1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
STANDARD MOTOR PRODUCTS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
STANDARD MOTOR PRODUCTS INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
2
STANDARD MOTOR PRODUCTS, INC. 37-18 NORTHERN BOULEVARD
LONG ISLAND CITY, N.Y. 11101
MANAGEMENT PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, MAY 26, 1994
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 the shareholders of the Company to be held on May
26, 1994, or at any adjournment thereof. Proxy material is being mailed on
April 26, 1994 to the Company's approximately 1,100 shareholders of record.
The total number of shares outstanding and entitled to vote on April 15, 1994,
is:
Common Stock . . . . . . . . . . . . . . . 13,218,226
The purposes of the annual meeting are: (1) to consider and vote upon a
proposal to adopt the Company's 1994 Omnibus Stock Option Plan under which
400,000 shares of the Company's Common Stock will be available for issuance,
(2) to elect nine directors, and (3) to transact such other business as may
properly come before the meeting and at any adjournment thereof.
PROPOSAL 1: ADOPTION OF 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. However, all
shares made available for issuance under previously approved stock option plans
have been fully utilized. Accordingly, the Board and its Compensation Committee
have approved and propose to the Company's shareholders the 1994 Omnibus Stock
Option Plan (The "Plan").
The Plan will authorize 400,000 shares of the Company's Common Stock be
made available for the grant of either incentive stock options or non-qualified
stock options. Unless sooner terminated by the Board of Directors, the Plan
would terminate on May 25, 2004.
No individual grant can exceed 50,000 shares. The Plan will be 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 discre tion
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 such 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 stockholders 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 nonstatutory 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 (exercisable) is twelve months and all options are exercisable for
a period of five years from the date of vesting. Option grants may be 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. 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
1
3
optionee's base salary, up to a maximum of 50% of the optionee's base salary.
Exerciseability may be accelerated by the Compensation Committee at any time
after grant. 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 would become immediately and fully
exercisable upon a Change in Control. For purposes of the Plan, a "Change in
Control" occurs principally (i) when a person (or group of persons acting in
concert) acquires 25% or more of the Company's Common Stock (other than those
presently holding such amount), (ii) when there is a change in the composition
of a majority of the Board of Directors when compared with those who are
currently serving or (iii) when the stockholders of the Company approve a
reorganization, merger, consolidation or other transaction as a result of which
the Company or a Subsidiary is not the surviving entity.
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 amend the Plan in such respects as it deems
advisable except that it may not (1) grant an option at a price that is less
than 100% of the fair market value of the Company's Common Stock on the date of
the option grant, (2) grant an individual option in excess of 50,000 shares of
the Company's Common Stock and (3) change the vesting requirement to be less
than twelve months from date of grant. The shareholders of the Company must
approve any amendment that would (i) materially increase the number of shares
of Common Stock that may be issued under the Plan, or (ii) materially modify
the requirements of eligibility for participation in the Plan. Stock option
grants under the Plan may be amended with the consent of the recipient so long
as the amended award is consistent with the terms of the Plan.
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
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 1994 Omnibus Stock
Option Plan is in the best interests of all shareholders and recommends a vote
"for" this Proposal.
The favorable vote of the holders of a majority of the shares of Common
Stock represented at the meeting is needed to approve this Proposal No. 1.
2
4
2. ELECTION OF DIRECTORS
At the annual meeting, nine 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 now
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: Bernard Fife, Nathaniel L. Sills, Arlene R. Fife, Ruth F.
Sills, John L. Kelsey, Robert J. Swartz, William H. Turner, Lawrence I. Sills
and Arthur D. Davis.
INFORMATION WITH RESPECT TO NOMINEES AND MAJOR SHAREHOLDERS
Information with respect to each nominee is set forth in Chart "A" on page
4. 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 5. Shares of Common Stock of the Company owned outright
by Bernard Fife and Arlene R. Fife, his wife, together with shares held as
trustee for or owned by Fife family members aggregate 2,430,357 shares (18.4%).
Shares of the Common Stock of the Company owned outright by Mr. Nathaniel L.
Sills and Ruth F. Sills, his wife, together with shares held as trustee for or
owned by Sills family members aggregate 2,576,366 shares (19.5%). The 244,125
shares of Common Stock owned by charitable foundations of wh ich Fife and
Sills family members are trustees represent 1.8% of the total outstanding
voting securities of the Company.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's Common Stock, to file with the Securities
and Exchange Commission and the New York Stock Exchange initial reports of
ownership and reports of changes in ownership of the Common Stock of the
Company. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. To the Company's knowledge, based solely on review of
the copies of such reports furnished to the Company and written representations
that no other reports were required, during the fiscal year ended December 31,
1993 all Section 16(a) filing requirements applicable to its officers and
directors were complied with.
3
5
CHART A--INFORMATION ABOUT NOMINEES
HAS SHARES OF COMMON STOCK
OFFICE WITH COMPANY AND SERVED BENEFICIALLY OWNED DIRECTLY
PRINCIPAL OCCUPATION AS DIRECTOR OR INDIRECTLY AS OF
NAME AGE DURING THE PAST FIVE YEARS SINCE MARCH 15, 1994*
- ----------------------------------------------------------------------------------------------------------------------------------
Bernard Fife . . . . . . 78 Co-Chairman and Director of the Company 1947 239,520 (1)(8)(14)
318,632 (2)(3)
Nathaniel L. Sills . . . 86 Co-Chairman and Director of the Company 1946 139,880 (1)(8)(15)
335,507 (2)(4)
Arlene R. Fife . . . . . 71 Director of the Company (5) 1960 193,958 (14)
323,437 (2)(3)
Ruth F. Sills . . . . . . 83 Director of the Company (6) 1960 124,690 (15)
289,687 (2)(4)
Lawrence I. Sills . . . . 54 President and Director of the Company (9) 1986 492,385 (8)(15)
26,524 (7)
Arthur D. Davis . . . . . 46 Director of the Company (10) 1986 47,679 (8)
John L. Kelsey . . . . . 68 Director of the Company; 1964 1,125
Advisory Director (Retired), Paine Webber Inc. (11)
Robert J. Swartz . . . . 68 Financial Consultant; 1992 --
Former Senior Partner of KPMG Peat Marwick (12)
William H. Turner . . . . 54 Director of the Company; 1990 500
Senior Executive Vice President,
Chemical Banking Corporation (13)
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Excludes 184,125 shares of Common Stock held in a charitable foundation
of which Messrs. Fife and Sills are trustees.
(2) Shares are subject to family trusts in which beneficial ownership is
disclaimed.
(3) Nathaniel L. Sills is co-trustee.
(4) Bernard Fife is co-trustee.
(5) Arlene R. Fife is the wife of Bernard Fife.
(6) Ruth F. Sills is the wife of Nathaniel L. Sills and the sister of Bernard
Fife.
(7) Held as custodian for minor children.
(8) Excludes allocated shares held by Trustee under the Company's ESOP.
(9) Lawrence I. Sills is an adult son of Nathaniel L. Sills. He was appointed
President of the Company in May 1986. Prior to that he had been Vice
President, Operations of the Company since January 1983. At that time his
responsibilities included the direction of the Champ Service Line
Division, the Four Seasons Division and the Company's engineering and
marketing areas. On January 1, 1986, Mr. Sills was given responsibility
for all other areas of the Company including finance, manufacturing and
distribution.
(10) Arthur D. Davis is an adult son-in-law of Bernard Fife. 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. Mr.
Davis presently performs special projects at the direction of the
President or the Board of Directors of the Company.
(11) Mr. Kelsey has retired but continues his association, in a consulting
capacity, with Paine Webber Inc. His previous responsibilities at Paine
Webber Inc. included all facets of investment banking. He is also a
director of Federal Paper Board Co. Inc. and Box Energy Corporation.
(12) Mr. Swartz was a senior partner in the accounting firm KPMG Peat Marwick
(and predecessor firms) for more than five years. On March 31, 1991 Mr.
Swartz retired from KPMG Peat Marwick and is currently working as an
independent financial consultant. He is also a director of Victoria
Creations, Inc., United Merchants & Manufacturers, Inc. and Bed Bath &
Beyond, Inc.
(13) Mr. Turner assumed his present position on December 31, 1991 when
Chemical Banking Corporation merged with Manufacturers Hanover
Corporation. He is responsible for middle market banking, private banking
and the Corporation's New Jersey Operations. In the latter capacity, he
is chairman, chief executive officer and a director of Chemical New
Jersey Holdings, Inc., an entity that holds all of the shares of both
Chemical Bank New Jersey and Princeton Bank and Trust Company. Mr.
Turner is also one of two Chemical Directors of The CIT Group. Prior to
December 31, 1991, and since August 1990, Mr. Turner was Vice Chairman
and Director of Chemical Bank and was responsible for the Corporation's
regional banking activities in New York, New Jersey and Connecticut,
which includes all of Chemical's consumer, middle market, private banking
and real estate activities in the tri-state region. Prior to August 1990
and, since February 1987, he was responsible for the Middle Market
Banking Group of Chemical Bank. In addition, from June 1989 to December
1991 he was President and Chief Operating Officer of Chemical New Jersey
Holding Inc.
(14) Excludes 20,000 shares of Common Stock held in the Fife Family
Foundation.
(15) Excludes 20,000 shares of Common Stock held in the Sills Family
Foundation.
* Mr. and Mrs. Fife and Mr. and Mrs. Sills disclaim beneficial ownership of
securities with respect to which their ownership is specified to be indirect.
4
6
CHART B--HOLDINGS OF MANAGEMENT AND OF HOLDERS OF 5% OR MORE OF ANY CLASS OF
THE COMPANY'S VOTING SECURITIES
AMOUNT AND
NATURE OF
BENEFICIAL
TITLE OF ADDRESS OF OWNERSHIP PERCENT OF
CLASS BENEFICIAL OWNER AS OF MARCH 15, 1994* CLASS
- ----------------------------------------------------------------------------------------------------------------------------------
Bernard Fife . . . . . . . . . . . . Common 37-18 Northern Boulevard 239,520 (1)(8)(11) 1.81
Common Long Island City, N.Y. 318,632 (2)(3) 2.41
Nathaniel L. Sills . . . . . . . . . Common 37-18 Northern Boulevard 139,880 (1)(8)(12) 1.06
Common Long Island City, N.Y. 335,507 (2)(4) 2.54
Arlene R. Fife (5) . . . . . . . . . Common 37-18 Northern Boulevard 193,958 (11) 1.47
Common Long Island City, N.Y. 323,437 (2)(3) 2.45
Ruth F. Sills (6) . . . . . . . . . . Common 37-18 Northern Boulevard 124,690 (12) .94
Common Long Island City, N.Y. 289,687 (2)(4) 2.19
John L. Kelsey . . . . . . . . . . . Common P.O. Box 8264 1,125 .01
Vero Beach, FL
William H. Turner . . . . . . . . . . Common 270 Park Avenue 500 --
New York, N.Y.
Lawrence I. Sills (9) . . . . . . . . Common 37-18 Northern Boulevard 492,385 (8)(12) 3.73
Common Long Island City, N.Y. 26,524 (7) .20
Arthur D. Davis (10) . . . . . . . . Common 37-18 Northern Boulevard 47,679 (8) .36
Long Island City, N.Y.
Directors and Officers as a
Group (twenty persons) . . . . . . 2,541,574 19.23
- ----------------------------------------------------------------------------------------------------------------------------------
(1) In addition Messrs. Fife and Sills are trustees of a charitable foundation
which owns 184,125 shares of Common Stock.
(2) Shares are subject to family trusts in which beneficial ownership is
disclaimed.
(3) Nathaniel L. Sills is co-trustee.
(4) Bernard Fife is co-trustee.
(5) Arlene R. Fife is the wife of Bernard Fife.
(6) Ruth F. Sills is the wife of Nathaniel L. Sills and the sister of Bernard
Fife.
(7) Held as custodian for minor children.
(8) Excludes allocated shares held by Trustee under the Company's ESOP.
(9) Lawrence I. Sills is an adult son of Nathaniel L. Sills.
(10) Arthur D. Davis is an adult son-in-law of Bernard Fife.
(11) In addition Mr. and Mrs. Fife are trustees of the Fife Family Foundation
which owns 20,000 shares of Common Stock.
(12) In addition Mr. and Mrs. N.L. Sills and Lawrence I. Sills are trustees of
the Sills Family Foundation which owns 40,000 shares of Common Stock.
* Mr. and Mrs. Fife and Mr. and Mrs. Sills disclaim beneficial ownership of
securities with respect to which their ownership is specified to be indirect.
5
7
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 five.
The Company has a Compensation Committee and an Audit Committee of the
Board of Directors, each consisting of three independent outside directors. The
members of both committees are John L. Kelsey, Robert J. Swartz and William H.
Turner. The Compensation Committee's function is to approve the compensation
packages (salary and bonus) of the Co-Chief Executive Officers and the named
executive officers appearing in the Summary Compensation Table on page 7, to
administer the Company's Stock Option Plan and to review the Company's
compensation policies for all executive officers. The Compensation Committee
was established in late 1992 and held its first and only 1993 meeting in
January 1993. 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
Company's internal accounting controls and the professional services furnished
by the independent auditors to the Company. The Audit Committee met two times
in 1993. 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 are paid a retainer
of $10,000 and receive $1,000 for each Regular, Audit Committee and
Compensation Committee meeting they attend. Mrs. Arlene Fife and Mrs. Ruth
Sills receive $500 for each meeting they attend. All other directors receive no
payment for the fulfillment of their directorial responsibilities.
CERTAIN TRANSACTIONS
During the year 1993, the Company, from time to time, borrowed monies on a
short-term basis from Chemical Bank under a line of credit. Such borrowings
were evidenced by notes which bore interest at rates which varied between 3.54%
and 4.54% per annum depending on the time of the borrowing. In 1993 the Company
had compensating balance requirements of approximately 5% on any short- term
borrowing, which fluctuated from $0 to $15,000,000. The largest principal
amount of such notes outstanding at any month-end during the year was
$7,200,000. The aggregate amount of interest paid to Chemical Bank during the
year was approximately $202,000.
In addition, on March 10, 1989 the Company entered into an agreement with
Chemical Bank to finance the purchase, on the open market, of 1,000,000 shares
of the Company's Common Stock in connection with the Company's Employee Stock
Ownership Plan (ESOP) which was established in January 1989. Under this
agreement the Company borrowed $16,729,000 payable in equal annual installments
through 1998 with interest at 77.52% of the Bank's prime rate. As of December
20, 1991, Chemical Bank and NBD Bank, N.A. entered into an Assignment Agreement
wherein Chemical Bank assigned all of its right, title and interest in the
March 10, 1989 ESOP financing agreement to NBD Bank, N.A. At April 26, 1994,
the Company's indebtedness to NBD Bank, N. A. under this agreement was
$6,713,571.
During 1993 two executive officers, Steven Brown, Vice President, Champ
Service Line Division and Nitin Parikh, Vice President, Information Services
were indebted to the Company as a result of loans made by the Company to these
officers. Mr. Brown had two loans outstanding. The first loan, in 1982, was
related to his relocation upon employment with the Company and was at the prime
rate of interest. In 1993 the largest amount of this indebtedness was $46,338.
At March 31, 1994, the amount of that indebtedness was $32,914. The second
loan, in the amount of $571,200, was made in 1993 as a non-interest bearing
bridge loan resulting from Mr. Brown's relocation to the vicinity of the
Company's Kansas facility (headquarters of the Champ Service Line Division). In
January 1994, Mr. Brown's Connecticut home was sold and the bridge loan was
repaid. In June 1993, a $150,000 loan was made to Mr. Parikh, to assist in the
financing of a relocation of his principal residence, at an interest rate of
31/2%. This loan was repaid in February 1994.
During 1993, the Company's Four Seasons Division purchased a portion of its
remanufacturing component requirements (approximately $2,000,000) from Recore
Automotive, Incorporated. The owner of Recore Automotive is a member of the
immediate family of the Vice President, Four Seasons Division, Mr. Stanley
Davidow. The purchases made from Recore Automotive are within the Company's
guidelines for transactions with related parties, which requires that any such
transactions be conducted on an arm's length basis.
6
8
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION ALL OTHER
ANNUAL COMPENSATION AWARDS COMPENSATION
NAME AND --------------------------------------------------------------------------------------
PRINCIPAL OTHER STOCK OPTIONS
POSITION YEAR SALARY BONUS COMPENSATION (1) GRANTED (2) (3)
- ----------------------------------------------------------------------------------------------------------------------------------
Bernard Fife . . . . . . . . . . . . . . 1993 $244,000 $120,000 $ 10,000 $10,001 $21,008
Co-Chief Executive Officer, . . . . . . 1992 234,000 100,000 24,546 11,550
Co-Chairman of the Board and Director . 1991 226,000 83,000 27,927 11,524
Nathaniel L. Sills . . . . . . . . . . . 1993 244,000 120,000 10,000 (670) 21,008
Co-Chief Executive Officer, . . . . . . 1992 234,000 100,000 (1,010) 11,550
Co-Chairman of the Board and Director . 1991 226,000 83,000 25,177 11,524
Lawrence I. Sills . . . . . . . . . . . . 1993 263,000 100,000 10,000 21,008
President, Chief Operating . . . . . . 1992 246,000 48,000 11,550
Officer and Director . . . . . . . . . 1991 238,000 20,800 11,524
Joseph Forlenza . . . . . . . . . . . . . 1993 239,772 110,143 21,008
Vice President/ . . . . . . . . . . . . 1992 217,788 69,300 8,000 11,550
General Manager Standard Division . . . 1991 182,481 48,285 11,420
Daniel Carboni . . . . . . . . . . . . . 1993 225,000 89,403 18,798
Vice President/ . . . . . . . . . . . . 1992 220,000 61,350 8,000 8,645
General Manager EIS Brake . . . . . . . 1991 192,638 47,660 --
Parts Division
Stanley Davidow . . . . . . . . . . . . . 1993 215,000 98,753 20,978
Vice President/ . . . . . . . . . . . . 1992 195,000 56,860 8,000 11,520
General Manager Four Seasons Division . 1991 189,000 32,620 11,053
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Does not include compensation associated with perquisites because such
amounts do not exceed the lesser of either $50,000 or 10% of total salary
and bonus disclosed.
(2) Includes accruals to fund a widows death benefit program which provides for
payments of $2,500 per month (as adjusted for cost of living increases from
1977) payable to the widows of Messrs. B. Fife and N. L. Sills and, in 1991
and 1992, premiums paid by the Company for life insurance, on the lives of
Messrs. B. Fife and N. L. Sills, in the amount of $200,000 each, payable to
designated beneficiaries.
(3) Company contributions to Profit Sharing, 401K and ESOP programs.
OPTION GRANTS IN THE LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (1)
- ----------------------------------------------------------------------------------------------------------------------------------
% OF TOTAL
OPTIONS/SARS
OPTIONS/ GRANTED TO EXERCISE OR
SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% 10%
- ----------------------------------------------------------------------------------------------------------------------------------
Bernard Fife . . . . . . . . . . . . . . . . 10,000 31.3% $18.5625 5/26/98 $51,251 113,305
Nathaniel L. Sills . . . . . . . . . . . . . 10,000 31.3 18.5625 5/26/98 $51,251 113,305
Lawrence I. Sills . . . . . . . . . . . . . . 10,000 31.3 18.5625 5/26/98 $51,251 113,305
- ----------------------------------------------------------------------------------------------------------------------------------
(1) The dollar amounts under these columns are the result of calculations at
five percent and ten percent rates set by the Securities and Exchange
Commission and therefore are not intended to forecast possible future
appreciation, if any, of the Company's stock price.
7
9
AGGREGATED OPTION EXERCISES IN 1993
AND DECEMBER 31, 1993 OPTION VALUES
NUMBER OF VALUE OF UNEXPECTED
UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED OPTIONS HELD AT OPTIONS AT
NAME ON EXERCISE (#) VALUE REALIZED ($) DECEMBER 31, 1993 DECEMBER 31, 1993 (1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Bernard Fife . . . . . . . . . . . . 50,000 $400,000 10,000 $78,125
Nathaniel L. Sills . . . . . . . . . 50,000 400,000 10,000 78,125
Lawrence I. Sills . . . . . . . . . . 50,000 400,000 10,000 78,125
Joseph Forlenza . . . . . . . . . . . 16,000 174,375 NONE NONE
Daniel Carboni . . . . . . . . . . . 7,000 84,875 3,000 40,875
Stanley Davidow . . . . . . . . . . . 16,000 166,163 NONE NONE
- ------------------------------------------------------------------------------------------------------------------------------------
(1) All options were exercisable at December 31, 1993.
(2) The fair market value at December 31, 1993 was $26.375 per share.
REPORT OF THE BOARD OF DIRECTORS
REGARDING EXECUTIVE COMPENSATION
Until late 1992, the Company's Board of Directors determined the
compensation of the Company's Co-Chief Executive Officers and Chief Operating
Officer. The Board also reviewed and approved the Company's compensation
policies for all executive officers which policies include annual base salary,
a formal MBO bonus program which consists of both Company earnings goals and
individual goals, and stock options.
Under the MBO bonus program, which was instituted in 1987, the bonuses of
the Co-Chief Executive Officers and the Chief Operating Officer are based
solely on Company earnings. The goals of the other executive officers are based
one-half on individual goals approved by the Chief Operating Officer and
one-half on Company earnings.
The MBO bonus program created a direct connection between Company
performance and executive compensation while the executives are given strong
incentives for long-term future performance by the granting, from time to time,
of stock options. These stock options, which expire after 5 years if not
exercised, have value for executives only if the Company's stock price
increases above the option grant price, which is set at the market price on the
date of each grant.
As a matter of Company policy, the compensation of the current Co-Chief
Executive Officers has consisted of a relatively modest base salary, a regular
bonus separate from the MBO program and a bonus under the MBO program.
Accordingly, for the years 1991 through 1993, the average percentage increase
from the prior year for base salary plus regular bonus for these officers was
4.5%.
The Board's decisions concerning the Company's compensation policies for
all executive officers were made in the context of their individual and
corporate responsibilities, historical practice and the competitive
environment.
Since late 1992, the compensation responsibilities of the Board of
Directors have been assumed by the Company's Compensation Committee. The
Compensation Committee of the Board of Directors is composed entirely of
independent outside directors. The Committee is now responsible for approving
the compensation packages (salary and bonus) of the Co-Chief Executive Officers
and the named executive offi-cers appearing in the Summary Compensation Table
on page 7, for administering the Company's Stock Option Plan and for reviewing
the Company's compensation policies for all executive officers.
Bernard Fife Lawrence I. Sills
Nathaniel L. Sills Arlene R. Fife
John L. Kelsey Arthur D. Davis
William H. Turner Ruth F. Sills
Robert J. Swartz
8
10
FIVE YEAR PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL Return*
FOR STANDARD MOTOR PRODUCTS, INC. S&P 500 INDEX AND a Peer Group (1)
(Graph)
SMP S&P PEER
GROUP
1988 100 100 100
1989 110 132 96
1990 59 128 80
1991 77 166 92
1992 105 179 123
1993 200 197 178
Assumes $100 invested on December 31, 1988 in Standard Motor Products, Inc.
Common Stock, S&P 500 Index and a Peer Group (1).
* Total Return assumes reinvestment of dividends.
(1) The Peer Group companies consist of Echlin Inc., Federal-Mogul Corporation,
Dana Corporation, SPX Corporation, MascoTech, Inc., Genuine Parts Company
and Arvin Industries, Inc.
9
11
INFORMATION AS TO VOTING SECURITIES
Holders of shares of Common Stock have the right to one vote for each share
registered in their names on the books of the Company as of the close of
business on April 15, 1994. On such date 13,218,226 shares of Common Stock were
outstanding and entitled to vote.
The close of business on April 15, 1994 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 26, 1994.
VOTING AND REVOCATION OF PROXIES
The persons named in the accompanying form of proxy will vote the shares
represented thereby, as directed in the proxy, if the proxy appears to be valid
on its face and is received on time. In the absence of specific instructions,
proxies so received will be voted for the election of the named nominees to the
Company's Board of Directors. Proxies are revocable at any time before they are
exercised by sending in a subsequent proxy (with the same or other
instructions), by appearing at the Annual Meeting of Shareholders and voting in
person or by notifying the Company that it is revoked.
METHOD AND EXPENSE OF PROXY SOLICITATION
The solicitation of proxies will be made primarily by mail. Proxies may
also be solicited personally and by telephone by regular employees of the
Company at nominal cost.
The Company does not expect to pay compensation for any solicitation of
proxies but may pay brokers and other persons holding shares in their names, or
in the names of nominees, their expenses for sending proxy material to
principals for the purpose of obtaining their proxies. The Company will bear
all expenses in connection with the solicitation of proxies.
INDEPENDENT AUDITORS
Since 1990, David Berdon & Co. has been the Company's independent auditors.
Their services from that time to the present have been satisfactory. However,
as of the date of this Proxy Statement, the Board of Directors and the Audit
Committee of the Company have not made a decision regarding the appointment of
independent auditors to audit the accounts of the Company for the fiscal year
ending December 31, 1994. Management does not believe it is necessary for
shareholders to ratify this appointment since there is no requirement under
Federal or New York law that the appointment of independent auditors be
approved by shareholders.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the Company's 1995 Annual
Meeting of Shareholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission, promulgated under the Securities Exchange
Act of 1934, as amended, must be received at the Company's offices in Long
Island City, New York, by January 4, 1995 for inclusion in the Company's proxy
statement and form of proxy relating to that meeting.
GENERAL
The Company's 1993 Annual Report has been mailed to shareholders. A copy of
the Company's Annual Report on Form 10-K will be furnished to any shareholder
who requests the same free of charge (except for Exhibits thereto for which a
nominal fee covering reproduction and mailing expenses will be charged.)
OTHER MATTERS
As of the date of this proxy statement, the management knows of no matters
other than Proposal 1 and the election of directors to come before the meeting.
However, if any other matters should properly come before the meeting, it is
the intention of the persons named in the accompanying form of proxy to vote
all proxies not marked to the contrary in accordance with their judgment on
such matters.
By Order of the Board of Directors
SANFORD KAY
Secretary
Dated: April 26, 1994
10
12
(LOGO)
STANDARD MOTOR PRODUCTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of STANDARD MOTOR PRODUCTS, INC. (the "Company")
hereby appoints BERNARD FIFE and NATHANIEL L. SILLS, as Proxies, each with
power to appoint his substitute, and hereby authorizes them to represent and
vote as designated below, all of the shares of the Company's Common Stock held
of record by the undersigned on April 15, 1994 at the annual meeting of
shareholders of the Company to be held on May 26, 1994, or at any adjournment
thereof.
1. Proposal to adopt the Company's 1994 Omnibus Stock Option Plan under which
400,000 shares of the Company's Common Stock will be available for issuance.
FOR / / AGAINST / / ABSTAIN / /
2. Election of Directors
/ / FOR all nominees listed below (except as marked to the contrary below)
/ / WITHHOLD AUTHORITY to vote for any individual nominee listed below.
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.) Bernard
Fife, Nathaniel L. Sills, Arlene R. Fife, Ruth F. Sills, John L.
Kelsey, Robert J. Swartz, William H. Turner, Lawrence I. Sills
and Arthur D. Davis
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
PLEASE DATE AND SIGN ON REVERSE SIDE
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder.
If no direction is made, this proxy will be voted for Proposal 1 and the
nominees on the reverse side.
DATE : 1994
----------------------------------------------------------------
- --------------------------------------------------------------------------
SIGNATURE
- --------------------------------------------------------------------------
SIGNATURE IF HELD JOINTLY
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE