<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
WESTGATE CORPORATE CENTER
505 MARTINSVILLE ROAD
LIBERTY CORNER, NEW JERSEY 07938
(908) 604-8686
November 22, 2000
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 19, 2000.
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. The Board
strongly recommends that you vote, or instruct your broker or nominee to vote,
FOR approval of both proposals. Please sign, date and return 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 will be appreciated. If you prefer, you may cast your vote
toll-free by telephone or online over the Internet. Simply follow the
instructions contained on the enclosed proxy card.
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 and
Chief Executive Officer
</TABLE>
<PAGE> 3
FEDDERS CORPORATION
LIBERTY CORNER, NEW JERSEY 07938
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 19, 2000
------------------------
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 19, 2000 at 10:30
a.m. for the following purposes:
1. To elect nine (9) directors 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 Deloitte & Touche LLP as the Company's
independent auditors.
By order of the Board of Directors
KENT E. HANSEN
Secretary
Dated: November 22, 2000
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. NO POSTAGE IS REQUIRED IF THE PROXY IS
RETURNED IN THE ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES. IF YOU
PREFER, YOU MAY CAST YOUR VOTE TOLL-FREE BY TELEPHONE OR ONLINE OVER THE
INTERNET. SIMPLY FOLLOW THE INSTRUCTIONS CONTAINED ON THE ENCLOSED PROXY CARD.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Proxy Statement............................................. 1
Proposal No. 1 -- Election of Directors..................... 3
Meetings of the Board of Directors and Certain
Committees............................................. 4
Security Ownership of Directors and Executive Officers...... 5
Section 16(a) Beneficial Ownership Reporting Compliance..... 6
Principal Stockholders...................................... 7
Executive Compensation...................................... 7
Summary Compensation Table................................ 7
Options/SAR Grant Table................................... 8
Aggregated Option/SAR Exercises and Fiscal Year-End
Option/SAR Value Table................................. 9
Audit Committee Report.................................... 9
Compensation Committee Interlocks and Insider
Participation.......................................... 10
Board Compensation Committee Report....................... 10
Performance Graph......................................... 11
Proposal No. 2 -- Ratify Independent Auditors............... 12
Stockholder Proposals -- Next Annual Meeting................ 12
Cost of Solicitation........................................ 12
</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 19, 2000, 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 on November 22, 2000. A stockholder
who shall sign and return a proxy in the form enclosed with this Proxy Statement
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 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, 1999 to August 31, 2000 (the "Fiscal Year"), including financial statements,
has been 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 nine current directors 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 Deloitte & Touche LLP as the Company's independent auditors for the fiscal
year ending August 31, 2001.
The close of business on October 20, 2000 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, 15,567,459 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, voting together as a single
class, 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) ratifying the appointment of Deloitte & Touche 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, S. A. Muscarnera, and Anthony E. Puleo. Set forth opposite the
name of each director/nominee 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 or director. 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); 90 1945
Sal Giordano, Jr. ................... Vice Chairman and Chief Executive Officer of the
Company(1)(2); 62 1965
William J. Brennan................... Financial Consultant(3); 72 1980
David C. Chang....................... President, Polytechnic University(4), 59 1998
Joseph Giordano...................... Retired(1)(5); 67 1961
C. A. Keen........................... Retired(6); 75 1996
Howard S. Modlin..................... President, Weisman Celler Spett & Modlin, P.C. (7);
69 1977
S. A. Muscarnera..................... Retired(1)(8); 60 1982
Anthony E. Puleo..................... President, Puleo Tree Co.(9); 65 1994
</TABLE>
---------------
(1) Messrs. Sal Giordano, Jr. and Joseph Giordano are sons, and Mr. 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 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 last 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 for more than 20 years until
his retirement in August 1992, with responsibilities in a number of areas
during that time, including marketing, treasury and international sales and
sourcing. 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) Mr. Muscarnera was Senior Vice President and Secretary of the Company prior
to his retirement on August 31, 1996. Mr. Muscarnera served in various
capacities with the Company for over 39 years, including human resources and
legal. Mr. Muscarnera is a member of the Audit and Finance Committees.
(9) Principal occupation during the past two and one half years. Puleo Tree Co.
is an importer of Christmas items. Prior to that Mr. Puleo was President of
Boulderwood Corporation. Mr. Puleo is a member of the Compensation and
Nominating Committees.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the Fiscal Year, the Board of Directors of the Company held eight
(8) meetings. All of the present directors attended 75% or more of such meetings
and of meetings of committees of which they were members. 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.
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 and transmits to the Board 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 eight (8)
meetings.
The Compensation Committee consists of four directors and 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 two (2) 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. During the Fiscal Year, the Executive Committee held one (1) meeting.
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, advises the Board concerning
sources and disposition of Company funds, evaluates investment programs, and
reviews the Company's continuing financial arrangements and methods of external
financing. During the Fiscal Year, the Finance Committee held three (3)
meetings.
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 20, 2000, 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 1.65%
Clarence R. 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 421,236 0 2.7%
as a group........................
Class A Stock Salvatore Giordano.................. 1,435,259(4)(5) 0 9.14%
Sal Giordano, Jr. .................. 1,602,594(4)(6) 180,000 11.22%
William J. Brennan.................. 59,385 22,500 Less than 1%
David Chang......................... 9,908 0 Less than 1%
Joseph Giordano..................... 1,022,102(4)(7) 122,500 7.23%
C. A. Keen.......................... 112,951 15,000 Less than 1%
Howard S. Modlin.................... 385,710(8) 31,875 2.65%
Clarence R. Moll.................... 82,877 15,000 Less than 1%
S. A. Muscarnera.................... 124,602 85,000 1.33%
Anthony E. Puleo.................... 22,385 15,000 Less than 1%
Michael B. Etter.................... 0 10,000 Less than 1%
Kent E. Hansen...................... 25,593 20,000 Less than 1%
Robert L. Laurent, Jr. ............. 302,482 90,000 2.48%
All directors and executive officers 4,209,187 768,144 30.2%
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 Class 6,892,989 768,144 22.32%
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 in
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 543,309 shares which are held by corporations in 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, 206,904
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 in trust as trustee for himself.
(7) Includes 71,630 shares held by Mr. Giordano in trust as trustee for himself
and 143,974 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
charter, 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, 3,698,925 shares constituting 11.02%;
Mr. Sal Giordano, Jr., 4,046,260 shares constituting 11.99%; Mr. Joseph
Giordano, 3,421,078 shares constituting 10.16%; and all directors and
executive officers as a group 7,661,133 shares constituting 22.32%. The
share totals for Messrs. Salvatore Giordano, Sal Giordano, Jr. and Joseph
Giordano include 2,806,975 shares which are held by corporations in which
they are officers, directors and stockholders and share voting and
investment power over such shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Each of the executive officers of the Company received an option to
purchase shares of the Company's Class A Stock in December 1999. The grant of
these options was timely reported by each executive officer who was otherwise
required to file a Beneficial Ownership Report under Section 16 before the end
of the fiscal year ended August 31, 2000. Because of an administrative
oversight, Forms 5 were not filed on behalf of the other executive officers in
respect of these option grants and in the case of three executive officers, a
second option grant from June 2000, until November 2000. One outside director
failed to report his annual stipend of Class A Stock until November. Based
solely on a review of information provided to the Company, all other persons
subject to these reporting requirements filed the required reports on a timely
basis for the Fiscal Year.
6
<PAGE> 11
PRINCIPAL STOCKHOLDERS OF FEDDERS
The following table sets forth information at October 20, 2000 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 99.82%
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................. 2000 533,154 577,860 -- 120,000 74,994
Chairman of the Board of
Directors 1999 522,701 536,130 -- -- 44,010
1998 522,701 378,660 -- -- 28,324
Sal Giordano, Jr. ................. 2000 591,345 577,860 -- 120,000 610,027
Vice Chairman and 1999 579,750 536,130 -- -- 689,770
Chief Executive Officer 1998 579,750 378,660 1,764,000 -- 543,165
Michael B. Etter................... 2000 217,000 127,553 -- 130,000 15,097
President and Chief Operating
Officer 1999 166,667 67,016 -- -- 6,424
1998 150,000 35,550 -- 10,000 6,424
Kent E. Hansen..................... 2000 192,676 108,349 -- 80,000 22,994
Executive Vice President and 1999 185,509 100,524 -- -- 18,836
Secretary 1998 185,503 47,333 -- -- 8,372
Robert L. Laurent, Jr. ............ 2000 255,000 288,930 -- 60,000 30,759
Executive Vice President, 1999 250,000 268,065 -- -- 17,010
Acquisitions and Alliances 1998 250,000 189,330 -- -- 14,001
</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. $13,759; Mr. Robert L.
Laurent, Jr. $1,038; Mr. Kent E. Hansen, $1,342; and Mr. Michael Etter
$233).
7
<PAGE> 12
OPTIONS/SAR GRANTS TABLE
The following table sets forth information concerning the grant of stock
options and/or stock appreciation rights (SARs) during the Fiscal Year to the
individual executive officers named in the Summary Compensation Table.
The table shows the number of options granted to each named executive
officer, the number of options granted as a percentage of options granted to all
employees during the Fiscal Year, the exercise price of each option, the
expiration date for each option, and a presentation of the potential realizable
value for each option assuming annual rates of stock appreciation of 5% and 10%
over each option term.
OPTIONS/SAR GRANTS LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
---------------------------------------------------------------------------- --------------------
% OF
TOTAL
OPTIONS
GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#) YEAR ($/ SH) DATE 5% ($) 10% ($)
---- ------- ---------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Salvatore Giordano......... 120,000 9.2% $4.94 12/21/04 $756,197 $954,227
Sal Giordano, Jr. ......... 120,000 9.2% 4.94 12/21/04 756,197 954,227
Michael B. Etter........... 80,000 6.1% 4.94 12/21/04 504,131 636,151
50,000 3.8% 4.81 6/27/05 306,946 387,328
Kent E. Hansen............. 55,000 4.2% 4.94 12/21/04 346,590 437,354
25,000.. 1.9% 4.81 6/27/05 153,473 193,664
Robert L. Laurent, Jr...... 60,000 4.6% 4.94 12/21/04 378,098 477,114
</TABLE>
8
<PAGE> 13
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
The following table sets forth the number of shares exercised during the
Fiscal Year, the value realized upon exercise, the number of unexercised options
at the end of the Fiscal Year and the value of unexercised in-the-money options
at the end of the Fiscal Year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)
SHARES ------------- -------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Salvatore Giordano...................... -- -- E -- E --
U120,000 U --
Sal Giordano, Jr........................ 139,066 127,619 E180,000 E26,250
U120,000 U --
Michael Etter........................... -- -- E 10,000 E 625
U130,000 U --
Kent E. Hansen.......................... -- -- E 20,000 E 1,250
U 80,000 U --
Robert L. Laurent, Jr................... 25,000 42,500 E 90,000 E13,125
U 60,000 U --
</TABLE>
REPORT OF AUDIT COMMITTEE
The Audit Committee is comprised of four directors who are not officers or
employees of the Company (Clarence R. Moll, William J. Brennan, Howard S. Modlin
and S.A. Muscarnera). The Audit Committee has reviewed and discussed the audited
financial statements for the Fiscal Year with management of the Company. The
Audit Committee has discussed with the Company's independent auditors, Deloitte
& Touche LLP, the matters required to be discussed by SAS 61 (the Codification
of Statements on Auditing Standards, AU 380), as may be modified or supplemented
from time-to-time. The Audit Committee has reviewed the written disclosures and
the letter from the Company's independent auditors required by Independence
Standards Board Standard No. 1 (Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees), as may be modified or
supplemented from time-to-time, and has discussed with the independent auditors
of the Company the independent auditor's independence and based upon the review
and discussions referred to above, the Audit Committee recommended to the Board
of Directors that the audited financial statements for the Fiscal Year be
included in the Company's Annual Report on Form 10-K for the Fiscal Year for
filing with the Securities and Exchange Commission.
Respectfully submitted,
AUDIT COMMITTEE
CLARENCE R. MOLL -- Chairman
WILLIAM J. BRENNAN
HOWARD S. MODLIN
S. A. MUSCARNERA
9
<PAGE> 14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of four directors who are not
officers or employees of the Company (Howard S. Modlin, William J. Brennan, C.A.
Keen and Anthony E. Puleo). The Committee submitted a plan to the Company's
Board of Directors (the "Board") for the Fiscal Year which was approved by the
Board on December 21, 1999.
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; the need to attract and
retain highly qualified executives necessary to build long-term stockholder
value; and the need to link a portion of each executive officer's long-term
capital accumulation to the growth in the market value of the Company's stock.
Executive compensation was broken down into three major components (i) cash
compensation, (ii) incentive bonuses, and (iii) stock options. 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 the
same plan as the last fiscal year which applied percentages against consolidated
earnings before interest, taxes, depreciation and amortization ("EBITDA") of the
Company minus $1,000,000 and, with respect to certain officers, against EBITDA
of the operations for which they are responsible and certain additional goals.
Mr. Laurent may also receive incentive compensation based upon successful
completion of acquisitions during the Fiscal Year. The awards under the plan are
based heavily upon the performance of the Company. The amount of the awards for
the Fiscal Year range from 0.19% to 1.00% of EBITDA. With respect to the
individuals named in the Summary Compensation Table, the following percentages
of EBITDA or potential bonus amount were designated: Mr. Salvatore Giordano
1.00%; Mr. Sal Giordano, Jr. 1.00%; Mr. Robert L. Laurent, Jr. 0.5%, Mr. Michael
B. Etter, $122,400 based upon EBITDA and sales of certain operating companies
and Mr. Kent E. Hansen 0.1875%.
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. The material
provisions of the Agreement include: (1) an annual base salary of at least
$232,000, payable in equal semi-monthly installments and (2) annual
participation in all compensatory plans and arrangements of the Company no less
favorable than the fiscal year 1993 plans. 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.
SAL GIORDANO, JR. Mr. Giordano has 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, which is
reviewable annually and subject to increase and (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 (EBITDA) in excess
of $1 million.
10
<PAGE> 15
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 CUSTOMER SELECTED
CORPORATION STOCK LIST NYSE MARKET INDEX
----------- ----------------- -----------------
<S> <C> <C> <C>
1995 100 100 100
1996 99.35 109.44 117.76
1997 112.62 127.85 159.96
1998 93.7 144.81 155.22
1999 120.97 202.46 215.91
2000 98.69 131.15 241.5
</TABLE>
ASSUMES $100 INVESTED ON SEPTEMBER 1, 1995
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED AUGUST 31, 2000.
11
<PAGE> 16
PROPOSAL NO. 2 -- RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Pursuant to the recommendations of its Audit Committee, the Board of
Directors selected the firm of BDO Seidman, LLP ("BDO") independent auditors, to
audit the consolidated financial statements of the Company for the year ended
August 31, 2000. The Company's stockholders ratified that selection at their
Annual Meeting on December 21, 1999. On June 20, 2000, the Company engaged
Deloitte & Touche LLP ("D&T") as its independent auditors, replacing BDO as
independent auditors. The Company's Board of Directors approved the decision to
change independent auditors upon the recommendation of its Audit Committee. The
reports of BDO on the Company's financial statements for the years ended August
31, 1999 and 1998 did not contain an adverse opinion or disclaimer of opinion
and were not qualified or modified as to uncertainty, audit scope or accounting
principle. During the last two fiscal years, the Company has not had any
disagreement with BDO on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure that would require
disclosure in this Proxy Statement. There have been no reportable events (as
defined in Regulation S-K Item 304(a)(1)(v)). At the Company's request, BDO
furnished a letter addressed to the Securities and Exchange Commission as
required by Item 304 (a) of Regulation S-K. A copy of such letter was attached
to the Company's report to the Commission on Form 8-K, dated June 14, 2000 and
incorporated herein in its entirety by reference.
The Company engaged D&T as its new independent auditors as of June 20,
2000. D&T has served as the Company's independent auditors for the balance of
the Fiscal Year.
On recommendation of the Audit Committee, the Board of Directors appointed
the firm of D&T, independent auditors, to audit the consolidated financial
statements of the Company and its subsidiaries for the fiscal year ending August
31, 2001, subject to ratification by the Company's stockholders at the Annual
Meeting. D&T does not have any direct financial interest in the Company.
Representatives of D&T 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 25, 2001.
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
may be made by the Company's regular employees. Solicitations will be made by
mail and may also be made by telegram, telephone and in person.
By order of the Board of Directors
KENT E. HANSEN
Secretary
Dated: November 22, 2000
Liberty Corner, New Jersey
12
<PAGE> 17
DIRECTIONS TO
SOMERSET HILLS HOTEL
200 LIBERTY CORNER ROAD
WARREN, NJ 07060
(908) 647-6700
The Somerset Hills Hotel is located directly north of Interstate 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> 18
PROXY
FEDDERS CORPORATION
Annual Meeting of Stockholders-December 19, 2000
Solicited on behalf of the Board of Directors
The undersigned stockholder of FEDDERS CORPORATION (the"Company") hereby
constitutes and appoints SALVATORE GIGORDANO, SAL GIGORDANO, 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 19, 2000 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 this 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 majorty of said attorneys and proxies, or their substitutes, as 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 WITNESS 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 22, 2000.
|-----------| |------------|
|SEE REVERSE| CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SEE REVERSE|
| SIDE | | SIDE |
|-----------| |----------- |
<PAGE> 19
Please mark, date, sign and mail your
proxy card back as soon as possible.
Annual Meeting of Stockholders
FEDDERS CORPORATION
December 19, 2000
| Please Detach and Mail in the Envelope Provided |
A /X/ Please mark your -
votes as in the -
example -
Unless you specify, the Proxy will be voted FOR Proposals 1 and 2
Directors recommend a vote FOR Proposals 1 and 2
WITHELD
FROM ALL
For 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. SA.Muscarnera.
Anthony E. Puleo
| | _____________________________________
For all nominees except as note above
FOR AGAINST ABSTAIN
2.Ratification of the appointment of | | | | | |
Deloitte & Touche LLP as the
Company's independent auditors
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT | |
Signature __________ Date: _____, 2000 Signature: __________ Date: ______, 2000
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.
