SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 26, 1997
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-1373
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MODINE MANUFACTURING COMPANY
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0482000
------------------------------------ ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 DeKoven Avenue, Racine, Wisconsin 53403-2552
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 636-1200
---------------
NOT APPLICABLE
------------------------------------------------------------------
(Former name or former address, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at February 4, 1998
------------------------------ -------------------------------
Common Stock, $0.625 Par Value 29,688,894
<PAGE>
MODINE MANUFACTURING COMPANY
INDEX
PART I. FINANCIAL INFORMATION Page No.
--------
Item 1. Financial Statements
Consolidated Balance Sheets -
December 26 and March 31, 1997 3
Consolidated Statements of Earnings -
For the Three Months Ended
December 26, 1997 and 1996
and the Nine Months Ended
December 26, 1997 and 1996 4
Consolidated Statements of Cash Flows -
For the Nine Months Ended
December 26, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 5. Other Events 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 16
<PAGE>
<TABLE>
MODINE MANUFACTURING COMPANY
CONSOLIDATED BALANCE SHEETS
December 26, 1997 and March 31, 1997
(In thousands, except per-share amounts)
(Unaudited)
<CAPTION>
December 26, 1997 March 31, 1997
----------------- --------------
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 30,094 $ 34,822
Trade receivables, less allowance for
doubtful accounts of $5,050 and $4,140 162,712 149,800
Inventories 141,894 142,115
Deferred income taxes and other current assets 40,170 39,405
-------- --------
Total current assets 374,870 366,142
-------- --------
Other assets:
Property, plant, and equipment -- net 229,494 210,115
Investment in affiliates 9,042 9,497
Intangible assets, less accumulated
amortization of $16,149 and $12,885 58,485 62,948
Deferred charges and other noncurrent assets 48,714 46,253
-------- --------
Total other assets 345,735 328,813
-------- --------
Total assets $720,605 $694,955
======== ========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C>
Current liabilities:
Short-term debt $ 14,017 $ 2,962
Long-term debt -- current portion 2,529 14,061
Accounts payable 68,642 72,173
Accrued compensation and employee benefits 45,614 44,497
Income taxes 10,245 7,535
Accrued expenses and other current liabilities 28,588 28,771
-------- --------
Total current liabilities 169,635 169,999
-------- --------
Other liabilities:
Long-term debt 81,182 85,197
Deferred income taxes 13,302 13,331
Other noncurrent liabilities 42,141 40,740
-------- --------
Total other liabilities 136,625 139,268
-------- --------
Total liabilities 306,260 309,267
-------- --------
<PAGE>
Shareholders' investment:
Preferred stock, $0.025 par value, authorized
16,000 shares, issued - none - -
Common stock, $0.625 par value, authorized
80,000 shares, issued 30,342 shares 18,964 18,964
Additional paid-in capital 11,563 9,760
Retained earnings 411,311 378,740
Foreign currency translation adjustment (6,501) (3,016)
Treasury stock at cost: 622 and 509 shares,
respectively (18,350) (14,949)
Restricted stock - unamortized value (2,642) (3,811)
-------- --------
Total shareholders' investment 414,345 385,688
-------- --------
Total liabilities and shareholders' investment $720,605 $694,955
======== ========
<FN>
(See accompanying notes to consolidated financial statements.)
</TABLE>
<PAGE>
<TABLE>
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
For the three months ended December 26, 1997 and 1996
For the nine months ended December 26, 1997 and 1996
(In thousands, except per-share amounts)
(Unaudited)
<CAPTION>
Three months ended Nine months ended
-------------------- --------------------
December 26 December 26
-------------------- --------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $267,699 $252,972 $785,428 $755,710
Cost of sales 192,114 181,868 559,513 548,140
-------- -------- -------- --------
Gross profit 75,585 71,104 225,915 207,570
Selling, general, and administrative expenses 45,015 45,626 135,839 132,093
-------- -------- -------- --------
Income from operations 30,570 25,478 90,076 75,477
Non-operating income 1,918 1,945 5,993 6,461
Interest expense (842) (1,157) (2,950) (4,021)
Non-operating expense (1,634) (1,812) (4,859) (4,644)
-------- -------- -------- --------
Earnings before income taxes 30,012 24,454 88,260 73,273
Provision for income taxes 12,176 9,052 34,010 25,827
-------- -------- -------- --------
Net earnings $ 17,836 $ 15,402 $ 54,250 $ 47,446
======== ======== ======== ========
Net earnings per share of common stock
- Basic $0.60 $0.52 $1.82 $1.59
- Diluted $0.59 $0.51 $1.79 $1.57
======== ======== ======== ========
Dividends per share $0.19 $0.17 $0.57 $0.51
======== ======== ======== ========
<FN>
(See accompanying notes to consolidated financial statements.)
</TABLE>
<PAGE>
<TABLE>
<PAGE>
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Nine Months Ended December 26, 1997 and 1996
(Unaudited)
<CAPTION>
Nine months ended December 26
-----------------------------
1997 1996
-------- --------
<S> <C> <C>
Net cash provided by operating activities $ 72,160 $ 74,842
Cash flows from investing activities:
Expenditures for property, plant, and equipment (52,668) (37,407)
Acquisitions, net of cash acquired 0 (1,829)
Investments in affiliates 0 (4,031)
Proceeds from dispositions of assets 1,883 230
Other -- net (91) (34)
-------- --------
Net cash (used for) investing activities (50,876) (43,071)
Cash flows from financing activities:
Increase/(decrease) in short-term debt -- net 11,158 (6,802)
Additions to long-term debt 15,179 20,617
Reductions of long-term debt (27,273) (17,411)
Issuance of common stock, including treasury stock 3,364 3,780
Purchase of treasury stock (11,480) (3,208)
Cash dividends paid (16,960) (15,217)
-------- --------
Net cash (used for) financing activities (26,012) (18,241)
-------- --------
Net (decrease)/increase in cash and cash equivalents (4,728) 13,530
Cash and cash equivalents at beginning of period 34,822 17,958
-------- --------
Cash and cash equivalents at end of period $ 30,094 $ 31,488
======== ========
<FN>
(See accompanying notes to consolidated financial statements.)
</TABLE>
<PAGE>
MODINE MANUFACTURING COMPANY
----------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------
1. The amounts of raw material, work in process and finished
goods cannot be determined exactly except by physical
inventories. Based on partial interim physical inventories
and percentage relationships at the time of complete
physical inventories, Management believes the amounts shown
below are reasonable estimates of raw material, work in
process and finished goods.
(In thousands)
---------------------------------------------------------------
December 26, 1997 March 31, 1997
---------------------------------------------------------------
Raw materials $ 38,335 $ 41,592
Work in process 38,901 37,317
Finished goods 64,658 63,206
--------- ---------
Total inventories $ 141,894 $ 142,115
========= =========
2. Property, plant, and equipment is composed of:
(In thousands)
---------------------------------------------------------------
December 26, 1997 March 31, 1997
---------------------------------------------------------------
Gross, property,
plant & equipment $ 494,764 $ 458,914
Less accumulated
depreciation (265,270) (248,799)
--------- ---------
Net property,
plant & equipment $ 229,494 $ 210,115
========= =========
3. Recent developments concerning legal proceedings reported in
the Company's Form 10-K report for the year ended March 31,
1997, are updated in Part II, Other Information, Item 1,
Legal Proceedings. While the outcome of these proceedings
is uncertain, in the opinion of the Company's Management,
any liabilities that may result from such proceedings are
not reasonably likely to have a material effect on the
Company's liquidity, financial condition, or results of
operations.
4. In February 1997, the Financial Accounting Standards Board
issued Statement No. 128, "Earnings per Share," which became
effective for both interim and annual financial statement
periods ending after December 15, 1997. As required by this
statement, the Company adopted the new standards for
computing and presenting earnings per share (EPS) for the
third quarter, and for all prior-period EPS data presented
herein.
<PAGE>
5. The computation of basic and diluted earnings per share, as
prescribed by FASB 128, is as follows:
(In thousands, except per-share amounts)
------------------------------------------------------------------------
Three months ended Nine months ended
December 26 December 26
------------------------------------------------------------------------
1997 1996 1997 1996
------------------------------------------------------------------------
Net earnings per share of
-------------------------
common stock:
------------
- Basic $0.60 $0.52 $1.82 $1.59
- Diluted $0.59 $0.51 $1.79 $1.57
Numerator:
----------
Income available to
common shareholders: $17,836 $15,402 $54,250 $47,446
Denominator:
------------
Weighted average shares
outstanding - basic 29,720 29,848 29,762 29,828
Effect of dilutive
securities -
options* 596 445 535 476
------- ------- ------- -------
Weighted average shares
outstanding - diluted 30,316 30,293 30,297 30,304
* There were outstanding options to purchase common stock at
prices that exceeded the average market price for the income
statement period as follows:
Average market
price per share $34.42 $25.38 $31.81 $25.98
Number of shares None 546 45 546
6. In June 1997, the Financial Accounting Standards Board
issued Statement No. 130, "Reporting Comprehensive Income"
and Statement No. 131, "Disclosures about Segments of an
Enterprise and Related Information." Under the new
reporting and disclosure requirements promulgated in these
statements, the Company is required to, and will adopt the
provisions beginning in its fiscal 1998-99 year.
7. The accompanying consolidated financial statements, which
have not been audited by independent certified public
accountants, were prepared in conformity with generally
accepted accounting principles and such principles were
applied on a basis consistent with the preparation of the
consolidated financial statements in the Company's March 31,
1997 Annual Report filed with the Securities and Exchange
Commission. The financial information furnished includes
all normal recurring accrual adjustments which are, in the
<PAGE>
opinion of Management, necessary for a fair statement of
results for the interim period. Results for the first nine
months of fiscal 1998 are not necessarily indicative of the
results to be expected for the full year.
8. Certain notes and other information have been condensed or
omitted from these interim financial statements which
consolidate both domestic and foreign wholly-owned
subsidiaries. Therefore, such statements should be read in
conjunction with the consolidated financial statements and
related notes contained in the Company's 1997 Annual Report
to stockholders which statements and notes were incorporated
by reference in the Company's Form 10-K Report for the year
ended March 31, 1997.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
The following discussion and analysis provides information which Management
believes is relevant to an assessment and understanding of the Company's
consolidated results of operations and financial condition. This discussion
should be read in conjunction with the consolidated financial statements and
notes thereto.
RESULTS OF OPERATIONS
- ---------------------
Comparison of the Third Quarter of 1997-98 with the Third Quarter of 1996-97
- ----------------------------------------------------------------------------
Net sales for the third quarter of fiscal 1997-98 were a record $267.7
million, up 5.8% from the $253.0 million reported in the third quarter
last year. Sales to the medium- and heavy-truck market had the largest
increase during the third quarter. Continued sales growth to North
American heavy-truck-market customers was accompanied by further
advances in Europe. Sales to Modine customers in the off-highway
vehicle market had the second-largest increase, led by exports to
construction-equipment manufacturers and by sales to U.S. agricultural-
equipment companies. Modine's revenues from the passenger-car and
light-truck market were down due to the currency translation effects
of the stronger dollar.
Gross margin increased 0.1%, as a percentage of sales, over the third
quarter of the previous year to 28.2% from 28.1%.
Selling, general, and administrative expenses decreased 1.3% from last
year's third quarter, while decreasing 1.2% as a percentage of sales.
The currency translation effect of the stronger dollar continued to
influence these costs in a positive manner.
Average outstanding debt levels during the quarter declined by
approximately $7.4 million, or 6.9% over the same period a year ago.
Correspondingly, interest expense decreased by 27.2%, or 0.3 million
from a year ago. The lower interest expense can be attributed to
several factors including a continuing reduction in higher rate
domestic debt through normally scheduled repayments and higher
capitalized interest resulting from major capital projects. Net
non-operating income remained virtually unchanged from the same
period last year.
Operating income increased 20.0% over last year's third quarter, or
1.3% as a percentage of sales. Lower material costs and improving
European operations continue to be the main factors contributing to
the increase.
The effective tax rate increased 3.6% when compared to the same period
last year. The largest factors influencing the increase were higher
foreign earnings and tax rates.
Net earnings for the quarter increased 15.8% to $17.8 million, or $0.60
basic and $0.59 diluted earnings per share from last year's $15.4 million,
or $0.52 basic and $0.51 diluted earnings per share. Earnings per share
<PAGE>
calculations were made in accordance with FASB 128 which became effective
for the Company in the third quarter. Prior period earnings per share
amounts have been restated to conform to the new standard. Return on
shareholders' investment, at 17.5 percent, was in Modine's target range
of 15-20 percent.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
RESULTS OF OPERATIONS
---------------------
Comparison of the First Nine Months of 1997-98 with the First
- -------------------------------------------------------------
Nine Months of 1996-97
- ----------------------
Net sales for the first nine months of fiscal 1997-98 were $785.4
million, up 3.9% from the $755.7 million reported in the first
nine months of last year. Sales to the medium- and heavy-truck
market had the highest percentage and dollar increase compared
with the same period a year ago. Continued recovery in the North
American heavy-truck market led the advance. Sales to Modine
customers in the off-highway vehicle market had the second
largest increase, led by exports to construction-equipment
manufacturers and by sales to U.S. construction- and agricultural-
equipment companies. Modine's revenues from the passenger-car
and light-truck market were down, due in part to the currency
translation effects of the stronger dollar. Overall, the
stronger U.S. dollar negatively impacted the translation of
foreign sales by $37.3 million in the nine-month period.
Gross margin increased 1.3%, as a percentage of sales, over the
first nine months of the previous year to 28.8% from 27.5%.
Improvements shown in Europe and the North American truck market
and automotive aftermarket continue to be primarily responsible
for the change. These changes are due in part to lower material
costs and continuing productivity improvements.
Selling, general, and administrative expenses decreased 0.2% as a
percentage of sales over the first nine months last year, while
increasing 2.8% in overall dollar terms. Among the items
contributing to the dollar increase over last year were higher
statutory and fringe benefit costs, increased research and
development expense, and higher freight costs.
Average outstanding debt levels during the first nine months
decreased by approximately $9.5 million, or 8.6%, over the same
period a year ago. Interest expense, decreased by 26.6% over the
same nine month period, a year ago. The lower interest expense
can be attributed to several factors including a continuing
reduction in higher rate domestic debt through normally scheduled
repayments and reduced interest expense resulting from completed
IRS reviews.
Operating income increased 19.3% over the same period last year,
or 1.5% as a percentage of sales. Lower material costs and
improving European operations continued to be the main factors
contributing to the overall improvement shown.
The effective tax rate increased by 3.3% when compared to the
same period last year. The increase is primarily the result of
improved foreign earnings and tax reducing items that impacted
fiscal 1996-97, including completed IRS reviews and the net
utilization of certain foreign operating loss carryforwards.
<PAGE>
Net earnings for the nine months were $54.3 million, or $1.82
basic and $1.79 diluted earnings per share, up 14.3% from the
$47.4 million, or $1.59 basic and $1.57 diluted earnings per
share the year before. Annualized return on shareholders'
investment, at 18.1 percent, was in management's target range of
15-20 percent.
Outlook for the Remainder of the Year
- -------------------------------------
As forecast in the annual report, the Company's margins have
continued to improve. If the markets the Company serves remain
strong, with the economies of the United States and Europe
continuing to hold up, fiscal-year earnings growth of about 10
percent is achievable on the more modest sales increase that is
expected. These forward looking statements regarding sales and
earnings are subject to certain risks and uncertainties which
could cause actual results to differ materially from those
projected. See "Important Factors and Assumptions Regarding
Forward-Looking Statements" attached hereto as exhibit 99 and
incorporated herein by reference.
Year 2000
- ---------
In response to the Year 2000 issue, the Company initiated a
project in early 1997 to identify, evaluate and implement changes
to its existing computerized business systems. The Company is
addressing the issue through a combination of modifications to
existing programs and conversions to Year 2000 compliant
software. The total cost associated with the required
modifications is not expected to be material to the Company's
consolidated results of operations and financial position, and is
being expensed as incurred. In addition, the Company is
communicating with its customers, suppliers, and other service
providers to determine whether they are actively involved in
projects to ensure that their products and business systems will
be Year 2000 compliant. If modifications and conversions by the
Company and those it conducts business with are not made in a
timely manner, the Year 2000 issue could have a material adverse
effect on the Company's business, financial condition, and
results of operations.
<PAGE>
FINANCIAL CONDITION
-------------------
Comparison between December 26, 1997 and March 31, 1997
- -------------------------------------------------------
Current Assets
- --------------
Cash and cash equivalents decreased by $4.7 million to a total of
$30.1 million. The Company's primary sources of liquidity and
capital resources were from cash provided by operations and the
use of available borrowing facilities.
Net trade receivables increased $12.9 million, or 8.6%. Normal
seasonal marketing programs in the heating and aftermarket
divisions, stronger truck sales, and extended payment terms were
the main factors contributing to the increase.
Overall inventory levels essentially remained the same, decreasing
by $0.2 million to $141.9 million.
Deferred income taxes and other current assets increased slightly
by $0.7 million.
Working capital increased approximately 4.6% to $205.2 million from
$196.1 million while the current ratio remained the same at 2.2 to 1.
A number of categories experienced changes, with the largest item
influencing the overall change being an increase in trade receivables
offset in part by a decrease to cash and cash equivalents.
Property, Plant and Equipment
- -----------------------------
Net property, plant and equipment increased $19.4 million to
$229.5 million as capital expenditures exceeded depreciation,
retirements and foreign currency translations. Outstanding
material commitments for capital expenditures were $56.5 million
at December 26, 1997, compared to $27.0 million at March 31,
1997. The largest commitment of approximately $18.6 million
relates to the construction of a new technical center in Racine,
Wisconsin. Another $19.7 million is related to facility
expansions, improvements, equipment upgrades, and new equipment
for a number of European plants. The outstanding commitments
will be primarily financed through internally generated cash.
Intangible Assets
- -----------------
Intangible assets, net of accumulated amortization declined $4.5
million. Amortization and foreign currency translations were the
main items contributing to the change.
Deferred Charges and Other Assets
- ---------------------------------
Deferred charges and other assets increased $2.5 million. The
net increase is primarily the result of continuing recognition of
the surplus in the Company's overfunded pension plans.
<PAGE>
Current Liabilities
- -------------------
Accounts payable and various accrued expenses decreased $2.6
million. Normal timing differences in the level of operating
activity were responsible for the decline. Accrued income taxes
increased $2.7 million from normal timing differences in making
estimated payments and certain federal tax benefits.
Debt
- ----
Outstanding debt decreased by $4.5 million from March 31, 1997.
Long-term debt decreased by $15.5 million while short-term debt
increased by $11.1 million. The majority of the changes in debt
were domestic. Total debt as a percentage of shareholders'
equity decreased from 26.5% to 23.6%.
Consolidated available lines of credit increased during the first
nine months by $8.5 million. Available credit lines increased in
the Netherlands by the U.S. equivalent of $6.2 million, and in
Germany by the U.S. equivalent of $3.8 million. The foreign
unused lines of credit at December 26, 1997 were $15.7 million,
while the Company had $13.0 million available under a domestic
multi-currency revolving credit agreement.
Shareholders' Investment
- ------------------------
Total shareholders' investment increased by $28.7 million to a
total of $414.3 million. The net increase resulted primarily
from net earnings of $54.3 million for the first nine months.
Offsetting items included dividends paid to shareholders of $17.0
million, unfavorable foreign currency translation impact of $3.5
million, net treasury stock transactions of $3.4 million and
other minor changes to the capital accounts.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
In the normal course of business, the Company and its
subsidiaries are named as defendants in various lawsuits and
enforcement proceedings by private parties, the Occupational
Safety and Health Administration, the Environmental Protection
Agency, other governmental agencies, and others in which claims,
such as personal injury, property damage, or antitrust and trade
regulation issues, are asserted against the Company. While the
outcome of these proceedings is uncertain, in the opinion of the
Company's Management and counsel, any liabilities that may result
from such proceedings are not reasonably likely to have a
material effect on the Company's liquidity, financial condition
or results of operations. Many of the pending damage claims are
covered by insurance and, in addition, the Company from time to
time establishes reserves for uninsured liabilities.
The Mitsubishi and Showa Litigation
-----------------------------------
In November 1991, the Company filed a lawsuit in the Federal
District Court in Milwaukee, Wisconsin against Mitsubishi Motor
Sales of America, Inc. and Showa Aluminum Corporation, alleging
infringement of the Company's Patent No. 4,998,580 on parallel-
flow air-conditioning condensers. The suit seeks an injunction
to prohibit continued infringement and accounting for damages, a
trebling of such damages for willful infringement, and
reimbursement of attorneys' fees. In December of 1991, the
Company submitted a complaint to the U. S. International Trade
Commission (ITC) requesting that the ITC ban the import and sale
of parallel-flow air-conditioning condensers and systems or
vehicles that contain them, which are the subject of the
aforementioned lawsuit. In August 1997, the ITC issued an Order
excluding from U.S. import Showa condensers that infringe Modine
Manufacturing Company's parallel-flow patent. The ITC's Order
covers condensers, their parts, and certain products including
them, such as air-conditioning kits and systems. It directs the
U.S. Customs Service to exclude from importation into the United
States such products manufactured by Showa Aluminum Corporation
of Japan and Showa Aluminum Corporation of America. The decision
is based on a Modine U.S. patent covering condensers with tube
hydraulic diameters less than 0.04822 inches. The Showa
companies must certify to Customs officials that any condenser
items imported by them do not infringe Modine's parallel-flow
patent. The Showa companies must also file annual reports with
the ITC regarding their sales of Showa parallel-flow condensers
in the United States. The ITC Order has been appealed by Showa
to the U. S. Court of Appeals for the Federal Circuit.
In July of 1994, Showa filed a lawsuit against the Company in the
Federal District Court in Columbus, Ohio alleging infringement by
the Company of Showa's patents pertaining to double circuit
condensers and baffles therefor (In June, 1995, the Company filed
a motion for partial summary judgment against such lawsuit). In
December of 1994, the Company filed another lawsuit against
Mitsubishi Motor Sales of America, Inc. and Showa Aluminum
Corporation in the Federal District Court in Milwaukee, Wisconsin
<PAGE>
pertaining to the Company's newly-issued Patent No. 5,372,188
also pertaining to parallel-flow air-conditioning condensers.
Both 1994 suits have been stayed pending the outcome of re-
examination in the U. S. Patent Office of the patents involved.
In October of 1997, Modine was issued a Japanese patent (in spite
of oppositions by many parties) covering parallel-flow air
conditioning condensers having tube hydraulic diameters less than
0.070 inches. A similar patent has been issued to Modine by the
European Patent Office and is currently in the opposition stage.
All legal and court costs associated with these cases have been
expensed as they were incurred.
Other previously reported legal proceedings have been settled or
the issues resolved so as to not merit further reporting.
Item 5. Other Events.
On November 10, 1997, Norwest Bank Minnesota, N.A., became the
transfer agent, registrar, dividend disbursement agent, and
administrator of the Modine Dividend Reinvestment Plan (DRP) for
shareholders of Modine Manufacturing Company.
Also effective November 10, 1997, Norwest became the rights agent
under the terms of the Modine shareholder Rights Plan. The Plan,
which is discussed in Note 16 of the 1997 Annual Report, was
initiated in October 1986. During fiscal 1995, Modine extended
the expiration date of the rights, which will expire on October
27, 2006, unless previously redeemed.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
--------
The following exhibits are included for information only unless
specifically incorporated by reference in this report:
Reference Number
per Item 601 of
Regulation S-K Page
- -------------- ----
3* Restated By-Laws (as amended).
4(a) Rights Agreement dated as of October 16, 1986
between the Registrant and First Chicago Trust
Company of New York (Rights Agent) (filed by
reference to the Registrant's Annual Report
on Form 10-K for the fiscal year ended
March 31, 1997).
4(b)(i) Rights Agreement Amendment No. 1 dated as of
January 18, 1995 between the Registrant and
First Chicago Trust Company of New York (Rights
Agent) (filed by reference to the exhibit
contained within the Registrant's Current
Report on Form 8-K dated January 13, 1995.)
<PAGE>
Reference Number
per Item 601 of
Regulation S-K Page
- -------------- ----
4(b)(ii) Rights Agreement Amendment No. 2 dated as of
January 18, 1995 between the Registrant and
First Chicago Trust Company of New York
(Rights Agent) (filed by reference to the
exhibit contained within the Registrant's
Current Report on Form 8-K dated January 13,
1995.)
4(b)(iii) Rights Agreement Amendment No. 3 dated as
of October 15, 1996 between the Registrant
and First Chicago Trust Company of New York
(Rights Agent) (filed by reference to the
exhibit contained within the Registrant's
Quarterly Report on Form 10-Q dated
December 26, 1996.)
4(b)(iv)* Rights Agreement Amendment No. 4 dated as of
November 10, 1997 between the Registrant and
Norwest Bank Minnesota, N.A., (Rights Agent).
Note: The amount of long-term debt authorized
under any instrument defining the rights of
holders of long-term debt of the Registrant,
other than as noted above, does not exceed
ten percent of the total assets of the
Registrant and its subsidiaries on a
consolidated basis. Therefore, no such
instruments are required to be filed as
exhibits to this Form 10-Q. The Registrant
agrees to furnish copies of such instruments
to the Commission upon request.
27* Financial Data Schedule (electronic
transmission only).
99* Important Factors and Assumptions Regarding
Forwarding-Looking Statements. 18
*Filed herewith.
(b) Reports on Form 8-K:
-------------------
The Company filed one report on Form 8-K during the third quarter
of fiscal 1997-98 dated December 17, 1997. The Board of Directors
of Modine Manufacturing Company announced that Richard T. Savage,
Chairman of the Board and Chief Executive Officer, will retire as
an officer effective March 31, 1998. Mr. Savage will remain as
Chairman. The Board also announced the election of Donald R.
Johnson to the Board and his promotion, effective April 1, 1998
to President and Chief Executive Officer.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MODINE MANUFACTURING COMPANY
(Registrant)
By: A. D. REID
---------------------------------------
A. D. Reid, Vice President,
Finance and Chief Financial Officer
(Principal Financial Officer)
Date: February 5, 1998 By: W. E. PAVLICK
---------------------------------------
W. E. Pavlick, Senior Vice President,
General Counsel and Secretary
<PAGE>
RESTATED
BY-LAWS
OF
MODINE MANUFACTURING COMPANY
(as adopted July 17, 1969)
(as amended September 17, 1970)
(as amended September 16, 1971)
(as amended May 4, 1972)
(as amended March 20, 1974)
(as amended September 18, 1974)
(as amended May 19, 1976)
(as amended July 21, 1976)
(as amended May 18, 1977)
(as amended July 20, 1977)
(as amended October 18, 1978)
(as amended May 16, 1979)
(as amended July 18, 1979)
(as amended October 17, 1979)
(as amended October 15, 1980)
(as amended May 1, 1981)
(as amended May 5, 1982 to be effective
July 21, 1982)
(as amended August 17, 1982)
(as amended February 18, 1987)
(as amended March 18, 1987)
(as amended July 15, 1987)
(as amended February 15, 1989)
(as amended May 19, 1993)
(as amended October 20, 1993)
(as amended November 17, 1993)
(as amended March 16, 1994 to be effective
July 20, 1994)
(as amended May 17, 1995 to be effective
July 19, 1995)
(as amended October 16, 1996 to be effective
October 16, 1996)
(as amended December 17, 1997)
ARTICLE I. STOCKHOLDERS
------------------------
1.01. Annual Meeting. The annual meeting of
--------------
stockholders of the Company shall be held each year at such time
and place, either within or without the State of Wisconsin, as
shall be determined by the Board of Directors at a meeting prior
to the date otherwise provided herein for such stockholders'
meeting; in the absence or failure of the Board to designate a
time and place, then at the principal office of the Company in
Racine, Wisconsin, on the third Wednesday in July, at 9:30
o'clock A.M., for the purpose of election of directors and for
the transaction of such other business as may properly come
before the meeting.
<PAGE>
1.02. Special Meetings. Special meetings of the
----------------
stockholders may be called by the Chairman of the Board or the
President and shall be called by the President, or Secretary at
the request in writing of a majority of the Board of Directors,
or at the request of stockholders owning Ten Percent (10%) or
more in amount of the entire capital stock of the Company issued
and outstanding and entitled to vote. Such request shall state
the purpose or purposes of the proposed meeting. Business
transacted at all special meetings shall be confined to the
purposes stated in the notice of meeting.
1.03. Notice of Meetings. The Company shall notify
------------------
each shareholder who is entitled to vote at the meeting, and any
other shareholder entitled to notice under ch. 180, of the date,
time, and place of each annual or special shareholders' meeting.
In the case of special meetings, the notice shall also state the
meeting's purpose. Unless otherwise required by ch. 180, the
meeting notice shall be given at least five (5) days before the
meeting date. Notice may be given orally or communicated in
person, by telephone, telegraph, teletype, facsimile, other form
of wire or wireless communication, private carrier, or in any
other manner provided by ch. 180. Written notice, if mailed, is
effective when mailed; and such notice may be addressed to the
shareholder's address shown in the Company's current record of
shareholders. Written notice provided in any other manner is
effective when received. Oral notice is effective when
communicated.
1.04. Quorum. A quorum at any meeting of the
------
stockholders shall consist of a majority of the voting stock of
the Company represented in person or by proxy. Unless otherwise
provided in the Articles of Incorporation, by these by-laws, or
by the Wisconsin Business Corporation Law, a majority of such
quorum shall decide any questions that may come before the
meeting. Though less than a quorum of the outstanding shares are
represented at a meeting, a majority of the shares so represented
may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
1.05. Order of Business. The order and conduct of
-----------------
business and matters of procedure at any meeting of stockholders
shall be determined by the Chairman.
1.06. List of Stockholders. The officer or agent
--------------------
having charge of the stock transfer books for shares of the
Company shall, before each meeting of stockholders, make a
complete list of the stockholders entitled to vote at such
meeting or any adjournment thereof, with the address of and the
number of shares held by each, which list shall be produced and
kept open at the time and place of the meeting and shall be
subject to the inspection of any stockholder during the whole
time of the meeting for the purposes of the meeting. The
<PAGE>
original stock transfer books shall be prima facie evidence as to
the stockholders entitled to examine such list or transfer books
or to vote at any meeting of stockholders.
1.07. Inspectors of Election. Two inspectors of
----------------------
election shall be appointed by the Board of Directors at or
before each stockholders' meeting at which an election of
directors shall take place; if no such appointment shall have
been made, or if the inspectors appointed by the Board shall
refuse to act, or fail to attend, then the appointment shall be
made by the Chairman at the meeting. The inspectors shall
receive and take in charge all proxies and ballots, and shall
decide all questions touching upon the qualification of voters,
and validity of proxies and the acceptance and rejection of
votes. In case of a tie vote by the inspectors on any questions,
the Chairman shall decide.
1.08. Voting of Shares. Each outstanding share shall
----------------
be entitled to one vote upon each matter submitted to a vote at a
meeting of stockholders, except to the extent that the voting
rights of the shares of any class or classes are enlarged,
limited or denied by the Wisconsin Business Corporation Law, the
Articles of Incorporation, or the resolution of the Board of
Directors creating such series of any class.
1.09. Proxies. At all meetings of stockholders, a
-------
stockholder entitled to vote may vote in person or by proxy
appointed in writing by the stockholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the Secretary
of the Company before or at the time of meeting. Unless
otherwise provided in the proxy, a proxy may be revoked at any
time before it is voted either by written notice filed with the
Secretary or the acting secretary of the meeting or by oral
notice given by the stockholder to the presiding officer during
the meeting. The presence of a stockholder who has filed his
proxy shall not of itself constitute a revocation. No proxy
shall be valid after eleven (11) months from the date of its
execution, unless otherwise provided in the proxy. The Board of
Directors shall have the power and authority to make rules
establishing presumptions as to the validity and sufficiency of
proxies.
ARTICLE II. DIRECTORS
----------------------
2.01. Number, Classification and Terms of Directors.
---------------------------------------------
The number of directors shall be ten. Directors need not be
stockholders.
The Board of Directors shall be divided into three
classes: a class consisting of four directors and two classes
consisting of three directors each. The term of office of a
director shall be three years. The classes of directors shall be
staggered so that each expires in succeeding years. At each
annual meeting of stockholders, the number of directors equal to
<PAGE>
the number of the class whose terms expire at the time of such
meeting shall be elected to hold office until the third
succeeding annual meeting and until their successors shall have
been elected.
2.02. Annual Directors' Meetings. Annual meeting of
--------------------------
the Board of Directors shall be held immediately following the
annual meeting of stockholders. No notice of the annual meeting
of the Board of Directors shall be required.
2.03. Special Directors' Meetings. Special meetings
---------------------------
of the Board of Directors may be called by the Chairman of the
Board, the President, or Secretary on twenty-four (24) hours'
notice to each director.
2.04. Notice of Meetings; Waiver of Notice. Notice of
------------------------------------
each board of directors' meeting, except meetings pursuant to
Section 2.02 of these by-laws, shall be delivered to each
director at his or her business address or at such other address
as the director shall have designated in writing and filed with
the Secretary. Notice may be given orally or communicated in
person, by telephone, telegraph, teletype, facsimile, other form
of wire or wireless communication, private carrier, or in any
other manner provided by ch. 180. Written notice shall be deemed
given at the earlier of the time it is received or at the time it
is deposited with postage prepaid in the United States mail or
delivered to the private carrier. Oral notice is effective when
communicated. A director may waive notice required under this
section or by-law at any time, whether before or after the time
of the meeting. The waiver must be in writing, signed by the
director, and retained in the corporate record book. The
director's attendance at or participation in a meeting shall
constitute a waiver of notice of the meeting, unless the director
at the beginning of the meeting or promptly upon his or her
arrival objects to holding the meeting or transacting business at
the meeting and does not thereafter vote for or assent to action
taken at the meeting. Neither the business to be transacted at
nor the purpose of any regular or special board of directors
meeting need be specified in the notice or waiver of notice of
the meeting.
2.05. Regular Meetings. Regular meetings of the
----------------
directors may be held without notice at such place and times as
shall be determined from time to time by resolution of the Board
of Directors.
2.06. Quorum. A quorum at any meeting of the Board of
------
Directors shall consist of a majority of the entire membership of
the Board. Unless otherwise provided in the Articles of
Incorporation, these by-laws, or by law, a majority of such
quorum shall decide all questions that may come before the
meeting.
<PAGE>
2.07. General Powers of Directors. The Board of
---------------------------
Directors shall manage the business and affairs of the Company
and subject to the restrictions imposed by law, by the Articles
of Incorporation, or by these by-laws, may exercise all the
powers, including specific powers, of the Company.
2.08. Compensation of Directors. The Board of
-------------------------
Directors, by the affirmative vote of a majority of the directors
then in office, and irrespective of any personal interest of any
of its members, shall have authority to establish reasonable
compensation of all directors for services to the Company as
directors, officers or otherwise, or to delegate such authority to
an appropriate committee. The Board of Directors also shall have
authority to provide for or to delegate authority to an appropriate
committee to provide for reasonable pensions, disability or death
benefits, employee stock options, and other benefits or payments,
to directors, officers and employees and to their estates, families,
dependents or beneficiaries on account of prior services rendered by
such directors, officers and employees to the Company.
2.09. Resignation and Removal for Cause. Any
---------------------------------
director, member of a committee or other officer may resign at
any time. Such resignation shall be made in writing, and shall
take effect at the time specified therein, and if no time be
specified, at the time of its receipt by the Chairman or
Secretary. The acceptance of a resignation shall not be
necessary to make it effective.
A director may be removed from office during the term
of such office but only upon a showing of good cause, such
removal to be by affirmative vote of a majority of the
outstanding shares entitled to vote for the election of such
director and which removal may only be taken at a special meeting
of stockholders called for that purpose.
A special meeting of the stockholders as herein
referred to may only be held after a hearing on the matter of
cause claimed to exist has been held by the full Board of
Directors of the Company at which hearing the director or
directors proposed for removal shall be given an adequate
opportunity for preparation and attendance in person (together
with representation by counsel); provided, however, that such
hearing shall be held only after written notice has been given to
said director or directors proposed for removal specifying the
matters of cause claimed to exist. The conclusions of said
hearing shall be reported by the Board of Directors in writing
accompanying the notice of the special stockholders' meeting sent
to each stockholder eligible to vote at said special meeting.
2.10. Increase or Decrease of Number of Directors.
-------------------------------------------
Increase or decrease of the number of directors and
classification of such directors, may only be made by amendment
of these by-laws at a regular or special meeting called for that
purpose, and a vacancy created by an increase in the number of
directors may be filled at such meeting.
<PAGE>
2.11. Filling of Vacancies. If the office of any director.
--------------------
member of a committee or other officer becomes vacant for any reason,
including vacancies on the Board of Directors due to removal for cause,
the remaining directors in office, by a majority vote, may appoint any
qualified person to fill such vacancy, who shall hold office for the
unexpired term and until his successor shall be duly chosen.
2.12. Informal Action by Directors. Any action required
----------------------------
or permitted by the Articles of Incorporation, these by-laws or other
provision of law, which might be taken at a meeting of the Board of
Directors or of a lawfully constituted committee thereof, may be taken
without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all the directors, or by all of the members
of such committee, as the case may be.
2.13. Retirement. Each Director shall be retired at the
----------
close of the term in which he attains the age of seventy (70) years
except that this provision shall not apply to any Director who has
been exempted from this provision by a resolution passed by a two-
thirds vote of the Board of Directors. Upon such retirement a
Director may take the status of a Director Emeritus. A Director
Emeritus shall receive the notice of meetings of Directors, shall
be invited to and welcome at all meetings of the Board and of the
stockholders, and shall receive such compensation and such
reimbursement for reasonable expenses, if any, for attendance at
meetings as the Board of Directors shall determine, provided,
however, that such compensation shall not exceed that received
by a Director. A Director Emeritus shall attend the meetings of
the Board in a consultive capacity but shall not be entitled to
vote or have any duties or powers of a Director of the Company.
2.14. Committees. The Board of Directors may by
----------
resolution or resolutions, adopted by a majority of the total
number of directors, designate one or more committees, each such
committee to consist of three or more directors elected by the
Board of Directors which, to the extent provided in said
resolution or resolutions, shall have and may exercise the powers
of the Board of Directors in the management of the business and
affairs of the corporation. Such committees shall have such
names as may be determined from time to time by resolution
adopted by the Board of Directors. A majority of the members of
any such committee may determine its action unless the Board of
Directors shall otherwise provide. The Board of Directors shall
have power at any time to fill vacancies in, to change the
membership of, or to dissolve any such committee. The Board of
Directors may elect one or more of its members as alternate
members of any committee who may take the place of any absent
member or members at any meeting of such committee.
ARTICLE III. OFFICERS
----------------------
3.01. Number. The principal officers of the Company
------
shall be a Chairman of the Board of Directors, a President, such
<PAGE>
number of Vice Presidents as the Board of Directors shall elect,
a Secretary, and a Treasurer, each of whom shall be elected by
the Board of Directors. Such other officers and assistant
officers as may be deemed necessary may be elected or appointed
by the Board of Directors. Any two or more offices may be held
by the same person, except the offices of President and Secretary
and the offices of President and Vice President.
3.02. Election and Term of Office. The officers of
---------------------------
the Company to be elected by the Board of Directors shall be
elected annually by the Board of Directors at the first meeting
of the Board of Directors held after each annual meeting of the
stockholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office at the
pleasure of the Board of Directors or until his successor shall
have been duly elected or until his prior death, resignation or
removal.
3.03. Removal. Any officer or agent may be removed by
-------
the Board of Directors whenever in its judgment the best
interests of the Company will be served thereby, but such removal
shall be without prejudice to the rights provided by written
contract, if any, of the person so removed. Election or
appointment shall not of itself create contract rights.
3.04. Vacancies. A vacancy in any principal office
---------
because of death, resignation, removal, disqualification or
otherwise, shall be filled by the Board of Directors for the
unexpired portion of the term.
3.05. Chairman of the Board. The Chairman of the
---------------------
Board of Directors shall preside at all meetings of stockholders
and directors. In his absence, the Vice Chairman of the Board,
if there be one, otherwise the President, shall preside.
3.06. President. The President shall be the Chief
---------
Executive Officer of the Company, and subject to the control of
the Board of Directors, shall in general supervise and control
all of the business and affairs of the Company. He shall have
authority, subject to such rules as may be prescribed by the
Board of Directors, to appoint such agents and employees of the
Company as he shall deem necessary, to prescribe their powers,
duties and compensation, and to delegate authority to them. Such
agents and employees shall hold office at the discretion of the
President. He shall have authority to sign, execute and
acknowledge, on behalf of the Company, all deeds, mortgages,
bonds, stock certificates, contracts, leases, reports and all
other documents or instruments necessary or proper to be executed
in the course of the Company's regular business, or which shall
be authorized by resolution of the Board of Directors; and except
as otherwise provided by law or the Board of Directors, he may
authorize any Vice President or other officer or agent of the
Company to sign, execute and acknowledge such documents or
<PAGE>
instruments in his place and stead. In general he shall perform
all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time
to time.
3.07. The Vice President. In the absence of the
------------------
President or in the event of his death, inability or refusal to
act, or in the event for any reason it shall be impracticable for
the President to act personally, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents
in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their election)
shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the
restrictions upon the President. Any Vice President may sign,
with the Secretary or Assistant Secretary, certificates for
shares of the Company; and shall perform such other duties and
have such authority as from time to time may be delegated or
assigned to him by the Chairman, President or by the Board of
Directors. The execution of any instrument of the Company by any
Vice President shall be conclusive evidence, as to third parties,
of his authority to act in the stead of the President.
3.08. The Secretary. The Secretary shall: (a) keep
-------------
the minutes of the meetings of the stockholders and of the Board
of Directors in one or more books provided for that purpose; (b)
see that all notices are duly given in accordance with the
provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the Company
and see that the seal of the Company is affixed to all documents
the execution of which on behalf of the Company under its seal is
duly authorized; (d) sign with the Chairman, President or a Vice
President, certificates for shares of the Company, the issuance
of which shall have been authorized by resolution of the Board of
Directors; and (e) in general perform all duties incident to the
office of Secretary as provided by the Wisconsin Business
Corporation Law and have such other duties and exercise such
authority as from time to time may be delegated or assigned to
him by the Chairman, President or by the Board of Directors.
3.09. The Treasurer. The Treasurer shall: (a) have
-------------
charge and custody of and be responsible for all funds and
securities of the Company; (b) receive and give receipts for
moneys due and payable to the Company from any source whatsoever,
and deposit all such moneys in the name of the Company in such
banks, trust companies or other depositaries as shall be selected
in accordance with the provisions of Section 6.07; and (c) in
general perform all of the duties incident to the office of
Treasurer and have such other duties and exercise such other
authority as from time to time may be delegated or assigned to
him by the Chairman, President or by the Board of Directors.
3.10. Assistant Secretaries and Assistant Treasurers.
----------------------------------------------
There shall be such number of Assistant Secretaries and Assistant
Treasurers as the Board of Directors may from time to time
<PAGE>
authorize and designate. The Assistant Secretaries and Assistant
Treasurers, in general, shall perform such duties and have such
authority as shall from time to time be delegated or assigned to
them by the Secretary or the Treasurer, respectively, or by the
Chairman, President or the Board of Directors.
3.11. Other Assistants and Acting Officers. The Board
------------------------------------
of Directors shall have the power to appoint any person to act as
assistant to any officer, or as agent for the Company in his
stead, or to perform the duties of such officer whenever for any
reason it is impracticable for such officer to act personally,
and such assistant or acting officer or other agent so appointed
by the Board of Directors shall have the power to perform all the
duties of the office to which he is so appointed to be assistant,
or as to which he is so appointed to act, except as such power
may be otherwise defined or restricted by the Board of Directors.
3.12. Salaries. The salaries of the principal
--------
officers shall be fixed from time to time by the Board of
Directors or by a duly authorized committee thereof, and no
officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the Company.
ARTICLE IV. INDEMNIFICATION BY THE COMPANY
-------------------------------------------
Any person made a party to or threatened with any
civil, criminal, administrative or investigative action, suit or
proceeding (other than an action by or in the right of the
Company) by reason of the fact that he, his testator or
intestate, is or was a Director, officer or employee of the
Company or is or was serving at the request of the Company as a
Director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall be
indemnified by the Company against the reasonable expenses,
including attorneys' fees, judgments, fines, and amounts paid in
settlement, actually and necessarily incurred by him in
connection with such action, suit or proceeding, or in connection
with any appeal therein, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Company, and with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was
unlawful. Such right of indemnification shall not be deemed
exclusive of any other right to which such Director, officer,
employee or agent may otherwise be entitled.
ARTICLE V. CAPITAL STOCK
-------------------------
5.01 Certificates of Stock. Certificates of stock,
---------------------
numbered and with the seal of the Company affixed, signed by the
President, or a Vice President, and the Secretary or an Assistant
Secretary, shall be issued to each stockholder certifying the
number of shares owned by him in the Company. When such
certificates are countersigned by a transfer agent, or registered
by a registrar, the signatures of such officers may be
<PAGE>
facsimiles. A facsimile or printed seal of the Company may be
affixed upon certificates of stock of the Company.
In case any officer who has signed, or whose facsimile
signature has been placed upon a certificate has ceased to be an
officer of the Company before such certificate has been issued,
such certificate may, nevertheless, be adopted and issued and
delivered by the Company as though the officer who signed such
certificate or whose facsimile signature shall have been used
thereon, had not ceased to be such officer with the same effect
as if he were such office at the date of its issue.
5.02. Lost Certificates. A new certificate of stock
-----------------
may be issued in the place of any certificate theretofore issued
by the Company, alleged to have been lost or destroyed, and the
directors may, in their discretion, require the owner of the lost
or destroyed certificate, or his legal representative, to give
the Company a bond, in such sum as they may direct, not exceeding
double the value of the stock, to indemnify the Company against
any claim that may be made against it on account of the alleged
loss of any such certificate or the issuance of any such new
certificate.
5.03. Transfer of Shares. Transfer of stock shall be
------------------
made only on the transfer books of the Company, kept at the
office of the Company or respective transfer agents designated to
transfer the stock, and before a new certificate is issued, the
old certificate shall be surrendered and cancelled.
5.04. Closing of Transfer Books. The Board of
-------------------------
Directors of the Company may provide that the stock transfer
books be closed for a period not to exceed, in any case, fifty
(50) days for the purpose of determining stockholders entitled to
notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of stockholders for
any other proper purposes. If the stock transfer books shall be
closed for the purpose of determining stockholders entitled to
notice of or to vote at a meeting of stockholders, such books
shall be closed for at least ten (10) days immediately preceding
such meeting. In lieu of closing the stock transfer books, the
Board of Directors may fix in advance a date as the record date
for any such determination of stockholders, such date in any case
to be not more than seventy (70) days and, in case of a meeting
of stockholders not less than ten (10) days prior to the date on
which the particular action, requiring such determination of
stockholders is to be taken. When a determination of
stockholder, entitled to vote at any meeting of stockholders has
been made as provided herein, such determination shall be applied
to any adjournment thereof except when the determination has been
made through the closing of the stock transfer books and the
stated period of closing has expired.
5.05. Dividends. The Board of Directors of the
---------
Company may, from time to time, declare and the Company may pay
<PAGE>
dividends on its outstanding shares in cash, property, or its own
shares, as provided by law.
ARTICLE VI. MISCELLANEOUS
--------------------------
6.01. Corporate Seal. The corporate seal shall be a
--------------
round metallic disc, with the words "MODINE MANUFACTURING
COMPANY, Wisconsin" around the circumference, and the words
"CORPORATE SEAL" in the center. If a facsimile or printed seal
is used on stock certificates, it shall be similar in content and
design to the above.
6.02. Fiscal Year. The fiscal year of the Company
-----------
shall begin on the first day of April in each year, and end on
the thirty-first day of March in the following year.
6.03. Contracts. The Board of Directors may authorize
---------
any officer or officers, agent or agents, to enter into any
contract or exercise or deliver any instrument in the name of and
on behalf of the Company, and such authorization may be general
or confined to specific instances. In the absence of other
designation, all deeds, mortgages, contracts, promissory notes,
and instruments of assignment or pledge made by the Company shall
be executed in the name of the Company by the Chairman, President
or one of the Vice Presidents and by the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer; the Secretary
or an Assistant Secretary, when necessary or required, shall
affix the corporate seal thereto; and when so executed no other
party to such instrument or any third party shall be required to
make any inquiry into the authority of the signing officer or
officers.
6.04. Loans. No indebtedness for borrowed money shall
-----
be contracted on behalf of the Company and no evidence of such
indebtedness shall be issued in its name unless authorized by or
under the authority of a resolution of the Board of Directors.
Such authorization may be general or confined to specific
instances.
6.05. Drafts, Checks, etc. All checks, drafts or
-------------------
other orders for the payment of money issued in the name of the
Company shall be signed by such employee or employees, agent or
agents, of the Company as are appointed by the Chairman or
President, and in such manner, including facsimile and printed
signatures, as may be designated by the Chairman or President.
In connection with the furnishing of authorizing resolution and
signature card forms needed by commercial banks, the corporate
Secretary, or any Assistant Secretary, is authorized to execute
and certify to such forms as he may deem appropriate as adopted
under the authority of this by-law and as binding upon the
Company in accordance therewith, thereby empowering employees or
agents appointed by the President to sign checks, drafts, or
other orders for the payment of money in the name of the Company.
<PAGE>
6.06. Deposits. All funds of the Company not
--------
otherwise employed shall be deposited from time to time to the
credit of the Company in such banks, trust companies or other
depositaries as may be selected by or under the authority of the
Chairman or President. In connection with the furnishing of
authorizing resolution and signature card forms, needed by such
banks, trust companies or other depositaries, the corporate
Secretary, or any Assistant Secretary, is authorized to execute
and certify to such forms as he may deem appropriate as adopted
under the authority of his by-law and as binding upon the Company
in accordance therewith, thereby designating such banks, trust
companies or other depositaries as may be selected by the
Chairman or President, for the deposit of Company funds.
6.07. Voting of Securities Owned by this Company.
------------------------------------------
Subject always to the specific directions of the Board of
Directors, (a) any shares or other securities issued by any other
corporation and owned or controlled by this Company may be voted
at any meeting of security holders of such other corporation by
the Chairman of this Company if he be present, or in his absence
by the President or any Vice President of this Company who may be
present, and (b) whenever, in the judgment of the Chairman, or in
his absence, of the President or any Vice President, it is
desirable for this Company to execute a proxy or written consent
in respect to any shares for other securities issued by any other
corporation and owned by this Company, such proxy or consent
shall be executed in the name of this Company by the Chairman,
President or one of the Vice Presidents of this Company, without
necessity of any authorization by the Board of Directors,
affixation of corporate seal or countersignature or attestation
by another officer. Any person or persons designated in the
manner above stated as the proxy or proxies of this Company shall
have full right, power and authority to vote the shares or other
securities issued by such other corporation and owned by this
Company the same as such shares or other securities might be
voted by this Company.
ARTICLE VII. AMENDMENTS
------------------------
These by-laws may be amended, repealed or altered in
whole or in part by the affirmative vote of not less than two-
third (2/3) of the shares of the Company entitled to vote
thereon, or by the affirmative vote of not less than two-thirds
(2/3) of the full Board of Directors of the Company, at any
regular meeting of the stockholders or of the Board of Directors,
or any special meeting of the stockholders or Bard of Directors,
provided that such action has been specified in the notice of any
such meeting.
<PAGE>
MODINE MANUFACTURING COMPANY
AND
NORWEST BANK MINNESOTA, N.A.
Rights Agent
Amendment Number 4
------------------
to
Rights Agreement
Dated as of October 15, 1986
<PAGE>
RIGHTS AGREEMENT
----------------
Amendment Number 4
------------------
This Amendment, when executed, shall constitute a valid and
binding amendment to that certain Rights Agreement dated as of
October 15, 1986 by and between Modine Manufacturing Company, a
Wisconsin corporation (the "Company"), and Norwest Bank
Minnesota, a national banking association (the "Rights Agent").
Recitals
A. The Rights Agreement provides that the Company may
discharge the Rights Agent and appoint a successor.
B. The Rights Agreement further provides that the Company
and the Rights Agent may supplement or amend the Rights Agreement
from time to time.
C. Norwest Bank Minnesota, N.A. was appointed by the Board
of Directors of the Company on September 17, 1997 as Rights Agent
in place of First Chicago National Bank of New York. The change
of Rights Agent is effective as of November 10, 1997.
D. The Company and the Rights Agent desire to amend the
Rights Agreement in accordance with the terms of this Amendment.
Agreement
1. In consideration of the Recitals and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company and the Rights Agent agree,
pursuant to the provisions set forth in the Rights Agreement, to
amend the Rights Agreement as follows:
2. The Rights Agreement is amended by substituting, where
applicable, "Norwest Bank Minnesota, N.A." in place of "First
Chicago Trust Company of New York" as the Rights Agent.
3. This Amendment shall be effective as of November 10,
1997.
4. The Company and the Rights Agent agree that all other
terms, provisions, covenants, or restrictions of the Rights
Agreement, to the extent not inconsistent with this Amendment,
shall remain unchanged and in full force and effect.
5. Capitalized terms which are not defined in this
Amendment have the meanings given such terms in the Rights
Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and their respective corporate
seals to be hereunto affixed and attested, as of the effective
date hereof.
(SEAL)
MODINE MANUFACTURING COMPANY
Attest:
By W. E. PAVLICK By D. R. JOHNSON
---------------------- -------------------------------
Title: Secretary Title: President and
Chief Operating Officer
(SEAL)
NORWEST BANK MINNESOTA, N.A.
Attest:
By s/Suzanne M. Swits By s/Ted Garrity
----------------------- --------------------------------
Title: Assistant Secretary Title: Corporate Officer
--------------------- ----------------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF EARNINGS
FOR THE PERIOD ENDING 12/26/97 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-1-1997
<PERIOD-END> DEC-26-1997
<CASH> 30,094
<SECURITIES> 0
<RECEIVABLES> 167,762
<ALLOWANCES> 5,050
<INVENTORY> 141,894
<CURRENT-ASSETS> 374,870
<PP&E> 494,764
<DEPRECIATION> 265,270
<TOTAL-ASSETS> 720,605
<CURRENT-LIABILITIES> 169,635
<BONDS> 81,182
0
0
<COMMON> 18,964
<OTHER-SE> 395,381
<TOTAL-LIABILITY-AND-EQUITY> 720,605
<SALES> 785,428
<TOTAL-REVENUES> 785,428
<CGS> 559,513
<TOTAL-COSTS> 559,513
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 950
<INTEREST-EXPENSE> 2,950
<INCOME-PRETAX> 88,260
<INCOME-TAX> 34,010
<INCOME-CONTINUING> 54,250
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,250
<EPS-PRIMARY> 1.82
<EPS-DILUTED> 1.79
</TABLE>
EXHIBIT 99
IMPORTANT FACTORS AND ASSUMPTIONS
REGARDING FORWARD-LOOKING STATEMENTS
These cautionary statements are being made pursuant to the
provisions of the Private Securities Litigation Reform Act of
1995 and with the intention of obtaining the benefits of the
"safe harbor" provisions of the Act. Investors are cautioned
that any forward-looking statements made by Modine are not
guarantees of future performance and that actual results may
differ materially from those in the forward-looking
statements as a result of various factors, including:
customers' integration of products currently being supplied
by the Company; the success of Modine or its competitors in
obtaining the business of the customer base; the ability to
pass on increased costs to customers; variations in currency-
exchange rates in view of a large portion of the Company's
business being non-domestic; the impact of year 2000
compliance by the Company or those entities with which the
Company does business; labor relations at Modine, its
customers, and its suppliers, which may affect the continuous
supply of product; and the ability to improve acquisitions'
operations.
In making statements about Modine's fiscal-1998 operating
results, management has assumed relatively stable economic
conditions in the United States and worldwide, no
unanticipated swings in the business cycles affecting
customer industries, and a reasonable legislative and
regulatory climate in those countries where Modine does
business.
Readers are cautioned not to place undue reliance on Modine's
forward-looking statements, which speak only as of the date
such statements are made.
<PAGE>
