UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14-A
(RULE 14A-101)
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Under Rule l4a-l2
STANDARD MOTOR PRODUCTS, INC.
(Name of Registrant as Specified In Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules l4a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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STANDARD MOTOR PRODUCTS, INC.
37-18 NORTHERN BLVD.
LONG ISLAND CITY, NEW YORK 11101
APRIL 21, 2009
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders
of Standard Motor Products, Inc. to be held at the offices of JPMorgan Chase,
One Chase Manhattan Plaza, New York, NY 10081, on Thursday, May 21, 2009 at 2:00
p.m. (Eastern Daylight Time).
At the Annual Meeting, you will be asked to (a) elect nine directors
and (b) ratify the appointment of Grant Thornton LLP as the Company's
independent registered public accounting firm for our 2009 fiscal year. The
Board of Directors recommends that you vote "FOR" each of the above proposals.
Please refer to the Proxy Statement for a detailed explanation of each of the
proposals.
The formal notice of the Annual Meeting, the Proxy Statement and the
Proxy Card are enclosed. We have also enclosed a copy of our Annual Report to
Stockholders, which includes our Form 10-K for our 2008 fiscal year.
YOUR VOTE IS IMPORTANT! The Board of Directors appreciates and
encourages stockholder participation in the Company's affairs and invites you to
attend the Annual Meeting in person. It is important, however, that your shares
be represented at the Annual Meeting in any event and, for that reason, we ask
that whether or not you expect to attend the Annual Meeting, you take a moment
to complete, date, sign and return the accompanying proxy in the enclosed
postage-paid envelope. You should be aware that only votes cast "FOR" or
"AGAINST" a proposal are used in determining the results of a vote.
On behalf of the Board of Directors, I would like to thank you for your
continued support of the Company. I look forward to seeing you at the Annual
Meeting.
Sincerely,
/s/ Lawrence I. Sills
-----------------------
Lawrence I. Sills
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON MAY 21, 2009--THE PROXY STATEMENT AND ANNUAL
REPORT ARE AVAILABLE AT WWW.SMPCORP.COM/MAIN/FINANCEINFO.ASPX.
STANDARD MOTOR PRODUCTS, INC.
37-18 NORTHERN BLVD.
LONG ISLAND CITY, NEW YORK 11101
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 2009
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
STANDARD MOTOR PRODUCTS, INC. (the "Company") will be held at the offices of
JPMorgan Chase, One Chase Manhattan Plaza, New York, NY 10081, on Thursday, May
21, 2009 at 2:00 p.m. (Eastern Daylight Time). The Annual Meeting will be held
for the following purposes:
1. To elect nine directors of the Company, all of whom shall hold
office until the next annual meeting of stockholders and until
their successors are duly elected and qualified;
2. To ratify the appointment of Grant Thornton LLP as the
Company's independent registered public accounting firm for
the fiscal year ending December 31, 2009; and
3. To transact such other business as may properly come before
the Annual Meeting.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this notice. The Board of Directors has fixed the close
of business on April 10, 2009 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Annual Meeting or any
adjournment thereof.
Whether or not you plan to attend the Annual Meeting, please vote, date
and sign the enclosed proxy, which is solicited by the Board of Directors of the
Company, and return it in the pre-addressed envelope, to which no postage need
be affixed, if mailed within the United States.
By Order of the Board of Directors
/s/ Carmine J. Broccole
------------------------
Carmine J. Broccole
VICE PRESIDENT GENERAL COUNSEL
AND SECRETARY
Long Island City, New York
April 21, 2009
STANDARD MOTOR PRODUCTS, INC.
37-18 NORTHERN BLVD.
LONG ISLAND CITY, NEW YORK 11101
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 2009
This Proxy 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 Stockholders of the Company to be
held on May 21, 2009 or at any adjournment thereof. Proxy material is being
mailed on or about April 21, 2009 to the Company's 582 stockholders of record.
The total number of shares of Common Stock outstanding and entitled to vote on
April 10, 2009 was 18,957,816.
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice of Annual Meeting of
Stockholders. Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION
INFORMATION AS TO VOTING SECURITIES
The close of business on April 10, 2009 has been fixed by the Board of
Directors as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Annual Meeting. Holders of Common Stock have the
right to one vote for each share registered in their names on the books of the
Company as of the close of business on the record date.
In order to conduct business at the Annual Meeting, our By-laws require
the presence in person or by proxy of stockholders holding a majority of the
voting power of the outstanding shares of Common Stock entitled to vote on the
matters presented at the Annual Meeting. If a quorum is not present, a vote
cannot occur, and our Annual Meeting may be adjourned to a subsequent date for
the purpose of obtaining a quorum. Proxy cards received by us but marked
"Withheld," abstentions and broker non-votes will be included in the calculation
of the number of shares considered in determining whether or not a quorum
exists. A broker non-vote occurs when a nominee holding shares for a beneficial
owner does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received voting
instructions from the beneficial owner.
VOTING AND REVOCATION OF PROXIES
You can vote your shares by completing and returning a proxy card or by
voting in person. If you hold your shares in "street name," you should provide
your broker or other nominee with voting instructions to ensure that your shares
are voted.
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. With respect to the election of
directors, stockholders may (a) vote in favor of all nominees, (b) withhold
their votes as to all nominees, or (c) withhold their votes as to specific
nominees. With respect to Proposal No. 2, stockholders may vote FOR or AGAINST
the proposal. Stockholders should specify their choices on the accompanying
proxy card. In the absence of specific instructions, proxies so received will be
voted: (1) "FOR" the election of the named nominees to the Company's Board of
Directors; and (2) "FOR" the ratification of Grant Thornton LLP as the Company's
independent registered public accounting firm.
Proxies are revocable at any time before they are exercised by (a)
sending in a later-dated proxy (with the same or other instructions), (b)
appearing at the Annual Meeting and voting in person, or (c) notifying Carmine
J. Broccole, Secretary of the Company, that the proxy is revoked via fax at
718-784-3284 or via mail to 37-18 Northern Blvd., Long Island City, NY 11101 or
via email at financial@smpcorp.com. If you hold shares through a bank or
brokerage firm, you must contact that bank or firm to revoke any prior voting
instructions.
VOTES REQUIRED
Nominees receiving a plurality of the votes cast will be elected as
directors. Proposal No. 2 requires the approval of the affirmative vote of a
majority of the shares of Common Stock present or represented by proxy and
entitled to vote at the Annual Meeting. Only those votes cast "FOR" or "AGAINST"
a proposal are used in determining the results of a vote. An abstention or a
broker non-vote shall not constitute a vote cast.
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 employees of the Company at
nominal cost.
The Company does not expect to pay compensation for any solicitation of
proxies but may pay brokers and other persons holding shares in their names, or
in the name of nominees, their expenses for sending proxy material to beneficial
owners for the purpose of obtaining their proxies. The Company will bear all
expenses in connection with the solicitation of proxies.
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PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, nine directors are to be elected to hold office
until the next annual meeting of stockholders and until their successors are
duly elected and qualified. Unless individual stockholders specify otherwise,
each executed proxy will be voted "FOR" the election to the Board of Directors
of the nine nominees named below, all of whom are currently directors of the
Company.
INFORMATION REGARDING NOMINEES
Each person listed below has consented to be named as a nominee and
agreed to serve if elected. If any of those named are not available for election
at the time of the Annual Meeting, discretionary authority will be exercised to
vote for substitutes unless the Board chooses to reduce the number of directors.
Management is not aware of any circumstances that would render any nominee
listed below unavailable.
DIRECTOR
NAME OF DIRECTOR POSITION WITH THE COMPANY AGE SINCE
---------------- ------------------------- --- -----
Lawrence I. Sills............. Chairman of the Board
and Chief Executive Officer 69 1986
William H. Turner(1)(2)....... Presiding Independent
Director 69 1990
Robert M. Gerrity(1)(3)....... Director 71 1996
Pamela Forbes Lieberman(1).... Director 55 2007
Arthur S. Sills............... Director 65 1995
Peter J. Sills................ Director 62 2004
Frederick D. Sturdivant(1).... Director 71 2001
Richard S. Ward(1)(4)......... Director 68 2004
Roger M. Widmann(1)........... Director 69 2005
-------------
(1) Member of the Company's Audit Committee, Compensation and
Management Development Committee, and Nominating and Corporate
Governance Committee.
(2) Chairman of the Audit Committee.
(3) Chairman of the Compensation and Management Development Committee.
(4) Chairman of the Nominating and Corporate Governance Committee.
LAWRENCE I. SILLS has served as our Chairman of the Board and Chief
Executive Officer since December 2000 and has been a director of the Company
since 1986. From 1986 to 2000, Mr. Sills served as our President and Chief
Operating Officer. From 1983 to 1986, he served as our Vice President of
Operations. Mr. Sills is the brother of Arthur S. Sills and Peter J. Sills, each
a director of the Company, and is the father of Eric Sills, our Vice President
Engine Management Division.
WILLIAM H. TURNER has served as our Presiding Independent Director
since January 2006 and as a director of the Company since May 1990. He also
serves as a director of Ameriprise Financial, Inc., Franklin Electronic
Publishers, Inc., Volt Information Sciences, Inc. and New Jersey Resources
Corporation. Since June 2008, Mr. Turner has served as Acting Dean of the
Business School at Montclair State University and, since 1985, the Chairman of
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the International College of Beirut. From 2004 to 2008, Mr. Turner was the Dean
of the College of Business at Stony Brook University. Mr. Turner served as the
Senior Partner of Summus Ltd., a consulting firm, from 2002 to 2004. From 1997
to 2002, he served in various capacities at PNC Bank NJ, including President,
Chief Executive Officer and Chairman Northeast Region. He was President and
Co-Chief Executive Officer of Franklin Electronic Publishers, Inc. from 1996 to
1997. Prior to that time, he was the Vice-Chairman of Chase Manhattan Bank and
its predecessor, Chemical Banking Corporation.
ROBERT M. GERRITY has served as a director of the Company since July
1996. Mr. Gerrity currently serves as the Chairman of the Industrial Group of
Glencoe Capital, a private equity firm, and is a director and principal of
Gerrity Partners, a Board consulting business. Mr. Gerrity also serves as a
director of Federal Signal Corporation, Rimrock Corporation and Polyair Inter
Pack Inc. Formerly, he served as a director of Rubbermaid Corporation,
Birmingham Steel Corporation, Harnischfeger Industries, Libralter Engineering
Systems and New Holland n.v. Prior to 1995, he served in a variety of
manufacturing, engineering and management positions with the Ford Motor Company
including Chief Executive Officer of Ford New Holland and Ford of Brazil.
PAMELA FORBES LIEBERMAN has served as a director of the Company since
August 2007. Ms. Forbes Lieberman also serves as a director of A.M. Castle & Co.
and VWR International and serves as a member of the advisory board of WHI
Capital Partners, a private equity firm. From March 2006 to August 2006, Ms.
Forbes Lieberman served as Interim Chief Operating Officer of Entertainment
Resource, Inc. Ms. Forbes Lieberman also served as President and Chief Executive
Officer and member of the Board of Directors of TruServ Corporation (now known
as True Value Company) from November 2001 to November 2004, as TruServ's Chief
Operating Officer and Chief Financial Officer from July 2001 to November 2001,
and as TruServ's Chief Financial Officer from March 2001 to June 2001. Prior to
March 2001, Ms. Forbes Lieberman held Chief Financial Officer positions at
ShopTalk Inc., Martin-Brower, and Fel-Pro Inc. Ms. Forbes Lieberman is a
Certified Public Accountant.
ARTHUR S. SILLS has served as a director of the Company since October
1995. Mr. Sills was an educator and administrator in the Massachusetts school
districts for thirty years prior to his retirement in 2000. Mr. Sills is the
brother of Lawrence I. Sills and Peter J. Sills, and is the uncle of Eric Sills.
PETER J. SILLS has served as a director of the Company since July 2004
and from December 2000 to May 2004. Mr. Sills is a writer and was an attorney.
Mr. Sills is the brother of Arthur S. Sills and Lawrence I. Sills, and is the
uncle of Eric Sills.
FREDERICK D. STURDIVANT has served as a director of the Company since
December 2001. Mr. Sturdivant has been an independent consultant and a Visiting
Professor at the Warrington College of Business at the University of Florida
since 2002. Mr. Sturdivant was Chairman of Reinventures LLC from 2000 to 2002.
From 1998 to 2000, he was Executive Managing Director of Navigant Consulting.
From 1996 to 1998, he was President of Index Research and Advisory Services, a
subsidiary of Computer Sciences Corporation. After completing his Ph.D. at
Northwestern University, Mr. Sturdivant held professorships at the University of
Southern California, University of Texas at Austin, the Harvard Business School,
and an endowed chair at Ohio State University.
-4-
RICHARD S. WARD has served as a director of the Company since July
2004. He is a private investor and legal consultant. From 1969 to 1998, he
served in various capacities at ITT Corporation, including Executive Vice
President and General Counsel, and served as a member of the ITT Management
Committee. In 2000, Mr. Ward served as Chairman of the Large, Complex Case
Committee of the American Arbitration Association. Prior to 1998, Mr. Ward
served as a director of STC, plc, a British telecommunications company, and ITT
Sheraton Corporation.
ROGER M. WIDMANN has served as a director of the Company since May
2005. Mr. Widmann also serves as a director of GigaBeam Corporation and Cedar
Shopping Centers, Inc. He currently serves as the Chairman of Keystone National
Group (a private equity fund of funds), a director of the March of Dimes of
Greater New York, the Vice Chair of Oxfam America, a senior moderator of the
Executive Seminar at The Aspen Institute and the Liberty Fellowship (South
Carolina), and a senior mentor of the Henry Crown Fellowship Program. He
previously served as Chairman of the Board of Lydall, Inc., a manufacturing
company, from 1974 to 2004 and was a principal of Tanner & Co., Inc., an
investment banking firm, from 1997 to 2004. Prior to that time, he was the
Senior Managing Director of Chemical Securities Inc. (now JPMorgan Chase
Corporation).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
EACH OF THE NOMINEES LISTED ABOVE.
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PROPOSAL 2
RATIFICATION OF GRANT THORNTON LLP
The Audit Committee of our Board of Directors plans to appoint Grant
Thornton LLP as the Company's independent registered public accounting firm to
audit its consolidated financial statements for the 2009 fiscal year. Although
the Company is not required to seek stockholder approval of this appointment,
the Board believes it to be sound corporate governance to do so and is asking
stockholders to ratify the appointment of Grant Thornton LLP. If the appointment
is not ratified, the Audit Committee will investigate the reasons for
stockholder rejection and will reconsider the appointment. Representatives of
Grant Thornton LLP are expected to attend the Annual Meeting where they will be
available to respond to questions and, if they desire, to make a statement.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF GRANT THORNTON LLP AS THE COMPANY'S INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM.
AUDIT AND NON-AUDIT FEES
The following table presents fees for professional services rendered by
Grant Thornton LLP, our principal accountants, in the fiscal years ended
December 31, 2008 and 2007:
2008 2007
---- ----
Audit fees........................... $2,241,906 $2,125,968
Audit-related fees (1)............... 89,029 139,814
Tax fees (2)......................... 75,730 80,571
All other fees....................... -- --
---------- ----------
Total........................... $2,406,665 $2,346,353
========== ==========
-----------------
(1) Audit-related fees consisted principally of audits of financial
statements of certain employee benefit plans.
(2) Tax fees consist primarily of U.S. and international tax compliance and
planning.
It is the policy of the Audit Committee to pre-approve any audit and
non-audit services provided to the Company by its independent auditors. All of
the fees paid to the Company's independent auditors described above were for
services pre-approved by the Audit Committee.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of March 15, 2009 by:
o each person known by the Company to own beneficially more than 5% of
the Company's Common Stock;
o each director and nominee for director of the Company;
o our principal executive officer, principal financial officer and each
of our other most highly compensated executive officers named in the
Summary Compensation Table below; and
o all directors and officers as a group.
AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE
NAME AND ADDRESS OWNERSHIP (1) OF CLASS
---------------- -------------- ----------
GAMCO Investors, Inc............................ 3,039,109 (2) 15.9%
One Corporate Center
Rye, NY
Peter J. Sills.................................. 1,654,932 (3) 8.7
Arthur S. Sills................................. 1,620,441 (4) 8.5
Dimensional Fund Advisors Inc................... 1,576,645 (5) 8.3
1299 Ocean Avenue
Santa Monica, CA
Lawrence I. Sills............................... 1,074,730 (6) 5.7
John P. Gethin.................................. 59,549 (7) *
James J. Burke.................................. 52,765 (8) *
William H. Turner............................... 39,917 (9) *
Frederick D. Sturdivant......................... 37,656 (10) *
Robert M. Gerrity............................... 35,096 (11) *
Dale Burks...................................... 30,936 (12) *
Richard S. Ward................................. 25,439 (13) *
Roger M. Widmann................................ 23,237 (14) *
Pamela Forbes Lieberman......................... 12,209 *
Carmine J. Broccole............................. 8,946 (15) *
Directors and Officers as a group
(twenty persons).............................. 3,477,127 (16) 18.3%
-----------------
* Represents beneficial ownership of less than 1% of the outstanding shares of
Common Stock.
(1) Applicable percentage of ownership is calculated by dividing (a) the
total number of shares beneficially owned by the stockholder by (b)
18,965,816, which is the number shares of Common Stock outstanding as
of March 15, 2009, plus that number of additional shares, if any, which
may be acquired through the exercise of options or convertible
debentures within 60 days of March 15, 2009. Beneficial ownership is
calculated based on the requirements of the Securities and Exchange
Commission. In computing the number of shares beneficially owned by a
person, shares of Common Stock subject to options and our convertible
debentures held by that person that are currently exercisable or
exercisable within 60 days of March 15, 2009 are deemed outstanding.
Regarding our convertible debentures, at March 15, 2009 our convertible
debentures were convertible into 31.068 shares of Common Stock for each
$1,000 of convertible debentures converted and the conversion price for
our convertible debentures was equivalent to approximately $32.19 per
share. Shares subject to options or our convertible debentures,
however, are not deemed outstanding for the purpose of computing the
percentage ownership of any other person. Except as indicated in the
footnotes to this table, the stockholder named in the table has sole
voting power and sole investment power with respect to the shares set
forth opposite such stockholder's name. Unless otherwise indicated, the
address of each individual listed in the table is c/o Standard Motor
Products, Inc., 37-18 Northern Blvd., Long Island City, New York.
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In footnotes 3, 4 and 6, where more than one director of our company is
a co-trustee of a trust or co-director of a foundation, and shares
voting power and investment power with another director with respect to
a certain number of shares, such shares are counted as being
beneficially owned by each director who shares such voting power and
investment power. However, in computing the aggregate number of shares
owned by directors and officers in footnote 16, these same shares are
only counted once.
(2) The information for GAMCO Investors, Inc. and certain of its affiliates
("GAMCO") is based solely on an amendment to its Schedule 13D filed
with the SEC on March 24, 2009, wherein GAMCO states that it
beneficially owns an aggregate of 3,039,109 shares of our Common Stock.
GAMCO states that it has sole voting power for 3,014,109 shares and has
sole investment power for 3,039,109 shares.
(3) Includes 1,056,619 shares of Common Stock, of which: (a) 289,687 shares
are held as co-trustee with Lawrence I. Sills and Arthur S. Sills, for
which Peter J. Sills has shared voting and investment power; and (b)
769,932 shares are held by the Sills Family Foundation, Inc., of which
Peter J. Sills is a director and officer and shares voting and
investment power with, among others, Arthur S. Sills. In his capacity
as a trustee and director of the foundation, Peter J. Sills disclaims
beneficial ownership of the shares so deemed "beneficially owned" by
him within the meaning of Rule 13d-3 of the Exchange Act.
(4) Includes 1,056,619 shares of Common Stock, of which: (a) 289,687 shares
are held as co-trustee with Lawrence I. Sills and Peter J. Sills, for
which Arthur S. Sills has shared voting and investment power; and (b)
769,932 shares are held by the Sills Family Foundation, Inc., of which
Arthur S. Sills is a director and officer and shares voting and
investment power with, among others, Peter J. Sills. In his capacity as
a trustee and director of the foundation, Arthur S. Sills disclaims
beneficial ownership of the shares so deemed "beneficially owned" by
him within the meaning of Rule 13d-3 of the Exchange Act.
(5) The information for Dimension Fund Advisors Inc. ("Dimension") is based
solely on an amendment to its Schedule 13G filed with the SEC on
February 9, 2009, wherein Dimension states that it beneficially owns an
aggregate of 1,576,645 shares of our Common Stock. Dimension states
that it has sole voting and sole investment power for all of such
shares.
(6) Includes 345,832 shares of Common Stock, of which: (a) 289,687 shares
are held as co-trustee with Arthur S. Sills and Peter J. Sills, for
which Lawrence I. Sills has shared voting and investment power; (b)
2,812 shares are owned by Mr. Sills' wife; and (c) 38,333 shares
underlie options to purchase Common Stock. In his capacity as a trustee
and for shares of stock held by his wife, Lawrence I. Sills disclaims
beneficial ownership of the shares so deemed "beneficially owned" by
him within the meaning of Rule 13d-3 of the Exchange Act.
(7) Includes options to purchase 30,500 shares of Common Stock.
(8) Includes options to purchase 23,000 shares of Common Stock.
(9) Includes options to purchase 13,400 shares of Common Stock.
(10) Includes options to purchase 7,400 shares of Common Stock.
(11) Includes options to purchase 13,400 shares of Common Stock.
(12) Includes options to purchase 18,200 shares of Common Stock.
(13) Includes options to purchase 2,000 shares of Common Stock.
(14) Includes options to purchase 2,000 Shares of Common Stock.
(15) Includes options to purchase 3,000 shares of Common Stock.
(16) Includes options to purchase 186,533 shares of Common Stock.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 stockholders are
required by regulation of the Securities and Exchange Commission to furnish the
Company with copies of all Section 16(a) forms they file. To the Company's
knowledge, based solely upon a review of the copies of such reports furnished to
the Company and written representations from our directors and executive
officers that no other reports were required during the fiscal year ended
December 31, 2008, the Company believes that all Section 16(a) filing reports
applicable to the Company's directors and officers were timely filed, except
that Mr. Roger M. Widmann, a director, did not timely report his acquisition of
shares on January 2, 2008. Promptly after the omission was discovered, Mr.
Widmann filed the applicable report on January 11, 2008.
CORPORATE GOVERNANCE
The Company's Board of Directors has adopted policies and procedures
that the Board believes are in the best interests of the Company and its
stockholders as well as compliant with the Sarbanes-Oxley Act of 2002, the rules
and regulations of the Securities and Exchange Commission, and the listing
standards of the New York Stock Exchange. In particular:
o The Board has adopted Corporate Governance Guidelines;
o The Board has appointed a Presiding Independent Director, who is
independent under the New York Stock o Exchange standards and
applicable Securities and Exchange Commission rules;
o A majority of the Board is independent, and each member of the Audit
Committee, Compensation and Management Development Committee, and
Nominating and Corporate Governance Committee is independent under the
New York Stock Exchange standards and applicable Securities and
Exchange Commission rules;
o The Board has adopted charters for each of the Committees of the Board
and the Presiding Independent Director;
o The Company's Corporate Governance Guidelines provide that the
independent directors meet periodically in executive session without
management and that the Presiding Independent Director chairs the
executive sessions;
o Interested parties are able to make their concerns known to
non-management directors or the Audit Committee by e-mail or by mail
(see "Communications to the Board" section below);
o The Company has a Corporate Code of Ethics that applies to all company
employees, officers and directors and a Whistleblower Policy with a
hotline available to any employee, supplier, customer, stockholder or
other interested third party; and
o The Company has established stock ownership guidelines that apply to
its independent directors and executive officers.
-9-
Certain information relating to corporate governance matters can be
viewed at WWW.SMPCORP.COM/MAIN/CORPORATEGOVERNANCE.ASPX. Copies of the Company's
(1) Corporate Governance Guidelines, (2) charters for the Audit Committee,
Compensation and Management Development Committee, Nominating and Corporate
Governance Committee, and the Presiding Independent Director, and (3) Corporate
Code of Ethics and Whistleblower Policy are available on the Company's website.
Copies will also be provided to any stockholder free of charge upon written
request to Carmine J. Broccole, Secretary of the Company, at 37-18 Northern
Blvd., Long Island City, NY 11101 or via email at financial@smpcorp.com.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
In 2008, the total number of meetings of the Board of Directors,
including regularly scheduled and special meetings, was seven. All of our
directors attended at least 75% of the meetings of the Board and the Committees
during the period for which he or she was a director in 2008.
The Company requires all Board members to attend its Annual Meeting of
Stockholders. All Directors, other than Roger M. Widmann, were present at the
2008 Annual Meeting of Stockholders held on May 15, 2008.
The Board currently has three committees: an Audit Committee,
Compensation and Management Development Committee, and a Nominating and
Corporate Governance Committee. The members of each Committee consist of all of
our independent directors: William H. Turner (Chairman of the Audit Committee
and Presiding Independent Director); Robert M. Gerrity (Chairman of the
Compensation and Management Development Committee); Pamela Forbes Lieberman;
Frederick D. Sturdivant; Richard S. Ward (Chairman of the Nominating and
Corporate Governance Committee); and Roger M. Widmann.
AUDIT COMMITTEE
The Audit Committee recommends to the Board of Directors the engagement
of the independent auditors of the Company, reviews with the independent
auditors the scope and results of the Company's audits, pre-approves the
professional services furnished by them to the Company, and reviews their
management letter with comments on the Company's internal accounting controls.
The Audit Committee held five meetings in 2008.
The Board of Directors has determined that each committee member is
financially literate and independent. In addition, the Board has determined that
at least one member of the Audit Committee meets the New York Stock Exchange
standard of having accounting or related financial management expertise. The
Board has also determined that William H. Turner (the Audit Committee's
Chairman), Robert M. Gerrity and Pamela Forbes Lieberman meet the Securities and
Exchange Commission criteria of an "audit committee financial expert."
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
The Compensation and Management Development Committee's function is to
approve the compensation packages of the Company's officers, to administer the
Company's equity incentive plans, to review the Company's overall compensation
policies, to review the performance, training and development of Company
management in achieving corporate goals and objectives, and to oversee the
Company's management succession planning. The Compensation and Management
Development Committee held two meetings in 2008.
-10-
The Compensation and Management Development Committee has the exclusive
authority and responsibility to determine all aspects of executive compensation
packages. The Committee may, at its discretion, solicit the input of our
executive officers (including our Chief Executive Officer) or any independent
consultant or advisor in satisfying its responsibilities.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating and Corporate Governance Committee's function is to
assist the Board of Directors in discharging and performing the duties and
responsibilities of the Board with respect to corporate governance, including:
o The identification and recommendation to the Board of individuals
qualified to become or continue as directors;
o The continuous improvement in corporate governance policies and
practices;
o The annual self-assessment of the performance of the Board and each
Committee of the Board;
o The recommendation of members for each committee of the Board; and
o The compensation arrangements for members of the Board.
The Nominating and Corporate Governance Committee held four meetings in
2008. The Nominating and Corporate Governance Committee has the exclusive
authority and responsibility to determine all aspects of director compensation.
The Committee may solicit, in its discretion, the input of an independent
consultant or advisor in satisfying its responsibilities.
Qualifications for consideration as a director nominee vary according
to the particular areas of expertise being sought as a complement to the
existing board composition. However, in making nominations, the Nominating and
Corporate Governance Committee seeks candidates who possess (1) the highest
level of integrity and ethical character, (2) a strong personal and professional
reputation, (3) sound judgment, (4) financial literacy, (5) independence, (6)
significant experience and proven superior performance in professional
endeavors, (7) an appreciation for board and team performance, (8) the
commitment to devote the time necessary for Board activities, (9) skills in
areas that will benefit the Board, and (10) the ability to make a long-term
commitment to serve on the Board.
In recommending candidates for election to the Board, the Nominating
and Corporate Governance Committee considers nominees recommended by directors,
officers, employees, stockholders and others, using the same criteria to
evaluate all candidates. The Committee reviews each candidate's qualifications,
including whether a candidate possesses any of the specific qualities and skills
desirable in certain members of the Board. Evaluations of candidates generally
involve a review of background materials, internal discussions and interviews
with selected candidates as appropriate. Upon selection of a qualified
candidate, the Committee would recommend the candidate for consideration by the
full Board. The Committee may engage consultants or third-party search firms to
assist in identifying and evaluating potential nominees.
-11-
Stockholders may propose director candidates for consideration by the
Nominating and Corporate Governance Committee. In order for stockholder
candidates to be considered, written notice of such stockholder recommendation
(a) must be provided to the Secretary of the Company not less than 45 days nor
more than 75 days prior to the first anniversary of the record date for the
preceding year's annual meeting, and (b) must contain the name of any
recommended candidate for director, together with a brief biographical sketch, a
document indicating the candidate's willingness to serve, if elected, and
evidence of the nominating person's ownership of Company stock. Both stockholder
proposed candidates and other candidates identified and evaluated by the
Nominating and Corporate Governance Committee must comply with the procedures,
and meet the qualification of directors, as outlined in the Charter of the
Committee and the By-laws of the Company. To recommend a prospective nominee for
the Nominating and Corporate Governance Committee's consideration, a stockholder
must submit the candidate's name and qualifications to Carmine J. Broccole,
Secretary of the Company, at 37-18 Northern Blvd., Long Island City, NY 11101.
PRESIDING INDEPENDENT DIRECTOR
The Presiding Independent Director of the Company is William H. Turner,
who also serves as the Chairman of our Audit Committee. The Presiding
Independent Director is elected every year, but a director may serve for one or
more terms at the discretion of the Nominating and Corporate Governance
Committee. The role of the Presiding Independent Director is to aid and assist
the Chairman and the remainder of the Board in assuring effective corporate
governance in managing the affairs of the Board and the Company.
COMMUNICATIONS TO THE BOARD
Stockholders and other interested parties may communicate with the
Board of Directors or individual directors pursuant to the procedures
established by the Nominating and Corporate Governance Committee from time to
time. The Nominating and Corporate Governance Committee shall review such
correspondence that first is delivered to the attention of the Secretary of the
Company at 37-18 Northern Blvd., Long Island City, NY 11101, which
correspondence the Secretary will forward to the Committee. The Nominating and
Corporate Governance Committee shall have the discretion to distribute only such
correspondence to the Board or individual members of the Board that the
Committee determines in good faith has a valid business purpose or is otherwise
appropriate for the Board or individual member thereof to receive.
CORPORATE CODE OF ETHICS
The Board of Directors of the Company has adopted a Corporate Code of
Ethics to (1) promote honest and ethical conduct, including fair dealing and the
ethical handling of actual or apparent conflicts of interest, (2) promote full,
fair, accurate, timely and understandable disclosure, (3) promote compliance
with applicable laws and governmental rules and regulations, (4) ensure the
protection of the Company's legitimate business interests, including business
opportunities, assets and confidential information, and (5) deter wrongdoing.
Our Corporate Code of Ethics is available at
WWW.SMPCORP.COM/MAIN/CORPORATEGOVERNANCE.ASPX.
-12-
DIRECTOR INDEPENDENCE
The Board of Directors has affirmatively determined that each member of
the Board and Committees of the Board, other than Lawrence I. Sills, Arthur S.
Sills and Peter J. Sills, is independent under the criteria established by the
New York Stock Exchange and the Securities and Exchange Commission for
independent board members. In that regard, the Board considered whether any
director has, and generally has not had in the most recent three years, any
material relationships with the Company, including any affiliation with our
independent auditors.
DIRECTOR COMPENSATION
The following table sets forth the compensation paid by the Company to
our non-employee directors in 2008.
FEES EARNED OR STOCK ALL OTHER
NAME PAID IN CASH (1) AWARDS (2) COMPENSATION(3) TOTAL
---- ------------ -------- ------------ -----
William H. Turner............... $ 94,583 $ 82,523 $ - $ 177,106
Robert M. Gerrity............... 75,000 79,606 12,000 166,606
Pamela Forbes Lieberman......... 72,083 77,523 12,000 161,606
Frederick D. Sturdivant......... 72,083 77,523 12,000 161,606
Richard S. Ward................. 67,083 87,523 - 154,606
Roger M. Widmann................ 67,583 77,523 - 145,106
Peter J. Sills.................. 11,500 - 12,000 23,500
Arthur S. Sills................. 10,000 - 12,000 22,000
----------------
(1) Includes (a) the cash portion of the annual retainer paid to
independent directors, (b) the annual retainer paid to each
Chairman of our Committees of the Board and to our Presiding
Independent Director, and (c) fees for director attendance at
Board and Committee meetings.
(2) Represents the value in accordance with SFAS 123(R) of (a) the
Company Common Stock received by our independent directors as part
of their annual retainer, (b) any portion of the annual cash
retainer which an independent director chose to take in Company
Common Stock, and (c) shares of restricted stock granted to each
independent director.
The number of outstanding stock awards and option awards held by
each independent director at December 31, 2008 are set forth
below:
OUTSTANDING OUTSTANDING
NAME STOCK AWARDS OPTION AWARDS
---- ------------ -------------
William H. Turner.............. 3,000 13,400
Robert M. Gerrity.............. 3,000 13,400
Pamela Forbes Lieberman........ 2,000 -
Frederick D. Sturdivant........ 3,000 7,400
Richard S. Ward................ 3,000 2,000
Roger M. Widmann............... 3,000 2,000
(3) Represents the value of medical benefits provided to these directors.
For 2008, the annual cash retainer paid to each independent director
was $42,083 (inclusive of a one-time pro rata increase in director compensation
in January 2008), of which any portion can be taken in Company Common Stock at
the discretion of each director; in 2008 Mr. Ward, Mr. Turner and Mr. Gerrity
elected to receive $10,000, $5,000 and $2,083, respectively, of such retainer in
Company Common Stock. In addition, in 2008 each independent director received an
automatic restricted stock award of 1,000 shares and an additional award of
-13-
Common Stock valued at $69,583 (inclusive of a one-time pro rata increase in
director compensation in January 2008), based on the fair market value of the
Company's Common Stock as of the date of issuance. For 2009, the annual cash
retainer for each independent director shall decrease to $38,000, and the
additional award of Common Stock shall be valued at $55,000. Independent
director restricted stock grants vest one year after the grant date, so long as
the director remains continuously in office. Independent directors are also
eligible to receive other types of awards under the 2006 Omnibus Incentive Plan,
but such awards are discretionary. In the event of a merger or asset sale,
vesting of all of the shares of restricted stock will accelerate, and such
shares will become fully vested. In March 2009, the Nominating and Corporate
Governance Committee agreed to decrease the annual cash retainer portion of the
independent director's compensation by five percent.
In 2008, William H. Turner received an additional annual retainer of
$20,000 and $7,500 for his services as our Presiding Independent Director and
Chairman of the Audit Committee, respectively. Robert M. Gerrity, Chairman of
our Compensation and Management Development Committee, and Richard S. Ward,
Chairman of our Nominating and Corporate Governance Committee, each received an
additional annual retainer of $5,000 for their services as Chairman of such
Committees. In 2008, non-employee directors also received $1,500 for each Board
and Committee meeting they attended and were reimbursed for meeting expenses. In
addition, Robert M. Gerrity, Pamela Forbes Lieberman, Arthur S. Sills, Peter J.
Sills and Frederick D. Sturdivant are covered under the Company's medical plan.
Lawrence I. Sills, being an officer of the Company, received no payment for the
fulfillment of his directorial responsibilities; please refer to the Summary
Compensation Table for disclosure regarding Mr. Sills' compensation.
POLICY ON POISON PILLS
The Company does not have a poison pill and is not presently
considering the adoption of such a device. If the Company were ever to adopt a
stockholder rights agreement, the Company would seek prior stockholder approval,
unless due to time constraints or other reasons, the Board, in the exercise of
its fiduciary responsibilities, determines that it would be in the best
interests of stockholders to adopt a stockholder rights agreement before
obtaining stockholder approval. If the Company's Board were ever to adopt a
stockholder rights agreement without prior stockholder approval, the Board would
submit such agreement to stockholders for ratification within one year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All members of the Board's Compensation and Management Development
Committee during 2008 were independent directors, and none of them were
employees or former employees of the Company. During 2008, no executive officer
of the Company served on the compensation committee (or equivalent) or the board
of directors of another entity whose executive officer(s) served on the
Company's Compensation and Management Development Committee or Board of
Directors.
-14-
MANAGEMENT INFORMATION
Our officers, and their ages and positions, are:
NAME AGE POSITION
---- --- --------
Lawrence I. Sills(1)......... 69 Chairman of the Board and
Chief Executive Officer
John P. Gethin(1)............ 60 President and Chief Operating Officer
James J. Burke(1)............ 53 Vice President Finance and
Chief Financial Officer
Carmine J. Broccole.......... 43 Vice President General Counsel
and Secretary
Dale Burks................... 49 Vice President Temperature
Control Division
Michael J. Fitzgerald........ 54 Vice President Marketing
Robert Kimbro................ 54 Vice President Distribution Sales
Ray Nicholas................. 45 Vice President Information Technology
Eric Sills................... 40 Vice President Engine Management
Division
Thomas S. Tesoro............. 54 Vice President Human Resources
William J. Fazio............. 54 Chief Accounting Officer
Robert H. Martin............. 62 Treasurer and Assistant Secretary
---------------
(1) Member of the Office of Chief Executive.
LAWRENCE I. SILLS has served as our Chief Executive Officer and
Chairman of the Board since 2000 and has been a director of the Company since
1986. From 1986 to December 2000, Mr. Sills served as our President and Chief
Operating Officer. From 1983 to 1986, he served as our Vice President of
Operations. Mr. Sills is the brother of Arthur S. Sills and Peter J. Sills, each
of whom are directors of the Company, and is the father of Eric Sills, our Vice
President Engine Management Division.
JOHN P. GETHIN has served as our President and Chief Operating Officer
since December 2000. From 1997 to 2000, Mr. Gethin served as our Senior Vice
President of Operations. From 1998 to 2003, he served as the General Manager of
our Temperature Control Division. From 1995 to 1997, Mr. Gethin was our Vice
President and General Manager of EIS Brake Parts Division (a former business
unit of ours).
JAMES J. BURKE has served as our Vice President Finance and Chief
Financial Officer since 1999. From 1998 to 1999, Mr. Burke served as our
Director of Finance, Chief Accounting Officer. From 1993 to 1997, he served as
our Corporate Controller.
CARMINE J. BROCCOLE has served as our Vice President General Counsel
and Secretary since January 2006 and was our General Counsel from August 2004 to
January 2006. Prior to such time, Mr. Broccole was a Partner of Kelley Drye &
Warren LLP.
DALE BURKS has served as our Vice President Temperature Control
Division since September 2006. From July 2003 to September 2006, Mr. Burks
served as our General Manager - Temperature Control Division. From 1984 to 2003,
he served in various capacities in our company including Director-Sales &
Marketing, Regional Manager and Territory Manager.
-15-
MICHAEL J. FITZGERALD has served as our Vice President Marketing since
May 2007. From July 2003 to May 2007, Mr. Fitzgerald served in a variety of
sales and marketing capacities in our company, including Director of Sales and
Marketing-NAPA. Prior to 2003, he worked for Echlin/Dana (acquired by our
company in 2003) as a Territory Salesman, Zone Manager, Retail Marketing Manager
and Vice President of Marketing.
ROBERT KIMBRO has served as our Vice President Distribution Sales since
September 2006. Since 1984, Mr. Kimbo served in a variety of sales capacities in
our company, most recently as Regional Sales Manager for the East Region
beginning in 1997.
RAY NICHOLAS has served as our Vice President Information Technology
since September 2006. From 1990 to September 2006, Mr. Nicholas served as the
Manager and Director of Information Systems for our Temperature Control
Division.
ERIC SILLS has served as our Vice President Engine Management Division
since September 2006. From 1991 to September 2006, Mr. Sills served in various
capacities in our company, most recently as General Manager, LIC Operations,
Director of Product Management, and Plant Manager, Oxygen Sensor Business Unit.
He is the son of Lawrence I. Sills and the nephew of Arthur S. Sills and Peter
J. Sills.
THOMAS S. TESORO has served as our Vice President Human Resources since
September 2006 after joining our company in July 2006. From 1999 to July 2006,
Mr. Tesoro served as Senior Vice President of Human Resources for Vertrue Inc.
Prior to such time, he served in a variety of senior human resources related
positions for a number of Fortune 500 companies.
WILLIAM J. FAZIO has served as our Chief Accounting Officer since March
2008. From September 2007 to March 2008, Mr. Fazio served as our Director,
Corporate Accounting. From April 2001 to September 2007, he served as the
Corporate Controller and Chief Accounting Officer of Hexcel Corporation. Prior
to that time, Mr. Fazio served as Vice President, Controller of Kodak Polychrome
Graphics. Mr. Fazio is a Certified Public Accountant.
ROBERT H. MARTIN has served as our Treasurer and Assistant Secretary
since 1999. From 1993 to 1999, Mr. Martin served as the Controller of our Engine
Management Division. From 1989 to 1993, he was the Division Controller of one of
our subsidiaries.
OFFICE OF CHIEF EXECUTIVE
The Company has established the Office of the Chief Executive to
strengthen the executive management structure of the Company. The Office of
Chief Executive is primarily responsible for the development of policy, strategy
and quality assurance, and the provision of leadership. Its functions also
include (a) supporting and providing timely and quality advice to the Chief
Executive Officer; (b) promoting the policies of the Company; and (c) improving
communications between management, customers, the Board of Directors and
stockholders. The Office of Chief Executive is comprised of (1) Lawrence I.
Sills, our Chairman and Chief Executive Officer, (2) John P. Gethin, our
President and Chief Operating Officer, and (3) James J. Burke, our Vice
President Finance and Chief Financial Officer.
-16-
EXECUTIVE COMPENSATION AND RELATED INFORMATION
COMPENSATION DISCUSSION AND ANALYSIS
OVERVIEW
Our Compensation and Management Development Committee of the Board of
Directors is responsible for:
o reviewing the overall goals, policies, objectives and structure of our
executive compensation and benefit programs;
o approving the compensation packages of the Company's executive
officers; and
o administering our equity incentive plans.
The Compensation Committee is comprised exclusively of independent
directors. In performing its duties, the Compensation Committee may, in its
discretion, solicit the input of any of our executive officers (including our
Chief Executive Officer), any of our other employees, and any other independent
consultant or advisor.
PRIMARY OBJECTIVES OF COMPENSATION
Our executive compensation program is designed to:
o attract, motivate and retain exceptional talent whose abilities are
critical to the Company's long-term success;
o maintain a portion of the executive's total compensation at risk, tied
to achievement of annual and long-term financial, organizational and
management performance goals; and
o provide variable compensation incentives directly linked to the
performance of the Company and improvement in stockholder return so
that executives manage from the perspective of owners with an equity
stake in the Company.
PRINCIPAL ELEMENTS OF COMPENSATION
The principal elements of our executive compensation program are (a)
base salary, (b) annual cash incentives, (c) long-term equity incentives, and
(d) perquisites and other benefits.
Our Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer generally participate in the same executive compensation plans
and arrangements available to the other executive officers; however, their
target performance bonuses are based solely upon achieving the Company's short
term and long term strategic goals.
While the elements of compensation are considered separately, the
Compensation Committee also considers the complete compensation package of an
individual executive to ensure that it will be effective in motivating and
incentivizing the executive. We determine the appropriate levels of our total
compensation, and each compensation element, based on several factors, such as
our overall performance, each executive's individual performance, and the desire
to maintain internal pay equity and consistency among our executives.
-17-
COMPENSATION PROCESS
ROLE OF MANAGEMENT. Following the end of each fiscal year, our Chief
Executive Officer evaluates each executive officer's performance for the prior
fiscal year (other than his own performance) and discusses the results of such
evaluations with the Compensation Committee. The Chief Operating Officer also
assists in the evaluations for those officers reporting to him. The Chief
Executive Officer's evaluation of each executive officer's performance may be
based upon subjective factors including an officer's individual business goals
and objectives, and the contributions made by the executive officer to our
overall results and achieving our strategic goals. These evaluations include an
assessment of the level of responsibility of each executive officer and the
percentage of total Company revenue and/or expense that each individual officer
is responsible for, where applicable. The Chief Executive Officer then makes
specific recommendations to the Compensation Committee for adjustments of base
salary and target bonus as part of the compensation packages for each executive
officer (other than himself) for the next fiscal year.
The Compensation Committee reviews the performance of the Chief
Executive Officer and determines the compensation for all executive officers,
considering the recommendations from the Chief Executive Officer. The
Compensation Committee discusses the recommendations of the Chief Executive
Officer in executive session without any members of management present and, as
applicable, modifies the recommendations when approving final compensation
packages.
Management also periodically provides recommendations to the
Compensation Committee regarding all benefit plan design and strategies,
including recommendations on the design and implementation of our bonus plans,
financial goals and criteria, and our equity incentive plans.
COMPENSATION CONSULTANTS; BENCHMARKING. We do not retain compensation
consultants to review our policies and procedures with respect to executive
compensation. The Compensation Committee may use market data for context and a
frame of reference for decision making, but it is not the sole source of
information on which executive compensation is determined. In establishing total
compensation for our executives, we target the median of the market, which we
determine to be equivalent to the domestic market for executive talent within US
industrial companies with gross revenues in the range of $500 million to $1
billion. Our Human Resources department conducts annual informal benchmark
reviews within the above-referenced market of the aggregate level of our
executive compensation, as well as the mix of elements used to compensate our
executive officers, and provides such information to the Compensation Committee.
This review is based in part on publicly available resources and surveys and
other databases to which we subscribe, such as those from Mercer and Watson
Wyatt.
TALLY SHEETS. When reviewing annual executive compensation, the
Compensation Committee has historically reviewed management-provided materials,
which highlight the base salary, target bonus, actual bonus, equity compensation
and fringe benefits paid to each of our executive officers for prior fiscal
years. The Compensation Committee uses this information to review compensation
trends, to compare increases or decreases year over year, and to ensure that
compensation decisions are made with a view of the total compensation package
awarded to each executive officer. No specific weight is assigned by the
Compensation Committee to the tally sheets.
-18-
ELEMENTS OF COMPENSATION AND HOW EACH ELEMENT IS CHOSEN
BASE SALARY. Base salaries for our executive officers are determined by
evaluating the responsibilities of the position, the experience of the
individual, and the competitive marketplace. We believe that our base salaries
are an important element of our executive compensation program because they
provide our executives with a steady income stream that is not contingent upon
our overall performance. We believe that maintaining base salary amounts at or
near the industry median minimizes competitive disadvantage, while avoiding
paying amounts in excess of what we believe to be necessary to motivate
executives to meet corporate goals.
Base salaries for executive officers are reviewed typically in January
of each year, at the time of a promotion, upon a change in level of
responsibilities, or when competitive circumstances may require review. Any
increase or decrease in base salary is dependent upon the Company's performance
and individual performance.
When setting compensation for 2008, the Compensation Committee
discussed the recommendations of the Chief Executive Officer, the financial
results of the Company for the prior year, and the ability of individual
officers to impact performance during 2009. For 2008, executives received
increases in their base salaries. However, for 2009 based on the Company's
performance in 2008 and overall market conditions, the Compensation Committee
established a salary freeze so that an executive's 2008 and 2009 base salary
would remain the same. In addition, the Compensation Committee determined that
our Chief Executive Officer's 2009 base salary should be reduced by five (5%)
percent.
ANNUAL BONUS. We utilize annual incentive cash bonuses to reward each
of our executive officers when (1) the executive officer achieves certain
individual performance objectives (or MBO goals) and (2) when we achieve certain
company-level financial objectives under our Economic Value Added (EVA) program.
Our annual cash bonuses are designed to more immediately reward our executives
for their performance during the most recent year. We believe that the immediacy
of these cash bonuses, in contrast to our equity grants, which vest over a
period of time, provides a significant incentive to our executives towards
achieving their respective individual objectives and thus our company-level
objectives. We believe our cash bonuses are an important motivating factor for
our executives, in addition to being a significant factor in attracting and
retaining our executives.
Near the beginning of each year, annual target cash bonuses are
determined as a percentage of each executive officer's total cash compensation
for the fiscal year. The target bonuses are set at levels that, upon achievement
of 100% of the target amount, are likely to result in bonus payments that the
Compensation Committee believes to be at or near the median for target bonus
amounts in the market; however, actual bonuses may be higher or lower based upon
achievement of MBO and EVA goals. The Compensation Committee reviews and
approves a detailed set of individual MBO goals (which are generally
quantifiable performance objectives and aligned with the Company's strategic
goals) initially prepared by management. Individual MBO goals, for example,
might include developing strategic opportunities, developing our executive team,
or improving operating efficiency and cost position. At the beginning of the
following year, the Compensation Committee determines the level of achievement
for each MBO goal of each executive and, together with the company-level
financial achievements based on our EVA program, final bonuses are determined.
-19-
With respect to company-level financial objectives, the Company
utilizes an EVA-based bonus program to more closely align executive compensation
to continuous improvements in corporate performance and increases in stockholder
value. EVA recognizes the productive use of capital assets and therefore wise,
responsible decision-making regarding capital investments. EVA is a measure that
is equal to net operating profit after tax, less a charge for the cost of
capital. Bonuses tied to EVA are such that increasing EVA year over year will be
favorable for the Company's stockholders as well as for those whose compensation
is based on EVA. In January 2009, we modified our EVA bonus program to cap the
maximum amount a participant may receive in any given year to 200% of an
executive's target EVA bonus.
Under the EVA bonus program, the 2008 bonuses of our named executive
officers are based on a range of 65% or greater on year-over-year improvement in
Company EVA and the remaining 35% or less on MBO goals approved by the
Compensation Committee. Our other executive officers may have a different
proportion between EVA and MBO goals based on their positions and
responsibilities. Earned MBO bonuses are paid out in full each year, typically
in mid-March; however, 2008 bonuses will be paid in the fourth quarter of 2009.
Due to the Company's performance in 2008, no executive officer received an EVA
bonus and, accordingly, the overall bonus payments is significantly lower than
bonuses earned in 2007.
LONG-TERM EQUITY INCENTIVE PROGRAMS. As part of the Company's
compensation program, the Compensation Committee grants equity stock to the
Company's executive officers and other key employees. We believe that equity
grants provide our executive officers with a strong link to our long-term
performance goals, create an ownership culture, and closely align the interests
of our executive officers and our stockholders. In addition, the vesting feature
of our equity grants should aid officer retention because this feature provides
an incentive to our executive officers to remain in our employ during the
vesting period. In determining the size of equity grants to our executive
officers, the Compensation Committee considers our company-level performance,
the applicable executive officer's performance, the amount of equity previously
awarded to the applicable executive officer, the vesting of such awards, and the
recommendations of management and any other advisor that the Compensation
Committee may choose to consult.
STOCK OPTION PLANS. Prior to 2006, the primary form of equity
compensation that we awarded to our executive officers consisted of incentive
stock options under our 1994 Omnibus Stock Option Plan and 2004 Omnibus Stock
Plan. We granted stock options to our executive officers once per year or every
other year at regularly scheduled meetings of the Board. However, after the
adoption of our 2006 Omnibus Incentive Plan (discussed below), our board of
directors has determined not to grant any additional stock options under these
stock option plans.
Historically, stock options for our executive officers were granted in
installments, such that the exercise price of the initial installment was equal
to the fair market value of our Common Stock on the date of grant and the
exercise price of the remaining one to three installments were either (a) one
dollar above the prior installment or (b) equal to 110% of the fair market value
of our Common Stock on the date of grant. Stock options had vesting periods of
two to four years. We spread the vesting of our options over a period of time to
compensate our executives for their contribution over a period of time and as a
retention tool. In addition, we increased the exercise price of the stock
options after the initial installment to further align the interests of our
executive officers and our stockholders.
-20-
2006 OMNIBUS INCENTIVE PLAN. Beginning in 2006, the accounting
treatment for stock options changed as a result of Statement of Financial
Accounting Standards No. 123(R), making the accounting treatment of stock
options less attractive. As a result, we assessed the desirability of granting
restricted stock awards and performance share awards to our executive officers
and other key employees and concluded that such awards would provide an equally
motivating form of incentive compensation while permitting us to issue fewer
shares, thereby reducing potential dilution. Because shares of restricted stock
have a defined value at the time the restricted stock grants are issued,
restricted stock grants are often perceived as having more immediate value than
stock options, which have a less calculable value when granted. In addition, we
provide performance shares to our executive officers because we believe that
their contributions to the Company have a direct relationship to the achievement
of the Company's strategic goals.
We grant our executive officers restricted stock and performance shares
once per year at a regularly scheduled meeting of the Board. The Incentive Plan
also permits the grant of incentive and nonqualified stock options, stock
appreciation rights, restricted stock units, and other stock-based awards to our
officers, directors, employees and consultants. However, we currently only
intend to grant restricted stock and performance shares under the Incentive
Plan. Each restricted stock award issued under the Incentive Plan is subject to
a three year vesting schedule. If an executive officer ceases to remain employed
with the Company before the end of the vesting period, such person shall forfeit
the entire restricted stock award. Restricted stock awards may become
immediately vested in full in cases of death, retirement at or after age 65,
total disability (as determined by the Compensation Committee in its sole
discretion), or upon a "change in control" of the Company.
We also award our executive officers performance shares in amounts
initially comparable to the number of shares of restricted stock issued to such
executives, although the actual number of performance shares awarded may be
higher or lower depending upon the level of the performance goal achieved. In
order for the performance shares to be earned, the Company must achieve a
certain level of earnings before taxes at the end of a three-year performance
period covered by the awards. The level of earnings before taxes is tied to
financial goals contained in the Company's three year strategic plan, which is
updated annually. The performance share awards are also subject to a three-year
vesting period. To the extent that an officer ceases to be an employee of the
Company before the end of the vesting period, the entire performance share award
shall be forfeited. The performance goals are scaled so that the recipient can
receive part of an award in the event that acceptable, but not the desired,
results are achieved. In connection with the performance shares granted to
executive officers in May 2006, no performance shares will be issued as the
Company did not achieve its financial goals at the end of the three-year
performance period.
It is our policy to ensure that we do not award equity grants in
connection with the release, or the withholding, of material non-public
information, and that the grant value of all equity awards is equal to the fair
market value on the date of grant.
-21-
SPECIAL INCENTIVE PLAN. In order to incentivize our executive officers
to achieve the goals set forth in the Company's three year strategic plan, in
January 2008 the Compensation Committee adopted the Standard Motor Products,
Inc. Special Incentive Plan. The Incentive Plan is designed to reward eligible
employees, including our named executive officers, for the achievement of
pre-determined sales and earnings per share targets as set forth in the
Company's three-year strategic plan. If the Company achieves the financial
targets determined as of the end of December 31, 2010, an eligible employee
shall receive a one-time incentive bonus of up to 30% of base pay and bonus at
par. Incentive bonuses, if any, would be payable on March 15, 2011, and eligible
employees must remain active employees on such date to receive any incentive
bonus.
STOCK OWNERSHIP GUIDELINES
To directly align the interests of executive officers with the
interests of our stockholders, we established stock ownership guidelines for our
executive officers. Our stock ownership guidelines provide that executive
officers are expected to own and hold a number of shares of Company Common Stock
with a value that represents either (a) 50 percent of their base salary, with
respect to the Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer, or (b) 30 percent of their base salary, with respect to each
of the other executive officers of the Company. Stock ownership levels should be
achieved by each executive officer within a period of time as determined at the
discretion of the Compensation Committee. We do not allow our executive officers
to hedge the economic risk of their stock ownership.
Our stock ownership guidelines also include a mandatory stock holding
period policy which requires our executive officers to hold for a period of six
months any stock acquired by them upon the exercise of stock options or lapse of
restrictions on restricted stock or performance shares, net of the funds
necessary to pay the exercise price of stock options or for payment of
applicable taxes.
TERMINATION-BASED COMPENSATION
We do not have individual change in control or severance arrangements
with our executive officers, other than John P. Gethin, our President and Chief
Operating Officer, and James J. Burke, our Vice President Finance and Chief
Financial Officer. As discussed in more detail in the "Severance and Change of
Control Arrangements" section below, Messrs. Gethin and Burke are entitled to
certain benefits upon the termination of their respective employment pursuant to
Severance Compensation Agreements, Retention Bonus and Insurance Agreements and
the Supplemental SERP. These benefits include severance and retention payments,
continued health and life insurance coverage for a limited period of time, and
additional service credit under the Company's Supplemental Compensation Plan.
The Compensation Committee initially adopted, and has maintained, these
agreements with Messrs. Gethin and Burke because the Compensation Committee
believes that such arrangements protect the interests of these senior executives
when a potential change of control could affect their job security. In addition,
since the agreements mitigate any concern these executive officers may have in
connection with a termination of their employment by us, or the loss of
employment as a result of a change in our control, they promote the interests of
stockholders by assuring that management focuses on evaluating opportunities
that are in our best interests, without concentrating on individual personal
interests. These agreements also help ensure that these executive officers stay
committed to furthering our interests, even if we were to consider a transaction
that resulted in a change of our control.
-22-
In addition, as discussed in more detail in the "Severance and Change
of Control Arrangements" section below, each of our executive officers are
eligible to receive termination-related benefits under the Company's
Supplemental Unemployment Benefit Plan (which is available to all eligible
employees) and Supplemental Executive Retirement Plan. As stated previously, our
2006 Omnibus Incentive Plan contains provisions that would accelerate the
vesting of restricted stock upon certain events, including a change of control
of the Company. We believe these severance and change of control benefits are an
essential element of our executive compensation package and assist us in
recruiting and retaining talented individuals.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Compensation Committee has considered the potential impact of
Section 162(m) of the Internal Revenue Code on the compensation paid to the
Company's executive officers. Section 162(m) disallows a tax deduction for any
publicly-held corporation for individual compensation exceeding $1 million in
any taxable year for any of the executive officers, unless compensation is
performance-based. In general, it is the Compensation Committee's policy to
qualify, to the maximum extent possible, its executives' compensation for
deductibility under applicable tax laws. In approving the amount and form of
compensation for the Company's executive officers, the Compensation Committee
will continue to consider all elements of the cost to the Company of providing
such compensation, including the potential impact of Section 162(m).
RETIREMENT PLANS
SERP. The Company has established a Supplemental Executive Retirement
Plan for our executive officers and other eligible employees. The purpose of
this plan is to enable the Company to supplement the benefits under the
Company's 401(K) Capital Accumulation Plan/Profit Sharing Plan as well as to
provide a means whereby certain amounts payable by the Company to our executive
officers may be deferred to some future period. Eligible employees may
irrevocably elect to defer receipt of (a) all or a portion of their bonuses for
the year and (b) their base compensation which would otherwise be payable for
the applicable plan year up to a maximum of 50%. In addition, the Company
generally makes an annual cash contribution into the SERP on behalf of each
participant.
SUPPLEMENTAL SERP. As mentioned above, the Company maintains an
unfunded supplemental SERP for John P. Gethin and James J. Burke. The
supplemental SERP provides that, upon attainment of a participant's normal
retirement age (i.e., 60 years of age), the participant shall be entitled to 50%
of such participant's highest average annual base salary plus bonus in three of
the last five years of service. If a participant terminates his employment
voluntarily prior to age 60 or is terminated for cause, such participant will
forfeit his benefits under the supplemental SERP. The benefits under this plan
are in addition to benefits payable to participants under the Company's 401(K)
Capital Accumulation Plan/Profit Sharing Plan and SERP. In July 2008, Mr. Gethin
received payment of approximately $5 million representing his full payment under
the Supplemental SERP and is no longer eligible for future payments. See the
Pension Benefits section for discussion of Mr. Gethin's Supplemental SERP
payment.
-23-
ESOP. Our executive officers are eligible to receive Company Common
Stock pursuant to our Employee Stock Ownership Plan, which is available for all
eligible employees. This stock grant plan gives our executives an opportunity to
share directly in the growth of the Company through stock ownership. The
Company's stock contributions for a particular calendar year are made in the
first quarter of such year. Typically, the Company makes a contribution to the
ESOP in a sufficient amount to permit an allocation of the number of shares
necessary (exclusive of forfeitures) up to the market value of 2% of the gross
annual cash compensation of all eligible participants. Under the plan, each
participant must comply with a six year vesting schedule.
RETIREE MEDICAL BENEFITS. The Company has a retiree medical benefit
plan for eligible employees. Lawrence I. Sills, James J. Burke and Dale Burks
are currently eligible to receive benefits under this plan. The plan provides
medical coverage (which is secondary to Medicare) to such executive officers
beginning at the age of 65 and remains in effect as long as such executive
officers continue to make the same contributions as made by active employees. In
2005, the Company changed the plan such that no employee hired after January 1,
1995 would be eligible under the plan. Accordingly, none of our other executive
officers is eligible to receive any benefits under this plan. In addition,
effective in January 2009, the Company discontinued its retiree medical benefit
plan and replaced it with a company-funded health reimbursement account for
eligible retirees, which include the above-referenced executive officers.
PERQUISITES AND OTHER BENEFITS
We provide our executive officers certain perquisites and other
benefits. We provide these benefits to provide an additional incentive for our
executives and to remain competitive in the general marketplace for executive
talent. The primary perquisite for our executive officers is allowances for
leasing an automobile. In addition, we maintain broad-based benefits that are
provided to all employees, including health insurance, life and disability
insurance, accidental death and dismemberment insurance, dental insurance,
401(K) Capital Accumulation Plan/Profit Sharing plan and an employee stock
purchase plan.
REPORT OF THE COMPENSATION
AND MANAGEMENT DEVELOPMENT COMMITTEE
The Compensation and Management Development Committee of the Board of
Directors has reviewed and discussed the Company's Compensation Discussion and
Analysis with management. Based on this review and discussion, the Committee
recommended that the Board of Directors include the Compensation Discussion and
Analysis in this Proxy Statement.
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
Robert M. Gerrity, Chairman Pamela Forbes Lieberman
Frederick D. Sturdivant William H. Turner
Richard S. Ward Roger M. Widmann
-24-
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation paid by the
Company during fiscal 2008, 2007 and 2006 to our principal executive officer,
our principal financial officer and our other most highly compensated executive
officers as defined in the regulations of the Securities and Exchange Commission
(the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
CHANGE
IN PENSION
VALUE AND
NAME NONQUALIFIED
AND DEFERRED ALL
PRINCIPAL STOCK COMPENSATION OTHER
POSITION YEAR SALARY BONUS (1) AWARDS (2) EARNINGS (3) COMPENSATION TOTAL
(4)
---------------------------------------------------------------------------------------------------------------------------
Lawrence I. Sills ................ 2008 $ 460,000 $ 129,276 $ 12,900 $ -- $ 36,531 $ 638,707
Chief Executive Officer and 2007 450,000 247,313 13,980 -- 43,447 754,740
Chairman of the Board 2006 403,000 298,594 13,800 -- 33,453 748,847
John P. Gethin ................... 2008 $ 538,000 $ 100,548 $ 12,094 $ 0 $ 44,692 $ 695,334
President and 2007 528,000 189,965 13,106 591,214 51,106 1,373,391
Chief Operating Officer 2006 503,000 229,688 12,938 506,262 43,965 1,295,853
James J. Burke ................... 2008 $ 438,000 $ 84,389 $ 12,094 $ 132,600 $ 35,212 $ 702,295
Vice President Finance and 2007 428,000 161,291 13,106 297,215 39,606 939,218
Chief Financial Officer 2006 403,000 183,750 12,938 0 34,513 634,201
Carmine J. Broccole .............. 2008 $ 308,000 $ 47,490 $ 8,063 $ -- $ 22,282 $ 385,835
Vice President General Counsel 2007 288,000 91,456 8,738 -- 24,053 412,247
and Secretary 2006 263,000 120,865 11,168 -- 18,987 414,020
Dale Burks ....................... 2008 $ 303,000 $ 54,772 $ 8,063 $ -- $ 15,630 $ 381,465
Vice President Temperature 2007 278,000 59,400 8,738 -- 19,519 365,657
Control Division 2006 253,000 120,411 11,168 -- 12,452 397,031
----------
(1) The amounts in this column constitute annual cash bonus awards. Bonuses
for 2008 will be paid in the fourth quarter of 2009. See the discussion
in the "Compensation Discussion and Analysis" section above.
(2) The amounts in this column represent the SFAS 123(R) compensation cost
we recognized in 2008, 2007 and 2006 for the restricted stock awards.
For a discussion of the valuation assumptions, see Note 11 to our
consolidated financial statements included in our Annual Report on Form
10-K for the year ended December 31, 2008. See "Grants of Plan-Based
Awards" and "Outstanding Equity Awards at Fiscal Year-End" sections for
more information regarding our stock awards.
(3) We do not pay "above market" interest on non-qualified deferred
compensation; therefore, this column reflects pension accruals only.
The amounts shown are attributable to the change in the actuarial
present value of the accumulated benefit under our Supplemental SERP on
a year-over-year basis. The change in actuarial present value of the
accumulated benefit was (a) a decrease of $4,292,272 in 2008 for Mr.
Gethin as he received a lump sum payout of $4,982,612 under the
Supplemental SERP in July 2008, and (2) a decrease of $7,358 in 2006
for Mr. Burke. Messrs. Gethin and Burke are the only participants of
the Supplemental SERP, but Mr. Gethin is no longer eligible to receive
any future payments under the plan. See the discussion in the "Pension
Benefits" section for more information.
(4) The amounts in this column represent (a) car allowances for leased
automobiles, (b) Company contributions to the 401(K) Capital
Accumulation Plan/Profit Sharing Plan, ESOP and SERP programs on behalf
of the Named Executive Officers (401(K) and SERP contributions will be
paid in September 2009), and (c) Company payments for life insurance
premiums. The amount attributable to each perquisite for each Named
Executive Officer does not exceed the greater of $25,000 or 10% of the
total amount of perquisites received by such officer.
-25-
The following table sets forth certain information with respect to
stock awards granted to the Named Executive Officers during 2008. The Company
does not have any non-equity incentive award plans and therefore has omitted the
corresponding columns.
GRANTS OF PLAN-BASED AWARDS
ESTIMATED FUTURE PAYOUTS
UNDER EQUITY INCENTIVE ALL OTHER STOCK
PLAN AWARDS (1) AWARDS: NUMBER OF
GRANT SHARES OF STOCK OR GRANT DATE
DATES THRESHOLD (#) TARGET (#) MAXIMUM (#) UNITS (#) (2) FAIR VALUE
----- ------------- ---------- ----------- --------- ----------
(3)
Lawrence I. Sills...............9/8/08 1,000 2,000 4,000 2,000 $12,900
9/8/08 12,900
John P. Gethin..................9/8/08 938 1,875 3,750 1,875 $12,094
9/8/08 12,094
James J. Burke..................9/8/08 938 1,875 3,750 1,875 $12,094
9/8/08 12,094
Carmine J. Broccole.............9/8/08 625 1,250 2,500 1,250 $ 8,063
9/8/08 8,063
Dale Burks......................9/8/08 625 1,250 2,500 1,250 $ 8,063
9/8/08 8,063
-----------------
(1) These columns reflect threshold, target and maximum payout levels for
performance share awards granted under our 2006 Omnibus Incentive Plan.
The performance share awards have a three year vesting period and
performance target goals relating to the Company's earnings before
taxes measured at the end of a three year period. To the extent that
the Company does not achieve the threshold level of earnings before
taxes at the end of the measuring period, no performance shares will be
issued. For 2008, no performance shares were issued, as the Company did
not achieve its financial goals during the requisite measuring period.
Holders of performance share awards are not entitled to stockholder
rights, including voting rights or dividends. To the extent that an
officer ceases to be an employee of the Company before the end of the
vesting period, the entire performance share award shall be forfeited.
Additional information regarding our 2006 Omnibus Incentive Plan is
included in the "Compensation Discussion and Analysis" section above.
(2) This column reflects the number of shares of restricted stock issued
under our 2006 Omnibus Incentive Plan. Shares of restricted stock have
a three year vesting period and are not entitled to dividends; however,
holders of restricted stock are entitled to voting rights. To the
extent that an officer ceases to be an employee of the Company before
the end of the vesting period, the entire restricted stock award shall
be forfeited. See related discussion in the "Compensation Discussion
and Analysis" section above. These awards are also described in the
"Outstanding Equity Awards at Fiscal Year-End" section below.
(3) The SFAS 123(R) value of these awards is $6.45 per share as of the date
of grant.
-26-
The following table summarizes the equity awards that we have made to our
Named Executive Officers which are outstanding as of December 31, 2008.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OPTION AWARDS STOCK AWARDS (1)
--------------------------------------------------- --------------------------------------------
EQUITY EQUITY
INCENTIVE INCENTIVE
PLAN PLAN
AWARDS: AWARDS:
NUMBER MARKET OR
OF PAYOUT
MARKET UNEARNED VALUE OF
VALUE OF SHARES, UNEARNED
NUMBER NUMBER NUMBER SHARES OR UNITS OR SHARES,
OF OF OF SHARES UNITS OF OTHER UNITS OF
SECURITIES SECURITIES OR UNITS STOCK RIGHTS OTHER
UNDERLYING UNDERLYING OF STOCK THAT THAT RIGHTS
UNEXERCISED UNEXERCISED OPTION OPTION THAT HAVE HAVE HAVE THAT HAVE
OPTIONS OPTIONS EXERCISE EXPIRATION NOT NOT NOT NOT
NAME GRANT DATE EXERCISABLE UNEXERCISABLE PRICE DATE VESTED VESTED(2) VESTED VESTED(2)
-----------------------------------------------------------------------------------------------------------------------------------
Lawrence I. Sills 2/14/2003 6,667 0 $13.74(5) 2/14/2009 -- -- -- --
2/14/2003 6,667 0 $14.74(4) 2/14/2010 -- -- -- --
2/14/2003 6,666 0 $15.74(3) 2/14/2011 -- -- -- --
5/24/2004 6,250 0 $13.55(5) 5/24/2014 -- -- -- --
5/24/2004 6,250 0 $14.91(4) 5/24/2014 -- -- -- --
5/19/2005 6,250 0 $10.55(5) 5/19/2015 -- -- -- --
5/19/2005 6,250 0 $11.61(4) 5/19/2015 -- -- -- --
5/18/2006 -- -- -- -- 2,000 $ 6,920 -- --
10/25/2007 -- -- -- -- 2,000 $ 6,920 2,000 $6,920
9/8/2008 -- -- -- -- 2,000 $ 6,920 2,000 $6,920
John P. Gethin 2/14/2003 6,000 0 $13.74(5) 2/14/2009 -- -- -- --
2/14/2003 6,000 0 $14.74(4) 2/14/2010 -- -- -- --
4/14/2003 6,000 0 $15.74(3) 2/14/2011 -- -- -- --
5/24/2004 5,625 0 $13.55(5) 5/24/2014 -- -- -- --
5/24/2004 5,625 0 $14.91(4) 5/24/2014 -- -- -- --
5/19/2005 1,625 0 $10.55(5) 5/19/2015 -- -- -- --
5/19/2005 5,625 0 $11.61(4) 5/19/2015 -- -- -- --
5/18/2006 -- -- -- -- 1,875 $ 6,488 -- --
10/25/2007 -- -- -- -- 1,875 $ 6,488 1,875 $6,488
9/8/2008 -- -- -- -- 1,875 $ 6,488 1,875 $6,488
James J. Burke 2/14/2003 4,000 0 $13.74(5) 2/14/2009 -- -- -- --
2/14/2003 4,000 0 $14.74(4) 2/14/2010 -- -- -- --
2/14/2003 4,000 0 $15.74(3) 2/14/2011 -- -- -- --
5/24/2004 3,750 0 $13.55(5) 5/24/2014 -- -- -- --
5/24/2004 3,750 0 $14.91(4) 5/24/2014 -- -- -- --
5/19/2005 3,750 0 $10.55(5) 5/19/2015 -- -- -- --
5/19/2005 3,750 0 $11.61(4) 5/19/2015 -- -- -- --
5/18/2006 -- -- -- -- 1,875 $ 6,488 -- --
10/25/2007 -- -- -- -- 1,875 $ 6,488 1,875 $6,488
9/8/2008 -- -- -- -- 1,875 $ 6,488 1,875 $6,488
-27-
OPTION AWARDS STOCK AWARDS (1)
--------------------------------------------------- --------------------------------------------
EQUITY EQUITY
INCENTIVE INCENTIVE
PLAN PLAN
AWARDS: AWARDS:
NUMBER MARKET OR
OF PAYOUT
MARKET UNEARNED VALUE OF
VALUE OF SHARES, UNEARNED
NUMBER NUMBER NUMBER SHARES OR UNITS OR SHARES,
OF OF OF SHARES UNITS OF OTHER UNITS OF
SECURITIES SECURITIES OR UNITS STOCK RIGHTS OTHER
UNDERLYING UNDERLYING OF STOCK THAT THAT RIGHTS
UNEXERCISED UNEXERCISED OPTION OPTION THAT HAVE HAVE HAVE THAT HAVE
OPTIONS OPTIONS EXERCISE EXPIRATION NOT NOT NOT NOT
NAME GRANT DATE EXERCISABLE UNEXERCISABLE PRICE DATE VESTED VESTED(2) VESTED VESTED(2)
-----------------------------------------------------------------------------------------------------------------------------------
Carmine J. Broccole 5/19/2005 1,500 0 $10.55(5) 5/19/2015 -- -- -- --
5/19/2005 1,500 0 $11.61(4) 5/19/2015 -- -- -- --
5/18/2006 -- -- -- -- 500 $ 1,730 -- --
9/1/2006 -- -- -- -- 750 $ 2,595 -- --
10/25/2007 -- -- -- -- 1,250 $ 4,325 1,250 $4,325
9/8/2008 -- -- -- -- 1,250 $ 4,325 1,250 $4,325
Dale Burks 2/14/2003 1,600 0 $13.74(5) 2/14/2009 -- -- -- --
2/14/2003 1,600 0 $14.74(4) 2/14/2010 -- -- -- --
2/14/2003 1,600 0 $15.74(3) 2/14/2011 -- -- -- --
5/24/2004 3,750 0 $13.55(5) 5/24/2014 -- -- -- --
5/24/2004 3,750 0 $14.91(4) 5/19/2014 -- -- -- --
5/19/2005 3,750 0 $10.55(5) 5/19/2015 -- -- -- --
5/19/2005 3,750 0 $11.61(4) 5/19/2015 -- -- -- --
5/18/2006 -- -- -- -- 500 $ 1,730 -- --
9/1/2006 -- -- -- -- 750 $ 2,595 -- --
10/25/2007 -- -- -- -- 1,250 $ 4,325 1,250 $4,325
9/8/2008 -- -- -- -- 1,250 $ 4,325 1,250 $4,325
-----------------
(1) Shares of restricted stock vest on the third anniversary of the date of
grant. Performance shares vest on the third anniversary of the date of
grant, provided that certain performance goals have been met at the end
of the three year measuring period. For 2008, no performance shares
were issued, as the Company did not achieve its financial goals during
the requisite measuring period. Please refer to the "Compensation
Discussion and Analysis" section above for additional information
regarding equity awards granted under our 2006 Omnibus Incentive Plan.
(2) The market value is based on the closing price of the Company's Common
Stock of $3.46 per share as of December 31, 2008 (the last trading day
of 2008).
(3) These options vest on the third anniversary of the date of grant.
(4) These options vest on the second anniversary of the date of grant.
(5) These options vest on the first anniversary of the date of grant.
-28-
The following table provides additional information relating to option
exercises and award vesting by our Named Executive Officers on option award
exercises during the year ended December 31, 2008.
OPTION EXERCISES AND STOCK VESTED
OPTION AWARDS STOCK AWARDS
------------------------------- ------------------------------
NUMBER OF NUMBER OF
SHARES SHARES VALUE
ACQUIRED ON VALUE REALIZED ACQUIRED ON REALIZED
NAME EXERCISE ON EXERCISE VESTING ON VESTING
------ -------- ----------- ------- ----------
Lawrence I. Sills .................. -- -- -- --
John P. Gethin ..................... -- -- -- --
James J. Burke ..................... -- -- -- --
Carmine J. Broccole ................ -- -- -- --
Dale Burks ......................... -- -- -- --
The following table shows the present value of accumulated benefits
payable to each of our Named Executive Officers, including the number of years
of service credited to each Named Executive Officer, under our Supplemental SERP
as of December 31, 2008.
PENSION BENEFITS
NUMBER OF YEARS
CREDITED PRESENT VALUE OF PAYMENTS DURING
NAME PLAN NAME (1) SERVICES (2) ACCUMULATED BENEFIT (3) LAST FISCAL YEAR (4)
---- --------- -------- ------------------- ----------------
Lawrence I. Sills.............. - - - -
John P. Gethin................. Supplemental SERP 13 $ 0 $4,982,612
James J. Burke................. Supplemental SERP 29 1,797,435 0
Carmine J. Broccole............ - - - -
Dale Burks..................... - - - -
-----------------
(1) The Supplemental SERP is an unfunded supplemental retirement program for
eligible employees. The Supplemental SERP provides that, upon attainment
of a participant's normal retirement age (i.e., 60 years of age), the
participant shall be entitled to 50% of such participant's highest
average annual base salary plus bonus in three of the last five years of
service. If a participant terminates his employment voluntarily prior to
age 60 or is terminated for cause, such participant will forfeit his
benefits under the Supplemental SERP. Please refer to the "Compensation
Discussion and Analysis" section above and the "Severance and Change of
Control Arrangements" section below for additional information regarding
our Supplemental SERP.
(2) The number of years of credited service reflects the Named Executive
Officer's actual service with us. We do not credit additional years of
service under the Supplemental SERP, other than as may be required under
the respective Severance Compensation Agreements with Messrs. Gethin and
Burke. See "Severance and Change of Control Arrangements" section for
additional information regarding the Severance Compensation Agreement.
(3) The amounts reflected in this column represent the benefit the Named
Executive Officer has accrued based upon his salary and the number of
years of credited service as of December 31, 2008.
(4) In July 2008, Mr. Gethin received his full payout under the Supplemental
SERP.
-29-
The following table shows the aggregate earnings and balances for each of
our Named Executive Officers under our Supplemental Executive Retirement Plan as
of December 31, 2008.
NONQUALIFIED DEFERRED COMPENSATION
EXECUTIVE REGISTRANT AGGREGATE AGGREGATE AGGREGATE
CONTRIBUTIONS CONTRIBUTIONS EARNINGS WITHDRAWALS/ BALANCE
NAME IN LAST FY (1)IN LAST FY (2) IN LAST FY (3) DISTRIBUTION AT LAST FYE
---- ---------- ---------- ---------- ------------ -----------
Lawrence I. Sills.................. $ 247,313 $ 16,799 $(1,076,189) $ - $ 2,363,019
John P. Gethin..................... - 17,270 (227,127) - 509,821
James J. Burke..................... - 12,971 (70,772) - 166,900
Carmine J. Broccole................ - 6,042 (1,933) - 9,798
Dale Burks......................... - 4,741 (12,379) - 35,550
-----------------
(1) The Supplemental Executive Retirement Plan contributions were based on
the officer's deferral election and were reported under the "Salary" and
"Bonus" amounts shown in the Summary Compensation Table for 2007. Please
refer to the "Compensation Discussion and Analysis" section above and the
"Severance and Change of Control Arrangements" section below for
additional information regarding our Supplemental Executive Retirement
Plan.
(2) The amounts shown in this column are reflected in the Summary
Compensation Table as part of the "All Other Compensation" amount for
2008.
(3) Earnings are not above market and therefore are not reportable in the
Summary Compensation Table.
EQUITY COMPENSATION PLAN INFORMATION
The following table presents a summary of shares of Company Common Stock
that may be issued under our existing equity plans.
NUMBER OF SECURITIES TO WEIGHTED AVERAGE NUMBER OF SECURITIES
BE ISSUED UPON EXERCISE EXERCISE PRICE OF REMAINING AVAILABLE
OF OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, FOR FUTURE ISSUANCE
WARRANTS AND RIGHTS WARRANTS AND RIGHTS UNDER EQUITY
PLAN CATEGORY COMPENSATION PLANS
------------- ----------------------- ------------------- ---------------------
Equity compensation plans approved by 796,598 (2) $13.44 419,225
security holders (1)....................
Equity compensation plans not
approved by security holders............ -- -- --
------- ------ -------
All plans............................... 796,598 (2) $13.44 419,225
======= ====== =======
-----------------
(1) Represents shares of the Company's Common Stock issued or issuable (a)
under the 2006 Omnibus Incentive Plan and (b) upon exercise of options
outstanding under our 1994 Omnibus Stock Option Plan, 1996 Independent
Outside Directors' Stock Option Plan, 2004 Omnibus Stock Option Plan
and 2004 Independent Outside Directors' Stock Option Plan.
(2) This amount includes options to purchase 515,823 shares of the
Company's Common Stock issuable under our several stock option plans
and 280,775 shares of restricted stock and performance shares issued or
issuable under our 2006 Omnibus Incentive Plan. Since the restricted
stock and performance shares have no exercise price, they are not
included in the weighted average exercise price calculation in the
table above.
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SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS
SEVERANCE COMPENSATION AGREEMENTS
In December 2001, the Company entered into Severance Compensation
Agreements with each of John P. Gethin and James J. Burke. The agreements
provide that if a change in control of the Company occurs and, within 12 months
thereafter, the executive's employment is terminated by the Company without
cause or by the executive for certain specific reasons, then the executive will
receive severance payments and certain other benefits. The specific reasons
which allow the executive to resign and receive the benefits are: (1) a
reduction or change in status, position or reporting responsibility; (2) a
reduction in the executive's annual rate of base salary; and (3) relocation of
more than 15 miles from the Company's current office.
If the executive resigns for one of the specific reasons, or is
terminated without cause, the executive will be entitled to receive: (1) a
severance payment equal to three times his base salary plus standard bonus,
payable over a two year period on a pro rata, semi-monthly basis; (2) continued
participation for a period of thirty six months in group medical, dental and/or
life insurance plans; (3) an immediate three years of additional service credit
for all purposes under the Company's Supplemental Compensation Plan and any
other applicable welfare plans; (4) exclusive use of a company automobile for
the duration of the lease then in effect; (5) outplacement services; and (6)
accelerated vesting of any unvested options.
For purposes of these agreements, a change in control of the Company
means the occurrence of any of the following events: (1) a sale of all or
substantially all of the assets of the Company to any person or group other than
certain designated individuals; (2) any person or group, other than certain
designated individuals, become the beneficial owner or owners of more than 50
percent of the total voting stock of the Company, including by way of merger,
consolidation or otherwise; or (3) Lawrence I. Sills ceases to be the Chairman
of the Board or the Chief Executive Officer of the Company.
RETENTION BONUS AND INSURANCE AGREEMENTS
In December 2006, the Company entered into Retention Bonus and
Insurance Agreements with each of John P. Gethin and James J. Burke. The
agreements provide among other things: (1) agreement by each officer to remain
an employee of the Company for a term of not less than three additional years
after such officer reaches the age of 60 (the "Extension Period"); (2)
additional compensation to each officer comprised of one year's salary plus any
applicable bonus at par payable in a lump sum; and (3) extension of the life
insurance policies for each of the officers during the Extension Period. The
bonus payable under these agreements would be forfeited in the event that the
officer's employment is terminated for any reason, other than a disability, in
which case the officer shall be entitled to a pro rata bonus calculated as
provided in the respective agreement.
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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (SERP)
The Company has established a Supplemental Executive Retirement Plan
(SERP) for our executive officers and other eligible employees. The purpose of
this plan is to enable the Company to supplement the benefits under the
Company's 401(K) Capital Accumulation Plan/Profit Sharing Plan as well as to
provide a means whereby certain amounts payable by the Company to our executive
officers may be deferred to some future period. To the extent that an eligible
employee retires or is terminated, their accounts in the SERP shall be paid
either in a lump sum or over a period not to exceed ten years, at the election
of the employee. In the event of a change of control of the Company, the Company
shall, as soon as possible, but in no event longer than 60 days following the
change of control event, make an irrevocable contribution to the trust account
in the amount that is sufficient to pay each SERP participant or beneficiary the
benefits to which SERP participants or their beneficiaries would be entitled
pursuant to the terms of the SERP as of the date on which the change of control
event occurred. Upon a change of control event, each participant's account shall
be fully vested.
SUPPLEMENTAL SERP
The Company currently maintains a Supplemental SERP for James Burke.
John Gethin was a participant for the Supplemental SERP but received all
payments ($4,982,612) due to him under such plan in July 2008. The Supplemental
SERP provides that, upon attainment of a participant's normal retirement age
(i.e., 60 years of age), the participant shall be entitled to 50% of such
participant's highest average annual base salary plus bonus in three of the last
five years of service. If a participant terminates his employment voluntarily
prior to age 60 or is terminated for cause, such participant will forfeit his
benefits under the Supplemental SERP. The benefits under the Supplemental SERP
are in addition to benefits payable to participants under the Company's 401(K)
Capital Accumulation Plan/Profit Sharing Plan and SERP. Benefits under the
Supplemental SERP will be paid from general corporate funds in the form of a
lump sum and are not subject to any deduction for Social Security or other
offset amounts.
RETIREE MEDICAL BENEFITS
The Company has established a company-funded health reimbursement
account for eligible retirees. The health reimbursement account replaces a prior
retiree medical benefit plan. Lawrence I. Sills, James J. Burke and Dale Burks
are the only executive officers eligible to receive benefits under this program.
2006 OMNIBUS INCENTIVE PLAN
As previously discussed in the "Compensation Discussion and Analysis"
section above, we granted our Named Executive Officers shares of restricted
stock. Under the terms of the 2006 Omnibus Incentive Plan, any unvested shares
of restricted stock shall immediately vest upon death, retirement at or after
the age of 65, total disability, or upon a change in control of the Company. For
purposes of the Incentive Plan, a "change of control" means any of the following
events:
(a) Any person, other than certain designated persons, becomes the
beneficial ownership of 20% or more of the total voting stock of the
Company;
(b) Individuals who constitute the Board as of May 15, 2008 cease for any
reason to constitute at least a majority of the Board, other than in
certain circumstances;
(c) Consummation of a reorganization, merger, or consolidation of the
Company or a sale or other disposition of all or substantially all of
the assets of the Company, in each case unless, (i) the beneficial
owners of the Company before such event hold less than 50% of the
voting stock after such event; (ii) no person beneficially owns,
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directly or indirectly, 20% or more of the total voting stock of the
successor entity, except to the extent that such ownership existed
prior to the business combination; and (iii) at least a majority of
the members of the board of directors of the successor entity were
members of the incumbent Board at the time of the execution of the
initial agreement or of the action of the Board providing for such
business combination; or
(d) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
Based upon a hypothetical termination date of December 31, 2008, the
severance, termination, retirement or change of control benefits for our Named
Executive Officers would have been as follows:
ESTIMATED BENEFITS UPON TERMINATION FOLLOWING A CHANGE IN CONTROL
SEVERANCE EARLY
COMPENSATION RETENTION SUPPLEMENTAL VESTING OF
AGREEMENT AGREEMENT SERP SERP RESTRICTED
NAME AMOUNT (1) AMOUNT (2) AMOUNT (3) AMOUNT (4) STOCK (5) OTHER (6) TOTAL
---- ------ ------ ------ ------ ----- ----- -----
Lawrence I. Sills.... -- -- $2,363,019 -- $ 20,760 $ 72,762 $ 2,456,541
John P. Gethin....... $ 2,454,000 $ 0 509,821 $ 0 19,463 94,156 3,077,440
James J. Burke....... 2,019,000 0 166,900 1,797,435 19,463 110,903 4,113,701
Carmine J. Broccole.. -- -- 9,798 -- 12,975 -- 22,773
Dale Burks........... -- -- 35,550 -- 12,975 32,509 81,034
-----------------
(1) This amount represents three times the sum of the executive officer's 2008
base salary and standard bonus.
(2) Neither Messrs. Gethin nor Burke are entitled to any payments under this
agreement at December 31, 2008.
(3) This amount represents the payouts under the SERP.
(4) This amount represents the payouts under the Supplemental SERP, inclusive
of the benefit of any additional service credit provided under the
Severance Compensation Agreement. In July 2008, Mr. Gethin received his
full payout under the Supplemental SERP.
(5) The value of restricted stock on December 31, 2008 is $3.46 per share.
(6) For Messrs. Gethin and Burke, this amount represents Company payments for
(a) group medical, dental and/or life insurance plans for a 36 month
period, (b) use of a company automobile for the duration of the lease then
in effect, and (c) the cost of outplacement services, pursuant to the terms
of the Severance Compensation Agreement. In addition, Messrs. Sills, Burke
and Burks are entitled to post-retirement medical benefits, the present
value of such amounts are included above.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our Board has adopted a written policy relating to the review, approval
or ratification of "related-person transactions" between the Company or its
subsidiaries and related persons. Under SEC rules, a related person is a
director, officer, nominee for director, or 5% stockholder of the Company since
the beginning of the last fiscal year and their immediate family members. The
Company's policies and procedures apply to any transaction or series of
transactions in which the Company or a subsidiary is a participant, the amount
involved exceeds $120,000, and a related person has a direct or indirect
material interest.
Our policy requires that all related party transactions be disclosed to
the Nominating and Corporate Governance Committee (with respect to Directors) or
the Audit Committee (with respect to officers). The applicable Committee then
reviews the material facts of such related party transactions and either
approves or disapproves of the entry into or ratifies the related party
-33-
transaction. In determining whether to approve or ratify a related party
transaction, the Committee will take into account, among other factors it deems
appropriate, whether the related party transaction is on terms no less favorable
than terms generally available to an unaffiliated third-party under the same or
similar circumstances and the extent of the related person's interest in the
transaction. In addition, our policy provides that any related party transaction
may be consummated or continue if (1) the transaction is approved by the
disinterested members of the Board of Directors or (2) the transaction involves
compensation approved by the Company's Compensation and Management Development
Committee. No Director shall participate in any discussion or approval of a
transaction for which he or she is the related party.
In 2008, there was one related-person transaction under the relevant
standards. Eric Sills, our Vice President Engine Management Division, is the son
of our Chairman and Chief Executive Officer, Lawrence I. Sills, and is the
nephew of our Directors, Arthur S. Sills and Peter J. Sills. Eric Sills received
total compensation of $287,648 for 2008, calculated in the same manner as in the
Summary Compensation Table (Base Salary: $223,000; Bonus: $34,650; Stock Awards:
$8,063; All Other Compensation: $21,935). The Compensation and Management
Development Committee reviewed and approved of this compensation arrangement.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company's financial reporting process
on behalf of the Board of Directors. The Committee is comprised of six directors
who are "independent" as defined under the listing standards of the New York
Stock Exchange. The Committee met five times in 2008 and operates under a
written charter adopted by the Board of Directors. Management has the primary
responsibility for the financial statements and the reporting process, including
the Company's systems of internal controls. In fulfilling its oversight
responsibilities, the Committee reviewed with management the audited financial
statements in the Annual Report on Form 10-K for the fiscal year ended December
31, 2008, including a discussion of the quality and the acceptability of the
Company's financial reporting and controls.
The Committee also reviewed with Grant Thornton LLP, the Company's
independent registered public accounting firm, that is responsible for
expressing an opinion on the conformity of those audited financial statements
with generally accepted accounting principles, their judgments as to the quality
and the acceptability of the Company's financial reporting, and such other
matters as are required to be discussed with the Committee under generally
accepted auditing standards, including SAS No. 61 (Codification of Statements on
Auditing Standards, AU Section 380). In addition, the Committee discussed with
Grant Thornton the auditors' independence from management and the Company,
including the matters in the auditors' written disclosures required by
applicable requirements of the Public Company Accounting Oversight Board
regarding the independent accountant's communications with the Committee
concerning independence.
The Committee also discussed with the Company's internal and
independent auditors the overall scope and plans for their respective audits.
The Committee meets periodically with the internal and the independent auditors,
with and without management present, to discuss the results of their
examinations, their evaluations of the Company's internal controls, and the
overall quality of the Company's financial reporting.
-34-
In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors that the audited financial
statements be included in the Annual Report on Form 10-K for the fiscal year
ended December 31, 2008 for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
William H. Turner, Chairman Robert M. Gerrity
Pamela Forbes Lieberman Frederick D. Sturdivant
Richard S. Ward Roger M. Widmann
STOCKHOLDER PROPOSALS FOR THE 2010 ANNUAL MEETING
To be considered for inclusion in next year's Proxy Statement pursuant
to the provisions of Rule 14a-8 of the Exchange Act, stockholder proposals must
be received at the Company's offices no later than the close of business on
December 21, 2009. Proposals should be addressed to Carmine J. Broccole,
Secretary, Standard Motor Products, Inc., 37-18 Northern Blvd., Long Island
City, New York 11101.
For any stockholder proposal that is not submitted for inclusion in the
next year's Proxy Statement, but is instead sought to be presented directly at
the 2010 Annual Meeting, rules of the Securities and Exchange Commission permit
management to vote proxies in its discretion if the Company: (1) receives notice
of the proposal before close of business on March 7, 2010, and advises
stockholders in the 2010 Proxy Statement about the nature of the matter and how
management intends to vote on such matter; or (2) does not receive notice of the
proposal prior to the close of business on March 7, 2010. Notice of intention to
present proposals at the 2010 Annual Meeting should be addressed to Carmine J.
Broccole, Secretary, Standard Motor Products, Inc., 37-18 Northern Blvd., Long
Island City, New York 11101.
FORM 10-K
THE COMPANY'S 2008 ANNUAL REPORT HAS BEEN MAILED TO STOCKHOLDERS. A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2008 IS INCLUDED IN THE 2008 ANNUAL REPORT AND WILL ALSO BE
FURNISHED TO ANY STOCKHOLDER WHO REQUESTS THE SAME FREE OF CHARGE (EXCEPT FOR
EXHIBITS THERETO FOR WHICH A NOMINAL FEE COVERING REPRODUCTION AND MAILING
EXPENSES WILL BE CHARGED). REQUESTS SHOULD BE ADDRESSED TO THE SECRETARY OF THE
COMPANY AT 37-18 NORTHERN BLVD., LONG ISLAND CITY, NY 11101. THE 2008 ANNUAL
REPORT IS ALSO AVAILABLE AT OUR WEBSITE AT
WWW.SMPCORP.COM/MAIN/FINANCEINFO.ASPX.
-35-
OTHER MATTERS
On the date this Proxy Statement went to press, management knew of no
other business that will be presented for action at the Annual Meeting. In the
event that any other business should come before the Annual Meeting, it is the
intention of the proxy holders named in the proxy card to take such action as
shall be in accordance with their best judgment.
By Order of the Board of Directors
/s/ Carmine J. Broccole
--------------------------
Carmine J. Broccole
VICE PRESIDENT GENERAL COUNSEL
AND SECRETARY
Dated: April 21, 2009
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[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
STANDARD MOTOR PRODUCTS, INC.
REVOCABLE PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
MAY 21, 2009
The undersigned stockholder of STANDARD MOTOR PRODUCTS, INC. (the "Company")
hereby appoints LAWRENCE I. SILLS, JOHN P. GETHIN and JAMES J. BURKE, as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and vote as designated on this Proxy, all of the shares of the
Company's Common Stock held of record by the undersigned on April 10, 2009 at
the Annual Meeting of Stockholders of the Company to be held on May 21, 2009, or
at any adjournment thereof.
Directors recommend a vote FOR all the nominees and FOR Proposal 2.
COMMON
1. Election of Directors
FOR ELECTION OF ALL WITHHOLD VOTE FOR ALL FOR ALL EXCEPT
NOMINEES NOMINEES
[--] [--] [--]
ROBERT M. GERRITY, PAMELA FORBES LIEBERMAN, ARTHUR S. SILLS, LAWRENCE I. SILLS,
PETER J. SILLS, FREDERICK D. STURDIVANT, WILLIAM H. TURNER, RICHARD S. WARD AND
ROGER M. WIDMANN
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), MARK
"FOR ALL EXCEPT" AND WRITE THE NAME OF SUCH NOMINEE(S) IN THE SPACE PROVIDED
BELOW.
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2. Proposal to ratify the appointment of Grant Thornton LLP as the
Company's independent registered public accounting firm for the fiscal
year ending December 31, 2009.
FOR AGAINST ABSTAIN
[--] [--] [--]
Note: In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting or any
adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL OF THE
NOMINEES NAMED ABOVE AND "FOR" PROPOSAL 2. AT THE PRESENT
TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE ANNUAL MEETING.
Please be sure to sign and date this Proxy in the box below.
Date
Stockholder sign above Co-Owner (if any) sign above
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
STANDARD MOTOR PRODUCTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please sign exactly as your name appears on this card. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
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A COPY OF THE COMPANY'S PROXY STATEMENT AND ANNUAL REPORT ARE AVAILABLE AT
WWW.SMPCORP.COM/MAIN/FINANCEINFO.ASPX.