<PAGE>   1

                                                                    EXHIBIT 99

               [LOGO]

                       UNITED DOMINION INDUSTRIES LIMITED

                                   NOTICE OF
                         ANNUAL MEETING OF SHAREHOLDERS

     NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of United Dominion Industries Limited (the "Corporation") will be
held in the Upper Canada Room of the Royal York Hotel, 100 Front Street West,
Toronto, Ontario, Canada on Tuesday, April 25, 2000 at 2:00 p.m. (Toronto time),
for the following purposes:

     (1) to receive the consolidated financial statements of the Corporation for
         the year ended December 31, 1999, together with the auditors' report
         thereon, and the annual report of the directors;

     (2) to elect directors;

     (3) to reappoint KPMG LLP to serve as independent auditors of the
         Corporation until the close of the next annual meeting of shareholders
         and to authorize the Board of Directors to fix KPMG's remuneration; and

     (4) to transact such other business, if any, as may properly come before
         the Meeting or any adjournment or postponement thereof.

                                          By order of the Board of Directors,

                                          /s/ Richard L. Magee

                                          R. L. Magee
                                          Secretary

Toronto, Ontario
March 22, 2000

If you are unable to be present in person at the Meeting, please date, sign and
return the enclosed form of proxy to the Corporation, care of Montreal Trust
Company of Canada, Place Montreal Trust, 1800 McGill College Avenue, Montreal,
Quebec, H3A 3K9, in the envelope provided for that purpose. For U.S.
shareholders, please date, sign and return the enclosed form of proxy to The
Bank of Nova Scotia Trust Company of New York, One Liberty Plaza, 23rd Floor,
New York, New York, 10006, in the envelope provided for that purpose. To be
effective, a form of proxy must be duly executed and deposited with the
Corporation's registrar and transfer agent, Montreal Trust Company of Canada or
The Bank of Nova Scotia Trust Company of New York, as the case may be, at the
applicable address above, not less than 48 hours, Saturdays and holidays
excepted, preceding the Meeting, or any adjournment or postponement thereof.
<PAGE>   2

               [LOGO]

                       UNITED DOMINION INDUSTRIES LIMITED

                                ---------------

                   MANAGEMENT PROXY CIRCULAR/PROXY STATEMENT

                            SOLICITATION OF PROXIES

     THIS MANAGEMENT PROXY CIRCULAR/PROXY STATEMENT (THE "PROXY CIRCULAR") IS
FURNISHED IN CONNECTION WITH THE SOLICITATION OF PROXIES BY THE BOARD OF
DIRECTORS AND THE MANAGEMENT OF UNITED DOMINION INDUSTRIES LIMITED (THE
"CORPORATION") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS OF THE CORPORATION
TO BE HELD ON APRIL 25, 2000 AT THE TIME, PLACE AND FOR THE PURPOSES SET FORTH
IN THE FOREGOING NOTICE OF MEETING, AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF
(THE "MEETING"). The Corporation will pay the cost of such solicitation. The
Corporation will reimburse brokers and other intermediaries for costs incurred
by them in mailing proxy materials to non-registered shareholders in accordance
with National Policy No. 41 of the Canadian Securities Administrators. This
Proxy Circular is being initially sent to shareholders on or about March 22,
2000.

     The principal executive offices of the Corporation are located at 2300 One
First Union Center, 301 South College Street, Charlotte, North Carolina,
28202-6039, U.S.A. The Corporation's registered office is located at Suite 5300,
Commerce Court West, Post Office Box 85, Toronto, Ontario, Canada, M5L 1B9.

                     APPOINTMENT AND REVOCATION OF PROXIES

     The persons designated in the accompanying form of proxy are officers of
the Corporation. A SHAREHOLDER ENTITLED TO VOTE AT THE MEETING HAS THE RIGHT TO
APPOINT ANOTHER PERSON (WHO NEED NOT BE A SHAREHOLDER), OTHER THAN A PERSON
DESIGNATED IN THE FORM OF PROXY, AS PROXYHOLDER TO REPRESENT SUCH SHAREHOLDER
AND VOTE ON SUCH SHAREHOLDER'S BEHALF AT THE MEETING BY EXECUTING (OR CAUSING AN
ATTORNEY DULY AUTHORIZED IN WRITING TO EXECUTE) THE ACCOMPANYING FORM OF PROXY
OR ANOTHER LEGAL FORM OF PROXY AND APPOINTING THEREON SUCH OTHER PERSON AS
PROXY. Execution of the form of proxy will not affect a shareholder's right to
attend the Meeting and vote in person if such shareholder revokes a proxy as
described below. Any shareholder giving a proxy has the right to revoke it at
any time before it is acted upon (a) by depositing an instrument in writing
executed by such shareholder or by an attorney authorized in writing, or, if the
shareholder is a corporation, by a duly authorized officer or attorney thereof,
(i) at the Corporation's registered office, Suite 5300, Commerce Court West,
Post Office Box 85, Toronto, Ontario, M5L 1B9, at any time up to and including
the last business day preceding the day of the Meeting, or any adjournment or
postponement thereof at which the proxy is to be used, or (ii) with the Chairman
of the Meeting on the day of the Meeting or an adjournment or postponement
thereof; or (b) in any other manner permitted by law.

                                  RECORD DATE

     Only holders of record of the Corporation's common shares ("Common Shares")
at the close of business on March 14, 2000 (the "Record Date") are entitled to
notice of and to attend and vote at the Meeting, except that a transferee who
acquires Common Shares after such date shall be entitled to vote at the Meeting
if such transferee produces properly endorsed share certificates for such shares
or otherwise establishes ownership of such shares and requests, not later than
10 days before the Meeting, that such transferee's name be included in the list
of shareholders entitled to receive notice of and to vote at the Meeting, such
list having been prepared as of the Record Date.

                                        1
<PAGE>   3

                        ACTION TO BE TAKEN UNDER PROXIES

     Shares represented by properly executed proxies in the accompanying form of
proxy will be voted or withheld from voting in accordance with instructions
indicated thereon.

     IF NO CONTRARY INSTRUCTION IS INDICATED, SHARES REPRESENTED BY SUCH PROXIES
WILL BE VOTED BY THE PERSONS DESIGNATED IN THE PRINTED PORTION THEREOF:

     - FOR THE ELECTION OF THE NOMINEES NAMED HEREIN TO SERVE AS DIRECTORS UNTIL
       THE NEXT ANNUAL MEETING;

     - FOR THE REAPPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS OF THE
       CORPORATION TO SERVE UNTIL THE NEXT ANNUAL MEETING AT A REMUNERATION TO
       BE APPROVED BY THE BOARD OF DIRECTORS; AND

     - AT THE DISCRETION OF THE PROXYHOLDERS WITH RESPECT TO ANY AMENDMENTS TO
       MATTERS IDENTIFIED IN THE NOTICE OF MEETING OR OTHER BUSINESS THAT MAY
       PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
       THEREOF.

     The Board of Directors and Management of the Corporation know of no such
amendments or other business to be presented at the Meeting.

     The election of directors and the reappointment of KPMG LLP to serve as
independent auditors of the Corporation must be approved by the affirmative vote
of a majority of the votes cast by the holders of outstanding Common Shares who
vote in respect of those actions. Abstentions and broker non-votes, which will
not be counted "for" or "against" proposals, have no effect on the vote for the
election of directors or the reappointment of KPMG LLP.

                               REPORTING CURRENCY

     Unless otherwise indicated, all dollar amounts referred to herein are
expressed in United States dollars.

                             ELECTION OF DIRECTORS

     Management and the Board of Directors propose for nomination twelve (12)
persons for election as directors at the Meeting. The Nominating & Corporate
Governance Committee recommended to the Board that the number of directors of
the Corporation be decreased by two, to twelve. The increase to fourteen in 1999
was intended to be temporary to prepare for the retirement in 2000 of two
long-service directors. Messrs. Dalton D. Ruffin and R. Stuart Dickson will
retire from the Board of Directors effective at the Meeting, having served since
1974 and 1990, respectively. The Board of Directors approved the committee's
recommendation; the twelve remaining incumbents are nominated for re-election.

     Each director elected will hold office until the next annual meeting of
shareholders, unless prior thereto such director resigns or such director's
office becomes vacant by death, removal or other cause. Management does not
expect that any of the nominees will be unable to serve as a director, but if a
nominee should become unable to act as a director for any reason prior to the
Meeting, the persons named in the accompanying form of proxy will have the right
to vote for another nominee in their discretion unless the shareholder has
specified in the proxy that shares are to be voted for another nominee or are to
be withheld from voting on the election of directors. Set forth below are the
names and ages of each person to be nominated for election as director, such
person's present principal occupation or employment, the period during which
such person has served as director of the Corporation, and additional
biographical information. The number of equity securities of the Corporation
beneficially owned, directly or indirectly (or over which control or direction
is exercised) by each director is set forth under

                                        2
<PAGE>   4

the heading "Voting Shares and Principal Holders Thereof: Security Ownership of
Directors and Management."

<TABLE>
<CAPTION>
                      NAME, AGE, POSITIONS WITH THE CORPORATION AND SIGNIFICANT AFFILIATES,     DIRECTOR OF THE
                              PRINCIPAL OCCUPATIONS, AND RECENT BUSINESS EXPERIENCE            CORPORATION SINCE
                      ---------------------------------------------------------------------    -----------------
<C>                   <S>                                                                      <C>
                      DONALD N. BOYCE (1) (61). Chairman of the Board of IDEX Corporation            1997
                      (a diversified manufacturing company), 1988 to present. President and
    [PHOTOGRAPH]      Chief Executive Officer of IDEX Corporation, 1988 to 1998. Director
                      of IDEX Corporation and Walter Industries, Inc.





                      HERMANN BUERGER (2) (56). Executive Vice President of Commerzbank AG           1997
    [PHOTOGRAPH]      (international bank), 1989 to present. Director of Security Capital
                      Group Incorporated and Paging Network, Inc.






                      JAMES E. COURTNEY (1) (3) (68). Chairman of the Board of First                 1989
                      Community Bank of Southwest Florida (commercial bank), 1998 to
    [PHOTOGRAPH]      present. Chairman of the Board, First Independence Bank of Fort Myers
                      (commercial bank), 1996- 1997. President of The Mariner Group, Inc.
                      (real estate management and development company), 1992-1995.




                      PETER A. CROSSGROVE (1) (63). Chairman of Premdor Inc. (international          1993
                      door manufacturing company), 1998 to present. President and Chief
                      Executive Officer of Southern Africa Minerals Corporation (diamond
                      exploration company), 1994 to present. Chairman and Chief Executive
                      Officer of Brush Creek Corporation (investment holding company), 1993
    [PHOTOGRAPH]      to present. Director of Premdor Inc., Dundee Realty, Inc., Acadia
                      Minerals Corp., Quadra Logic Technologies Inc., Southern Africa
                      Minerals Corporation, Barrick Gold Corporation, Band-Ore Resources
                      Inc., A.M.T. International Mining Corporation, QLT Photo Therapeutics
                      Inc. and Philex Gold, Inc.

                      JERE A. DRUMMOND (2) (60). Vice Chairman of BellSouth Communications           1999
                      Group (telecommunications company), January 1, 2000 to present. Group
    [PHOTOGRAPH]      President and Chief Executive Officer, BellSouth Communications
                      Group, 1998 to 1999. President and Chief Executive Officer, BellSouth
                      TeleCommunications, Inc., 1995-1997. Director of Borg Warner
                      Automotive, Inc.


</TABLE>

                                        3
<PAGE>   5

<TABLE>
<CAPTION>
                      NAME, AGE, POSITIONS WITH THE CORPORATION AND SIGNIFICANT AFFILIATES,     DIRECTOR OF THE
                              PRINCIPAL OCCUPATIONS, AND RECENT BUSINESS EXPERIENCE            CORPORATION SINCE
                      ---------------------------------------------------------------------    -----------------
<C>                   <S>                                                                      <C>
                      THE HONORABLE JAMES A. GRANT, P.C., Q.C. (3) (4) (62). Partner of              1989
                      Stikeman Elliott (law firm), 1970 to present. Chairman of Executive
    [PHOTOGRAPH]      Committee of Stikeman Elliott, 1988 to 1999. Director of BioChem
                      Pharma Inc., CAE Industries Ltd. and Canadian Imperial Bank of
                      Commerce.




                      WILLIAM R. HOLLAND (4)(5) (61). Chairman of the Corporation and                1985
                      United Dominion Industries, Inc., 1987 to present. Chief Executive
    [PHOTOGRAPH]      Officer of the Corporation and United Dominion Industries, Inc., 1986
                      to present. Director of The BFGoodrich Company and Lance, Inc.





                      RUSSELL C. KING, JR. (2) (65). Retired as of May 20, 1994. President           1992
                      and Chief Operating Officer of Sonoco Products Company (international
    [PHOTOGRAPH]      manufacturer of packaging products), 1990-1994. Director of
                      Integrated Business Systems and Services, Inc.





                      JOHN T. MAYBERRY (2) (55). President and Chief Executive Officer of            1999
    [PHOTOGRAPH]      Dofasco Inc. (steel producer), 1993 to present. Director of Dofasco
                      Inc., Decoma International Inc. and The Bank of Nova Scotia.






                      DR. HARRY A. NURKIN (3) (56). President and Chief Executive Officer            1999
    [PHOTOGRAPH]      of Carolinas Healthcare System (integrated healthcare services
                      system), 1983 to present.





</TABLE>

                                        4
<PAGE>   6

<TABLE>
<CAPTION>
                      NAME, AGE, POSITIONS WITH THE CORPORATION AND SIGNIFICANT AFFILIATES,     DIRECTOR OF THE
                              PRINCIPAL OCCUPATIONS, AND RECENT BUSINESS EXPERIENCE            CORPORATION SINCE
                      ---------------------------------------------------------------------    -----------------
<C>                   <S>                                                                      <C>
                      WILLIAM W. STINSON (4)(5) (66). Retired as of May 1, 1996. Chairman            1986
                      of Canadian Pacific Limited (transportation, energy and hotel
                      company), 1989-1996. President and Chief Executive Officer of
     [PHOTOGRAPH]     Canadian Pacific Limited, 1985-1996. Director of PanCanadian
                      Petroleum Limited, Western Star Ltd., Westshore Investment Trust, Sun
                      Life Assurance Company of Canada and Massachusetts Financial Services
                      Company.


                      GEORGE S. TAYLOR (2) (59). Retired as of December 31, 1995. President          1995
     [PHOTOGRAPH]     and Chief Executive Officer of John Labatt Limited, 1992-1995.
                      Director of Great Lakes Power Inc., EdperBrascan Limited, Acanthus
                      Real Estate Corporation and Teknion Corporation.




</TABLE>

---------------

(1) Member of Compensation & Human Resources Committee.
(2) Member of Audit & Risk Management Committee.
(3) Member of Nominating & Corporate Governance Committee.
(4) Member of Executive Committee.
(5) Also a member of the board of directors of United Dominion Holdings, Inc.
    and United Dominion Industries, Inc., wholly owned subsidiaries of the
    Corporation.

                                        5
<PAGE>   7

                           COMPENSATION OF DIRECTORS

     The following table shows the fees payable to directors of the Corporation.
Directors who also serve as executive officers of the Corporation are not
separately compensated for serving as directors. Directors are also paid their
out-of-pocket expenses for attending each meeting of the Board of Directors of
the Corporation and its committees.

                      SCHEDULE OF BOARD AND COMMITTEE FEES

<TABLE>
<S>                                                           <C>
Board of Directors
     Annual Retainer........................................  $30,000
     Fee per Meeting........................................    1,200
Executive Committee
     Annual Retainer........................................    4,500
Compensation & Human Resources Committee
     Annual Retainer........................................    4,000
     Fee per Meeting........................................    1,200
Audit & Risk Management Committee
     Annual Retainer........................................    4,000
     Fee per Meeting........................................    1,200
Nominating & Corporate Governance Committee
     Annual Retainer........................................    4,000
     Fee per Meeting........................................    1,200
</TABLE>

     In the most recently completed financial year, the Corporation paid fees in
the aggregate amount of U.S. $642,775 to thirteen directors. In 1999, ten
directors were each granted options to purchase 2,000 Common Shares pursuant to
the Corporation's non-qualified Stock Option and Restricted Stock Plan.

               COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS

     During 1999, the Corporation's Board of Directors met in person six times
and held three telephonic meetings. The Board of Directors has standing
Executive, Audit & Risk Management, Compensation & Human Resources, and
Nominating & Corporate Governance committees.

     The Executive Committee is empowered to exercise the full powers of the
Board of Directors when the Board is not in session, except those powers which,
under the Canada Business Corporations Act (the "CBCA") or the Corporation's
By-Laws, a committee of the Board of Directors has no authority to exercise. The
Executive Committee did not meet during 1999; however, it took unanimous action
in lieu of meeting three times.

     The Audit & Risk Management Committee (the "Audit Committee"), which met
three times during 1999, reviews the audit plan developed by the Corporation's
auditors in connection with their annual audit of the Corporation's books and
records, the consolidated financial statements and results of the annual audit
performed by the Corporation's auditors, the auditors' fees submitted to the
Corporation, the response of Management to management letters issued by the
auditors, current accounting rules and changes therein, the financial reviews
performed by members of the Corporation's internal audit staff, and the
financial control mechanisms and risk management procedures adopted by the
Corporation. The Audit Committee also recommends the selection of auditors to
the Board of Directors each year. The Board of Directors is required to have an
audit committee by applicable statutory and regulatory requirements.

     The Compensation & Human Resources Committee (the "Comp Committee"), which
met in person five times and by telephone two times during 1999, reviews the
appropriateness and cost of the Corporation's compensation and benefit programs,
including the salaries, incentive compensation and benefits of all executive
officers and certain other key employees; assesses the effectiveness of the
Corporation's chief executive officer; and monitors management development and
succession planning programs.

                                        6
<PAGE>   8

     The Nominating & Corporate Governance Committee was added in 1999 and met
twice during the year. It is the Corporation's nominating committee, proposing a
slate of directors and committee members each year. It also monitors corporate
governance matters and prepares the Corporation's report on its status with the
governance guidelines of The Toronto Stock Exchange ("TSE") for this Proxy
Circular.

     Shares in the Corporation owned by directors are reported under the heading
"Voting Shares and Principal Holders Thereof: Security Ownership of Directors
and Management."

                  VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

     As of the Record Date, the Corporation had outstanding 39,122,355 Common
Shares, each such share being entitled to one vote.

SECURITY OWNERSHIP OF CERTAIN PERSONS

     The directors and officers of the Corporation believe that, as of the
Record Date, the following persons beneficially owned, directly or indirectly,
or exercised control or direction over, Common Shares carrying more than 5% of
the votes attached to the Common Shares:

<TABLE>
<CAPTION>
                                                                             PERCENT OF
      NAME AND ADDRESS OF BENEFICIAL OWNER         NUMBER OF COMMON SHARES   OUTSTANDING
      ------------------------------------         -----------------------   -----------
<S>                                                <C>                       <C>
Ontario Teachers' Pension Plan Board (1).........         4,679,031             12.0%
  5650 Yonge Street, 5th Floor
  Toronto, Ontario M2M 4H5
TAL Global Asset Management Inc. (2).............         3,475,016              8.9%
  1000 de la Gauchetiere West, Suite 3100
  Montreal, Quebec H3B 4W5
Mackenzie Financial Corporation (3)..............         3,067,400              7.8%
  150 Bloor Street West, Suite M111
  Toronto, Ontario M5S 3B5
The Prudential Insurance Company of America
  (4)............................................         2,058,500              5.3%
  751 Broad Street
  Newark, New Jersey 07102-3777
</TABLE>

---------------

(1) Ontario Teachers' Pension Plan Board ("Ontario Teachers") provides pension
    services to active and retired teachers and is the largest single invested
    pension plan in Canada. As of March 14, 2000, according to a Schedule 13D/A
    filed with the Corporation and the United States Securities and Exchange
    Commission on March 15, 2000, Ontario Teachers had sole dispositive and
    voting power in respect of the number of Common Shares shown.
(2) On February 12, 2000, TAL Global Asset Management Inc. ("TAL"), filed a
    report on Schedule 13G indicating that, in its capacity as a registered
    investment advisor and in the ordinary course of its business, it has sole
    dispositive power over the referenced number of Common Shares and sole
    voting power over 181,497 Common Shares. TAL manages common stock and bond
    portfolios for mutual funds and institutional and private investors.
    According to T.A.L., none of the several accounts that it manages has an
    interest in more than 5% of the Common Shares.
(3) On February 14, 2000, Mackenzie Financial Corporation filed a report on
    Schedule 13G in its capacity as an investment advisor indicating that
    several accounts it manages have the right to receive dividends and proceeds
    from the sale of the referenced number of Common Shares. Mackenzie, a
    registered investment adviser, indicated that none of these accounts
    individually owns more than 5% of the Common Shares.
(4) The Prudential Insurance Company of America informed the Corporation in
    March 2000 that, at the end of February 2000, it had direct or indirect
    voting and/or investment discretion over the referenced number of Common
    Shares, which are held for the benefit of its clients. Prudential is a
    Newark, New Jersey based insurance company and a registered investment
    adviser.

                                        7
<PAGE>   9

     The directors and officers of the Corporation are not aware of any other
person who beneficially owns, directly or indirectly, or exercises control or
direction over, 5% or more of the Common Shares.

SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT

     The following table presents the number of equity securities of the
Corporation beneficially owned, directly or indirectly, or controlled or
directed by, its directors, nominees and executive officers (with sole voting
and investment power, except as otherwise indicated) as of March 14, 2000.
Beneficial ownership has been determined in accordance with subsection 2(1) of
the CBCA and Rule 13d-3 under the United States Securities Exchange Act of 1934,
as amended.

<TABLE>
<CAPTION>
                                                                         TOTAL SHARES
                                   NUMBER OF        OPTIONS PRESENTLY    BENEFICIALLY      PERCENT OF
    NAME OF BENEFICIAL OWNER       SHARES(A)           EXERCISABLE          OWNED            CLASS
    ------------------------       ----------       -----------------    ------------      ----------
<S>                                <C>              <C>                  <C>               <C>
Donald N. Boyce..................     1,000                7,000              8,000           (b)
Hermann Buerger..................     2,000                7,000              9,000           (b)
James E. Courtney................     1,535               13,000             14,535           (b)
Peter A. Crossgrove..............     5,000               12,000             17,000           (b)
R. Stuart Dickson................     1,790               14,000             15,790           (b)
Jere A. Drummond.................         0                    0                  0           (b)
James A. Grant...................     1,000               14,000             15,000           (b)
William R. Holland...............   253,041(c)(d)        332,750            585,791           1.5%
Russell C. King, Jr..............     5,000                9,000             14,000           (b)
John T. Mayberry.................     1,000                    0              1,000           (b)
Harry A. Nurkin..................     1,000                    0              1,000           (b)
Dalton D. Ruffin.................     6,757               14,000             20,757           (b)
William W. Stinson...............    15,042               19,000             34,042           (b)
George S. Taylor.................    11,000               10,000             21,000           (b)
All directors and executive
  officers as a group (28
  persons).......................   424,901(c)(d)        993,422          1,418,323           3.5%
</TABLE>

---------------

(a) Shares listed are Common Shares actually owned beneficially, not including
    presently exercisable options.
(b) Less than 1% of the outstanding Common Shares.
(c) Includes, for Mr. Holland, 88,626 restricted Common Shares, and for all
    directors and executive officers as a group, 154,691 restricted Common
    Shares.
(d) Does not include Common Shares held in United Dominion Industries, Inc.'s
    Compass Plan, a qualified defined contribution plan designed to satisfy the
    provisions of Section 401(k) of the United States Internal Revenue Code,
    which permits investment of employee accounts in a pooled fund invested
    principally in Common Shares and maintained for the plan by its plan
    administrator.

                         CORPORATE GOVERNANCE PRACTICES

     The TSE requires that each company whose shares are listed and posted for
trading on the TSE disclose, on an annual basis, such company's approach to
corporate governance with reference to specified guidelines (the "TSE
Guidelines") for effective corporate governance. These guidelines deal with the
constitution of boards of directors and board committees, their functions, their
independence from management, and other means of ensuring sound corporate
governance. In light of the TSE requirements, a summary of the status of the
Corporation with respect to the TSE Guidelines is set forth in Appendix "A" to
this Proxy Circular.

                                        8
<PAGE>   10

                  EXECUTIVE COMPENSATION AND OTHER INFORMATION

  Summary Compensation

     The following table, presented in accordance with the CBCA and the
applicable provincial securities legislation in Canada, sets forth information
concerning compensation paid to the Chief Executive Officer, and each of the
other four most highly compensated executive officers of the Corporation (the
"Named Executive Officers"), for services rendered to the Corporation and its
subsidiaries during the financial years ended December 31, 1999, 1998 and 1997.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                LONG-TERM COMPENSATION
                                                                         -------------------------------------
                                            ANNUAL COMPENSATION                  AWARDS              PAYOUTS
                                      --------------------------------   -----------------------   -----------
                                                               OTHER                                                ALL
                                                              ANNUAL     RESTRICTED   SECURITIES                   OTHER
                                                              COMPEN-      STOCK      UNDERLYING      LTIP        COMPEN-
                                      SALARY(1)   BONUS(2)   SATION(3)   AWARDS(4)    OPTIONS(5)   PAYOUTS(6)    SATION(7)
NAME AND PRINCIPAL POSITION    YEAR      ($)        ($)         ($)         ($)          (#)           ($)          ($)
---------------------------    ----   ---------   --------   ---------   ----------   ----------   -----------   ---------
<S>                            <C>    <C>         <C>        <C>         <C>          <C>          <C>           <C>
W. R. Holland................  1999    850,000    615,825     126,808      894,160      72,750       536,831        4,322
  Chairman & CEO               1998    850,000    603,202      85,942       38,097      70,000       571,954        4,843
                               1997    805,000    681,040      80,615       85,377          --       656,860        4,250

G. A. Eisenberg..............  1999    315,000    117,731      48,810      243,698      15,000       124,168          333
  President & COO              1998    293,750    144,749      28,981       30,652      58,000       100,209          302
                               1997    257,000    100,230      28,285       64,764      20,000        95,468       24,687

B. B. Burns, Jr..............  1999    292,000    159,505      36,059      177,699      15,000       103,148          631
  Executive VP                 1998    292,000    162,346      28,295       21,646       7,000       109,267       46,616
                               1997    286,000    130,425      25,422       69,191      22,500        88,745       99,780

J. M. Gibbs..................  1999    275,000    118,594      29,758      215,062      15,000        76,812           --
  Senior VP and                1998    227,333    109,709      18,998       70,088      35,000        94,887           --
  Segment President            1997    209,000     24,210       6,927        6,948       9,000       103,800           --

L. Wahl......................  1999    348,600    325,419       8,328           --      31,875       145,161           --
  Senior VP and                1998    303,477    210,234       7,661           --      47,500       151,182           --
  Segment President            1997    289,353    162,761       7,510       65,104      12,000       283,067           --
</TABLE>

---------------

(1) Includes amounts voluntarily deferred pursuant to United Dominion
    Industries, Inc.'s Compass Plan (the "401(k) Plan"), a qualified defined
    contribution plan designed to satisfy the provisions of Section 401(k) of
    the United States Internal Revenue Code, and United Dominion Industries,
    Inc.'s Excess Deferred Compensation Plan (the "Excess Plan"), a
    non-qualified deferred compensation plan.
(2) Bonuses were approved by the Comp Committee and were paid in February of the
    following year. See "Report of the Compensation & Human Resources Committee
    on Executive Compensation." Amounts shown include amounts deferred pursuant
    to the 401(k) Plan and the Excess Plan. Amounts shown include only the cash
    portion of annual bonuses; Common Shares received pursuant to elections to
    receive shares in lieu of cash for a portion of the annual bonus are
    included in the column headed "Restricted Stock Awards." See Note (4) below.
(3) Includes personal use of company airplane, gross-up of taxable use of
    company airplane, insurance on personal automobiles, automobile allowance,
    membership dues, executive tax service, health care benefits and credits,
    parking and matching contributions by the Corporation under the 401(k) Plan.
(4) Includes the value of Common Shares issued in lieu of cash compensation
    under the Annual Management Incentive Plan of the Corporation (the "Annual
    Plan") and the Long-Term Management Performance Incentive Plan of the
    Corporation (the "Long-Term Plan"). These plans allow participants to elect
    to receive shares in lieu of a portion of cash bonuses, subject to the
    decision of the Comp Committee as to award multiple and eligible bonus
    percentage. The Comp Committee determines the maximum percentage of a
    participant's award that will be eligible for payment in Common Shares and
    an award multiple not to exceed 1.25. Participants in each of these plans
    may elect to receive Common Shares instead of cash, subject to the
    limitations established in the

                                        9
<PAGE>   11

    respective plans and by the Comp Committee. For awards each year, the Comp
    Committee approved an award multiple of 1.20 and allowed participants to
    elect to receive up to 35% of their incentive awards in Common Shares.
    Amounts shown in the "Bonus" column under "Annual Compensation" reflect the
    actual cash bonus received. Amounts shown in the "Restricted Stock Awards"
    column reflect the value of shares issued in lieu of the cash bonus award
    otherwise payable under the Annual Plan (taking into account the award
    multiple). Amounts shown in the column "LTIP Payouts" include the cash award
    and the value of any Common Shares issued under the Long-Term Plan (taking
    into account the award multiple). Also includes for Mr. Holland, Mr.
    Eisenberg, Mr. Burns and Mr. Gibbs, the value of restricted share awards
    received in February 1999.
(5) Stock options with respect to the indicated number of Common Shares were
    granted by the Comp Committee in February of each year indicated, except
    1998, when options were awarded in February and October, and 1999 for Mr.
    Wahl, when options were also awarded in April.
(6) Payments were approved by the Comp Committee and made pursuant to the
    Corporation's Long-Term Plan in February of each year based on performance
    units granted for the three-year period ended December 31 of the prior year.
    Amounts stated include the value of shares received pursuant to the plan as
    a result of elections by participants to receive shares in lieu of a portion
    of the cash bonus due.
(7) Includes the following: for Mr. Burns (1997 and 1998), relocation
    reimbursements; for Mr. Eisenberg (1997), membership fees and related tax
    gross-up. Also includes imputed income on split dollar life insurance
    policies. Does not include amounts realized upon the exercise of stock
    options (see "Aggregated Option Exercises During the Most Recently Completed
    Financial Year and Financial Year-End Option Values").

STOCK OPTIONS

     The following table shows the stock options granted to the Named Executive
Officers in February and April 1999. These non-qualified stock options become
exercisable in thirds, one-third one year after date of grant, another one-third
two years after date of grant, and the final one-third three years after date of
grant. Options held by persons (including Mr. Holland) who are eligible to
retire under United Dominion Industries, Inc.'s Revised Retirement Plan (age 55
plus not less than five years' service), become exercisable six months after
grant.

                  OPTION GRANTS IN MOST RECENT FINANCIAL YEAR

<TABLE>
<CAPTION>
                                                                                                  POTENTIAL
                                 INDIVIDUAL GRANTS                                            REALIZABLE VALUE
                       -------------------------------------                                     AT ASSUMED
                                                               MARKET VALUE                    ANNUAL RATES OF
                                     % OF TOTAL                OF SECURITIES                     SHARE PRICE
                       NUMBER OF      OPTIONS                   UNDERLYING                    APPRECIATION FOR
                       UNDERLYING    GRANTED TO                   OPTIONS                        OPTION TERM
                        OPTIONS      EMPLOYEES     EXERCISE       ON THE                    ---------------------
                        GRANTED     IN FINANCIAL   PRICE(1)    DATE OF GRANT   EXPIRATION      5%          10%
NAME                      (#)           YEAR       ($CDN/SH)      ($CDN)        DATE(2)      ($CDN)      ($CDN)
----                   ----------   ------------   ---------   -------------   ----------   ---------   ---------
<S>                    <C>          <C>            <C>         <C>             <C>          <C>         <C>
W. R. Holland........    72,750        12.3%         29.80       2,167,950     02/11/09     1,363,000   3,455,000
G. A. Eisenberg......    15,000         2.5%         29.80         447,000     02/11/09       281,000     712,000
B. B. Burns, Jr......    15,000         2.5%         29.80         447,000     02/11/09       281,000     712,000
J. M. Gibbs..........    15,000         2.5%         29.80         447,000     02/11/09       281,000     712,000
L. Wahl..............    15,000         2.5%         29.80         447,000     02/11/09       281,000     712,000
L. Wahl..............    16,875         2.9%        32.775         553,078     04/26/09       348,000     881,000
</TABLE>

---------------

(1) The Exercise Price is the fair market value of the Common Shares on the
    grant date, defined to be the average of the previous day's high and low
    board-lot trading prices on the TSE.
(2) Options expire 10 years after the date of the grant. If an officer retires,
    the 10-year period continues.

                                       10
<PAGE>   12

     The following table provides information as to options exercised by the
Named Executive Officers in 1999 and the value of options held by such
executives at year-end.

 AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
                      AND FINANCIAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                                           NUMBER OF SECURITIES             VALUE OF UNEXERCISED
                                                          UNDERLYING UNEXERCISED            IN-THE-MONEY OPTIONS
                       SECURITIES      AGGREGATED          OPTIONS AT FY-END(#)               AT FY-END($)(1)
                       ACQUIRED ON       VALUE        ------------------------------   ------------------------------
NAME                   EXERCISE(#)   REALIZED($)(1)   EXERCISABLE(2)   UNEXERCISABLE   EXERCISABLE(2)   UNEXERCISABLE
----                   -----------   --------------   --------------   -------------   --------------   -------------
<S>                    <C>           <C>              <C>              <C>             <C>              <C>
W. R. Holland........    48,000         267,008          332,750          100,000         251,644            --
G. A. Eisenberg......        --              --          103,200          112,000          72,057            --
B. B. Burns, Jr......        --              --          106,333           64,667         242,935            --
J. M. Gibbs..........        --              --           35,333           56,667           4,219            --
L. Wahl..............        --              --           56,366           82,709          10,224            --
</TABLE>

---------------

(1) The values represent the difference between the exercise price of the
    options and the market price of Common Shares on the date of exercise (with
    respect to exercised options) and at year-end (with respect to unexercised
    options).
(2) Exercisability was determined as of March 14, 2000.

LONG-TERM INCENTIVE AWARDS

     The following table contains information regarding Performance Units
awarded to the Named Executive Officers under the Long-Term Plan during the
financial year ended December 31, 1999. The Long-Term Plan is described in this
Proxy Circular in the "Report of the Compensation & Human Resources Committee on
Executive Compensation."

           LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FINANCIAL YEAR

<TABLE>
<CAPTION>
                                                       PERFORMANCE OR     ESTIMATED FUTURE PAYOUTS UNDER
                                         NUMBER OF      OTHER PERIOD      NON-STOCK PRICE-BASED PLANS($)
                                        PERFORMANCE   UNTIL MATURATION   --------------------------------
NAME                                       UNITS         OR PAYOUT       THRESHOLD     TARGET    MAXIMUM
----                                    -----------   ----------------   ----------   --------   --------
<S>                                     <C>           <C>                <C>          <C>        <C>
W. R. Holland.........................     5,950         1999-2001        301,070     595,000      N/A
G. A. Eisenberg.......................     1,260         1999-2001         63,756     126,000      N/A
B. B. Burns, Jr.......................     1,168         1999-2001         59,100     116,800      N/A
J. M. Gibbs...........................     1,100         1999-2001         55,660     110,000      N/A
L. Wahl...............................     1,394         1999-2001         70,536     139,400      N/A
</TABLE>

REPORT OF THE COMPENSATION & HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION

  Composition of the Committee

     The Compensation & Human Resources Committee of the Board of Directors (the
"Committee"), is composed of four non-employee directors, none of whom is
considered by the Corporation to be a "related director" under the TSE
Guidelines and all of whom are "outside directors" under Section 162(m) of the
United States Internal Revenue Code.

  Background

     The Committee establishes and administers the executive compensation
program for the Corporation's key executives. The executive compensation program
is a well-defined management tool that reinforces the Corporation's culture and
commitment to shareholders. It is designed to attract and retain high-quality
executives, to encourage them to make career commitments to the Corporation, and
to accomplish the Corporation's short and long-term objectives of continuously
improving shareholder return. The Committee reviews and acts on any proposed
changes to current compensation and benefit programs, and on proposed changes in
salary and incentive levels for key executives. The Committee

                                       11
<PAGE>   13

fundamentally believes that a sound compensation program motivates and rewards
executives for the accomplishment of the Corporation's stated financial
objectives by linking a material portion of executive pay to those objectives.

  Principles of the Executive Compensation Program

     The Corporation has historically viewed executive compensation as a total
package that includes base salary and variable short- and long-term
performance-based compensation. The total program is structured to deliver a
significant percentage of pay through variable at-risk pay programs, which
reward executives if the performance of the Corporation warrants such
recognition. The Executive Compensation Program is built on the following basic
principles:

             - Maximize shareholder value.

             - Develop an entrepreneurial spirit among key executives.

             - Retain, reward and motivate key executives.

             - Compensate for performance rather than create a sense of
               entitlement.

             - Reward team results.

             - Build executive equity ownership in the Corporation.

  Components of Executive Compensation

     To determine the competitive level of total compensation, the Committee
sets the total pay target in a competitive compensation range as benchmarked
against published survey data and data derived through special studies of
comparable industries. The Corporation's base salary program is designed to pay
an experienced executive at or near the median or 50th percentile of the
prevailing pay range in the industry for comparable positions. Base salaries are
customarily increased annually, based on a combination of market conditions,
individual performance and corporate performance. Generally, annual increases
are no greater than industry median increases, except in instances of promotion
or significant change in job responsibilities. Incentive compensation is
variable and contingent upon the Corporation's financial performance against
stated and pre-determined objectives. The Committee has the right to make
discretionary payments outside the provisions of the Corporation's variable
incentive compensation programs in very limited circumstances, for example, if
an executive or group of executives has provided exceptional service to the
benefit of shareholders and the Committee believes some recognition is due.

     Annual Management Incentive Compensation:  The Corporation maintains a
Corporate Annual Management Incentive Compensation Plan (the "Annual Plan") for
a number of its key employees, including the Named Executive Officers.
Shareholders of the Corporation approved the Annual Plan on April 27, 1999. The
Committee determines the Chief Executive Officer's eligibility to participate in
the Annual Plan, reviews the Chief Executive Officer's recommendations of other
Annual Plan participants, and, with such changes as the Committee may determine,
if any, approves the annual awards. Participants are classified into groups,
with each group having an annual incentive opportunity of 10% to 80% of base
salary. Annual cash incentive is paid only if the Corporation's performance
meets or exceeds pre-established annual financial targets that are important to
the Corporation and its shareholders. The relative importance of each target is
determined each year by the Committee, and may vary depending upon the
Corporation's financial objectives for that year. All incentive awards under the
Annual Plan are subject to the Committee's approval, and are paid in February
following the year with respect to which amounts are calculated. 1999
performance targets were based on sales growth and return on equity ("ROE"). In
1999, the Corporation achieved sales growth of 6.3% and ROE of 9.9%, resulting
in an award equal to 66.8% of each participant's target award. Excluding
restructuring charges, ROE was 11.5%. As a reward for management's aggressive
actions to improve operations, including restructuring activities, the Committee
provided ex gratia awards totaling $1.016 million to certain corporate officers,
including the Named Executive Officers.

     Annual incentive compensation plans are also maintained on behalf of the
Corporation's operating units for their key employees. During 1999, participants
were able to earn cash incentives based on pre-
                                       12
<PAGE>   14

determined sales growth and return on investment goals derived from segment and
operating unit business plans. The amount of annual incentive compensation is
determined by the participant's position and base salary, with target awards
ranging from 10% to 50% of base salary.

     Long-Term Incentive Compensation:  The Corporation maintains a Long-Term
Management Incentive Compensation Plan (the "Long-Term Plan") which provides
long-term cash incentive to focus corporate executives on achieving longer-term
shareholder value. Shareholders of the Corporation approved the Long-Term Plan
on April 27, 1999. Under the Long-Term Plan, participants receive annual grants
of participation units that are payable after the end of three-year performance
cycles. The Committee establishes performance goals, such as earnings growth,
sales growth, return on capital employed or other such measures, as it deems
appropriate, given the Corporation's objectives. Participants earn from 0% to
150% of the value of their participation units based on the extent to which
pre-established performance goals are achieved.

     Long-Term Incentive plans are also maintained on behalf of the
Corporation's operating units for their key employees. During the 1997-99 plan
cycle, participants were able to earn cash incentives based on pre-determined
goals derived from operating unit business plans. The amount of annual incentive
paid is determined by the participant's position and base salary, with target
awards ranging from 10% to 35% of base salary.

     Under terms of the Annual Plan, the Long-Term Plan, and unit annual and
long-term plans, the Committee may grant Plan participants an opportunity to
receive a multiple of a portion of their annual incentive in the Corporation's
Common Shares to further encourage equity ownership among management. With
respect to incentives earned in 1999, the Committee approved an award multiple
of 1.2 and allowed participants to receive up to 35% of their annual incentive
in Common Shares.

     Stock Option Plan:  Like cash incentives, stock options and restricted
stock are important parts of the total compensation packages of key executives
and are specifically focused on the Corporation's longer-term objectives. The
Corporation maintains a non-qualified stock option and restricted stock plan
(the "Option Plan") for key employees, officers and directors, including the
Named Executive Officers. Shareholders of the Corporation approved the Option
Plan on April 27, 1999. Stock option awards are vested one-third each year.
Options are granted at 100% of the fair market value of the Corporation's common
stock on the date of grant and expire ten years from the date of grant. The use
of restricted stock is designed primarily to retain executive officers and other
key employees of the Corporation while building stock ownership and long-term
equity, and linking pay directly with shareholder return. Option Plan
participation and the size of awards are determined by the individual's
potential to make significant contributions to the Corporation's financial
results, level of management responsibility and individual performance and
potential. Under the Option Plan, the Committee recommends to the Board of
Directors those employees, officers and directors to whom restricted stock or
options to purchase Common Shares should be granted, and the number of shares to
be placed under option. The Board of Directors may accept, modify or return for
further consideration the Committee's recommendations. In no instance may the
exercise price of options be less than 100% of the fair market value of the
Common Shares at the time the option is granted. As of December 31, 1999,
options to purchase 2,787,458 Common Shares were outstanding and remained
unexercised under the Option Plan and 1,163,750 shares remained available for
purposes of future grants.

     In February 1999, the Corporation's directors, officers and other employees
received restricted stock and option grants in respect of 666,565 Common Shares,
which was 1.64% of the Common Shares outstanding as of the date of grant. This
total grant percentage compares to an industry median among comparable companies
of approximately 1.76% of common shares outstanding, on an annual basis, based
on data supplied by the Corporation's compensation consultants.

     The Corporation's incentive compensation programs are designed to reward
executives for achievement of the Corporation's performance objectives. The
plans, as approved by shareholders, are designed to comply with Internal Revenue
Code Section 162(m) to ensure tax deductibility. However, the Committee
considers it important to retain the flexibility to design compensation programs
that are in the best interest of the Corporation and the shareholders and is
therefore not necessarily constrained by that provision.
                                       13
<PAGE>   15

  CEO Compensation

     In making its decisions late in 1998 regarding Mr. Holland and his
management team's compensation for 1999, and in establishing incentive goals for
1999, the Committee considered the Corporation's continuing successful
performance during 1998 and the steps Mr. Holland had taken to position the
Corporation for future growth. 1998 sales grew to $2 billion. Segment operating
income totaled $207 million, up 19% from 1997. Net income of $99.7 million
produced earnings per share of $2.45, a year-over-year gain of 17% in income
from continuing operations:

     Key achievements included:

        - Sales growth of 22% year-over-year, driven largely by acquisitions.
          31% of total sales came from outside the United States.

        - The gain on the sale of the Marley Pump motor business and an
          international tax refund more than offset the non-recurring charges
          related to cost reduction initiatives and previously divested
          businesses. Excluding one-time gains and charges, net income would
          have totaled $87 million, or $2.15 per share.

        - The balance sheet remained strong, ending 1998 at 37% net debt to
          capital. In addition, the Corporation generated $41 million in free
          cash flow after capital expenditures totaling $52 million and $15
          million in dividends.

        - Success of the Company's growth programs, including 11 product-line
          acquisitions for a total investment of $172 million with annualized
          sales of $150 million.

        - The Corporation repurchased 3.3 million Common Shares for $84 million.

     The Committee also recognized the continuing value of Mr. Holland's
management expertise; his key role in the successful transition of the
Corporation to manufacturing; his global expansion of the business; and his
continuing efforts to take the Corporation to world-class manufacturer status.
In addition, for the past three years Mr. Holland has worked closely with the
Board of Directors to develop a transition plan to the next generation of senior
management. In December 1999, as a result of this effort, Glenn A. Eisenberg was
named President and Chief Operating Officer, B. Bernard Burns was named
Executive Vice President and Chief Administrative Officer, and William Dries was
named Chief Financial Officer. These steps, and the continued development of
United Dominion's management under Mr. Holland's guidance, position the
Corporation for continued success. The committee reviews Mr. Holland's
performance at its December meeting pursuant to a written report from him,
which, among other things, is used to assess the appropriateness of his
compensation.

     For fiscal year 1999, Mr. Holland received a base salary of $850,000 and
was awarded an incentive bonus of $397,758 under the Annual Plan based on the
Corporation's achievement of $88.9 million in earnings and $128.3 million in
sales growth, 66.8% of his targets. He also received a bonus under the Long-Term
Plan for the 1997-1999 cycle of $479,313 as a result of the achievement by the
Corporation of cumulative return on equity of 12.6% and cumulative net earnings
of $326.6 million, 85.1% of the three-year targets set in 1996. In addition, the
Committee recommended and the Board approved the payment to Mr. Holland of an ex
gratia bonus in the amount of $286,492 in recognition of the significant
restructuring activities led by Mr. Holland during the year to improve future
operating performance.

     During 1999, Mr. Holland was awarded stock options in respect of 76,750
Common Shares and 27,250 restricted Common Shares under the Option Plan. He was
also awarded 5,950 units for the 1999-2001 cycle under the Long-Term Plan. The
value of the long-term award, if the Corporation's long-term target results are
satisfied, is $595,000, equal to 70% of Mr. Holland's 1999 base salary.

     The Committee carefully reviewed Mr. Holland's executive compensation
package. Given Mr. Holland's long-time service to the Corporation, the
Corporation's continued solid financial performance in 1999, and the
accomplishments described above, the Committee believes the package is
appropriate and that the amount and nature of each component of the package is
consistent with competitive pay practices among comparable United States
companies, based on data supplied by the Corporation's compensation consultants.
In conformity with its past practice, the Committee will

                                       14
<PAGE>   16

periodically review the compensation and benefits of Mr. Holland and the
Corporation's other key executives and will from time to time make such changes,
as it deems appropriate under the circumstances.

     Compensation & Human Resources Committee:

     D. N. Boyce
     J. E. Courtney, Vice Chairman
     P. A. Crossgrove
     D. D. Ruffin, Chairman

UNITED DOMINION INDUSTRIES, INC. RETIREMENT PLAN

     The executive officers of the Corporation (other than Mr. Wahl) participate
in the United Dominion Industries, Inc. Revised Retirement Plan (the "United
Dominion Plan"), a qualified defined benefit plan available to all salaried
employees of United Dominion Industries, Inc. The amount payable at age 65 is
0.8% of participant's final average earnings ("FAE"), defined as the annualized
average of the highest consecutive five years of compensation out of the last
ten years of employment, plus 0.6% of the participant's FAE in excess of the
covered compensation (the average of the thirty-five social security wage bases
in effect or projected to be in effect during the thirty-five years prior to the
year during which the participant will reach age 65) multiplied by up to a
maximum of 35 years of service. For each year of service over 35 years, the
retirement benefit is increased by 0.5% of FAE. Compensation covered by the
United Dominion Plan is total cash compensation paid during the plan year,
including bonuses and awards made under the Annual Plan and Long-Term Plan
described above, but excluding directors' fees and non-service related
compensation.

     The following table shows estimated annual gross benefits payable from the
United Dominion Plan as a single life annuity upon retirement at age 65 in 1999
for employees in the salary classifications and with the years of service
specified. The amount shown for each category is the total benefit payable under
the United Dominion Plan benefit formula without regard to United States
regulations which limit both the maximum benefit that can be paid from a
qualified defined benefit plan and the amount of salary that can be included in
a qualified plan's salary-based benefit formula. The Corporation pays the full
amount due pursuant to the United Dominion Plan's benefit formula through a
combination of the qualified defined benefit plan and either a non-qualified
pension restoration plan or the Supplemental Plan described below. The
Supplemental Plan provides additional retirement benefits to certain executives.
See "Other Plans and Agreements."

<TABLE>
<CAPTION>
    AVERAGE
CONTINUOUS BEST                                         YEARS OF SERVICE
 FIVE YEARS OF                        ----------------------------------------------------
 COMPENSATION                            15         20         25         30         35
---------------                       --------   --------   --------   --------   --------
<C>               <S>                 <C>        <C>        <C>        <C>        <C>
  $  100,000      ..................  $ 18,030   $ 24,040   $ 30,050   $ 36,060   $ 42,070
     200,000      ..................    39,030     52,040     65,050     78,060     91,070
     300,000      ..................    60,030     80,040    100,050    120,060    140,070
     400,000      ..................    81,030    108,040    135,050    162,060    189,070
     500,000      ..................   102,030    136,040    170,050    204,060    238,070
     600,000      ..................   123,030    164,040    205,050    246,060    287,070
     800,000      ..................   165,030    220,040    275,050    330,060    385,070
   1,000,000      ..................   207,030    276,040    345,050    414,060    483,070
   1,200,000      ..................   249,030    332,040    415,050    498,060    581,070
   1,400,000      ..................   291,030    388,040    485,050    582,060    679,070
   1,600,000      ..................   333,030    444,040    555,050    666,060    777,070
   1,800,000      ..................   375,030    500,040    625,050    750,060    875,070
   2,000,000      ..................   417,030    556,040    695,050    834,060    973,070
</TABLE>

     The Named Executive Officers (other than Mr. Wahl) have the credited years
of service indicated beside each of their names: Mr. Holland -- 27, Mr. Burns --
10, Mr. Eisenberg -- 10, Mr. Gibbs -- 22.

                                       15
<PAGE>   17

     Mr. Wahl does not participate in the United Dominion Plan; instead, he is
covered by a German pension plan for BOMAG management. The plan is based on his
salary, taking into account social security pension payments and years of
service. The maximum annual amount payable under the BOMAG management plan is
approximately 55% of Mr. Wahl's final salary.

OTHER PLANS AND AGREEMENTS

     The Corporation provides a Supplemental Executive Retirement Plan (the
"Supplemental Plan") to 12 of its key executives, including the Named Executive
Officers except Mr. Wahl. Under the Supplemental Plan, a fully vested
participant is eligible to receive a target annual benefit at age 62 equal to
60% of Final Average Earnings, reduced by retirement income from the United
Dominion Plan described in the preceding section and Social Security. "Final
Average Earnings" is defined for purposes of the Supplemental Plan as the
average of the highest three years of "Eligible Income" out of the ten years
immediately preceding retirement; Eligible Income includes salary and all
incentive earnings under the Corporation's established incentive plans. To
become fully vested under the Supplemental Plan a participant must accumulate,
or be granted by the Comp Committee (as in the case of Messrs. Eisenberg and
Burns), fifteen years of service. For purposes of the Supplemental Plan, Mr.
Gibbs has been granted twelve years credit, five for his period of service with
United Dominion and seven for his service with United Dominion's Serco business
prior to its acquisition by United Dominion. Benefit accruals begin after five
full years of service, with one-tenth of the target benefit vesting each year
thereafter. All of the benefits under the Supplemental Plan are paid in a 50%
joint and survivorship annuity for the life of the participant. A participant
may elect to retire at any time after age 55 and receive a benefit, actuarially
reduced, for life.

     Pursuant to an agreement between Mr. Holland and the Corporation dated
April 28, 1999, Mr. Holland will be entitled to receive his Supplemental Plan
benefit in a lump sum upon his retirement or other separation from the
Corporation. Also pursuant to the agreement, the discount computation rate that
will be used to compute the lump sum benefit has been fixed at 5.25% (the 1999
GATT cash lump sum discount rate used in the United Dominion Plan).

     United Dominion Industries, Inc. has established a "grantor trust" (the
"Trust") for the purpose of providing certain executives (including all of the
Named Executive Officers other than Mr. Wahl) with greater assurances that the
supplemental pension benefits to which such executives may be entitled under the
Supplemental Plan and the change in control agreements described under the
heading "Change in Control Agreements" would be satisfied in the event of a
"change in control" as defined in the Trust (collectively, the "Covered
Benefits"). The Trust is intended to constitute an "unfunded" arrangement.
However, United Dominion Industries, Inc. has deposited into the Trust a letter
of credit in the face amount of approximately $32.8 million, which is equal to
120% of the estimated value of the Covered Benefits that would be payable
assuming a change in control had occurred on January 1, 1999 and all of the
covered executives had terminated employment on that date. The Covered Benefits
are redetermined annually as of January 1 of each year. To the extent the
aggregate value of the Covered Benefits increases, additional contributions (in
the form of letters of credit or otherwise) are required to be made to maintain
the assets of the Trust at a level equal to 120% of the estimated benefit
values. Upon the occurrence of a change in control, United Dominion Industries,
Inc. is required to make additional contributions to the Trust in cash so that
the aggregate amount of the assets held by the Trust equals 120% of the Covered
Benefits determined as of the date such change occurs. The letter(s) of credit
would be drawn upon to the extent any supplemental pension benefits which become
payable under the Supplemental Plan or the change in control agreements are not
otherwise paid by United Dominion Industries, Inc. The assets of the Trust are
subject to the claims of the creditors of United Dominion Industries, Inc. in
the event United Dominion Industries, Inc. becomes "Insolvent" as defined in the
Trust.

     The Corporation also provides several other supplemental executive benefit
plans to the Named Executive Officers, including split-dollar life insurance and
long-term disability insurance. The life insurance plan provides participants a
death benefit equal to one hundred percent of their current salary and prior
year's incentive bonus. The supplemental long-term disability plan provides a
make-up benefit to ensure that participants receive a disability benefit at
least equal to 60% of eligible total compensation when combined with the
Corporation's group long-term disability benefit plan.

                                       16
<PAGE>   18

                               PERFORMANCE GRAPH

     The following graph compares cumulative total return (assuming reinvestment
of dividends) for the Corporation's Common Shares against the TSE Composite 300
(TSE 300) for the five-year period ended December 31, 1999, assuming $100
invested on December 31, 1994.

<TABLE>
<CAPTION>
           Measurement Period                       United
         (Fiscal Year Covered)                     Dominion          TSE 300
<S>                                                <C>               <C>
                  1994                                100               100
                  1995                                110               112
                  1996                                122               141
                  1997                                137               159
                  1998                                122               154
                  1999                                112               200
</TABLE>

                          CHANGE IN CONTROL AGREEMENTS

     United Dominion Industries, Inc. has agreements with fifteen of its key
employees, including each of the Named Executive Officers except Mr. Wahl,
providing for protection in the event of a change in control of the Corporation.
In general, the agreements provide for (a) a lump-sum severance payment by
United Dominion Industries, Inc. to the employee equal to the amount of base
salary that the employee would have earned had he continued to be employed until
the earlier of (i) the end of the thirty-six month period following the date of
termination or (ii) the attainment of normal retirement age, assuming the
employee's salary rate would be equal to his highest monthly rate during the
thirty-six month period preceding termination, (b) amounts in lieu of continued
participation in incentive compensation and stock option plans based on
assumptions concerning the Corporation's results for the thirty-six month period
following termination and the employee's continued participation for the period,
(c) insurance and other benefits for the thirty-six month period after
termination (to the extent the employee does not receive comparable benefits
during the period), and (d) supplemental pension benefits, if the Corporation
experiences a change in control and the employee is terminated for reasons other
than death, disability, retirement or cause, or terminates his employment for
reasons relating to a change in, among other things, his compensation, duties,
benefits or location. These agreements are designed to provide the benefits the
employee would have received had he continued working for United Dominion
Industries, Inc. for three additional years.

     The amount to be paid is not subject to reduction for compensation earned
from subsequent employment or from subsequent pension benefits. The agreements
provide for a "gross-up" of the awards to reimburse participants for any excise
tax payable on account of any "excess parachute payment" under United States
Internal Revenue Code Section 280(G).

                                       17
<PAGE>   19

                  DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

     The Corporation and its directors and officers are covered under a
directors' and officers' liability insurance policy maintained by the
Corporation that has aggregate coverage limits of $100,000,000. This policy
includes a per-loss deductible of $250,000 with regard to claims against the
Corporation, but no deductible with regard to claims against individual
directors and officers. The premium paid by the Corporation in 1999 was $273,750
in respect of its officers and directors as a group. The Corporation paid all of
the premiums.

            CERTAIN BUSINESS RELATIONSHIPS AND RELATED TRANSACTIONS

     The Honorable James A. Grant, P.C., Q.C., a director of the Corporation
(and a nominee for re-election), is a partner in the law firm Stikeman Elliott,
which provides certain legal services to the Corporation.

     Mr. William W. Stinson, a director of the Corporation (and a nominee for
re-election) entered into a management consulting agreement with the Corporation
effective January 1, 1998. That agreement was renewed for successive additional
one-year terms effective January 1, 1999 and January 1, 2000. Mr. Stinson was
paid $150,000 during 1999 and will be paid $150,000 during 2000 pursuant to the
agreement.

                           REAPPOINTMENT OF AUDITORS

     KPMG LLP has been the auditor of the Corporation since 1992. If no contrary
instruction is indicated in the proxy, the persons named in the enclosed form of
proxy intend to vote such proxy in favor of the reappointment of KPMG LLP as
auditor of the Corporation to serve until the close of the next annual meeting
of shareholders, at a remuneration to be approved by the Board of Directors.
Arrangements have been made for one or more representatives of KPMG LLP to
attend the Meeting. Representatives of KPMG LLP will be allowed to make a
statement at the Meeting if they desire to do so, and will be available to
respond to appropriate questions.

                SHAREHOLDERS' PROPOSALS FOR 2001 ANNUAL MEETING

     Under the CBCA, proposals by shareholders for any matter intended to be
raised at the 2001 Annual Meeting of Shareholders of the Corporation must be
received by the Secretary of the Corporation no later than January 25, 2001 in
order to be included in the 2001 management proxy circular and on the proxy card
that will be solicited by the Board of Directors in connection with that
meeting. The inclusion of any proposal will be subject to applicable
requirements of the CBCA. Written notice must be received by the Secretary of
the Corporation at its principal executive office, 2300 One First Union Center,
301 South College Street, Charlotte, North Carolina 28202-6039, U.S.A.

                           AVAILABILITY OF DOCUMENTS

     In accordance with National Policy No. 47 of the Canadian Securities
Administrators, the Corporation shall provide to any person or company, upon
request to the Secretary of the Corporation:

          (a) when the securities of the Corporation are in the course of a
     distribution pursuant to a short form prospectus or a preliminary
     short-form prospectus which has been filed in respect of a distribution of
     its securities,

             (i) one copy of the Corporation's annual report on Form 10-K
        together with one copy of any document, or the pertinent pages of any
        document, incorporated therein by reference;

             (ii) one copy of the comparative financial statements of the
        Corporation filed under applicable provincial securities legislation in
        Canada for the Corporation's most recently completed financial year in
        respect of which such financial statements have been issued,

                                       18
<PAGE>   20

        together with the report of the auditor thereon, Management's discussion
        and analysis of financial condition and results of operations, and any
        interim financial statements of the Corporation filed under the said Act
        subsequent to the filing of the annual financial statements;

             (iii) one copy of the proxy circular of the Corporation filed under
        such Act in respect of the most recent annual meeting of shareholders of
        the Corporation which involved the election of directors; and

             (iv) one copy of any reports filed by the Corporation pursuant to
        such Act which are incorporated by reference into the preliminary
        short-form prospectus or the short-form prospectus; or

          (b) at any other time, the documents referred to in Clauses (a)(i),
     (ii) and (iii) above, provided that the Corporation may require the payment
     of a reasonable charge from such person or company who is not a security
     holder of the Corporation where the documents are furnished under this
     Clause (b).

     The Board of Directors of the Corporation has approved the contents and
sending of this Proxy Circular.

                                          /s/ Richard L. Magee
                                          R. L. Magee,
                                          Secretary

Toronto, Ontario
March 22, 2000

                                       19
<PAGE>   21

                                                                    APPENDIX "A"

                                  STATEMENT OF
                         CORPORATE GOVERNANCE PRACTICES

     Set forth below are summaries of guidelines on corporate governance issued
by The Toronto Stock Exchange and the Corporation's approach with respect to
each guideline.

 1. As stewards of the corporation, each board of directors should assume
    responsibility for the following:

     (i) adoption of a strategic planning process;

        Status: The Board of Directors (the "Board") of the Corporation follows
                a process whereby it reviews and approves a strategic plan
                presented to it by management annually. The Board also discusses
                developments impacting corporate strategy at every Board meeting
                and through periodic discussions with management. The Board has
                responsibility for monitoring management's success in
                implementing the strategic plan.

     (ii) identification of the principal risks of the corporation's business
          and ensuring the implementation of appropriate systems to manage these
          risks;

        Status: The Board, through its Audit & Risk Management Committee, and
                through periodic reports presented to it by the Corporation's
                insurance and management pension committees, and by various
                members of management, continually identifies principal risks
                facing the Corporation. Any material issues relating to the
                appropriateness or effectiveness of the Corporation's systems
                utilized to contain, manage or eliminate such risks are
                addressed by the Board and referred to management for
                resolution.

     (iii) succession planning, including appointing, training and monitoring
           senior management;

        Status: The Corporation utilizes a formal management development and
                succession planning program. Periodic reports relating to this
                program are provided to the Board of Directors and to the
                Compensation and Human Resources Committee.

     (iv) implementation of a policy of effective communication with
          shareholders and the general public;

        Status: The Corporation maintains a formal communications policy which
                requires, in part, that the Corporation be responsive and
                consistent in matters of external and internal communication
                about the Corporation's affairs. Through corporate
                communications and investor relations staff functions,
                shareholders, members of the investment community, stock
                exchanges and regulatory bodies are provided with information in
                a timely and continuous manner, using regular quarterly and
                annual reports, special mailings and the media.

     (v) ensuring the integrity of the corporation's internal control and
         management information systems.

        Status: The Board monitors the Corporation's internal control and
                management information systems through its Audit & Risk
                Management Committee, which reviews periodic reports and
                conducts discussions with senior management and regularly with
                internal audit personnel, in some cases without the presence of
                members of management.

 2. A majority of the directors should qualify as unrelated directors, i.e.
    independent of management and free from any interest and any business or
    other relationship which could or could reasonably be perceived to
    materially interfere with the director's ability to act with a view to the
    best interests of the corporation, other than interests and relationships
    arising from shareholding.

                                       A-1
<PAGE>   22

        Status: The Corporation's Board Composition Philosophy requires that the
                Board be composed of a majority of directors who qualify as
                unrelated directors and no more than three inside directors. In
                addition, Committees should generally be composed of outside
                directors, majorities of whom are unrelated, although the
                Executive Committee may include one or more inside directors.
                The Board currently has one inside director and one outside
                director who is a related director.

 3. The board should disclose on an annual basis whether the board has a
    majority of "unrelated directors".

        Status: The Corporation's annual Management Proxy Circular/Proxy
                Statement discloses any relationship between a director and the
                Corporation.

 4. A committee of outside directors, a majority of whom are "unrelated", should
    be responsible for proposing new nominees to the board.

        Status: In 1999 the Board added a Nominating & Corporate Governance
                Committee. One of its responsibilities is to identify and select
                individuals as candidates for election to the Board of
                Directors. The Nominating & Corporate Governance Committee
                currently is comprised of four members, none of whom is an
                inside director or a related director.

 5. The board should implement a process to be carried out by an appropriate
    committee for assessing the effectiveness of the board and of its committees
    and for assessing the contribution of each individual director.

        Status: The Board has assigned the Nominating & Corporate Governance
                Committee responsibility for assessing the effectiveness of the
                Board and of its committees and for assessing the Board's
                ability to conduct effective decision-making. This is
                accomplished through periodic Board and management discussions
                and by means of a detailed questionnaire completed biannually by
                each member of the Board of Directors. Use of this questionnaire
                also enables each individual director to assess his or her
                contribution as a member of the Board of Directors. The
                Corporation has a system in place whereby a Board member whose
                employment or vocation is materially changed is required to
                submit his resignation to the Chairman of the Board for
                consideration and action by the full Board.

 6. An orientation and education program should be provided for new recruits to
    the board.

        Status: Each new director is provided with recent literature and reports
                relating to the Corporation and a handbook containing relevant
                information on issues or topics such as the Corporation's
                by-laws, directors, committees, officers, meetings,
                compensation, stock options, liability insurance, subsidiaries,
                and the Corporation's Code of Business Conduct.

 7. The board should examine its size and undertake where appropriate a program
    to reduce the number of directors to a number which facilitates more
    effective decision-making.

        Status: Based on the Corporation's current composition and size, the
                Corporation and the Board believe that the size of the Board
                proposed for nomination at the 2000 Annual Meeting of
                Shareholders - 12 members, is appropriate in light of current
                circumstances. The Board will re-examine this issue
                periodically.

 8. The board should review the adequacy and form of the compensation of
    directors and ensure the compensation realistically reflects the
    responsibilities and risk involved in being an effective director.

        Status: The adequacy and form of director compensation is currently
                reviewed on an annual basis, utilizing various types of survey
                data. The Board has assigned the Compensation & Human Resources
                Committee responsibility on an annual basis for determining the
                                       A-2
<PAGE>   23

                adequacy and form of Board compensation. Stock ownership in the
                Corporation by directors is encouraged; a minimum number of
                shares (presently, 1,000 Common Shares) is required to be owned
                by each director. Stock options as a portion of director
                compensation are also currently utilized to increase share
                ownership by members of the Board.

 9. Committees should generally be composed of outside directors, a majority of
    whom are "unrelated", although some committees, such as the executive
    committee, may include one or more inside directors.

        Status: The Audit & Risk Management Committee, the Compensation & Human
                Resources Committee and the Nominating & Corporate Governance
                Committee are currently composed of outside and unrelated
                directors. The Executive Committee currently includes one inside
                and related director, one outside and related director and three
                unrelated directors.

 10. The board should assume responsibility for, or assign to a committee, the
     general responsibility for developing the corporation's approach to
     governance issues.

        Status: Previously, the Compensation & Human Resources Committee had
                responsibility for corporate governance issues. The Board in
                1999 added the Nominating & Corporate Governance Committee, in
                part to give more attention to governance matters. One of the
                new committee's responsibilities is to develop the Corporation's
                approach to corporate governance issues.

 11. The board, together with the CEO, should develop position descriptions for
     the board and for the CEO, involving the definition of the limits to
     management's responsibilities. The board should approve or develop the
     corporate objectives, which the CEO is responsible for meeting.

        Status: The Compensation & Human Resources Committee, with the
                assistance of senior management, developed position descriptions
                for the Board and for the Chief Executive Officer which allocate
                responsibilities and define the limits of management's
                responsibilities. The Nominating & Corporate Governance
                Committee reviews annually the guidelines for each Board
                committee, which are then approved by the Board. In addition,
                the board approves, or develops with the Chief Executive
                Officer, the corporate objectives that the Chief Executive
                Officer is responsible for meeting. The Nominating & Corporate
                Governance Committee monitors the Board position descriptions
                and the Committee guidelines. The Compensation & Human Resources
                Committee monitors the performance of the Chief Executive
                Officer.

 12. The board should have in place appropriate structures and procedures to
     ensure that the board can function independently of management. These
     structures and procedures may involve the board meeting on a regular basis
     without management present. The board should either (i) appoint a chair of
     the board who is not a member of management or (ii) adopt alternate means
     so that the board is able to function independently of management -- this
     could include assigning the responsibility to a committee or to a lead
     director.

        Status: The Board elects from its membership on an annual basis a lead
                director who is entitled, pursuant to the Corporation's by-laws,
                to call meetings of the Board to be held without management
                present. In addition, to the extent the Corporation's Chief
                Executive Officer or Chief Operating Officer is unavailable or
                is not the appropriate person to undertake such action, the lead
                director has the right to speak on behalf of the Corporation.
                Currently, Mr. Ruffin serves as lead director. A new lead
                director will be elected upon Mr. Ruffin's retirement in April
                2000. The Board and each of its committees conduct regular in
                camera sessions outside the presence of members of management,
                including management directors.

                                       A-3
<PAGE>   24

 13. The audit committee should be composed only of outside directors. The role
     and responsibilities of the audit committee should be specifically defined.
     The audit committee should have direct communication channels with the
     internal and external auditors and should ensure management's design and
     implementation of an effective system of internal control.

        Status: The Audit & Risk Management Committee is composed solely of
                outside directors. The role and responsibilities of the Audit &
                Risk Management Committee are defined in the Corporation's
                by-laws and detailed in the Committee's guidelines. These
                guidelines are currently being reviewed and revised and will be
                converted into a charter for the Committee, which will be
                adopted by the Board in April. The Audit & Risk Management
                Committee periodically meets privately with the Corporation's
                internal and external auditors after or during regularly
                scheduled committee meetings.

 14. The board should implement a system that enables an individual director to
     engage an outside adviser at the expense of the corporation in appropriate
     circumstances, subject to the approval of an appropriate committee.

        Status: The Board has adopted a resolution, which allows individual
                directors to engage outside advisors (such as lawyers or
                accountants) at the expense of the Corporation, in appropriate
                circumstances. The resolution requires that each request to
                engage outside advisors have the approval of the Compensation &
                Human Resources Committee and that management must be fully
                advised. The Nominating & Corporate Governance Committee will
                succeed the Compensation & Human Resources Committee as the
                committee that must approve any such engagement.

                                       A-4