DEF 14A 1 formdef14a.htm MODINE MANUFACURING DEF14A 7-17-2008 formdef14a.htm


SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant R

Filed by a Party Other than the Registrant  o

Check the appropriate box:

o
Preliminary Proxy Statement
o
Confidential, for Use of the Commission Only (as  permitted by Rule 14a-6(e)(2))
R
Definitive Proxy Statement
o
Definitive Additional Materials
o
Soliciting Material Pursuant to Section 240.14a-2.

Modine Manufacturing Company
(Name of Registrant as Specified In Its Charter)
_____________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

R  No fee required.

o  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11

(1)  Title of each class of securities to which transaction applies:
______________________________________________________________________________

(2)  Aggregate number of securities to which transaction applies:
______________________________________________________________________________

(3)  Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
______________________________________________________________________________

(4)  Proposed maximum aggregate value of transaction:
______________________________________________________________________________

(5)  Total fee paid:
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o  Fee paid previously with preliminary materials.

o  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.  Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1)  Amount Previously Paid:
______________________________________________________________________________

(2)  Form, Schedule or Registration Statement No.:
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(3)  Filing Party:
______________________________________________________________________________

(4)  Date Filed:

June 12, 2008
 


 
 

 

Logo

1500 DeKoven Avenue
Racine, Wisconsin  53403-2552


Notice of Annual Meeting of Shareholders


Date:
 
Thursday, July 17, 2008
     
Time:
 
9:00 a.m.
     
Place:
 
The Pfister Hotel
424 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
     
Record Date:
 
May 23, 2008

The annual meeting is for the following purposes:

1. 
To elect the Company nominated slate of four directors for terms expiring in 2011;

 
2.
To approve the Modine Manufacturing Company 2008 Incentive Compensation Plan;

 
3.
To ratify the appointment of the Company's independent registered public accounting firm;

 
4.
To consider and act upon a shareholder proposal requesting adoption of a majority voting standard for the election of directors, if properly presented at the meeting; and

5.
To consider any other matters properly brought before the shareholders at the meeting.

 
By order of the Board of Directors,
   
 
/s/ Dean R. Zakos
 
Dean R. Zakos
 
Vice President, General Counsel and Secretary


June 12, 2008

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, logging onto the Internet or by completing the enclosed proxy card and returning it in the enclosed envelope.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on July 17, 2008 – the Proxy Statement and 2008 Annual Report are available at www.proxyvote.com and www.modine.com.

 
 

 
 
PROXY STATEMENT

2008 Annual Meeting of Shareholders of Modine Manufacturing Company 
 

SOLICITATION OF PROXIES

This proxy statement is solicited on behalf of the Board of Directors for use at the 2008 Annual Meeting of Shareholders.  The meeting will be held at 9:00 a.m. on Thursday, July 17, 2008, at The Pfister Hotel, 424 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.  This proxy statement and accompanying proxy card are first being mailed to shareholders on or about June 12, 2008.
 
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
 
Who may vote?
 
You may vote your shares of common stock if our records show that you owned the shares at the close of business on May 23, 2008, the record date.  A total of 32,262,884 shares of common stock were outstanding as of the record date and entitled to vote at the annual meeting.  You get one vote for each share of common stock you own.  The holders of common stock do not have cumulative voting rights.  The enclosed proxy card shows the number of shares you may vote.

How do I vote?

You may vote in person or by properly appointed proxy.

The telephone and Internet voting procedures on the enclosed proxy card are for your convenience and reduce costs for Modine.  The procedures are designed to authenticate your identity, to allow you to give voting instructions and to confirm that those instructions have been recorded properly.

Registered Holders

Registered holders of Modine common stock may vote by completing and mailing the enclosed proxy card or electronically either via the Internet or by calling Broadridge Financial Solutions, Inc.  Specific instructions to be followed by any registered shareholder interested in voting via the Internet or by telephone are set forth on the enclosed proxy card.

Street Name Holders

If your shares are registered in the name of a bank or brokerage firm, you may be eligible to vote your shares electronically via the Internet or by telephone.  A large number of banks and brokerage firms are participating in the Broadridge Investor Communication Services online program.  This program provides eligible shareholders the opportunity to vote via the Internet or by telephone.  If your bank or brokerage firm is participating in Broadridge’s program, your voting form will provide you with instructions.

401(k) Retirement Plan Participants

If you are a participant in one of the Company’s 401(k) Savings Plans, you will receive a proxy that will serve as voting instructions for your shares of common stock held in your plan account.  The trustee for the plan, Marshall & Ilsley Trust Company N.A., will vote your shares as you direct.  If a proxy is not returned for shares held in a plan, the trustee generally will vote those shares in the same proportion that all shares in the plan for which voting instructions have been received are voted although it may do otherwise in its discretion.
 
 
1

 

What does the Board of Directors recommend?

The Board of Directors’ recommendation is included with the description of each item in this proxy statement.  In summary, the board recommends a vote:

FOR election of the Company nominated slate of four directors for terms expiring in 2011 (see Item 1);

FOR approval of the Modine Manufacturing Company 2008 Incentive Compensation Plan (see Item 2);

FOR ratification of the Company's independent registered public accounting firm (see Item 3); and

The Board of Directors does not oppose the shareholder proposal requesting adoption of a majority voting standard for the election of directors (see Item 4).

Unless you give other instructions, the persons named as proxies will vote FOR Items 1, 2 and 3 and abstain with respect to Item 4.

What if other matters come up at the annual meeting?

The matters described in this proxy statement are the only matters to our knowledge that will be subject to a vote at the annual meeting.  If other matters are properly presented at the meeting, the persons appointed as proxies will vote your shares on those other matters in accordance with their best judgment.

May I change my vote after I appoint a proxy?

You may change your vote by revoking your proxy.  You may revoke your proxy by:

 
·
submitting a new proxy;
 
 
·
giving written notice before the annual meeting to the Company’s Secretary stating that you are revoking your previous proxy;
 
 
·
revoking your proxy in the same manner you initially submitted it – by telephone, the Internet or mail; or
 
 
·
attending the annual meeting and voting your shares in person.
 

If you decide to vote your shares in person, we prefer that you first revoke your prior proxy in the same way you initially submitted it – that is, by telephone, the Internet or mail.  The presence at the annual meeting of a shareholder who has made an effective proxy appointment does not, of itself, constitute a revocation of the proxy appointment.

May I vote in person at the annual meeting?

Although we encourage you to complete and return the proxy card or vote by telephone or via the Internet to ensure that your vote is counted, you may attend the annual meeting and vote your shares in person.  You will need to obtain a “legal proxy” from your broker if you hold your shares in street name and want to vote those shares at the annual meeting in person.

Please tell us when you appoint your proxy if you plan on attending the annual meeting so that we may have an accurate count of the number of shareholders attending the meeting.

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 voting instructions from the beneficial owner.
 
 
2

 

Voting on the Election of Directors (Item 1)

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, up to the maximum number of directors to be elected in the election.  Therefore, shares not voted 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.

Voting on the Modine Manufacturing Company 2008 Incentive Compensation Plan (Item 2)

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal, provided that, pursuant to the New York Stock Exchange’s (“NYSE”) stockholder approval policy, the total votes cast on the proposal represent over 50% of the shares entitled to vote on the proposal.  In addition, under the NYSE’s interpretations of its stockholder approval policies, abstentions will have the same effect as votes against the proposal and broker non−votes are considered shares entitled to vote but as to which votes were not cast.

Voting on the Ratification of Independent Registered Public Accounting Firm (Item 3)

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal, provided a quorum is present.  Because abstentions are not considered votes cast, they will not have an effect on the vote.

Voting on the Shareholder Proposal Regarding Majority Voting for Directors (Item 4)

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal, provided a quorum is present.  Because abstentions and broker non-votes are not considered votes cast, they will not have an effect on the vote.

Who will count the votes?

Broadridge Financial Solutions, Inc., an independent tabulator, will count the votes under the supervision of the Inspectors of Election appointed by the Board of Directors.

Who pays for this proxy solicitation?

Modine pays for the proxy solicitation.  Directors, officers and employees of Modine, who will receive no compensation for their services, may solicit proxies in person or by mail, telephone, facsimile transmission or other means.  Modine also has retained Morrow & Co., Inc., 470 West Avenue, Stamford, CT 06902, to assist in such solicitation for a fee of $6,500, plus expenses, for its services.  Brokers, banks, nominees, fiduciaries and other custodians will be requested to solicit beneficial owners of shares and will be reimbursed for their expenses.

How may I help reduce mailing costs?

Eligible shareholders who have more than one account in their name or the same address as other shareholders may authorize us to discontinue mailings of multiple annual reports and proxy statements.  Most shareholders can also view future annual reports and proxy statements on the Internet rather than receiving paper copies in the mail.  See the next two questions and answers below and your proxy card for more information.

Are proxy materials and the annual report available electronically?

Yes, they are available at www.proxyvote.com and on our website, www.modine.com. In addition, most shareholders may elect to view future proxy statements and annual reports over the Internet instead of receiving paper copies in the mail.  If you are a shareholder of record, you may choose this option and save us the cost of producing and mailing these documents by following the instructions provided on the proxy card to vote over the Internet.  On the referenced website, you will be given instructions for choosing the option of receiving future proxy statements and annual reports electronically.  If you hold your stock in street name, please refer to the information provided by the party in whose name the shares are held for instructions on how to elect to view future proxy statements and annual reports over the Internet.

 
3

 

What happens if multiple shareholders share the same address?

We adopted a procedure called "householding" so we are sending only one proxy statement to those with the same last name at a single address, unless we have received instructions to do otherwise.  Householding reduces our printing and postage costs.  If a shareholder of record wishes to receive a separate copy of a proxy statement or annual report in the future, he or she may provide written notice to the Company’s Secretary, Modine Manufacturing Company, 1500 DeKoven Avenue, Racine, WI 53403-2552 and tell us otherwise.  Upon written or oral request, the Company will promptly send a copy of either document.  Shareholders of record sharing the same address and receiving multiple copies of the annual report and proxy statement may request householding by contacting us in the same manner.  If you own your shares in street name, you may request householding by contacting the entity in whose name the shares are held.
 


SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of the outstanding shares of the Company’s common stock by: (i) persons known by the Company to beneficially own more than 5% of the outstanding shares of the common stock; (ii) nominees for director and directors of the Company; (iii) the executive officers named in the Summary Compensation Table in the Executive Compensation section of this proxy statement; and (iv) all current directors and executive officers of the Company as a group.  The number of shares set forth for nominees for director,
directors and executive officers are reported as of May 23, 2008.  The number of shares for 5% shareholders is as of the date such shareholder reported such holdings in filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), unless more recent information was provided.

 
Common Stock
Name and Address of Owner (1)
Number of Shares Owned and Nature of Interest (2)(3)
 
Percent of Class
       
Mario J. Gabelli and affiliates (4)
One Corporate Center
Rye, New York 10580-1435
4,135,283
 
12.8
       
Dimensional Fund Advisors LP (5)
1299 Ocean Avenue
Santa Monica, California 90401
2,717,214
 
8.4
       
Wellington Management Company, LLP (6)
75 State Street
Boston, Massachusetts 02109
2,039,074
 
6.3
       
Rutabaga Capital Management LLC (7)
64 Broad Street
Boston, Massachusetts 02109
1,905,182
 
5.9
       
Shamrock Partners Activist Value Fund, L.L.C. (8)
4444 Lakeside Drive
Burbank, California 91505
1,612,900
 
5.0
       
Charles P. Cooley
1,814
 
*
       
Frank P. Incropera
38,888
 
*
       
Frank W. Jones (9)
76,874
 
*
       
Dennis J. Kuester
55,976
 
*
       
Vincent L. Martin (10)
50,552
 
*
       
Gary L. Neale
86,822
 
*
       
Marsha C. Williams
45,282
 
*
       
Michael T. Yonker
47,631
 
*
       
David B. Rayburn
424,484
 
1.3
       
Bradley C. Richardson
155,262
 
*
       
Thomas A. Burke
111,495
 
*
       
Charles R. Katzfey
129,334
 
*
       
Klaus A. Feldmann
153,790
 
*
       
James R. Rulseh
142,811
 
*
       
All directors and executive officers as a group (15 persons)(11)(12)
1,285,853
 
3.9

 
4

 
 
*
Represents less than 1% of the class.

(1)
Except as otherwise indicated, each person has the sole power to vote and dispose of all shares listed opposite his or her name.

(2)
Includes shares of common stock issuable upon the exercise of options within 60 days of May 23, 2008 as follows: Dr. Incropera – 35,852 shares; Mr. Jones – 36,876 shares; Mr. Kuester – 36,876; Mr. Martin – 35,852; Mr. Neale – 53,265; Ms. Williams – 40,974 and Mr. Yonker – 36,876.

(3)
Includes the following:

   
Number of Shares
 
Name
 
Direct Ownership
   
Options Exercisable within 60 Days of May 23, 2008
   
Held in 401(k) Plan
   
Attributable to Deferred Comp. Plan
   
Restricted Shares (Not Vested)
 
David B. Rayburn
    84,965       319,128      
12,095
      8,296       0  
                                         
Bradley C. Richardson
    25,770       106,990       344       1,274       20,884  
                                         
Thomas A. Burke
    6,218       79,226       271       327       25,453  
                                         
Charles R. Katzfey
    35,138       94,196       0       0       0  
                                         
Klaus A. Feldmann
    16,955       121,194    
NA
   
NA
      15,641  
                                     
James R. Rulseh
    13,785       112,511       995       33       15,487  

 
5

 

(4)
Based on Schedule 13D/A filed under the Exchange Act, dated June 2, 2008.  Each reporting person included in the Schedule 13D/A: Gabelli Funds, LLC; GAMCO Asset Management Inc. (“GAMCO”); GGCP, Inc.; GAMCO Investors, Inc.; Gabelli Securities, Inc. and Mario J. Gabelli, has the sole power to vote or direct the vote and the sole power to dispose or direct the disposition of the reported shares, except that (i) GAMCO does not have authority to vote 147,000 of the reported shares, and (ii) in certain circumstances, proxy voting committees may have voting power over the reported shares.

(5)
Based on Schedule 13G filed under the Exchange Act dated December 31, 2007.  Dimensional Fund Advisors LP has the sole power to vote or direct the vote and the sole power to dispose of or direct the disposition of the reported shares.

(6)
Based on a filing on Form 13F by Wellington Management Company, LLP, filed on May 15, 2008 for the period ended March 31, 2008.  Wellington Management Company, LLP reported that it had sole investment discretion with respect to 1,863,174 shares, sole voting powers with respect to 1,425,174 shares and no voting power with respect to 438,000 shares.  Wellington Management Company, LLP also reported that Wellington Trust Company, NA had sole investment discretion and shared voting power with respect to 175,900 shares.

(7)
Based upon a filing on Form 13F by Rutabaga Capital Management, LLC, filed on May 2, 2008 for the period ended March 31, 2008.  Rutabaga Capital Management, LLC reported that it had sole investment discretion with respect to 1,905,182 shares and did not report regarding its voting power.

(8)
Based on Schedule 13D/A filed under the Exchange Act, dated June 5, 2008.  Shamrock Partners Activist Value Fund, L.L.C. (“Shamrock Partners”) is the managing member of Shamrock Activist Value Fund GP, L.L.C., a Delaware limited liability company (the “General Partner”), which is the general partner of three funds that collectively own the shares reported. Shamrock Partners has sole voting and dispositive power with respect to all of such shares, the General Partner has shared voting and dispositive power with respect to all of the shares, and each of the funds has shared voting and dispositive power with respect to the shares held by the respective funds.

(9)
Mr. Jones shares the power to vote and dispose of 11,295 shares of common stock with his spouse.

(10)
Mr. Martin shares the power to vote and dispose of 2,000 shares of common stock with his spouse.

(11)
Includes 1,105,648 shares subject to the exercise of options within 60 days of May 23, 2008.

(12)
None of the shares of common stock held by a director or executive officer are pledged as security.

The above beneficial ownership information is based on information furnished by the specified persons and is determined in accordance with Exchange Act Rule 13d-3, as required for purposes of this proxy statement.  It includes shares of common stock that are issuable upon the exercise of stock options exercisable within 60 days of the record date.  Such information is not necessarily to be construed as an admission of beneficial ownership.

Ownership of Common Stock by Modine Employee Benefit Plans

The following table shows the number of shares of Modine common stock held in Modine employee benefit plans as of March 31, 2008.

   
Common Stock
 
Name of Plan
 
Number of Shares Owned
   
Percent of Class
 
Administrative Committee of Modine’s 401(k) Salaried Savings Plan (1)(2)
    1,530,187       4.7  
                 
Administrative Committee of Modine’s 401(k) Hourly Savings Plan (1)(2)
    1,059,720       3.3  
                 
Administrative Committees of Modine’s Master Retirement Trusts for Pension Plans (2)(3)
    372,600       1.2  
                 
Administrative Committee of Modine’s Deferred Compensation Plan (2)(4)
    21,054       *  

 
6

 
 
*
Represents less than 1% of the class.

(1)
Under Exchange Act Rule 13d-3, the Administrative Committee of the plan may be deemed to be the beneficial owner of the shares held in the plan, although Marshall & Ilsley Trust Company N.A. is trustee of the shares in the plan.  The participants are entitled to direct how the stock represented by the units in their plan accounts will be voted and Marshall & Ilsley Trust Company N.A. votes undirected shares in its sole discretion.

(2)
Marshall & Ilsley Trust Company N.A., as custodian, may be viewed as having voting or dispositive authority in certain situations pursuant to Department of Labor regulations or interpretations of federal case law.  Pursuant to Exchange Act Rule 13d-4, inclusion of such shares in this table shall not be construed as an admission that the reporting person or its affiliates are, for purposes of Sections 13(d) or 13(g) of the Exchange Act, the beneficial owners of such securities.  Marshall & Ilsley Corporation and its subsidiaries specifically disclaim beneficial ownership of stock held by the plan and the related trusts.

(3)
Marshall & Ilsley Trust Company N.A. is the trustee of the Master Trust that holds the shares for Modine’s various non-union pension plans.  The shares held by such plans are voted by the Administrative Committee of the plan.

(4)
The shares held by such plan are voted by the Administrative Committee of the plan.

CORPORATE GOVERNANCE

The Company's business is managed under the direction of its Board of Directors, pursuant to the laws of the State of Wisconsin, its Amended and Restated Articles of Incorporation and its Bylaws.  Members of the Board of Directors are kept informed of the Company's business through discussions with the CEO and with key members of management, by reviewing materials provided to them and by participating in meetings of the Board of Directors and its committees.

The Company reviews and evaluates its corporate governance policies and practices, particularly in light of the Sarbanes-Oxley Act of 2002 and rule changes made by the Securities and Exchange Commission (“SEC”) and the NYSE and believes that our current policies and practices meet these requirements.  Our corporate governance policies, including our Guidelines on Corporate Governance and charters for committees of the board, are available on our website, www.modine.com, and are available in print to any shareholder or interested person upon request.

Code of Ethics

Modine’s Global Policy on Business Conduct (our "Global Policy") summarizes the compliance and ethical standards and expectations we have for all our employees, officers (including our principal executive officer, principal financial officer and principal accounting officer) and directors with respect to their conduct in furtherance of Company business.  It contains procedures for reporting suspected violations of the Global Policy, including procedures for the reporting of questionable accounting or auditing matters or other concerns regarding accounting, internal accounting controls or auditing matters.  The Company has established a Business Ethics Program through which employees and others may report concerns, anonymously and in confidence, regarding such matters.  A copy of our Global Policy, as well as further information regarding our Business Ethics Program is available on our website, www.modine.com.  These materials are also available in print to any shareholder or interested person upon request.  If we make any substantive amendment to the Global Policy, we will disclose the nature of such amendment on our website or in a current report on Form 8-K.  In addition, if a waiver from the Global Policy is granted to an executive officer or director, we will disclose the nature of such waiver on our website, in a press release or in a current report on Form 8-K.

 
7

 

ITEM 1 - ELECTION OF DIRECTORS

Action will be taken at the 2008 Annual Meeting of Shareholders for the election of four directors to serve as directors until the 2011 Annual Meeting of Shareholders and until their respective successors are duly elected and qualified.  The Company’s Amended and Restated Articles of Incorporation provide that the Board of Directors shall be divided into three classes, as nearly equal in number as possible, serving staggered three-year terms.  The Board of Directors currently consists of ten members with two classes of three directors each and one class with four directors.

In March 2008, the Board of Directors elected Thomas A. Burke and Bradley C. Richardson to the Board effective April 1, 2008.  The election of Messrs. Burke and Richardson followed the retirement of David B. Rayburn from the Board of Directors and his position as President and CEO of the Company on March 31, 2008.

The nominees for election are Frank P. Incropera, Vincent L. Martin, Bradley C. Richardson and Marsha C. Williams.  The election will be determined by a plurality of the votes duly cast.  It is intended that the persons appointed as proxies will vote FOR the election of the nominees listed below, unless instructions to the contrary are given to them.  The nominees have indicated that they are able and willing to serve as directors.  While it is not anticipated that any of the nominees will be unable to take office, if that happens, it is intended that the proxies will vote FOR the substitute nominee(s) designated by the Board of Directors. In accordance with our Bylaws, a director shall hold office until the end of such director’s term and until the director’s successor shall have been elected or there is a decrease in the number of directors or until his or her prior death, resignation or removal.  Vacancies may be filled by the shareholders or the remaining directors. See Selection of Nominees for the Board below.

The Company's Bylaws provide that each Director shall retire at the close of the term in which he or she attains the age of 70 years, except that the provision shall not apply to any director who has been exempted from the provision by a resolution passed by a two-third's vote of the Board of Directors.

The nominees for the Board of Directors, the directors whose terms will continue, their ages, principal occupation (which they have been in for at least five years unless otherwise indicated), other directorships and their tenure and expiration dates of their terms are as follows:

Name
 
Principal Occupation and Directorships
 
Nominees to be Elected for Terms Expiring in 2011:
     
Frank P. Incropera
Age 68
Director since 1999
 
Clifford and Evelyn Brosey Professor of Mechanical Engineering of the University of Notre Dame's College of Engineering, Notre Dame, Indiana since July 2006.  From 1998 to July 2006, Dr. Incropera was McCloskey Dean of the University of Notre Dame’s College of Engineering.  Dr. Incropera was with Purdue University from 1966 to 1998 with the exceptions of research leaves spent at NASA-Ames (1969), U.C. Berkeley (1973-1974) and the Technical University of Munich (1988).
     
Vincent L. Martin
Age 68
Director since 1992
 
Retired.  Mr. Martin was Chairman of the Board of Jason Incorporated, a diversified manufacturing company based in Milwaukee, Wisconsin from January 1986 to October 2004.  He was Chief Executive Officer of Jason Incorporated from 1986 to 1999.  Mr. Martin's business career includes experience with AMCA International, FMC Corporation and Westinghouse Air Brake.  Mr. Martin is also a director of Proliance International, Inc.
     
Bradley C. Richardson
Age 49
Director since April 2008
 
Executive Vice President – Corporate Strategy and Chief Financial Officer (April 2008 – Present); Executive Vice President, Finance and Chief Financial Officer (January 2006 – March 2008) and Vice President, Finance and Chief Financial Officer (May 2003 – January 2006) of the Company.  Prior to joining Modine in May 2003, Mr. Richardson worked over a period of more than 20 years in various management positions with BP (f/k/a BP Amoco) including as Chief Financial Officer and Vice President of Performance Management and Control for BP’s Worldwide Exploration and Production Division (2000 – May 2003) and President of BP Venezuela (1999 – 2000).  Mr. Richardson is also a director of Brady Corporation and Tronox Incorporated.
     
Marsha C. Williams
Age 57
Director since 1999
 
Senior Vice President and Chief Financial Officer of Orbitz Worldwide, Inc., an online travel company based in Chicago, Illinois, since July 2007. Prior to joining Orbitz Worldwide, Ms. Williams was Executive Vice President and Chief Financial Officer of Equity Office Properties Trust from August 2002 until February 2007.  Ms. Williams is also a director of Chicago Bridge & Iron Company N.V., Davis Funds and Selected Funds.

 
8

 
 
Directors Continuing in Service for Terms Expiring in 2009:
     
Frank W. Jones
Age 68
Director since 1982
 
Independent management consultant in Tucson, Arizona.  Mr. Jones's forty-five year career in business includes over twenty-five years of service with Giddings & Lewis, Inc., a manufacturer of machine tools and, at that time, a NYSE- listed company, the last five as President and Chief Executive Officer.  Mr. Jones served as an officer of the Company in 1986 and 1987.
 
     
Dennis J. Kuester
Age 66
Director since 1993
 
Chairman of the Board (since January 2005), Chief Executive Officer (January 2002 – April 2007) and President (1987 to April 2005) of Marshall & Ilsley Corporation and Chairman of Metavante Technologies, Inc., a Milwaukee, Wisconsin-based bank holding company and financial technology services company, respectively.  Mr. Kuester is also a director of Wausau Paper Corporation.
     
Michael T. Yonker
Age 65
Director since 1993
 
Retired.  Prior to June 1998, Mr. Yonker was President and Chief Executive Officer of Portec, Inc., Lake Forest, Illinois, a manufacturer of material handling equipment.  Mr. Yonker is also a director of Woodward Governor Company and EMCOR Group, Inc.
 
 
Directors Continuing in Service for Terms Expiring in 2010:
     
Thomas A. Burke
Age 50
Director since April 2008
 
President and Chief Executive Officer (April 2008 – Present); Executive Vice President and Chief Operating Officer (July 2006 – March 2008); and Executive Vice President (May 2005 – July 2006) of the Company.  Prior to joining Modine in May 2005, Mr. Burke worked over a period of nine years in various management positions with Visteon Corporation in Detroit, Michigan, a leading supplier of parts and systems to automotive manufacturers, including as Vice President of North American Operations (2002 – May 2005) and Vice President, European and South American Operations (2001 – 2002).  Prior to working at Visteon, Mr. Burke worked in positions of increasing responsibility at Ford Motor Company.
     
Charles P. Cooley
Age 52
Director since 2006
 
Since July 2005, Mr. Cooley has been Senior Vice President, Treasurer and Chief Financial Officer of The Lubrizol Corporation, Cleveland, Ohio, a specialty chemical company.  Mr. Cooley held the position of Vice President and Chief Financial Officer of The Lubrizol Corporation from April 1998 to July 2005.  Prior to joining The Lubrizol Corporation, Mr. Cooley was Assistant Treasurer of Corporate Finance, Atlantic Richfield Company (ARCO) and Vice President, Finance, ARCO Products Company.
     
Gary L.  Neale
Age 67
Director since 1977
 
Retired.  Non-Executive Chairman of the Board of Modine since April 1, 2008.  Prior to January 2007, Mr. Neale was Chairman of NiSource, Inc., Merrillville, Indiana, a holding company for gas and electric utilities and other energy-related subsidiaries.  Mr. Neale served as Chief Executive Officer (1993 – July 2005) and President (1994 – November 2004) of NiSource, Inc. Mr. Neale serves as a director of Chicago Bridge & Iron Company N.V.

The Board of Directors recommends a vote FOR all of the director-nominees:  Dr. Incropera, Mr. Martin, Mr. Richardson and Ms. Williams.

Director Independence

The Company requires, as set forth in its Guidelines on Corporate Governance, that a majority of the board’s members be independent in accordance with the independence standards of the NYSE.  However, the Company is not opposed to having members of the Company's management, including the CEO and CFO, serve as directors. At a minimum, to qualify as "independent," a director must meet the independence standards of the NYSE.  The Corporate Governance and Nominating Committee assesses independence on an ongoing basis, and each director is responsible for bringing to the attention of that Committee any changes to his or her status that may affect independence.  In addition, the directors complete, on an annual basis, a questionnaire prepared by the Company that is designed to elicit information that relates to the independence assessment.  At least annually, the Board reviews the relationships that each director has with the Company.  Only those directors who the board affirmatively determines have no material relationship with the Company, and who do not have any of the relationships that prevent independence under the standards of the NYSE, are considered to be independent directors.

 
9

 
 
The Board has determined that the following directors are independent within the meaning of the listing standards of the NYSE: Messrs. Cooley, Jones, Kuester, Martin, Neale and Yonker, Dr. Incropera and Ms. Williams.  The Board concluded that none of these directors possessed the categorical relationships set forth in the NYSE listing standards that prevent independence and had no other business or other relationships with the Company relevant to a determination of their independence.  Neither Mr. Burke nor Mr. Richardson is independent given Mr. Burke’s position as President and CEO of the Company and Mr. Richardson’s role as Executive Vice President – Corporate Strategy and CFO of the Company.

Non-Executive Chairman

Effective April 1, 2008, the Board of Directors appointed Gary L. Neale Non-Executive Chairman of the Board.  As Non-Executive Chairman of the Board, Mr. Neale will preside over all meetings of the shareholders and Board of Directors and carryout such other duties as directed by the Board of Directors.

Mr. Neale served as the Board’s Lead Director from June 2003, when the position was created, through March 2008.  As Lead Director, Mr. Neale presided over periodic executive sessions of the board in which the CEO and other members of management did not participate.  At least once annually, “non-management” directors meet without the “management” directors.  Mr. Neale also chaired certain portions of board meetings and performed other duties that the board from time to time delegated to him to assist the Board in the fulfillment of its responsibilities.  Mr. Neale did not receive any compensation in addition to his director fees to perform the role of Lead Director.

Selection of Nominees for the Board

The Corporate Governance and Nominating Committee (the “Nominating Committee”) considers prospective candidates for Board membership who are recommended by its members, as well as management and shareholders.  The Nominating Committee may also decide to engage a professional search firm to assist in identifying qualified candidates.  When such a search firm is engaged, the Nominating Committee sets its fees and scope of engagement.

Once the Nominating Committee identifies a prospective nominee, it initially determines whether to conduct a full evaluation of the candidate.  The Nominating Committee makes its initial determination based on the information provided to it with the recommendation of the prospective candidate, as well as the Nominating Committee's own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others.

The Nominating Committee then evaluates the prospective nominee.  The Nominating Committee considers relevant factors as it deems appropriate, including the current composition of the Board and the evaluations of other prospective nominees.  In assessing candidates, the Board considers issues such as education, experience, diversity, knowledge and understanding of matters such as finance, manufacturing, technology and others frequently encountered by a global business.

Every effort is made to complement and supplement skills within the existing board and strengthen any identified areas.  Further criteria include a candidate's personal and professional ethics, integrity and values, as well as his or her willingness and ability to devote sufficient time to attend meetings and participate effectively on the Board.

In connection with this evaluation, the Board determines whether to interview the prospective nominee, and if warranted, one or more members of the Nominating Committee, and others as appropriate, including the Non-Executive Chairman, will interview prospective nominees.  After completing the evaluation and interview, the Board determines who should be nominated for a position on the Board of Directors.
 
 
10

 

Shareholder Nominations and Recommendations of Director Candidates

The Bylaws of the Company provide that any shareholder who is entitled to vote for the election of directors at a meeting called for such purpose may nominate persons for election to the Board of Directors.   Shareholders who desire to nominate a person or persons for election to the board must comply with the notice requirements in the Bylaws, a copy of which is available from the Company’s Secretary.  Shareholders who want to submit a recommendation for a director candidate for the board may submit the recommendation to the board using the procedure described below under Shareholder and Other Interested Persons’ Communication with the Board.  The Nominating Committee intends to evaluate candidates recommended by shareholders in the same manner that it evaluates other candidates. The Nominating Committee requests that it receive any such recommendations by October 1, 2008 for the 2009 Annual Meeting of Shareholders.

The direct nomination of a director by shareholders must be made in accordance with the advance written notice requirements of the Company’s Bylaws.  A copy of the Bylaws may be obtained from the Company’s Secretary.  For consideration at the 2009 Annual Meeting of Shareholders, direct nominations must be received by the Secretary no earlier than March 29, 2009 and no later than April 28, 2009.

Shareholder and Other Interested Persons’ Communication with the Board

Shareholders and other interested persons wishing to communicate with the Board of Directors or with a board member (including the Non-Executive Chairman) should address communications to the Board or to the particular board member, c/o Secretary, Modine Manufacturing Company, 1500 DeKoven Avenue, Racine, Wisconsin 53403-2552.  Under a process approved by the Board of Directors, the Secretary reviews all such correspondence and forwards to the Board a summary of all such correspondence and copies of all correspondence that, in the opinion of the Secretary, deal with the functions of the board or committees thereof or that he otherwise determines requires their attention.  Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Company's Business Ethics Committee and handled in accordance with procedures established by the Audit Committee with respect to such matters.  From time to time, the Board may change the process by which shareholders and other interested persons may communicate with the Board of Directors or its members.  Please refer to the Company's website, www.modine.com, for any changes to this process.

Board Meetings and Committees

The Board of Directors held seven meetings during the fiscal year ended March 31, 2008 and had five standing committees as follows: Audit; Officer Nomination & Compensation; Pension; Corporate Governance and Nominating; and Technology.  In July of each year, the Board selects the members of each of the committees.  The table below shows the membership of each committee, the number of times the board and each committee met and the attendance at board and committee meetings on which each director served in the fiscal year ended March 31, 2008.  All directors attended at least 75% of the aggregate of the board meetings and meetings of committees on which they served.  Effective April 1, 2008, Marsha C. Williams assumed the role of Chair of the Officer Nomination & Compensation Committee vacated by Gary L. Neale.

 
Meetings Attended
 
 
Board
 
 
Committee
         
Charles P. Cooley
 
6 of 7 (86%)
 
 (chair) Audit 5 of 5 (100%)
Corp. Gov. 4 of 4 (100%)
Pension 1 of 2 (50%)
Technology 1 of 1 (100%)
         
Frank P. Incropera
 
7 of 7 (100%)
 
Audit 5 of 5 (100%)
Corp. Gov. 4 of 4 (100%)
Pension 3 of 3 (100%)
(chair) Technology 1 of 1 (100%)
         
Frank W. Jones
 
7 of 7 (100%)
 
Corp. Gov. 4 of 4 (100%)
ONC 3 of 3 (100%)
(chair) Pension 3 of 3 (100%)
Technology 1 of 1 (100%)
         
Dennis J. Kuester
 
7 of 7 (100%)
 
Corp. Gov. 4 of 4 (100%)
ONC 3 of 3 (100%)
         
Vincent L. Martin
 
6 of 7 (86%)
 
Corp. Gov. 3 of 3 (100%)
ONC 2 of 2 (100%)
Pension 3 of 3 (100%)
Technology 1 of 1 (100%)
         
Gary L. Neale
 
6 of 7 (86%)
 
Audit 5 of 5 (100%)
Corp. Gov. 4 of 4 (100%)
ONC 3 of 3 (100%)
Technology 1 of 1 (100%)
         
David B. Rayburn
 
7 of 7 (100%)
 
Not applicable
         
Marsha C. Williams
 
5 of 7 (71%)
 
Audit 4 of 5 (80%)
Corp. Gov. 4 of 4 (100%)
(chair) ONC 3 of 3 (100%)
         
Michael T. Yonker
 
7 of 7 (100%)
 
Audit 5 of 5 (100%)
(chair) Corp. Gov. 4 of 4 (100%)
ONC 3 of 3 (100%)

 
11

 
 
Audit = Audit Committee
ONC = Officer Nomination & Compensation Committee
Corp. Gov = Corporate Governance and Nominating Committee
Pension = Pension Committee
Technology = Technology Committee

Attendance at Annual Meeting.  Although the Company does not have a formal policy that its directors attend the Annual Meeting of Shareholders, it expects them to do so and the Company's directors historically have attended these meetings.  Richard Doyle, Charles Cooley, Frank Incropera, Frank Jones, Dennis Kuester, Vincent Martin, David Rayburn and Michael Yonker attended last year's Annual Meeting of Shareholders. The Board of Directors conducts its annual meeting directly after the Annual Meeting of Shareholders.

Roles of the Board's Committees

Audit Committee.

The Audit Committee is a separately designated standing committee of the Board of Directors, established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended.  The functions of the Audit Committee are described below in the Report of the Audit Committee on pages 51-52 of this proxy statement. The charter of the Audit Committee is available on the Company's website, www.modine.com.

The Board of Directors has determined that each of the members of the Audit Committee is “independent” as defined in the corporate governance listing standards of the NYSE relating to audit committees.  The Board of Directors has determined that each Audit Committee member satisfies the financial literacy and experience requirements of the NYSE, and that Mr. Cooley (the Chair of the Committee) and Ms. Williams each qualify as an “audit committee financial expert” within the meaning of the SEC rules.
 
 
12

 

Officer Nomination & Compensation Committee.

Composition.  The Officer Nomination & Compensation Committee of the Board of Directors (the “ONC Committee”) is composed exclusively of non-employee, independent directors none of whom has a business relationship with the Company, other than in their capacity as directors, or has any interlocking relationships with the Company that are subject to disclosure under the rules of the SEC related to proxy statements.

Scope of Authority.  The ONC Committee reviews the performance of the executive officers; reviews candidates for positions as officers; makes recommendations to the board on officer candidates; makes recommendations to the board on compensation of officers; considers recommendations made by management relating to director compensation and presents those recommendations to the Board; and administers the incentive compensation plans in which executive officers and directors participate.  The charter of the ONC Committee is available on the Company's website, www.modine.com.

Role of Consultants. In January, prior to the end of the Company’s 2008 fiscal year, the ONC Committee reviewed all components of the directors’ compensation and the named executive officers’ compensation, including salary, bonus, equity and long-term incentive compensation, the dollar value to the executive and the cost to the Company of all perquisites and other personal benefits.  The ONC Committee, with the assistance of Towers Perrin, an independent executive compensation consulting firm hired by the ONC Committee to advise it on executive compensation matters, compared the total direct compensation of each named executive officer and the directors to compensation survey data provided by Towers Perrin.

Role of Executive Officers.  Towers Perrin assists the ONC Committee in the evaluation of the compensation of the CEO.  For all other officers, the Company’s CEO and Chief Human Resources Officer, with input from Towers Perrin, recommends the officer’s compensation level to the ONC Committee.  The ONC Committee determines the compensation for such officers, including the named executive officers.

Compensation Committee Interlocks and Insider Participation:  Effective April 1, 2008, Marsha C. Williams assumed the role of Chair of the Officer Nomination & Compensation Committee vacated by Gary L. Neale.  Vincent L. Martin joined the ONC Committee in July 2007.  The members of the ONC Committee are Frank W. Jones, Dennis J. Kuester, Vincent L. Martin, Marsha C. Williams and Michael T. Yonker.  Mr. Jones is a former executive officer of the Company having served more than three years ago.  See the Director Independence section above for additional information concerning director independence.

The Company had no “Compensation Committee Interlocks” as described by the SEC during fiscal 2008.

Corporate Governance and Nominating Committee.

The Corporate Governance and Nominating Committee (the “Nominating Committee”) develops and implements policies and practices relating to corporate governance matters, including reviewing and monitoring implementation of the Company's Guidelines on Corporate Governance; develops and reviews background information on prospective nominees to the board and makes recommendations to the Board regarding such persons; and supervises the Board's annual self-evaluation working with an outside law firm to conduct such evaluation.  The Nominating Committee is composed exclusively of non-employee, independent directors none of whom has a business relationship with the Company, other than in their capacity as directors, or has any interlocking relationships with the Company that are subject to disclosure under the rules of the SEC related to proxy statements.  The Nominating Committee may utilize the services of any non-independent director but that director does not have the power to vote.  The charter of the Nominating Committee is available on the Company's website, www.modine.com.

Pension Committee.

The Pension Committee reviews and monitors performance of the defined benefit pension plans and the defined contribution plans offered by the Company; monitors the objectives, membership and activities of the Company's Pension Investment Committee; and provides oversight for pension trust investments and defined contribution plans.  The charter of the Pension Committee is available on the Company's website, www.modine.com.
 
 
13

 

Technology Committee.

The Technology Committee reviews and makes recommendations to the entire Board of Directors on major strategies and other subjects related to the Company’s approach, emphasis, and direction with regard to technical and commercial innovation and opportunities; the technology acquisition process to assure ongoing business growth; and development and implementation of measurement and tracking systems important to successful innovation.

Compensation of Directors

Employees of Modine do not receive any compensation for serving on the Modine Board.  For the 2008 fiscal year, non-employee directors, including the Lead Director, received the following: an annual retainer of $35,000, payable quarterly; $1,750 for each board meeting attended; $1,500 for each committee meeting attended; an annual retainer of $5,000 for acting as Chair of the ONC Committee, Pension Committee, Nominating Committee or Technology Committee and an annual retainer of $10,000 for acting as Chair of the Audit Committee; reimbursement for travel, lodging, and related expenses incurred in attending board and/or committee meetings; and travel-accident and director and officer liability insurance.  The ONC Committee granted Mr. Neale 3,563 shares of unrestricted Company stock on May 20, 2008 in recognition of the substantial amount of time Mr. Neale is required to devote to the Company as Non-Executive Chairman of the Board.  The stock award had a value of $60,000 on the date of grant.  The ONC Committee anticipates making annual awards of unrestricted stock to Mr. Neale as compensation for his service as the Non-Executive Chairman of the Board.

The Amended and Restated 2000 Stock Incentive Plan for Non-Employee Directors (the “Amended Directors’ Plan”) gives discretion to the Board, or a committee of the Board, to grant stock options and stock awards to non-employee directors.  The Amended Directors’ Plan is currently administered by the ONC Committee.  The Board or the ONC Committee, as applicable, has broad discretionary authority to set the terms of awards under the Amended Directors’ Plan.  It is the current policy of the Board of Directors to grant unrestricted stock awards to each non-employee director after the annual meeting of shareholders.

The following table sets forth compensation paid to non-employee members of the Company’s Board of Directors in fiscal 2008:

Name
 
Fees Earned or Paid in Cash ($)
   
Stock Awards  ($)(1)(2)
   
Change in Pension Value ($)
   
Total ($)
 
                               
Charles P. Cooley
    70,750       39,900    
NA
      110,650  
Richard J. Doyle (4)
    15,375       0       (3 )     15,375  
Frank P. Incropera
    70,500       39,900       (3 )     110,400  
Frank W. Jones
    69,000       39,900       (3 )     108,900  
Dennis J. Kuester
    58,000       39,900       (3 )     97,900  
Vincent L. Martin
    62,500       39,900       (3 )     102,400  
Gary L. Neale
    70,250       39,900       (3 )     110,150  
Marsha C. Williams
    60,500       39,900       (3 )     100,400  
Michael T. Yonker
    70,500       39,900       (3 )     110,400  

(1)
After the 2007 Annual Meeting of Shareholders, all of the directors continuing in office, other than Mr. Rayburn, were granted 1,400 shares of unrestricted stock under the Amended Directors’ Plan.  Ms. Williams, Dr. Incropera and Mr. Martin were granted shares of unrestricted stock even though they had received a grant of stock covering a period of three years after the 2005 Annual Meeting of Shareholders.

 
14

 

Prior to the approval of the Amended Directors’ Plan, non-employee directors, upon election or re-election to the board, received options to purchase the number of shares of stock equal to the product of 6,000 times (for elections between July 2000 and July 2004) or 5,000 times (for elections prior to July 2000) the number of years in the term to which such director was elected or re-elected.  These options were granted at 100% of the fair market value of the common stock on the grant date.  These options expire no later than ten years after the grant date and terminate no later than three years after termination of director status for any reason, other than death.

None of the directors included in the table above held any unvested stock awards as of the end of fiscal 2008.  As of March 31, 2008, the directors included in the table above held options to purchase shares of common stock, all of which are exercisable, as follows: Mr. Cooley – none; Mr. Doyle – 33,803; Dr. Incropera – 35,852; Mr. Jones – 36,876; Mr. Kuester – 36,876; Mr. Martin – 35,852; Mr. Neale – 53,265; Ms. Williams – 40,974 and Mr. Yonker – 36,876.

(2)
Represents amounts expensed in fiscal 2008 relating to stock grants.  Effective April 1, 2006, the Company adopted SFAS No. 123(R), which requires it to recognize compensation expense for stock options and other stock-related awards granted to our employees and directors based on the estimated fair value of the equity awards at the time of grant.  The assumptions used to determine the value of the awards are discussed in Note 24 of the Notes to the Consolidated Financial Statements of the Company contained in the Company’s Form 10-K for the fiscal year ended March 31, 2008.

(3)
Represents the change in pension value between the end of fiscal 2007 and fiscal 2008 under the Modine Manufacturing Company Director Emeritus Retirement Plan as follows: Mr. Doyle – a reduction of $10,069; Dr. Incropera – no change; Mr. Jones – a reduction of $16,394; Mr. Kuester – a reduction of $3,415; Mr. Martin – a reduction of $4,380; Mr. Neale – a reduction of $22,631; Ms. Williams – a reduction of $198; and Mr. Yonker – a reduction of $3,415.  The foregoing amounts are not included in the table above because they are negative numbers.  The change in pension value is solely a result of the change in the interest rate used to calculate the present value of the pension benefit under the Director Emeritus Retirement Plan because no benefits otherwise continue to accrue under that plan.  The Company used an interest rate of 6.62% to calculate the present value of the pension benefit at March 31, 2008 and an interest rate of 5.92% at March 31, 2007.

The Board of Directors adopted the Director Emeritus Retirement Plan pursuant to which any person, other than an employee of the Company, who was or became a director of Modine on or after April 1, 1992 and who retired from the board would be paid a retirement benefit equal to the annualized sum directors were paid for their service to the Company as directors (including board meeting attendance fees but excluding any applicable committee attendance fees) in effect at the time such director ceased his or her service as a director.  The retirement benefit continues for the period of time equal in length to the duration of the director's board service.  If a director dies before retirement or after retirement during such period, his or her spouse or other beneficiary would receive the benefit.  In the event of a change in control (as defined in the Director Emeritus Retirement 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 that 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 it.  All eligible directors who retired prior to July 1, 2000 continue to receive benefits pursuant to the Director Emeritus Retirement Plan.  All current directors eligible for participation, Ms. Williams, Messrs. Jones, Kuester, Martin, Neale and Yonker, and Dr. Incropera, accrued pension benefits pursuant to the Director Emeritus Retirement Plan until July 1, 2000.

(4)
Mr. Doyle retired from the Board of Directors when his term expired in July 2007.

 
15

 

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis explains the compensation philosophy, policies and practices of the Company with respect to the Company's Principal Executive Officer, Principal Financial Officer and the three most highly compensated executive officers, other than the Principal Executive Officer and Principal Financial Officer, who were serving as executive officers as of March 31, 2008, and one former executive officer (the "named executive officers").

For purposes of this section, “named executive officers” refers to David B. Rayburn, President and Chief Executive Officer until his retirement on March 31, 2008; Bradley C. Richardson who was Executive Vice President – Finance and Chief Financial Officer previously and became Executive Vice President – Corporate Strategy and Chief Financial Officer on April 1, 2008; Thomas A. Burke, who became President and Chief Executive Officer on April 1, 2008 and was Executive Vice President and Chief Operating Officer prior to that time; Charles R. Katzfey, former Regional Vice President – Americas; Klaus A. Feldmann, Regional Vice President – Europe; and James R. Rulseh, Regional Vice President - Americas.

Executive Compensation Policy

The following principles guide the Officer Nomination & Compensation Committee’s (the “ONC Committee”) decisions on executive compensation:

 
·
Modine's goals can only be achieved by the retention and attraction of competent, highly skilled people;
 
 
·
Compensation is a primary factor in retaining and attracting employees;
 
 
·
Performance-based compensation must balance rewards for short-term and long-term results;
 
 
·
Compensation must be linked to the interests of our shareholders by using stock incentives, both stock awards and stock options;
 
 
·
Elements of executive compensation: base salary; targeted annual incentives (cash bonus); and targeted long-term incentives (stock-based) are set to be at the median of the market using two different compilations of survey data representing many different industries regressed to Modine’s revenue size;
 
 
·
Strong financial and operational performance must be encouraged and shareholders’ investments must be preserved and enhanced over time without undue risk in the process; and
 
 
·
Corporate results need to be rewarded rather than independent performance of operating units given the interdependence of those units and the benefits derived from the fostered cooperation and optimization of resource allocation.
 
Elements of Executive Compensation for Fiscal 2008

It is the ONC Committee’s philosophy that an executive compensation program should be used to promote both the short and long-term financial objectives of the Company, encourage the executives to act as owners of the Company and attract and retain people who are qualified, motivated and committed to excellence.  The ONC Committee believes this can be accomplished through a compensation program that provides a balanced mix of cash and equity-based compensation.  The equity compensation provides an incentive that rewards superior performance and provides financial consequences for underperformance.

The CEO participates in the same programs and receives compensation based generally on the same factors as the other named executive officers.  However, the level of the CEO’s compensation is heavily dependent upon the Company’s performance.  Mr. Rayburn's overall compensation reflected and Mr. Burke’s salary reflect a greater degree of policy and decision-making authority and a higher level of responsibility with respect to the strategic direction and financial and operational results of the Company.  The ONC Committee believes that the CEO’s compensation should be more weighted in performance measurements so that his compensation increases to a greater degree with improvements in the Company’s performance.

 
16

 

Base Salary

Individual performance is the key component in determining base salary and any changes to base salary.  Base salary is designed to compensate executives for their level of responsibility and sustained individual performance.  The ONC Committee, in addition to testing base salary against relevant survey data, exercises its judgment to determine the appropriate level of base compensation to differentiate individuals based upon their individual performance.  The determination of base salary affects every other aspect of executive compensation because all of the other components of executive compensation, including severance and retirement benefits, are set by the amount of the individual’s base salary.  The ONC Committee determines the CEO’s base salary with the assistance of the ONC Committee’s consultant, Towers Perrin, and reviews and approves the compensation of other officers. The ONC Committee annually reviews base salary to ensure, on the basis of responsibility and performance, that executive compensation is meeting the ONC Committee's principles.  Superior performance is recognized through above market merit increases.

The ONC Committee evaluates the individual performance of the Company’s CEO and sets his base salary to reflect his:

 
·
Success in meeting specified financial goals for the Company;
 
 
·
Development and successful implementation of an effective senior management team and provision for management succession;
 
 
·
Development and successful implementation of Modine's long-term strategic plan and annual goals and objectives;
 
 
·
Leadership abilities;
 
 
·
Ability to instill confidence in others and inspire the confidence of others;
 
 
·
Effective communications with stakeholders; and
 
 
·
Relationship with the board.
 
As a result of this evaluation and comparison with compensation norms, Mr. Rayburn's salary was increased from $702,000 to $723,000, a 3% increase, effective July 1, 2007.  Except as provided below, the range of base salary increases for the other named executive officers was between 1.9 percent and 7.1 percent.

On May 20, 2008, the ONC Committee, in recognition of the expectations for the CEO, increased Mr. Burke’s annual base salary from $465,000, his salary as Chief Operating Officer, to $627,750.  The salary increase for Mr. Burke was retroactive to April 1, 2008, the date he assumed the role of President and Chief Executive Officer.  On May 20, 2008, the ONC Committee also increased Mr. Richardson’s annual base salary from $417,000 to $454,530, retroactive to April 1, 2008, the date he assumed the role of Executive Vice President – Corporate Strategy and Chief Financial Officer.

Cash Incentive Bonus

The Modine Management Incentive Plan (“MIP”) is Modine’s globally applied cash incentive plan.  All named executive officers participate in the MIP.  The MIP has a short-term focus (one year) and, through fiscal 2008, was based on fiscal year results of the Company using Return on Assets Employed (“ROAE”) as its measure.  ROAE is determined by adding back after-tax interest expense to net earnings and dividing by average net assets.  ROAE drives performance by focusing the organization on asset utilization, working capital management and earnings improvement.  Using one measure, ROAE, fosters cooperation among regions, product lines and plants, encourages efficient allocation of resources and keeps managers focused on the performance of the corporation overall.  The ONC Committee annually reviews the percentage to be awarded as a MIP bonus and the methodology for calculation of ROAE as well as the appropriateness of ROAE as the basis for the MIP award.

Cash incentives would increase in a linear fashion with increases in the Company's ROAE.  The incentive is set at a percentage of base salary and the incentive levels are greater for more highly compensated individuals to reflect their level of responsibility which is consistent with general industry practice.

 
17

 

The Threshold, Target and Maximum levels for ROAE in the MIP were originally set by establishing acceptable, expected and exceptional levels of performance as measured against the return on net assets of companies in the Standard & Poor’s 500.  The ONC Committee determined that the Target level would be set so that it was expected to be achievable 50% of the time.  The Threshold, Target and Maximum Incentive payments were set at an ROAE of 4.7%, 8.7%, and 14.0%, respectively.  The ONC Committee reviews the Threshold, Target and Maximum levels, as well as the percentage of salary payable upon achievement of such goals, on an annual basis.  As a result of such a review, the ONC Committee may change the Threshold, Target and Maximum levels to best drive short-term corporate performance as it deems appropriate.

The table below shows the percentage of salary the CEO and the other named executive officers could earn under the MIP.  For the fiscal year ended March 31, 2008, the Company did not pay MIP bonuses to any employee, including the named executive officers because the Company did not achieve the Threshold level.


ROAE
 
Bonus
 
Percentage of CEO Salary Subject to  Award
 
Percentage of Salary Subject to Award for
Messrs. Richardson and Burke
 
Percentage of Salary subject to Award for
Messrs. Feldmann, Katzfey and Rulseh
                 
4.7%
 
Threshold
 
47.5
 
30
 
25
 
               
8.7%
 
Target
 
95
 
60
 
50
   
 
           
14%
 
Maximum
 
190
 
120
 
100

Effective April 1, 2008, payment under the MIP will be based upon achievement of the Company’s annual plan, specifically, the attainment of certain gross margin as a percentage of revenue and operating working capital as a percentage of revenue measures. The Company continues to have Threshold, Target and Maximum levels of payment under the MIP depending upon the results of the Company against the specified gross margin and operating working capital levels.  Each measure is weighted 50% and payment under one measure is independent of the other.  If both the achievement of gross margin and working capital were at Target levels, participants would receive 100% of their Target bonus.  Fifty percent of the corresponding MIP achievement schedule would be paid at the Threshold, Target and Maximum levels for gross margin of 14.5%, 15.0% and 15.5%, respectively.  Fifty percent of the corresponding MIP achievement schedule would be paid at the Threshold, Target and Maximum levels for operating working capital of 10.9%, 10.2% and 9.5%, respectively.

Equity Incentives - Long-Term Incentive Compensation

The Company’s long-term incentive plan is used to attract, retain and motivate key employees who directly impact the performance of the Company over a timeframe greater than a year.  The plan is stock-based so that Modine’s stock price directly affects the amount of compensation the executive receives upon achievement of the performance goals under the plan.  The ONC Committee sets the grants as a percentage of base salary.  Determinations of the achievement of performance goals for the equity compensation long-term performance share incentives are not made until the Company’s audited financial statements are completed.

The ONC Committee’s compensation consultant works with the ONC Committee to determine the appropriate level of long-term compensation for each position.  For fiscal 2008, the ONC Committee with market input from its compensation consultant, determined that the long-term incentive compensation for the CEO would be targeted at 200% of his salary, which is the median based on the survey data used by the Company and described above under Executive

 
18

 

Compensation Policy.  For the remaining named executive officers, the CEO recommended, and the ONC Committee approved, the percentage of salary for long-term incentive compensation as follows:

 
Name
 
 
 
Percentage of Salary
Bradley C. Richardson
 
145%
Thomas A. Burke
 
145%
Charles R. Katzfey
 
115%
Klaus A. Feldmann
 
100%
James R. Rulseh
 
115%

In fiscal 2008, the Company’s named executive officers received the following long-term incentive compensation:

 
·
Stock Options (targeted at approximately 20% of long-term incentive dollars) - The ONC Committee believes that stock options focus executives on driving performance.  Stock options have an exercise price equal to the fair market value of the common stock on the date of grant, are immediately exercisable when the recipient has been employed by the Company for at least one year and have a term of ten years from the date of grant;

 
·
Retention Restricted Stock Awards (targeted at approximately 20% of long-term incentive dollars) - Retention stock awards reward employees for their continued commitment to the Company.  The Company grants the employees shares of restricted stock and the restrictions lapse on one-quarter of the shares each year for a period of four years; and

 
·
Performance Stock Awards (targeted at approximately 60% of long-term incentive dollars depending on the achievement of the Threshold, Target or Maximum goals as described below) - Awards of performance stock are earned by achieving corporate financial goals over a three-year period and are paid after the end of that three-year period.  Payout levels vary based upon the achievement of Threshold, Target or Maximum goals.  Once earned, the performance stock awards are not subject to any restriction.

Two measures are used to determine performance stock awards – Earnings per Share (“EPS”) growth and Total Shareholder Return (“TSR”).  The EPS measure focuses management on increasing earnings for shareholders.  The TSR measure gauges performance relative to other companies and focuses management on driving positive differentiation in Modine’s stock performance.  Achievement and payout for each measure is calculated and paid out independently of the other measure. A new performance period begins each year so multiple performance periods, with separate goals, operate simultaneously.  EPS achievement is weighted at 60% of the Target performance shares and TSR is weighted at 40% of the Target performance shares.

The EPS goal is measured over a three-year period, which ensures that management makes decisions with the intermediate term in mind versus trying to maximize a given year’s performance to the detriment of future periods.  Through the end of fiscal 2008, the EPS growth achievement was based on cumulative three year EPS achievement with levels as follows: Threshold - 5% per year; Target – 10% per year and Maximum – 20% per year.  The 10% annualized EPS growth goal was set to approximate the average EPS growth of the S&P 500 over a ten-year period.

For the plan commencing in fiscal 2009, the EPS goal is expressed as a specified cumulative dollar amount to be achieved over the three-year period rather than a year-over-year percentage increase.  EPS will be determined under generally accepted accounting principles but the ONC Committee may, in its discretion, make appropriate adjustments to eliminate the impact of unusual items.  For the plan commencing in fiscal 2009, the EPS three-year cumulative amounts are $2.00, $2.50, and $3.00, respectively, for Threshold, Target and Maximum levels.
 
 
19

 

The performance measure for TSR is Modine’s performance relative to the performance of the S&P 500 over a three year period with levels as follows through fiscal 2008: Threshold – 25th percentile; Target – 50th percentile and Maximum – 75th percentile.  For the plans commencing in fiscal 2009, the TSR performance levels are as follows: Threshold – 35th percentile; Target – 50th percentile and Maximum – 75th percentile.  The calculation of TSR includes both the stock price change over the three-year period as well as dividends paid during the period.

See the Grants of Plan-Based Awards table below which contains estimates of future payout of long-term compensation.

Employment and Post-Employment Benefits

General Benefits.  The named executive officers receive the same basic employee benefits that are offered by the Company to all salaried employees within the region where the individual resides.  These benefits include medical and dental coverage, disability insurance and life insurance.  The cost of these benefits is partially borne by the employee, including each named executive officer.

Retirement Benefits for U.S. Employees.

The Company offers retirement benefits to its employees through tax-qualified plans, including an employee-funded Modine 401(k) Retirement Plan for U.S. Salaried Employees (the “401(k) Retirement Plan”).  Under the 401(k) Retirement Plan, the Company contributes 50% of the amount contributed to the plan by the employee, subject to a maximum contribution of 2.5% of the employee’s pay up to the maximum allowed by law.  While the benefit is available to all of the Company’s full-time employees in the U.S., each individual participant’s 401(k) Retirement Plan balance may vary due to a combination of differing annual amounts contributed by the employee, the investment choices of the participant (the same investment choices are available to all participants in the plan) and the number of years the person has participated in the plan.

The Company makes a contribution in January of each year to a defined contribution plan in an amount between four and seven percent of salary for each full-time U.S. salaried employee, including the named executive officers, other than Klaus A. Feldmann.  The percentage paid is determined each December based upon business performance balanced against the need to offer competitive benefits.  This contribution replaces the accumulation of service credit and salary increases for those eligible to participate in the Company’s pension plan, which is otherwise frozen, and provides another vehicle for retirement savings for those who are not eligible to participate in the Company’s pension plan. The Company’s pension plan is more fully described in the Pension Benefits Table below.  Messrs. Rayburn, Richardson and Rulseh participate in the Company’s pension plan.  Mr. Burke joined the Company after the pension plan was closed to new participants.  Mr. Feldmann does not participate in the U.S. company-sponsored pension plan because he is a citizen of Germany, but the Company provides a cash benefit of 5% of base salary to Mr. Feldmann to fund a retirement benefit.

In addition to the employee benefits applicable to U.S. employees in general, more highly compensated employees of Modine, including the named executive officers, other than Klaus Feldmann, receive the following benefits:

Deferred Compensation Plan. The Deferred Compensation Plan is a non-qualified plan.  It allows an employee to defer salary in an amount that exceeds the statutory limitations applicable to the 401(k) Retirement Plans.  For the 2007 calendar year, an employee could contribute no more than $15,500 to a 401(k) Retirement Plan.  The Deferred Compensation Plan allows a highly compensated employee to defer an amount of salary that exceeds $15,500 but in no event can the deferral into the Deferred Compensation Plan exceed 10% of base salary.  Salary deferred pursuant to the Deferred Compensation Plan is invested by the committee administering the plan and does not earn a preferential rate of return.  Payments out of the Deferred Compensation Plan are deferred until termination of service or retirement.  The employer match is made in this plan only to the amount that was lost in the 401(k) Retirement Plan due to statutory limits.

Additionally, an employer contribution may be made each January in conjunction with the defined contribution plan payment of between four and seven percent of salary.  A contribution to the executive’s deferred compensation account is limited to the amount that would have otherwise been made in the qualified plan but was not paid because of statutory limitations.

 
20

 

Executive Supplemental Retirement Plan (“SERP”).  The SERP is a non-qualified pension plan.  The SERP is an extension of the Company’s qualified pension plan that allows salary and bonus that is in excess of statutory limits to be taken into account in determining pension benefits payable to an employee.

Perquisites.  The Company does not provide significant perquisites or personal benefits to named executive officers.  Modine provides the named executive officers with the following limited perquisites that are available to officers generally, but not to other employees, to facilitate their ability to attend to matters of the business:

 
·
Annual allowance for financial and tax planning services;
 
 
·
Eligibility for annual physical examinations at an off-site medical facility;
 
 
·
In extremely limited circumstances and where appropriate given the significant time demands on Modine’s executives, use of Modine-owned aircraft;
 
 
·
Use of Modine fleet vehicles for occasional personal use; and
 
 
·
Country club initiation fees.
 
The ONC Committee reviewed the above perquisites provided by Modine during the fiscal year ended March 31, 2008 and found them to be reasonable and appropriate.

Share Ownership Guidelines

Effective January 16, 2008, the Board adopted share ownership guidelines for incumbent members of the Board of Directors and officers of the Company.  The guidelines are set forth in the Company’s Guidelines on Corporate Governance that are available at the Company’s website, www.modine.com.  The Board believes that in order to further align the interests of members of the Board and shareholders, members of the Board and officers should have a meaningful personal investment in the Company.   Only shares of stock, either restricted or unrestricted, count toward the guideline figures.  Options are not counted toward the guideline figures.  The guidelines generally provide that by 2013, incumbent directors are expected to hold shares of Company stock with a value of at least three times the value of the director’s annual cash retainer.   With regard to officers, by 2013, the President and CEO is expected to hold shares of Company stock with a value of at least four times his annual base salary; named executive officers, other than the President and CEO, are expected to hold shares of Company stock with a value of at least three times their annual base salary; and officers, other than those addressed above, are expected to hold shares of Company stock with a value of at least two times their annual base salary.

Grants of Stock Options/Stock Awards

In May 2007, after the earnings release for results of fiscal 2007, the ONC Committee set the Threshold, Target and Maximum levels for the grant of Performance Stock Awards.  The number of shares of stock at each level was based upon the stock price on May 2, 2007 but the ultimate number of shares issued, if any, is dependent upon the achievement of the EPS and TSR levels set by the ONC Committee and described above in Equity Incentives – Long Term Incentive Compensation.

It has also been the Company’s practice for the ONC Committee, at the January meeting, to make awards of stock options and retention restricted stock to the named executive officers as well as other employees of the Company recommended by management.  Prior to fiscal 2008, the options were granted at the closing price of the stock on the date of the grant.  In addition to the January option grants, the Company grants stock options and/or stock awards, in its discretion, to new executive officers as well as certain other new hires.  In these instances, the grant price is the closing price of the Company’s common stock on the first day of the employee’s employment.  In no instance has the Company planned to time or has it timed its release of material nonpublic information for the purpose of affecting the value of executive compensation.

In January 2008, the ONC Committee determined that the annual awards of restricted stock and option grants would be effective one week after the earnings release for the Company’s third quarter of fiscal 2008, at the closing price of the stock on that date.  The awards were effective on February 11, 2008, one week after the Company’s third quarter earnings release; the closing price of the stock on that date was $13.33.

 
21

 

Employment Agreements

The Company has employment agreements with each of Messrs. Burke and Richardson as well as its Vice President and Chief Technology Officer, Dr. Anthony C. De Vuono who is an executive officer but not a named executive officer.  Modine Holding GmbH, the Company’s subsidiary in Germany, has an employment agreement with Mr. Feldmann, as is customary in Germany.  The Company also has change in control agreements with all of its officers, including Mr. Rulseh, and certain key employees.   The purpose of these agreements is to ensure continuity and, in the case of change in control provisions, the continued dedication of our executives during any period of uncertainty.

The Company had a change in control agreement with Charles Katzfey, Regional Vice President – Americas, until his retirement from the Company on December 31, 2007.  On October 5, 2007, the Company entered into a letter agreement with Mr. Katzfey regarding his retirement from the Company which superseded his change in control agreement.

The Company had an employment agreement with Mr. Rayburn, the Company’s President and CEO prior to his retirement on March 31, 2008.  On April 6, 2008, Company entered into a retirement agreement with Mr. Rayburn pursuant to which Mr. Rayburn confirmed his retirement and his resignation from the Board of Directors.

In May 2008, the ONC Committee reviewed and approved a change to the employment agreements the Company has with Messrs. Burke and Richardson and Dr. De Vuono, effective July 1, 2008. The agreements will be amended to provide that any severance payment under such agreements would be paid over the remaining 36 month term of the agreement in the case of Messrs. Burke and Richardson and over the remaining 24 month term in the case of Dr. De Vuono, rather than in a lump sum.  In addition, the ONC Committee determined that the definition of “Good Cause” under such agreements should be amended to provide that a termination for “willful and continued failure to perform substantially the Executive’s duties” would be grounds for termination for Good Cause.  In the event of termination for Good Cause, the Company is not contractually obligated to pay benefits under the agreement to the executive.

See Potential Payments upon Termination or Change in Control below for additional information about these agreements.

Compliance with Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986, as amended, generally disallows a tax deduction to public companies for compensation over $1,000,000 paid to a company's CEO and the other named executive officers who are covered by Section 162(m).  Qualifying performance-based compensation will not be subject to the deduction limit if certain requirements are met.

The ONC Committee believes that it is generally in the Company's best interest to attempt to structure performance-based compensation, including stock option and stock award grants and annual bonuses, to named executive officers who may be subject to Section 162(m) in a manner that satisfies the statute's requirements.  However, the ONC 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 ONC 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) will do so.

Officer Nomination and Compensation Committee Report

The ONC Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis with management; and, based on that review and discussion, the Officer Nomination and Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s proxy statement and the Company’s annual report on Form 10-K.

Effective April 1, 2008, Marsha C. Williams assumed the role of Chair of the ONC Committee vacated by Gary L. Neale.  Vincent Martin joined the ONC Committee in July 2007.

Members of the ONC Committee:

Marsha C. Williams,  Chair
Vincent L. Martin
Frank W. Jones
Michael T. Yonker
Dennis J. Kuester
 

 
22

 

Summary Compensation Table

The following table sets forth compensation awarded to, earned by, or paid to the Company's Principal Executive Officer, Principal Financial Officer, and the three most highly compensated executive officers, other than the Principal Executive Officer and Principal Financial Officer, who were serving as executive officers as of March 31, 2008 and one former executive officer (the "named executive officers") for services rendered to the Company and its subsidiaries during the fiscal years ended March 31, 2008 and 2007.  Modine has no employees who earn more than the named executive officers.  

Name and Principal Position
 
Fiscal Year
   
Salary ($)(1)
   
Bonus ($)(2)
   
Stock Awards ($)(3)
   
Option Awards ($)(3)
   
Non-Equity Incentive Plan Compensation ($)(2)
   
Change in Pension Value ($)(4)
   
All Other Compensation ($)(5)
   
Total ($)
 
David B. Rayburn   
President and CEO (until March 31, 2008)
   
2008
 
 2007
     
717,750
 
702,000
     
-
 
 -
     
137,274
 
 690,912
     
212,814
 
 226,005
     
0
 
 384,126
     
194,292
 
 362,727
     
3,075,735
 
 79,081
     
4,337,865
 
 2,444,851
 
                                                                         
Bradley C. Richardson   
EVP - Corporate Strategy and CFO
   
2008
 
 2007
     
414,000
 
 405,000
     
-
 
 -
     
95,877
 
 269,040
     
89,013
 
 88,011
     
0
 
 130,359
     
-
 
 7,294
     
54,432
 
 44,864
     
653.322
 
 944,568
 
                                                                       
Thomas A. Burke  
President and CEO (since April 1, 2008; previously, EVP and COO)
   
2008
 
 2007
     
462,500
 
 448,366
     
-
 
 -
     
107,721
 
 266,098
     
100,003
 
 87,048
     
0
 
 144,050
   
NA
 
 NA
     
69,380
 
44,507
     
739,604
 
 990,069
 
                                                                         
Charles R. Katzfey   
Regional VP-Americas (until October 12,   2007)
   
2008
 
 2007
     
237,469
 
 311,000
     
-
 -
     
41,378
 
 175,986
     
-
 
57,571
     
0
 
100,103
     
15,438
 
 128,555
     
628,834
 
 42,064
     
923,119
 
 815,279
 
                                                             
Klaus A. Feldmann(6)   
Regional VP – Europe
   
2008
 
 
 2007
   
282,645€/
 $446,728
 
275,000€/
 $367,352
     
-
 
 
 -
   
94,919€/
 $150,022
 
129,818€/
 $173,415
   
88,111€/
 $139,262
 
 42,465€/
 $56,726
     
0
 
 
 88,516€/
$118,242
   
NA
 
 
 NA
   
47,162€/
 $74,541
 
51,307€/
 $68,538
   
512,837€/ 
$810,553
 
 587,106€/
 $784,273
 
                                                                         
James R. Rulseh
Regional VP-Americas
   
2008
 
 2007
     
318,500
 
 311,000
     
-
 
 -
     
58,393
 
 175,986
     
54,212
 
 57,571
     
0
 
 100,103
     
-
 
 133,698
     
47,625
 
 40,710
     
478,730
 
 819,068
 


 
23

 

(1)
The salary amounts include amounts deferred at the named executive officer's option through contributions to the Modine 401(k) Retirement Plan for Salaried Employees and the Modine Deferred Compensation Plan.

(2)
The “Bonus” column includes only discretionary bonus payments.  Payments under the Management Incentive Plan are set forth in the “Non-Equity Incentive Plan Compensation” column of this table.  Because named executive officers’ goals are specific and the officers’ performance against them is measured, payments under the Management Incentive Plan that relate to the achievement of stated goals are reflected in the “Non-Equity Incentive Plan Compensation column of this table.

(3)
Represents the amounts expensed in the stated fiscal year relating to grants of Retention Restricted Stock Awards, Performance Stock Awards (Stock Awards column) and options (Option Awards column) under the Modine Manufacturing Company 2007 Incentive Compensation Plan (the “2007 Plan”).  See Grants of Plan-Based Awards table and Compensation Discussion and Analysis – Equity Incentives – Long-Term Incentive Compensation for further discussion regarding the awards in fiscal 2008 and the Outstanding Equity Awards at Fiscal Year End table regarding all outstanding awards.

Effective April 1, 2006, the Company adopted SFAS No. 123(R), which requires it to recognize compensation expense for stock options and other stock-related awards granted to employees and directors based on the estimated fair value of the equity awards at the time of grant.  The compensation expense for such awards is expensed at the time of grant.  The assumptions used to determine the value of the awards are discussed in Note 24 of the Notes to the Consolidated Financial Statements of the Company contained in the Company’s Form 10-K for the fiscal year ended March 31, 2008.

The Retention Restricted Stock Awards under the 2007 Plan are subject to restrictions that lapse annually in fourths (for awards made in and after January 2006) and in fifths (for awards made prior to January 2006) over a period commencing at the end of the first year from the date of grant.  The shares may, if authorized by the ONC Committee, be released at an earlier date.  Dividends are paid on the restricted shares at the same time and at the same rate as dividends are paid to all shareholders.  The amount of the dividends paid on unvested shares of restricted stock is included in the “All Other Compensation” column of this table.

The actual value, if any, which an optionee will realize upon the exercise of an option will depend on the excess of the market value of the Company’s common stock over the exercise price on the date the option is exercised, which cannot be forecasted with any accuracy.  The ultimate value of the Performance Stock Awards will depend upon the number of shares that vest and the Company’s common stock price at vesting.

(4)
Represents the change in pension value between the end of fiscal 2007 and fiscal 2008.  The aggregate changes in pension value for the named executive officers who participate in the Modine Manufacturing Company Pension Plan for Non-Union Hourly-Paid Factory Employees and Salaried Employees and the Salaried Pension Plan and Executive Supplemental Retirement Plan were as follows: Mr. Rayburn – an increase of $194,292; Mr. Richardson – a reduction of $9,732; Mr. Rulseh – a reduction of $20,952.  These amounts for Messrs. Richardson and Rulseh are not included in the table above because they are negative numbers.  For purposes of calculating the change in benefit values from year to year, the discount rates used to determine the present value of the benefit were 5.92% as of March 31, 2006, 5.92% as of March 31, 2007, and 6.62% as of March 31, 2008.

(5)
The amounts set forth in this column for fiscal 2008 include: Company contributions under the 401(k) Retirement Plan (“401(k) Co. Match”); Company contribution to the qualified deferred contribution plan (“Def. Contr. Plan”); Company matching contributions under the Modine Deferred Compensation Plan (“DC Co. Match”); Company payment of long-term disability insurance premiums (“LTD Ins.”); Company payment of life insurance premiums (“Life Ins.”); dividends on unvested restricted stock; perquisites and other personal benefits; and retirement benefits.

 
24

 

Perquisites and Other Personal Benefits.  We provide our executive officers with perquisites and other personal benefits as part of providing a competitive executive compensation program and for employee retention.  Perquisites for employees resident in the U.S. may include an annual allowance for financial and tax planning services; an annual physical at an off-site medical facility; use of Modine fleet vehicles for occasional personal use; use of the company plane (which is only used in extremely limited circumstances); and country club initiation fees.  For Mr. Feldmann, perquisites consist of lease of a vehicle and a retirement supplement because he does not participate in the benefit plans available to U.S. residents.

Amounts do not include the incremental cost of our Business Travel Accident Insurance Plan, which provides coverage to all of our directors and full-time salaried employees.  The total aggregate premiums in fiscal 2007 and fiscal 2008 for this plan for all participants were $14,000 and $12,650, respectively.

Name
 
Fiscal Year
   
401(k) Co. Match ($)
   
Def. Contr. Plan ($)
   
DC Co. Match ($)
   
LTD Ins. ($)
   
Life Ins. ($)
   
Dividends on Restricted
 Stock ($)
   
Perquisites ($)
   
Retirement Benefits
   
Total
 
David B. Rayburn
   
2008
 2007
     
8,100
 7,235
     
9,000
 8,800
     
52,384
 17,065
     
840
 845
     
2,656
 2,322
     
25,710
 36,665
     
13,679
6,149
     
2,963,366
 0
     
3,075,735
 79,081
 
                                                                                 
Bradley C. Richardson
   
2008
 2007
     
7,874
 7,767
     
9,000
 8,800
     
19,333
 6,626
     
840
 845
     
926
 810
     
11,560
 18,179
     
4,899
 1,837
     
0
 0
     
54,432
 44,864
 
                                                                                 
Thomas A. Burke
   
2008
 2007
     
7,607
 8,275
     
9,000
 8,800
     
23,607
 7,866
     
840
 845
     
1,242
 926
     
10,070
 14,215
     
17,014
 3,580
     
0
0
     
69,380
 44,507
 
                                                                                 
Charles R. Katzfey
   
2008
 2007
     
5,525
 8,028
     
9,000
 3,168
     
10,839
 8,800
     
632
 845
     
2,522
 2,459
     
8,936
 14,629
     
13,666
 4,135
     
577,714
 0
     
628,834
 42,064
 
                                                                 
Klaus A. Feldmann
   
2008
 
 2007
   
NA
 
NA
   
NA
 
 NA
   
NA
 
 NA
   
NA
 
 NA
   
14,132€/
 $22,336
 13,750€/
 $18,368
   
5,734€/
 $9,063
 10,643€/
 $14,217
   
27,296€/
 $43,142
 26,914€/
 $35,953
     
0
 
 0
   
47,162€/
 $74,541
 51,307€/
$68,538
 
                                                                                 
James R. Rulseh
   
2008 
2007
     
7,790
 8,105
     
9,000
 8,800
     
10,906
 3,091
     
840
 845
     
1,182
 1,150
     
9,213
 14,540
     
8,694
 4,179
     
0
 0
     
47,625
 40,710
 
 
 
(6)
The salary, bonus and other annual compensation for Mr. Feldmann, who works and lives in Germany, were paid to him in Euros.  The amounts shown in U.S. dollars in the table above were converted from Euros at the following exchange rates in effect at March 31 in the years indicated: 2008 - $1=.6327€ and 2007 - $1=0.7486€.

Grants of Plan-Based Awards for Fiscal 2008

The compensation plan under which the grants in the following table were made, the Modine Management Incentive Plan (“MIP”) and the Modine Manufacturing Company 2007 Incentive Compensation Plan (the “2007 Plan”), are generally described in Executive Compensation – Compensation Discussion and Analysis – Cash Incentive Bonus and Equity Incentives – Long-Term Incentive Compensation. The MIP provides for short term cash awards.  The 2007 Plan provides for, among other incentives, the grant of performance stock awards, stock options and restricted stock awards.  The following table sets forth information about grants of any award made in the fiscal year ended March 31, 2008 to the named executive officers.  As indicated in the footnotes to this table, the amounts included in the “Estimated Payouts under Equity Incentive Plan Awards” column of this table are contingent upon the achievement of certain earnings per share and total shareholder return levels.

 
25

 
 
Name
Award Date
Grant Date
 
Estimated Future Payouts 
Under Non-Equity 
Incentive Plan Awards (1)
   
Estimated Future Payouts Under
Equity Incentive Plan Awards (2)
   
All Other Stock Awards; Number of Shares of Stock or Units (#)(3)
   
All Other Option Awards; Number of Securities Under- lying Options (#)
   
Exercise or Base Price of Option Awards ($/Sh)
   
Grant Date Fair Value of Stock and Option Awards ($)
 
       
Threshold ($)
   
Target ($)
   
Max ($)
   
Threshold (#)
   
Target (#)
   
Max (#)
                         
                                                                 
David B. Rayburn (4)
4/1/07
   5/2/07
   1/15/08
   1/15/08
4/1/07
   5/2/07
   2/11/08
   2/11/08
    340,931       681,863       1,363,725      
 
15,838
     
 
39,594
     
 
69,290
     
 
 
22,668
     
 
 
 
67,775
     
 
 
 
13.33
     
 
464,917
 302,164
 212,814
 
                                                                                     
Bradley C. Richardson
4/1/07
   5/2/07
   1/15/08
   1/15/08
4/1/07
   5/2/07
   2/11/08
   2/11/08
    124,200       248,400       496,800      
 
6,624
     
 
16,561
     
 
28,981
     
 
 
9,481
     
 
 
 
28,348
     
 
 
 
13.33
     
 
271,832
 126,382
 89,013
 
                                                                                     
Thomas A. Burke
4/1/07
   5/2/07
   1/15/08
   1/15/08
4/1/07
   5/2/07
   2/11/08
   2/11/08
    138,750       277,500       555,000      
 
7,442
     
 
18,605
     
 
32,559
     
 
 
10,652
     
 
 
 
31,848
     
 
 
 
13.33
     
 
305,412
 141,991
 100,003
 
                                                                             
Charles R. Katzfey
4/1/07
   5/2/07
4/1/07
   5/2/07
    79,625       159,250       318,500      
 
4,034
     
 
10,086
     
 
17,650
   
 
 
NA
   
 
 
NA
   
 
 
NA
   
 
112,779
 NA
 
                                                                                     
Klaus A. Feldmann
4/1/07
   5/2/07
   1/15/08
   1/15/08
4/1/07
   5/2/07
   2/11/08
   2/11/08
    111,682       223,365       446,728      
 
4,149
     
 
10,372
     
 
18,151
     
 
 
5,938
     
 
 
 
17,754
     
 
 
 
13.33
     
 
170,270
 79,153
 55,784
 
                                                                                     
James R. Rulseh
4/1/07
   5/2/07
   1/15/08
   1/15/08
4/1/07
   5/2/07
   2/11/08
   2/11/08
    79,625       159,250       318,500      
 
4,034
     
 
10,086
     
 
17,650
     
 
 
5,774
     
 
 
 
17,265
     
 
 
 
13.33
     
 
165,557
 76,967
 54,212
 
 
(1)
The awards are made under the MIP.  The MIP is Modine’s globally applied cash bonus plan and is described in Compensation Discussion and Analysis – Cash Incentive Bonus above.  Award levels for the MIP are set prior to the beginning of the fiscal year.

(2)
Performance Stock Awards under the 2007 Plan were granted, subject to the Company’s achievement of the performance level under the plan, for payment in the fiscal year ending March 31, 2010.  The awards were granted at $23.35, the closing price of the Company’s stock on May 2, 2007.  No dividends are paid on these shares of stock.  See Compensation Discussion and Analysis – Equity Incentives – Long-Term Incentive Compensation above.

(3)
Retention Restricted Stock Awards.  See Compensation Discussion and Analysis – Equity Incentives – Long-Term Incentive Compensation above.

 
26

 

(4)
The amounts of Performance Stock Awards set forth for Mr. Rayburn were prorated given his retirement from the Company on March 31, 2008.  Since Mr. Rayburn was employed by the Company for one year of the three-year term of the awards granted on May 2, 2007, Mr. Rayburn would receive one-third of what he would have received if he were employed by the Company until the payment of the award, if any, in the fiscal year ending March 31, 2010.

Outstanding Equity Awards at Fiscal Year End
 

   
Option Awards
 
Stock Awards
 
Name
 
Number of Securities Underlying Unexercised Options (#) Exercisable (1)
 
Number of Securities Underlying Unexercised Options (#)   Unexercisable(1)
 
Option Exercise Price ($)
 
Option Expiration Date
 
Number of Shares or Units of Stock that Have Not Vested ($)(2)
   
Market Value of Shares or Units of Stock that Have Not Vested ($)(2)
   
Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)(3)
   
Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or other Rights that Have Not Vested ($)(3)
 
David B. Rayburn
   
20,487
 25,608
 25,609
 40,974
 22,945
 30,730
 26,663
 25,988
 32,379
 67,775
 
NA
   
32.46
 24.41
 22.70
 22.24
 18.09
 28.48
 30.82
 32.61
 27.22
 13.33
 
1/20/2009
 1/19/2010
 1/17/2011
 3/31/2011
 3/31/2011
 3/31/2011
 3/31/2011
 3/31/2011
 3/31/2011
   3/31/2011
    59,650       864,329       27,022       391,549  
                                                     
Bradley C. Richardson
   
25,608
 16,390
 14,238
 9,797
 12,609
 28,348
 
NA
   
20.96
 28.48
 30.82
 32.61
 27.22
 13.33
 
5/12/2013
   1/20/2014
   1/18/2015
   1/17/2016
   1/16/2017 
  2/11/2018
 
  27,464       397,953       16,629       240,954  
                                                     
Thomas A. Burke
   
25,609
 9,298
 12,471
 31,848
 
NA
   
30.40
 32.61
 27.22
 13.33
 
5/31/2015
   1/17/2016
   1/16/2017
   2/11/2018
 
 
25,453       368,814       17,141       248,373  
                                                     
Charles R. Katzfey
   
8,195
 12,292
 15,366
 20,487
 12,292
 10,653
 6,663
 8,248
 
NA
   
32.46
 24.41
 22.70
 22.24
 28.48
 30.82
 32.61
 27.22
 
1/20/2009
   1/19/2010
   12/31/2010
   12/31/2010
   12/31/2010
   12/31/2010
   12/31/2010
   12/31/2010
    0       0       15,734       227,986  
                                                     
Klaus A. Feldmann
   
6,146
 12,292
 15,366
 20,487
 11,472
 12,292
 10,653
 6,605
 8,127
 17,754
 
NA
   
32.46
 24.41
 22.70
 22.24
 18.09
 28.48
 30.82
 32.61
 27.22
 13.33
 
1/20/2009
   1/19/2010
   1/17/2011
   1/16/2012
   1/06/2013
   1/20/2014
   1/18/2015
   1/17/2016
   1/16/2017
   2/11/2018
    18,521       268,369       10,744       155,681  
                                                     
James R. Rulseh
   
8,195
 8,194
 9,219
 20,487
 11,472
 12,292
 10,653
 6,486
 8,248
 17,265
 
NA
   
32.46
 24.41
 22.70
 22.24
 18.09
 28.48
 30.82
 32.61
 27.22
 13.33
 
1/20/2009
   1/19/2010
   1/17/2011
   1/16/2012
   1/16/2013
   1/20/2014
   1/18/2015
   1/17/2016
   1/16/2017
   2/11/2018
    18,367       266,138       10,618       153,855  

 
 
27

 
 
(1)
Under the Modine Manufacturing Company 2007 Incentive Compensation Plan (the “2007 Plan”), options are exercisable immediately if the recipient has been employed by the Company for at least one year.

(2)
Under the 2007 Plan, these shares are Retention Stock Awards.  The market value of the awards was determined by multiplying the number of unvested shares by $14.49, the closing price of the Company’s common stock on March 31, 2008.  See Compensation Discussion and Analysis – Equity Incentives – Long-Term Incentive Compensation for a description of Retention Stock Awards.

The restricted shares vest as follows:

   
Share Vesting for
David Rayburn (#)
   
Share Vesting for Bradley Richardson (#)
   
Share Vesting for Thomas
Burke (#)
   
Share Vesting for Klaus Feldmann (#)
   
Share Vesting for James
Rulseh (#)
 
  
                               
April 13, 2008
    59,650                          
May 5, 2008
                        300       300  
May 6, 2008
            480             480       480  
May 12, 2008
            6,100             2,100       2,100  
May 31, 2008
                    5,000                  
January 16, 2009
            1,080       1,068       696       707  
January 17, 2009
            840       797       566       556  
January 18, 2009
            600               600       600  
January 20, 2009
            600               600       600  
February 11, 2009
            2,370       2,663       1,484       1,443  
May 6, 2009
            480               480       480  
May 12, 2009
            2,100               2,100       2,100  
May 31, 2009
                    5,000                  
January 16, 2010
            1,080       1,068       696       707  
January 17, 2010
            840       797       567       556  
January 18, 2010
            600               600       600  
February 11, 2010
            2,370       2,663       1,484       1,443  
May 12, 2010
            2,100               2,100       2,100  
January 16, 2011
            1,083               698       707  
January 17, 2011
                    1,071                  
February 11, 2011
            2,370       2,663       1,484       1,443  
February 11, 2012
            2,371       2,663       1,486       1,445  


(3)
Performance Stock Awards under the 2007 Plan at the Threshold level.  See Compensation Discussion and Analysis – Equity Incentives – Long-Term Incentive Compensation for a description of Performance Stock Awards.  The market value of the awards was determined by multiplying the number of unvested shares by $14.49, the closing price of the Company’s common stock on March 31, 2008.

 
28

 

Option Exercises and Stock Vested for Fiscal 2008

Each of the stock prices set forth below was the closing price of the common stock on the NYSE on the date the restrictions lapsed and the shares vested.
 
 
Option Awards
 
Stock Awards
 
     
 
           
Name
Number of Shares Acquired on Exercise (#)
 
Value Realized on Exercise ($)
 
Number of Shares Acquired on Vesting (#)
   
Value Realized on Vesting ($)
 
David B. Rayburn
NA
 
NA
    700       16,247 (1)
            800       18,568 (2)
            6,300       147,294 (3)
            3,000       45,960 (4)
            2,775       38,545 (5)
            2,227       30,844 (6)
            1,000       14,000 (7)
            1,000       14,000 (8)
                       
Bradley C. Richardson
NA
 
NA
    480       11,141 (2)
            6,100       142,618 (3)
            1,080       15,001 (5)
            840       11,634 (6)
            600       8,400 (7)
            600       8,400 (8)
                       
Thomas A. Burke
NA
 
NA
    5,000       117,550 (9)
            1,068       14,835 (5)
            797       11,038 (6)
                       
Charles R. Katzfey
NA
 
NA
    300       6,963 (1)
            480       11,141 (2)
            19,121       315,688 (10)
                       
Klaus A. Feldmann
NA
 
NA
    300       6,963 (1)
            480       11,141 (2)
            2,100       49,098 (3)
            1,600       24,512 (4)
            696       9,667 (5)
            566       7,839 (6)
            600       8,400 (7)
            600       8,400 (8)
                       
James R. Rulseh
NA
 
NA
    300       6,963 (1)
            480       11,141 (2)
            2,100       49,098 (3)
            1,880       28,802 (4)
            707       9,820 (5)
            556       7,701 (6)
            600       8,400 (7)
            600       8,400 (8)
 
(1)
Shares vested on May 5, 2007 at $23.21 per share.

(2)
Shares vested on May 6, 2007 at $23.21 per share.

 
29

 

(3)
Shares vested on May 12, 2007 at $23.38 per share.

(4)
Shares vested on January 6, 2008 at $15.32 per share.

(5)
Shares vested on January 16, 2008 at $13.89 per share.

(6)
Shares vested on January 17, 2008 at $13.85 per share.

(7)
Shares vested on January 18, 2008 at $14.00 per share.

(8)
Shares vested on January 20, 2008 at $14.00 per share.

(9)
Shares vested on May 31, 2007 at $23.51 per share.

(10)
Shares vested on December 31, 2007 at $16.51 per share.

Pension Benefits

The named executive officers who were employed by the Company on or before December 31, 2003 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 (the "Salaried Pension Plan") (with the exception of Klaus A. Feldmann, who is a German citizen and receives an annual contribution of five percent of his annual base salary for his personal pension planning purposes).  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, bonus, and any amount deferred under the 401(k) Retirement Plan and the Deferred Compensation Plan which is 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 the benefits to vest.  The principal benefit under the Salaried Pension Plan is a lifetime monthly benefit for the joint lives of a participant and his or her spouse based on the employee's earnings and period of employment.  The pension benefit is not subject to offset by Social Security benefits.  Employees may 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.  In addition, an employee may elect to receive a lump-sum pension benefit if, upon retirement, the sum of the employee's age plus years of eligible service with the Company equals 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 or she elects not to retire at that time.

Effective April 1, 2006, the Company froze credited service under the Salaried Pension Plan so participants in the Salaried Pension Plan no longer earn additional credited service.  While credited service is frozen, eligibility service for employees hired on or before December 31, 2003 continues to accrue.  Effective December 31, 2007, the Company froze pension salary accruals in the Salaried Pension Plan.  As a result, no increases in salary for a participant in the Salaried Pension Plan are considered in determining pension benefits after December 31, 2007.  Neither Mr. Burke nor Mr. Feldmann is eligible to participate in the Company’s defined benefit plans.  Mr. Richardson became vested in the Salaried Pension Plan and Executive Supplemental Retirement Plan (the “SERP”) on May 15, 2008.

Pension benefits under the Salaried Pension 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 pursuant to the SERP from general operating funds of the Company.

Pension Benefits Table for Fiscal 2008
 

Name
Plan Name
 
Number of Years Credited Service (#)
   
Present Value of Accumulated Benefit ($)
   
Payments During Last Fiscal Year ($)
 
David B. Rayburn
Salaried Pension Plan
   SERP
   Total
   
15.3
 15.3
     
488,756
 1,959,649
 2,448,405
     
0
 0
 
                           
Bradley C. Richardson
Salaried Pension Plan
   SERP
   Total
   
3.1
 3.1
     
49,952
 69,351
 119,303
     
0
 0
 
                     
Thomas A. Burke
NA
 
NA
   
NA
   
NA
 
                           
Charles R. Katzfey
Salaried Pension Plan
   SERP
   Total
   
19.2
 19.2
     
663,032
 640,155
 1,303,187
     
0
 0
 
                     
Klaus A. Feldmann
NA
 
NA
   
NA
   
NA
 
                           
James R. Rulseh
Salaried Pension Plan
   SERP
   Total
   
29
 29
     
579,200
 536,699
 1,115,899
     
0
 0
 
 
 
30

 
 
The Company used the following assumptions to determine the present value of the accumulated benefit as set forth in the table above: discount rate of 6.62% and pay up to December 31, 2007; use of RP-2000 combined health and mortality tables (post-retirement decrement only); service up to March 31, 2006; employees elect to begin payment as soon as they are eligible to receive unreduced benefits; 80% of employees elect lump sum payment from the qualified plan and 20% elect annuities; and all payments from the SERP are in the form of a lump sum with lump sums valued using a 3-tier yield curve of 4.11% for years 0-5, 6.18% for years 5-20 and 7.05% for years 20+ and the specified 417(e) mortality table.

Nonqualified Deferred Compensation

The Deferred Compensation Plan is a non-qualified plan.  It allows an employee to defer salary in an amount that exceeds the statutory limitations applicable to the 401(k) Retirement Plans.  For the 2007 calendar year, an employee could contribute no more than $15,500 to the 401(k) Retirement Plan.  The Deferred Compensation Plan allows a highly compensated employee to defer up to 10% of base salary.  Salary deferred pursuant to the Deferred Compensation Plan is invested by the committee administering the plan.  Payments out of the Deferred Compensation Plan are deferred until termination of service or retirement.  The employer match is made in this plan only to the amount that was lost in the 401(k) Retirement Plan due to statutory limits.

Nonqualified Deferred Compensation Table for Fiscal 2008

Name
 
Executive Contributions in Last FY ($)(1)
   
Registrant Contributions
in Last FY ($)(2)
   
Aggregate Earnings
in Last FY ($)(3)
   
Aggregate Withdrawals/ Distributions ($)
   
Aggregate Balance
 at Last FYE ($)
 
David B. Rayburn
    35,847       52,384       (93,629 )     0       569,426  
                                         
Bradley C. Richardson
    41,354       19,333       (42,747 )     0       230,080  
                                         
Thomas A. Burke
    9,242       23,607       (5,905 )     0       67,268  
                                         
Charles R. Katzfey
    24,212       10,839       (10,604 )