<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
FEDDERS CORPORATION
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
_
(2) Aggregate number of securities to which transaction applies:
_
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is calculated and state how
it was determined):
_
(4) Proposed maximum aggregate value of transaction:
_
(5) Total fee paid:
_
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
_
(2) Form, Schedule or Registration Statement No.:
_
(3) Filing Party:
_
(4) Date Filed:
_
<PAGE> 2
FEDDERS CORPORATION
LIBERTY CORNER, NEW JERSEY 07938
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 21, 1999
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Fedders
Corporation (the "Company") will be held at the Somerset Hills Hotel, 200
Liberty Corner Road, Warren, NJ 07060 on Tuesday, December 21, 1999 at 10:30
a.m. for the following purposes:
1. To elect each current director to hold office until the next annual
meeting of stockholders and until each such director's successor shall have
been elected and shall have qualified; and
2. To ratify the appointment of BDO Seidman, LLP as the Company's
independent auditors.
By order of the Board of Directors
KENT E. HANSEN
Secretary
Dated: November 26, 1999
Liberty Corner, New Jersey
IMPORTANT: THE BOARD OF DIRECTORS INVITES YOU TO ATTEND THE MEETING IN
PERSON, BUT IF YOU ARE UNABLE TO BE PERSONALLY PRESENT, PLEASE DATE, SIGN AND
RETURN THE ENCLOSED PROXY IMMEDIATELY. AS AN ADDED CONVENIENCE, YOU MAY NOW CAST
YOUR VOTE TOLL-FREE BY TELEPHONE OR ONLINE OVER THE INTERNET. SIMPLY FOLLOW THE
INSTRUCTIONS CONTAINED ON THE ENCLOSED PROXY CARD. NO POSTAGE IS REQUIRED IF THE
PROXY IS RETURNED IN THE ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES.
<PAGE> 3
FEDDERS CORPORATION
WESTGATE CORPORATE CENTER
505 MARTINSVILLE ROAD
LIBERTY CORNER, NEW JERSEY 07938
(908) 604-8686
November 26, 1999
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
the Company to be held at 10:30 a.m. on December 21, 1999.
At the meeting you will be asked to elect directors and ratify the
appointment of independent auditors.
It is important that your shares be represented at the meeting, whether or
not you are personally able to be present. If your shares are held in the name
of your broker or a nominee, they can vote your preferences for you. As an added
convenience, you may now cast your vote toll-free by telephone or online over
the Internet. Simply follow the instructions contained on the enclosed proxy
card. The Board strongly recommends that you vote, or instruct your broker or
nominee to vote, FOR approval of all proposals. Please sign, date and return, or
otherwise submit, your proxy as soon as possible. If you do attend and wish to
vote in person, your proxy can be revoked at your request. Your prompt response
in immediately returning the enclosed proxy card or using the alternative
methods of voting will be appreciated.
Enclosed are the Notice of Meeting, Proxy Statement and proxy card.
Sincerely,
<TABLE>
<S> <C>
SALVATORE GIORDANO SAL GIORDANO, JR.
Chairman of the Board Vice Chairman, President and
Chief Executive Officer
</TABLE>
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Proxy Statement............................................. 1
Proposal No. 1 -- Election of Directors..................... 3
Meetings and Compensation of the Board of Directors....... 4
Membership and Meetings of the Committees of the Board of
Directors.............................................. 4
Security Ownership of Directors and Executive Officers...... 5
Section 16(a) Beneficial Ownership Reporting Compliance..... 6
Principal Stockholders of Fedders........................... 7
Executive Compensation...................................... 7
Summary Compensation Table................................ 7
Options/SAR Grants Table.................................. 8
Aggregated Option/SAR Exercises in Last Fiscal Year and
FY-End Option/SAR Values............................... 8
Report of the Compensation Committee on Executive
Compensation........................................... 8
Employment Contracts...................................... 9
Performance Graph......................................... 10
Proposal No. 2 -- Ratification of Selection of Independent
Auditors.................................................. 11
Stockholder Proposals -- Next Annual Meeting................ 11
Cost of Solicitation........................................ 11
</TABLE>
<PAGE> 5
FEDDERS CORPORATION
WESTGATE CORPORATE CENTER
505 MARTINSVILLE ROAD
LIBERTY CORNER, NEW JERSEY 07938
(908) 604-8686
------------------------
PROXY STATEMENT
------------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Fedders Corporation ("Fedders" or the "Company") of
proxies in the accompanying form to be used at the Annual Meeting of
Stockholders of the Company to be held on Tuesday, December 21, 1999, and at all
adjournments thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting. It is intended that this Proxy Statement and the proxies
solicited hereby be mailed to stockholders of the Company (the "Stockholders")
on November 26, 1999. A Stockholder who submits a proxy has the power to revoke
it at any time before it is exercised by giving written notice to the Secretary
of the Company to such effect or by delivering to the Company an executed proxy
bearing a later date. As an added convenience to Stockholders, you may now cast
your vote toll-free by telephone or online over the Internet. Simply follow the
instructions contained on the enclosed proxy card. Any Stockholder who has given
a proxy may still attend the Annual Meeting, revoke his or her proxy, and vote
in person.
The Company's Annual Report to Stockholders for the period from September
1, 1998 to August 31, 1999 (the "Fiscal Year"), including financial statements,
is enclosed with this Proxy Statement.
At the Annual Meeting, holders of shares of the Company's Common Stock and
Class B Stock will be asked to (i) elect each current director to hold office
until the next annual meeting of stockholders and until each such director's
successor shall have been elected and qualified; and (ii) ratify the appointment
of BDO Seidman, LLP as the Company's independent auditors for the fiscal year
ending August 31, 2000.
The close of business on October 22, 1999 has been fixed as the record date
for the determination of the Stockholders entitled to notice of, and to vote at,
the Annual Meeting. As of such date, 16,134,955 shares of Common Stock and
2,266,406 shares of Class B Stock of the Company were outstanding and entitled
to be voted at the Annual Meeting. The holders of Class B Stock are entitled to
ten votes per share in any election of directors if more than 15% of the shares
of Common Stock outstanding on the record date are owned beneficially by a
person or a group of persons acting in concert, or if a nomination for the Board
of Directors is made by a person or a group of persons acting in concert (other
than the Board) provided such nomination is not made by one or more of the
holders of Class B Stock, acting in concert with each other, who beneficially
own more than 15% of the shares of Class B Stock outstanding on such record
date. The Board of Directors is not presently aware of any circumstance that
would give holders of Class B Stock the right to ten votes per share in the
election of directors at the Annual Meeting.
Under the terms of the Company's Certificate of Incorporation, approval of
Proposal No. 1 for the election of directors, requires a plurality of the votes
of the shares of Common Stock and Class B Stock present in person or represented
by proxy at the Annual Meeting, provided that such shares constitute a quorum.
Approval of Proposal No. 2 for the ratification of the appointment of the
Company's independent auditors requires the affirmative vote of a majority of
the shares of Common Stock and Class B Stock voting together as a single class.
The proxies in the accompanying form will be voted as specified, but if no
specification is made they will be voted in favor of (i) the election of
directors; and (ii) ratification of the appointment of BDO Seidman, LLP as the
Company's independent auditors for the ensuing fiscal year. In the discretion of
the proxyholders, the proxies will also be voted for or against such other
matters as may properly come before the meeting. The Board of Directors is not
aware that any other matters are to be presented for action at the meeting.
<PAGE> 6
The shares represented by a proxy which is timely returned and marked
"Abstain" as to any matter, as well as broker non-votes, will be considered
present at the Annual Meeting and will be included in the calculation of those
shares needed to constitute a quorum. The shares represented by such proxies,
although considered present for quorum purposes, will not be considered a part
of the voting power present with respect to any proposal which is abstained from
or to which the broker non-vote relates.
2
<PAGE> 7
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
The nominees for election as directors are Messrs. Salvatore Giordano, Sal
Giordano, Jr., William J. Brennan, David C. Chang, Joseph Giordano, C. A. Keen,
Howard S. Modlin, Clarence Russel Moll, S. A. Muscarnera and Anthony E. Puleo.
Set forth opposite the name of each nominee or in the notes below, is his age,
principal occupation for the past five years, the name and principal business of
any corporation or other organization in which such employment is carried on and
other business directorships held by the nominee. The Company is not presently
aware of any circumstance which would prevent any nominee from fulfilling his
duties as a director of the Company.
NOMINEES
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AND AGE SINCE
---- ---------------------------- --------
<S> <C> <C>
Salvatore Giordano................... Chairman of the Board of the Company(1)(2); 89 1945
Sal Giordano, Jr. ................... Vice Chairman, President and Chief Executive Officer
of the Company(1)(2); 61 1965
William J. Brennan................... Financial Consultant(3); 71 1980
David C. Chang....................... President, Polytechnic University(4); 58 1998
Joseph Giordano...................... Retired(1)(5); 66 1961
C. A. Keen........................... Retired(6); 74 1996
Howard S. Modlin..................... President, Weisman Celler Spett & Modlin, P.C.(7); 68 1977
Clarence R. Moll..................... President Emeritus, Widener University(8); 86 1967
S. A. Muscarnera..................... Retired(1)(9); 59 1982
Anthony E. Puleo..................... President, Puleo Tree Co.(10); 64 1994
</TABLE>
- ---------------
(1) Messrs. Sal Giordano, Jr. and Joseph Giordano are sons, and Mr. S. A.
Muscarnera is the nephew, of Mr. Salvatore Giordano.
(2) Messrs. Salvatore Giordano and Sal Giordano, Jr. have been associated in
executive capacities with the Company for more than five years. Mr.
Salvatore Giordano is Chairman of the Executive Committee. Mr. Sal
Giordano, Jr. is Chairman of the Nominating Committee, and a member of the
Executive Committee.
(3) Principal occupation during the past five years. Mr. Brennan served as a
director of the Company from 1980 to 1987, and was again elected a director
in 1989. He is also a director of CSM Worldwide. He has been a financial
consultant since 1988. Mr. Brennan is Chairman of the Finance Committee and
a member of the Audit and Compensation Committees.
(4) Principal occupation during the past five years. Prior to that, Dr. Chang
was Dean of the College of Engineering and Applied Sciences at Arizona
State University. Dr. Chang is a member of the Finance and Nominating
Committees.
(5) Mr. Giordano was a Senior Vice President of the Company until his
retirement on August 31, 1992, and President of NYCOR, Inc. until its
merger into the Company on August 13, 1996. Mr. Giordano is a member of the
Executive and Finance Committees.
(6) Mr. Keen was a Vice President of the Company and President of Fedders
International, Inc. for many years prior to his retirement in August 1992.
He was also a director of NYCOR, Inc. until its merger into the Company on
August 13, 1996. Mr. Keen is a member of the Compensation and Nominating
Committees.
(7) Principal occupation during the past five years. The law firm of Weisman
Celler Spett & Modlin, P.C. renders legal services to the Company from time
to time. Mr. Modlin is also a director of General DataComm Industries, Inc.
and Trans-Lux Corporation. Mr. Modlin is Chairman of the Compensation
Committee and a member of the Executive and Audit Committees.
3
<PAGE> 8
(8) Principal occupation during the past five years. Dr. Moll is also a
director of Ironworkers' Savings Bank. Dr. Moll is Chairman of the Audit
Committee.
(9) Mr. Muscarnera was Senior Vice President and Secretary of the Company for
many years prior to his retirement on August 31, 1996. Mr. Muscarnera is a
member of the Audit and Finance Committees.
(10) Principal occupation during the past two and one half years. Puleo Tree Co.
is an importer of Christmas items and garden furniture. Prior to that, Mr.
Puleo was President of Boulderwood Corporation. Mr. Puleo is a member of
the Compensation and Nominating Committees.
MEETINGS AND COMPENSATION OF THE BOARD OF DIRECTORS
During the Fiscal Year, the Board of Directors of the Company held seven
meetings. All of the present directors attended 75% or more of such meetings and
of meetings of committees of which they were members held during the Fiscal
Year. Directors who are not employees receive an annual fee of $48,000, payable
one-half in cash and one-half in shares of the Company's Class A Stock.
MEMBERSHIP AND MEETINGS OF THE COMMITTEES OF THE BOARD OF DIRECTORS
The Board has five standing committees. Committee memberships are indicated
in the preceding biographical information.
The Audit Committee consists of four directors, none of whom is an employee
of the Company. The Audit Committee reviews significant matters relating to the
audit and internal controls of the Company, reviews the results of audits by the
Company's independent auditors, reviews the activities of the internal audit
staff, and recommends selection of the Company's independent auditors for
approval by the Board, subject to ratification by the Stockholders. The
Committee reviews the unaudited financial statements of the Company monthly and
the audited financial statements of the Company after the close of each fiscal
year. The Chairman and other members of the Audit Committee receive a fee of
$1,000 and $500, respectively, for each meeting they attend. During the Fiscal
Year, the Audit Committee held seven meetings.
The Compensation Committee consists of four non-employee directors. The
Committee develops compensation plans for the executive officers of the Company,
subject to the approval of the full Board. During the Fiscal Year, the
Compensation Committee held three meetings.
The Executive Committee consists of four directors and has the authority to
act on most matters concerning the Company during intervals between Board
meetings. The Executive Committee did not meet during the Fiscal Year.
The Finance Committee consists of four directors. This Committee reviews
the Company's financial policies, keeps informed of its operations and financial
condition, including requirements for funds, and reviews the Company's
continuing financial arrangements and methods of external financing. The Finance
Committee held one meeting during the Fiscal Year.
The Nominating Committee consists of four directors, three of whom are
non-employee directors. The Committee reviews possible director candidates and
makes recommendations to the Board concerning nominees to serve on the Board.
The Nominating Committee did not meet during the Fiscal Year.
4
<PAGE> 9
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS OF FEDDERS
As of October 29, 1999, each director of the Company and each executive
officer of the Company named in the Summary Compensation Table under "Executive
Compensation" and all directors and executive officers of the Company as a
group, owned beneficially the number of shares of the Company's equity
securities set forth in the following table. Shares subject to acquisition
within 60 days pursuant to stock options are shown separately. Unless otherwise
indicated, the owners listed have sole voting and investment power. The
Company's Class A Stock has no voting rights except as provided under Delaware
Law.
<TABLE>
<CAPTION>
SHARES
AMOUNT AND SUBJECT TO
NATURE OF ACQUISITION PERCENT
BENEFICIAL WITHIN OF CLASS
TITLE OF CLASS NAME OF INDIVIDUAL OR PERSONS IN GROUP OWNERSHIP 60 DAYS(10) OWNED(11)
- -------------- -------------------------------------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Common Stock Salvatore Giordano.................. 1,100(1) 0 Less than 1%
Sal Giordano, Jr. .................. 1,100(1) 0 Less than 1%
William J. Brennan.................. 5,000 0 Less than 1%
Joseph Giordano..................... 13,910(1) 0 Less than 1%
C. A. Keen.......................... 2,000 0 Less than 1%
Howard S. Modlin.................... 256,800(2) 0 1.6%
Clarence Russel Moll................ 61,400(3) 0 Less than 1%
S. A. Muscarnera.................... 55,000 0 Less than 1%
Anthony E. Puleo.................... 2,000 0 Less than 1%
Robert L. Laurent, Jr. ............. 20,000 0 Less than 1%
All directors and executive officers 421,710 0 2.6%
as a group........................
Class A Stock Salvatore Giordano.................. 1,542,842(4)(5) 0 8.7%
Sal Giordano, Jr. .................. 1,738,102(4)(6) 319,066 11.4%
William J. Brennan.................. 45,022 31,875 Less than 1%
David C. Chang...................... 4,920 0 Less than 1%
Joseph Giordano..................... 1,185,214(4)(7) 131,875 7.4%
C. A. Keen.......................... 118,663 15,000 Less than 1%
Howard S. Modlin.................... 376,335(8) 31,875 2.3%
Clarence Russel Moll................ 77,889 15,000 Less than 1%
S. A. Muscarnera.................... 113,890 103,750 1.2%
Anthony E. Puleo.................... 8,022 24,375 Less than 1%
Robert L. Laurent, Jr. ............. 287,639 140,590 2.4%
Kent E. Hansen...................... 25,593 20,000 Less than 1%
Michael B. Etter.................... 0 10,000 Less than 1%
All directors and executive officers 5,605,444 986,044 35.4%
as a group........................
Class B Stock(11) Salvatore Giordano.................. 2,262,566(9) 0 99.8%
Sal Giordano, Jr. .................. 2,262,566(9) 0 99.8%
Joseph Giordano..................... 2,262,566(9) 0 99.8%
All directors and executive officers 2,262,566 0 99.8%
as a group........................
Ownership of Common, Class A, and 8,289,720 986,044 25.0%
Class B Stock combined, by all
directors and executive officers as
a group...........................
</TABLE>
5
<PAGE> 10
- ---------------
(1) The amount shown includes 1,100 shares which are held by a corporation of
which Messrs. Salvatore Giordano, Sal Giordano, Jr. and Joseph Giordano are
officers, directors and stockholders, and share voting and investment power
over such shares.
(2) Includes 3,100 shares owned by members of Mr. Modlin's family as to which
Mr. Modlin disclaims beneficial ownership.
(3) Includes 15,000 shares owned by Dr. Moll's wife, as to which Dr. Moll
disclaims beneficial ownership.
(4) Includes 570,492 shares which are held by corporations of which Messrs.
Salvatore Giordano, Sal Giordano, Jr. and Joseph Giordano are officers,
directors and stockholders, and share voting and investment power over such
shares.
(5) Includes 204,292 shares held of record by Mr. Giordano's wife and 78,861
shares held of record by Mr. Giordano's wife in trust for their
grandchildren, as to which Mr. Giordano disclaims beneficial ownership.
(6) Includes 18,119 shares held of record by Mr. Giordano's wife and 162,904
shares held of record by Mr. Giordano's wife in trust for their
grandchildren, as to which Mr. Giordano disclaims beneficial ownership, and
71,630 shares held by Mr. Giordano as trustee in trust for himself.
(7) Includes 71,630 shares held by Mr. Giordano as trustee in trust for himself
and 107,974 shares held by Mr. Giordano in trust for his grandchildren.
(8) Includes 2,713 shares owned by members of Mr. Modlin's family as to which
Mr. Modlin disclaims beneficial ownership.
(9) Shares are owned by Giordano Holding Corporation as to which Messrs.
Salvatore Giordano, Sal Giordano, Jr. and Joseph Giordano share voting and
investment power.
(10) The amounts shown are the number of shares held under options exercisable
within 60 days.
(11) Class B Stock is convertible into Common Stock at any time on a
share-for-share basis. In the event that the individuals named as owning
Class B Stock converted their shares into Common Stock, less than 5% of the
class would remain outstanding, and pursuant to the terms of the Company's
Certificate of Incorporation, all remaining Class B Stock and all
outstanding Class A Stock would automatically be converted into Common
Stock. If such conversion took place, and the named individuals exercised
all of the options indicated, such individuals and the group would
beneficially own the following number of shares constituting the indicated
percentage of Common Stock outstanding: Mr. Salvatore Giordano, 3,806,508
shares constituting 10.57%; Mr. Sal Giordano, Jr., 4,320,834 shares
constituting 11.89%; Mr. Joseph Giordano, 3,593,565 shares constituting
9.94%; and all directors and executive officers as a group, 9,275,764
shares constituting 25.0%. The share totals for Messrs. Salvatore Giordano,
Sal Giordano, Jr. and Joseph Giordano include 2,834,158 shares which are
held by corporations of which they are officers, directors and stockholders
and share voting and investment power over such shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is required to identify any officer, director or owner of more
than 10% of the Company's Common or Class A Stock who failed to file on a timely
basis with the Securities and Exchange Commission and the New York Stock
Exchange a required report relating to beneficial ownership of such equity
securities of the Company under Section 16 of the Securities Exchange Act of
1934. Based solely on a review of information provided to the Company, all
persons subject to these reporting requirements filed the required reports on a
timely basis for the Fiscal Year, except Dr. Daryl Erbs, Vice President,
Technology, who did not timely file his initial Form 3 and Mr. Gerald C. Senion,
who did not file a Form 5 showing a grant of an option to purchase 25,000 shares
of the Company's Class A Stock. Both filings have since been completed.
6
<PAGE> 11
PRINCIPAL STOCKHOLDERS OF FEDDERS
The following table sets forth information at October 29, 1999 with respect
to the beneficial ownership of the Company's voting securities by all persons
known by the Company to own more than 5% of the Company's outstanding voting
securities. Unless otherwise indicated, the owners listed have sole voting and
investment power.
<TABLE>
<CAPTION>
AMOUNT
NAME AND ADDRESS BENEFICIALLY PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER(1) OWNED OF CLASS
- -------------- ------------------------ ------------ --------
<S> <C> <C> <C>
Class B Stock Salvatore Giordano 2,262,566 99.8%
Joseph Giordano and
Sal Giordano, Jr.
c/o Fedders Corporation
Liberty Corner, NJ 07938
</TABLE>
- ---------------
(1) See footnotes (9) and (11) to the previous table for more detailed
information with respect to the security ownership of the named individuals.
EXECUTIVE COMPENSATION
The following information is furnished as to all cash compensation paid by
the Company and its subsidiaries during the Fiscal Year to each of the five
highest paid executive officers of the Company whose aggregate direct
compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------- --------------------
(a) (b) (c) (d) (f) (g) (i)
--- --- --- --- --- --- ---
RESTRICTED ALL OTHER
FISCAL SALARY BONUS STOCK OPTIONS COMPENSATION(1)
NAME AND PRINCIPAL POSITION YEAR ($) ($) AWARDS (#) ($)
- --------------------------- ------ ------- ------- ---------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Salvatore Giordano................. 1999 522,701 536,130 -- -- 44,010
Chairman of the Board of Directors 1998 522,701 378,660 -- -- 28,324
1997 522,701 412,320 -- 120,000 28,060
Sal Giordano, Jr. ................. 1999 579,750 536,130 -- -- 689,770
Vice Chairman, President and 1998 579,750 378,660 1,764,000 -- 543,165
Chief Executive Officer 1997 579,750 412,300 -- 120,000 42,550
Robert L. Laurent, Jr. ............ 1999 250,000 268,065 -- -- 17,010
Executive Vice President,
Acquisitions 1998 250,000 189,330 -- -- 14,001
and Alliances 1997 250,000 206,160 -- 60,000 14,564
Kent E. Hansen..................... 1999 185,503 100,524 -- -- 18,836
Senior Vice President and
Secretary 1998 185,503 47,333 -- -- 8,372
1997 185,503 51,540 -- 20,000 8,306
Michael B. Etter................... 1999 166,667 67,016 -- -- 6,424
Senior Vice President, Fedders 1998 150,000 35,499 -- 10,000 6,424
Corporation and Chairman and 1997 104,510 30,418 -- -- 149
Chief Executive Officer of
Fedders
Air Conditioning
</TABLE>
- ---------------
(1) Includes the Company contribution to savings and investment retirement plans
up to the 3% offered to all employees of the Company and the dollar value of
the benefit of premiums paid for split-dollar life insurance policies
projected on an actuarial basis, which cost is recovered by the Company from
the proceeds of such policies (Mr. Sal Giordano, Jr., $13,368; Mr. Robert L.
Laurent, Jr., $941; and
7
<PAGE> 12
Mr. Kent E. Hansen, $1,261). The 1999 amount for Mr. Sal Giordano, Jr.
includes $333,333 related to his employment contract.
OPTIONS/SAR GRANTS TABLE
There were no grants of stock options and/or stock appreciation rights
(SARs) during the Fiscal Year to the individual executive officers named in the
Summary Compensation Table.
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
The following table sets forth the number of shares exercised during the
Fiscal Year, the value realized upon exercise, the number of unexercised options
at the end of the Fiscal Year, and the value of unexercised in-the-money options
at the end of the Fiscal Year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)
SHARES ------------- -------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Sal Giordano, Jr........................ -0- -0- 319,066E 401,070E
-0- U -0- U
Robert L. Laurent, Jr................... -0- -0- 140,590E 185,114E
-0- U -0- U
Kent E. Hansen.......................... -0- -0- 20,000E 19,200E
-0- U -0- U
Michael B. Etter........................ -0- -0- 10,000E 9,400E
-0- U -0- U
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
In determining the total compensation package for the chief executive
officer and all other executive officers for the Fiscal Year, the Committee
considered several factors, including: the performance of the Company; the
individual contribution of each executive officer; and the need to attract and
retain highly qualified executives in the air conditioning industry necessary to
build long-term stockholder value. Executive compensation was broken down into
two major components: (i) cash compensation and (ii) incentive bonuses. Messrs.
Salvatore Giordano and Sal Giordano, Jr. have employment contracts with the
Company.
Cash compensation for the Fiscal Year is shown on the Summary Compensation
Table. For the Fiscal Year, the Committee recommended and the Board adopted a
plan (the "Executive Plan") pursuant to which executive officers may receive
incentive awards based upon designated percentages applied against the Company's
earnings before interest, taxes, depreciation and amortization minus $1,000,000,
exclusive of restructuring charges. The designated percentages for the Fiscal
Year range from 0.125% to 1%. With respect to the individuals named in the
Summary Compensation Table, the following percentages were designated: Mr.
Salvatore Giordano, 1%; Mr. Sal Giordano, Jr., 1%; Mr. Robert L. Laurent, Jr.,
0.5%; and Mr. Kent E. Hansen, 0.125%. Mr. Michael B. Etter was on a separate
plan based upon the performance of the Company's subsidiary, Fedders North
America, Inc. Under the Executive Plan and the plan for Mr. Etter, the following
awards were made for Fiscal Year performance: Mr. Salvatore Giordano, $536,130;
Mr. Sal Giordano, Jr.,
8
<PAGE> 13
$536,130; Mr. Robert L. Laurent, Jr., $268,065; Mr. Kent E. Hansen, $100,524 and
Mr. Michael B. Etter, $67,016.
Respectfully submitted,
COMPENSATION COMMITTEE
HOWARD S. MODLIN -- Chairman
WILLIAM J. BRENNAN
C. A. KEEN
ANTHONY E. PULEO
EMPLOYMENT CONTRACTS
SALVATORE GIORDANO. Mr. Salvatore Giordano has an Employment Agreement
with the Company, which became effective on March 23, 1993, and was amended in
August 1996 to take into account the merger of NYCOR, Inc. into the Company. The
material provisions of the Agreement include: (1) an annual base salary of at
least $232,000, payable in equal semi-monthly installments; (2) annual
participation in all compensatory plans and arrangements of the Company no less
favorable than the fiscal year 1993 plans including, but not limited to, a bonus
not less than the amount of the fiscal year 1993 bonus (none was paid), and
continuing eligibility to be awarded stock options; (3) reimbursement for all
expenses incurred while on Company-related business; and (4) annual
consideration for base salary and plan participation increases, if deemed
justified by the Company. The Agreement has a stated expiration date of March
23, 2003, but the term of the Agreement automatically extends and has a
remaining term of ten years from any point in time, until the term is finally
fixed at a period of ten years from an intervening event, as provided in the
Agreement, such as permanent disability or death. During the Fiscal Year, the
Company amortized the estimated present value of future non-salary benefits
payable under the Agreement based upon certain assumptions, in the amount of
$200,000.
SAL GIORDANO, JR. In order to assure the services of Mr. Sal Giordano, Jr.
through age 65, the Board of Directors offered Mr. Giordano a comprehensive
employment agreement for a term of six years. Mr. Giordano accepted the
Company's offer and effective October 1, 1998 entered into an Employment
Agreement with the Company which expires on September 30, 2003. The material
provisions of the Agreement include: (1) an annual base salary of at least
$579,750 payable in accordance with the Company's usual payroll practices for
officers of the Company, which is reviewable annually and subject to increase;
(2) eligibility to receive an annual bonus of not less than 1% of the Company's
earnings before income taxes, plus net interest expense and depreciation and
amortization in excess of $1 million; (3) an award of 300,000 restricted shares
of the Company's Class A Stock, which is being held by the Company until January
1, 2004, with the provision that, under certain circumstances, this stock award
may be forfeited by Mr. Giordano; (4) a one-time signing bonus of $2 million
contributed to Mr. Giordano's account under the Company's supplementary
retirement plan and which will vest at the rate of one-sixth per year; and (5)
real estate financing in an amount not to exceed $4 million or alternatively,
the provision of housing, furnishings and maintenance in the State of New
Jersey, comparable to Mr. Giordano's current residence.
9
<PAGE> 14
PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total
stockholder return on the Company's Common Stock with returns on the New York
Stock Exchange Composite Index, and stocks included in the "Home Appliance"
category by The Value Line Investment Survey.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG FEDDERS CORPORATION,
NYSE COMPOSITE INDEX, AND HOME APPLIANCE STOCKS
[GRAPH]
<TABLE>
<CAPTION>
FEDDERS CORPORATION PEER GROUP INDEX NYSE MARKET INDEX
------------------- ---------------- -----------------
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 138.38 108.25 113.94
1996 137.48 118.20 134.19
1997 155.85 138.28 182.27
1998 129.66 156.39 189.40
1999 157.40 218.80 246.02
</TABLE>
ASSUMES $100 INVESTED ON SEPTEMBER 1, 1994
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED AUGUST 31, 1999.
10
<PAGE> 15
PROPOSAL NO. 2 -- RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
BDO Seidman, LLP ("BDO") has been engaged by the Company as its independent
auditors since May 23, 1995.
On recommendation of the Audit Committee, the Board of Directors appointed
the firm of BDO, independent auditors, to audit the consolidated financial
statements of the Company and its subsidiaries for the fiscal year ending August
31, 2000, subject to ratification by the Company's Stockholders at the Annual
Meeting. BDO does not have any direct financial interest in the Company.
Representatives of BDO are expected to be at the Annual Meeting and will be
available to respond to any appropriate questions by Stockholders and may make a
statement, if they so choose.
STOCKHOLDER PROPOSALS -- NEXT ANNUAL MEETING
If any Stockholder desires to submit a proposal for action at the next
regular annual meeting, it must be received by the Company, P.O. Box 813,
Liberty Corner, NJ 07938 on or before July 27, 2000.
COST OF SOLICITATION
The cost of preparing and mailing material in connection with the
solicitation of proxies is to be borne by the Company. To the extent necessary
in order to assure sufficient representation at the meeting, such solicitation
will be made by the Company's regular employees in the total approximate number
of five. Solicitations will be made by mail and may also be made by telegram,
telephone, on the Internet and in person.
By order of the Board of Directors
KENT E. HANSEN
Secretary
Dated: November 26, 1999
Liberty Corner, New Jersey
11
<PAGE> 16
DIRECTIONS TO
SOMERSET HILLS HOTEL
200 LIBERTY CORNER ROAD
WARREN, NJ 07060
(908) 647-6700
The Somerset Hills Hotel is located directly north of Inter-state 78 at
Exit 33. Newark International Airport is less than 35 minutes away, and New York
City is within an hour's commute. The Bernardsville and Lyons railroad stations
are conveniently located approximately seven minutes from the Hotel.
[Map for Somerset Hills Hotel]
<PAGE> 17
PROXY
FEDDERS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS- DECEMBER 21, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE undersigned stockholder of FEDDERS CORPORATION (the "Company") hereby
constitutes and appoints SALVATORE GIORDAN, SAL GIORDANO, JR. and KENT E.
HANSEN, and each of them, the attorneys and proxies of the undersigned, with
full power of substitution, to vote for and in the name, place and stead of the
undersigned, at the Annual Meeting of Stockholders of the Company, to be held
at the Somerset Hills Hotel, 200 Liberty Corner Road, Warren, New Jersey, on
December 21, 1999 at 10:30 a.m. and at any adjournments thereof, the number of
votes the undersigned would be entitled to cast if personally present, on the
items as set forth on the reverse side of the proxy and in their discretion,
upon such other matters as may properly come before the meeting or any
adjournment thereof. The Board of Directors recommends a vote in favor of
Proposals 1 and 2.
A majority of said attorneys and proxies, or their substitutes, at said meeting
or any adjournment thereof (or, if only one, that one) may exercise all of the
power hereby given. Any proxy to vote any of the shares with respect to which
the undersigned iS, or would be entitled to vote, heretofore given to any
persons, other than the persons named above, is hereby revoked.
IN WITTNESS WHEREOF, THE UNDERSIGNED HAS SIGNED THIS PROXY AND HEREBY
ACKNOWLEDGES RECEIPT OF A COPY OF THE NOTICE OF SAID MEETING AND PROXY
STATEMENT IN REFERENCE THERETO BOTH DATED NOVEMBER 26, 1999.
____________ ______________
|SEE REVERSE| CONTINUED AND TO BE SIGNED ON REVERSE SIDE |SEE REVERSE |
| SIDE | | SIDE |
|__________ | |___________ |
<PAGE> 18
PLEASE MARK, DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
FEDDERS CORPORATION
DECEMBER 21, 1999
| PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED |
___ __
A | | PLEASE MARK YOUR | |
| X | VOTES AS IN THIS |
___ EXAMPLE. _____
UNLESS YOU SPECIFY, THE PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
DIRECTORS RECOMMEND A VOTE FOR PROPOSALS 1 AND 2.
WITHHELD
FOR ALL FROM ALL
NOMINEES NOMINEES
____ ____ Nominees:
1. Election of | | | | Salvatore Giordano, Sal Giordano, Jr.,
Directors for | | | | William J. Brennan, David C. Chang,
a term of ____ ____ Joseph Giordano, C. A. Keen,
one year Howard S. Modlin, Clarence R. Moll,
[ ]_________________________________ S.A. Muscarnera, Anthony E. Puleo
For all nominees except as noted
above.
FOR AGAINST ABSTAIN
____ ____ ____
2. Ratification of the appointment of BDO | | | | | |
Seidman, LLP as the Company's | | | | | |
independent auditors. ____ ____ ____
____
MARK HERE FOR ADDRESS AND NOTE AT LEFT | |
| |
____
Signature_______________Date____, 1999 Signature_______________Date____, 1999
Note: If a signer is a corporation, sign in full corporate name by a duly
authorized officer. Attorneys, executors, administrators, trustees or
guardians should sign full name and mark as such.
