Document:

Exhibit 10.1

 

MODINE MANUFACTURING COMPANY

2008 INCENTIVE COMPENSATION PLAN

PERFORMANCE STOCK AWARD

AWARD AGREEMENT

We are pleased to inform you that you have been granted an opportunity to earn a Performance Stock Award of Modine Manufacturing Company (the “Company”), subject to the terms and conditions of the Modine Manufacturing Company 2008 Incentive Compensation Plan (the “Plan”) and of this Award Agreement.  Unless otherwise defined herein, all terms used in this Award Agreement shall have the same meanings as set forth in the Plan.

 

	
Full name of Grantee:

	 
	 	 
	
Date of Award:

	
June 1, 2017

	 	 
	
Target number of Common Stock:

	 
	 	 
	
Performance Period:

	
April 1, 2017 to March 31, 2020

1.  Performance Stock Award.  Pursuant to the Plan, you are hereby granted a Performance Stock Award, subject to the terms and conditions of this Award Agreement and the Plan.  The number of shares of Common Stock to be issued hereunder if the Target Performance Goals are achieved is set forth above.

2.  Terms of Performance Stock Award and Performance Goals.  You have been granted an opportunity to earn shares of Common Stock under this Performance Stock Award.  The actual number of shares of Common Stock earned by you will be determined as described below, based upon the actual results for the Performance Period set forth above compared to the Performance Goals set forth below, provided that you remain an employee of the Company or a Subsidiary for the entire Performance Period (subject to the provisions below regarding death, Disability or retirement) and the achievement of the Performance Goals is greater than the Threshold amount specified below (the “Conditions”).  If either of these Conditions is not satisfied, then except as otherwise provided in this Award Agreement and the Plan, no Common Stock shall be earned.  The Performance Goals for this Performance Stock Award are: Return on Average Capital Employed (“ROACE”) and Average Annual Revenue Growth (“Revenue Growth”), with each having a 50% weight.  The Threshold Performance Goals are the minimum Performance Goals necessary for the Performance Period that must be achieved by the Company in order for you to qualify for any Common Stock and the Maximum Performance Goals are the minimum Performance Goals for the Performance Period in order for you to qualify for the maximum number of shares of Common Stock earned under this Performance Stock Award.

 

	
Performance Goal: ROACE

	
Performance Stock Award Earned Based on Achievement of Performance Goal

	
Threshold:  5.0%

	
5% of Target number of Common Stock

	
Target:   9.0%

	
50% of Target number of Common Stock

	
Maximum:   ≥14.0%

	
100% of Target number of Common Stock

 

	
Performance Goal: Revenue Growth

	
Performance Stock Award Earned Based on Achievement of Performance Goal

	
Threshold:  3.0%

	
5% of Target number of Common Stock

	
Target: 8.0%

	
50% of Target number of Common Stock

	
Maximum: ≥13.0%

	
100% of Target number of Common Stock

“ROACE” or “Return on Average Capital Employed” means NOPAT divided by Average Capital Employed.  NOPAT means the Company’s Adjusted Operating Income, as reported on the Company’s audited financial statements, multiplied by .7 to account for an assumed 30% income tax rate, and further adjusted to exclude earnings (or losses) attributable to minority shareholders.  Adjusted Operating Income equals operating income plus or minus Permitted Adjustments.  Average Capital Employed means the Company’s total debt plus shareholders’ equity, as reported on the Company’s audited financial statements, excluding from shareholders’ equity any equity attributable to minority shareholders.  Annual ROACE shall be averaged over five points (i.e., the last day of each fiscal quarter and prior fiscal year-end).   Permitted Adjustments include:

Restructuring Charges

		·	
Fees and expenses for restructuring consultants or financial advisors

		·	
Employee severance, outplacement and related benefits

		·	
Employee insurance and benefits continuation

		·	
Contractual salary continuation for terminated employees

		·	
Equipment transfers and facility preparation

		·	
Environmental services (e.g. plant clean-up prior to sale)

Acquisition and Divestiture Charges

		·	
Fees and expenses for transaction advisors

		·	
Integration expenses

		·	
Other incremental costs and charges that are non-recurring and directly related to the transaction

Other

		·	
Fees and expenses for strategy advisory services associated with a specific transaction or unique project

		·	
Unusual, non-recurring or extraordinary cash and non-cash charges or income

 

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Adoption of New Accounting Standards

		·	
The impact of the adoption of new U.S. GAAP accounting standards and significant changes in the Company’s accounting methods.

Notwithstanding the foregoing, the Committee may disregard all or part of any Permitted Adjustment as separately applicable to each performance metric if doing so would decrease the amount payable under this Performance Stock Award.

“Revenue Growth” means the simple three-year arithmetic average of the annual change in revenue over the Performance Period, as reported on the Company’s audited financial statements.

If actual ROACE or Revenue Growth for the Performance Period is between Threshold and Target and/or between Target and Maximum, the number of shares of Common Stock earned shall be determined on a linear basis.  In the event that the Company’s actual ROACE or Revenue Growth does not meet the Threshold for the Performance Period, no Common Stock shall be earned relative to such metric under this Performance Stock Award.  In the event that the Company’s actual ROACE or Revenue Growth exceeds the Maximum for the Performance Period, only the Maximum percentage of the Target number of shares of Common Stock set forth above shall be earned relative to such metric.

3.  Delivery of Shares of Common Stock.   Performance Stock earned shall be paid in shares of Common Stock delivered to you after the end of the Performance Period as soon as administratively practicable after the Committee has approved and certified the number of shares of Performance Stock that have been earned hereunder or, in the event of vesting covered under Paragraph 4 below, within thirty (30) days of the date of your termination of employment.

 

4.  Change in Control.    Notwithstanding anything in this Agreement to the contrary, upon a Change in Control, all outstanding Performance Stock shall be deemed to have satisfied the Target Performance Goals and shall continue to vest during the Performance Period; however, in the event of an involuntary termination of your employment with the Company or a Subsidiary without Cause within one year following a Change in Control, all outstanding Performance Stock shall vest pro-rata based upon the period worked during the Performance Period.

 

5.  Death, Disability or Retirement.  Notwithstanding anything in this Agreement to the contrary, upon your termination of employment due to death or Disability (as defined herein), or upon your retirement (with Committee approval), a prorated portion (based on the period working during the Performance Period) of the Performance Stock granted to you hereunder shall vest based on the Company’s actual achievement of the Performance Goals at the end of the Performance Period as certified by the Committee and shares will be delivered to you after the Committee has approved and certified the number of shares of Performance Stock that have been earned hereunder.  For purposes of this Award Agreement, “Disability” shall mean “permanent and total disability” as defined in Section 22 (e)(3) of the Code.

6.  Forfeiture.  Other than as described above in Paragraph 4 regarding a Change in Control or Paragraph 5 regarding Death, Disability or retirement, upon your termination of employment with the Company or a Subsidiary for any reason during the Performance Period, you will forfeit all Performance Stock covered by this Agreement.

 

7.  Shareholder Status.  While this Performance Stock Award is outstanding and until Common Stock is issued hereunder, you shall not have any rights as a shareholder of the Company, including the right to vote and the right to receive dividends on any Common Stock potentially earned under this Performance Stock Award.

 

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8.  Transfer.  The Performance Stock Award shall be nontransferable.  Notwithstanding the foregoing, you shall have the right to transfer the Performance Stock Award or Common Stock otherwise issued hereunder upon your death, either by the terms of your will or under the laws of descent and distribution.

9.  No Unlawful Issue of Common Stock.  If, in the opinion of its counsel, the issue of any Common Stock hereunder pursuant to this Performance Stock Award shall not be lawful for any reason, including the inability of the Company to obtain, from any regulatory body having jurisdiction, authority deemed by such counsel to be necessary to such issuance, the Company shall not be obligated to issue any such Common Stock pursuant to this Performance Stock Award.

10.  No Obligation of Employment.  This Performance Stock Award shall not impose any obligation on the Company to continue your employment with the Company or any Subsidiary.

11.  Controlling Provisions; Plan Controls.  In the event of a conflict between the terms of this Award Agreement and any employment agreement or change in control agreement between you and the Company, this Award Agreement shall control.   This Performance Stock Award is qualified in its entirety by reference to the terms and conditions of the Plan under which it is granted, a copy of which you may request from the Company.  The Plan empowers the Committee to make interpretations, rules and regulations thereunder and, in general, provides that the determinations of such Committee with respect to the Plan shall be binding upon you.  The Plan is incorporated herein by reference.

12.  Forfeiture Under Recoupment Policy.  The Company shall have the power and the right to require you to forfeit and return the shares of Common Stock issued hereunder or any proceeds therefrom consistent with any recoupment policy maintained by the Company under applicable law, as such policy is amended from time to time.

13.  Use of Words.  The use of words of the masculine gender in this Award Agreement is intended to include, wherever appropriate, the feminine or neuter gender and vice versa.

14.  Successors.  This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.

15.  Taxes.  The Company may require payment of or withhold any tax which it believes is required as a result of this Performance Stock Award, and the Company may defer making delivery with respect to shares issuable hereunder until arrangements satisfactory to the Company have been made with respect to such tax withholding obligations.

16. Committee Discretion.  Notwithstanding anything in this Agreement, the Committee retains the discretion to make negative adjustments to the final determination of the achievement of any Performance Goals.

17. Personal Information.  Solium Capital LLC and Wells Fargo Bank, N.A. assist the Company in the operation of the Plan and the administration of the Performance Stock Award granted pursuant to this Award Agreement.  If you choose to participate in the Plan, you acknowledge and consent to the Company sharing your name, email, and information regarding the grant of the Performance Stock Award under this Award Agreement with both Solium Capital LLC and Wells Fargo Bank, N.A.

 

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By your electronic agreement and the signature of the Company’s representative below, you and the Company agree that this Performance Stock Award awarded to you under this Award Agreement is subject to the terms and conditions of the Plan, a copy of which is available to you upon request.  As provided in the Plan, you hereby agree to accept as binding any decision of the Committee with respect to the interpretation of the Plan and this Award Agreement, or any other matters associated therewith.

IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed as of June 1, 2017.

	 	
MODINE MANUFACTURING COMPANY

	 	 	 
	 	
By:

	
/s/ Thomas A. Burke

	 	 	
Thomas A. Burke

	 	 	
President and Chief Executive Officer

 

 

5Exhibit 10.2

 

MODINE MANUFACTURING COMPANY

2008 INCENTIVE COMPENSATION PLAN

INCENTIVE STOCK OPTION

AWARD AGREEMENT

We are pleased to inform you that you have been granted an Option to purchase shares of Common Stock of Modine Manufacturing Company (the “Company”), subject to the terms and conditions of the Modine Manufacturing Company 2008 Incentive Compensation Plan (the “Plan”) and of this Award Agreement.  Unless otherwise defined herein, all terms used in this Award Agreement shall have the same meanings as set forth in the Plan.

	
Full name of Grantee:

	 
	 	 
	
Date of Award:

	
June 1, 2017

	 	 
	
Exercise price per share:

	 
	 	 
	
Total number of shares:

	 
	 	 
	
Total exercise price:

	 

1.  Option.  Pursuant to the Plan, you are hereby granted the option to purchase shares of Common Stock on the terms and conditions set forth in this Award Agreement.  The Option is intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code to the extent it meets the requirements thereof, including the $100,000 per year limitation in Code Section 422(d).  Any portion of the Option that does not qualify as an Incentive Stock Option shall be a Nonqualified Stock Option.  This Option is intended to qualify as an Incentive Stock Option so that you may obtain preferential tax treatment and, consequently, certain limitations on disposition must be observed.  In order to obtain preferential tax treatment, shares of Common Stock obtained upon exercise of the Option may not be disposed of within twenty-four (24) months after the Date of Award or within twelve (12) months after exercise of the Option.

2.  Vesting Schedule.  The Option granted pursuant to this Award will vest according to the following schedule, provided, however, that, except as otherwise provided in Section 12.02 of the Plan or in this Award Agreement, you must be employed by the Company or a Subsidiary on each vesting date for that portion of the Option to vest.  If you separate from service due to Disability (as defined below), death, or your retirement (with Committee approval) prior to any Vesting Date, any unvested portion of the Option shall become fully and immediately exercisable.  For purposes of this Award Agreement, “Disability” shall mean “permanent and total disability” as defined in Section 22 (e)(3) of the Code.

	
Number of Shares of Common Stock

	
Vesting Date

	
25% of the total number of shares

	
June 1, 2018

	
25% of the total number of shares

	
June 1, 2019

	
25% of the total number of shares

	
June 1, 2020

	
25% of the total number of shares

	
June 1, 2021

 

3.  Time of Exercise; Exercise Limitation.  Vested Options may be exercised (in the manner provided in paragraph 4 hereof) in whole or in part, from time to time after the Vesting Date, subject to the following limitations:

		(a)	
If you are an executive officer of the Company subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, the Option may not be exercised by you within six (6) months after the Grant Date; and

		(b)	
The Option may only be exercised, at any one time, exclusively in multiples of twenty‐five (25) shares with a one hundred (100) share exercise minimum, except for the purchase of all shares then remaining subject to these options.

4.  Method of Exercising Option.  Subject to the limitations stated elsewhere in this Award Agreement or in the Plan, this Option will be exercisable as to all or a portion of the Common Stock in accordance with the vesting schedule above in Paragraph 2.  In no event will the Option be exercisable if it would result in a violation of federal or state securities laws or would occur later than ten (10) years from the date of grant.  The Option may be exercised in whole or in part by delivery to the Company or its designee of (a) written notice identifying the Option and stating the number of shares with respect to which it is being exercised, and (b) payment in full of the exercise price of the shares then being acquired; provided, however, that you may pay the exercise price either in cash, by transferring to the Company shares of stock of the Company at their Fair Market Value as of the date of exercise of the Option ("Delivered Stock"), a combination of cash and Delivered Stock, or such other forms or means that the Company determines are consistent with the Plan's purpose and applicable law.  Notwithstanding the foregoing, the Company may arrange for or cooperate in permitting broker-assisted cashless exercise procedures.  No person shall acquire any rights or privileges of a shareholder of the Company with respect to any shares of Common Stock until such shares have been duly issued.  The Company shall have the right to delay the issue or delivery of any shares to be delivered hereunder until (a) the completion of such registration or qualification of such shares under federal, state or foreign law, ruling or regulation as the Company shall deem to be necessary or advisable, and (b) receipt from you of such documents and information as the Company may deem necessary or appropriate in connection with such registration or qualification or the issuance of shares hereunder.

5.  Expiration Date.  Upon a termination of your employment for any reason (except termination of employment for Cause), this Option shall expire one (1) year from the date of termination of your employment.  Upon your termination of employment for Cause, this Option shall immediately expire. Notwithstanding anything herein contained to the contrary, this Option shall not be exercisable subsequent to ten (10) years after the date of grant.  Your Option will become nonqualified (i.e., lose preferential tax treatment) if it is not exercised within three (3) months after a termination of employment or within one (1) year after a termination of employment due to Disability.

6.  Transfer of Option.  The Option shall be nontransferable and shall, except in the case of death or Disability, be exercisable only by you during your lifetime.  Notwithstanding the foregoing, you shall have the right to transfer the Option upon your death, either by the terms of your will or under the laws of descent and distribution.  In the case of your Disability, the Option shall be exercisable by your personal representative.  Upon your death, the Option shall be exercisable by your personal representative, administrator, or other representative of your estate, or the person or persons to whom this Option shall pass by will or under the laws of descent and distribution.

 

7.  Transfer of Stock.  If you dispose of any of the Common Stock acquired upon exercise of the Option within twenty-four (24) months after the date the Option was granted or within twelve (12) months after exercise of the Option, then, you shall promptly notify the Company of the number of shares so disposed of, the dates of disposition, and the consideration, if any, received for such shares.  In order to comply with federal income tax law, the Company may take such action as it deems appropriate to ensure notice to the Company of any disposition of the Common Stock with the time periods described.

 

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8.  No Unlawful Issue of Shares.  If, in the opinion of its counsel, the issue or sale of any shares of its stock hereunder pursuant to the Option shall not be lawful for any reason, including the inability of the Company to obtain, from any regulatory body having jurisdiction, authority deemed by such counsel to be necessary to such issuance or sale, the Company shall not be obligated to issue or sell any such shares pursuant to the exercise of the Option.

9.  No Obligation of Employment.  The Option shall not impose any obligation on the Company to continue your employment with the Company or a Subsidiary.

10.  Controlling Provisions; Plan Controls.  In the event of a conflict between the terms of this Award Agreement and any employment agreement or change in control agreement between you and the Company, this Award Agreement shall control.  This Option is qualified in its entirety by reference to the terms and conditions of the Plan under which it is granted, a copy of which you may request from the Company.  The Plan empowers the Committee to make interpretations, rules and regulations thereunder and, in general, provides that the determinations of such Committee with respect to the Plan shall be binding upon you.  The Plan is hereby incorporated herein by reference.

11.  Change in Control.  The vesting of the Option in the event of a Change in Control is governed by Section 12.02 of the Plan.

12.  Forfeiture Under Recoupment Policy.  The Company shall have the power and the right to require you to forfeit this Option, return the shares of Common Stock issued pursuant to an exercise of this Option or any proceeds therefrom consistent with any recoupment policy maintained by the Company under applicable law, as such policy is amended from time to time.

13.  Use of Words.  The use of words of the masculine gender in this Award Agreement is intended to include, wherever appropriate, the feminine or neuter gender and vice versa.

14.  Successors.  This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.

15.   Taxes.  The Company may require payment of or withhold any tax that it believes is required as a result of the grant or exercise of the Option, and the Company may defer making delivery with respect to shares issuable hereunder until arrangements satisfactory to the Company have been made with respect to such tax withholding obligations.

16.  Personal Information.  Solium Capital LLC and Wells Fargo Bank, N.A. assist the Company in the operation of the Plan and the administration of the Option granted pursuant to this Award Agreement.  If you choose to participate in the Plan, you acknowledge and consent to the Company sharing your name, email, and information regarding the grant of the Option under this Award Agreement with both Solium Capital LLC and Wells Fargo Bank, N.A.

By your electronic agreement and the signature of the Company’s representative below, you and the Company agree that the Option which has been awarded to you under this Award Agreement is subject to the terms and conditions of the Plan, a copy of which is available to you upon request.  As provided in the Plan, you hereby agree to accept as binding any decision of the Committee with respect to the interpretation of the Plan and this Award Agreement, or any other matters associated therewith.

 

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IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed as of June 1, 2017.

	 	
MODINE MANUFACTURING COMPANY

	 	 	 
	 	
By:

	
/s/ Thomas A. Burke

	 	 	
Thomas A. Burke

	 	 	
President and Chief Executive Officer

 

 

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