Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
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Filed by a party other than the Registrant [ ]
Check the appropriate box:
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[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TRANSPRO, INC.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[Logo]
March 30, 2000
Dear Fellow Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders which will be held at The St. Regis Hotel, 2 East 55th Street, New
York, New York on Wednesday, May 3, 2000 at 11:00 a.m. This year you are being
asked to elect seven directors to the Company's Board and approve the Company's
auditors for the year ending December 31, 2000, all as set forth in the
accompanying notice and proxy statement.
We look forward to greeting personally those stockholders who are able to be
present at the meeting; however, whether or not you plan to be with us at the
meeting, it is important that your shares be represented. Accordingly, you are
requested to sign and date the enclosed proxy and mail it in the envelope
provided at your earliest convenience.
Thank you for your cooperation.
Sincerely yours,
Barry R. Banducci
Barry R. Banducci
Chairman of the Board
TRANSPRO, INC.
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of TransPro,
Inc. will be held on Wednesday, May 3, 2000 at 11:00 a.m., at The St. Regis
Hotel, 2 East 55th Street, New York, New York, for the following purposes:
(1) To elect seven directors to serve for the ensuing year;
(2) To consider and vote on the approval of PricewaterhouseCoopers LLP
as the Company's independent auditors for the year ending December 31, 2000;
and
(3) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Stockholders of record at the close of business on March 6, 2000 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. All stockholders are cordially invited to attend the Annual Meeting in
person. Stockholders who are unable to attend the Annual Meeting in person are
requested to complete and date the enclosed form of proxy and return it promptly
in the envelope provided. No postage is required if mailed in the United States.
Stockholders who attend the Annual Meeting may revoke their proxy and vote their
shares in person.
TIMOTHY E. COYNE
Secretary
New Haven, Connecticut
March 30, 2000
TRANSPRO, INC.
100 GANDO DRIVE
NEW HAVEN, CONNECTICUT 06513
-------------------------
PROXY STATEMENT
-------------------------
GENERAL INFORMATION
PROXY SOLICITATION
This Proxy Statement is furnished to the holders of Common Stock of
TransPro, Inc. (the 'Company') in connection with the solicitation by the Board
of Directors of the Company of proxies for use at the Annual Meeting of
Stockholders to be held on Wednesday, May 3, 2000, or at any adjournment of the
Annual Meeting. The purposes of the meeting and the matters to be acted upon are
described in the accompanying Notice of Annual Meeting of Stockholders. The
Board of Directors is not currently aware of any other matters that will come
before the meeting.
Proxies for use at the meeting are being solicited by the Board of Directors
of the Company. Proxies will be mailed to stockholders on or about March 31,
2000 and will be solicited chiefly by mail. The Company will make arrangements
with brokerage houses and other custodians, nominees and fiduciaries to send
proxies and proxy material to the beneficial owners of the shares and will
reimburse them for their expenses in so doing. Should it appear desirable to do
so in order to ensure adequate representation of shares at the meeting,
officers, agents and employees of the Company may communicate with stockholders,
banks, brokerage houses and others by telephone, facsimile, or in person to
request that proxies be furnished. All expenses incurred in connection with this
solicitation will be paid by the Company.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the Annual Meeting and a return envelope for the
proxy are enclosed. Stockholders may revoke the authority granted by their
execution of proxies at any time before their effective exercise by filing with
the Secretary of the Company a written notice of revocation or a duly executed
proxy bearing a later date, or by voting in person at the meeting. Shares of the
Company's Common Stock represented by executed and unrevoked proxies will be
voted in accordance with the choice or instructions specified thereon. If no
specifications are given, the proxies intend to vote the shares represented
thereby to approve Proposals No. 1 and 2 as set forth in the accompanying Notice
of Annual Meeting of Stockholders and in accordance with their best judgment on
any other matters which may properly come before the meeting.
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on March 6, 2000 are
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. On March 6, 2000 there were 6,597,335 shares of Common Stock
outstanding; each such share is entitled to one vote on each of the matters to
be presented at the Annual Meeting. The holders of a majority of the outstanding
shares of Common Stock, present in person or by proxy, will constitute a quorum
at the Annual Meeting. Abstentions and broker non-votes will be counted for
purposes of determining the presence or absence of a quorum. 'Broker non-votes'
are shares held by brokers or nominees which are present in person or
represented by proxy, but which are not voted on a particular matter because
instructions have not been received from the beneficial owner. Under applicable
Delaware law, the effect of broker non-votes on a particular matter depends on
whether the matter is one as to which the broker or nominee has discretionary
voting authority under the applicable rule of the New York Stock Exchange. The
effect of broker non-votes on the specific items to be brought before the Annual
Meeting of Stockholders is discussed under each item.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
Seven directors (constituting the entire Board) are to be elected at the
Annual Meeting. Unless otherwise specified, the enclosed proxy will be voted in
favor of the persons named below to serve until the next annual meeting of
stockholders and until their successors shall have been duly elected and shall
qualify. Each person named below is now a director of the Company. In the event
any of these nominees shall be unable to serve as a director, the shares
represented by the proxy will be voted for the person, if any, who is designated
by the Board of Directors to replace the nominee. All nominees have consented to
be named and have indicated their intent to serve if elected. The Board of
Directors has no reason to believe that any of the nominees will be unable to
serve or that any vacancy on the Board of Directors will occur.
The nominees, their ages, the year in which each first became a director of
the Company and their principal occupations or employment during the past five
years are:
YEAR FIRST
BECAME PRINCIPAL OCCUPATION
NOMINEE AGE DIRECTOR DURING THE PAST FIVE YEARS
------- --- -------- --------------------------
Barry R. Banducci......... 64 1995 Chairman of the Board of the Company since
September 1995; from 1984 to 1996, Vice Chairman of
the Board and a director of The Equion
Corporation ('Equion'), a manufacturer of
automotive products; from 1988 to 1994, President
and Chief Executive Officer of Equion and from
1984 to 1988, President and Chief Operating
Officer of Equion; currently a director of
Advanced Accessory Systems and The Delker
Corporation. (1)(3)
Henry P. McHale........... 61 1995 President and Chief Executive Officer of the
Company since July 1995; since September 1992,
President and Chief Executive Officer of GO/DAN
Industries (a business unit of the Company since
September 1995); prior thereto, various executive
positions with Ladish Corporation and Rockwell
Automotive. (3)
William J. Abraham, Jr.... 52 1995 Partner with Foley & Lardner, a law firm in
Milwaukee, Wisconsin, since 1980; currently
Chairman of the Business Law Department of Foley
& Lardner; currently a director of The Vollrath
Company, Inc., Park Bank, and Windway Capital
Corp. (2)
Philip Wm. Colburn........ 71 1995 Chairman of the Board of Allen Telecom Inc.
('Allen') since December 1988 and a director of
Allen since 1973; from March 1988 to February
1991, Chief Executive Officer of Allen; currently
a director of Superior Industries International,
Inc. and Earl Scheib, Inc. (2)
Paul R. Lederer........... 60 1995 Currently a director of R&B Inc., Woods Equipment
Co. and Icarz.com, and a member of the advisory
boards of Richco Inc., Turtle Wax, Inc., Ampere
Products, The Wine Discount Center, and
StockYards Packing; prior to retirement in
October 1998, Executive Vice
President -- Worldwide Aftermarket of
Federal-Mogul Corporation since February 1998;
from November 1994 to February 1998, President
and Chief Operating Officer of Fel-Pro Inc.
(which was acquired by Federal-Mogul
Corporation); from January 1993 to November 1994,
an automotive consultant and served on the
advisory boards of Fullerton Metals and Fel-Pro
Inc. (1)(3)
2
YEAR FIRST
BECAME PRINCIPAL OCCUPATION
NOMINEE AGE DIRECTOR DURING THE PAST FIVE YEARS
------- --- -------- --------------------------
Sharon M. Oster........... 51 1995 Frederic D. Wolfe Professor of Management and
Entrepreneurship at the School of Management,
Yale University since 1992; from 1992 to 1994,
Associate Dean of Yale's School of Management;
from 1983 to 1994, Professor of Economics and
Management at Yale's School of Management;
currently a director of HealthCare REIT, Inc. and
The Aristotle Corporation. (1)
F. Alan Smith............. 68 1995 Chairman of Advanced Accessory Systems, LLC since
September 1995, Chairman of Mackie Automotive
Systems since May 1998, and a director of 3M
since 1986; retired from General Motors
Corporation ('GM') in 1992 after 36 years of
service; from 1981 to 1992, Executive Vice
President and a member of the Board of Directors
of GM. (2)
- ---------
(1) Member of the Management Compensation and Nominating Committee of the Board
of Directors.
(2) Member of the Audit Committee of the Board of Directors.
(3) Member of the Management Committee of the Board of Directors.
INFORMATION REGARDING BOARD OF DIRECTORS
The business and affairs of the Company are managed under the direction of
its Board of Directors, whose members are elected annually by the stockholders.
During 1995, the Board of Directors of the Company designated a Management
Compensation and Nominating Committee and an Audit Committee. Messrs. Lederer
and Banducci and Ms. Oster are the members of the Management Compensation and
Nominating Committee; and Messrs. Smith, Abraham and Colburn are the members of
the Audit Committee. Prior to April 28, 1999, Messrs. Colburn and Lederer were
the members of the Management Compensation and Nominating Committee; and Mr.
Colburn, Ms. Oster and Mr. Smith were the members of the Audit Committee. During
1999, the Board of Directors of the Company designated a Management Committee.
Messrs. McHale, Banducci and Lederer are the members of the Management
Committee.
The Management Compensation and Nominating Committee (the 'Compensation
Committee') recommends to the Board salaries and incentive compensation awards
for officers of the Company and its subsidiaries; reviews and approves
guidelines for the administration of incentive compensation programs for other
management employees; makes recommendations to the Board with respect to major
compensation programs; administers the Company's 1995 Stock Plan (the '1995
Stock Plan') and its 1995 Nonemployee Directors Stock Option Plan (the
'Directors Plan'), grants stock options and restricted shares of the Company's
Common Stock under the 1995 Stock Plan; and issues the Report on Executive
Compensation required to be included in the Company's proxy statement by the
rules of the Securities and Exchange Commission. See 'Executive
Compensation -- Compensation Committee Report on Executive Compensation.' This
Committee also selects and recommends to the Board nominees for election as
directors and considers the performance of incumbent directors in determining
whether to recommend them for nomination for re-election. The Compensation
Committee has recommended each of the seven incumbent directors for re-election
at the Annual Meeting. The Committee will consider nominees recommended by
stockholders for election at the 2001 Annual Meeting of Stockholders that are
submitted prior to the end of 2000 to the Secretary of the Company at the
Company's offices, 100 Gando Drive, New Haven, Connecticut 06513. Any such
recommendation must be in writing and must include a detailed description of the
business experience and other qualifications of the recommended nominee as well
as the signed consent of such person to serve if nominated and elected.
The Audit Committee recommends to the Board of Directors the appointment of
the Company's independent auditors and reviews the degree of their independence
from the Company; approves the scope of the audit engagement, including the cost
of the audit; reviews any non-audit services rendered
3
by the auditors and the fees therefor; reviews with the auditors and management
the Company's policies and procedures with respect to internal accounting and
financial controls and, upon completion of an audit, the results of the audit
engagement; and reviews internal accounting and auditing procedures with the
Company's financial staff and the extent to which recommendations made by the
independent auditors have been implemented.
The Management Committee serves as an advisory resource for management of
the Company with regard to industry-specific strategic issues and the condition
of the marketplace in which the Company operates. The Management Committee was
established to assist management in its oversight of the Company through the
experience and knowledge of its members, rather than to take specific action
with regard to any particular area of corporate governance.
During the year ended December 31, 1999, the Board of Directors of the
Company held five meetings, the Compensation Committee held two meetings, the
Audit Committee held two meetings and the Management Committee held five
meetings. Each director attended at least 75% of the meetings of the Board of
Directors held and of all committees of the Board of Directors on which he or
she served while he or she was director or a member of a committee of the Board
of Directors, with the exception of Mr. Smith, who attended three of the five
meetings of the Board of Directors during 1999.
COMPENSATION OF DIRECTORS
The Chairman of the Board of Directors is paid an annual retainer of $35,000
per year for his services as Chairman and $1,000 for each meeting of the Board
of Directors attended. The Chairman does not receive any additional compensation
for Committee participation. All other nonemployee directors are paid $12,000
per year for their services as a director and $1,000 for each meeting of the
Board of Directors attended. Each nonemployee member of the Audit, Compensation
or Management Committee is paid $2,000 per year for his or her services as such
member, and each such Committee member is paid $500 for each meeting of a
Committee attended. Directors are not paid fees for their participation in
meetings by telephone conference or for actions by unanimous written consent.
Each director and Committee member is reimbursed for travel and related expenses
incurred in attending meetings.
Under the Company's 1995 Nonemployee Directors Stock Option Plan (the
'Directors Plan'), the Chairman and each nonemployee director are automatically
entitled to a grant of options to purchase 3,200 and 1,500 shares of Common
Stock, respectively, on an annual basis, on the first Friday following the
Company's Annual Meeting of Stockholders. As the Board of Directors unanimously
determined not to accept the automatic option grant due in April 1998, the Board
granted pursuant to the Directors Plan to each of Messrs. Abraham, Colburn,
Lederer, Ms. Oster and Mr. Smith options to purchase 3,000 shares of Common
Stock on April 30, 1999 at an exercise price of $5.875 per share. Mr. Banducci
received options to purchase 6,400 shares of Common Stock on such date at the
same exercise price. Each of the foregoing options expires 10 years from date of
grant and is exercisable 50 percent after two years from date of grant, 75
percent after three years from date of grant and 100 percent after four years
from date of grant.
The Company maintains a Matching Gift Program for the benefit of the
directors of the Company. Pursuant to the Matching Gift Program, in 1999, the
Company matched gifts to charitable organizations made by the directors in
amounts up to $2,500 for each director.
The Company is a party to an Employment Agreement with Mr. McHale. For a
description of the terms of this agreement, see 'Executive
Compensation -- Employment, Termination of Employment and Change of Control
Arrangements.'
VOTE REQUIRED
The seven nominees receiving the highest number of affirmative votes of the
shares present in person or represented by proxy and entitled to vote for them,
a quorum being present, shall be elected as directors. Only votes cast for a
nominee will be counted, except that the accompanying proxy will be voted for
all nominees in the absence of instruction to the contrary. Abstentions, broker
non-votes and instructions on the accompanying proxy card to withhold authority
to vote for one or more nominees will result in the respective nominees
receiving fewer votes.
THE BOARD OF DIRECTORS DEEMS 'PROPOSAL NO. 1 -- ELECTION OF DIRECTORS' TO BE
IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE
'FOR' APPROVAL THEREOF.
4
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Management Compensation and Nominating Committee (the 'Compensation
Committee') is comprised of three independent non-employee directors. As members
of the Compensation Committee, it is our responsibility to administer the
Company's executive compensation programs, monitor corporate performance and its
relationship to compensation of executive officers, and make appropriate
recommendations concerning matters of executive compensation.
Compensation Policies
The Compensation Committee has formulated a compensation philosophy for the
Company which is designed to enable the Company to attract, retain and reward
capable employees who can contribute to the success of the Company, principally
by (i) setting base salaries at the median of the marketplace, (ii) creating a
significant annual incentive opportunity with target award levels somewhat above
median marketplace practices and (iii) creating a highly leveraged (i.e.,
approximately between the marketplace 50th and 75th percentiles) long term
incentive opportunity for senior management. The Compensation Committee believes
that implementation of a system of compensation that emphasizes performance
based compensation provides a strong alignment to stockholders' interests. Five
key principles serve as the guiding framework for compensation decisions for all
employees of the Company:
To attract and retain the most highly qualified management and employee
team.
To pay competitively compared to similar automotive companies.
To encourage superior employee performance by aligning rewards with
stockholder interests, especially through the use of tangible
performance targets.
To motivate senior executives to achieve the Company's annual and
long-term business goals by providing higher than average leveraged
equity-based incentive opportunities.
To strive for fairness in administration by emphasizing performance
related contributions as the basis of pay decisions.
To implement these policies, the Compensation Committee has designed the
framework for a four-part executive compensation program consisting of base
salary, annual incentive plan, long-term incentive opportunities for senior
management, and other employment benefits.
Base Salary. The Compensation Committee will seek to maintain levels of
compensation that are competitive with similar automotive companies. Base salary
represents the fixed component of the executive compensation program. The
Company's philosophy regarding base salaries is conservative, and will seek to
maintain salaries for the aggregate officer group at approximately the
competitive industry average. Periodic increases in base salary will relate to
individual contributions evaluated against established objectives, length of
service, and the industry's annual competitive pay practice movement. The
Compensation Committee has determined that base salary for 1999 for the
Company's Chief Executive Officer and for the other executive officers was
generally at the competitive industry average.
Annual Incentive Plan. The Compensation Committee has designed an annual
incentive plan pursuant to which key Company employees will be eligible to
receive performance bonuses in a range based upon a percentage of their annual
base salary. Payment of the performance bonuses is based upon performance
measures set by the Compensation Committee that incorporate overall Company,
divisional and personal targets. In general, with regard to senior executives, a
greater degree of emphasis is placed on the long-term incentives described
below.
Long Term Incentives. The Compensation Committee believes that the pay
program should provide senior executives with an opportunity to increase their
ownership and potentially gain financially from Company stock price increases.
By this approach, the best interests of stockholders and senior executives will
be closely aligned. Therefore, senior executives are eligible to receive
restricted stock and are also eligible to receive stock options, giving them the
right to purchase shares of Common Stock of the Company at a specified price in
the future. The Compensation Committee believes that the use of
5
restricted stock and stock options as the basis for long-term incentive
compensation meets the Compensation Committee's defined compensation strategy
and business needs of the Company by achieving increased value for stockholders
and retaining key employees.
Other Benefits. The Company's philosophy is to provide competitive health-
and welfare-oriented benefits to executives and employees, but to maintain a
conservative posture relative to executive benefits. Consistent with industry
practices, the Company provides a Company automobile to executive officers and
reimburses club dues for the Chief Executive Officer.
Compliance With Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to a public corporation for compensation over $1 million paid to the
corporation's chief executive officer and four other most highly compensated
executive officers. Qualifying performance-based compensation will not be
subject to the cap if certain requirements are met. The Compensation Committee
and the Board of Directors intend to structure the compensation of its executive
officers in a manner that should ensure that the Company does not lose any tax
deductions because of the $1 million compensation limit in the foreseeable
future.
The Company's salaries for its highest paid executives will be set, based on
independent studies, at levels approximating the average for companies of
comparable size in similar industries and are not expected to approach $1
million in the foreseeable future. The Compensation Committee is a proponent of
using more performance and equity-based compensation, which can often be
designed to ensure that tax deductibility is not compromised.
The Company's 1995 Stock Plan incorporates maximum limitations on individual
annual stock option and restricted stock grants so as to meet the requirements
of Section 162(m). The Plan also identifies performance measures to be used if
the Compensation Committee decides to use performance-based vesting restricted
stock in the future to meet the requirements of Section 162(m).
1999 Compensation for the Chief Executive Officer
In 1999, Henry P. McHale received annual base salary payments of $386,250,
pursuant to the terms of his employment agreement with the Company. See
'Executive Compensation -- Employment, Termination of Employment and Change of
Control Arrangements.' Mr. McHale also received an annual performance bonus
pursuant to the Annual Incentive Plan in 1999 in the amount of $142,913, based
upon achieving certain goals set by the Compensation Committee. In April 1999,
Mr. McHale was granted an option to purchase 25,000 shares of Common Stock at
$5.50 per share, which was the market price for the Common Stock on the date of
grant. This option grant was made in accordance with the Committee's
compensation practices, and the Committee believes that this grant in
conjunction with the significant stock option and restricted stock grants
previously made to Mr. McHale in accordance with the terms of his employment
agreement align his interests with those of the stockholders.
Summary
The Compensation Committee believes that it has implemented a comprehensive
compensation program for executives of the Company that is appropriate and
competitive with the total compensation programs provided by other similar
automotive companies with which the Company competes. The Compensation Committee
believes its compensation philosophy ties compensation to stockholder returns
and thereby links compensation to the achievement of annual and longer-term
operational results of the Company on behalf of the Company's stockholders. We
look forward to providing the stockholders with an update in our next annual
report to you.
Management Compensation and Nominating Committee
of the Board of Directors
PAUL R. LEDERER, CHAIRMAN
BARRY R. BANDUCCI
SHARON M. OSTER
6
ANNUAL AND LONG-TERM EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation paid or
accrued by the Company and its subsidiaries to those persons who were (i) the
Chief Executive Officer, (ii) the other four most highly compensated executive
officers of the Company at the end of 1999 and (iii) one former executive
officer of the Company (collectively, the 'Named Executive Officers'), for
services rendered by them in all capacities in which they served the Company and
its subsidiaries during 1997, 1998 and 1999.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
----------------------------------- ------------------------
SECURITIES
RESTRICTED UNDERLYING ALL OTHER
OTHER ANNUAL STOCK OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION AWARDS($) SARS(#) ($)(a)
--------------------------- ---- --------- -------- ------------ --------- ------- ------
Henry P. McHale ................. 1999 $386,250 $142,913 (b) $ 0 25,000 $ 9,322
President and Chief Executive 1998 375,000 170,600 $50,324(c) 0 0 9,729
Officer 1997 375,000 0 59,699(c) 75,175(d) 50,700 8,714
Michael T. Hooper ............... 1999 168,000 0 (b) 0 20,000 5,208
President, Crown Divisions 1998 158,462 48,000 (b) 20,150(e) 13,700 4,246
1997 150,000 120,000 (b) 21,700(d) 14,300 3,110
John F. Della Ventura (f) ....... 1999 157,500 23,940 (b) 0 15,000 3,874
President, G&O Division 1998 138,462 46,200 (b) 17,050(e) 11,400 4,417
1997 -- -- -- 0 -- --
Timothy E. Coyne ................ 1999 168,000 49,728 (b) 0 20,000 4,080
Vice President, Treasurer, 1998 133,749 58,200 (b) 0 20,000 4,733
Secretary and Chief Financial 1997 125,000 0 (b) 9,300(d) 6,000 4,037
Officer
Jeffrey L. Jackson .............. 1999 135,000 29,970 (b) 0 10,000 4,265
Vice President - Human 1998 126,880 35,100 (b) 0 0 3,513
Resources 1997 126,320 0 (b) 11,625(d) 7,800 4,464
John C. Martin, III (g) ......... 1999 0 0 (b) 0 0 176,978(h)
Former Vice President, 1998 147,281 58,100 (b) 0 0 31,809(i)
Treasurer, Secretary and Chief 1997 174,000 0 (b) 24,800(d) 16,600 5,224
Financial Officer
- ---------
(a) All Other Compensation includes for 1997, 1998 and 1999, respectively,
(i) contributions made by each Named Executive Officer's employer under its
defined contribution plan in the following amounts: Mr. McHale -- $6,035,
$6,346 and $6,663; Mr. Hooper -- $923, $675 and $2,154; Mr. Della
Ventura -- $0, $1,038 and $1,123; Mr. Coyne -- $2,019, $2,675 and $2,573;
Mr. Jackson -- $3,688, $2,538 and $3,489; and Mr. Martin -- $2,679, $1,200
and $0; and (ii) insurance premiums paid by the Company in 1997, 1998 and
1999 for the benefit of the Named Executive Officers in the following
amounts: Mr. McHale -- $2,679, $3,383 and $2,659; Mr. Hooper -- $2,187,
$3,571 and $3,054; Mr. Della Ventura -- $0, $3,379 and $2,752; Mr.
Coyne -- $2,018, $2,058 and $1,507; Mr. Jackson -- $776, $975 and $776; and
Mr. Martin -- $2,545, 3,840 and $2,978.
(b) Aggregate amount of such compensation is less than the lesser of $50,000 or
10% of the total salary and bonus reported for each indicated Named
Executive Officer.
(c) Other Annual Compensation for Mr. McHale in 1997 and 1998, respectively,
includes (i) personal travel reimbursements in the amount of $18,666 and
$16,462, (ii) reimbursed housing expenses in the amount of $18,000 and
$13,000, and (iii) company car payments in the amount of $17,761 and
$16,862.
(d) Represents the value of 9,700 shares, 2,800 shares, 1,500 shares, 1,200
shares and 3,200 shares of restricted TransPro common stock issued to
Messrs. McHale, Hooper, Coyne, Jackson and Martin, respectively, which vest
on April 25, 2001. Dollar values reflect the value of TransPro common stock
on the date of award. Mr. Martin's shares were forfeited in connection with
his resignation from the Company in October 1998. At December 31, 1999,
Messrs. McHale, Hooper, Coyne, Jackson and Martin held an aggregate of
9,700, 7,000, 1,900, 3,226 and 0 shares, respectively, of restricted
TransPro common stock which had an aggregate value (calculated by
multiplying such amounts by $6.4375, the closing price of TransPro common
stock on December 31, 1999) of $62,444, $45,063, $12,231, $20,767 and $0,
respectively. Dividends are paid on restricted stock at the same rate as
unrestricted TransPro common stock.
(footnotes continued on next page)
7
(footnotes continued from previous page)
(e) Represents the value of 2,600 shares and 2,200 shares of restricted
TransPro common stock issued to Messrs. Hooper and Della Ventura,
respectively, which vest on April 29, 2002. Dollar values reflect the value
of TransPro common stock on the date of award. At December 31, 1999, Mr.
Della Ventura held an aggregate of 2,200 shares of restricted TransPro
common stock which had an aggregate value (calculated by multiplying such
amount by $6.4375, the closing price of TransPro common stock on December
31, 1999) of $14,163.
(f) Mr. Della Ventura joined the Company in February 1998.
(g) Mr. Martin resigned from the Company in October 1998.
(h) Includes severance payments in the amount of $174,000 paid to Mr. Martin in
1999.
(i) Includes severance payments in the amount of $26,769 paid to Mr. Martin in
1998.
The following table sets forth the grants of stock options made by the
Company during the year ended December 31, 1999 to the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
% OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES GRANT DATE
OPTIONS IN FISCAL EXERCISE PRESENT
NAME GRANTED(a) PERIOD(b) PRICE EXPIRATION DATE VALUE(c)
---- ---------- --------- ----- --------------- --------
Henry P. McHale.................... 25,000 25.6% $5.50 4/30/2009 $67,750
Michael T. Hooper.................. 20,000 20.5% 5.50 4/30/2009 54,200
John F. Della Ventura.............. 15,000 15.4% 5.50 4/30/2009 40,650
Timothy E. Coyne................... 20,000 20.5% 5.50 4/30/2009 54,200
Jeffrey L. Jackson................. 10,000 10.3% 5.50 4/30/2009 27,100
John C. Martin, III................ 0 -- -- -- --
- ---------
(a) All options granted are exercisable 50 percent after two years from date of
grant, 75 percent after three years from date of grant and 100 percent
after four years from date of grant.
(b) Options to purchase a total of 97,500 shares of Common Stock were issued by
the Company to employees in fiscal 1999.
(c) Present value calculated using the Black Scholes model assuming 6.54%
interest rate (the rate of treasury securities with a maturity date closest
to the expected life of the options) and 52.08% volatility (calculated
based upon the performance of the Common Stock from the date of the
spin-off through the grant date).
The following table sets forth information with respect to unexercised
options to purchase the Company's Common Stock held by the Named Executive
Officers at December 31, 1999. No options to purchase the Company's Common Stock
were exercised in 1999 by such persons.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END(#) FISCAL YEAR-END($)(a)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Henry P. McHale............................... 131,600 69,100 $ 0 $23,438
Michael T. Hooper............................. 15,100 43,500 0 18,750
John F. Della Ventura......................... 0 26,400 -- 14,063
Timothy E. Coyne.............................. 6,300 44,100 0 30,000
Jeffrey L. Jackson............................ 12,525 16,775 0 9,375
John C. Martin, III........................... 0 0 -- --
- ---------
(a) Computed based upon the difference between the closing price of the
Company's Common Stock on December 31, 1999 ($6.4375) and the exercise
price.
8
RETIREMENT PLANS
The Company maintains a defined benefit retirement plan (the 'Retirement
Plan'), covering all of the full-time salaried employees of the G&O and Crown
divisions in the United States and Messrs. Hooper and Della Ventura. The other
full-time salaried employees of the Company and GDI continue to be covered by
GDI's non-contributory defined benefit cash balance plan.
TransPro, Inc. Retirement Plan
The Retirement Plan generally provides a retirement benefit based upon the
participant's years of credited service and his or her final average earnings,
with final average earnings consisting of the sum of (i) the average of the
salaries of the participant during the five years of highest salaries of the
participant in the 10 years preceding the participant's retirement or
termination date, and (ii) the average of the performance bonuses and overtime
earnings of the participant during the five years of highest aggregate bonuses
and overtime earnings of the participant in the 10 years preceding the
participant's retirement or termination date. Retirement benefits are payable
either as a straight life annuity, a joint and survivor annuity or in other
optional forms. Normal retirement is at age 65, but certain early retirement
benefits may be payable to participants who have attained age 55 and completed
10 years of continuous service, and survivor benefits may be payable to the
surviving spouse of a vested participant who dies prior to early or normal
retirement. A participant's benefit under the Retirement Plan vests after five
years of credited service, all benefits funded by the Company are based upon
actuarial computations, and no contributions are made by participants.
The following table shows estimated annual benefits payable under the
Retirement Plan to participants in specified compensation (final average
earnings) and years-of-service classifications on a straight life annuity basis,
assuming normal retirement at age 65 in 1999 and application of the current U.S.
Social Security covered compensation base.
YEARS OF SERVICE(a)
FINAL AVERAGE -------------------------------------------------------------
EARNINGS(b) 10 15 20 25 30 35
----------- -- -- -- -- -- --
$125,000 ................. $15,120 $22,680 $ 30,240 $ 37,800 $ 45,360 $ 45,360
150,000 ................. 18,495 27,743 36,990 46,238 55,485 55,485
175,000 ................. 21,870 32,805 43,740 54,675 65,610 65,610
200,000 ................. 25,245 37,868 50,490 63,113 75,735 75,735
225,000 ................. 28,620 42,930 57,240 71,550 85,860 85,860
250,000 ................. 31,995 47,993 63,990 79,988 95,985 95,985
300,000 ................. 38,745 58,118 77,490 96,863 116,235 116,235
350,000 ................. 45,495 68,243 90,990 113,738 136,485 136,485
400,000 ................. 52,245 78,368 104,490 130,613 156,735 156,735
450,000 ................. 58,995 88,493 117,990 147,488 176,985 176,985
500,000 ................. 65,745 98,618 131,490 164,363 197,235 197,235
- ---------
(a) Years of credited service under the Retirement Plan for Messrs. Della
Ventura and Hooper are 10 and 3, respectively.
(b) The current final average earnings for Messrs. Della Ventura and Hooper
during 1999 were $155,692 and $155,207 respectively.
GO/DAN Industries Retirement Plan
Messrs. McHale, Jackson and Coyne are covered by a non-contributory defined
benefit cash balance plan of GDI. GDI credits an amount, quarterly, to a
notional account for each participant under the plan equal to the sum of
(i) each participant's total compensation for the quarter (excluding bonus)
multiplied by a percentage factor plus (ii) each participant's total
compensation for the quarter
9
(excluding bonus) in excess of a fraction of the Social Security wage base
multiplied by a percentage factor. The percentage factors are determined under
the following table:
PLUS % OF PAY ABOVE
CREDIT ACCOUNT WITH 1/12 OF SOCIAL SECURITY
YEARS OF SERVICE % OF PAY TAXABLE WAGE BASE
- ---------------- -------- -----------------
Less than 10 years.............................. 2.25% 2%
10 to 20 years.................................. 3.00% 2%
20 or more years................................ 4.00% 2%
Each year until each participant's normal retirement date (age 65), the
notional account balances will be credited quarterly with interest equal to the
average of the one-year Treasury bill rate on the first day of October, November
and December of the previous calendar year multiplied by his or her account
balance at the beginning of the quarter. Upon retirement, the notional account
balance will be paid in the form of a lump sum payment or converted to an
annuity to provide monthly benefit payments. Upon normal retirement at age 65,
Messrs. McHale's, Jackson's and Coyne's estimated annual pension benefits under
the cash balance plan are $6,999, $12,253 and $17,058, respectively.
EMPLOYMENT, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Each of Messrs. McHale and Martin (the 'Senior Executive Officers') entered
into an employment agreement with the Company which extended through December
31, 1996, with automatic one-year extensions upon each anniversary date of such
agreement unless either party gives at least 90 days' notice to the contrary. No
such notice was given in 1996 or 1997 with regard to Messrs. McHale or Martin
and their agreements were extended until December 31, 1998. Mr. Martin resigned
from the Company effective November 6, 1998. Mr. McHale's agreement was extended
until December 31, 2000. Each employment agreement may be terminated by the
Company for 'cause' (as defined in each employment agreement) or in the event
such executive becomes disabled, and each executive may terminate his agreement
for 'good reason' (as defined in each agreement). The employment agreements
provide annual pension benefits to each Senior Executive Officer, supplemental
to the annual benefits paid to such Senior Executive Officers under the
Company's retirement plans, in an amount determined in accordance with the
Company's retirement plan applicable to such Senior Executive Officer, without
giving effect to limits imposed by the Internal Revenue Code and regulations of
the IRS on the amount of benefits payable or compensation that may be used in
determining benefits that may be paid to an individual under a Federal income
tax qualified plan. Upon a 'change in control' of the Company, the Company is
required to pay each Senior Executive Officer affected thereby an amount equal
to the present value of his supplemental pension benefits under his employment
agreement. A 'change in control' of the Company is defined as (i) the
acquisition of more than 30 percent of the outstanding Common Stock of the
Company by any person or group of related persons, (ii) the change in a majority
of the directors of the Company during a consecutive two-year period, unless the
election of each new director was approved by at least two-thirds of the
directors then still in office who were directors at the beginning of such
period, (iii) subject to certain exceptions, the stockholders approve a merger
or consolidation of the Company with any other corporation, or (iv) the
stockholders approve a plan of complete liquidation or an agreement for the sale
or disposition of all or substantially all of the Company's assets. 'Good
reason' includes the assignment of duties inconsistent with the employee's
position with the Company, a significant adverse alteration in the nature or
status of the employee's responsibilities or the conditions of his employment, a
reduction of the employee's salary (except for across-the-board salary
reductions similarly affecting all management personnel of the Company), a
relocation of the Company's office at which the employee is principally employed
by more than 25 miles or the failure by the Company to continue any material
compensation or benefit plan. The employment agreements provide for an annual
salary of not less than the prior year's salary (except for across-the-board
salary reductions similarly affecting all management personnel of the Company)
and fringe benefits in accordance with the Company's policies adopted from time
to time. The initial base salaries under the employment agreements with the
Senior Executive Officers were as follows: $300,000 for Mr. McHale, and $164,000
for Mr. Martin. During 1996, Mr. McHale's base salary was increased to $355,000.
Effective January 1997, Mr. McHale's base salary was increased to $375,000 and
Mr. Martin's
10
base salary was increased to $174,000. Effective February 1999, Mr. McHale's
base salary was increased to $386,250. In addition, under such agreements,
Messrs. McHale and Martin previously received awards of options to purchase
125,000 and 6,250 shares of Common Stock, respectively, under the 1995 Stock
Plan. In 1997 Mr. McHale received an additional 9,700 shares of restricted
Common Stock and options to purchase 50,700 shares of Common Stock, while Mr.
Martin received an additional 3,200 shares of restricted Common Stock and
options to purchase 16,600 shares of Common Stock. No stock option or restricted
stock grants were made to Messrs McHale or Martin in 1998. In 1999 Mr. McHale
received options to purchase an additional 25,000 shares of Common Stock. See
'Executive Compensation -- Annual and Long-Term Executive Compensation.'
Mr. McHale's employment agreement contains additional provisions which
provide that, in the event the Company terminates Mr. McHale's employment other
than for 'cause' or his disability, or if Mr. McHale terminates his employment
for 'good reason,' the Company will pay him an amount equal to his salary for
one year and will provide his life, disability, accident, medical and
hospitalization insurance benefits during a period of one year after such
termination. If, following a 'change in control', the Company terminates Mr.
McHale's employment other than for 'cause' or disability or if Mr. McHale
terminates his employment for 'good reason', the Company will pay him an amount
equal to 2.99 times his average annual taxable compensation from the Company
during the preceding five years. In any case, the Company will pay Mr. McHale
accrued vacation pay and all other amounts to which he is entitled under any
compensation plan of the Company, and following a 'change in control', an amount
equal to the excess of the 'fair market value' (as defined in each employment
agreement), on the date of termination, over the option price of the shares
subject to each stock option held by him, whether or not exercisable at the
time, in exchange for surrender of the option. All severance payments and all
insurance benefits will be discontinued if, following the Company's termination
of his employment for 'cause' or 'disability' or Mr. McHale's termination of his
employment other than for 'good reason', Mr. McHale engages in competition with
the Company or engages in conduct which is injurious to the Company.
Mr. McHale's employment agreement was amended effective October 1, 1998 to
provide that at all times after October 15, 1998, during the term of the
employment agreement, Mr. McHale shall have his principal residence in
Connecticut within a 45 mile radius of the Company's New Haven, Connecticut
headquarters. In order to induce Mr. McHale to amend his employment agreement,
the Company agreed to reimburse Mr. McHale's temporary housing costs in an
amount not to exceed $18,000 and further agreed to reimburse Mr. McHale for the
reasonable costs of relocation from Florida to Connecticut, consisting of:
(i) the costs of two trips from Florida to Connecticut by Mr. McHale's spouse to
search for a home in Connecticut, (ii) moving costs, and (iii) reasonable and
customary closing costs related to the purchase of a new home in Connecticut
(excluding any prepaid mortgage interest or 'points'). The foregoing cost
reimbursements shall not include any closing costs or ancillary costs (i.e.
brokerage fees) related to the sale of Mr. McHale's previous home.
Mr. Martin's employment agreement also provided for the payment of severance
benefits if the Company terminated his employment other than for 'cause' (as
defined in the employment agreement) or disability before or after a 'change in
control' of the Company or if Mr. Martin terminated his employment for 'good
reason' (as defined in the employment agreement) after a 'change in control.'
Severance payments under the agreement will be six months' salary plus an
additional month for each full year of service but in no event more than 18
months' salary, and will be paid in normal pay periods, except that upon
termination after a 'change in control,' the Company would pay Mr. Martin in a
lump sum 150% of (i) six months' salary plus (ii) an additional month for each
full year of service with a maximum of 18 months' salary, plus all earned
accrued vacation pay and all other amounts to which he is entitled under any
compensation plan of the Company, and an amount equal to the excess of the 'fair
market value' (as defined in the employment agreement), on the date of
termination, over the option price of the shares subject to each stock option
held by him, whether or not exercisable at the time, in exchange for surrender
of the option. Life, disability, accident and health insurance benefits would
continue during the period of severance payments. Severance payments in excess
of the base amount of six months' salary would be reduced by any compensation
received by Mr. Martin from other employment (other than self-employment) prior
to a 'change in control.' All severance payments and
11
all insurance benefits would be discontinued if, following the Company's
termination of his employment other than for 'good reason,' Mr. Martin engaged
in competition with the Company or engaged in conduct injurious to the Company.
Mr. Martin resigned from the Company effective November 6, 1998. In lieu of any
payments due to Mr. Martin pursuant to his employment agreement, the Company
agreed to make certain payments and provided other consideration to Mr. Martin
as described below. See ' -- Severance Payments.'
Severance Agreements
Messrs. Hooper, Della Ventura, Coyne and Jackson entered into severance
agreements with the Company. Pursuant to their respective severance agreements,
if either Mr. Hooper, Mr. Della Ventura, Mr. Coyne or Mr. Jackson lost his
current position (except for termination for 'cause' as defined in each
severance agreement), or if during the term thereof should there be a material
change in ownership, or the sale of a portion of the business, which results in
his not having a position similar to his current position including similar pay
and benefits, then his base salary will continue to be paid until he either
secures other full-time employment, or for one year, whichever occurs first.
In addition to their severance agreements, Messrs. Hooper and Della Ventura
are each parties to a stay pay agreement with the Company. Each agreement
provides for a cash bonus in the amount of sixteen months base salary, payable
one-half upon a closing of the sale of the division of which he is President and
one-half if he is still employed on the six-month anniversary of the closing or
at the time he has been terminated (except for termination for 'cause' as
defined in each stay pay agreement) by the purchaser of the respective division
prior to the end of the six month period. The stay pay agreements also provide
for a bonus payment in the event their respective divisions are sold for more
than certain threshold sale prices.
Severance Payments
The Company entered into a Settlement and Release Agreement with Mr. Martin
pursuant to which the Company agreed to pay Mr. Martin (i) six months of
severance pay at the rate of $14,500 per month and (ii) up to an additional
twelve months of severance pay at the same rate, subject to reduction if Mr.
Martin is employed or provides consulting services during the twelve-month
period. The Company also agreed to pay for certain outplacement services and
agreed to pay Mr. Martin $58,100, consisting of a percentage of his 1998 bonus
amount. In addition, for as long as Mr. Martin is receiving severance payments,
the Company will continue to provide Mr. Martin with the health and welfare
benefits provided during his tenure with the Company. During 1998 and 1999, the
Company made severance payments to Mr. Martin in the amounts of $26,769 and
$174,000, respectively.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee currently consists of three
non-employee directors -- Messrs. Lederer, Banducci and Ms. Oster. Mr. Abraham
was a member of the Compensation Committee during 1999, but resigned from the
Compensation Committee in February 1999. Mr. Colburn was a member of the
Compensation Committee during 1999, but resigned from the Compensation Committee
in April 1999. As the Board of Directors unanimously determined not to accept
the automatic option grant due in April 1998, the Board granted pursuant to the
Directors Plan to each of Messrs. Abraham, Colburn, Lederer, Ms. Oster and Mr.
Smith options to purchase 3,000 shares of Common Stock on April 30, 1999 at an
exercise price of $5.875 per share. Mr. Banducci received options to purchase
6,400 shares of Common Stock on such date at the same exercise price. Each of
the foregoing options expires 10 years from date of grant and is exercisable 50
percent after two years from date of grant, 75 percent after three years from
date of grant and 100 percent after four years from date of grant. See 'Proposal
No. 1 -- Compensation of Directors'.
The Company has from time to time retained the law firm of Foley & Lardner
to perform legal services on its behalf. Payments made by the Company to Foley &
Lardner in 1999 were approximately $167,000. William J. Abraham, a member of the
Compensation Committee until February 1999, is a partner with Foley & Lardner.
12
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than ten
percent of the Company's Common Stock, to file initial reports of ownership and
reports of changes in ownership with the SEC and The New York Stock Exchange.
Executive officers, directors and greater than ten percent beneficial owners are
required by the SEC to furnish the Company with copies of all Section 16(a)
forms they file.
Based upon a review of the copies of such forms furnished to the Company and
written representations from the Company's executive officers and directors, the
Company believes that during fiscal 1999 all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than ten percent
beneficial owners were complied with, except that Ms. Oster failed to file a
Form 5 regarding certain acquisitions pursuant to a dividend reinvestment
program.
COMPANY PERFORMANCE
The following graph shows the cumulative total stockholder return on the
Company's Common Stock since the beginning of 'regular way' trading in the
Company's Common Stock on October 11, 1995, compared to the returns of the New
York Stock Exchange Market Value Index, and a peer group consisting of the
reporting companies in SIC Code 3714 -- Motor Vehicle Parts and Accessories.
TRANSPRO, INC.
COMPARISON OF CUMULATIVE TOTAL RETURN 10/95-12/99
VS NYSE MARKET VALUE INDEX
AND SIC -- MOTOR VEHICLE PARTS AND ACCESSORIES INDEX
[PERFORMANCE GRAPH]
Assumes $100 invested October 11, 1995 in the Company's Common Stock, NYSE
Market Value Index and SIC -- Motor Vehicle Parts and Accessories Index; assumes
dividend reinvestment.
10/95 12/95 12/96 12/97 12/98 12/99
----- ------- ------- ------- ------- -------
TRANSPRO................................. $100 $ 90.43 $ 79.71 $ 80.34 $ 44.95 $ 61.47
NYSE MARKET VALUE INDEX.................. $100 $105.48 $127.06 $167.15 $198.90 $217.80
SIC INDEX................................ $100 $ 98.17 $121.12 $156.47 $155.93 $126.18
13
STOCK OWNERSHIP
PRINCIPAL STOCKHOLDERS
The following tables set forth information as of March 6, 2000 with respect
to the only persons known to the Company to be the beneficial owners (for
purposes of the rules of the Securities and Exchange Commission) of more than 5%
of the outstanding shares of the Company's Common Stock as of that date.
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNERS OWNERSHIP OF CLASS
----------------- --------- --------
Gabelli Funds, LLC ......................................... 856,920(a) 13.0%
GAMCO Investors, Inc.
Gabelli Performance Partnership L.P.
Gemini Capital Management Limited
Gabelli Advisers, Inc.
One Corporate Center
Rye, New York 10580
State of Wisconsin Investment Board ........................ 710,100(b) 10.8%
P.O. Box 7842
Madison, Wisconsin 53707
Fidelity Management & Research Company ..................... 660,925(c) 10.0%
FMR Corp.
Edward C. Johnson 3d
Abigail P. Johnson
82 Devonshire Street
Boston, Massachusetts 02109
Franklin Advisory Services, LLC ............................ 434,500(d) 6.6%
Franklin Resources, Inc.
Charles B. Johnson
Rupert H. Johnson, Jr.
One Parker Plaza, 16th Floor
Fort Lee, New Jersey 07024
- ---------
(a) This figure is based on information set forth in a Schedule 13D Amendment
No. 10 filed with the SEC on November 12, 1999. GAMCO Investors, Inc.
('GAMCO') holds sole voting and dispositive power over 464,620 shares of
Common Stock. Gabelli Funds, LLC holds sole voting and dispositive power
over an aggregate of 357,000 shares of Common Stock. Gabelli Performance
Partnership L.P. ('GPP') holds sole voting and dispositive power over
10,000 shares of Common Stock, and Gemini Capital Management Ltd. holds
sole voting and dispositive power over 5,200 shares of Common Stock,
respectively. Gabelli Advisers, Inc. holds sole voting and dispositive
power over 20,100 shares of Common Stock. Mario J. Gabelli is the majority
stockholder and Chairman of the Board of Directors and Chief Executive
Officer of Gabelli Asset Management Inc., which is the sole parent of GAMCO
and Gabelli Funds, LLC. Mr. Gabelli is also the chief investment officer of
GPP.
(b) This figure is based upon information set forth in a Schedule 13G Amendment
No. 5 filed with the SEC on February 2, 2000. The State of Wisconsin
Investment Board has sole voting and dispositive power over all of the
indicated shares.
(c) This figure is based on information set forth in a Schedule 13G Amendment
No. 4 filed with the SEC on June 9, 1999. FMR Corp. ('FMR') and Edward C.
Johnson 3d have sole dispositive power over all of the indicated shares but
do not hold voting power over the shares. Fidelity Management & Research
Company, a wholly-owned subsidiary of FMR, holds sole voting power over the
indicated shares under written guidelines established by its Board of
Trustees.
(d) This figure is based on information set forth in a Schedule 13G Amendment
No. 1 dated February 7, 2000 filed with the SEC. Franklin Advisory
Services, LLC ('FAS') holds sole voting and dispository power over all of
the indicated shares. Franklin Resources, Inc. ('FRI') is the parent
company of FAS and Charles B. Johnson and Rupert H. Johnson, Jr. each own
in excess of 10% of the common stock of FRI.
DIRECTORS AND OFFICERS
The following table sets forth information as of March 6, 2000, with respect
to shares of Common Stock of the Company beneficially owned (for purposes of the
rules of the Securities and Exchange Commission) by each director and each Named
Executive Officer and by all directors and current executive officers of the
Company as a group, except that the information with respect to shares held by
14
the trustee under the Company's 401(k) Savings Plan is as of December 31, 1999
(the most recent practicable date for such information).
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------------ --------- --------
Barry R. Banducci........................................... 50,600(a) *
Henry P. McHale............................................. 190,952(b) 2.8%
William J. Abraham, Jr...................................... 33,875(c)(d) *
Philip Wm. Colburn.......................................... 33,063(c) *
Paul R. Lederer............................................. 10,625(c)(e) *
Sharon M. Oster............................................. 8,686(c) *
F. Alan Smith............................................... 7,625(c) *
Timothy E. Coyne............................................ 10,287(f) *
John F. Della Ventura....................................... 11,658(g) *
Michael T. Hooper........................................... 33,398(h) *
Jeffrey L. Jackson.......................................... 36,836(i) *
John C. Martin, III......................................... 35,032(j) *
All directors and executive officers as a group (11
persons).................................................. 427,605(k) 6.2%
- ---------
* Less than 1%
(a)Includes 15,600 shares issuable upon exercise of options exercisable within
60 days. Also includes 28,000 shares held by The Banducci Family LLC.
(b)Consists of 9,700 restricted shares of Common Stock awarded under the
Company's 1995 Stock Plan, 18,227 shares held by the trustee under the
TransPro, Inc. 401(k) Savings Plan and 163,025 shares issuable upon exercise
of options exercisable within 60 days.
(c)Includes 7,625 shares issuable upon exercise of options exercisable within 60
days.
(d)Includes 10,000 shares held in Mr. Abraham's Keogh account.
(e)Includes 3,000 shares held by the Paul R. Lederer Revocable Trust.
(f)Consists of 1,900 restricted shares of Common Stock awarded under the
Company's 1995 Stock Plan, 587 shares held by the trustee under the TransPro,
Inc. 401(k) Savings Plan and 7,800 shares issuable upon exercise of options
exercisable within 60 days.
(g)Includes 2,200 restricted shares of Common Stock awarded under the Company's
1995 Stock Plan, 1,758 shares held by the trustee under the TransPro, Inc.
401(k) Savings Plan and 5,700 shares issuable upon exercise of options
exercisable within 60 days.
(h)Consists of 7,000 restricted shares of Common Stock awarded under the
Company's 1995 Stock Plan, 873 shares held by the trustee under the TransPro,
Inc. 401(k) Savings Plan and 25,525 shares issuable upon exercise of options
exercisable within 60 days.
(i)Consists of 3,226 restricted shares of Common Stock awarded under the
Company's 1995 Stock Plan, 16,260 shares held by the trustee under the
TransPro, Inc. 401(k) Savings Plan and 17,350 shares issuable upon exercise
of options exercisable within 60 days.
(j)Includes 5,845 shares held by the trustee under the TransPro, Inc. 401(k)
Savings Plan.
(k)Consists of 92,688 shares owned by or on behalf of directors and executive
officers; 37,705 shares held on behalf of certain executive officers by the
trustee under the TransPro, Inc. 401(k) Savings Plan; 24,026 restricted
shares of Common Stock awarded under the Company's 1995 Stock Plan and
273,125 shares issuable upon exercise of options exercisable within 60 days.
PROPOSAL NO. 2 -- RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP as the
Company's independent auditors for the year ending December 31, 2000, and has
further directed that management submit the selection of independent auditors
for ratification by stockholders at the Annual Meeting. PricewaterhouseCoopers
LLP and its predecessor Coopers & Lybrand L.L.P. has audited the Company's
financial statements since it was spun-off from Allen Telecom Inc. (formerly The
Allen Group Inc.) in 1995. A representative of PricewaterhouseCoopers LLP is
expected to be present at the Annual Meeting and will have an opportunity to
make a statement if he or she desires and will be available to respond to
appropriate questions.
Stockholder ratification of the selection of PricewaterhouseCoopers LLP as
the Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of
PricewaterhouseCoopers LLP to the stockholders for ratification as a matter
15
of good corporate practice. If the stockholders fail to ratify the selection,
the Board will reconsider whether or not to retain that firm. Even if the
selection were ratified, the Board in its discretion may direct the appointment
of a different independent accounting firm at any time during the year if the
Board determines that such a change would be in the best interests of the
Company and its stockholders.
VOTE REQUIRED
The affirmative vote of holders of a majority of the shares of Common Stock
issued, outstanding and entitled to vote, present or represented at the meeting,
a quorum being present, is required for the adoption of this proposal. Broker
non-votes with respect to this matter will be treated as neither a vote 'for' or
a vote 'against' the matter, although they will be counted in determining if a
quorum is present. However, abstentions will be considered in determining the
number of votes required to attain a majority of the shares present or
represented at the meeting and entitled to vote. Accordingly, an abstention from
voting by a stockholder present in person or by proxy at the meeting has the
same legal effect as a vote 'against' the matter because it represents a share
present or represented at the meeting and entitled to vote, thereby increasing
the number of affirmative votes required to approve this proposal.
THE BOARD OF DIRECTORS DEEMS 'PROPOSAL NO. 2 -- RATIFICATION OF SELECTION OF
INDEPENDENT AUDITORS' TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS AND RECOMMENDS A VOTE 'FOR' APPROVAL THEREOF.
CERTAIN TRANSACTIONS
RELATIONSHIP WITH ALLEN
On September 8, 1995, the Board of Directors of The Allen Group Inc. (now
known as Allen Telecom Inc.) ('Allen') declared a distribution (the
'Distribution'), payable to the holders of Allen common stock at the close of
business on September 29, 1995 (the 'Record Date'), of one share of TransPro
Common Stock, along with an associated stock purchase right issued pursuant to a
stockholder rights plan (a 'Right' and, collectively with the distributed
TransPro Common Stock, a 'Share'), for every four shares of common stock of
Allen held on the Record Date. The Distribution took place on September 29, 1995
(the 'Distribution Date'). Mr. Philip Wm. Colburn, a director of the Company, is
also the Chairman of the Board of Allen. In connection with the Distribution,
the Company and Allen entered into several agreements for the purpose of giving
effect to the Distribution and defining their ongoing relationships. These
agreements were negotiated while the Company was wholly owned by Allen and
therefore were not the result of arms-length negotiations between independent
parties, although the Company believes the various pricing terms to be
comparable to what could be achieved through arms-length negotiations.
Immediately prior to the Distribution, the Company and Allen entered into a
Contribution Agreement providing for, among other things, the principal
corporate transactions required to transfer the automotive and truck products
business to TransPro, the agreements and conditions relating to the
Distribution, the division between the Company and Allen of certain assets and
liabilities and certain other agreements governing the relationship between
Allen and the Company with respect to or as a consequence of the Distribution.
Pursuant to the Contribution Agreement, substantially all of the assets and
liabilities of the automotive and truck products business, including Allen's 50%
ownership interest in GDI, were transferred by Allen to the Company (the
'Contribution'). In connection with the Contribution, the Company agreed to
assume from Allen any and all liabilities, indebtedness and obligations of Allen
arising out of or relating to the automotive and truck products business,
including an aggregate of approximately $13 million of indebtedness under
certain IRBs, and all liabilities and obligations relating to the requirements
of any applicable environmental laws or regulations, the redemption of GDI, the
registration statement relating to the Distribution or any pending or threatened
litigation.
The Company and Allen agreed to indemnify each other against certain
liabilities. Subject to certain exceptions, the Company agreed to indemnify
Allen against any and all claims that arise out of
16
or are related to the businesses, assets acquired and liabilities assumed by the
Company, the registration statement relating to the Distribution or certain tax
payments and to reimburse Allen for any legal or other costs and expenses
reasonably incurred by Allen in connection with investigating or defending any
such claim. Allen has agreed to indemnify the Company from any claims that arise
out of or are related to the businesses, assets and liabilities retained by
Allen and to reimburse the Company for any legal or other costs and expenses
reasonably incurred by the Company in connection with investigating or defending
any claim. The Contribution Agreement also included procedures for notice and
payment of indemnification claims and provided that the indemnifying party may
assume the defense of a claim or suit brought by a third party.
OTHER
The Company has from time to time retained the law firm of Foley & Lardner
to perform legal services on its behalf. Payments made by the Company to Foley &
Lardner in 1999 were approximately $167,000. William J. Abraham, a director of
the Company, is a partner with Foley & Lardner.
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the 2001
Annual Meeting of Stockholders of the Company must be received by the Company no
later than December 1, 2000 for inclusion in the Board of Directors' proxy
statement and form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at the
Annual Meeting. However, if any other business properly comes before the Annual
Meeting, it is the intention of the persons named in the enclosed proxy to vote
on such matters in accordance with their best judgment.
The Annual Report, including financial statements, of the Company for the
year 1999 is enclosed herewith but is not a part of the proxy soliciting
material.
The prompt return of your proxy will be appreciated and helpful in obtaining
the necessary vote. Therefore, whether or not you expect to attend the Annual
Meeting, please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
TIMOTHY E. COYNE
Secretary
Dated: March 30, 2000
17
APPENDIX 1
TRANSPRO, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 3, 2000
Barry R. Banducci and Henry P. McHale, and each of them, as the true
and lawful attorneys, agents and proxies of the undersigned, with full power of
substitution, are hereby authorized to represent and to vote all shares of
Common Stock of TransPro, Inc. held of record by the undersigned on March 6,
2000, at the Annual Meeting of Stockholders to be held at 11:00 a.m. on
Wednesday, May 3, 2000, at The St. Regis Hotel, 2 East 55th Street, New York,
New York and at any adjournment thereof. Any and all proxies heretofore given
are hereby revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR PROPOSALS
NO. 1 AND 2.
1. Election of Directors - Nominees:
Barry R. Banducci
Henry P. McHale
William J. Abraham, Jr.
Philip Wm. Colburn
Paul R. Lederer
Sharon M. Oster, and
F. Alan Smith.
[ ] FOR ALL NOMINEES
[ ] WITHHELD FROM ALL NOMINEES
[ ] FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
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2. Approval of Appointment of PricewaterhouseCoopers LLP as the
Company's Independent Auditors:
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
Discretionary authority is hereby granted with respect to such other
matters as may properly come before the meeting.
[ ] Mark here for address change and note at left.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND THE PROXY STATEMENT FURNISHED THEREWITH.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
IMPORTANT: PLEASE SIGN EXACTLY AS NAME APPEARS AT LEFT. EACH JOINT OWNER
SHOULD SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD GIVE
FULL TITLE AS SUCH. IF SIGNER IS A CORPORATION, PLEASE GIVE FULL
CORPORATE NAME BY DULY AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE
SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
Signature:_________________________ Date:_________________________
Signature:_________________________ Date:_________________________
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