-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Tq6XCZ6UInoQwcyUsCZttmxE/R9X4CIUgFJE3+ApvDcvUDtR8Z+xRbFCCXIV4Hh2 zukT+e5polZsEPQq9gXwzQ== 0000950117-98-000622.txt : 19980327 0000950117-98-000622.hdr.sgml : 19980327 ACCESSION NUMBER: 0000950117-98-000622 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980429 FILED AS OF DATE: 19980326 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSPRO INC CENTRAL INDEX KEY: 0000948844 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 341807383 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-13894 FILM NUMBER: 98574068 BUSINESS ADDRESS: STREET 1: 100 GANDO DR CITY: NEW HAVEN STATE: CT ZIP: 06513 BUSINESS PHONE: 2034016450 MAIL ADDRESS: STREET 1: 100 GANDO DR CITY: NEW HAVEN STATE: CT ZIP: 06513 DEF 14A 1 TRANSPRO INC. DEF 14A 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. ) Filed by the Registrant [X] Filed by a party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 TRANSPRO INC. ................................................................. (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): [X] No fee required [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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: ....................................................... [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ....................................................... (2) Form, Schedule or Registration Statement No.: ....................................................... (3) Filing Party: ....................................................... (4) Date Filed: ....................................................... [LOGO] March 26, 1998 Dear Fellow Stockholder: You are cordially invited to attend the Company's Annual Meeting of Stockholders which will be held at the Omni Berkshire Place Hotel, 21 East 52nd Street, New York, New York on Wednesday, April 29, 1998 at 11:00 a.m. This year you are being asked to (i) elect seven directors to the Company's Board and (ii) approve the Company's auditors for the year ending December 31, 1998, 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, April 29, 1998 at 11:00 a.m., at the Omni Berkshire Place Hotel, 21 East 52nd 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 Coopers & Lybrand L.L.P. as the Company's independent auditors for the year ending December 31, 1998; 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 4, 1998 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. JOHN C. MARTIN, III Secretary New Haven, Connecticut March 26, 1998 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, par value $.01 per share (the '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, April 29, 1998, or at any adjournment thereof, pursuant to the accompanying Notice of Annual Meeting of Stockholders. The purposes of the meeting and the matters to be acted upon are set forth in the accompanying Notice of Annual Meeting of Stockholders. The Board of Directors is not currently aware of any other matters which 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 27, 1998 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 borne 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 4, 1998 are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof. On March 4, 1998 there were 6,611,460 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................ 62 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, Aristotle Corporation and The Delker Corporation. Henry P. McHale.................. 59 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 wholly-owned partnership of the Company since September 1995); prior thereto, various executive positions with Ladish Corporation and Rockwell Automotive. William J. Abraham, Jr. ......... 50 1995 Partner with Foley & Lardner, a law firm in Milwaukee, Wisconsin, since 1980; currently managing partner of Foley & Lardner; currently a director of The Vollrath Company, Inc., Park Bank, and Windway Capital Corp.(1) Philip Wm. Colburn............... 69 1995 Chairman of the Board of Allen Telecom Inc. (formerly The Allen Group 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., Earl Scheib, Inc., and Spinnaker Industries, Inc.(1)(2) Paul R. Lederer.................. 58 1995 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.; from November 1989 to October 1991, Chairman and Chief Executive Officer of Epicor Industries, Inc. ('Epicor') and from October 1991 to December 1992, Executive Vice President of Stant, Inc. (which acquired Epicor in October 1991).(1)
2
YEAR FIRST BECAME PRINCIPAL OCCUPATION NOMINEE AGE DIRECTOR DURING THE PAST FIVE YEARS - ------------------------------------ ---------- --------------------------------------------------------------- Sharon M. Oster.................. 49 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 and Aristotle Corporation.(2) F. Alan Smith.................... 66 1995 Chairman of Advanced Accessory Systems since September 1995 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. 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. Abraham, Colburn and Lederer are the members of the Management Compensation and Nominating Committee; and Mr. Colburn, Ms. Oster and Mr. Smith are the members of the Audit 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 1999 Annual Meeting of Stockholders that are submitted prior to the end of 1998 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 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. 3 During the year ended December 31, 1997, the Board of Directors of the Company held six meetings and acted once by unanimous written consent, the Compensation Committee held two meetings and the Audit Committee held three 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, except for Ms. Oster who attended four of the six meetings of the Board of Directors and Mr. Colburn who attended two of the three meetings of the Audit Committee. 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 member of the Audit or Compensation Committees is paid $2,000 per year for his or her services as such member, and each 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 granted 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. Pursuant to the Directors Plan, Messrs. Abraham, Colburn, Lederer, Ms. Oster and Mr. Smith were each granted options to purchase 1,500 shares of Common Stock on April 25, 1997 at an exercise price of $7.75 per share. Mr. Banducci received options to purchase 3,200 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 1997, 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. However, the number of votes otherwise received by the nominee will not be reduced by such action. 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 'Committee') is comprised of three independent non-employee directors. As members of the 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 Company was formed in 1995 pursuant to a spin-off of the automotive and truck products business of The Allen Group Inc. (currently Allen Telecom Inc.). Although the current management team of the Company consists primarily of persons who were previously involved in the businesses of the Company prior to the spin-off, the Committee has formulated a new compensation philosophy for the Company which is designed to enable the Company to attract, retain and reward capable employees who can contribute to the continued 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 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: 1. To attract and retain the most highly qualified management and employee team. 2. To pay competitively compared to similar automotive companies. 3. To encourage superior employee performance by aligning rewards with stockholder interests, especially through the use of tangible performance targets. 4. 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. 5. To strive for fairness in administration by emphasizing performance related contributions as the basis of pay decisions. To implement these policies, the 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 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 Committee has determined that base salary for 1997 for the Company's Chief Executive Officer and for the other executive officers was generally at the competitive industry average. Annual Incentive Plan. The 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 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 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 5 of the Company at a specified price in the future. The Committee believes that the use of restricted stock and stock options as the basis for long-term incentive compensation meets the 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, enacted in 1993, 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 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 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). 1997 Compensation for the Chief Executive Officer In 1997, Henry P. McHale received annual base salary payments of $375,000, 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 did not receive an annual performance bonus pursuant to the Annual Incentive Plan in 1997. In April 1997, Mr. McHale was granted an option to purchase 50,700 shares of Common Stock at $7.75 per share, which was the market price for the Common Stock on the date of grant and also received a grant of 9,700 shares of restricted Common Stock. The restrictions on the restricted Common Stock lapse four years from the date of grant and are subject to early lapse upon a change of control. These option and restricted stock grants were made in accordance with the Committee's compensation practices. Summary The Committee believes that it has implemented a comprehensive compensation program for executives of the Company which is appropriate and competitive with the total compensation programs provided by other similar automotive companies with which the Company competes. The Committee believes its compensation philosophy ties compensation to stockholder returns and thereby links compensation to the achievement of annual and longer-term operational results of the Company on behalf of the Company's stockholders. We look forward to providing the stockholders with an update in our next annual report to you. Management Compensation and Nominating Committee of the Board of Directors WILLIAM J. ABRAHAM, JR. PHILIP WM. COLBURN PAUL R. LEDERER 6 ANNUAL AND LONG-TERM EXECUTIVE COMPENSATION The following table sets forth the annual and long-term compensation paid or accrued by the Company and its subsidiaries and their predecessors to those persons who were (i) the Chief Executive Officer and (ii) the other four most highly compensated executive officers of the Company (collectively, the 'Named Executive Officers'), for services rendered by them in all capacities in which they served the Company and its subsidiaries and their predecessors during 1995, 1996 and 1997. SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION AWARDS ------------------------ ANNUAL COMPENSATION SECURITIES --------------------------------------- RESTRICTED UNDERLYING ALL OTHER OTHER ANNUAL STOCK OPTIONS/ COMPENSATION NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION AWARDS($) SARS(#) ($)(a) - --------------------------------------- ---- --------- ---------- ------------ --------- ---------- ------------ Henry P. McHale(b) .................... 1997 $ 375,000 $ 0(c) $ 59,699(d) $ 75,175(e) 50,700 $8,714 President and Chief Executive Officer 1996 332,679 301,750(c) (f) -- 75,000 7,837 1995 231,987 1,654,239(c) (f) -- 50,000 8,018 John C. Martin, III(b) ................ 1997 174,000 0 (f) 24,800(e) 16,600 5,224 Vice President, Treasurer, Secretary 1996 164,000 111,520 (f) 27,690(g) 24,600 3,759 and Chief Financial Officer 1995 139,850 57,120 (f) 432,078(h) 41,728(i) 3,700 Michael Hooper(j) ..................... 1997 150,000 120,000 (f) 21,700(e) 14,300 3,110 President, Crown Divisions 1996 35,961 0 (f) 13,000(g) 10,600 672 1995 -- -- -- -- -- -- Jeffrey L. Jackson(b) ................. 1997 126,320 0(c) (f) 11,625(e) 7,800 4,464 Vice President -- Human Resources 1996 119,600 58,650(c) (f) 12,945(g) 11,500 3,587 1995 98,000 200,114(c) (f) -- -- 2,714 Timothy E. Coyne(k) ................... 1997 125,000 0 (f) 9,300(e) 6,000 4,037 Vice President, Controller and 1996 26,442 0 (f) 5,688(g) 4,400 0 Assistant Secretary 1995 -- -- -- -- -- --
- ------------ (a) All Other Compensation includes for 1995, 1996 and 1997, respectively, (i) contributions made by each Named Executive Officer's employer under its defined contribution plan in the following amounts: Mr. McHale -- $4,981, $5,373 and $6,035; Mr. Martin -- $1,578, $1,200 and $2,679; Mr. Hooper -- $0, $0 and $923; Mr. Jackson -- $2,714, $2,841 and $3,688; and Mr. Coyne -- $0, $0 and $2,019; (ii) insurance premiums paid by Allen with respect to term life insurance for the benefit of Mr. Martin of $2,122, $0 and $0, respectively; and (iii) insurance premiums paid by the Company in 1996 and 1997 for the benefit of the Named Executive Officers in the following amounts: Mr. McHale -- $2,464 and $2,679, Mr. Martin -- $2,559 and $2,545, Mr. Hooper -- $672 and $2,187, Mr. Jackson -- $746 and $776, and Mr. Coyne -- $0 and $2,018. (b) Prior to September 29, 1995, Messrs. McHale, and Jackson were employed by GDI and Mr. Martin was employed by Allen. (c) Amounts listed as bonuses for Messrs. McHale and Jackson include (i) annual performance bonuses earned by each in 1995, 1996 and 1997 and (ii) amounts earned in 1995 under the GDI Long Term Incentive Plan, although the payment will be made in three equal installments on April 1 of each year commencing in 1996. Mr. McHale's portion was paid in full on September 29, 1995 as an inducement to accept the position of President and Chief Executive Officer of the Company. (d) Other Annual Compensation for Mr. McHale in 1997 includes (i) personal travel reimbursements in the amount of $18,666, (ii) reimbursed housing expenses in the amount of $18,000, and (iii) company car payments in the amount of $17,761. (e) Represents the value of (i) 9,700 shares, 3,200 shares, 2,800 shares, 1,500 shares and 1,200 shares of restricted TransPro common stock issued to Messrs. McHale, Martin, Hooper, Jackson and Coyne, respectively, which vest on April 25, 2001. Dollar values reflect the value of TransPro common stock on the date of award. At December 31, 1997, Messrs. McHale, Martin, Hooper, Jackson and Coyne held an aggregate of 9,700, 41,253, 4,400, 3,226 and 1,900 shares, respectively, of restricted TransPro common stock which had an aggregate value (calculated by multiplying such amounts by $9.00, the closing price of TransPro common stock on December 31, 1997) of $87,300, $371,277, $39,600, $29,034 and $17,100, respectively. Dividends are paid on restricted stock at the same rate as unrestricted TransPro common stock. (f) 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. (g) Represents the value of (i) 3,692 shares and 1,726 shares of restricted TransPro common stock issued to Messrs. Martin and Jackson, respectively, which vest on April 8, 2000 and (ii) 1,600 shares and 700 shares of restricted (footnotes continued on next page) 7 (footnotes continued from previous page) TransPro common stock issued to Messrs. Hooper and Coyne, respectively, which vest on December 5, 2000. Dollar values reflect the value of TransPro common stock on the date of award. (h) Represents the value of (i) 7,565 shares of restricted TransPro common stock issued to Mr. Martin to replace 2,811 shares of restricted Allen common stock issued to Mr. Martin pursuant to Allen's Key Management Deferred Bonus Plan and forfeited pursuant to the spin-off, which vest in annual increments between September 1996 and September 1999; and (ii) 29,603 shares of restricted TransPro common stock issued to Mr. Martin to replace 11,000 shares of restricted Allen common stock issued to Mr. Martin pursuant to the Allen 1992 Stock Plan and forfeited pursuant to the spin-off, which vest on December 31, 2000 and December 31, 2001 or beginning in 1997, if certain earnings targets are met. Dollar values reflect the value of TransPro common stock on the date of award. (i) Includes options to purchase 35,478 shares of TransPro common stock issued to Mr. Martin with the same intrinsic value as options to purchase 13,200 shares of Allen common stock which were forfeited pursuant to the spin-off. (j) Mr. Hooper joined the Company in October 1996. (k) Mr. Coyne joined the Company in October 1996. ------------------------ The following table sets forth the grants of stock options made by the Company during the year ended December 31, 1997 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............................ 50,700 53.1% $ 7.75 April 27, 2007 $133,726 John C. Martin, III........................ 16,600 17.4 7.75 April 27, 2007 43,784 Michael Hooper............................. 14,300 15.0 7.75 April 27, 2007 37,718 Jeffrey L. Jackson......................... 7,800 8.2 7.75 April 27, 2007 20,573 Timothy E. Coyne........................... 6,000 6.3 7.75 April 27, 2007 15,826
- ------------ (a) All options granted are exercisable 50 percent after two years from date of grant, 75 percent after three years from date of grant and 100 percent after four years from date of grant. (b) Options to purchase a total of 95,400 shares of Common Stock were issued by the Company to employees in fiscal 1997. (c) Present value calculated using the Black Scholes model assuming 6.69% interest rate (the rate of treasury securities with a maturity date closest to the expected life of the options) and 30.2% volatility (calculated based upon the performance of the Common Stock from the date of the spin-off through the grant date). 8 The following table sets forth information with respect to unexercised options to purchase the Company's Common Stock held by the Named Executive Officers at December 31, 1997. No options to purchase the Company's Common Stock were exercised in 1997 by such persons. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT FISCAL YEAR-END# FISCAL YEAR-END($)(a) ---------------------------- ---------------------------- NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - --------------------------------------------------------- ----------- ------------- ----------- ------------- Henry P. McHale.......................................... 25,000 150,700 $ 0 $ 175,875 John C. Martin, III...................................... 25,568 57,360 42,279 73,963 Michael Hooper........................................... 0 24,900 -- 27,150 Jeffrey L. Jackson....................................... 0 19,300 -- 27,000 Timothy E. Coyne......................................... 0 10,400 -- 11,350
- ------------ (a) Computed based upon the difference between the closing price of the Company's Common Stock on December 31, 1997 ($9.00) and the exercise price. 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. Martin and Hooper. 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 1997 and application of the current U.S. Social Security covered compensation base, and includes amounts attributable to the supplemental 9 pension benefit provisions contained in the employment agreement entered into by the Company with Mr. Martin.
YEARS OF SERVICE(a) FINAL AVERAGE ------------------------------------------------------------------ EARNINGS(b) 10 15 20 25 30 35 - ------------- ------- ------- -------- -------- -------- -------- $ 125,000 ...................... $15,319 $22,978 $ 30,637 $ 38,297 $ 45,956 $ 45,956 150,000 ...................... 18,694 28,040 37,387 46,734 56,081 56,081 175,000 ...................... 22,069 33,103 44,137 55,172 66,206 66,206 200,000 ...................... 25,444 38,165 50,887 63,609 76,331 76,331 225,000 ...................... 28,819 43,228 57,637 72,047 86,456 86,456 250,000 ...................... 32,194 48,290 64,387 80,484 96,581 96,581 300,000 ...................... 38,944 58,415 77,887 97,359 116,831 116,831 350,000 ...................... 45,694 68,540 91,387 114,234 137,081 137,081 400,000 ...................... 52,444 78,665 104,887 131,109 157,331 157,331 450,000 ...................... 59,194 88,790 118,387 147,984 177,581 177,581 500,000 ...................... 65,944 98,915 131,887 164,859 197,831 197,831
- ------------ (a) Years of credited service under the Retirement Plan for Messrs. Martin and Hooper are 18 and 1, respectively. (b) The current final average earnings for Messrs. Martin and Hooper during 1997 were $223,489 and $150,000, 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 (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 $7,487, $13,513 and $0, respectively. EMPLOYMENT, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS Each of Messrs. McHale and Martin (the 'Senior Executive Officers') has 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. 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 10 the 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 base salary was increased to $174,000. 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. 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 his 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. Martin's employment agreement also provides for the payment of severance benefits if the Company terminates 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 terminates 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 will pay Mr. Martin in a lump 11 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 will continue during the period of severance payments. Severance payments in excess of the base amount of six months' salary will 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 all insurance benefits will be discontinued if, following the Company's termination of his employment other than for 'good reason,' Mr. Martin engages in competition with the Company or engages in conduct which is injurious to the Company. Mr. Martin is also entitled to severance benefits as if he was terminated other than for 'cause' by the Company if, during the three year period beginning on the Distribution Date, the Company relocates its principal executive offices by more than 25 miles from its existing location. Severance Agreements Messrs. Hooper, Jackson and Coyne entered into severance agreements with the Company. Pursuant to their respective severance agreements, if either Mr. Hooper, Mr. Jackson or Mr. Coyne 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. Severance Payments The Company made severance payments in 1997 to two former executive officers -- Raymond M. Scanlon, former Senior Vice President, and Andrew J. Mazzarella, former Vice President, Controller and Assistant Secretary. Mr. Scanlon, who resigned from the Company in March 1996, received severance payments of $51,231 in 1997, and Mr. Mazzarella, who resigned from the Company in October 1996 received severance payments of $107,308 in 1997. Mr. Mazzarella also received payments in 1997 under the GDI Long-Term Incentive Plan. See ' -- GDI Long Term Incentive Plan.' No further severance payments are due to Messrs. Scanlon or Mazzarella. GDI Long-Term Incentive Plan Allen and Handy & Harman ('H&H') instituted a Long-Term Incentive Plan for certain key executives of GDI, including Messrs. Jackson and Mazzarella but excluding Mr. McHale. Under the plan, such key executives were entitled to receive awards aggregating $1.5 million based on the achievement of certain operating targets for GDI as of November 30, 1995. GDI achieved the operating targets. Accordingly, the Company decided to fully vest the participants in the plan. Messrs. Jackson and Mazzarella were entitled to receive awards aggregating $168,479 and $255,421, respectively. The awards under the plan are being paid in three equal payments on April 1 of 1996, 1997 and 1998, and will be subject to forfeiture in accordance with the provisions of the plan. Messrs. Jackson and Mazzarella received payments of $56,160 and $85,140 respectively in April 1996 and April 1997. Pursuant to his resignation in October 1996, the Company agreed to pay Mr. Mazzarella the remaining amounts due in 1997 and 1998 in April 1997 and October 1997, respectively. Mr. Mazzarella received his 1998 installment of $85,140 in October 1997. Pursuant to the Contribution Agreement with Allen, the Company agreed to assume responsibility for all payments due under the plan. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Company's Compensation Committee currently consists of three non-employee directors -- Messrs. Abraham, Colburn and Lederer. Pursuant to the Directors Plan, Messrs. Abraham, Colburn and Lederer were each granted options to purchase 1,500 shares of Common Stock on April 25, 1997, at an exercise price of $7.75. Each of the foregoing options expires 10 years from date of 12 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'. 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 1997 all Section 16(a) filing requirements applicable to its executive officers, directors and greater than ten percent beneficial owners were complied with. 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 10/95-12/97 VS NYSE MARKET VALUE INDEX AND SIC -- MOTOR VEHICLE PARTS AND ACCESSORIES INDEX [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 ---- ------- ------- ------- TRANSPRO............................................. $100 $ 90.43 $ 79.71 $ 80.34 NYSE MARKET VALUE INDEX.............................. $100 $105.48 $127.06 $167.15 SIC INDEX............................................ $100 $ 98.17 $121.12 $156.47
13 STOCK OWNERSHIP PRINCIPAL STOCKHOLDERS The following tables set forth information as of March 4, 1998 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, Inc. ........................................................ 725,650(a) 11.0% GAMCO Investors, Inc. Gabelli Performance Partnership L.P. Gemini Capital Management Ltd. One Corporate Center Rye, New York 10580 Fidelity Management & Research Company ...................................... 660,925(b) 10.0% FMR Corp. Edward C. Johnson 3d Abigail P. Johnson 82 Devonshire Street Boston, Massachusetts 02109 State of Wisconsin Investment Board ......................................... 641,400(c) 9.7% P.O. Box 7842 Madison, Wisconsin 53707
- ------------ (a) This figure is based on information set forth in a Schedule 13D Amendment No. 8 dated February 17, 1998 filed with the SEC. GAMCO Investors, Inc. ('GAMCO') holds sole voting and dispositive power over 362,650 shares of Common Stock. Gabelli Funds, Inc. holds sole voting and dispositive power over an aggregate of 343,000 shares of Common Stock. Gabelli Performance Partnership L.P. ('GPP') and Gemini Capital Management Ltd. each hold sole voting and dispositive power over 10,000 shares of Common Stock, respectively. Mario J. Gabelli is the majority stockholder and Chairman of the Board of Directors and Chief Executive Officer of Gabelli Funds, Inc., which is the sole parent of GAMCO. Mr. Gabelli is also the general partner and chief investment officer of GPP. (b) This figure is based on information set forth in a Schedule 13G Amendment No. 2 dated February 11, 1998 filed with the SEC. 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. (c) This figure is based upon information set forth in a Schedule 13G Amendment No. 2 filed with the SEC on January 23, 1998. The State of Wisconsin Investment Board has sole voting and dispositive power over all of the indicated shares. DIRECTORS AND OFFICERS The following table sets forth information as of March 4, 1998, which 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 Company's 401(k) Savings Plan is as of December 31, 1997 (the most recent practicable date for such information).
AMOUNT AND NATURE OF BENEFICIAL PERCENT NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS - ----------------------------------------------------------------------------- ---------- -------- Barry R. Banducci............................................................ 31,600(a) * Henry P. McHale.............................................................. 73,875(b) 1.1% William J. Abraham, Jr. ..................................................... 10,250(c)(d) * Philip Wm. Colburn........................................................... 28,688(c) * Paul R. Lederer.............................................................. 6,250(c)(e) * Sharon M. Oster.............................................................. 3,650(c) * F. Alan Smith................................................................ 3,250(c) * Timothy E. Coyne............................................................. 2,099(f) * Michael Hooper............................................................... 4,449(g) * Jeffrey L. Jackson........................................................... 9,589(h) * John C. Martin, III.......................................................... 90,750(i) 1.4% All directors and executive officers as a group (11 persons)................. 264,360(j) 3.9%
- ------------ * Less than 1% (a) Includes 6,600 shares issuable upon exercise of options exercisable within 60 days. Also includes 18,000 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, 1,675 shares held by the trustee under the TransPro, Inc. 401(k) Savings Plan and 62,500 shares issuable upon exercise of options exercisable within 60 days. (c) Includes 3,250 shares issuable upon exercise of options exercisable within 60 days. (d) Includes 1,000 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 and 109 shares held by the trustee under the TransPro, Inc. 401(k) Savings Plan. (g) Consists of 4,400 restricted shares of Common Stock awarded under the Company' s 1995 Stock Plan and 49 shares held by the trustee under the TransPro, Inc. 401(k) Savings Plan. (h) Consists of 3,226 restricted shares of Common Stock awarded under the Company' s 1995 Stock Plan, 613 shares held by the trustee under the TransPro, Inc. 401(k) Savings Plan and 5,750 shares issuable upon exercise of options exercisable within 60 days. (i) Includes 41,253 restricted shares of Common Stock awarded under the Company' s 1995 Stock Plan, 838 shares held by the trustee under the TransPro, Inc. 401(k) Savings Plan and 42,034 shares issuable upon exercise of options exercisable within 60 days. (j) Consists of 67,463 shares owned by or on behalf of directors and executive officers; 3,284 shares held on behalf of certain executive officers by the trustee under the TransPro, Inc. 401(k) Savings Plan; 60,479 restricted shares of Common Stock awarded under the Company's 1995 Stock Plan and 133,134 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 Coopers & Lybrand L.L.P. as the Company's independent auditors for the year ending December 31, 1998, and has further directed that management submit the selection of independent auditors for ratification by stockholders at the Annual Meeting. 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 Coopers & Lybrand L.L.P. 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 Coopers & Lybrand L.L.P. as the Company's independent auditors is not required by the Company's Bylaws or otherwise. However, the Board is submitting the selection of Coopers & Lybrand L.L.P. to the stockholders for ratification as a matter 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 15 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 On September 8, 1995, the Board of Directors of 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. The following is a summary of certain ongoing material agreements, arrangements and transactions between the Company and Allen. CONTRIBUTION AGREEMENT 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. Contribution of Automotive and Truck Products Business. 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, which was incorporated for that purpose on July 28, 1995 (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. 16 Employees. The Company agreed to continue to employ all employees of Allen whose duties related primarily to the automotive and truck products business. Except as provided for in the Contribution Agreement, the Company agreed to provide such employees with terms and conditions of employment that are substantially the same as those provided to such employees by Allen, including employee benefits and other perquisites. The Company has agreed to assume all liabilities relating to such employees, including liabilities relating to their employment by Allen prior to the Distribution. Cross Indemnification. 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 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. CONSULTING AGREEMENT As of the Distribution Date, the Company and Allen entered into a Consulting Agreement (the 'Consulting Agreement'), pursuant to which Mr. Frank J. Hyson continued to be an employee of Allen, but provided full-time services to the Company as the President of the Crown division in exchange for monthly payments equal to the total aggregate monthly compensation, benefits, incentive and other compensation incurred by Allen with respect to Mr. Hyson. In October 1996, the Company and Allen restated their Consulting Agreement to provide that Mr. Hyson would no longer act as President of the Crown division, but would instead provide full time services to the Company on the same basis as Special Assistant to the Chief Executive Officer. The restated Consulting Agreement terminated on December 31, 1997. STOCKHOLDER PROPOSALS All stockholder proposals which are intended to be presented at the 1999 Annual Meeting of Stockholders of the Company must be received by the Company no later than November 27, 1998 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 1997 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 JOHN C. MARTIN, III Secretary Dated: March 26, 1998 17 Appendix A TRANSPRO, INC. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 29, 1998 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 4, 1998, at the Annual Meeting of Stockholders to be held at 11:00 a.m. on Wednesday, April 29, 1998, at the Omni Berkshire Place Hotel, 21 East 52nd 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 -1- 2. Approval of Appointment of Coopers & Lybrand L.L.P. 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:_________________________ -2- -----END PRIVACY-ENHANCED MESSAGE-----