SCHEDULE 14A INFORMATION
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the Securities Exchange Act of 1934
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Section 240.14a-12.
Modine Manufacturing Company
-----------------------------------------------
(Name of Registrant as Specified In Its Charter
Modine Manufacturing Company
-----------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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/ / Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11
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computed pursuant to Exchange Act Rule 0-11:*
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<PAGE>
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/ / Check box if any part of the fee is offset as proved by
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<PAGE>
notice
of meeting
and proxy
statement
annual meeting
1995
of shareholders
M O D I N E
<PAGE>
M O D I N E
- ---------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS, JULY 19, 1995
TO THE SHAREHOLDERS:
The Annual Meeting of the Shareholders of Modine Manufacturing Company
will be held at the offices of the Company, 1500 DeKoven Avenue, Racine,
Wisconsin, on Wednesday, July 19, 1995, at 9:30 a.m. for the following
purposes:
1. To elect three directors to serve until the Annual Meeting
in 1998.
2. To transact any other business that may properly come before
the meeting or any adjournment thereof.
The transfer books of the Company will not be closed, but only
shareholders of record at the close of business on May 30, 1995, are entitled
to notice of and to vote at this meeting.
In order that your stock may be represented at the meeting, in case you
are not personally present, PLEASE SIGN THE ENCLOSED PROXY AND RETURN IT IN
THE ENCLOSED ENVELOPE.
By order of the Board of Directors
W. E. PAVLICK, Secretary
June 9, 1995
YOUR VOTE IS IMPORTANT!
Please date, sign, and return
the enclosed Proxy immediately.
<PAGE>
PROXY STATEMENT
Annual Shareholders' Meeting of Modine Manufacturing Company--1995
- -----------------------------------------------------------------------
GENERAL INFORMATION
The solicitation of the enclosed proxy is made by and on behalf
of the Board of Directors of Modine Manufacturing Company, 1500 DeKoven
Avenue, Racine, Wisconsin 53403 (hereinafter called the "Company") for
use at the Annual Meeting of Shareholders of the Company to be held on
July 19, 1995, or at any adjournment thereof.
A person giving the proxy has the power to revoke it at any time
prior to the exercise thereof by giving notice in writing to the Secretary
of the shareholders' meeting or by oral notice to the presiding officer
during the meeting. Unless revoked, properly executed proxies will be
voted in accordance with the instructions of the shareholder. If no
specific instructions are given, the shares represented by the proxy
will be voted FOR the election of directors.
With regard to the election of directors, votes may be cast in favor
or withheld; votes that are withheld will be excluded entirely from the
vote and will have no effect.
In their discretion the Proxies are authorized to vote upon such
other business as may come before the meeting. Holders of record at the
close of business on May 30, 1995, are entitled to one vote for each share
of stock held. It is intended that these proxy materials will be sent to
shareholders on or about June 9, 1995. The total number of shares of
Common Stock outstanding and entitled to vote at the meeting is 29,688,821
shares; no Preferred Stock is presently outstanding. The holders of Common
Stock of the Company do not have cumulative voting rights.
1. ELECTION OF DIRECTORS
The Board of Directors currently consists of ten members.
Pursuant to the By-Laws, E. E. Richter is retiring and is not a
nominee for election in 1995. The office of Chairman of the Board of
Directors currently held by Mr. Richter will not be filled. Mr. R. T.
Savage, President and Chief Executive Officer, will assume the duties
of the Chairman effective July 19, 1995.
By Board of Directors action in May, 1995, effective as of July 19,
1995, the authorized number of directors will be fixed at nine. The
Restated By-Laws of the Company, as amended in May 1995, effective as of
July 19, 1995, classify the Board of Directors into three classes of
directors, with each director serving a term of office of three years.
Each class of directors is staggered so that each expires in succeeding
years. This year, the terms of Thomas J. Guendel, Gary L. Neale, and
Richard J. Doyle expire at the 1995 Annual Meeting of Shareholders and
each of them has been nominated for a new three year term expiring at
the Annual Meeting in 1998.
Each of these nominees has indicated his willingness to serve if
elected. While it is not anticipated that any of the nominees will be
unable to take office, if such is the case proxies will be voted in favor
of such other person or persons as the Board of Directors may propose to
<PAGE>
fill the three directorships. In accordance with the Restated By-Laws, a
director shall hold office until the Annual Meeting for the year in which
his term expires and until his successor shall be elected and qualify,
subject, however, to prior death, resignation, retirement, disqualification,
or removal from office. Vacancies may be filled by the remaining directors.
The nominees for the Board of Directors, and the directors whose
terms will continue, their ages, other directorships, and their tenure and
expiration dates of their terms, are set forth on the following pages:
Nominees to be Elected
- ----------------------
THOMAS J. GUENDEL Director since 1980
Age 67
Mr. Guendel is the retired Chairman of the Board and Chief
Executive Officer of Portec, Inc., Lake Forest, Illinois, a
manufacturer of railroad, construction, and material handling
equipment. He is an Adjunct Professor, Lake Forest Graduate
School of Management. Term to expire in 1998.
GARY L. NEALE Director since 1977
Age 55
Mr. Neale is Chairman, President and Chief Executive Officer
and director of NIPSCO Industries, Inc., Hammond, Indiana, a
holding company for gas and electric utilities and other
energy related subsidiaries. Term to expire in 1998.
RICHARD J. DOYLE Director since 1987
Age 63
Mr. Doyle is Chairman, Chief Executive Officer and director of
three private electrical contracting corporations. Prior to his
retirement January 1, 1989, Mr. Doyle was a Vice President of
Borg-Warner Corporation, Chicago, Illinois, a diversified
manufacturing and services company, and President and Chief
Executive Officer of Borg-Warner Automotive, Inc., Troy, Michigan,
a subsidiary of Borg-Warner Corporation. Term to expire 1998.
Directors Continuing in Service
- -------------------------------
FRANK W. JONES Director since 1982
Age 55
Mr. Jones is an independent management consultant, Tucson,
Arizona. He is also a director of Jason Incorporated, Met
Coil Systems Corp., Ingersoll Milling Machine Co., Star
Cutter Co., Gardner Publications, Inc., General Tool Co.,
and TRAK International, Inc. Term to expire in 1997.
<PAGE>
DENNIS J. KUESTER Director since 1993
Age 53
Mr. Kuester is President of Marshall & Ilsley Corporation and of
M&I Marshall & Ilsley Bank, and Chairman and Chief Executive
Officer of M&I Data Services, Inc., a Milwaukee, Wisconsin, bank
holding company, bank, and banking services company, respectively.
He is also a director of M&I Data Services, Inc., M&I Marshall &
Ilsley Bank, M&I Corporation, Interstate Forging Industries,
Inc., Super Steel Products Corp., TYME Corporation, and Krueger
International. Term to expire in 1997.
MICHAEL T. YONKER Director since 1993
Age 52
Mr. Yonker is President and Chief Executive Officer of Portec, Inc.,
Lake Forest, Illinois, a manufacturer of railroad, construction, and
material handling equipment. Prior to joining Portec, Inc. in 1989,
Mr. Yonker served in various capacities at P.T. Components, FMC
Corporation, and Exxon Corporation. He is also a director of Crown
Anderson, Inc. and Woodward Governor Company. Term to expire in 1997.
STUART W. TISDALE Director since 1987
Age 66
Mr. Tisdale is the retired Chairman, Chief Executive Officer and a
director of WICOR, Inc., Milwaukee, Wisconsin, a holding company whose
primary subsidiaries are Wisconsin Gas Company, a public utility,
Sta-Rite Industries, a manufacturer of pumps and fluid handling systems,
and SHURflo Pump Manufacturing Company, a manufacturer of small high-
performance pumps, valves, motors and systems. He is also a director
of Marshall & Ilsley Corporation and Twin Disc, Inc. Term to expire
in 1996.
VINCENT L. MARTIN Director since 1992
Age 55
Mr. Martin is Chairman, President and Chief Executive Officer, and
director of Jason Incorporated, a diversified manufacturing company
based in Milwaukee, Wisconsin. He is also a director of Crane
Manufacturing & Service, Bank One Wisconsin Corporation, and Oldenburg
Group, Inc. Term to expire in 1996.
RICHARD T. SAVAGE Director since 1989
Age 56
Mr. Savage is President and Chief Executive Officer of the Company.
He will assume the duties of Chairman of the Board effective July 19,
1995. He is also a director of Twin Disc, Inc., and M&I Bank of
Racine. Term to expire in 1996.
<PAGE>
PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE
OFFICERS
Principal Shareholders
The following table sets forth information based upon the records of
the Company and filings with the Securities and Exchange Commission ("SEC")
as of March 31, 1995, with respect to each person known to be the beneficial
owner of more than five percent (5%) of any class of the Company's voting
securities.
Title Name and Address of Amount and Nature of Percent
of Class Beneficial Ownership Beneficial Ownership(f) of Class
- -------- --------------------------- -------------------------- --------
Common Investment Committee of 2,314,844 Power to vote 7.79 %
Modine Manufacturing and dispose of
Company Employees' Retire- Trusts' stock
ment Trusts, 1500 DeKoven
Avenue, Racine, WI.
Members: R. T. Savage,
A. D. Reid, V. S.
Frangopoulos, D. R.
Johnson and W. E. Pavlick*
Common Administrative Committee 5,705,579 Power to vote 19.21%
of Modine Contributory Plans' stock
Employee Stock Ownership not voted by
& Investment Plans, employees
1500 DeKoven Avenue, owning it
Racine, WI. Members:
R. M. Gunnerson, R. L.
Hetrick, and D. R. Zakos*
Common Mario T. Gabelli, GAMCO 1,914,576 Sole or shared 6.47 %
Investors, Inc., Gabelli voting and/or
& Company, Inc. and power to dispose
Gabelli Funds, Inc. of stock
655 Third Avenue, New
York, NY 10017**
- ------------------------------------------------------------------------------
* M&I Marshall and Ilsley Bank is trustee and holder of
record of the Modine Contributory Employee Stock
Ownership and Investment Plans' and Retirement Trusts'
stock and is the escrow agent for participants' stock
under the 1990 through 1995 Stock Award Plans. D. J.
Kuester is President of Marshall & Ilsley Corporation
and of M&I Marshall & Ilsley Bank.
** Based on a joint Schedule 13D filed as of May 10, 1994,
by Mario T. Gabelli, GAMCO Investors, Inc., Gabelli &
Company, Inc., and Gabelli Funds, Inc.
The Company knows of no other person or group which is a beneficial
owner of five percent or more of the Company's Common Stock.
<PAGE>
Securities Owned by Management
- ------------------------------
The table below reflects, as of March 31, 1995, the number of shares of
Common Stock beneficially owned by each of the directors of the Company,
each of the executive officers named in the Summary Compensation Table, and
the number of shares beneficially owned by all directors and executive
officers of the Company as a group.
Title Name of Amount and Nature of Percent
of Class Beneficial Owner Beneficial Ownership of Class
- -------- ------------------- -------------------- --------
Common R. J. Doyle* 22,000(a) **
Common T. J. Guendel* 77,008(b) **
Common F. W. Jones* 79,934(a) **
Common D. J. Kuester* 21,000(c) **
Common V. L. Martin* 21,300(d) **
Common G. L. Neale* 46,246(a) **
Common S. W. Tisdale* 46,061(a) **
Common M. T. Yonker* 20,000(a) **
Common R. T. Savage 442,553(e)(f) 1.49 %
Common D. R. Johnson 214,298(e)(f) **
Common V. S. Frangopoulos 343,961(e)(f) 1.15 %
Common M. G. Baker 238,348(e) **
Common W. E. Pavlick 286,259(e)(f) **
Common All executive
officers and
directors as a
group (25 persons) 2,864,505(g) 9.6 %
* Non-employee directors have the right to acquire additional
shares of Common Stock (not listed in the above table)
through the exercise of options automatically granted upon
re-election pursuant to the 1994 Stock Option Plan for Non-
Employee Directors discussed on Page 8 herein.
** Denotes less than one percent of shares outstanding.
(a) The 22,000 shares listed for Mr. Doyle include options to acquire
15,000 shares; the 79,934 shares listed for Mr. Jones include options
to acquire 45,000 shares; the 46,246 shares listed for Mr. Neale
include options to acquire 15,000 shares; the 46,061 shares listed
<PAGE>
for Mr. Tisdale include options to acquire 45,000 shares; and
the 20,000 shares listed for Mr. Yonker include options to acquire
20,000 shares.
(b) The 77,008 shares listed for Mr. Guendel include options to acquire
42,000 shares. This number includes 15,308 shares held by Mr. Guendel's
wife.
(c) The 21,000 shares listed for Mr. Kuester exclude shares held of record
by M&I Marshall & Ilsley Bank. See footnote to the Five Percent Stock
Ownership table on Page 5. This number includes options to acquire
20,000 shares.
(d) The 21,300 shares listed for Mr. Martin include options to acquire
20,000 shares and includes 300 shares held in a Children's Trust with
Mr. Martin as Trustee.
(e) The 442,553 shares listed for Mr. Savage include options to acquire
197,000 shares, and 50,000 restricted shares awarded to Mr. Savage;
the 214,298 shares listed for Mr. Johnson include 2,288 shares held
by Mr. Johnson's wife, options to acquire 131,750 shares, and 33,300
restricted shares awarded to Mr. Johnson; the 343,961 shares listed
for Mr. Frangopoulos include 4,800 shares owned by one of his
children, options to acquire 142,000 shares, and 33,200 restricted
shares awarded to Mr. Frangopoulos; the 238,348 shares listed for
Mr. Baker include options to acquire 137,800 shares, and 20,100
restricted shares awarded to Mr. Baker; the 286,259 shares listed
for Mr. Pavlick include 621 shares held by Mr. Pavlick's wife,
options to acquire 113,613 shares, and 20,300 restricted shares
awarded to Mr. Pavlick.
All awards listed are pursuant to the 1990 through 1995 Stock Award
Plan grants but subject to restrictions which lapse annually in fifths
over a period commencing at the beginning of the third year from the
date of grant.
(f) In addition to the beneficial ownership listed, R. T. Savage, A. D.
Reid, V. S. Frangopoulos, D. R. Johnson, and W. E. Pavlick comprise
the Investment Committee of the Modine Pension Plans appointed by
the Board of Directors. The Committee exercises investment and
voting control over the assets, including Modine Common Stock, held
of record by the Modine Pension Trusts of which M&I Marshall & Ilsley
Bank is trustee as described above.
(g) This number includes 1,005,537 shares held by officers (other than
the five named executive officers) as a group (12 persons) and
includes options to acquire 485,063 shares and 68,800 shares awarded
pursuant to the 1990 through 1995 Stock Award Plan grants but subject
to restrictions which lapse annually in fifths over a period commencing
at the beginning of the third year from the date of grant.
Approximately forty-nine percent (49%) of all outstanding shares are
owned or controlled by or for directors, officers, employees, retired
employees, and their families.
<PAGE>
BOARD MEETINGS, COMMITTEES AND COMPENSATION
The Board of Directors held nine regular meetings during the fiscal
year ended March 31, 1995. An additional eight meetings were held by the
standing Committees of the Board to assist the Board in carrying out its
responsibilities. A description of these committees and their functions
is set forth below.
The Audit Committee consists of five outside directors. Current
members are R. J. Doyle, Chairman, F. W. Jones, V. L. Martin, G. L.
Neale, and S. W. Tisdale. The Audit Committee recommends to the Board
of Directors the engagement of the independent auditors. Before the audit,
the Committee meets with the independent auditors to discuss the plan and
scope of the audit engagement. At the completion of the audit, the Committee
meets with the independent auditors to review the results of the audit, the
effectiveness of the Company's internal auditing procedures, and the adequacy
of the Company's internal accounting controls. The Committee also reviews
and approves the budget for each non-audit service, the audit and non-audit
fees, and their effect on the independence of the auditors. The Audit
Committee met a total of three times during the fiscal year ended March 31,
1995.
The Officer Nomination and Compensation Committee consists of five
outside directors. Current members of this Committee are G. L. Neale,
Chairman, T. J. Guendel, V. L. Martin, S. W. Tisdale, and M. T. Yonker.
This Committee reviews candidates for positions as Company officers and
makes recommendations to the Board on such candidates, makes recommendations
to the Board on compensation for the Company's officers, and administers the
Company's 1994 Incentive Compensation Plan. The Officer Nomination and
Compensation Committee met three times during the last fiscal year.
The Pension Committee consists of four outside directors. Current
members of this Committee are T. J. Guendel, Chairman, R. J. Doyle, F. W.
Jones, and D. J. Kuester. This Committee provides oversight with respect
to the investments of the Company's Pension Plan. The Pension Committee
met two times during the last fiscal year.
The Board of Directors does not have a committee which nominates
directors since nomination and review of director candidates is a function
of the full Board.
Compensation of Directors
- -------------------------
Directors of the Company who are not employees were paid a retainer
fee of $4,500 per quarter. In addition, Directors received a fee of $1,000
for each Board meeting attended and $850 for each Committee meeting attended
with the Chairman of the Audit Committee eligible for a fee of $1,700.
Effective April 1, 1995, the retainer fee was increased to $5,250 per quarter
and the Committee meeting fee was increased to $1,000. Directors who are
officers do not receive any fees in addition to their remuneration as
officers. The Company also reimburses its directors for travel, lodging,
and related expenses incurred in attending Board and Committee meetings,
and it provides each director with travel accident and director and officer
liability insurance.
Directors of the Company who are not employees are eligible to
participate in the 1994 Stock Option Plan for Non-Employee Directors (the
<PAGE>
"Directors' Plan") which is authorized to grant non-qualified stock options
through July 20, 2004, on up to 500,000 shares of the Company's Common Stock.
These options are granted at one hundred percent of the fair market value
on the date of the grant and will expire no later than ten years after the
date they are granted and will terminate no later than three years after
termination of director status for any reason other than death. Within
30 days after election or re-election to the Board, each director so elected
or re-elected is automatically granted an option for that number of shares
equal to the multiple of 5,000 and the number of years in the term to which
such director has been so elected or re-elected. The Directors' Plan may
be administered by a committee of two or more directors of the Company if
deemed necessary or advisable in order to comply with the exemptive rules
promulgated pursuant to Section 16(b) of the Securities Exchange Act of 1934,
as amended. The Board or any such committee shall have no authority to
administer the Directors' Plan with respect to the selection of participants
under the plan or the timing, pricing, or amounts of any grants.
The Board of Directors has adopted the Modine Manufacturing Company
Director Emeritus Retirement Plan (the "Director Emeritus Retirement Plan")
whereby any person (employee or non-employee) who is or becomes a director
of Modine on or after April 1, 1992, and who retires from the Board will be
paid a retirement benefit equal to the annualized rate at which directors
are being paid for their services to the Company as directors (including
Board meeting attendance fees but excluding any applicable committee
attendance fees) as in effect at the time such director ceases his service
as a director. The retirement benefit will continue until the period of
time the retirement benefit paid equals the period of time of the director's
Board services. If a director dies before or after retirement, his spouse
or other beneficiary will receive the applicable retirement benefit. In the
event of a change in control (as defined in the Plan) of Modine, each
eligible director, or his spouse or other beneficiary entitled to receive
a retirement benefit through him, would be entitled to receive a lump sum
payment equal to the present value of the total of all benefit payments
which would otherwise be payable under the Director Emeritus Retirement
Plan. The retirement benefit is not payable if the director directly or
indirectly competes with the Company or if the director is convicted of
fraud or a felony and such fraud or felony is determined by disinterested
members of the Board of Directors to have damaged the Company.
Two former directors (who retired prior to April 1, 1992) have
agreements with the Company whereby, as Directors Emeriti, they are entitled
to receive retainer fees and monthly meeting fees equal to the fees paid at
the time each retired from the Board for a period continuing until their
deaths.
EXECUTIVE COMPENSATION
Summary Compensation Table
- --------------------------
The following table sets forth compensation awarded to, earned by,
or paid to the Company's Chief Executive Officer and the four most highly
compensated executive officers other than the Chief Executive Officer who
were serving as executive officers at March 31, 1995, for services rendered
to the Company and its subsidiaries during fiscal 1994-1995. Also included
is salary, bonus, restricted Common Stock awards, and stock option
information for fiscal years ended March 31, 1993, and March 31, 1994.
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation (1) Long-Term Compensation
----------------------- ----------------------------------
Restricted Stock All Other
Year Name Principal Position Salary Bonus Stock (2) Options(3) Comp.(4)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1994/95 R. T. Savage President & CEO $ 334,500 $ 334,500 $199,500 25,000 $24,958
1993/94 318,125 264,044 210,000 26,000 22,709
1992/93 292,000 175,200 273,750 36,000 21,607
1994/95 D. R. Johnson Executive VP, $ 214,000 $ 171,200 $156,750 20,000 $15,891
1993/94 Operations 185,125 122,923 150,000 19,000 13,807
1992/93 164,500 78,960 200,750 26,000 12,144
1994/95 V. S. Frangopoulos Group VP, Off- $ 188,000 $ 150,400 $142,500 15,000 $14,027
1993/94 Highway Products 177,125 117,611 150,000 19,000 13,214
1992/93 161,000 77,280 200,750 26,000 11,819
1994/95 M. G. Baker Group VP, $ 166,000 $ 116,200 $ 85,500 11,000 $12,357
1993/94 Distributed Products 151,125 87,804 81,000 12,000 7,989
1992/93 139,000 58,380 109,500 16,000 6,181
1994/95 W. E. Pavlick Senior VP, General $ 157,000 $ 109,900 $ 57,000 9,000 $11,280
1993/94 Counsel & Secretary 148,125 86,061 81,000 12,000 11,478
1992/93 138,000 57,960 109,500 16,000 10,213
<FN>
(1) Excludes "Other Annual Compensation" under SEC Regulations
since such does not exceed the lesser of $50,000 or 10% of
each individual's combined salary and bonus.
(2) The total number of restricted shares and the aggregate
market value at March 31, 1995, were: Mr. Savage - 50,000
shares valued at $1,675,000; Mr. Johnson - 33,300 shares
valued at $1,115,550; Mr. Frangopoulos - 33,200 shares
valued at $1,112,200; Mr. Baker - 20,100 shares valued at
$673,350; and Mr. Pavlick - 20,300 shares valued at
$680,050. Dividends are paid on the restricted shares at
the same time and the same rate as dividends paid to
shareholders of unrestricted shares. Aggregate market value
is based on a fair market value of $33.50 at March 31, 1995.
Restricted stock is awarded to an employee at no cost and
placed in escrow until the beginning of the third, fourth,
fifth, sixth, and seventh years respectively at which time one-
fifth of the shares are released to the employee. In the event
of retirement or a takeover of the Company, the shares may be
released at an earlier date.
(3) The 1994 Incentive Compensation Plan authorized the Officer
Nomination and Compensation Committee of the Board to grant
stock options (incentive stock options and non-qualified
stock options) and other stock-based rights through July 20,
2004, on up to 3,000,000 shares of the Company's common stock.
Incentive stock options and non-qualified stock options
granted are at one hundred percent of the fair market value
<PAGE>
on the date of the grant and will expire no later than ten
years after the date of the grant. Grants pursuant to the
Plan may be made to such officers or certain other employees
as shall be determined by the Committee.
Upon the exercise of the option, the optionee may pay the
purchase price in cash, stock, or a combination of cash and
stock. The optionee may also satisfy any tax withholding
obligation by using optioned shares. In the event of a sale,
merger, consolidation, or other specified transaction
involving the Company, the optionee will have the right to
receive (regardless of whether or to what extent the option
would then have been exercisable) the difference between the
exercise price and the fair market value of the stock.
(4) Employer matching contributions to the Company Tax Saver
(401(k)) Plan, Stock Purchase Plan, and Supplemental Executive
Retirement Plan. The Company has a program (the "Executive
Supplemental Stock Plan") to pay, out of general assets, an
amount substantially equal to the difference between the
amount that would have been allocated to a participant's
account as Company matching contributions, in the absence of
legislation limiting such allocations, and the amount
actually allocated under the plans. Payment of this amount
and appreciation thereon is deferred until termination of
service or retirement.
</TABLE>
Officer Nomination and Compensation Committee Report on Executive
- ------------------------------------------------------------------
Compensation
- ------------
The Officer Nomination and Compensation Committee has provided
the following report on Executive Compensation:
Compensation Philosophy
-----------------------
The Company's executive compensation philosophy is designed to
address the needs of the Company, its executives, and its shareholders.
The specific factors underlying the Committee's decision with
respect to compensation for each of the named executives for the
last fiscal year are two-fold:
1. The ability to accomplish the Company's goal of preserving
and enhancing the shareholders' investment over the long-
term without bearing undue risk in the process. The
Committee recognizes that there will be short-term
fluctuations in the Company's business and is of the
opinion that incentive compensation should be based
primarily upon attainment of the Company's goals over a
longer period of time. It is the Committee's intention
to compensate its executive officers appropriately for
superior performance; however, inherent in attaining the
Company's goal is the premise that shareholder assets
will not be wasted by the payment of excessive compensation.
<PAGE>
2. The second factor underlying the Committee's compensation
decision is that achieving the foregoing Company goals
can only be accomplished by the retention of competent,
highly skilled people. Accordingly, the design of the
compensation package must include sufficient tools to
assure retention of key individuals.
Numerous other criteria are considered in the compensation
decision, including high ethical standards, concern for
employees, regard for the environment, and commitment to the
highest levels of product quality and customer service. Each of
these criteria is an intrinsic part of attaining the Company's
long-term goals.
Total Annual Compensation
-------------------------
The Company's executive compensation program is composed of
an annual cash component, consisting of salary and a bonus based
on the financial performance of the Company, and a long-term
incentive component, currently consisting of stock awards and
stock options.
The compensation package design reflects the Committee's
belief that a larger than typical portion of compensation should
be based upon incentives. This results in the base salary of
Company executives being lower than those executives in
comparable companies and industries and with incentive compensation
being higher. Incentive compensation is established at a level
designed to ensure that, when such payouts are added to a
participant's base salary, the resultant compensation for above
average performance will exceed the average compensation level
for comparable companies. For fiscal 1994-95, the Company used a
formula bonus program which does not commence payout until a pre-
tax return of 15 percent on shareholders' investment is earned for the
shareholders. Thereafter, Company executives can earn a cash
bonus which increases at a linear rate with Company earnings and
is proportional with the executive's level of management
responsibility, including the Chief Executive Officer ("CEO"),
who could earn a cash bonus of up to 100% of his base salary (the
maximum payout under the program) in fiscal 1994-95. The formula
was modified in 1993-94 to increase the risk/reward scenario for
all Company executives. All other incentive awards are
calculated as a job slotted percentage of the CEO's percent of
earned award. By so doing, the entire management team shares the
risks and rewards of overall Company performance. For fiscal
1994-95, the total annual compensation provided was in accordance
with this philosophy.
Long-Term Compensation
----------------------
To further align the Company executives' interests with those
of the shareholder, the Compensation Committee utilizes long-term
stock based incentives in the form of stock options and stock
awards. The number of stock options and stock awards granted to
each executive officer is established for each person considering
the survey data described below. Individual awards are determined
based on a subjective assessment of individual performance,
contribution, and potential. The Committee generally considers
previous grant and award amounts when determining annual grants
or awards under its programs.
The stock options currently granted are at market value and
are exercisable within ten years of date of grant. The options
may be rescinded at any time up until two years after exercise
<PAGE>
should the individual be terminated for cause, compete in any way
against the Company, not fully comply with applicable laws and
government regulations, fail to maintain high ethical standards,
or breach the Company's policies such as Guidelines for Business
Conduct, Antitrust Compliance, or confidentiality of proprietary
technology and information.
Stock awards are grants of Company stock to a limited number
of top executives, at no cost. These awards vest only at the rate
of 20 percent per year commencing with the third year after grant,
acting thereby as both a retention tool and involving the
executive in a longer-term stake in the Company. Stock awards
not previously vested are terminated should the executive cease
to be employed by the Company for any reason other than
retirement or a takeover.
Consequently, the executive is compensated over the long-term,
through both the stock option and stock award programs, as the
Company stock price increases, which is for the benefit of the
shareholder.
Chief Executive Officer Compensation
------------------------------------
The Committee recognizes that effective management of the Company
is a team effort, led by the CEO. The CEO and the named officers must
possess the difficult to define qualities of leadership, ability to
instill confidence in their actions, and to inspire others to even
greater effort. These qualities can only be determined through
observation over a longer period of time and through the ultimate
results attained. Accordingly, the CEO's and senior executive officers'
team compensation decision was not based solely on fiscal 1994-95 annual
financial results but was based on the compensation policies referenced
above and the Company's favorable return on shareholders' investment
over the longer term and the Committee's subjective assessment of the
performance of the management team. The CEO's employment agreement
(described on page 14) only specifies minimum termination
compensation. Total Annual compensation is established by the
Compensation Committee.
Other Executive Officer Compensation
------------------------------------
Since, as stated above, we believe that corporate management
is a team effort, we also believe that it is appropriate for the
CEO to select his team members and make a substantial contribution
to the compensation decision for each of such team members.
Accordingly, upon detailed consultation with the CEO, assessment
of the experience, capabilities and performance of each of the
named executives toward attaining Company goals, and the policies
referenced above, compensation decisions were made. As a background
for such decisions, the Compensation Committee reviewed four major
compensation consultant data bases with respect to compensation.
The compensation consultant data bases and the comparator group of
companies used in the performance graph are both large data bases
of industrial companies which the Committee believes appropriately
reflect the broad labor market for Modine executives. Within a range
of acceptable total compensation for each individual, compensation was
determined as described above.
<PAGE>
Compliance with Internal Revenue Code Section 162(m)
----------------------------------------------------
Section 162(m) of the Internal Revenue Code, enacted in 1993,
generally disallows a tax deduction to public companies for
compensation over $1 Million paid to the Company's CEO and four
other most highly compensated executive officers. Qualifying
performance-based compensation will not be subject to the
deduction limit if certain requirements are met. The compensation
of the Company's CEO and the four other most highly compensated
executive officers currently does not approach the disqualifying
threshold. In the future, in the event the disqualifying threshold
becomes an issue, the Committee will weigh all the facts and
circumstances in existence at the time.
G. L. Neale, Chairman
T. J. Guendel
V. L. Martin
S. W. Tisdale
M. T. Yonker
Performance Graph
- -----------------
The following graph shows the cumulative total stockholder return
on the Company's Common Stock over the last five fiscal years as compared
with the returns of the Standard & Poor's 500 Stock Index and the NASDAQ
Industrials Stock Index (Non-financial Index). The NASDAQ Industrials
Stock Index consists of approximately 3,000 industrial companies (including
Modine), and includes a broad range of manufacturers. The Company believes,
because of the diversity of its business, that comparison with this broader
index is appropriate. The graph assumes $100 was invested on April 1, 1990,
in the Company's Common Stock, the S&P 500 Stock Index, and the NASDAQ
Industrials Stock Index and assumes reinvestment of dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Measurement Period
(Fiscal Year Covered) Modine S&P NASDAQ
- --------------------- ------ --- ------
Measurement Pt. 4/1/90 $100 $100 $100
FYE 91 108 114 118
FYE 92 194 127 147
FYE 93 225 146 159
FYE 94 299 148 174
FYE 95 396 172 190
Options Granted
- ---------------
The following table sets forth information about stock option grants
during the last fiscal year for the five executive officers named in the
Summary Compensation Table.
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Appreciation
Individual Grants Appreciation for Option Term(1)(2)(3)
-------------------------------------------- --------------------------------------
% of Total
Options
Options Granted to Exercise Expiration
Name Granted Employees Price Date 0% 5% 10%
- ------------------ ------- ---------- -------- ----------- --- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
R. T. Savage 25,000 11.2% $28.50 1/18/2005 $0 $ 448,875 $ 1,132,875
D. R. Johnson 20,000 9.0% $28.50 1/18/2005 $0 359,100 906,300
V. S. Frangopoulos 15,000 6.7% $28.50 1/18/2005 $0 269,325 679,725
M. G. Baker 11,000 4.9% $28.50 1/18/2005 $0 197,505 498,465
W. E. Pavlick 9,000 4.0% $28.50 1/18/2005 $0 161,595 407,835
All Optionees 223,000 100% $28.50 1/18/2005 $0 4,003,965 10,105,245
All Shareholders N/A N/A N/A N/A $0 $626,817,804 $1,581,968,742
<FN>
(1) All options granted are immediately exercisable. Holders may use shares
previously owned or received upon exercise of options to exercise options.
The Company may accept shares to cover withholding or other employee
taxes.
(2) The dollar amounts under these columns are the result of calculations
at zero percent and at the five-percent and ten-percent rates set by
the SEC and therefore are not intended to forecast possible future
appreciation, if any, of the Company's stock price.
(3) No gain to the optionee is possible without an increase in stock price
appreciation, which will benefit all shareholders commensurately. A
zero percent gain in stock price appreciation will result in zero
dollars for the optionee.
</TABLE>
Option Exercises and Fiscal Year-End Values
- -------------------------------------------
The following table sets forth information with respect to the five
executive officers named in the Summary Compensation Table concerning the
number of option exercises and value of options outstanding at the end of
the last fiscal year.
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<CAPTION>
Total Value of
Total Number Unexercised
Number of of Unexercised In-the Money
Shares Options Held at Options Held at
Acquired on Value Fiscal Year End (1) Fiscal Year End(1)
Name Exercise Realized Exercisable (2) Exercisable (2)
- ------------------ ------------- ----------- ------------------- ------------------
<S> <C> <C> <C> <C>
R. T. Savage 58,000 $1,244,290 197,000 $3,310,000
D. R. Johnson 1,000 20,562 131,750 2,128,109
V. S. Frangopoulos 14,800 316,588 142,000 2,458,500
M. G. Baker -0- -0- 137,800 2,768,667
W. E. Pavlick 21,587 483,157 113,613 2,181,130
<FN>
(1) All options granted are immediately exercisable.
(2) Granted at fair market value on the date of Grant. Total
value of outstanding options is based on a fair market value of
Company stock of $33.50 as of March 31, 1995.
</TABLE>
Pension Plan Table
- ------------------
The following table sets forth the estimated annual benefits payable
upon retirement at normal retirement age for the years of service indicated
under the Company's defined pension plan at the indicated remuneration levels
(average of five years earnings).
- ----------------------------------------------------------------------------
Average Annual Representative Years of Service
Earnings 15 Years 20 Years 25 Years 30 Years 35 Years
- -------------- -------- -------- -------- -------- --------
$125,000 $ 29,900 $ 39,850 $ 49,825 $ 59,800 $ 69,750
200,000 48,750 64,975 81,225 97,475 113,725
275,000 67,575 90,100 112,650 135,175 157,700
350,000 86,425 115,225 144,050 172,850 201,675
425,000 105,275 140,350 175,450 210,550 245,625
500,000 124,125 165,475 206,850 248,225 289,600
- ----------------------------------------------------------------------------
The five executive officers named in the Summary Compensation Table
participate on the same basis as other salaried employees in the non-
contributory Modine Pension and Disability Plan for Salaried Employees.
Because the Company's contributions to the plan are actuarially based on
all eligible salaried employees and are not allocated to individual
employee accounts, expenses for a specific person cannot readily be
<PAGE>
separately or individually calculated. Retirement benefits are based
on an employee's earnings for the five highest of the last ten years
preceding retirement and on years of service. Applicable earnings include
salary, bonuses, and any deferred amount under the Modine Tax Saver (401(k))
Plan. They are approximately the same as cash compensation reported in the
Summary Compensation Table, but on a calendar year rather than a fiscal year
basis. A minimum of five years of service is required for eligibility. The
principal benefit under the plan is a lifetime monthly benefit for the joint
lives of participants and their spouses based on the employee's earnings and
period of employment, and is not subject to offset by Social Security
benefits. Employees can retire with unreduced early retirement benefits at
age sixty-two or may be eligible for disability, deferred, or other early
retirement benefits depending on age and years of service upon retirement
or termination. In addition, an employee who has reached age sixty-two and
who has accumulated thirty or more years of eligible service may request that
the accrued benefit be paid immediately in a lump-sum amount, even if not
retired at the time of election.
Assuming continued employment until age sixty-five, the estimated
credited years of service under the plan for Messrs. Savage, Johnson,
Frangopoulos, Baker, and Pavlick are thirty-one, twenty-eight, twenty-eight,
twenty-five, and nineteen years, respectively.
Pension benefits under the plan are subject to possible limitations
imposed by the Employee Retirement Income Security Act of 1974 and subsequent
amendments thereto. To the extent that an individual employee's retirement
benefit exceeds these limits, the excess will be paid from general operating
funds of the Company.
Employees, including officers, may also qualify for long-term disability
payments of approximately sixty percent of their base salary, up to a maximum
of $8,000 per month, if they become disabled.
Employment Agreements
- ---------------------
The Company entered into an employment contract effective October 1,
1983, with Mr. Savage covering his employment for a three year term. The
contract is automatically extended annually for an additional year so that
the remaining contract term is between two and three years, unless notice
is given by either party to the contrary. This contract provides for a
minimum annual salary equal to that paid the past fiscal year to Mr. Savage
plus bonus participation. Mr. Savage will continue to receive all employee
benefits, plus supplements to his retirement pension and 401(k) benefits
designed to provide him with benefits which otherwise are reduced by
statutory limitations on qualified benefit plans. In the event of
disability, salary continuation is provided at a level of one hundred
percent for the first twelve months and up to sixty percent thereafter
with no maximum dollar amount. In the event of termination of the
contract by the Company other than for cause, death, or disability, or
by Mr. Savage upon a failure to be re-elected as an officer and/or a
director, a significant change in authority, a breach of the contract
by the Company, or a liquidation or merger of the Company where the
contract is not assumed, Mr. Savage would receive annually for the
remainder of the contract term, compensation equal to the average of
the five highest of the last ten years. Mr. Savage agrees to refrain
from competition with the Company during the length of the Agreement
<PAGE>
and for a period of two years after such Agreement is terminated,
except if such termination occurs after a change in control of the
Company. W. E. Pavlick has a similar agreement on substantially the
same terms and conditions as stated hereinabove.
Change-in-Control Arrangements
- ------------------------------
The Company's stock option and stock award plans contain certain
provisions relating to change-in-control or other specified transactions
that would accelerate or otherwise release shares granted or awarded under
those plans. See footnotes (2) and (3) to the Summary Compensation Table
herein.
TRANSACTIONS
In the regular course of business since April 1, 1994, the Company
has had transactions with corporations or other firms of which certain
non-employee directors are executive officers or otherwise principally
involved. Such transactions were in the ordinary course of business and
at competitive prices and terms.
The Company does not consider the amounts involved to be
material. The Company anticipates that similar transactions will
occur in fiscal 1994-95.
OTHER INFORMATION
Independent Auditors
- --------------------
Coopers & Lybrand have been the independent certified public accountants
since 1935 and were selected as the Company's accountants for the fiscal year
ended March 31, 1995. They are appointed by the Board of Directors of the
Company and report to the Audit Committee. A representative of Coopers &
Lybrand will not be attending the 1995 Annual Meeting of Shareholders.
Expenses of Solicitation
- ------------------------
The cost of soliciting proxies is being borne by the Company. In
addition to solicitation by mail, arrangements have been made with brokerage
houses, nominees, and other custodians and fiduciaries to send proxy material
to their principals and the Company will reimburse them for their expenses
in doing so. Proxies also may be solicited personally or by telephone or
other means of electronic communication by directors, officers, and a few
regular employees of the Company in addition to their usual duties. They
will not be specially compensated for these services.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
- --------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent
<PAGE>
of a registered class of the Company's equity securities, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc.
Officers, directors, and greater than ten-percent shareholders are required
by SEC regulation to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on review of the copies of such forms furnished to the
Company, the Company believes that during the period April 1, 1994, to
March 31, 1995, all Section 16(a) filing requirements applicable to its
officers, directors, and greater than ten percent beneficial owners were
complied with, except that during 1993 and 1994 R. L. Hetrick timely
reported transactions but inadvertently did not include in those reports
certain small share acquisitions pursuant to the Company's Dividend
Reinvestment Plan. These omissions were corrected by the reporting of
these facts in Mr. Hetrick's year end Form 5.
ADDITIONAL MATTERS
The Board of Directors is not aware of any other matters that will
be presented for action at the 1995 annual meeting. Should any additional
matters come before the meeting, the persons named in the enclosed proxy
will vote on those matters in accordance with their best judgment.
SHAREHOLDER PROPOSALS FOR 1996
If a shareholder wishes to present a proposal for consideration at
next year's Annual Meeting of Shareholders, such proposal must be received
at Modine's offices on or before February 9, 1996.
ANNUAL REPORT
The Annual Report of the Company, including financial statements for
the fiscal year ended March 31, 1995, is enclosed.
W. E. PAVLICK, Secretary
<PAGE>
APPENDIX
Please mark your
/X/ votes as in this
example
FOR WITHHELD Nominees: Thomas J. Guendel
1. Election of Gary L. Neale
Directors / / / / Richard J. Doyle
For, except vote withheld from the This Proxy, when properly executed,
following nominee(s): will be voted in the manner directed
herein. If no direction is made,
___________________________________ this proxy will be voted FOR Item 1.
PLEASE MARK, DATE, EXECUTE AND
RETURN THIS PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE.
SIGNATURE(S) _____________________________________ DATE___________ 1995
NOTE: Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
<PAGE>
MODINE MANUFACTURING COMPANY
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints Richard T. Savage and Walter E. Pavlick,
with full power of substitution, proxies to vote at the Annual Meeting of
Shareholders of Modine Manufacturing Company (the "Company") to be held
on July 19, 1995 at 9:30 a.m., local time, and at any adjournment or
adjournments thereof, hereby revoking any proxies heretofore given, to
vote all shares of common stock of the Company held or owned by the
undersigned as directed below, and in their discretion upon such other
matters as may come before the meeting.
(To be Signed on Reverse Side)
<PAGE>
