SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party Other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / 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-12.
Modine Manufacturing Company
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(Name of Registrant as Specified In Its Charter
Not Applicable
-----------------------------------------------
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other than the Registrant)
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6(i)(4) and 0-11
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applies:
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----------------------------------------------------
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applies:
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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):
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notice
of meeting
and proxy
statement
annual meeting
2002
of shareholders
------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------------------------------------------------------
Date: Wednesday, July 17, 2002
Time: 9:30 a.m.
Place: 1500 DeKoven Ave.
Racine, WI 53403-2552
Record Date: May 28, 2002
Matters to be voted on:
1. To elect three directors;
2. To approve the adoption of the 2002 Incentive Compensation
Plan;
3. To consider one shareholder proposal; and
4. To consider any other matters properly brought before the
shareholders at the meeting.
By order of the Board of Directors,
D. R. ZAKOS
D. R. ZAKOS, Secretary
June 7, 2002
Contents
Page
----
General Information About Voting 2
Proposal No. 1: Election of Directors 3
Proposal No. 2: Approval of the adoption of the
2002 Incentive ompensation Plan 20
Proposal No. 3: Shareholder Proposal 25
PROXY STATEMENT
Your vote at the annual meeting is important to us. Please
vote your shares of Common Stock by calling a toll-free telephone
number or by completing the enclosed proxy card and returning it
to us in the enclosed envelope. This proxy statement has information
about the annual meeting and was prepared by the Company's management
for the Board of Directors. This proxy statement was first mailed to
shareholders on June 7, 2002.
PROXY STATEMENT
Annual Shareholders' Meeting of Modine Manufacturing Company--2002
-----------------------------------------------------------------------
GENERAL INFORMATION ABOUT VOTING
Who can vote?
------------
You can vote your shares of common stock if our records show that
you owned the shares on May 28, 2002. A total of 33,894,202 shares of
common stock can vote at the annual meeting. You get one vote for each
share of common stock. The holders of common stock do not have
cumulative voting rights. The enclosed proxy card shows the number
of shares you can vote.
How do I vote?
-------------
Shareholders of record can give a proxy to be voted at the meeting
by calling a toll-free telephone number or, if you prefer, you may mail
the enclosed proxy card. Shareholders who hold their shares in "street
name" will continue to vote their shares in the manner required by their
brokers.
The telephone voting procedure has been set up for your convenience
and has been designed to authenticate your identity, to allow you to give
voting instructions, and to confirm that those instructions have been
recorded properly.
The enclosed proxy card contains instructions for telephone and
mail voting. Whichever method you use, the proxies identified on the
back of the proxy card will vote your shares in accordance with your
instructions. If you submit a proxy card without giving specific voting
instructions, the proxies will vote those shares as recommended by the
Board of Directors.
What are the Board's recommendations?
------------------------------------
Unless you give other instructions on your proxy card, the persons
named as proxy holders on the proxy card will vote in accordance with
the recommendations of the Board of Directors. The Board's
recommendation is set forth together with the description of each item
in this proxy statement. In summary, the Board recommends a vote:
For election of the nominated slate of directors (see Item 1);
For approval of the 2002 Incentive Compensation Plan (see Item 2);
and
Against approval of the shareholder proposal (see Item 3).
What if other matters come up at the annual meeting?
---------------------------------------------------
The matters described in this proxy statement are the only matters
we know will be voted on at the annual meeting. If other matters are
properly presented at the meeting, the proxyholders will vote your shares
as they see fit.
Can I change my vote after I return my proxy card?
-------------------------------------------------
You can revoke your proxy card by:
- Submitting a new proxy card;
- Giving written notice before the meeting to the Secretary of the
Company, stating that you are revoking your proxy card; or
- Attending the meeting and voting your shares in person.
If you decide to vote your shares in person, you should first revoke
your prior proxy card in the same way you initially submitted it - that is,
by telephone or mail.
Can I vote in person at the annual meeting?
------------------------------------------
Although we encourage you to complete and return the proxy card or
vote by phone to ensure that your vote is counted, you can attend the
annual meeting and vote your shares in person.
What do I do if my shares are held in "street name?"
--------------------------------------------------
If your shares are held in the name of your broker, or other nominee,
that party should give you instructions for voting your shares.
How are votes counted?
---------------------
A majority of the shares entitled to vote, represented in person or
by proxy, will constitute a quorum at the annual meeting. Abstentions and
broker "non-votes" are counted as present for purposes of determining a
quorum. A broker "non-vote" occurs when a broker holding shares for a
beneficial owner does not vote on a particular proposal because the broker
does not have discretionary voting power for that particular item and has
not received instructions from the beneficial owner.
Directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election, as long as a quorum is present. This
means that the individuals who receive the largest number of votes are
elected as directors. Therefore, shares not voted, whether by withheld
authority, broker non-vote or otherwise, have no effect in the election
of directors. Votes attempted to be cast against a candidate are not
given legal effect and are not counted as votes cast in an election of
directors.
If a quorum is present, the affirmative vote of the holders of a
majority of the shares represented at the meeting, in person or by
proxy, and entitled to vote thereon will be required for approval of
the 2002 Incentive Compensation Plan and the Shareholder Proposal.
Shares which are the subject of broker non-votes will be considered as
not entitled to vote on these matters, and therefore broker non-votes
will not affect the outcome. Abstentions will have the effect of votes
against these matters.
Who will count the vote?
-----------------------
Wells Fargo Bank Minnesota, NA, Shareowner Services, an independent
tabulator, will count the vote and act as the Board appointed Inspectors
of Election.
Who pays for this proxy solicitation?
------------------------------------
We do. In addition to sending you these materials, some of our
employees may contact you by telephone, mail, or in person. None of
these employees will receive any extra compensation for doing this.
Further solicitation will be made in the same manner under the
direction of Georgeson Shareholder Communications, Inc. at an
anticipated cost of $10,000 plus expenses.
1. ELECTION OF DIRECTORS
The Board of Directors currently consists of nine members.
This year the terms of Frank P. Incropera, Vincent L. Martin and
Marsha C. Williams expire at the 2002 Annual Meeting of Shareholders.
Messrs. Incropera and Martin and Ms. Williams have been nominated for a
new three-year term expiring at the Annual Meeting in 2005.
While it is not anticipated that any of the nominees will be
unable to take office, if such is the case, proxies will be voted in
favor of such other person or persons as the Board of Directors may
propose to fill the three directorships. In accordance with the
Restated By-Laws, a director shall hold office until the Annual Meeting
for the year in which his or her term expires and until his or her
successor shall be elected and qualify, subject, however, to prior
death, resignation, retirement, disqualification, or removal from
office. Vacancies may be filled by the remaining directors.
The nominees for the Board of Directors, the directors whose terms
will continue, their ages, other directorships, and their tenure and
expiration dates of their terms are as follows:
Nominees to be Elected
----------------------
FRANK P. INCROPERA Director since 1999
Dr. Incropera, 62, is the McCloskey Dean of the University of
Notre Dame's College of Engineering, South Bend, Indiana, and has
served in that position since 1998. Prior to that, he served as
the Head of the School of Mechanical Engineering at Purdue
University, West Lafayette, Indiana. Current term to expire in
2002.
VINCENT L. MARTIN Director since 1992
Mr. Martin, 62, is Chairman of the Board and a director of Jason
Incorporated, a diversified manufacturing company based in
Milwaukee, Wisconsin. Prior to June 30, 1999, he was also Chief
Executive Officer of Jason Incorporated. He is also a director of
Crane Manufacturing & Service. Current term to expire in 2002.
MARSHA C. WILLIAMS Director since 1999
Ms. Williams, 51, is Chief Administrative Officer of Crate &
Barrel, a privately held retailer of home furnishings and
accessories headquartered in Northbrook, Illinois. Previously,
Ms. Williams had been Vice President and Treasurer of Amoco
Corporation and Carson Pirie Scott & Company, and Vice President
of The First National Bank of Chicago. She is also a director of
Chicago Bridge & Iron, Davis Funds and Selected Funds. Current
term to expire in 2002.
Directors Continuing in Service
-------------------------------
DONALD R. JOHNSON Director since 1997
Mr. Johnson, 60, is Chairman and Chief Executive Officer of the
Company effective April 1, 2002. He is also a director of Grede
Foundries, Inc. and the M&I Marshall & Ilsley Bank. Current term
to expire in 2004.
GARY L. NEALE Director since 1977
Mr. Neale, 62, is Chairman, President, Chief Executive Officer,
and a director of NiSource, Inc., Hammond, Indiana, a holding
company for gas and electric utilities and other energy-related
subsidiaries. He is also a director of Chicago Bridge & Iron.
Current term to expire in 2004.
RICHARD J. DOYLE Director since 1987
Mr. Doyle, 69, is retired. Prior to April 30, 1998, he was Chief
Executive Officer and a director of three private electrical
contracting corporations. Prior to January 1, 1989, Mr. Doyle was
a Vice President of Borg-Warner Corporation, Chicago, Illinois, a
diversified manufacturing and services company, and President and
Chief Executive Officer of Borg-Warner Automotive, Inc., Troy,
Michigan, a subsidiary of Borg-Warner Corporation. Current term
to expire in 2004.
FRANK W. JONES Director since 1982
Mr. Jones, 62, is an independent management consultant in Tucson,
Arizona. He is also a director of Star Cutter Co., Gardner
Publications, Inc., and General Tool Co. Current term to expire
in 2003.
DENNIS J. KUESTER Director since 1993
Mr. Kuester, 60, is President and Chief Executive Officer of
Marshall & Ilsley Corporation, Chairman and Chief Executive
Officer of M&I Marshall & Ilsley Bank, and Chairman of Metavante
Corporation, a Milwaukee, Wisconsin bank holding company, bank,
and banking services company, respectively. He is also a
director of Metavante Corporation, M&I Marshall & Ilsley Bank,
Marshall & Ilsley Corporation, Super Steel Products Corp.,
Krueger International, and Wausau/Mosinee. Current term to
expire in 2003.
MICHAEL T. YONKER Director since 1993
Mr. Yonker, 59, is retired. Prior to June 15, 1998, he was
President and Chief Executive Officer of Portec, Inc., Lake
Forest, Illinois, a manufacturer of material handling equipment.
He is also a director of Woodward Governor Company. Current term
to expire in 2003.
The Board of Directors recommends a vote IN FAVOR OF all of the
director-nominees: Mr. Incropera, Mr. Martin and Ms. Williams.
PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE
OFFICERS
Principal Shareholders
----------------------
The following table shows the number of shares of common stock
beneficially owned by each person or entity who we know beneficially
owns more than 5% of the common stock.
Title Name and Address of Amount and Nature of Percent
of Class Beneficial Ownership Beneficial Ownership of Class
-------- ---------------------------- -------------------------- --------
Common Administrative Committee of 4,202,906** Power to vote 12.62%
Modine Employee Stock Plans' stock
Ownership Plan, 1500 DeKoven not voted by
Avenue, Racine, Wisconsin employees
53403-2552 Members: D. B. owning it
Spiewak, R. L. Hetrick and
D. R. Zakos*
Common Gabelli Funds, Inc. and 6,257,031*** Sole or 18.70%
affiliates shared voting
One Corporate Center and/or power
Rye, New York 10580-1434 to dispose
of stock
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* M&I Marshall and Ilsley Trust Company is trustee and holder of
record of the Modine Contributory Employee Stock Ownership and
Investment Plans, Employees' Retirement Trusts and 401(k)
Retirement Plans stock, and is the escrow agent for participants'
stock under the 1997 through 2002 Stock Award Plans. The Marshall
& Ilsley Trust Company, as custodian, may be viewed as having
voting or dispositive authority in certain situations pursuant to
Department of Labor regulations or interpretations or federal case
law. Pursuant to SEC Rule 13d-4, inclusion of such shares in this
statement shall not be construed as an admission that the Reporting
Person or its subsidiaries are, for purposes of Sections 13(d) or
13(g) of the Act, the beneficial owners of such securities. D. J.
Kuester is President and CEO of Marshall & Ilsley Corporation and
Chairman and CEO of M&I Marshall & Ilsley Bank. M&I Marshall &
Ilsley Corporation and its subsidiaries specifically disclaim
beneficial ownership of stock held by these plans and trusts.
** As of March 31, 2002.
*** Based on a Schedule 13D dated November 15, 2001, by Gabelli
Funds, Inc. and affiliates.
We know of no other person or group that is a beneficial owner of
five percent (5%) or more of the Company's common stock.
Securities Owned by Management
------------------------------
The following table shows the number of shares of common stock
beneficially owned as of March 31, 2002 by:
- each director;
- each executive officer named in the Summary Compensation Table
on page 11; and
- the directors and executive officers as a group.
Title Name of Amount and Nature of Percent
of Class Beneficial Owner Beneficial Ownership of Class
-------- ---------------------- -------------------- --------
Common R. J. Doyle* 71,000(a) **
Common F. P. Incropera* 17,000(a) **
Common F. W. Jones* 85,819(a) **
Common D. J. Kuester* 54,000(b) **
Common V. L. Martin* 54,200(c) **
Common G. L. Neale* 84,322(a) **
Common M. C. Williams* 22,000(a) **
Common M. T. Yonker* 55,000(a) **
Common D. R. Johnson 389,052(d) 1.16%
Common E. T. Thomas 68,633(d) **
Common D. B. Rayburn 223,401(d) **
Common C. R. Katzfey 107,342(d) **
Common J. R. Rulseh 99,734(d) **
Common All executive officers
and directors as a
group (22 persons) 1,970,691(e) 5.89%
* Non-employee directors have the right to acquire additional
shares of common stock (not listed in the above table) through the
exercise of options automatically granted upon re-election pursuant
to the 2000 Stock Option Plan for Non-Employee Directors discussed
on pages 10-11.
** Denotes less than one percent of shares outstanding.
(a) The 71,000 shares listed for Mr. Doyle include options to acquire
64,000 shares; the 17,000 shares listed for Dr. Incropera include
options to acquire 17,000 shares; the 85,819 shares listed for Mr.
Jones include options to acquire 48,000 shares; the 84,322 shares
listed for Mr. Neale include options to acquire 64,000 shares; the
22,000 shares listed for Ms. Williams include options to acquire
22,000 shares and the 55,000 shares listed for Mr. Yonker include
options to acquire 53,000 shares.
(b) The 54,000 shares listed for Mr. Kuester exclude shares held of
record by M&I Marshall & Ilsley Bank. See footnote to the Five
Percent Stock Ownership table. This number includes options to
acquire 53,000 shares.
(c) The 54,200 shares listed for Mr. Martin include options to acquire
52,000 shares and include 200 shares held in trusts for his
children with Mr. Martin as trustee.
(d) The 389,052 shares listed for Mr. Johnson include 2,288 shares held by
Mr. Johnson's wife, options to acquire 295,000 shares, 17,000 restricted
shares awarded to Mr. Johnson and 7,611.1033 units held in the form of
Modine Common Stock Fund Units (Modine 401(k) Retirement Plan and
Deferred Compensation Plan) (each Unit consisting of Modine common
stock and a cash component); the 68,633 shares listed for Mr. Thomas
include options to acquire 60,000 shares, 6,500 restricted shares
awarded to Mr. Thomas, and 1,791.3284 units held in the form of Modine
Common Stock Fund Units (Modine 401(k) Retirement Plan and Deferred
Compensation Plan) (each Unit consisting of Modine common stock and a
cash component); the 223,401 shares listed for Mr. Rayburn include
options to acquire 192,000 shares, 10,800 restricted shares awarded to
Mr. Rayburn and 6,759.8835 units held in the form of Modine Common Stock
Fund Units (Modine 401(k) Retirement Plan and Deferred Compensation Plan)
(each Unit consisting of Modine common stock and a cash component); the
107,342 shares listed for Mr. Katzfey include options to acquire 83,605
shares, 5,900 restricted shares awarded to Mr. Katzfey and 1,550.9027
units held in the form of Modine Common Stock Fund Units (Modine 401(k)
Retirement Plan and Deferred Compensation Plan) (each Unit consisting
of Modine common stock and a cash component) and the 99,734 shares
listed for Mr. Rulseh include options to acquire 83,000 shares, 5,000
restricted shares awarded to Mr. Rulseh and 753.7560 units held in the
form of Modine Common Stock Fund Units (Modine 401(k) Retirement Plan
and Deferred Compensation Plan) (each Unit consisting of Modine common
stock and a cash component);
The awards granted pursuant to the 1997 through 1998 Stock Award Plans
are subject to restrictions that lapse annually in fifths over a period
commencing at the end of the second year from the date of grant. The
awards granted pursuant to the 2000 through 2002 Stock Award Plans are
subject to restrictions that lapse annually in fifths over a period
commencing at the end of the first year from the date of grant.
(e) This number includes 639,186 shares held by officers (other than the
five named executive officers) as a group (9 persons) and includes
options to acquire 427,100 shares; 31,800 shares awarded pursuant to
the 1997 through 1998 Stock Award Plans are subject to restrictions
that lapse annually in fifths over a period commencing at the end of
the second year from the date of grant while the awards granted
pursuant to the 2000 through 2002 Stock Award Plans are subject to
restrictions that lapse annually in fifths over a period commencing
at the end of the first year from the date of grant; and 10,079.1202
units held in the form of Modine Common Stock Fund Units (Modine
401(k) Retirement Plan and Deferred Compensation Plan) (each Unit
consisting of Modine common stock and a cash component).
BOARD MEETINGS, COMMITTEES AND COMPENSATION
The Board of Directors held eight regular meetings during the fiscal
year. An additional eight meetings were held by standing Committees of
the Board. The following chart describes the function and membership of
each committee and the number of times it met in 2001-2002:
Audit Committee - 3 meetings
Function
--------
- recommends engagement of auditors;
- meets with independent auditors to:
- discuss plan and scope of audit;
- review results of audit;
- evaluates internal audit procedures and accounting controls;
- approves budget for non-audit services;
- reviews and approves audit and non-audit fees;
- reviews proposed significant changes in accounting or financial
reporting practices; and
- reviews required periodic financial statements and regulatory
reports and procedures.
Members
-------
R. J. Doyle, Chair
F. P. Incropera
F. W. Jones
V. L. Martin
G. L. Neale
M. C. Williams
Officer Nomination and Compensation Committee - 3 meetings
Function
--------
- reviews candidates for positions as Company officers;
- makes recommendations to Board on candidates;
- makes recommendations to Board on compensation for officers;
- administers the 1985 Incentive Stock Plan; and
- administers the 1994 Incentive Compensation Plan.
Members
-------
G. L. Neale, Chair
R. J. Doyle
D. J. Kuester
V. L. Martin
M. T. Yonker
Pension Committee - 2 meetings
Function
--------
- provides oversight for pension trust investments.
Members
-------
F. W. Jones, Chair
F. P. Incropera
D. J. Kuester
M. C. Williams
M. T. Yonker
The Board of Directors does not have a committee that nominates
directors since nomination and review of director candidates is a
function of the full Board. In addition, shareholders who wish to
nominate candidates for election to the Board may do so.
All directors attended seventy-five percent or more of all Board
meetings and meetings of Committees of which they were members during
the fiscal year.
Generally, if a shareholder intends to propose business or make
a nomination for the election of directors at an annual meeting, or
make a nomination for the election of directors at a special meeting
of shareholders, the Company must receive written notice of such
intention. The deadline for shareholder nominations for directors
and proposals at the 2002 Annual Meeting of Shareholders was
February 8, 2002.
Report of the Audit Committee
-----------------------------
The following Report of the Audit Committee does not constitute
soliciting material and should not be deemed filed or incorporated by
reference into any other Company filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent the
Company specifically incorporates this Report by reference therein.
The Audit Committee of the Board of Directors developed a written
charter for the Committee, which was approved by the full Board on
June 30, 1999. As set forth in the charter, the Audit Committee's
primary responsibilities fall into four broad categories:
- the Committee oversees management's implementation of effective
systems of internal controls, including review of policies
relating to legal and regulatory compliance, ethics and conflicts
of interests; and review of the activities and recommendations
of the Company's internal auditing program;
- the Committee is charged with monitoring the preparation of
quarterly and annual financial reports by the Company's
management, including discussions with management and the
Company's outside auditors about draft annual financial
statements and key accounting and report matters;
- the Committee is responsible for matters concerning the
relationship between the Company and its outside auditors,
including recommending their appointment or removal; reviewing
the scope of their audit services and related fees, as well as
any other services being provided to the Company; and determining
whether the outside auditors are independent (based in part on the
annual letter provided to the Company pursuant to Independence
Standards Board Standard No. 1); and
- the Committee annually reviews management's program to monitor
compliance with the Company's Code of Conduct.
The Committee has implemented procedures to ensure that during the
course of each fiscal year it devotes the attention that it deems
necessary or appropriate to each of the matters assigned to it under
the Committee's charter. To carry out its responsibilities, the
Committee met three times during fiscal 2001-2002.
In overseeing the preparation of the Company's financial
statements, the Committee met with both management and the Company's
outside auditors to review and discuss all financial statements prior
to their issuance and to discuss significant accounting issues.
Management advised the Committee that all financial statements were
prepared in accordance with generally accepted accounting principles.
The Committee's review included discussion with the outside auditors of
matters required to be discussed pursuant to Statement on Auditing
Standards No. 61 (Communication With Audit Committees).
With respect to the Company's outside auditors, the Committee,
among other things, discussed with PricewaterhouseCoopers LLP matters
relating to its independence, including the disclosures made to the
Committee as required by the Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees).
Finally, the Committee continued to monitor the scope and adequacy
of the Company's internal auditing program, including proposals for
adequate staffing and to strengthen internal procedures and controls
where appropriate.
On the basis of these reviews and discussions, the Committee
recommended to the Board of Directors that the Board approve the
inclusion of the Company's audited financial statements in the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 2002,
for filing with the Securities and Exchange Commission.
R. J. Doyle, Chair V. L. Martin
F. P. Incropera G. L. Neale
F. W. Jones M. C. Williams
Audit and Related Fees
----------------------
Audit Fees. Aggregate fees for professional services rendered by
----------
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") in connection with
its audit of the Company's consolidated financial statements as of and for
the year ended March 31, 2002 and its limited reviews of the Company's
unaudited condensed consolidated interim financial statements were $515,970.
Financial Information Systems Design and Implementation Fees.
------------------------------------------------------------
During the year ended March 31, 2002, PricewaterhouseCoopers rendered
no professional services to the Company in connection with the design
and implementation of financial information systems.
All Other Fees. In addition to the fees described above,
--------------
aggregate fees of $561,028 were billed by PricewaterhouseCoopers during
the year ended March 31, 2002, primarily for the following professional
services:
Audit-related services (a) $281,051
Income tax compliance and related tax services $267,072
Other $ 12,905
(a) Audit related fees include fees for audits of the Company's
employee benefit plans and statutory audits.
The Audit Committee has determined that the provisions of services
rendered above for (a) financial information systems design and
implementation fees, and (b) all other fees, is compatible with
maintaining PricewaterhouseCoopers LLP's independence.
Compensation of Directors
-------------------------
Non-employee directors receive:
- a retainer fee of $6,000 per quarter;
- $1,000 for each Board, committee and special meeting attended;
- a retainer fee of $3,000 per year for acting as Chair of a
Committee;
- reimbursement for travel, lodging, and related expenses incurred
in attending Board and committee meetings; and
- travel-accident and director and officer liability insurance.
Directors who are officers of the Company do not receive any fees
in addition to their remuneration as officers.
Effective as of July 1, 2000, Directors of the Company who are not
employees are eligible to participate in the 2000 Stock Option Plan for
Non-Employee Directors (the "Directors' Plan") which is authorized to
grant non-qualified stock options through June 30, 2010, on up to
500,000 shares of the Company's common stock. These options are granted
at one hundred percent of the fair market value on the date of the grant.
They will expire no later than ten years after the date they are granted
and will terminate no later than three years after termination of director
status for any reason other than death. Within 30 days after election or
re-election to the Board, each director so elected or re-elected is
automatically granted an option for that number of shares equal to the
multiple of 6,000 and the number of years in the term to which such
director has been so elected or re-elected. In addition, the 2000 Plan
provides for a one-time grant of 2,000 shares to those directors elected
or re-elected in 1999 and 1,000 shares to those directors elected or
re-elected in 1998. The Directors' Plan may be administered by the Board
or by a committee of two or more directors of the Company if deemed
necessary or advisable in order to comply with the exemptive rules
promulgated pursuant to Section 16(b) of the Securities Exchange Act of
1934, as amended. Neither the Board nor any such committee shall have
authority to administer the Directors' Plan with respect to the selection of
participants under the plan or the timing, pricing, or amounts of any grants.
Prior to July 1, 2000, Directors of the Company who were not employees
were eligible to participate in the 1994 Stock Option Plan for Non-Employee
Directors (the "1994 Directors' Plan") which was authorized to grant non-
qualified stock options through July 20, 2004, on up to 500,000 shares of
the Company's common stock. These options were granted at one hundred
percent of the fair market value on the date of the grant and will expire
no later than ten years after the date they were granted and will terminate
no later than three years after termination of director status for any
reason other than death. Within 30 days after election or re-election to
the Board, each director so elected or re-elected was automatically granted
an option for that number of shares equal to the multiple of 5,000 and the
number of years in the term to which such director had been so elected or
re-elected. The Directors' Plan was administered by the Board or by a
committee of two or more directors of the Company if deemed necessary or
advisable in order to comply with the exemptive rules promulgated pursuant
to Section 16(b) of the Securities Exchange Act of 1934, as amended.
Neither the Board nor any such committee had authority to administer the
Directors' Plan with respect to the selection of participants under the
plan or the timing, pricing, or amounts of any grants. The 1994 Directors'
Plan was terminated at the end of June 2000 and no additional grants have
been made.
The Board of Directors adopted the Modine Manufacturing Company
Director Emeritus Retirement Plan (the "Director Emeritus Retirement Plan")
whereby any person (non-employee) who is or becomes a director of Modine on
or after April 1, 1992, and who retires from the Board will be paid a
retirement benefit equal to the annualized rate at which directors are
being paid for their services to the Company as directors (including Board
meeting attendance fees but excluding any applicable committee attendance
fees) as in effect at the time such director ceases his service as a
director. The retirement benefit will continue until the period of time
the retirement benefit paid equals the period of time of the director's
Board services. If a director dies before or after retirement, his or
her spouse or other beneficiary will receive the applicable retirement
benefit. In the event of a change in control (as defined in the Plan) of
Modine, each eligible director, or his or her spouse or other beneficiary
entitled to receive a retirement benefit through him or her, would be
entitled to receive a lump-sum payment equal to the present value of the
total of all benefit payments which would otherwise be payable under the
Director Emeritus Retirement Plan. The retirement benefit is not payable
if the director directly or indirectly competes with the Company or if the
director is convicted of fraud or a felony and such fraud or felony is
determined by disinterested members of the Board of Directors to have
damaged Modine.
Effective July 1, 2000 the Director Emeritus Retirement Plan was
frozen with no further benefits accruing under such Plan. All Directors
Emeriti having retired prior to July 1, 2000 will continue to receive the
benefits called for and currently being paid pursuant to the Directors
Emeritus Retirement Plan as if this current action had not been taken.
All current Directors eligible for participation accrued pension benefits
pursuant to the Director Emeritus Retirement Plan until July 1, 2000.
EXECUTIVE COMPENSATION
Summary Compensation Table
--------------------------
The following table sets forth compensation awarded to, earned by,
or paid to the Company's Chief Executive Officer and the four most highly
compensated executive officers other than the Chief Executive Officer who
were serving as executive officers as of March 31, 2002, for services
rendered to the Company and its subsidiaries during fiscal 2001-2002. Also
included is salary, bonus, restricted common stock awards, and stock option
information for fiscal years ended March 31, 2001, and March 31, 2000.
SUMMARY COMPENSATION TABLE
Annual Compensation (1) Long-Term Compensation
------------------------ -------------------------------------
Restricted Stock All Other
Year Name Principal Position Salary Bonus Stock (2) Options (3) Comp. (4)
--------------------------------------------------------------------------------------------------------------------------
2001/2002 D. R. Johnson President and Chief $640,000 $ 47,930 $217,500 50,000 $19,342
2000/2001 Executive Officer 580,000 53,200 0 35,000 35,902
1999/2000 500,000 220,000 187,500 35,000 33,792
2001/2002 D. B. Rayburn Executive Vice President $400,000 $ 32,919 $145,000 40,000 $12,019
2000/2001 Operations 355,000 36,521 0 25,000 21,250
1999/2000 305,000 111,833 125,000 25,000 20,137
2001/2002 E. T. Thomas Senior Vice President, $290,000 $ 23,232 $101,500 20,000 $ 9,046
& Chief Financial Officer
2000/2001 263,500 25,758 0 15,000 15,843
1999/2000 Group Vice President, 232,500 71,610 87,500 15,000 15,272
Highway Products
2001/2002 C. R. Katzfey Group Vice President $262,500 $ 19,517 $101,500 20,000 $ 7,960
2000/2001 235,000 21,630 0 15,000 14,027
1999/2000 General Manager, 193,000 48,121 87,500 12,000 12,749
Truck Division
2001/2002 J. R. Rulseh Group Vice President $220,000 $ 14,655 $101,500 20,000 $ 5,422
2000/2001 Europe - Automotive 190,000 16,228 0 9,000 6,544
1999/2000 Business Unit, 179,000 44,630 50,000 8,000 6,601
Managing Director
(1) Excludes "Other Annual Compensation" under Securities and Exchange
Commission regulations since such does not exceed the lesser of
$50,000 or 10% of each individual's combined salary and bonus.
(2) The total number of restricted shares outstanding and the aggregate
market value at March 31, 2002, were: Mr. Johnson - 17,000 shares
valued at $458,830; Mr. Rayburn - 10,800 shares valued at $291,492;
Mr. Thomas - 6,500 shares valued at $175,435; Mr. Katzfey - 5,900
shares valued at $159,241 and Mr. Rulseh - 5,000 shares valued at
$134,950 Dividends are paid on the restricted shares at the same
time and the same rate as dividends paid to shareholders of
unrestricted shares. Aggregate market value is based on a fair
market value of $26.99 at March 31, 2002.
The stock awarded pursuant to the 1997 through 1998 Stock Award
Plans was granted to an employee at no cost and placed in escrow
until the beginning of the third, fourth, fifth, sixth, and
seventh years, respectively, at which time one-fifth of the shares
are released to the employee. The awards granted pursuant to the
2000 through 2002 Stock Award Plans are subject to restrictions
that lapse annually in fifths over a period commencing at the end
of the first year from the date of grant. In the event of
retirement, the shares may, if authorized by the Officer
Nomination and Compensation Committee of the Board, be released
at an earlier date. In the event of a change-in-control, the
share restrictions will lapse.
(3) The 1994 Incentive Compensation Plan authorized the Officer
Nomination and Compensation Committee of the Board to grant stock
options (incentive stock options and non-qualified stock options)
and other stock-based rights through July 20, 2004, on up to
3,000,000 shares of the Company's common stock. Incentive stock
options and non-qualified stock options granted are at one hundred
percent of the fair market value on the date of the grant and
will expire no later than ten years after the date of the grant.
Grants pursuant to the Plan may be made to such officers or
certain other employees as shall be determined by the Committee.
Upon the exercise of the option, the optionee may pay the
purchase price in cash, stock, optioned stock, or a combination
thereof. The optionee may also satisfy any tax withholding
obligation by using optioned stock. In the event of a sale,
merger, consolidation, or other specified transaction involving
the Company, the optionee will have the right to receive
(regardless of whether or to what extent the option would then
have been exercisable) the difference between the exercise price
and the fair market value of the stock.
(4) Includes employer matching contributions to the Company Tax Saver
(401(k)) Plan, Stock Purchase Plan, Executive Supplemental Stock
Plan, and, since January 1, 1999, the Modine 401(k) Retirement
Plan and the Modine Non-Qualified Deferred Compensation Plan.
The Company has a program (the Executive Supplemental Stock Plan
and, after January 1, 1999, the Modine Non-Qualified Deferred
Compensation Plan) to pay, out of general assets, an amount
substantially equal to the difference between the amount that
would have been allocated to a participant's account as Company
matching contributions, in the absence of legislation limiting
such allocations, and the amount actually allocated under the
plans. Payment of this amount and appreciation thereon is
deferred until termination of service or retirement. Because
the Company's contributions to the Executive Supplemental
Retirement Plan are actuarially based and are not allocated to
the individual named executive officers' accounts until
retirement, such contributions are not readily ascertainable
and are not included in this column. See page 18 herein
regarding the Pension Plan Table for additional information.
Officer Nomination and Compensation Committee Report on Executive
-----------------------------------------------------------------
Compensation
------------
The Officer Nomination and Compensation Committee has provided the
following report on Executive Compensation:
Compensation Philosophy
-----------------------
The Company's executive compensation philosophy is designed to
address the needs of the Company, its executives, and its shareholders.
The specific factors underlying the Committee's decisions with
respect to compensation for each of the named executives for the last
fiscal year are two-fold:
1. The first factor is the ability to accomplish the Company's goal
of preserving and enhancing the shareholders' investment over
the long term without bearing undue risk in the process. The
Committee recognizes that there will be short-term fluctuations
in the Company's business and is of the opinion that incentive
compensation should be based primarily upon attainment of the
Company's goals over a longer period of time. It is the
Committee's intention to compensate the Company's executive
officers appropriately for superior performance; however,
inherent in attaining the Company's goal is the premise that
shareholder assets will not be wasted by the payment of
excessive compensation.
2. The second factor underlying the Committee's compensation
decisions is that the foregoing Company goals can only be
achieved by the retention of competent, highly skilled people.
Accordingly, the design of the compensation package must
include sufficient tools to assure retention of key individuals.
Numerous other criteria are considered in the compensation
decisions, including high ethical standards, concern for employees,
regard for the environment, and commitment to the highest levels of
product quality and customer service. Each of these criteria is an
intrinsic part of attaining the Company's long-term goals.
Total Annual Compensation
-------------------------
The Company's executive compensation program is composed of an
annual cash component, consisting of salary and a bonus based on the
financial performance of the Company or the considered discretion of
the Board or Committee, and a long-term incentive component, currently
consisting of stock awards and stock options.
For fiscal 2001-2002, the Company adopted the principles of Value-
Based Management and used the measurement of Return on Assets Employed
for determining bonus earned. Value-based management is a fundamental
organizational belief and corresponding behavioral change that focuses
management's strategy, decision-making and actions on increasing
shareholder value. Value-based management represents a way of managing
the business that considers the balance sheet and the income statement.
Under the 1994 Incentive Compensation Plan, Company executives can earn a
cash bonus that increases at a linear rate with the Company's return on
assets and is proportional with the executive's level of management
responsibility. Under this plan the Chief Executive Officer (CEO) could
earn a cash bonus equal to 120% of his base salary (the maximum payout
under the plan). All other incentive awards are calculated as a
percentage of the CEO's earned bonus. By doing so, the entire executive
management team shares the risks and rewards of overall company performance.
For fiscal year 2001-2002, the Committee determined that several changes
to the executive compensation program were appropriate, including base pay
adjustments, granting of stock awards in an equal number of shares as
granted in January 2000, based upon level of management responsibility,
and a discretionary bonus at less than threshold value for certain named
executive officers, to align compensation more closely with industry
competition.
Long-Term Compensation
----------------------
To further align the Company's executives' interests with those of the
shareholders, the Compensation Committee utilizes long-term-based incentives
in the form of stock options and stock awards. Individual stock option
grants are determined based upon a subjective assessment of individual
performance, contribution, and potential. The stock options currently
granted are at market value and are exercisable within ten years of date
of grant. The options may be rescinded at any time up until two years
after exercise should the individual be terminated for cause, compete in
any way against the Company, not fully comply with applicable laws and
government regulations, fail to maintain high ethical standards, or breach
the Company's policies such as Guidelines for Business Conduct, Antitrust
Compliance, or confidentiality of proprietary technology and information.
The size of option grants is based upon many factors including (1)
Company and individual performance, (2) previous grants of stock options
and stock awards, and (3) the competitive market for long-term incentive
compensation. As all grants are made at fair market value, it should be
noted that executives receive no value from stock options unless all
shareholders see an increase in the value of their holdings. Stock
options granted in January 2002 reflect each of these factors, including
the increased reliance on long-term incentives seen in the U.S. market.
For the plan prior to 1998-99, stock awards were grants of Company
stock to a limited number of top executives at no cost. These awards vest
only at the rate of 20% per year commencing at the end of the second year
after grant, acting thereby as both a retention tool and a way of involving
the executive in a longer-term stake in the Company. Stock awards not
previously vested are terminated should the executive cease to be employed
by the Company for any reason other than normal retirement or a change of
control of the Company.
Beginning with the 1998-99 fiscal year and continuing for the 1999-
2000 and 2000-2001 fiscal years, stock awards were provided on the
basis of meeting specified targets and vest 20% per year commencing at
the end of the first year. Achievement is measured based on the fiscal
year's performance of specified percentages of sales growth and
earnings per share growth over the prior year's results. The sales
growth and earnings per share growth achievements are calculated
separately and carry equal weight. Target achievement for each element
earn half of the target awards so that full target awards are earned if
both goals are achieved. Each element has a minimum, target, and
maximum goal. No awards were earned in 2000-2001.
Beginning in fiscal year 2001-2002 the stock award plan will be
revised to deliver compensation on two bases: retention and performance.
To be competitive in the marketplace and retain management talent, the
Company will grant one-third of the target awards annually to a limited
number of top executives. At the conclusion of the year the balance of
stock awards will be granted on the basis of performance against an
earnings per share ("EPS") goal set at the beginning of the fiscal year.
No awards on the basis of performance will be considered for the 2001-2002
fiscal year.
For future years awards will be granted as follows: A target number
of shares that relates to market competitive pay will be selected for
each level participant. A retention increment equal to one-third of
the target will be granted in January. The performance portion earned
on EPS will add to the retention portion to equate to 50% target at
threshold, 100% at the targeted rate and 150% of target at maximum.
Executive Officer Compensation
------------------------------
The Committee recognizes that effective management of the Company is
a team effort, led by the CEO. The CEO and the named officers must
possess the difficult-to-define qualities of leadership, ability to
instill confidence in their actions, and the ability to inspire others
to even greater effort. These qualities can only be determined through
observation over a longer period of time and through the ultimate results
attained. Accordingly, the CEO's and senior executive officers' team
compensation decisions were not based solely on fiscal 2001-2002 annual
financial results but were based on the compensation philosophy referenced
above, on the Company's favorable return on shareholders' investment over
the longer term and on the Committee's subjective assessment of the
performance of the management team.
Since, as stated above, we believe that corporate management is a team
effort, we also believe that it is appropriate for the CEO to select his
team members and make a substantial contribution to the compensation
decision for each of such team members. Accordingly, upon detailed
consultation with the CEO, assessment of the experience, capabilities,
and performance of each of the named executives toward attaining Company
goals, and the policies and plans referenced above, compensation decisions
were made. As a background for such decisions, the Compensation Committee
reviewed several major compensation consultant databases with respect to
compensation. The compensation consultant databases are large databases
of industrial companies that the Committee believes appropriately reflect
the broad labor market for Company executives. Within a range of
acceptable total compensation for each individual, compensation is
determined as described above.
Compliance with Internal Revenue Code Section 162(m)
----------------------------------------------------
Section 162(m) of the Internal Revenue Code, enacted in 1993,
generally disallows a tax deduction to public companies for
compensation over one million dollars paid to the Company's CEO and
four other most highly compensated executive officers. Qualifying
performance-based compensation will not be subject to the deduction
limit if certain requirements are met.
The Committee believes that it is generally in the Company's best
interest to attempt to structure performance-based compensation,
including stock option grants and annual bonuses, to executive officers
who may be subject to Section 162(m) in a manner that satisfies the
statute's requirements. However, the Committee also recognizes the
need to retain flexibility to make compensation decisions that may not
meet Section 162(m) standards when necessary to enable the Company to
meet its overall objectives, even if the Company may not deduct all of
the compensation. Accordingly, the Board and the Committee have
expressly reserved the authority to award non-deductible compensation
in appropriate circumstances. Further, because of ambiguities and
uncertainties as to the application and interpretation of Section
162(m) and the regulations issued thereunder, no assurance can be
given, notwithstanding the Company's efforts, that compensation
intended by the Company to satisfy the requirements for deductibility
under Section 162(m) does in fact do so.
Compensation Committee Interlocks and Insider Participation
-----------------------------------------------------------
None of the Committee members is or has been a Company officer or
employee. D. R. Johnson, the Company's President and Chief Executive
Officer, serves on the compensation committee of Marshall & Ilsley
Corporation, of which D. J. Kuester is an executive. No other Company
executive officer currently serves on the compensation committee or any
similar committee of another public company.
G. L. Neale, Chair
R. J. Doyle
D. J. Kuester
V. L. Martin
M. T. Yonker
Performance Graph
-----------------
The following graph compares the five-year cumulative total shareholder
return on the Company's common stock as compared with the returns of the
Standard & Poor's 500 Stock Index and the Nasdaq Industrials Stock Index
(non-financial index). The graph assumes a $100 investment and reinvestment
of dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Measurement Period
(Fiscal Year Covered) Modine S&P 500 NASDAQ
--------------------- ------ ------- ------
Measurement Pt. 4/1/97 100 100 100
FYE 98 145.23 148.00 150.26
FYE 99 120.48 175.32 201.47
FYE 00 111.48 206.77 374.30
FYE 01 118.88 161.95 150.63
FYE 02 129.00 162.34 151.05
EQUITY COMPENSATION
-------------------
Equity Compensation Plan Information
The following table sets forth information about equity compensation
plans, as required by amendments recently adopted by the SEC to its
disclosure requirements found in Items 201 and 601 of Regulation S-K.
(a) (b) (c)
------------------------------------------------------------------------------------------------------------
Number of securities Number of securities
to be issued Weighted-average remaining available
upon exercise of exercise price of for future issuance
outstanding options, outstanding options, (excluding securities
Plan Category warrants or rights warrants and rights reflected Column (a))
------------------------------------------------------------------------------------------------------------
Equity Compensation Plans
-------------------------
approved by security holders 1
-------------------------------
1985 Incentive Stock Plan 239,642 $25.9479 0
1985 Stock Option Plan for
Non-Employee Directors
and Directors Emeriti 120,000 $22.59375 0
1994 Incentive Compensation Plan 2,135,460 $26.71 302,092
1994 Stock Option Plan for
Non-Employee Directors 190,000 $31.25657 0
2000 Stock Option Plan for
Non-Employee Directors 100,000 $28.5652 400,000
Modine Manufacturing Company
Stock Option Plan for Thermacore
Employees under the DTX
Corporation 1995 Stock Option Plan 6,090 $4.9325 0
Modine Manufacturing Company
Stock-Based Compensation Plan for
Thermacore Employees under the
DTX Corporation 1997 Plan 218,757 $10.32877 0
Equity Compensation Plans not N/A The N/A N/A
-----------------------------
approved by security holders Company has
----------------------------
no such plans.
------------------------------------------------------------------------------------------------------------
Total 3,009,949 $25.2094 702,092
1 The referenced plans contain standard anti-dilution provisions that
provide for adjustment of the number of shares covered by the plan in
the event of stock dividends, stock splits or similar transactions or
in the event the Company acquires an entity which has issued, and has
outstanding, stock options or rights. Any such adjustments shall be
made to prevent substantial dilution or enlargement of the benefits
granted to, or available for, participants. The 2002 Incentive
Compensation Plan, which is attached to this Proxy Statement as Exhibit
A, contains such provisions in Paragraph 8.
Options Granted
---------------
The following table sets forth information about stock option
grants during the last fiscal year for the five executive officers
named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed Annual
Rates of Stock Appreciation -
Individual Grants Appreciation for Option Term(1)(2)(3)
--------------------------------------------- ---------------------------------------
% of Total
Options
Options Granted to Exercise Expiration
Name Granted Employees Price Date 0% 5% 10%
---- ------- ---------- -------- ---------- -- -- ---
D. R. Johnson 50,000 9.80% $22.78 1/16/2012 $0 $ 717,570 $ 1,811,010
D. B. Rayburn 40,000 7.84% $22.78 1/16/2012 $0 $ 574,056 $ 1,448,808
E. T. Thomas 20,000 3.92% $22.78 1/16/2012 $0 $ 287,028 $ 724,404
C. R. Katzfey 20,000 3.92% $22.78 1/16/2012 $0 $ 287,028 $ 724,404
J. R. Rulseh 20,000 3.92% $22.78 1/16/2012 $0 $ 287,028 $ 724,404
All Optionees 508,000 100% $22.78 1/16/2012 $0 $ 7,290,511 $ 18,399,862
All Shareholders N/A N/A N/A N/A $0 $480,230,924 $1,323,011,380
(1) All options granted are immediately exercisable except within the
first year of employment. Holders may use shares previously owned
or received upon exercise of options to exercise options. The
Company may accept shares to cover withholding or other employee
taxes.
(2) The dollar amounts under these columns are the result of
calculations at zero percent and at the five-percent and ten-percent
rates set by the Securities and Exchange Commission and, therefore,
are not intended to forecast possible future appreciation, if any,
of the Company's stock price.
(3) No gain to the optionee is possible without stock price appreciation,
which will benefit all shareholders commensurately. A zero percent
gain in stock price appreciation will result in zero dollars for the
optionee.
Option Exercises and Fiscal Year-End Values
-------------------------------------------
The following table sets forth information with respect to the
five executive officers named in the Summary Compensation Table
concerning the number of option exercises and value of options
outstanding at the end of the last fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Total Value of
Total Number Unexercised
Number of of Unexercised In-the-Money
Shares Options Held Options Held at
Acquired on Value at Fiscal Year End (1) Fiscal Year End (1)
Name Exercise Realized Exercisable (2) Exercisable (2)
---- ----------- -------- ---------------------- -------------------
D. R. Johnson 0 $ 0 295,000 $787,790
D. B. Rayburn 4,375 $ 52,500 192,000 $541,190
E. T. Thomas 15,000 $ 88,650 60,000 $104,650
C. R. Katzfey 0 $ 0 83,605 $193,385
J. R. Rulseh 0 $ 0 83,000 $181,620
(1) All options granted are immediately exercisable except within the
first year of employment.
(2) Granted at fair market value on the date of Grant. Total value of
outstanding options is based on a fair market value of Company
stock of $26.99 as of March 31, 2002.
Pension Plan Table
------------------
The following table sets forth the estimated annual benefits
payable upon retirement at normal retirement age for the years of
service indicated under the Company's qualified and non-qualified
defined benefit pension plan at the indicated remuneration levels
(average of five years' earnings).
---------------------------------------------------------------------------
Average Annual Representative Years of Service
Earnings 15 Years 20 Years 25 Years 30 Years 35 Years
----------- -------- -------- -------- -------- --------
$125,000 $ 28,596 $ 38,128 $ 47,660 $ 57,192 $ 66,724
200,000 47,440 63,253 79,066 94,879 110,692
275,000 66,283 88,378 110,472 132,567 154,661
350,000 85,124 113,503 141,879 170,254 198,630
425,000 109,971 138,628 173,285 207,942 242,599
500,000 122,815 163,753 204,691 245,629 286,567
575,000 141,658 188,878 236,097 283,317 330,536
650,000 160,502 214,003 267,504 321,004 374,505
725,000 179,346 239,128 298,910 358,692 418,474
---------------------------------------------------------------------------
The five executive officers named in the Summary Compensation
Table participate on the same basis as other salaried employees in the
non-contributory Modine Manufacturing Company Pension Plan for Non-Union
Hourly-Paid Factory Employees and Salaried Employees. Because the
Company's contributions to the plan are actuarially based on all eligible
salaried employees and are not allocated to individual employee accounts,
expenses for a specific person cannot readily be separately or individually
calculated. Retirement benefits are based on an employee's earnings for
the five highest consecutive of the last ten calendar years preceding
retirement and on years of service. Applicable earnings include salary,
bonuses, and any deferred amount under the Modine Tax Saver (401(k)) Plan
or, since January 1, 1999, the Modine 401(k) Retirement Plan. They are
approximately the same as cash compensation reported in the Summary
Compensation Table, but on a calendar year rather than a fiscal year
basis. A minimum of five years of service is required for eligibility.
The principal benefit under the plan is a lifetime monthly benefit for
the joint lives of participants and their spouses based on the employee's
earnings and period of employment, and is not subject to offset by Social
Security benefits. Employees can retire with unreduced early retirement
benefits at age sixty-two or may be eligible for disability, deferred, or
other early retirement benefits depending on age and years of service
upon retirement or termination. In addition, an employee may elect to
receive a lump-sum pension benefit if, upon retirement, the employee has
accuumulated a sum of his/her age and years of employment of at least 85.
Furthermore, if employed on and before March 31, 2001, an employee who
reaches age sixty-two and who has accumulated thirty or more years of
eligible service may request that the accrued benefit be paid immediately
in a lump-sum amount, even if he/she elects not to retire at that time.
Assuming continued employment until age sixty-five, the estimated
credited years of service under the plan for Messrs. Johnson, Rayburn,
Thomas, Katzfey, and Rulseh are twenty-eight, twenty-two, twenty-one,
twenty-five, and forty-three years, respectively.
Pension benefits under the plan are subject to possible
limitations imposed by the Employee Retirement Income Security Act of
1974 and subsequent amendments thereto. To the extent that an
individual employee's retirement benefit exceeds these limits, the
excess will be paid from general operating funds of the Company.
Employees, including officers, may also qualify for long-term
disability payments of approximately sixty percent of their base
salary, up to a maximum of $15,000 per month, if they become disabled.
Employment Agreements, Termination and Change-of-Control Arrangements
---------------------------------------------------------------------
The Company entered into an employment contract effective May 16,
2001 with Mr. Johnson covering his employment for a thirty-six month
term; applicable change-of-control provisions were last amended May 20,
1999. After the effective date, the employment contract automatically
and continuously extends for an additional day, unless either party has
given written notice of termination to the other party, in which case
the term becomes a thirty-six month period beginning on the date such
notice is received.
The Company may terminate the employment contract for "Cause," as
that term is defined in the contract and Mr. Johnson may terminate the
employment contract upon the occurrence of any of the following events:
failure to elect or re-elect him to the offices he holds; a significant
change in the scope of his authority, duties, or compensation; a breach
by the Company of any provision of the employment contract; and the
liquidation, dissolution, consolidation, or merger of the Company.
In the event of a termination, the Company will remit, as
liquidated damages, severance pay to Mr. Johnson an amount equal to his
"Average Annual Earnings" during the remainder of the period of
employment. "Average Annual Earnings" means the arithmetic average of
annual compensation includable in Mr. Johnson's gross income in the
five taxable years preceding the taxable year of termination. Mr.
Johnson will continue to receive all employee benefits plus supplements
to his retirement pension and 401(k) benefits designed to provide him
with benefits that otherwise are reduced by statutory limitations on
qualified benefit plans. In the event of disability, salary
continuation is provided at a level of one hundred percent for the
first twelve months and up to sixty percent thereafter with no maximum
dollar amount.
In the event of a "Change-in-Control," as defined in the Change-in-
Control Agreement, as amended, at any time during the 24 months after a
change in control occurs, if Mr. Johnson is terminated without "Good
Cause" or if Mr. Johnson terminates the Agreement, a 36-month
"Severance Period" is triggered during which Mr. Johnson is entitled to
receive an amount equal to three times the greater of:
- the sum of his base salary and target bonus; or
- the sum of his five-year average base salary and five-year average
actual bonus payable in a lump sum within 60 days after the date
of termination of employment; and
- an amount equal to the pro-rata portion of the target bonus for
the calendar year in which his employment terminated; and
- applicable benefits and credited service for pension purposes for
the 36-month period.
In the event of Mr. Johnson's death, such amounts will be payable
to his estate. Any stock options or stock awards will immediately
vest, or restrictions lapse, as the case may be, on the date of
termination. In the event a change in control occurs, and if payments
made to Mr. Johnson are subject to the excise tax provisions of Section
4999 of the Internal Revenue Code, Mr. Johnson will be entitled to
receive a lump-sum payment (the "Gross-up Payment"), sufficient to
cover the full cost of such excise taxes and his federal, state and
local income and employment taxes on the additional payment.
Mr. D. B. Rayburn and Mr. E. T. Thomas have similar employment
contracts and "Change-in-Control" provisions on substantially the same
terms and conditions as stated for Mr. Johnson. The employment contracts
for Messrs. Rayburn and Thomas were entered into and effective May 16, 2001.
As of February 26, 1997, the Company entered into separate change-
in-control agreements (the "Change-in-Control Agreements") with the
named executive officers (except Mr. Johnson, described above, and Mr.
Thomas, whose agreement is dated August 7, 1998) and certain other key
employees.
The Change-in-Control Agreements were amended and restated May 20,
1999. In the event of a "Change-in-Control," as defined in those
Agreements, as amended and restated, certain key executives (including
the named executive officers other than Messrs. Johnson, Rayburn and
Thomas, addressed above), if terminated by the Company for any reason
other than "Good Cause," or if terminated by the executive for "Good
Reason" within 24-months after the change in control occurs, or if
terminated by the executive for any reason during the 13th month after
the change in control, will trigger a 24-month "Severance Period"
during which the executive is entitled to receive an amount equal to
two times the greater of:
- the sum of the executive's base salary and target bonus; or
- the sum of the executive's five-year average base salary and
five-year average actual bonus payable in a lump sum within
60 days after the date of termination of employment; and
- an amount equal to the pro-rata portion of the target bonus
for the calendar year in which the executive's employment
terminated; and
- applicable benefits and credited service for pension purposes
for the 24-month period.
In the event of the executive's death, such amounts will be
payable to the executive's estate. Any stock option or stock awards
will immediately vest, or restrictions lapse, as the case may be, on
the date of termination. In the event a change in control occurs, and
if payments made to the executive are subject to the excise tax
provisions of Section 4999 of the Internal Revenue Code, the executive
will be entitled to receive a lump-sum payment (the "Gross-up
Payment"), sufficient to cover the full cost of such excise taxes and
the executive's federal, state, and local income and employment taxes
on the additional payment.
In adidtion one other key executive has an employment contract
that was entered into on May 16, 2001 as well as a Change-in-Control
agreement dated February 26, 1997 and amended May 20, 1999. Those
agreements are substantially identical to the previous contracts
described for Messrs. Johnson, Rayburn and Thomas.
TRANSACTIONS
In the regular course of business since April 1, 2001, the Company
has had transactions with corporations or other firms of which certain
non-employee directors are executive officers or otherwise principally
involved. Such transactions were in the ordinary course of business
and at competitive prices and terms. The Company does not consider the
amounts involved to be material. The Company anticipates that similar
transactions will occur in fiscal year 2002-2003.
2. 2002 INCENTIVE COMPENSATION PLAN
The Plan
--------
The Board of Directors unanimously recommends approval of a new
incentive compensation plan (hereinafter called the "2002 Plan") in the
form attached as Exhibit A. The following statements with respect to
the 2002 Plan are qualified by and made subject to the more complete
information contained in Exhibit A.
It is the judgment of the Directors that stock option grants that
have been made under the Company's previous plans (i.e., the 1964 and
1968 Qualified Stock Option Plans, the 1978 and 1985 Incentive Stock
Plans and the 1994 Incentive Compensation Plan) have been effective and
useful in attracting, holding and motivating key employees. No
additional stock options or other stock rights may be granted under the
1964 and 1968 Qualified Stock Option Plans or the 1978 or 1985
Incentive Stock Plans. As of January 17, 2002, 302,092 shares of Common
Stock remain available under the 1994 Incentive Compensation Plan for
stock options, stock awards, or other stock-based compensation. It is
believed that a new plan, providing for the issuance of incentive and
non-qualified stock options, and other stock-related benefits, as
hereinafter mentioned, should now be adopted so that the Company may
continue to be competitive in its search for, and retention of,
outstanding employees.
Administration
--------------
The Officer Nomination and Compensation Committee (the
"Committee") of the Board of Directors will administer the 2002 Plan.
The Committee is comprised of two or more members of the Board, who are
"Non-employee Directors" as that term is defined in Rule 16b-3 of the
Securities and Exchange Commission and Section 162(m) of the Internal
Revenue Code. The Committee is authorized to interpret the 2002 Plan;
establish and amend the rules for its administration; determine which
key employees shall be granted options and/or other benefits, the
number of shares and the type of options and/or other benefits to be
granted to each employee; and amend the 2002 Plan subject to the terms
and conditions contained therein. However, no amendment of the 2002
Plan shall, without approval of the stockholders of the Company: (1)
increase the total number of shares which may be issued or increase the
amount or type of benefits that may be granted, except in limited
circumstances that are outlined in the Plan; (2) change the minimum
purchase price, if any, of shares of Common Stock which may be made
subject to benefits; or (3) modify the requirements as to eligibility
for benefits.
It is not possible at this time to determine who may be selected
to receive options and/or other benefits under the 2002 Plan or the
amount of Common Stock to be optioned to any person. However, the 2002
Plan provides that any one employee may receive no more than 150,000
shares in any one year. It is expected however, that the Committee will
make these determinations on the basis of the person's responsibilities
and current and potential contributions to the success of the Company,
and that among those who may qualify as recipients of options and/or
related benefits will be officers and other key employees of the
Company and its majority-owned subsidiaries. In fiscal 2001-02 under
the 1994 Incentive Compensation Plan, the Committee granted or awarded
stock awards and/or stock options to a total of 111 employees, 14 of whom
are executive officers, including each of the individuals named in the
Cash Compensation Table. The stock option grants are set forth on Page 17.
Benefits
--------
Stock-based or cash benefits ("Benefits") under the 2002 Plan may
be granted, awarded, or paid in any one or a combination of Stock
Purchase Agreements, Stock Awards, Stock Options (incentive stock
options and non-qualified stock options), Stock Appreciation Rights,
Restricted Stock, Performance Unit Plans, Performance Share Plans, Book
Value Stock Plans, and annual Stock or Cash Incentive Plans. There is
reserved for issue under the 2002 Plan an aggregate of 3,000,000 shares
of Common Stock, $0.625 par value, of which no more than twenty-five
percent will be restricted stock. These aggregate shares may be newly-
issued shares, authorized but unissued shares, or shares reacquired by
the Company, including shares purchased on the open market. These shares
are in addition to those shares remaining under the 1994 Incentive
Compensation Plan. The aggregate amount is subject to proportionate
adjustments for stock dividends, stock splits, and similar changes.
The Company may enter into agreements with employees for the
present or future sale of shares to them at such prices as the
Committee may determine. The shares subject to any such agreement may
not be transferred to the employee (and the employee will have no
ownership rights therein) until payment has been received in full.
Agreements may contain restrictions on transferability for stated
periods and/or provisions obligating the employee to resell his shares
to the Company under stated circumstances. Such restrictions and
obligations will normally lapse at stated intervals.
Stock awards will consist of shares issued to employees as a bonus
for services rendered and without other payment. It is anticipated that
such awards will be subject to restrictions on transferability for
stated periods and/or forfeiture if the employee's employment with the
Company terminates. Such restrictions and risk of forfeiture will
normally lapse at stated intervals.
Stock options will consist of options (either incentive stock
options or non-qualified stock options) to purchase shares of Common
Stock. The Compensation Committee will establish the time or times at
which options may be exercised and whether all of the options may be
exercisable at one time or in increments over time. The option price or
procedure for setting the option price shall be set by the Compensation
Committee at the time of the granting of an option. For incentive stock
options, the option price may not be less than the fair market value of
the Company's stock on the date of grant. For non-qualified stock
options, the option price may be less than, equal to, or greater than
the fair market value of the Company's stock on the date of grant.
However, options granted at less than fair market value may not qualify
as performance-based compensation under existing tax laws, and might be
partially or wholly non-deductible if exercised by individuals who are
named executive officers in the Company's proxy statement for the
taxable year of exercise. The Committee also has the authority to reset
the price of any stock option after the original grant and before
exercise. In the event of stock dividends, splits, and similar capital
changes, the 2002 Plan provides for appropriate adjustments in the
number of shares available for options and the number and option prices
of shares subject to outstanding options. The term of a stock option
will be determined by the Committee; however, an incentive stock option
will have a term of no more than ten years from the date of the grant.
Under certain circumstances, extensions or other modifications to
outstanding options might result in disqualification of an option as
performance-based compensation and loss of deductions if the individual
is a named executive officer in the year in which the option is
exercised. The purchase price of option shares may be paid in cash,
Company stock, a combination of Company stock and cash, or such other
legal and appropriate forms or means that the Committee may determine.
For non-qualified options, the option holder must also pay the Company,
at the time of purchase, the amount of federal, state, and local
withholding taxes required to be withheld by the Company. These taxes
may be settled in cash or with Company stock, including stock that is
part of the award or that is received upon exercise of the stock option
that gives rise to the withholding requirement. Shares of the Company's
Common Stock also may be used by participants for payment of the option
price or satisfaction of withholding tax obligations. The Plan also
permits other forms of payment if authorized by the Board and
consistent with applicable law and regulations.
Stock appreciation rights may be granted under the 2002 Plan with
respect to options granted concurrently or previously under the 2002
Plan. Each stock appreciation right will permit the holder thereof to
receive up to 100%, or such lesser amount as set by the Committee, of
the difference between the market price (on the date of exercise) of
the shares to which it relates and the option price thereof. A stock
appreciation right will be exercisable at the time and to the extent
the option to which it relates is exercisable. Holders of stock
appreciation rights will be permitted to exercise the right or the
related option, but not both. Upon exercise, rights will be paid in
Common Stock of the Company or cash, or a combination thereof, as
determined by the Committee. Any exercise will reduce the shares
issuable under the Plan under which the related option was granted by
the number of shares with respect to which the right is exercised, even
if payment is made partly or wholly in cash.
Restricted stock becomes vested in approximately equal installments
over a period of time specified from the date of grant thereof, with each
such installment to mature annually. Each installment becomes vested only
if earned out by the recipient by remaining in the employment of the
Company, subject to certain exceptions.
A Performance Unit Plan will provide for units, contingently granted,
which entitle the employee to cash payments or their equivalent in shares
of stock valued at the time of the grant (i.e., the unit value remains
constant and does not fluctuate with changes in the market value of the
stock), if predetermined objectives are met.
A Performance Share Plan will provide for artificial shares,
contingently granted, which entitle the employee to actual shares of
Common Stock or their cash equivalent at the time of payment (i.e., the
unit value may appreciate or decline depending on future market value
of the stock), if predetermined objectives are achieved.
A Book Value Stock Plan will permit the employee to purchase
shares of Common Stock at book value. Such "book value" stock may be
required to be resold to the Company upon termination of the employment
relationship, or at other specified times at the then-book value of the
stock. On March 31, 2002, the book value of the Company's Common Stock
was $15.42 per share.
An annual Stock or Cash Incentive Plan will allow the employee to
receive, in addition to the employee's base salary, annual stock or
cash bonuses (portions of which may be paid quarterly over the course
of the fiscal year) based upon the financial performance of the Company
or the considered discretion of the Committee. The financial
performance measurement for the stock or cash bonus will be determined
by the Board or Committee. The maximum annual formula bonus may be
fixed at up to one hundred fifty percent (150%) of the employee's base
salary (base salaries for the five named executive officers are as set
forth in the Summary Compensation Table at page 11 herein) with the
Board or Committee designating the percentage level of participation
and maximum bonus for each officer of the Company while management
designates the percentage level of participation and maximum bonus for
other employees. The Board or Committee will determine whether the
bonuses will be payable to employees in stock or cash or a combination
of stock and cash.
Adjustment and Change in Control
--------------------------------
In the event the Company at any time changes the number of issued
shares of common stock without new consideration to the Company (by way
of stock dividends, stock splits, or similar transactions), the total
number of shares reserved for issuance under the Plan and the number of
shares covered by each outstanding Benefit will be adjusted so that the
aggregate consideration payable to the Company, if any, and the value
of each such Benefit will not be changed.
In the event of a proposed reorganization, sale, merger,
consolidation, dissolution, or liquidation of the Company, outstanding
Benefits may also contain provisions for their continuation,
acceleration, immediate vesting, or other equitable adjustments, unless
otherwise provided by the Board or Committee. In addition, the Named
Executive Officers and certain other key employees have Change-of-
Control arrangements as set forth on Pages 19 and 20.
The Board or the Committee has the right to substitute or assume
Benefits in connection with mergers, reorganizations, separations, or
other transactions; provided such substitutions and assumptions are
permitted by applicable provisions of the Internal Revenue Code and
regulations promulgated thereunder. The number of shares reserved for
the 2002 Plan may be increased by the corresponding number of options
and other Benefits assumed and, in the case of a substitution, by the
net increase and number of shares subject to options or other Benefits
before and after the substitution.
Amendment
---------
The Board of Directors or the Committee may amend, alter or
discontinue the 2002 Plan. However, no amendment, alteration or
discontinuation of the 2002 Plan or any Benefit granted under the 2002
Plan may impair the rights of any participant under any Benefit,
without the participant's consent.
Other Terms
-----------
The issuance of stock upon exercise of options or other grant or
award of Benefits is subject to the registration with the Securities and
Exchange Commission of the shares reserved by the Company for the Plan.
Benefits (other than non-qualified stock options) are not
transferable other than by will or the laws of descent and distribution,
or pursuant to a qualified domestic relations order; non-qualified stock
options may be assignable or transferable to or for the benefit of a
member of the employee's family.
The closing price of the Company's Common Stock on the NASDAQ
National Market System on March 31, 2002, was $26.99 per share.
Effective Date
--------------
The 2002 Plan will be effective on the date it is approved by the
shareholders. No stock options or other Benefits included in the 2002
Plan may be granted after July 17, 2012.
Federal Income Tax Consequences Relating to the Plan
----------------------------------------------------
The federal income tax consequences of an employee's participation
in the Plan are complex and subject to change. The following discussion
is only a summary of the general rules applicable to stock based
compensation.
Incentive Stock Options
-----------------------
If an option granted under the 2002 Plan is treated as an incentive
stock option, the optionee will not recognize any income upon either the
grant or the exercise of the option and the Company will not be allowed a
deduction for federal tax purposes. Upon a sale of the shares, the tax
treatment to the optionee and the Company will depend primarily upon
whether the optionee has met certain holding period requirements at the
time he or she sells the shares. In addition, as discussed below, the
exercise of an incentive stock option may subject the optionee to
alternative minimum tax liability.
If an optionee exercises an incentive stock option and does not
dispose of the shares received within two years after the date of the
grant of such option or within one year after transfer of the shares to
him or her, any gain realized upon disposition will be characterized as
long-term capital gain, and in such case, the Company will not be
entitled to a federal tax deduction. If the optionee disposes of the
shares either within two years after the date the option is granted or
within one year after the transfer of the shares to him or her, such
disposition will be treated as a disqualifying disposition and an
amount equal to the lesser of (1) the fair market value of the shares
on the date of exercise minus the purchase price, or (2) the amount
realized on the disposition minus the purchase price, will be taxed as
ordinary income to the optionee in the taxable year in which the
disposition occurs. The excess, if any, of the amount realized upon
disposition over the fair market value at the time of the exercise of the
option will be treated as long-term capital gain if the shares have been
held for more than one year following the exercise of the option. In
the event of a disqualifying disposition, the Company may withhold income
taxes from the optionee's compensation with respect to the ordinary income
realized by the optionee as a result of the disqualifying disposition.
The exercise of an incentive stock option may subject an optionee to
alternative minimum tax liability because the excess of the fair market
value of the shares at the time an incentive stock option is exercised
over the purchase price of the shares is included in income for purposes
of the alternative minimum tax. Consequently, an optionee may be obligated
to pay alternative minimum tax in the year he or she exercises an incentive
stock option.
In general, there will be no federal tax consequences to the Company
upon the grant, exercise, or termination of an incentive stock option.
However, in the event an optionee sells or disposes of stock received
upon the exercise of an incentive stock option in a disqualifying
disposition, the Company will be entitled to a deduction for federal
income tax purposes in an amount equal to the ordinary income, if any,
recognized by the optionee upon disposition of the shares, provided that
the deduction is not allowed under the Code.
Non-qualified Stock Options
---------------------------
Non-qualified stock options granted under the Plan do not qualify
as "incentive stock options" and will not qualify for any special tax
benefits to the optionee. An optionee generally will not recognize any
taxable income at the time he or she is granted a non-qualified option.
However, upon its exercise, the optionee will recognize ordinary income
for federal tax purposes measured by the excess of the then fair market
value of the shares over the option price. The income realized by the
optionee will be subject to income tax withholding.
The optionee's basis for determination of gain or loss upon the
subsequent disposition of shares acquired upon the exercise of a non-
qualified stock option will be the amount paid for such shares plus any
ordinary income recognized as a result of the exercise of such option.
Upon disposition of any shares acquired pursuant to the exercise of a
non-qualified stock option, the difference between the sale price and the
optionee's basis in the shares will be treated as a capital gain or loss
and will be characterized as long-term capital gain or loss if the shares
have been held for more than one year at the date of their disposition.
In general, there will be no federal tax consequences to the
Company upon the grant or termination of a non-qualified stock option
or a sale or disposition of the shares acquired upon the exercise of a
non-qualified stock option. However, upon the exercise of a non-
qualified stock option, the Company will be entitled to a deduction for
federal income tax purposes equal to the amount of ordinary income that
an optionee is required to recognize as a result of the exercise,
provided that the deduction is not disallowed under the Code.
Stock Appreciation Rights
-------------------------
No income will be recognized by the recipient of a stock
appreciation right until shares representing the amount of the
appreciation or the cash equivalent, if so elected, are transferred to
the recipient pursuant to the exercise of the right. The amount of such
income will be equal to the fair market value of such shares on the
exercise date (or the cash equivalent), and will be ordinary income.
Subject to the applicable provisions of the Code, the Company will be
entitled to a deduction at the same time and in the same amount as the
employee realizes ordinary income as a result of the exercise of the right.
Stock Awards
------------
Generally, at the time the substantial risk of forfeiture terminates
with respect to a stock award, the then fair market value of the stock
will constitute ordinary income to the employee. Subject to the applicable
provisions of the Code, a deduction for federal income tax purposes will
be allowable to the Company in any amount equal to the compensation
realized by the employee.
Performance Unit Awards
-----------------------
The grant of a performance unit award generally will result in taxable
income to the employee on the earlier of actual receipt of compensation
pursuant to the award or when such compensation is credited to the
employee's account, or set apart, or otherwise made available. Subject to
the applicable provisions of the Code, a deduction for federal income tax
purposes will be allowable to the Company in an amount equal to the
compensation realized by the employee.
The Board of Directors recommends a vote IN FAVOR OF this Plan.
-----------
3. SHAREHOLDER PROPOSAL
GAMCO Investors, Inc., One Corporate Center, Rye, New York, 10590-
1435, has presented the following resolution for action at the Annual
Meeting. The Company will provide the number of Company securities held
by the proponent of this proposal promptly upon receipt of a request.
RESOLVED, That the shareholders of Modine Manufacturing
Company (the "Company") hereby request that the Board of
Directors redeem the Rights issued pursuant to the
Rights Agreement, dated as of October 16, 1986 -- as
subsequently amended -- unless the holders of a majority
of the outstanding shares approve the issuance at a
meeting of the shareholders held as soon as practical.
SHAREHOLDER'S SUPPORTING STATEMENT
In October 1986, the Board of Directors adopted a shareholder
rights plan and issued one right for each share of common stock. Under
the plan, shareholders may exercise the Rights 10 days after a
shareholder has acquired 20 percent or more of Modine's stock, or has
commenced a tender or exchange offer for 30 percent or more of Modine's
stock. In the event of certain mergers, sales of assets, or other
transactions, each Right not owned by such 20-percent-or-more holder
will become exchangeable for common stock having a market value of
twice the exercise price of the right. Modine can redeem the Rights at
a price of $0.0125 per right, at any time before a holder acquires 20
percent or more of Modine's common stock.
The Board issued the Rights to prevent acquisitions of Modine
without Board consent. The Rights, unless redeemed, would vastly
increase the cost to a potential bidder of effecting a merger or tender
offer that is not approved by the Board of Directors. Adopting the
Rights plan without shareholder input arrogated to the Board a nearly
exclusive right to determine the price and terms of virtually any
acquisition.
We believe the shareholders should retain the right to decide what
represents a fair price for their holdings. As a consequence of the
poison pill, however, potential bidders for the Company's stock must
negotiate with management, and cannot take an offer directly to the
shareholders even if an overwhelming majority of the shareholders would
have accepted such an offer. A Board and management sometimes may have
interests that conflict with the interests of shareholders. We believe
that the shareholders should be able to weigh in each case whether they
wish to entrust the Board with this enormous power.
By redeeming the Rights or putting this significant matter to a
vote of shareholders, the Board will serve two important goals. First,
it will encourage shareholder democracy by soliciting the views of its
shareholder constituency about the advisability of anti-takeover
devices. Second, it will allow shareholders to decide for themselves
whether a Rights Plan improves or undermines shareholder value.
We urge Shareholders to vote for this resolution
THE COMPANY'S RESPONSE
Modine's shareholder rights plan ("Plan" or "the Plan") was first
adopted by the Board of Directors in 1986, and later renewed in 1996.
The Board's goal in adopting and renewing the Plan was to maximize
Modine's value for its shareholders. The Board's goal in retaining the
Plan is the same. For the reasons outlined below, the Board
---------
unanimously recommends a vote AGAINST the adoption of the GAMCO
---------------------------------------------------------------
Investors, Inc. proposal.
------------------------
Shareholder rights plans (often called "poison pills") are not
uncommon, and they continue to be adopted. According to Thomson
Financial Securities Data (now Thomson Financial Investment Banking and
Capital Markets Group), 140 U.S. companies adopted shareholder rights
plans or provisions in the first half of 2001, a figure that was up 45%
from the same period during 2000. As of the end of 2001, over 1500
U.S. Companies had shareholder rights plans in place.
Modine's Plan is designed to protect Modine's shareholders against
unsolicited attempts to take control of Modine that would not maximize
shareholder value. Modine believes that its independent Board of
Directors, which was elected by the shareholders, is in the best
position to evaluate acquisition offers. The Plan allows the Board to
conduct that evaluation and protect the shareholders from potential
takeover abuses, abuses often committed by those seeking short-term
rewards with little regard for others negatively affected. Takeover
abuses include "creeping" acquisitions of Modine's stock in the open
market, hostile tender offers made at less than a fair price, and
partial and two-tiered tender offers that often discriminate against
late-tendering shareholders.
Today's global economy is a highly competitive one. Modine's
Board and Management believe that the best way for Modine to compete in
that economy is by a commitment to long-term strategic initiatives.
Modine's shareholders deserve that kind of commitment. The shareholder
rights plan is an important tool that enables the Board to carry out
its business objectives.
Contrary to the suggestion advanced by the proponent, Modine's
Plan itself does not give the Board absolute power over possible
acquisitions of Modine or other business combinations. Rather, in
maintaining the Plan, the Board is obligated by law to exercise its
separate fiduciary obligations to the shareholders. Shareholder rights
plans neither prevent unsolicited proposals from being made nor prevent
companies from being acquired at prices that are fair and reasonable.
In fact, a study of takeover data from 1992-1996 by Georgeson & Company,
a nationally recognized proxy solicitation and investor relations firm,
found that the presence of a shareholder rights plan neither increased
the likelihood of defeat of an unsolicited takeover proposal nor reduced
the likelihood of a company becoming a takeover target.
Some opponents of shareholder rights plans argue that such plans
negatively impact shareholder value. Additional, compelling data
compiled by Georgeson & Company supports the opposite view. According
to Georgeson's research, from 1992 through 1996, the period under
review, the takeover premium for a company with a shareholder rights
plan averaged 8% more than for a company without such a plan. A follow-
up study confirmed that the takeover premium for companies with
shareholder rights plans was still significant. When translated into
dollars, Georgeson's study showed that companies with shareholder
rights plans benefited from an estimated $13 billion premium from 1992-
1996, while companies without such plans lost an estimated $14.5
billion in shareholder value.
In recommending a vote against the proposal, the Board of Directors
is not suggesting that it will, without question, retain the Plan until
its expiration by its terms in 2006. Any determination to retain, amend
or revoke the Plan will be made only after careful deliberation, conducted
in light of all reliable data and information available at that time, and
in accordance with the Board's continuing fiduciary responsibilities to
its shareholders. Those responsibilities include a determined effort to
increase the return on your investment in Modine and to pursue that goal
with the long-term interests of Modine's shareholders, its employees, and
the communities in which its facilities are located squarely in mind.
The Board takes its obligations to the shareholders very seriously, and
believes it can best safeguard shareholder value and Modine's assets by
retaining the flexibility granted by the presence of the Plan.
The Board recommends a vote AGAINST the proposal.
-------
OTHER INFORMATION
Independent Accountants
-----------------------
PricewaterhouseCoopers LLP have been the Company's independent
certified public accountants since 1935 and were selected as the
Company's auditors for the fiscal year ended March 31, 2002. They are
appointed by the Board of Directors of the Company and report to the
Audit Committee. No representatives of PricewaterhouseCoopers LLP will
be attending the 2002 Annual Meeting of Shareholders.
Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership with the Securities
and Exchange Commission and the National Association of Securities
Dealers, Inc. Officers, directors, and greater-than-ten-percent
shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished to the
Company, the Company believes that, during the period April 1, 2001 to
March 31, 2002, all Section 16(a) filing requirements applicable to its
officers, directors, and greater-than-ten-percent beneficial owners
were complied with.
ADDITIONAL MATTERS
The Board of Directors is not aware of any other matters that will
be presented for action at the 2002 annual meeting. Should any additional
matters come before the meeting, the persons named in the enclosed proxy
will vote on those matters in accordance with their best judgment.
SHAREHOLDER PROPOSALS FOR 2003
If a shareholder wishes to present a proposal for consideration at
next year's Annual Meeting of Shareholders, such proposal must be
received at Modine's offices on or before February 7, 2003.
ANNUAL REPORT
The Annual Report of the Company, including financial statements
for the fiscal year ended March 31, 2002, is enclosed.
D. R. ZAKOS, Secretary
APPENDIX
EXHIBIT A
MODINE MANUFACTURING COMPANY
2002 INCENTIVE COMPENSATION PLAN
1. PURPOSE. The Modine Manufacturing Company 2002 Incentive
Compensation Plan (the "Plan") is intended to provide incentives which
will attract and retain highly competent persons as officers and key
employees of Modine Manufacturing Company (the "Company") and its
majority owned subsidiaries by providing them with opportunities to
acquire Common Stock of the Company ("Common Stock"), receive monetary
payments based on the value of such shares pursuant to the stock-based
benefits described herein, or receive cash or Common Stock bonuses,
also described herein (collectively "Benefits").
2. ADMINISTRATION.
(a) Procedure. The Board of Directors of the Company shall
---------
supervise and administer the Plan. Any questions of interpretation of
the Plan or of any Benefits issued under it shall be determined by the
Board and such determination shall be final and binding upon all
persons.
(b) Committee. Any or all powers and discretion vested in the
---------
Board under this Plan may be exercised by a committee (the "Committee")
of at least two members of the Board who are "Non-Employee Directors"
as defined in Rule 16 b-3 of the Securities and Exchange Act of 1934
(the "Exchange Act") and Section 162(m) of the Internal Revenue Code.
A majority of members of the Committee shall constitute a quorum, and
all determinations of the Committee shall be made by a majority of its
members. Any determination of the Committee under the Plan may be made
without notice or meeting of the Committee, by a writing signed by a
majority of the Committee members.
(c) Powers of the Board. Subject to the provisions of the
-------------------
Plan, the Board or Committee shall have the authority, in its
discretion: (i) to grant or award Benefits under the Plan consistent
with the purposes of the Plan; (ii) to determine, in accordance with
the provisions of the Plan, the fair market value of the Common Stock;
(iii) to determine, in accordance with the provisions of the Plan, the
exercise price per share of options to be granted; (iv) to determine
the employees to whom, and the time or times at which, options or other
Benefits shall be granted and the number of shares to be represented by
each option or other Benefit; (v) to interpret the Plan; (vi) to
prescribe, amend, and rescind rules and regulations relating to the
Plan; (vii) to determine the terms and provisions of each option or
other Benefit granted or awarded (which need not be identical) and,
with the consent of the holder thereof, modify or amend each option or
other Benefit; (viii) to reduce the exercise price per share of
outstanding and unexercised options; (ix) to accelerate or defer (with
the consent of the optionee) the exercise date of any option; (x) to
authorize any person to execute on behalf of the Company any instrument
required to effectuate the grant or award of an option or other
Benefit; and (xi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(d) Effect of Decisions. All decisions, determinations, and
-------------------
interpretations of the Board, or the Committee, as the case may be,
shall be final and binding on all participants and any other holders of
any Benefits granted or awarded under the Plan.
(e) Section 16 Compliance. With respect to persons subject to
---------------------
Section 16 of the Exchange Act, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision,
application or interpretation of the Plan or action by the Committee is
inconsistent with this intent, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee. In
addition, to the extent a participant (who is also a Reporting Person
under Rule 16b-3 or its successors) engages in an opposite-way
transaction within six months that jeopardizes the exemption, it shall
be deemed null and void.
3. PARTICIPANTS; GENERAL TERMS AND CONDITIONS.
(a) Employees. Participants will consist of such key employees
---------
(including officers) of the Company or any or all of its present or
future majority owned subsidiaries as the Board of Directors in its sole
discretion determines to be mainly responsible for the success and future
growth and profitability of the Company and whom the Board of Directors
may designate from time to time to receive Benefits under the Plan.
Benefits may be granted under this Plan to persons who have received
options or other Benefits under this or other plans of the Company.
(b) Maximum Number. The maximum number of shares with respect
--------------
to which a Benefit may be granted or awarded to any participant in any
one year of the Company shall not exceed one hundred fifty thousand
(150,000) shares.
(c) General Terms and Conditions. The Committee shall
----------------------------
determine the time or times at which Benefits shall be granted or
awarded, the number or amount of Benefits granted or awarded (subject
to the limitation of this Section 3(b) above), and such other terms and
conditions of the Benefits in addition to those set forth in this Plan
which comply with applicable Internal Revenue Service, Securities and
Exchange Commission, or other laws and regulations, all as the
Committee deems appropriate.
4. BENEFITS.
(a) Types. Benefits under the Plan may be granted in any one
-----
or a combination of:
(1) Stock Purchase Agreements. Stock Purchase Agreements
-------------------------
will consist of agreements for the present or future sale of Common
Stock by the Company to a participant at such prices and on such terms
and conditions as the Board or Committee deems appropriate.
(2) Stock Awards or Bonuses. Stock Awards or Bonuses will
-----------------------
consist of shares of Common Stock transferred to participants with or
without other payment therefor as a bonus for services rendered or to
be rendered to the Company and its majority owned subsidiaries.
(3) Stock Options (incentive stock options and non-qualified
--------------------------------------------------------
stock options with or without tax offset bonuses and
----------------------------------------------------
discounted stock options):
-------------------------
(i) Exercise Price. Stock Options will consist of
--------------
options to purchase shares of Common Stock at purchase prices
determined by the Board or Committee at the date such option is
granted. Except regarding Incentive Stock Options, such option price
may be less than the fair market value of Common Stock on the date of
grant, but in no event shall the option price be less than the par
value of the shares. The fair market value shall be the closing price
per share of Common Stock on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") National Market System on the date
of grant. If the Common Stock ceases to be listed on the NASDAQ National
Market System, the Board or Committee shall designate an alternative
method of determining the fair market value of the Common Stock.
(ii) Term. Such options will be exercisable not later
----
than ten years after the date they are granted and will terminate not
later than three years after termination of employment for any reason
other than death.
(4) Stock Appreciation Rights: Stock Appreciation Rights,
-------------------------
granted in conjunction with a stock option, will consist of rights to
receive an amount equal to the appreciation in fair market value since
the date of grant in lieu of exercising the corresponding stock option.
(5) Restricted Stock: Restricted Stock will consist of
----------------
shares of Common Stock which are transferred to the participant but
which carry restrictions such as a prohibition against disposition or
an option to repurchase in the event of employment termination, and may
be subject to a substantial risk of forfeiture. Shares of Restricted
Stock may be granted to the participant at no charge, or they may be
sold to the participant. Restrictions on the shares of stock may lapse
over a period of time. As the restrictions lapse, the participant has
unrestricted shares which then may be sold or transferred. If,
however, the restrictions are violated prior to their lapse, those
shares still subject to such restrictions are forfeited by the
participant, and must be returned to the Company.
(6) Performance Unit Plans: A Performance Unit Plan will
----------------------
provide for units, contingently granted, which entitle the participant
to cash payments or their equivalent in shares of stock valued at the
time of the grant (i.e., the unit value remains constant and does not
fluctuate with changes in the market value of the stock), if
predetermined objectives are met.
(7) Performance Share Plans: A Performance Share Plan will
-----------------------
provide for artificial shares, contingently granted, which entitle the
participant to actual shares of Common Stock or their cash equivalent
at the time of payment (i.e., the unit value may appreciate or decline
depending on future market value of the stock), if predetermined
objectives are achieved.
(8) Book Value Stock Plans: A Book Value Stock Plan will
----------------------
permit the participant to purchase shares of Common Stock at book
value. Such "book value" stock may be required to be resold to the
Company upon termination of the employment relationship, or at other
specified times at the then book value of the stock.
(9) Annual Stock or Cash Incentive Plans. An annual Stock
------------------------------------
or Cash Incentive Plan will allow the participant to receive, in
addition to the participant's base salary, annual stock or cash bonuses
(portions of which may be paid quarterly over the course of the fiscal
year) based upon the financial performance of the Company or the
considered discretion of the Board or Committee. The financial
performance measurement for the stock or cash bonus will be determined
by the Board or Committee. The maximum annual formula award may be
fixed at up to one hundred fifty percent (150%) of the participant's
base salary with the Board or Committee designating the percentage
level of participation and maximum bonus for each officer of the
Company while management designates the percentage level of
participation and maximum bonus for other participants. The Board or
Committee will determine whether the bonuses will be payable to
participants in stock or cash or a combination of stock and cash.
(b) Written Agreement. Each grant or award of a Benefit shall
-----------------
be evidenced by an appropriate written agreement, the form of which
shall be consistent with the terms and conditions of the Plan and
applicable law and shall be signed by an officer of the Company and the
participant.
5. SHARES RESERVED UNDER THE PLAN. There is hereby reserved for
issuance under the Plan an aggregate of three million (3,000,000)
shares of Common Stock (except as supplemented hereinafter provided in
Section 8), $0.625 par value of which no more than twenty-five percent
will be restricted stock. These aggregate shares may be newly-issued
shares, authorized but heretofore unissued shares or shares reacquired
by the Company, including shares purchased on the open market. Any
shares subject to the options, rights, agreements, plans, or awards as
described hereinafter or issued under such options, rights, agreements,
plans, or awards may thereafter be subject to new options, rights,
agreements, plans or awards under this Plan if there is a lapse,
expiration or termination of any such options, rights, agreements,
plans or awards prior to issuance of the shares or payment of the
equivalent or if shares are issued under such options, rights,
agreements, plans, or awards, and thereafter are reacquired by the
Company pursuant to rights reserved by the Company upon issuance
thereof; provided, however, issued shares reacquired by the Company may
only be subject to new options, rights, agreements, plans, or awards if
the participant received no benefit of ownership from the shares.
6. FORM OF PAYMENT. Payments required, if any, upon a
participant's exercise of Benefits under the Plan may be made in the
form of: (a) cash; (b) Company stock; (c) a combination of Company
stock and cash; or (d) such other forms or means which the Committee
shall determine in its discretion and in such manner as is consistent
with the Plan's purpose and applicable Internal Revenue Service,
Securities and Exchange Commission, or other laws or regulations.
7. WITHHOLDING TAXES. No later than the date as of which an
amount first becomes includible in the gross income of the participant
for federal income tax purposes with respect to any Benefit under the
Plan or with respect to any exercise of any stock option granted under
the Plan, the participant shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment of, any
federal, state, local or foreign taxes of any kind required by law to
be withheld. Such withholding obligations may be settled with Common
Stock, including Common Stock that is part of the award or that is
received upon the exercise of the stock option that gives rise to the
withholding requirement. The obligations of the Company under the Plan
shall be conditional upon such payment or arrangements, and the Company
shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to the participant. The
Company may establish such procedures as it deems appropriate,
including the making of irrevocable elections or the timing of the use
of Common Stock, for the settlement of its withholding obligations.
8. ADJUSTMENT PROVISIONS.
(a) Changes in Capitalization. If the Company shall at any time
-------------------------
change the number of issued shares of Common Stock without new
consideration to the Company (by stock dividends, stock splits, or
similar transactions), the total number of shares reserved for issuance
under this Plan and the number of shares covered by each outstanding
Benefit shall be adjusted so that the aggregate consideration payable
to the Company, if any, and the value of each such Benefit shall not be
changed.
(b) Reorganization, Sale, etc. Benefits may also contain
-------------------------
provisions for their continuation, acceleration, immediate vesting, or
for other equitable adjustments after changes in the Common Stock
resulting from reorganization, sale, merger, consolidation,
dissolution, liquidation, or similar occurrences.
(1) Substitutions and Assumptions. If the Company acquires
-----------------------------
an entity which has issued stock options or other rights, which remain
outstanding, the Company may substitute stock options or rights for
options or rights of such entity, including options or other rights to
acquire stock at less than 100% of the fair market price of the stock
at grant. The number and kind of such stock options and other rights
shall be determined by the Committee and the total number of shares
reserved for issuance under this Plan shall be appropriately adjusted
consistent with such determination and in such manner as the Committee
may deem equitable to prevent substantial dilution or enlargement of
the Benefits granted to, or available for, present or future
participants of this Plan. The number of shares reserved for issuance
pursuant to Section 5 may be increased by the corresponding number of
options or other benefits assumed and, in the case of a substitution,
by the net increase in the number of shares subject to options or other
benefits before and after the substitution.
9. NONTRANSFERABILITY. Benefits (other than non-qualified stock
options) granted under the Plan to an employee shall not be
transferable by the participant otherwise than by will or the laws of
descent and distribution, or pursuant to a qualified domestic relations
order, and shall be exercisable, during the participant's lifetime,
only by the participant; non-qualified stock options granted under the
Plan to a participant may be assignable or transferable by the
participant to or for the benefit of a member of the participant's
family. In the event of the death of a participant during employment
or prior to the termination of any Benefit held by the participant
hereunder, each Benefit theretofore granted to the participant shall be
exercisable or payable to the extent provided therein but not later
than one year after the participant's death (and not beyond the stated
duration of the Benefit). Any such exercise or payment shall be made
only:
(a) By or to the executor or administrator of the estate of the
deceased participant or the person or persons to whom the deceased
participant's rights under the Benefit shall pass by will or the laws
of descent and distribution; and
(b) To the extent, if any, that the deceased participant was
entitled at the date of the participant's death.
10. OTHER PROVISIONS. The award of any Benefit under the Plan may
also be subject to such other provisions (whether or not applicable to
the Benefit awarded to any other participant) as the Board or Committee
determines appropriate, including without limitation, provisions for
the installment purchase of Common Stock under such Benefits,
provisions to assist the participant in financing the acquisition of
Common Stock, provisions for prepayment at the participant's election
of the purchase price of Common Stock under such Benefits, provisions
for the forfeiture of, or restrictions on resale or other disposition
of shares acquired under such Benefits, provisions giving the Company
the right to repurchase shares acquired under any form of Benefit in
the event the participant elects to dispose of such shares, provisions
to comply with federal and state tax or securities laws, or
understandings or conditions as to the participant's employment in
addition to those specifically provided for under the Plan or written
agreement.
11. TENURE. A participant's right, if any, to continue to serve
the Company and its subsidiaries as an officer, employee, or otherwise,
shall not be enlarged or otherwise affected by designation as a
participant under the Plan.
12. EMPLOYEES IN FOREIGN COUNTRIES. The Board or Committee shall
have the authority to adopt such modifications, procedures, and
subplans as may be necessary or desirable to comply with provisions of
the laws of foreign countries in which the Company or its subsidiaries
may operate to assure the viability of the Benefits granted or awarded
to employees employed in such countries and to meet the objectives of
the Plan.
13. DURATION, AMENDMENT AND TERMINATION. No Benefit shall be
granted more than ten years after the date of adoption of this Plan;
provided, however, that the terms and conditions applicable to any
Benefit granted within such period may thereafter be amended or
modified by mutual agreement between the Company and the participant or
such other persons as may then have an interest therein. Also, by
mutual agreement between the Company and a participant hereunder, or
under any future plan of the Company, Benefits may be granted to such
participant in substitution and exchange for, and in cancellation of,
any Benefits previously granted such participant under this Plan, or
any benefit previously or thereafter granted to him under any future
plan of the Company. The Board or Committee may amend the Plan from
time to time or terminate the Plan at any time. However, no action
authorized by this paragraph shall reduce the amount of any existing
Benefit or change the terms and conditions thereof without the
participant's consent. No amendment of the Plan shall, without
approval of the stockholders of the Company, (i) increase the total
number of shares which may be issued under the Plan or increase the
amount or type of Benefits that may be granted under the Plan; (ii)
change the minimum purchase price, if any, of shares of Common stock
which may be made subject to Benefits under the Plan; or (iii) modify
the requirements as to eligibility for Benefits under the Plan.
14. UNFUNDED STATUS OF PLAN. It is presently intended that the
Plan constitute an "unfunded" plan for incentive compensation. The
Board or Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver
Common Stock or make payments; provided, however, that, unless the
Board or Committee otherwise determines, the existence of such trusts
or other arrangements is consistent with the "unfunded" status of the
Plan.
15. SHAREHOLDER APPROVAL. The Plan has been adopted by the Board
of Directors on March 20, 2002, and shall be effective upon approval by
the shareholders of the Company. Such adoption shall be null and void
if shareholder approval is not obtained within twelve months of the
adoption of the Plan by the Board of Directors.
PROXY CARD
[Modine logo]
Annual Meeting of Shareholders
Wednesday, July 17, 2002
9:30 a.m. CDT Modine shareholders can build
their investments in Modine
through a no-cost plan for
automatically reinvesting
dividends and making additional
cash purchases of Modine stock.
Modine Manufacturing Company Systematic investments can be
established for your account by
1500 DeKoven Avenue authorizing direct deductions
from your bank account on a
Racine, Wisconsin 53403-2552 monthly basis. To receive
material and enrollment
information, call 800-813-3324.
The Modine Manufacturing Company
Dividend Reinvestment and
Direct Stock Purchase Plan
is administered by the
company's transfer agent,
Wells Fargo Shareowner
Services, 800-468-9716.
[Modine logo]
Modine Manufacturing Company
1500 DeKoven Avenue, Racine, Wisconsin 53403-2552 proxy
This proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints D. R. Johnson and D. R. Zakos, or either of
them, with full power of substitution to each, as attorneys and proxies to
represent the undersigned at the Annual Meeting of Shareholders of Modine
Manufacturing Company to be held at the corporate offices of Modine
Manufacturing Company, 1500 DeKoven Avenue, Racine, Wisconsin 53403-2552
on the 17th day of July, 2002 at 9:30 a.m. CDT, and at any adjournment(s)
thereof, and to vote all shares of Common Stock which the undersigned may
be entitled to vote at said meeting as directed with respect to the
proposals as set forth in the Proxy Statement. The Board of Directors
does not know of any other business that may be presented for consideration
at the Annual Meeting. If any other business should properly come before
the Meeting, the shares represented by the proxies and voting instructions
solicited thereby may be discretionarily voted on such business in
accordance with the best judgment of the proxy holders.
You are encouraged to specify your choices by marking the appropriate boxes
on the reverse side, but you need not mark any boxes if you wish to vote
in accordance with the Board of Directors' recommendations. The tabulator
cannot vote your shares unless you sign, date and return this proxy card
or vote by telephone.
IF YOU VOTE BY PHONE, PLEASE DO NOT MAIL YOUR PROXY CARD
--------------------------------------------------------
See Reverse Side
---------------
/COMPANY # /
Dear Shareholder: /CONTROL # /
---------------
Modine Manufacturing Company encourages you to take advantage of a new and
convenient way by which you can vote your shares. You can vote your shares
by telephone. This eliminates the need to return the proxy card.
To vote your shares by telephone you must use the control number printed in
the box at the top of this page. The series of numbers that appear in the
box above must be used to access the system.
To vote over the telephone:
- On a touch-tone telephone -- call 1-800-240-6326 -- 24 hours a day,
7 days a week, until 12:00 p.m. CDT on July 16, 2002.
- You will be prompted to enter your 3-digit Company Number and
your 7-digit Control Number which are located above.
- Follow the simple instructions the Voice provides you.
Your electronic vote authorizes the named Proxies to vote your shares in
the same manner as if you marked, signed, dated and returned the proxy card.
Modine Employee Stock Ownership Plan and/or Modine 401(k) Retirement Plan
Voting Instructions to Trustee Marshall & Ilsley Trust Company N.A. for
the Annual Meeting of Shareholders
As a participant in the Modine Employee Stock Ownership Plan and/or Modine
401(k) Plan, you have the right to give instructions to the Plan Trustee
as to the voting of certain shares of Modine Manufacturing Company Common
Stock allocated to your account. The voting of those shares will occur at
the Annual Meeting of Shareholders or at any and all adjournments or post-
ponements of the Annual Meeting. In this regard, please indicate your
voting choices on this card, sign and date it, and return this card
promptly in the enclosed postage prepaid envelope or vote by phone. If
your instructions are not received at least five days prior to the Annual
Meeting, or if you do not respond, shares held in your account for which
a proxy is not received will be voted by the Trustee, Marshall & Ilsley
Trust Company N.A. in its own discretion and in accordance with ERISA.
PLEASE FOLD HERE
The Board of Directors Recommends a Vote FOR Item 1
1. Election 01 Frank P. Incropera / / Vote FOR all nominees / / WITHHOLD
of Directors 02 Vincent L. Martin listed (except as marked Authority
03 Marsha C. Williams contrary below) For All.
(Instructions: To withhold authority to vote for any indicated nominee,
write the number(s) of the nominee(s) in the box provided to the right.)
The Board of Directors Recommends a Vote FOR Item 2
2. Approval of the adoption of the 2002 Incentive Compensation Plan / / For / / Against / / Abstain
The Board of Directors Recommends a Vote AGAINST Item 3
3. Shareholder Proposal / / For / / Against / / Abstain
* NOTE * To consider and act upon such other matters as may properly come
before the meeting or any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR ITEMS 1 AND 2 AND AGAINST ITEM 3.
--- -------
Address Change? Mark Box / /
Indicate changes below:
Date_________________________, 2002
-----------------------------------
/ /
/ /
-----------------------------------
Signature(s) in Box
Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign.
Trustees, administrators, etc.,
should include title and authority.
Corporations should provide full
name of corporation and title of
authorized officer signing the proxy.