SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party Other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
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)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2)
/ / $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11
1) Title of each class of securities to which transaction
applies:
Not Applicable
----------------------------------------------------
2) Aggregate number of securities to which transaction
applies:
Not Applicable
------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
Not Applicable
------------------------------------------------------
<PAGE>
4) Proposed maximum aggregate value of transaction:
Not Applicable
------------------------------------------------------
* Set forth the amount on which the filing fee is calculated
and state how it was determined.
/ / Check box if any part of the fee is offset as proved by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
Not Applicable
-------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
Not Applicable
-------------------------------------------------------
3) Filing Party:
Not Applicable
-------------------------------------------------------
4) Date Filed:
Not Applicable
-------------------------------------------------------
<PAGE>
notice
of meeting
and proxy
statement
annual meeting
1996
of shareholders
M O D I N E
<PAGE>
M O D I N E
- - -------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS, JULY 17, 1996
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 17, 1996, at 9:30 a.m. for the
following purposes:
1. To elect three directors to serve until the Annual
Meeting in 1999.
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 28,
1996, 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 7, 1996
YOUR VOTE IS IMPORTANT!
Please date, sign, and return
the enclosed Proxy immediately.
<PAGE>
PROXY STATEMENT
Annual Shareholders' Meeting of Modine Manufacturing Company--1996
- - ------------------------------------------------------------------
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 17, 1996, 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 28, 1996, 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 7, 1996. The total number of shares of Common Stock
outstanding and entitled to vote at the meeting is 29,786,556
shares; no Preferred Stock is currently 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 nine members.
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 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, the directors whose
terms will continue, their ages, other directorships, and their
<PAGE>
tenure and expiration dates of their terms are set forth on the
following pages:
Nominees to be Elected
- - ----------------------
STUART W. TISDALE Director since 1987
Age 67
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
SHURflow Pump Manufacturing Company, a manufacturer of small
high performance pumps, valves, motors and systems. He is
also a director of M&I Marshall & Ilsley Bank, Marshall &
Ilsley Corporation and Twin Disc, Inc. Term to expire in
1999.
VINCENT L. MARTIN Director since 1992
Age 56
Mr. Martin is Chairman, President, Chief Executive Officer,
and a director of Jason Incorporated, a diversified
manufacturing company based in Milwaukee, Wisconsin. He is
also a director of Crane Manufacturing & Service. Term to
expire in 1999.
RICHARD T. SAVAGE Director since 1989
Age 57
Mr. Savage is President and Chief Executive Officer of the
Company. He is also a director of Twin Disc, Inc., and M&I
Marshall & Ilsley Bank. Term to expire in 1999.
Directors Continuing in Service
- - -------------------------------
THOMAS J. GUENDEL Director since 1980
Age 68
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.
<PAGE>
GARY L. NEALE Director since 1977
Age 56
Mr. Neale is Chairman, President, Chief Executive Officer,
and a 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 64
Mr. Doyle is Chairman, Chief Executive Officer, and a
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 in 1998.
FRANK W. JONES Director since 1982
Age 56
Mr. Jones is an independent management consultant, Tucson,
Arizona. He is also a director of Jason Incorporated,
Ingersoll Milling Machine Co., Star Cutter Co., Gardner
Publications, Inc., and General Tool Co. Term to expire in
1997.
DENNIS J. KUESTER Director since 1993
Age 54
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 53
Mr. Yonker is President and Chief Executive Officer of
Portec, Inc., Lake Forest, Illinois, a manufacturer of
railroad, construction, and material handling equipment.
He is also a director of Crown Anderson, Inc. and
Woodward Governor Company. Term to expire in 1997.
<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, 1996, 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 Administrative Committee 5,527,675 Power to vote 18.57%
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 Investment Committee of 2,136,597 Power to vote 7.18%
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 J. P. Morgan & Co., 1,829,600 Sole or shared 6.15%
Incorporated voting and/or
60 Wall Street power to dispose
New York, NY 10260** of stock
Common Mario T. Gabelli, GAMCO 1,624,950 Sole or shared 5.46%
Investors, Inc., Gabelli & voting and/or
Company, Inc., and Gabelli power to dispose
Funds, Inc., 655 Third of stock
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 1991 through 1996 Stock Award Plans. D. J.
Kuester is president of Marshall & Ilsley Corporation
and of M&I Marshall & Ilsley Bank.
** Based on a Schedule 13G filed as of December 29, 1995,
by J. P. Morgan & Co. Incorporated.
<PAGE>
*** Based on a joint Schedule 13D filed as of June 1, 1995,
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.
Securities Owned by Management
- - ------------------------------
The table below reflects, as of March 31, 1996, 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* 37,000(a) **
Common T. J. Guendel* 85,508(b) **
Common F. W. Jones* 79,934(a) **
Common D. J. Kuester* 21,000(c) **
Common V. L. Martin* 22,500(d) **
Common G. L. Neale* 54,215(a) **
Common S. W. Tisdale* 46,082(a) **
Common M. T. Yonker* 20,000(a) **
Common R. T. Savage 475,632(e)(f) 1.60%
Common D. R. Johnson 226,305(e)(f) **
Common V. S. Frangopoulos 344,352(e)(f) 1.16%
Common M. G. Baker 245,982(e) **
Common D. B. Rayburn 88,623(e) **
Common All executive officers
and directors as a
group (25 persons) 3,018,687(g) 10.14%
* 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.
** Denotes less than one percent of shares outstanding.
<PAGE>
(a) The 37,000 shares listed for Mr. Doyle include options to
acquire 30,000 shares; the 79,934 shares listed for Mr.
Jones include options to acquire 45,000 shares; the 54,215
shares listed for Mr. Neale include options to acquire
30,000 shares; the 46,082 shares listed 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 85,508 shares listed for Mr. Guendel include options to
acquire 45,000 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 22,500 shares listed for Mr. Martin include options to
acquire 20,000 shares and include 500 shares held in trusts
for his children with Mr. Martin as trustee.
(e) The 475,632 shares listed for Mr. Savage include options to
acquire 229,000 shares, and 51,100 restricted shares awarded
to Mr. Savage; the 226,305 shares listed for Mr. Johnson
include 2,288 shares held by Mr. Johnson's wife, options to
acquire 144,750 shares, and 31,200 restricted shares awarded to
Mr. Johnson; the 344,352 shares listed for Mr. Frangopoulos
include 5,200 shares owned by one of his children, options to
acquire 140,302 shares, and 27,200 restricted shares awarded
to Mr. Frangopoulos; the 245,982 shares listed for Mr. Baker
include options to acquire 147,800 shares, and 17,560
restricted shares awarded to Mr. Baker; the 88,623 shares
listed for Mr. Rayburn include options to acquire 64,000
shares, and 16,160 restricted shares awarded to Mr. Rayburn.
All awards listed are pursuant to the 1991 through 1996
Stock Award Plan grants but subject to restrictions that
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 1,271,554 shares held by officers
(other than the five named executive officers) as a group
(12 persons) and includes options to acquire 581,613 shares,
and 57,700 shares awarded pursuant to the 1991 through 1996
Stock Award Plan grants but subject to restrictions that
lapse annually in fifths over a period commencing at the
beginning of the third year from the date of grant.
<PAGE>
Approximately forty-seven percent (47%) of all outstanding
shares are owned or controlled by or for directors, officers,
employees, retired employees, and their families.
BOARD MEETINGS, COMMITTEES AND COMPENSATION
The Board of Directors held nine regular meetings during the
fiscal year ended March 31, 1996. 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, 1996.
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 that
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 $5,250 per quarter. In addition, directors
received a fee of $1,000 for each Board meeting attended and
$1,000 for each Committee meeting attended with the Chairman of
the Audit Committee eligible for a fee of $2,000. Directors who
are officers do not receive any fees in addition to their
remuneration as officers. The Company also reimburses its
<PAGE>
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 "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
Modine.
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.
<PAGE>
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, 1996, for
services rendered to the Company and its subsidiaries during fiscal
1995-1996. Also included is salary, bonus, restricted Common Stock
awards, and stock option information for fiscal years ended March 31,
1994, and March 31, 1995.
<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>
1995/96 R. T. Savage President & Chief $348,500 $317,135 $398,125 32,000 $25,997
1994/95 Executive Officer 334,500 334,500 199,500 25,000 24,958
1993/94 318,125 264,044 210,000 26,000 22,709
1995/96 D. R. Johnson Executive Vice $236,000 $171,808 $170,625 25,000 $17,298
1994/95 President, 214,000 171,200 156,750 20,000 15,891
1993/94 Operations 185,125 122,923 150,000 19,000 13,807
1995/96 V. S. Frangopoulos Group Vice $195,000 $141,960 $ 91,000 15,000 $14,549
1994/95 President, 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
1995/96 M. G. Baker Group Vice $178,000 $113,386 $ 91,000 15,000 $13,279
1994/95 President, 166,000 116,200 85,500 11,000 12,357
1993/94 Distributed Products 151,125 87,804 81,000 12,000 7,989
1995/96 D. B. Rayburn Group Vice $171,000 $108,927 $113,750 15,000 $13,025
1994/95 President, 156,000 93,600 85,500 11,000 11,607
1993/94 Highway Products 140,125 69,782 81,000 10,000 10,445
<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, 1996, were: Mr. Savage - 51,100
shares valued at $1,354,150; Mr. Johnson - 31,200 shares
valued at $826,800; Mr. Frangopoulos - 27,200 shares valued
at $720,800; Mr. Baker - 17,560 shares valued at $465,340;
and Mr. Rayburn - 16,160 shares valued at $428,240.
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 $26.50 at March 31, 1996.
<PAGE>
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 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:
<PAGE>
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.
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
1995-96, the Company used a formula bonus program that 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 that 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 1995-96. 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 1995-96, the total annual compensation provided was in
accordance with this philosophy.
<PAGE>
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
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 shareholders.
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 1995-96 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. In 1996, for the fiscal year
ending March 31, 1997, the CEO, whose base pay is considerably
below the midpoint of CEO's in comparably sized companies as set
forth in survey data, was awarded an additional stock award of
7,500 shares in lieu of a base pay increase. The CEO's
employment agreement (described on page 17) only specifies
minimum termination compensation. Total annual compensation is
established by the Compensation Committee.
<PAGE>
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 several 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 is determined as
described above. Specifically in 1996, for the fiscal year ending
March 31, 1997, more aggressive changes in base pay were granted
for other than the CEO (discussed above) so as to bring the officer
corps base pay closer to the median of similarly sized companies.
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.
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Measurement Period
(Fiscal Year Covered) Modine NASDAQ S&P 500
- - --------------------- ------ ------ -------
Measurement Pt. 4/1/91 100 100 100
FYE 92 181 124 111
FYE 93 209 134 128
FYE 94 277 147 130
FYE 95 368 161 150
FYE 96 297 214 198
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.
<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 32,000 11.9% $22.75 1/17/2006 $ 0 $ 458,645 $ 1,157,520
D. R. Johnson 25,000 9.3% $22.75 1/17/2006 $ 0 358,313 904,313
V. S. Frangopoulos 15,000 5.6% $22.75 1/17/2006 $ 0 214,988 542,588
M. G. Baker 15,000 5.6% $22.75 1/17/2006 $ 0 214,988 542,588
D. B. Rayburn 15,000 5.6% $22.75 1/17/2006 $ 0 214,988 542,588
All Optionees 268,000 100% $22.75 1/17/2006 $ 0 3,841,110 9,694,230
All Shareholders N/A N/A N/A N/A $ 0 $496,830,261 $1,253,904,945
<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
<PAGE>
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.
<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 Options Held at
Acquired on Value at Fiscal Year End (1) Fiscal Year End (1)
Name Exercise Realized Exercisable (2) Exercisable (2)
---- -------- -------- --------------- --------------
<S> <C> <C> <C> <C>
R. T. Savage -0- $ -0- 229,000 $2,192,000
D. R. Johnson 12,000 331,500 144,750 1,185,609
V. S. Frangopoulos 16,698 410,214 140,302 1,318,125
M. G. Baker 5,000 101,563 147,800 1,827,763
D. B. Rayburn -0- -0- 64,000 356,250
<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 $26.50 as of March 31, 1996.
</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 $ 29,441 $ 39,255 $ 49,069 $ 58,883 $ 68,697
200,000 48,285 64,380 80,475 96,570 112,665
275,000 67,129 89,505 111,882 134,258 156,634
350,000 85,973 114,630 143,288 171,945 200,603
425,000 104,816 139,755 174,694 209,633 244,572
500,000 123,660 164,880 206,100 247,320 288,540
- - ---------------------------------------------------------------------------
<PAGE>
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
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 Rayburn are thirty-one, twenty-eight, twenty-
eight, twenty-five, and twenty-two 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
<PAGE>
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 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. One
other officer of the Company 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, 1995, 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 1996-97.
OTHER INFORMATION
Independent Auditors
- - --------------------
Coopers & Lybrand have been the independent certified public
accountants since 1935 and were selected as the Company's
auditors for the fiscal year ended March 31, 1996. 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 1996 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
<PAGE>
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 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, 1995, to March 31, 1996, all Section 16(a) filing
requirements applicable to its officers, directors, and greater
than ten percent beneficial owners were complied with.
ADDITIONAL MATTERS
The Board of Directors is not aware of any other matters
that will be presented for action at the 1996 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 1997
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 8, 1997.
ANNUAL REPORT
The Annual Report of the Company, including financial
statements for the fiscal year ended March 31, 1996, is enclosed.
W. E. PAVLICK, Secretary
<PAGE>
APPENDIX
Please mark your
/X/ votes as in this
example
FOR WITHHELD
1. Election Nominees: Stuart W. Tisdale
of Vincent L. Martin
Directors / / / / Richard T. Savage
For, except vote withheld from This proxy, when properly executed,
the 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________________ 1996
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 17, 1996 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 on
the reverse side of this proxy, and in their discretion upon such other
matters as may come before the meeting.
(To be Signed on Reverse Side)
<PAGE>
