 15, 2000.
(9) In an amendment, dated November 4, 1999, to its Schedule 13D, GAMCO
Investors, Inc. stated that it and certain affiliated entities beneficially
owned an aggragate of 2,559,564 shares of the Company's Common Stock. As to
such shares GAMCO or its affiliates state that they have sole voting power
for 2,509,564.
(10) Marilyn F. Cragin is an adult daughter of Bernard Fife (deceased).
(11) Arthur D. Davis is an adult son-in-law of Bernard Fife.
<PAGE>
(12) Susan F. Davis is an adult daughter of Bernard Fife.
(13) Arthur S. Sills is an adult son of Nathaniel L. Sills and a brother of
Lawrence I. Sills.
(14) 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, 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. 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, Kenneth A.
Lehman, Robert J. Swartz and William H. Turner. During the period January 1,
1999 through November 29, 1999, Mr. Andrew M. Massimilla was a member of both
Committees. Mr. Massimilla resigned as of November 29, 1999 and was replaced by
Mr. Lehman on December 15, 1999. The Compensation Committee's function is to
approve the compensation packages (salary and bonus) of the Company's 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 two meetings in 1999. 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 1999. 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 $20,000 of which at least $7,500 must be in shares of
the Company's Common Stock valued as of the date of the Annual Meeting of
Shareholders. The Chairman of the Audit Committee receives an additional
retainer of $3,500. In addition, pursuant to the Company's Independent Outside
Directors' Stock Option Plan, the Outside Directors each received a stock option
grant of 2,000 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 the Annual Meeting of Shareholders. Outside Directors also received
$1,000 for each Board, Audit Committee and Compensation Committee meeting they
attended. Marilyn F. Cragin, Arthur D. Davis, Susan F. 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 1999 two executive officers, John P. Gethin, Senior Vice
President-Operations and James J. Burke, Vice President Finance-Chief Financial
Officer 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
<PAGE>
Option Plan are required to attain a Common Stock ownership position with a
market value equal to 50% of the grantee's base salary within a specified period
after the date of the original grant. The Compensation Committee permitted the
Company to make available to each grantee a loan to achieve 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 1997 Mr. Gethin borrowed $77,488 for the purchase of the Company's Common
stock to meet the above-mentioned stock ownership requirement. At March 31,
2000, the amount of this indebtedness was $50,469. In addition, Mr. Gethin has
an outstanding loan balance of $200,000 relating to his 1999 relocation to Texas
to fulfill his responsibilities as General Manager of the Company's Temperature
Control Division. This loan carries an interest rate equal to the Company's
short-term interest rate. The terms of repayment require equal annual principal
payments of one-fifth of the original principal plus accrued interest. The
payments are to be made in April of each year beginning April 2000.
In November 1999 Mr. Burke borrowed $79,943 for the purchase of the Company's
Common stock to meet the above-mentioned stock ownership requirement. At March
31, 2000, the amount of this indebtedness was $76,615.
<PAGE>
Executive Compensation
The following table sets forth the annual compensation for the Chief Executive
Officer and the five other most highly compensated executive officers of the
Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term All Other
Compensation Annual Compensation
--------------- -------------------------------
Name and Awards Compensation
Principal Other Stock Options
Position Year Salary Bonus Compensation (1) Granted (2)
-------- ---- ------ ----- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Lawrence I. Sills 1999 $300,000 $ 25,000 25,000 $ 22,913
Chief Executive Officer, 1998 290,000 264,271 -- 25,073
President and Director 1997 290,000 -- 40,000 18,426
John P. Gethin 1999 295,000 24,000 20,000 20,691
Senior Vice President 1998 275,000 242,249 -- 23,069
- Operations 1997 240,000 74,025 35,000 11,648
Joseph G. Forlenza 1999 280,000 26,640 15,000 20,375
Vice President and 1998 275,000 220,165 -- 29,653
General Manager 1997 265,000 62,600 23,000 18,480
Standard Division
Donald Herring 1999 194,000 11,097 15,000 13,049
Vice President 1998 189,000 121,162 -- 18,494
- - Aftermarket Sales 1997 184,000 26,819 23,000 11,435
Sanford Kay 1999 173,000 22,750 15,000 12,136
Vice President 1998 165,000 119,116 -- 18,102
- - Human Resources 1997 155,000 46,400 23,000 9,737
Michael J. Bailey (3) 1999 259,500 44,000 20,000 19,656
Senior Vice President 1998 250,000 222,526 -- 28,504
- -Administration &Finance 1997 230,000 74,875 35,000 14,781
</TABLE>
- -------------------------
(1) Does not include compensation associated with perquisites because such
amounts do not exceed the lesser of either $50,000 or 10% of total salary
and bonus disclosed.
(2) Represents company contributions to the Profit Sharing, 401K, ESOP and SERP
programs on behalf of the named individual.
(3) Mr. Bailey resigned from the Company on October 21, 1999.
<PAGE>
OPTION GRANTS IN THE LAST FISCAL YEAR
Potential Realizable
Value at Assumed
Annual Rates of
Stock Appreciation
<TABLE>
<CAPTION>
Individual Grants for Option Term (3)
% Of Total
Options/SARs
Options/ Granted to Exercise or
SARs Employees in Base Price Expiration
Name Granted(#) Fiscal Year ($/Sh) (1) Dates (2) 5% 10%
- ---- ---------- ----------- ---------- --------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Lawrence I. Sills 25,000 20% $22.84-24.84 5/27/05-5/27/07 $164,582 $363,856
John P. Gethin 20,000 16% 22.84-24.84 5/27/05-5/27/07 131,665 291,085
Joseph G. Forlenza 15,000 12% 22.84-24.84 5/27/05-5/27/07 98,749 218,314
Donald Herring 15,000 12% 22.84-24.84 5/27/05-5/27/07 98,749 218,314
Sanford Kay 15,000 12% 22.84-24.84 5/27/05-5/27/07 98,749 218,314
Michael J. Bailey 20,000 16% 22.84-24.84 5/27/05-5/27/07 131.665 291,085
</TABLE>
- -------------------------
(1) Stock options granted in 1999 vest equally over a three year period
beginning on the first anniversary of the grant. The exercise price in the
first year of vesting is $22.84 and increases by $1.00 each subsequent
year.
(2) Stock option grants expire at the rate of one-third of the total grant on
May 27th of each year beginning May 27, 2005.
(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
1999 by the Named Officers and the value of such Named Officers'
unexercised options at December 31, 1999.
AGGREGATED OPTION EXERCISES IN 1999
AND DECEMBER 31, 1999 OPTION VALUES
<TABLE>
<CAPTION>
(1) Number of Shares Underlying Value of Unexercised
Shares Unexercised Options at In-the-Money Options at
Acquired on Value Fiscal Year-End Fiscal Year-End (2)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence I. Sills -- -- 66,500 50,500 -- --
John P. Gethin -- -- 29,500 41,500 -- --
Joseph G. Forlenza 20,000 $152,200 23,500 30,500 -- --
Donald Herring 10,000 64,850 23,500 30,500 -- --
Sanford Kay 28,000 209,825 15,500 30,500 -- --
Michael J. Bailey 6,500 41,144 59,501 -- -- --
</TABLE>
<PAGE>
- -------------------------
(1) Market value of underlying securities on dates of exercise, minus exercise
price.
(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 $16.125 per share
on December 31, 1999 (the last trading day of 1999), minus the exercise
price. All of the stock options unexercised at December 31, 1999 have an
exercise price per share greater than the market value on December 31, 1999
($16.125) and, therefore, are not "In-the-Money."
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 officers, for administering
the Company's Stock Option Plans, 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. Simply stated, EVA is equal to net operating
profit after tax, less a charge for the cost of capital. Bonuses tied to EVA are
such that increasing EVA year over year will be favorable for the Company's
shareholders as well as those whose compensation is based on EVA. In the event
of decreasing EVA, (as was the case in 1999), bonuses will be affected
negatively to the point of erasing the portion based upon EVA. EVA bonuses
earned in any one year may not necessarily be paid out in full. In order to
promote longer-term shareholder improvement and to provide for years which may
produce "negative EVA" results, the entire bonus structure is monitored through
a "banking" feature. The "bank" allows only a portion of the year's earnings to
be paid out in any given year, saving the remainder for lean year's growth or
negative growth. Due to this feature, it is possible to receive a nominal
bonus in a poor year only because the individual has a bank upon which to draw.
It is also possible to completely exhaust the bank or create a negative bank.
Such is the case for most bonus participants in 1999. However, a floor of
negative 100% has been established in order to preserve an incentive for
continuous effort in future years. In the case of a negative bank, bonuses tied
to EVA would not be paid until the bank is once again positive as a result of
positive incremental changes in EVA.
The change to EVA 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:
o Provide a competitive total compensation package that enables the Company
to attract and retain key executive talent.
o Align all pay programs with the Company's annual and long-term strategies
and objectives.
o Provide variable compensation incentives directly linked to the performance
of the Company and improvement in shareholder return.
Under the EVA bonus program, the bonuses of the officers are based 80% on
year-over-year improvement in Company EVA and 20% on MBO goals approved by the
Compensation Committee. Earned MBO bonuses are paid out in full each year.
<PAGE>
As part of the Company's compensation program, the Compensation Committee,
from time to time, grants stock options to the Company's executive officers and
other key employees. This feature further strengthens the link between
continuous Company improvement and long-term compensation. These grants
generally include proportional vesting over multi-year periods at increasing
exercise prices. The grants also require a holding period before they may be
exercised. To gain access to the non-vested portions, executive officers must
retain ownership of specified numbers of shares of the Company's Common Stock.
Submitted by:
Robert M. Gerrity
John L. Kelsey
Kenneth A. Lehman
Robert J. Swartz
William H. Turner
<PAGE>
Five Year Performance Graph
Comparison of Five Year Cumulative Total Return*
[GRAPHIC - DATA POINTS LISTED BELOW]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
COMPANY/INDEX/PEER GROUP 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
STANDARD MOTOR PRODUCTS 100 78 74 120 129 90
S&P 500 INDEX 100 138 169 226 290 351
PEER GROUP 100 102 124 183 205 117
</TABLE>
For Standard Motor Products, Inc. S&P 500 Index and a Peer Group (1)
Assumes $100 invested on December 31, 1994 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 Federal-Mogul Corp., Dana Corp., Arvin Industries, Inc. and
R&B, Inc.
<PAGE>
Information as to Voting Securities
The close of business on April 7, 2000 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 18, 2000. 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 the record date. On that date 12,902,322 shares of
Common Stock were outstanding and entitled to vote. 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.
The close of business on April 7, 2000 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 18, 2000.
Votes Required
Nominees receiving a plurality of the votes cast will be elected as
directors. An affirmative vote of the holders of a majority of the outstanding
shares of Common Stock is required to approve the proposal to amend the stock
option plan and an affirmative vote of a majority of the votes cast at the
meeting is required to approve the shareholder proposal with respect to
preferred share purchase rights. Only those votes cast for or against a proposal
are used in determining the results of a vote. Abstentions are counted for
quorum purposes only. Broker non-votes have the same effect as abstentions.
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 beneficial
owners 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 LLP to audit the
accounts of the Company for the fiscal year ending December 31, 2000. Management
does not believe it is necessary for shareholders to ratify this appointment due
to the satisfactory services of KPMG 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 LLP was unanimously approved by the Audit Committee of the
Board of Directors. It is expected that representatives of KPMG LLP will be
present at the Annual Meeting of Shareholders with an opportunity to make a
statement if they so desire and to respond to questions.
<PAGE>
Shareholder Proposals for the 2001 Annual Meeting
Shareholder proposals intended to be presented at next year's 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, on or before December 19, 2000 for inclusion in the
Company's proxy statement and form of proxy relating to that meeting.
General
The Company's 1999 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
On the date this Proxy Statement went to press, management knew of no other
business that will be presented for action at the meeting. In the event that any
other business should come before the meeting, it is the intention of the
proxyholders named in the proxy card to take such action as shall be in
accordance with their best judgment.
By Order of the Board of Directors
/S/Sanford Kay
---------------
Sanford Kay
Secretary
Dated: April 18, 2000
<PAGE>
STANDARD MOTOR PRODUCTS, INC.
REVOCABLE PROXY
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
Annual Meeting of Shareholders
May 18, 2000
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 on this Proxy, all of the shares of the
Company's Common Stock held of record by the undersigned on April 7, 2000 at the
annual meeting of the shareholders of the Company to be held on May 18, 2000, or
at any adjournment thereof.
Please be sure to sign and date this Proxy in the box below.
-------------------------------
Date
-------------------------------
Shareholder sign above
-------------------------------
Co-holder (if any) sign above
- --------------------------------------------------------------------------------
1. Election of Directors
With- For All
[ ] For [ ] Hold [ ] Except
Marilyn F. Cragin, Arthur D. Davis, Susan F. Davis,
Robert M. Gerrity, John L. Kelsey, Kenneth A. Lehman,
Arthur S. Sills, Lawrence I. Sills, Nathaniel L. Sills,
Robert J. Swartz and William H. Turner
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
For Against Abstain
[ ] [ ] [ ]
2. Management's proposal to amend the Company's 1994 Omnibus Stock Option
Plan to increase the number of shares of the Company's Common Stock available
for issuance thereunder by 500,000 shares.
For Against Abstain
3. Shareholder proposal concerning preferred share purchase rights.
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting. THIS PROXY WILL BE VOTED AS
DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR ALL
OF THE NOMINEES NAMED ABOVE FOR PROPOSAL 2 AND AGAINST
PROPOSAL 3. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
Detach above card, sign, date and mail in postage paid envelope provided.
STANDARD MOTOR PRODUCTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Please sign exactly as your name appears on this card. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
