<PAGE>
LOGO
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SPS TECHNOLOGIES, INC.
101 GREENWOOD AVENUE, SUITE 470
JENKINTOWN, PENNSYLVANIA 19046
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
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THE ANNUAL MEETING OF SHAREHOLDERS OF SPS TECHNOLOGIES, INC. WILL BE HELD ON
TUESDAY, APRIL 30, 1996, AT TEN O'CLOCK A.M., LOCAL TIME, AT 17 MELLON BANK
CENTER, 1735 MARKET STREET, PHILADELPHIA, PENNSYLVANIA 19101, IN THE FORUM ROOM
(EIGHTH FLOOR), FOR THE FOLLOWING PURPOSES:
1. To elect two Class III directors for a term of three years;
2. To transact such other business as may properly come before the meeting or
any adjournments or postponements thereof.
All shareholders are cordially invited to attend the meeting. Shareholders of
record at the close of business on March 12, 1996 will be entitled to vote at
the meeting.
Aaron Nerenberg
Secretary
March 28, 1996
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YOUR VOTE IS IMPORTANT
You are urged to mark, sign, date and promptly return your proxy in
the enclosed envelope.
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<PAGE>
PROXY STATEMENT
===============================================================================
GENERAL
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This proxy statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Shareholders of SPS Technologies, Inc.
("Company"), to be held on Tuesday, April 30, 1996, and at any adjournments or
postponements thereof. This proxy statement and the enclosed form of proxy are
first being mailed to shareholders on or about March 28, 1996.
Shareholders are requested to mark, sign, date and return in the envelope
provided, the enclosed proxy which is being solicited by the Board of Directors
of the Company. No postage is required if the proxy is returned in the enclosed
envelope and mailed in the United States.
Execution of the enclosed proxy will not affect a shareholder's right to
attend the meeting and vote in person. The proxy is revocable by delivering
written notice of revocation to the Secretary of the Company at any time before
the proxy is voted, by a properly executed, later-dated proxy, or by attending
the meeting and voting in person.
The cost of soliciting proxies will be paid by the Company. The Company will
reimburse brokers, custodians, nominees and fiduciaries for the cost of
forwarding materials to beneficial owners. Proxies may be solicited by
directors, officers and employees, but such persons will not be specially
compensated for such services.
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Voting Information
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Only record holders of Common Stock of the Company at the close of business
on March 12, 1996, are entitled to vote. On that date there were issued and
outstanding 5,946,880 shares of Common Stock, par value $1.00 per share, each of
which is entitled to one vote and which, in the election of directors, has
cumulative voting rights. This means that shareholders have the right to
multiply the number of votes to which they may be entitled by the total number
of directors to be elected in the same election and may cast the whole number of
such votes for one nominee or may distribute them among any two or more
nominees. Proxy holders may vote cumulatively for any or all of the nominees,
and it is the Company's intention to have the proxy holders exercise such
cumulative voting rights to elect the maximum number of nominees proposed by the
Board of Directors.
Shares represented by proxies in the accompanying form, unless otherwise
directed, will be voted at the Annual Meeting or any adjournments or
postponements thereof FOR the election of directors as stated under the
heading "Election of Directors." Management does not intend to bring any
other matters before the meeting, and it does not know of any additional
proposals to be presented by others. However, if any other matters properly
come before the meeting, the persons named in the accompanying proxy will
vote thereon in accordance with their best judgment. Under the Company's
By-laws, proposals of shareholders to be presented at the meeting must be
submitted in accordance with the procedures summarized below under the
heading "Proposals of Shareholders."
<PAGE>
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Ownership of Voting Securities
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As of February 29, 1996, the following persons were known by the Company to
be the principal beneficial owners of the voting securities of the Company:
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<TABLE>
<CAPTION>
Name and Address Amount and Nature of Beneficial
of Beneficial Owner Ownership of Shares of Common Stock Percent of Class
- --------------------------------------------------------------------------------------
<S> <C> <C>
Gabelli Funds, Inc.,
GAMCO Investors, Inc., and
Mario J. Gabelli
One Corporate Center
Rye, NY 10580-1434 1,581,700(a) 26.6%
Tinicum Enterprises, Inc.,
Tinicum Investors,
RIT Capital Partners plc,
RUTCO Incorporated,
J. Rothschild Capital
Management Limited,
St. James's Place
Capital plc,
Putnam L. Crafts, Jr.,
James H. Kasschau,
Derald H. Ruttenberg,
Eric M. Ruttenberg,
John C. Ruttenberg,
Katherine T. Ruttenberg, and
Hattie Ruttenberg
990 Stewart Avenue
Garden City, NY 11530 994,945(b) 16.7%
Anne Hallowell Miller
c/o Stacey W. McConnell
MacElree, Harvey, Gallagher
& Featherman, Ltd.
P.O. Box 660
West Chester, PA 19381-0660 286,440(c) 4.8%
Howard T. Hallowell III
c/o Stacey W. McConnell
MacElree, Harvey, Gallagher
& Featherman, Ltd.
P.O. Box 660
West Chester, PA 19381-0660 271,105(d) 4.6%
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</TABLE>
(a) Based on information supplied by the named entities in a joint filing on
Schedule 13D made on October 19, 1995, with the Securities and Exchange
Commission. According to such filing, the named entities held sole,
shared or no voting and dispositive power over the shares as follows:
Gabelli Funds, Inc. -- 182,600 shares (shared voting and sole dispositive
power), GAMCO Investors, Inc. -- 1,265,340 shares (sole voting and
dispositive power) and 126,500 shares (no voting and sole dispositive
power). Mr. Mario J. Gabelli is the majority stockholder of Gabelli
Funds, Inc. and individually owns 7,260 shares (sole voting and
dispositive power) of the Company's Common Stock.
2
<PAGE>
(b) Based on information supplied by the named entities in a joint filing on
Schedule 13D made on January 26, 1996, with the Securities and Exchange
Commission. According to such filing, the named entities held sole, shared
or no voting and dispositive power over the shares as follows: Tinicum
Enterprises, Inc. (no voting or dispositive power); Tinicum Investors, --
629,339 shares (sole voting and dispositive power); RIT Capital Partners plc
(RIT) -- 132,311 shares (shared voting and dispositive power); RUTCO
Incorporated (no voting or dispositive power); J. Rothschild Capital
Management Limited (JRCML) (no voting or dispositive power); St. James's
Place Capital plc. (no voting or dispositive power); Putnam L. Crafts, Jr.
-- 100,000 shares (sole voting and dispositive power); James H. Kasschau --
10,000 shares (sole voting and dispositive power); Derald H. Ruttenberg --
24,446 shares (sole voting and dispositive power); Eric M. Ruttenberg --
25,511 shares (sole voting and dispositive power); John C. Ruttenberg --
24,446 shares (sole voting and dispositive power); Katherine T. Ruttenberg
-- 24,446 shares (sole voting and dispositive power); and Hattie Ruttenberg
-- 24,446 shares (sole voting and dispositive power). The filing indicates
that pursuant to a discretionary management agreement between RIT and JRCML,
JRCML serves as the investment manager of RIT's investment portfolio and
pursuant to such agreement has the authority on behalf of RIT to vote and
dispose of RIT's shares. Eric M. Ruttenberg, a director of the Company, is a
stockholder, director and executive officer of Tinicum Enterprises, Inc. and
a general partner of Tinicum Investors.
(c) Based on information supplied by Mrs. Miller to the Company. According to
such information, the shareholdings indicated by Mrs. Miller include 1,236
shares held in a fiduciary capacity in which she has a beneficial interest
and shared voting and dispositive power, and 285,204 shares held by Mrs.
Miller as to which she has sole voting and dispositive power. The amount of
shares held and percent of ownership shown does not include 50,000 shares
held by the Hallowell Foundation, established in 1956 by H. Thomas
Hallowell, Jr., of which the Company is informed Mrs. Miller is a trustee.
Mrs. Miller has disclaimed beneficial ownership of such shares.
(d) Based on information supplied by Mr. Hallowell to the Company. According to
such information, the shareholdings indicated by Mr. Hallowell include 245
shares held in a fiduciary capacity in which he has a beneficial interest
and shared voting and dispositive power, and 270,860 shares held by Mr.
Hallowell as to which he has sole voting and dispositive power. The amount
of shares held and percent of ownership shown does not include 50,000 shares
held by the Hallowell Foundation, of which the Company is informed Mr.
Hallowell is a trustee. Mr. Hallowell has disclaimed beneficial ownership of
such shares.
3
<PAGE>
Information pertaining to the voting securities of the Company beneficially
owned, as of February 29, 1996, by each director, by the Chief Executive Officer
and the four other most highly compensated executive officers, and by the group
consisting of such persons and the Company's other executive officers (the
"Group") is set forth below. This information has been supplied in each instance
by the individuals involved.
<TABLE>
<CAPTION>
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Name of Individual or Amount and Nature of Acquirable
Number of Beneficial Ownership of Shares Within Percent of Class
Persons in Group of Common Stock(a) 60 Days(b) If 1% or More
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles W. Grigg 12,008 154,000 2.7%
Howard T. Hallowell III 271,105 0 4.6%
Richard W. Kelso 570 0 --
Dr. John F. Lubin 886 1,619 --
Eric M. Ruttenberg 25,511(c) 2,410 --
Raymond P. Sharpe 2,065 531 --
Harry J. Wilkinson 12,065 62,283 1.2%
John P. McGrath 3,045 27,644 --
Aaron Nerenberg 3,365 20,202 --
William M. Shockley 2,226 8,400 --
All Directors and Executive
Officers as a Group (12
persons) 333,770 290,889 10.0%
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</TABLE>
(a) The individuals named in the table or included in the Group each exercise
sole voting and dispositive power over the shares beneficially owned by them
except for 5,938 shares held by certain members of the Group, over which
such members have shared voting and dispositive power. The total includes
210 shares held by an executive officer not named in the table, as to which
he disclaims beneficial ownership and has no voting or dispositive power.
(b) Represents shares which may be acquired within 60 days of February 29, 1996,
through the exercise of stock options under the SPS 1988 Long Term Incentive
Stock Plan.
(c) The indicated shares of Common Stock are beneficially owned directly by Mr.
Ruttenberg. Mr. Ruttenberg is a general partner of Tinicum Investors, a
Delaware partnership ("Investors"), that had direct beneficial ownership of
629,339 shares of Common Stock as of February 29, 1996. Based on
understandings with certain other beneficial owners of Common Stock
described in a Statement on Schedule 13D dated January 26, 1996, Mr.
Ruttenberg and Investors may be deemed to have indirect beneficial ownership
of an additional 340,095 shares of Common Stock beneficially owned directly
by such other beneficial owners as of February 29, 1996. Mr. Ruttenberg
disclaims beneficial ownership of any shares of Common Stock beneficially
owned directly by Investors or such other beneficial owners.
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Election of Directors
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The Company currently has seven directors serving in three classes,
consisting of one class of three members and two classes of two members each.
The term of office of one class will expire each year. Members of each class are
elected for terms of three years, except in the case of a vacancy in any class,
in which case the vacancy may be filled by the Board of Directors for the
balance of the term of the class in which the vacancy exists.
The terms of office of the two Class III directors expire this year.
Accordingly, shareholders are being asked to elect two Class III directors who
will hold office until the 1999 Annual Meeting of Shareholders and until their
successors are duly elected and qualified. Unless you indicate otherwise, your
proxy will be voted in favor of the election of each of the nominees named below
for a three-year term. Should any nominee become unavailable for election for
any unforeseen reason, the Board of Directors or the Executive Committee of the
Board of Directors will determine how the proxies will be voted. The two
nominees receiving the highest number of votes cast at the meeting will be
elected as Class III directors.
4
<PAGE>
Listed below are the names of, and certain other information respecting the
two nominees for election as Class III directors, and the other five directors
who will be continuing in office following the meeting.
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CLASS III - NOMINEES FOR A THREE-YEAR TERM
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Harry J. Wilkinson
Age: 58 Director since 1986
President and Chief Operating Officer of the Company since prior to 1991. A
director of Drexelbrook Engineering Co. and Flexible Circuits, Inc.
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Eric M. Ruttenberg
Age: 40 Director since 1991
General Partner of Tinicum Investors, an investment management company, since
prior to 1991. A director of Kollmorgen Corporation and Environmental
Strategies Corporation; Trustee, Mount Sinai Medical Center.
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CLASS II - DIRECTORS WITH TERMS EXPIRING IN 1997
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Dr. John F. Lubin
Age: 69 Director since 1979
Educator, University of Pennsylvania since 1949 and a Professor of
Management, The Wharton School, University of Pennsylvania, from 1968 until
his retirement as Professor Emeritus in 1992.
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Raymond P. Sharpe
Age: 47 Director since 1994
Executive Vice President of Cookson America, Inc., a manufacturer of industrial
materials, and Chief Operating Officer of the Electronic Materials Division, a
supplier of special chemicals, metals, printed circuit board laminates and
equipment to the printed circuit board fabrication and electronic assembly
market, since 1994. President of the Electronic Materials Division since prior
to 1991. A director of Cookson Group plc and Hisco Corporation; Trustee, St.
Andrews School.
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5
<PAGE>
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CLASS I - DIRECTORS WITH TERMS EXPIRING IN 1998
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Howard T. Hallowell III
Age: 61 Director since 1992
Economist, since prior to 1991 until his retirement in July, 1994, at Eastman
Kodak Company, a leading manufacturer of photographic equipment and supplies.
A director of PMHP Inc.; Trustee of the Hallowell Foundation.
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Charles W. Grigg
Age: 56 Director since 1993
Chairman of the Board and Chief Executive Officer of the Company since
December 1, 1993. Previously, since prior to 1991, President and Chief
Operating Officer of Watts Industries, Inc., a manufacturer of valve
products.
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Richard W. Kelso
Age: 58 Director since 1995
President and Chief Executive Officer of PQ Corporation, a global manufacturer
of inorganic chemicals, high performance catalysts and functional glass products
since 1991. A director of PQ Corporation and the World Affairs Council of
Philadelphia.
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Board Meetings, Committees and Compensation of Directors
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During 1995, there were six meetings of the Board of Directors of the
Company. Throughout 1995 there was an Executive Compensation and Stock Option
Committee, a Directors Committee and an Audit Committee.
The Executive Compensation and Stock Option Committee, composed of Messrs.
Sharpe (Chairman), Hallowell, Lubin and Ruttenberg, held one meeting in 1995.
Paul F. Miller, Jr., the former Chairman of this Committee throughout 1995,
retired at the end of the year. The Committee's function is to fix the salaries
and other compensation of all officers and key executives of the Company other
than the Chief Executive Officer and the President of the Company (whose
compensation is fixed by the Board of Directors), to evaluate the Company's
executive compensation programs to insure that they remain effective in
retaining and attracting managerial talent, and to administer certain of the
Company's executive incentive compensation and stock option plans, including the
granting of awards as provided in those plans.
The Directors Committee of the Board of Directors, composed of Messrs. Lubin
(Chairman), Grigg, Ruttenberg and Sharpe, held one meeting in 1995. Its
functions are to nominate candidates for election to the Board of Directors,
recommend nominees for service on its standing committees, review programs for
senior management succession, make recommendations to the Board on matters of
directors' compensation, benefits, retirement and tenure policy, and consider
nominees for director recommended by shareholders.
The Directors Committee will consider shareholder nominations in accordance
with the Company's By-laws, as approved by shareholders. To be considered,
notice of a nomination must be received not less than 60 days before the date of
the relevant Annual Shareholders' Meeting. Such notice must include (i) the name
and address of the nominating shareholder, (ii) a representation that the
shareholder is entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting, (iii) the name, age, business and residence
addresses and principal occupation of such proposed nominee, (iv) a description
of any and all arrangements or understandings between the shareholder and each
6
<PAGE>
proposed nominee, (v) such other information as would be required by the
Securities and Exchange Commission to be included in a proxy statement
soliciting proxies for the election of the proposed nominee, and (vi) the signed
consent of each such individual to serve as director if elected. The Board may
require any proposed nominee to furnish other information reasonably required to
determine the proposed nominee's eligibility and qualifications to serve as a
director. Under Pennsylvania law, to be eligible, a nominee must be an
individual 18 years of age or older. Factors relevant to a nominee's
qualifications would include his or her experience or lack thereof in managing
business enterprises, service on other boards of directors, potential or actual
conflicts of interest, expertise in a field related to the Company's business,
criminal record and other similar information. If the Board (after affording the
shareholder a reasonable opportunity to cure any deficiency in the original
notice) determines that an individual was not proposed in accordance with the
By-laws, then such individual would not be eligible for nomination and election
as a director. If a nominee is determined to have been properly proposed by a
shareholder, and the Directors Committee determines not to nominate the person,
the shareholder proposing such person may nominate the candidate at the meeting.
A copy of the Company's By-laws specifying the requirements for nominations for
director will be furnished to any shareholder without charge upon written
request to the Secretary of the Company.
The Audit Committee of the Board of Directors, composed of Messrs. Ruttenberg
(Chairman), Hallowell, Kelso, Lubin, and Sharpe, held two meetings in 1995. Mr.
Miller was a member of this Committee throughout 1995 until his retirement at
the end of the year. The Committee's functions include meeting periodically with
the Company's management, internal auditors and independent certified public
accountants to review with each whether they are properly discharging their
respective responsibilities. In addition, this committee is responsible for
recommendations to the Board of Directors in the selection and retention of the
Company's independent certified public accountants, for establishing the scope
of their accounting services and for approval of related fees.
In 1995, all of the directors attended more than 75% of the aggregate of the
meetings of the Board and the committees of the Board on which they served.
7
<PAGE>
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EXECUTIVE COMPENSATION
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The following table sets forth, for the Company's fiscal years ended December
31, 1993 through 1995, the total annual and long-term compensation of the
Chairman and Chief Executive Officer and the four other most highly compensated
executive officers other than the Chairman and Chief Executive Officer (the
"Named Officers").
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Summary Compensation Table
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
- -----------------------------------------------------------------------------------------------------------------------------------
Awards Payouts
------------------------- ------------
Securities
Underlying Long-Range All Other
Other Annual Restricted Options Incentive Compen-
Name and Salary Bonus Compensation Stock Granted Bonus sation
Principal Position Year ($)(1) ($)(2) ($)(3) ($)(4) (#) ($)(5) ($)(6)
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles W. Grigg 1995 443,333 210,895 13,171 54,417 20,000 54,417 9,225
Chairman and 1994 400,000 150,000 8,318 0 0 0 51,474
Chief Executive Officer 1993 33,333 0 1,000 0 150,000 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Harry J. Wilkinson 1995 310,000 108,717 49,882 25,113 5,000 25,113 11,032
President and 1994 300,000 56,220 28,792 0 5,000 0 7,182
Chief Operating Officer 1993 293,333 0 39,571 0 0 0 7,012
- -----------------------------------------------------------------------------------------------------------------------------------
John P. McGrath 1995 159,000 31,800 6,720 5,506 2,000 10,225 3,099
Vice President, 1994 154,000 34,804 1,247 0 2,000 0 2,925
Corporate Services 1993 149,333 0 4,654 0 0 0 1,853
- -----------------------------------------------------------------------------------------------------------------------------------
Aaron Nerenberg 1995 141,000 42,300 7,321 4,883 2,000 9,068 2,616
Vice President, Secretary 1994 136,000 33,456 2,036 0 2,000 0 1,670
and General Counsel 1993 132,667 0 5,165 0 0 0 1,616
- -----------------------------------------------------------------------------------------------------------------------------------
William M. Shockley 1995 125,800 37,490 0 6,827 15,000 10,240 272
Vice President, Chief 1994 105,000 25,830 0 0 7,500 0 229
Financial Officer and 1993 95,000 0 0 0 0 0 199
Controller
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</TABLE>
1. Amounts shown include amounts (where applicable) deferred by the
Named Officers under the Company's Executive Deferred Compensation
Plan.
2. Amounts shown reflect cash payments to the Named Officers under the
Company's Management Incentive Plan.
3. Amounts shown include directors' fees for 1995 through 1993, respectively as
follows for Mr. Grigg -- $5,000, $7,000, and $1,000; and for Mr. Wilkinson --
$5,000, $7,000, and $7,000. Amounts shown also reflect, for each of the Named
Officers, interest accrued in excess of 120% of the applicable federal
long-term rate with respect to the Company's Executive Deferred Compensation
Plan.
4. Restricted stock awards were made for the dollar values shown pursuant to the
Company's Long Range Incentive Plan on February 1, 1996 at the fair market
value of the Company's common stock of $54 per share on that date under the
SPS 1988 Long-Term Incentive Stock Plan to the Named Officers in the
following amounts -- Mr. Grigg (1008 shares); Mr. Wilkinson (465 shares); Mr.
McGrath (102 shares); Mr. Nerenberg (90 shares); and Mr. Shockley (126
shares). The restrictions lapse on 20% of the shares each year on the
anniversary date of the award for the next five years, after which all
restrictions will have lapsed.
5. Amounts shown reflect cash payments to the Named Officers under the Company's
Long Range Incentive Plan.
6. Amounts shown include payments by the Company on behalf of the Named Officers
for term life insurance and, in the case of Mr. Wilkinson, deemed
compensation under a Split Dollar Life Insurance Plan, for the years 1995
through 1993, respectively, as follows: $538, $882, and $881. In the case of
Mr. Grigg, the amount shown for 1994 includes $43,636 representing payment
for purchase of an automobile from his previous employer including all
federal and state income taxes resulting from such payment, as specified in
his Employment Agreement.
8
<PAGE>
The following tables provide information concerning the number and value of
option grants during the last year and the number and value of options to
purchase the Company's Common Stock held by each of the Named Officers as of
December 31, 1995. All options outstanding were granted under the SPS 1988 Long
Term Incentive Stock Plan at 100% of the fair market value of the Company's
Common Stock on the date of grant. The vesting provisions of the options are
determined by the Executive Compensation and Stock Option Committee.
- -------------------------------------------------------------------------------
Option Grants in Last Year
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Potential Realizable
Value at
Assumed Annual Rates of
Stock
Price Appreciation for
Individual Grants Option Term
- ---------------------------------------------------------------------------------------------------------
% of Total
Options
Number of Granted to
Securities All
Underlying Employees Exercise
Options in Last Price Expiration
Name Granted Year ($/Sh) Date 5% ($) 10% ($)
=========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Charles W. Grigg 20,000 18% 28.4375 Feb. 6, 2005 357,684 906,441
- ---------------------------------------------------------------------------------------------------------
Harry J. Wilkinson 5,000 4% 28.4375 Feb. 6, 2005 89,421 226,610
- ---------------------------------------------------------------------------------------------------------
John P. McGrath 2,000 2% 28.4375 Feb. 6, 2005 35,768 90,644
- ---------------------------------------------------------------------------------------------------------
Aaron Nerenberg 2,000 2% 28.4375 Feb. 6, 2005 35,768 90,644
- ---------------------------------------------------------------------------------------------------------
William M. Shockley 5,000 4% 28.4375 Feb. 6, 2005 89,421 226,610
10,000 9% 39.50 July 24, 2005 248,413 629,528
- ---------------------------------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
Aggregated Option Exercises and Year-End Option Value Table
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Number of Value of Unexercised
Unexercised "In-the-Money"
Options at Options at Year-End
Year-End ($)(1)
Number of
Shares Dollar
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
===========================================================================================
<S> <C> <C> <C> <C>
Charles W. Grigg(2) 0 0 90,000/80,000 2,857,500/2,403,750
- -------------------------------------------------------------------------------------------
Harry J. Wilkinson 0 0 60,283/9,000 1,540,713/244,688
- -------------------------------------------------------------------------------------------
John P. McGrath 0 0 26,844/3,600 669,705/97,875
- -------------------------------------------------------------------------------------------
Aaron Nerenberg 0 0 19,402/3,600 452,858/97,875
- -------------------------------------------------------------------------------------------
William M. Shockley 0 0 5,900/21,000 189,650/443,438
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Value of unexercised options based on the year end, December 29, 1995, stock
price of $53.375 per share.
(2) Mr. Grigg received an option grant of 150,000 shares under the SPS 1988 Long
Term Incentive Stock Plan ("Plan") on December 1, 1993, upon being elected
Chairman and Chief Executive Officer of the Company. The number of options
set forth below opposite the target price become vested and exercisable when
the closing sale price of the Company's Common Stock, as reported on the New
York Stock Exchange Composite Tape, equals or exceeds the target price set
forth below for at least forty-five trading days in any period of sixty
consecutive trading days. As of January 23, 1996, all 150,000 options became
fully vested and exercisable.
9
<PAGE>
Target Price Number of Options Vested and Exercisable
------------ ----------------------------------------
$28.125 45,000
$34.60 45,000
$43.25 60,000
Mr. Grigg was granted 20,000 options on February 7, 1995 at a exercise price
of $28.4375 per share which vest 20% per year on the anniversary date of the
grant for the next five years.
The Stock Option Agreement contains certain resale restrictions. The total
shares of Common Stock issued pursuant to the option grant of December 1, 1993
(150,000) shall not be sold more quickly than as follows:
Time Period Cumulative Percent Which May Be Sold
-------------------------- ----------------------------------------
12/1/94 to 11/30/95 20%
12/1/95 to 11/30/96 40%
12/1/96 to 11/30/97 60%
12/1/97 to 11/30/98 80%
12/1/98 and thereafter 100%
- -------------------------------------------------------------------------------
Pension Benefits
- -------------------------------------------------------------------------------
The following table shows the amount of the total annual pension which a
Named Officer (with the exception of Messrs. McGrath, Nerenberg and Shockley)
would receive at age 65 for the years-of-service indicated under the Company's
(i) Retirement Income Plan (RIP), a qualified cash balance plan in which the
benefit is determined by Company contribution credits based on age and service,
and interest credits based on one-year Treasury rates; (ii) Benefit Equalization
Plan (BEP), a non-qualified unfunded plan which makes up retirement benefit
reductions under RIP due to ceilings established by the Internal Revenue Code
and/or reductions due to participation in the Executive Deferred Compensation
Plan; and (iii) Supplemental Executive Retirement Plan (SERP), a non-qualified
unfunded plan in which an enhanced retirement benefit is accrued based upon
highest average pensionable earnings and years-of-service.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PENSION PLAN TABLE
- ---------------------------------------------------------------------------------------
Years of Service
- ---------------------------------------------------------------------------------------
Average Pensionable
Earnings for
Highest
Five-Year Period
Preceding 5 Years 10 Years 20 Years 30 Years 40 Years
Retirement Service Service Service Service Service
=======================================================================================
<S> <C> <C> <C> <C> <C>
$150,000 $ 28,476 $ 50,976 $ 89,976 $104,976 $104,976
- ---------------------------------------------------------------------------------------
200,000 32,976 62,976 114,976 134,976 134,976
- ---------------------------------------------------------------------------------------
250,000 37,476 74,976 139,976 164,976 164,976
- ---------------------------------------------------------------------------------------
300,000 41,976 86,976 164,976 194,976 194,976
- ---------------------------------------------------------------------------------------
350,000 46,476 98,976 189,976 224,976 224,976
- ---------------------------------------------------------------------------------------
400,000 50,976 110,976 214,976 254,976 254,976
- ---------------------------------------------------------------------------------------
450,000 55,476 122,976 239,976 284,976 284,976
- ---------------------------------------------------------------------------------------
500,000 59,976 134,976 264,976 314,976 314,976
- ---------------------------------------------------------------------------------------
</TABLE>
Pensionable earnings with respect to the Named Officers are based solely on
the amounts shown in the salary column of the Summary Compensation Table.
10
<PAGE>
As of December 31, 1995, the years of credited service for the Named
Officers were as follows: C. W. Grigg -- 2; H. J. Wilkinson -- 30; J. P.
McGrath -- 37; A. Nerenberg -- 21; W. M. Shockley -- 4.
The total annual payments represent the straight life annuity amounts payable
at age 65 including primary social security benefits and benefits provided under
RIP, BEP and SERP, for the years of service indicated in the Pension Table.
Participants under the RIP and BEP receive quarterly statements evidencing an
accrued benefit in the form of a present value lump sum which grows through
Company contribution credits and interest credits based on one-year Treasury
rates. The Company contribution credits are determined on the basis of age and
service points, as follows:
- ----------------------------------------------------------------
Company
Contribution as % of Earnings:
- ----------------------------------------------------------------
Age and Service Under SS Over SS
Points *Wage base *Wage base **Supplemental
================================================================
0-27 1.250% 2.500% 0.000%
- ----------------------------------------------------------------
28-35 1.625% 3.250% 0.000%
- ----------------------------------------------------------------
36-43 2.000% 4.000% 0.000%
- ----------------------------------------------------------------
44-51 2.500% 5.000% 0.000%
- ----------------------------------------------------------------
52-59 3.125% 6.125% 0.000%
- ----------------------------------------------------------------
60-67 3.750% 6.750% 1.500%
- ----------------------------------------------------------------
68-75 4.625% 7.625% 1.850%
- ----------------------------------------------------------------
76-83 5.625% 8.625% 2.250%
- ----------------------------------------------------------------
84-91 6.750% 9.750% 2.700%
- ----------------------------------------------------------------
92 and over 8.125% 11.125% 3.250%
- ----------------------------------------------------------------
* For 1996, the Social Security (SS) wage base is $62,700.
** Supplemental credits are available only to those active participants who had
60 or more total age and service points as of December 31, 1994, the date of
the cash balance plan inception.
The estimated total annual life annuity benefits payable upon retirement at
the normal retirement age of 65 from the RIP and BEP only, for each of the Named
Officers, are as follows:
- ----------------------------------------------------------------------------
Date Years of Service
Named Officer at Age 65 at Age 65 Annual Benefit
============================================================================
Charles W. Grigg June, 2004 10 $ 49,600
- ----------------------------------------------------------------------------
Harry J. Wilkinson November, 2002 37 183,600
- ----------------------------------------------------------------------------
John P. McGrath August, 2004 45 97,500
- ----------------------------------------------------------------------------
Aaron Nerenberg September, 2005 31 58,900
- ----------------------------------------------------------------------------
William M. Shockley August, 2026 34 166,500
- ----------------------------------------------------------------------------
11
<PAGE>
- ------------------------------------------------------------------------------
Compensation of Directors
- ------------------------------------------------------------------------------
Each director who is not an employee of the Company receives an annual
retainer of $17,000 plus a fee of $1,000 for each meeting of the Board of
Directors or one of its committees attended by him. Each director who is an
employee of the Company receives a fee of $1,000 for each meeting of the Board
of Directors attended by him. Each non-employee director on May 2, 1995 received
a restricted stock award in the amount of $25,000, or 765 shares, based upon the
fair market value of the Company's common stock on that date of $32.6875 per
share. Mr. Kelso, who was appointed as a director on October 24, 1995, received
a pro rata restricted stock award in the amount of $22,500, based upon the
number of months remaining until May 2, 2000, in accordance with the SPS 1988
Long-Term Incentive Stock Plan, or 570 shares based upon the fair market value
of the Company's common stock on October 24, 1995 of $39.4375 per share. The
restrictions lapse on 20% of the shares each year on the anniversary date of the
award for the next five years, after which all restrictions will have lapsed. A
director who is not a participant in any of the Company's qualified retirement
plans and who retires at or after age 70 with 5 or more years of service, or at
or after age 65 with 10 or more years of service will receive annually during
his lifetime an amount equal to the annual retainer in effect as of the date of
his retirement. A director who retires at or after age 65 but before age 70 with
less than 10 years of service will receive annually a pro rata amount. A
non-employee director may elect to receive discounted options in lieu of all or
a portion of his annual retainer under the SPS 1988 Long Term Incentive Stock
Plan.
- -------------------------------------------------------------------------------
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
- -------------------------------------------------------------------------------
The Company entered into an Employment Agreement with Mr. Grigg on December
1, 1993, which continues until termination of his employment with the Company or
his retirement at age 65. The Agreement provides for an annual base salary in
the first year of $400,000, with an increase on each subsequent December 1 of an
amount equal to at least the percentage increase in the Consumer Price Index for
the Philadelphia Region. The Employment Agreement also provides for an incentive
bonus payment of $150,000 for the first year, and eligibility to participate in
the Company's Management Incentive Plan thereafter. The Agreement further
provides for a payment of up to $25,000 plus any federal and state income tax
liability resulting from such payment for the purchase of an automobile from his
previous employer. He is eligible to participate in all executive benefit plans,
stock option programs and employee fringe benefits during his employment with
the Company. The Employment Agreement contains severance provisions whereby,
upon a "change of control" (as defined in the Executive Severance Agreement
described below), the provisions under such Severance Agreement govern; upon
termination of employment by Mr. Grigg, or by the Company for "cause" (as
defined in the Employment Agreement) or upon death, disability or retirement, he
is entitled only to the benefits accrued under the specific benefit plans in
which he participates; and upon termination of employment by the Company without
"cause," if within the first three years of employment, he is entitled to 200%
of his base salary then in effect plus such benefits to which he would have been
entitled under the Company's Senior Executive Severance Plan (described below)
as if he were a participant, and if after three years of employment, the
benefits provided in the Senior Executive Severance Plan (described below). Mr.
Grigg is subject to a non-competition provision during the term of his
employment with the Company and for a period of two years thereafter.
The Company has entered into an Executive Severance Agreement ("Agreement")
with each of the Named Officers. The Agreement provides that if a "triggering
termination" of employment (as defined in the Agreement) occurs within three
years after a "change of control" of the Company (as defined in the Agreement),
then the employee is entitled to receive within 15 days after the employee's
termination date, among other benefits, cash in an amount equal to two times the
sum of the employee's annual base salary plus the incentive bonus awards earned
by or allocated to the employee in the previous fiscal year under the Company's
Management Incentive Plan (MIP) and Long Range Incentive Plan (LRIP). A
"triggering termination" generally includes a termination of employment
initiated by the Company for any reason other than a disability qualifying the
employee for benefits under the Company's Long Term Disability Plan, or for
"cause" (as defined in the Agreement), or by the employee for certain reasons
set forth in the Agreement.
12
<PAGE>
Upon a "triggering termination," the employee will also be entitled to
receive the appreciated value of all the employee's stock options outstanding
and unexercised as of the termination date (whether or not vested), any unpaid
salary, all incentive bonus awards payable to, earned by or allocated to the
employee under the MIP and LRIP, and all amounts deferred by the employee under
any incentive plan and under the Company's Executive Deferred Compensation Plan.
The employee will also receive two additional years of credited service under
each of the Company's RIP, BEP and SERP (if a participant), and will, for two
years, continue to receive certain insurance benefits on a cost-sharing basis.
The employee's benefits from BEP and SERP (if a participant) are payable in a
lump sum within 15 days after the termination date. Any restrictions remaining
on restricted shares that may have been awarded to the employee lapse, and the
employee will own such shares free and clear of any Company-imposed restriction.
Any non-competition agreements (including non-compete provisions of the MIP)
terminate; however, the employee will continue to be bound by the
confidentiality provisions of the Agreement. Each Agreement provides for
compensation to the employee for any adverse effect of payments under the
Agreement determined to be "excess parachute payments," as defined in the
Internal Revenue Code.
Pursuant to the Company's Senior Executive Severance Plan (SESP), each of the
Named Officers would receive certain compensation and benefits in the event of
termination of employment with the Company, without a change of control, for any
reason other than for "cause" (as defined in the SESP) or a disability which
qualifies the participant for benefits under the Company's Long-Term Disability
Plan, or if initiated by the participant, upon the occurrence of certain events
described in the SESP. Upon such termination, the participant is entitled to
receive (among other benefits) the base salary in effect prior to the
termination date for a period of up to 12 months, all bonuses earned under the
MIP and LRIP for completed and uncompleted (pro rata) periods, and all amounts
deferred under the Company's Executive Deferred Compensation Plan. The
participant will remain on the Company's payroll for up to 12 months, during
which all employee benefits to which the participant was entitled prior to the
termination will continue, and the participant will be entitled to Company-paid
professional outplacement services. At the end of the 12-month period, the
participant will be vested in the Company's BEP and SERP (if a participant) and
will be entitled to receive a lump sum payment of these retirement benefits.
Restrictions on restricted shares, if any, issued to the participant lapse. The
participant is prohibited from competing with the Company during the 12-month
period following termination of employment. If the participant is employed by a
competitor of the Company without the Company's consent, the ongoing benefits
described above cease as of the date of such employment. If the participant is
employed on a full-time basis by other than a competitor, the ongoing benefits
cease either as of the date of such employment or six months, whichever is
later. In the event an employee receives a payment under the Agreement, he is
not eligible to receive any payment under the SESP. The Company has agreed that
the SESP will not be terminated or amended to reduce or eliminate the benefits
granted to certain employees, including the Named Officers. The SESP provides
for additional compensation to the participant if any plan payment is subject to
an excise or similar tax under the Internal Revenue Code.
In addition, the Company offers retiring executives (including the Named
Officers) an agreement pursuant to which, under certain circumstances, the
Company would be required to pay in a lump sum all amounts otherwise payable
periodically to them under any plan of, or agreement with, the Company. Such
lump sum payment would be made only if, within three years after a "change of
control" (as defined in such agreement), there is a change in two of the top
three executive officers of the Company designated in such agreement. To date,
no such agreements are in effect.
13
<PAGE>
- -------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------------------------------
In connection with the Company's Rights Offering of the Company's Common
Stock which concluded in December, 1994 (the "Rights Offering"), the Company
entered into a Standby Purchase Agreement, dated as of November 16, 1994, with
certain Purchasers and Investors.(1) The Purchasers agreed to acquire from the
Company, at the subscription price provided in the Rights Offering, all
remaining shares of Common Stock not subscribed for by the Company's
shareholders. Eric M. Ruttenberg, a director of the Company, is an "Affiliate"
(as such term is defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended) of certain of the Purchasers.
Pursuant to the Standby Purchase Agreement, the Purchasers acquired 268,380
shares of Common Stock for $6,575,310 and received from the Company $63,088 as
reimbursement for certain expenses incurred by the Purchasers in connection with
the Rights Offering. The Purchasers, Investors and their Affiliates
(collectively the "Affiliated Group") owned an aggregate of 785,280 shares of
Common Stock, or approximately 13.93% of the 5,636,359 shares of the Company's
Common Stock outstanding, at the conclusion of the Rights Offering and the
Purchase of unsubscribed shares in accordance with the Standby Purchase
Agreement.
The Standby Purchase Agreement will terminate upon the earliest to occur of:
(a) six years from the date of the Standby Purchase Agreement (the "Term"),
or
(b) the date upon which the Affiliated Group no longer beneficially owned Common
Stock representing in excess of 10% of the Total Voting Power (as defined
below), or
(c) removal of or failure to re-elect the designee(s) of the Purchasers and
Investors to the Board of Directors in certain circumstances contemplated by
the Standby Purchase Agreement.
Pursuant to the Standby Purchase Agreement, the Company on November 16, 1994,
amended its Rights Agreement dated as of November 11, 1988, as amended, between
the Company and Mellon Bank (East), N.A., as Rights Agent (the "Rights
Agreement"), to permit the Affiliated Group to acquire or beneficially own
Common Stock representing up to 20% (the "Percentage Limitation") of the total
voting power in the general election of directors of the Company ("Total Voting
Power"). The Company further agreed, during the Term, to amend the Rights
Agreement as necessary to permit an increase of the Percentage Limitation in
certain circumstances, including the Company's permitting any other person,
generally, to acquire or beneficially own Common Stock representing in excess of
18% of the Total Voting Power, in which case the Percentage Limitation will
generally automatically increase to 110% of the percentage of Total Voting Power
that such other person is permitted to acquire or beneficially own.
The Affiliated Group agreed for approximately six years, to a broad range of
restrictions prohibiting such activities as: soliciting proxies; generally
making shareholder proposals; engaging in efforts to acquire stock in, or assets
of, the Company (by purchase, merger, or otherwise); or seeking changes in the
composition of the Board of Directors. Such restrictions will be automatically
waived (A) if any person publicly makes a bona fide offer to acquire a majority
of the outstanding Common Stock and the Company's Board of Directors does not
oppose such offer, or (B) if any person makes a bona fide offer to acquire a
majority of the outstanding Common Stock and either (i) the Company's Board of
Directors determines to accept such offer, or (ii) the Company's Board of
Directors determines, for example, to seek competing offers or proposes to
effect or negotiate with any person any form of business combination or similar
transaction with the Company, or proposes in response to such bona fide offer, a
recapitalization, share repurchase, extraordinary dividend or other similar
extraordinary transaction involving the Company, its securities or assets, to
the extent necessary to allow the Affiliated Group to make a competing offer to
the Company's Board of Directors to acquire the Company or its securities or its
assets.
- -----------
(1) Tinicum Enterprises, Inc., Tinicum Investors, RUTCO Incorporated, Tinicum
Foreign Investments Corporation, Tinicum Associates, G.P., Putnam L. Crafts,
Jr. and James H. Kasschau (collectively, the "Purchasers"), and RIT Capital
Partners plc, J. Rothchild Capital Management Limited and St. James's Place
Capital plc (collectively, the "Investors"). See "Ownership of Voting
Securities" for more recent information on the Affiliated Group as herein
defined.
14
<PAGE>
The Purchasers and Investors also agreed that, for approximately six years,
all shares of Common Stock which are directly or indirectly beneficially owned
by the Affiliated Group, other than those shares of Common Stock which represent
voting power of up to 10% of the Total Voting Power, will be voted in accordance
with the recommendation of the majority of the Company's Board of Directors on
all matters submitted to the shareholders for a vote, including the election of
directors of the Company, except with respect to any matter which, pursuant to
the Company's Bylaws, requires the approval of an 80% super majority of the
Company's shareholders, will be voted pro rata in accordance with the vote of
the Company's other shareholders.
The Purchasers and Investors further agreed during the Term, with certain
specific exceptions, not to sell or transfer shares of Common stock representing
in excess of 10% of Total Voting Power to any one person in any transaction or
series of transactions, unless such person agrees to be bound by the terms of
the Standby Purchase Agreement.
During the Term, the Company agreed, generally, to exercise all authority
under applicable law, to cause Eric M. Ruttenberg (or another designee of the
Purchasers and Investors) to be elected to the Company's Board of Directors and
in addition, to the Audit, Executive, Directors and Executive Compensation and
Stock Option Committees of the Board. In the event the Board of Directors is
expanded beyond eight members, the Purchasers and Investors are entitled to
nominate an individual to fill the first out of each three Board member
positions in excess of eight Board member positions (i.e. the ninth, twelfth,
etc.).
The Company also entered into a certain Registration Rights Agreement with
the Purchasers and Investors, dated as of November 16, 1994, pursuant to which
the Company, subject to certain terms and conditions, has granted two demand
registration rights and unlimited piggyback registration rights to the
Purchasers and Investors whereby the Purchasers and Investors may require the
Company to cause shares of Common Stock Beneficially owned by them to be
registered for public sale under the Securities Act. The demand registration
rights are not exercisable for a period of three years from November 16, 1994,
but the piggyback registration rights are currently exercisable. All such
registration rights will terminate on November 16, 2002.
- -------------------------------------------------------------------------------
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION OVERVIEW AND
PHILOSOPHY
- -------------------------------------------------------------------------------
The Executive Compensation and Stock Option Committee of the Board of
Directors ("Compensation Committee") is composed entirely of outside directors
and is responsible for developing and making recommendations to the Board with
respect to the Company's executive compensation policies. In addition, the
Compensation Committee annually recommends to the full Board the compensation to
be paid to the Chief Executive Officer and President, and determines the
compensation of each of the other executive officers of the Company. The
Compensation Committee is free to engage and consult with outside compensation
consultants as it sees fit and generally has access to independent compensation
data.
The objectives of the Company's executive compensation program are to:
o Emphasize long-term performance and increases in shareholder value.
o Provide base compensation and benefit levels that are competitive with
those in the markets in which the Company competes for executive
personnel.
o Reward executives for the achievement of short-term and long-term
financial goals and the enhancement of shareholder value.
o Support a performance-oriented environment by providing incentive
compensation that changes in a consistent and predictable way with both
the financial performance of the Company and management performance in
support of strategic objectives.
o Provide a long-term and career-oriented compensation environment.
o Offer meaningful and competitive retirement and supplemental benefits that
are consistent with the Company's objective of retaining key employees.
15
<PAGE>
The executive compensation program provides a compensation package that is
competitive with those offered by similar companies. The Company periodically
reviews the competitive practices of companies in the fabricated metals, durable
manufacturing and other industries, as well as with a broader group of companies
of comparable size and complexity. Actual compensation levels may be greater or
less than average competitive levels in surveyed companies based upon annual and
long-term Company performance as well as individual performance. The
Compensation Committee uses its discretion to set executive compensation at
levels warranted in its judgment by external, internal and individual
circumstances.
- -------------------------------------------------------------------------------
EXECUTIVE OFFICER COMPENSATION
- -------------------------------------------------------------------------------
Executive officer compensation is comprised of base salary, annual cash
incentive compensation, long-term incentive compensation in the form of stock
options, long range cash and restricted stock incentive compensation, specific
benefits designed to provide remuneration for career service, and various
benefits, including medical, life insurance and savings plans generally
available to employees of the Company.
- -------------------------------------------------------------------------------
BASE SALARY
- -------------------------------------------------------------------------------
Base salary levels for the Company's executive officers are competitively set
relative to certain companies in the fabricated metals, durable manufacturing
and other industries as well as other comparable companies. In determining
salaries, the Compensation Committee also takes into account individual
experience and performance and specific expertise beneficial to the Company.
- -------------------------------------------------------------------------------
INCENTIVE COMPENSATION
- -------------------------------------------------------------------------------
The Company's incentive programs are intended to provide incentives to
achieve financial and individual objectives, and to reward exceptional
performance. The Management Incentive Plan is the Company's annual incentive
program for executive officers and key managers. The purpose of the plan is to
provide a direct financial incentive in the form of an annual cash bonus to
executives for the attainment of annual financial and individual goals.
Threshold, target and maximum goals for total Company and individual business
unit performance are set by the Compensation Committee at the beginning of each
fiscal year. The Long Range Incentive Plan is the Company's three-year incentive
program for executive officers and certain operating executives. The purpose of
the Plan is to provide a direct financial incentive in the form of an annual
cash bonus and a restricted share award under the SPS 1988 Long Term Incentive
Stock Plan to executives for the attainment of long-range financial goals of the
Company set by the Compensation Committee at the beginning of a three year
period.
- -------------------------------------------------------------------------------
EQUITY-BASED COMPENSATION
- -------------------------------------------------------------------------------
The equity-based compensation component of the Company's executive
compensation program is oriented toward the achievement of increasing
shareholder value over the long term. This component of the program -- the SPS
1988 Long Term Incentive Stock Plan -- provides for grants of stock options and
awards of restricted stock which align this portion of the executive's
compensation with future shareholder gains. These grants and awards enable
executives to develop and maintain a significant, long-term ownership position
in the Company's Common Stock.
16
<PAGE>
- -------------------------------------------------------------------------------
EXECUTIVE BENEFITS
- -------------------------------------------------------------------------------
The benefit component of executive compensation is designed to provide
executives with adequate and meaningful retirement benefits which are reflective
of the benefits offered in comparable companies, and which encourage
career-service orientation of the Company's executives. In addition, other
benefits such as perquisites are rigidly controlled and minimized. The amount of
such perquisites, as determined in accordance with rules of the Securities and
Exchange Commission relating to executive compensation, did not exceed 10% of
salary for fiscal 1995.
- -------------------------------------------------------------------------------
CHIEF EXECUTIVE OFFICER COMPENSATION
- -------------------------------------------------------------------------------
The compensation of the Chief Executive Officer (CEO) is fixed by the full
Board of Directors (other than the CEO) consistent with the practices described
above. Factors considered by the Board of Directors in deciding the compensation
of the CEO are generally subjective. Effective December 1, 1995, Mr. Grigg's
annual base salary was increased by the Board of Directors from $440,000 to
$484,000. The Board believes this increase is commensurate with the Company's
improved financial performance during 1995. This amount is also believed to be
competitive with companies of similar size and complexity. Mr. Grigg, has a 50%
incentive opportunity under the Company's Management Incentive Plan and a 40%
incentive opportunity under the Company's Long Range Incentive Plan.
Members of the Executive Compensation and Stock Option Committee --
Raymond P. Sharpe, Chairman; Howard T. Hallowell, III; Dr. John F. Lubin; and
Eric M. Ruttenberg.
17
<PAGE>
- -------------------------------------------------------------------------------
Common Stock Performance Graph
- -------------------------------------------------------------------------------
The graph set forth below shows the cumulative shareholder return (i.e.,
price change plus reinvestment of dividends) of the Company's Common Stock
during the five-year period ended December 31, 1995, as compared to the Standard
and Poor's 500 Index and the Standard and Poor's Diversified Manufacturing
Index.
Comparison of Five-Year Cumulative Total Return for
SPS, the S&P Index and the S&P Diversified
Industrial Manufacturing Index
(see Notes 1 and 2 below)
DOLLARS
300----------------------------------------------------------------------------
#
250----------------------------------------------------------------------------
*
@
200----------------------------------------------------------------------------
* *
@ @
150----------------------------------------------------------------------------
@
@# * #
*
#
100 @*# -------------------------------------#--------------------------------
50----------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
- -------------------------------------------------------------------------------
@ S&P 500 # SPS Technologies, Inc. * S&P Manufacturing Index
- -------------------------------------------------------------------------------
- ------
Notes:
(1) Total return assumes reinvestment of dividends.
(2) The above graph assumes $100 was invested on December 31, 1990 in SPS
Technologies Common Stock, the S&P 500 Index and S&P Diversified
Industrial Manufacturing Index. The values shown in the graph above are
as of the end of each period indicated. Raw data for the S&P 500 Index
and S&P Diversified Manufacturing Index are supplied by S&P.
- -------------------------------------------------------------------------------
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- -------------------------------------------------------------------------------
Coopers & Lybrand L.L.P., the Company's independent certified public
accountants for the year 1995, has been selected to continue for the year 1996.
Representatives of Coopers & Lybrand are expected to be present at the Annual
Meeting with the opportunity to make a statement if they desire to do so and to
respond to appropriate questions.
18
<PAGE>
- -------------------------------------------------------------------------------
SECTION 16 REPORTS
- -------------------------------------------------------------------------------
Based solely on a review of the reports on Forms 3, 4 and 5 filed with the
Company by its directors, executive officers and known 5% beneficial owners, and
in certain cases upon certificates received from such persons that such filings
are not required, no such person failed to file any report required to be filed
during, or with respect to, the fiscal year of the Company ended December 31,
1995.
- -------------------------------------------------------------------------------
PROPOSALS OF SHAREHOLDERS
- -------------------------------------------------------------------------------
Under the Company's By-laws, notice of any proposal to be presented by any
shareholder at a meeting must be received by the Secretary of the Company not
less than 60 days in advance of the meeting. The notice must include the text of
the proposal to be presented, a brief written statement of the reasons why such
shareholder favors the proposal, the name and address of record of the proposing
shareholder, a representation that the shareholder is entitled to vote at the
meeting and intends to appear at the meeting, in person or by proxy, the number
of shares of stock beneficially owned by such shareholder and any material
interest of such shareholder in the proposal (other than as a shareholder). A
copy of the Company's By-laws specifying these requirements will be furnished to
any shareholder without charge upon written request to the Secretary.
Under the rules of the Securities and Exchange Commission, shareholders
wishing to submit proposals for inclusion in the Proxy Statement of the Board of
Directors for the Annual Meeting of Shareholders to be held in 1997 must submit
such proposals so as to be received at the office of the Secretary, SPS
Technologies, Inc., 101 Greenwood Avenue, Suite 470, Jenkintown, PA 19046, no
later than November 28, 1996.
Aaron Nerenberg
Secretary
March 28, 1996
- -------------------------------------------------------------------------------
Upon written request to the office of the Secretary, SPS Technologies, Inc., 101
Greenwood Avenue, Suite 470, Jenkintown, PA 19046, the Company will provide,
without charge, to any shareholder solicited hereby, a copy of its Annual Report
on Form 10-K, including the financial statements and the
schedules thereto.
- -------------------------------------------------------------------------------
19
<PAGE>
SPS
LOGO SPS TECHNOLOGIES, INC. PROXY
Jenkintown, PA 19046
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby constitutes and appoints Charles W. Grigg and Harry J.
Wilkinson or either of them, proxies, with full power of substitution, to
represent and to vote as specified on the reverse side hereof all of the shares
of Common Stock that the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders of SPS Technologies, Inc. to be
held at 17 Mellon Bank Center, 1735 Market Street, Philadelphia, Pennsylvania in
the Forum Room (eighth floor), on Tuesday, April 30, 1996, at 10:00 a.m., local
time, and any adjournments or postponements thereof.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, WILL
BE VOTED FOR THE NOMINEES FOR DIRECTOR, IN THE MANNER STATED IN THE PROXY
STATEMENT.
Please mark, sign and date this proxy card on the reverse side hereof and
return it promptly using the enclosed envelope.
^ FOLD AND DETACH HERE ^
<PAGE>
1. ELECTION OF DIRECTORS:
VOTE FOR
all nominees WITHHOLD
listed (except AUTHORITY
as marked to to vote for all
the contrary nominees listed
[ ] [ ]
INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's
name in the list below.)
Nominees:
CLASS III: Eric M. Ruttenberg and Harry J. Wilkinson
2. DISCRETION IS GRANTED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
The undersigned hereby revokes any proxy heretofore given for
said meeting and ratifies and confirms all that the named proxies
shall do by virtue hereof. The undersigned has received the
Notice of said meeting including the Proxy Statement and the 1995
Annual Report.
Please sign exactly as name appears hereon. 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.
Signature(s) Signature(s) Date , 1996
------------------ ------------------- -------
^ FOLD AND DETACH HERE ^
YOU VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE PROXY
CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
