[GRAPHIC OMITTED]
March 29, 2001
Dear Fellow Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders which will be held at The St. Regis Hotel, 2 East 55th Street, New
York, New York on Wednesday, May 2, 2001 at 11:00 a.m. This year you are being
asked to elect seven directors to the Company's Board and approve the Company's
auditors for the year ending December 31, 2001, 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,
[GRAPHIC OMITTED]
Barry R. Banducci
Chairman of the Board
TRANSPRO, INC.
--------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
TransPro, Inc. will be held on Wednesday, May 2, 2001 at 11:00 a.m., at The St.
Regis Hotel, 2 East 55th Street, New York, New York, for the following
purposes:
(1) To elect seven directors to serve for the ensuing year;
(2) To consider and vote on the approval of PricewaterhouseCoopers LLP
as the Company's independent auditors for the year ending December
31, 2001; 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 5, 2001 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. All stockholders are cordially invited to attend the Annual Meeting in
person. Stockholders who are unable to attend the Annual Meeting in person are
requested to complete and date the enclosed form of proxy and return it
promptly in the envelope provided. No postage is required if mailed in the
United States. Stockholders who attend the Annual Meeting may revoke their
proxy and vote their shares in person.
TIMOTHY E. COYNE
Secretary
New Haven, Connecticut
March 29, 2001
TRANSPRO, INC.
100 GANDO DRIVE
NEW HAVEN, CONNECTICUT 06513
-------------------------
PROXY STATEMENT
-------------------------
GENERAL INFORMATION
PROXY SOLICITATION
This proxy statement is furnished to the holders of common stock of
TransPro, Inc. in connection with the solicitation by our Board of Directors of
proxies for use at the annual meeting of stockholders to be held on Wednesday,
May 2, 2001, or at any adjournment of the annual meeting. The purposes of the
meeting and the matters to be acted upon are described in the accompanying
Notice of Annual Meeting of Stockholders. The Board of Directors is not
currently aware of any other matters that will come before the meeting.
Proxies for use at the meeting are being solicited by our Board of
Directors. Proxies will be mailed to stockholders on or about March 30, 2001
and will be solicited chiefly by mail. We 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, our officers, agents
and employees may communicate with stockholders, banks, brokerage houses and
others by telephone, e-mail, facsimile, or in person to request that proxies be
furnished. We will pay all expenses incurred in connection with this
solicitation.
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
our Secretary a written notice of revocation or a duly executed proxy bearing a
later date, or by voting in person at the meeting. Shares of common stock
represented by executed and unrevoked proxies will be voted in accordance with
the choice or instructions specified. If no specifications are given, the
proxies intend to vote the shares represented to approve Proposals No. 1 and 2
as described 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 5, 2001 are
entitled to notice of and to vote at the annual meeting or any adjournment of
the annual meeting. On March 5, 2001 there were 6,580,635 shares of common
stock outstanding; each 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 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 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 have been duly elected and qualified.
Each person named below is now a director of TransPro. In the event any of
these nominees will 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 .............. 65 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, a
manufacturer of automotive products; from 1988 to
1994, President and Chief Executive Officer of Equion
and from 1984 to 1988, President and Chief Operating
Officer of Equion; currently a director of Advanced
Accessory Systems and the Delker Corporation. (1)(3)
William J. Abraham, Jr ......... 53 1995 Partner with Foley & Lardner, a law firm in Milwaukee,
Wisconsin, since 1980; formerly Chairman of the
Business Law Department of Foley & Lardner; currently
a director of The Vollrath Company, Inc., Park Bank,
and Windway Capital Corp. (2)
Philip Wm. Colburn ............. 72 1995 Chairman of the Board of Allen Telecom Inc. since
December 1988 and a director of Allen since 1973; from
March 1988 to February 1991, Chief Executive Officer
of Allen; currently a director of Superior Industries
International, Inc. and Earl Scheib, Inc. (2)
Charles E. Johnson ............. 55 2001 Since March 2001, President and Chief Executive Officer
of TransPro, Inc.; from 1996 to March 2001, President
and Director, and since 1997, Chief Executive Officer,
of Canadian General-Tower Ltd., a producer of polymer
films and composite materials to the automotive and
other markets; from 1984 to 1996, various positions at
The Equion Corporation, including President and Chief
Operating Officer from 1993 to 1996. (3)
Paul R. Lederer ................ 61 1995 Currently a director of R&B Inc., Woods Equipment
Co., FPM, Inc. and Icarz.com, and a member of the
advisory boards of Richco Inc., Turtle Wax, Inc.,
Ampere Products and The Wine Discount Center;
prior to retirement in October 1998, Executive Vice
President -- Worldwide Aftermarket of Federal-Mogul
Corporation since February 1998; from November 1994
to February 1998, President and Chief Operating Officer
of Fel-Pro Inc. (which was acquired by Federal-Mogul
Corporation). (1)(3)
2
YEAR FIRST
BECAME PRINCIPAL OCCUPATION
NOMINEE AGE DIRECTOR DURING THE PAST FIVE YEARS
------- --- ---------- --------------------------
Sharon M. Oster ......... 52 1995 Frederic D. Wolfe Professor of Management and
Entrepreneurship at the School of Management, Yale
University since 1992; from 1992 to 1994, Associate
Dean of Yale's School of Management; from 1983 to
1994, Professor of Economics and Management
at Yale's School of Management; currently a director
of HealthCare REIT, Inc. and The Aristotle
Corporation. (1)
F. Alan Smith ........... 69 1995 Chairman of Advanced Accessory Systems, LLC since
September 1995, Chairman of Mackie Automotive
Systems since May 1998, and a director of 3M since
1986; retired from General Motors Corporation in 1992
after 36 years of service; from 1981 to 1992, Executive
Vice President and a member of the Board of Directors
of GM. (2)
----------
(1) Member of the Management Compensation and Nominating Committee of the
Board of Directors.
(2) Member of the Audit Committee of the Board of Directors.
(3) Member of the Management Committee of the Board of Directors.
INFORMATION REGARDING BOARD OF DIRECTORS
The business and affairs of TransPro are managed under the direction of
our Board of Directors, whose members are elected annually by the stockholders.
During 1995, the Board of Directors designated a Management Compensation and
Nominating Committee and an Audit Committee. Messrs. Lederer and Banducci and
Ms. Oster are the members of the Management Compensation and Nominating
Committee; and Messrs. Smith, Abraham and Colburn are the members of the Audit
Committee. During 1999, the Board of Directors designated a Management
Committee. Messrs. Banducci, Johnson and Lederer are the members of the
Management Committee. Henry P. McHale, our former President and Chief Executive
Officer, was a member of the Management Committee until December 31, 2000.
Charles E. Johnson, our current President and Chief Executive Officer joined
the Management Committee in March 2001.
The Management Compensation and Nominating Committee (the "Compensation
Committee") recommends to the Board salaries and incentive compensation awards
for our officers; 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 our 1995 Stock Plan and our 1995 Nonemployee Directors Stock Option
Plan (the "Directors Plan"), grants stock options and restricted shares of
common stock under the 1995 Stock Plan; and issues the Report on Executive
Compensation required to be included in our proxy statement by the rules of the
Securities and Exchange Commission. 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
returning incumbent directors for re-election at the annual meeting. The
Compensation Committee will consider nominees recommended by stockholders for
election at the 2002 Annual Meeting of Stockholders that are submitted prior to
the end of 2001 to our Secretary at TransPro's offices, 100 Gando Drive, New
Haven, Connecticut 06513. Any 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 the
nominee to serve if nominated and elected.
The Audit Committee recommends to the Board of Directors the appointment
of our independent auditors and reviews the degree of their independence;
approves the scope of the audit engagement,
3
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 our
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 our financial
staff and the extent to which recommendations made by the independent auditors
have been implemented. All members of the Audit Committee are independent as
defined in the listing standards of the New York Stock Exchange. On June 13,
2000, the Board of Directors adopted an Audit Committee Charter that meets the
requirements of the Securities and Exchange Commission and the New York Stock
Exchange. A copy of the Audit Committee Charter is attached as Exhibit B to the
electronic version of this proxy statement filed with the SEC.
The Management Committee serves as an advisory resource for TransPro
management with regard to industry-specific strategic issues and the condition
of the marketplace in which we operate. The Management Committee was
established to assist management in its oversight of our operations through the
experience and knowledge of its members, rather than to take specific action
with regard to any particular area of corporate governance.
During the year ended December 31, 2000, the Board of Directors of the
Company held six meetings, the Compensation Committee held seven meetings, the
Audit Committee held five meetings and the Management Committee held five
meetings. Each director attended at least 75% of the meetings of the Board of
Directors held and of all committees of the Board of Directors on which he or
she served while he or she was director or a member of a committee of the Board
of Directors, with the exception of Mr. Abraham, who attended three of the five
meetings of the Audit Committee during 2000.
COMPENSATION OF DIRECTORS
The Chairman of the Board of Directors is paid an annual retainer of
$35,000 per year for his services as Chairman and $1,000 for each meeting of
the Board of Directors attended. The Chairman does not receive any additional
compensation for committee participation. All other nonemployee directors are
paid $12,000 per year for their services as a director and $1,000 for each
meeting of the Board of Directors attended. Each nonemployee member of the
Audit, Compensation or Management Committee is paid $2,000 per year for his or
her services as a 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 our 1995 Nonemployee Directors Stock Option Plan, the Chairman and
each nonemployee director are automatically entitled to a grant of options to
purchase 3,200 and 1,500 shares of common stock, respectively, on an annual
basis, on the first Friday following our annual meeting of stockholders. The
Board of Directors unanimously determined not to accept the automatic option
grant due in May 2000.
We maintain a matching gift program for the benefit of our directors.
Pursuant to the matching gift program, in 2000, we matched gifts to charitable
organizations made by the directors in amounts up to $2,500 for each director.
We are party to an employment agreement with Charles E. Johnson, our
President and Chief Executive Officer, and a director. In addition, we were a
party to an employment agreement with Henry P. McHale, our former President and
Chief Executive Officer and a former director. For a description of the terms
of these agreements, see "Executive Compensation -- Employment, Termination of
Employment and Change of Control Arrangements."
VOTE REQUIRED
The seven nominees receiving 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, shall be elected as
directors. 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
4
quorum is present. However, instructions on the accompanying proxy card to
withhold authority to vote for one or more nominees 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
instruction to withhold authority by a stockholder present in person or by
proxy at the meeting has the same legal effect as a vote "against" the nominee
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 the nominee.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 1 -- ELECTION OF DIRECTORS" TO
BE IN THE BEST INTERESTS OF TRANSPRO AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE
"FOR" APPROVAL OF THIS PROPOSAL.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Management Compensation and Nominating Committee is comprised of three
independent non-employee directors. As members of the Compensation Committee,
it is our responsibility to administer TransPro'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
We have formulated a compensation philosophy which is designed to enable
us to attract, retain and reward capable employees who can contribute to the
success of TransPro, 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. We
believe 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 TransPro:
o To attract and retain the most highly qualified management and employee
team.
o To pay competitively compared to similar automotive companies.
o To encourage superior employee performance by aligning rewards with
stockholder interests, especially through the use of tangible performance
targets.
o To motivate senior executives to achieve TransPro's annual and long-term
business goals by providing higher than average leveraged equity-based
incentive opportunities.
o To strive for fairness in administration by emphasizing performance
related contributions as the basis of pay decisions.
To implement these policies, we have 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. We 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. TransPro'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. We have determined that base salary
for 2000 for our former Chief Executive Officer and for the other executive
officers was generally at the competitive industry average.
Annual Incentive Plan. We have designed an annual incentive plan pursuant
to which key TransPro employees will be eligible to receive performance bonuses
in a range based upon a percentage of their
5
annual base salary. Payment of the performance bonuses is based upon
performance measures set by the Compensation Committee that incorporate overall
corporate, 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. We believe that the pay program should provide
senior executives with an opportunity to increase their ownership and
potentially gain financially from TransPro 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 at a specified price in the
future. We believe that the use of restricted stock and stock options as the
basis for long-term incentive compensation meets our defined compensation
strategy and business needs of TransPro by achieving increased value for
stockholders and retaining key employees.
Other Benefits. Our 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, we provide a company automobile to executive officers and reimbursed
club dues for our former Chief Executive Officer.
Compliance With Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to a public corporation for compensation over $1 million paid to a
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. We intend to structure the
compensation of our executive officers in a manner that should ensure that
TransPro does not lose any tax deductions because of the $1 million
compensation limit in the foreseeable future.
The salaries for our 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. We are a proponent of using more performance
and equity-based compensation, which can often be designed to ensure that tax
deductibility is not compromised.
Our 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 1995 Stock Plan also identifies performance measures to be
used if we decide to use performance-based vesting restricted stock in the
future to meet the requirements of Section 162(m).
2000 Compensation for the Chief Executive Officer
In 2000, Henry P. McHale received annual base salary payments of $386,250,
pursuant to the terms of his employment agreement with the Company. See
"Executive Compensation -- Employment, Termination of Employment and Change of
Control Arrangements." Mr. McHale did not receive an annual performance bonus
pursuant to the Annual Incentive Plan in 2000, due to the failure to achieve
certain goals set by the Compensation Committee. No option or restricted stock
grants were made to Mr. McHale in 2000, since the Committee believed that the
significant stock option and restricted stock grants previously made to Mr.
McHale in accordance with the terms of his employment agreement aligned his
interests with those of the stockholders.
6
Summary
The Compensation Committee believes that we have implemented a
comprehensive compensation program for TransPro executives that is appropriate
and competitive with the total compensation programs provided by other similar
automotive companies with which we compete. We believe our compensation
philosophy ties compensation to stockholder returns and thereby links
compensation to the achievement of annual and longer-term operational results
of TransPro on behalf of our stockholders. We look forward to providing the
stockholders with an update in our next annual report to you.
Management Compensation and Nominating
Committee of the Board of Directors
- PAUL R. LEDERER, CHAIRMAN
- BARRY R. BANDUCCI
- SHARON M. OSTER
ANNUAL AND LONG-TERM EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation paid
or accrued by the Company and its subsidiaries to those persons who were (i)
the Chief Executive Officer, (ii) the other four most highly compensated
executive officers of the Company at the end of 2000 and (iii) one former
executive officer of the Company (collectively, the "Named Executive
Officers"), for services rendered by them in all capacities in which they
served the Company and its subsidiaries during 1998, 1999 and 2000.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
------------------------------------
OTHER
BONUS ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY ($) ($) COMP.
--------------------------------------- ---- ---------- ----- ------
Henry P. McHale ....................... 2000 $386,250 $ 0 (b)
Former President and Chief 1999 386,250 142,913 (b)
Executive Officer 1998 375,000 170,600 $50,324(c)
John F. Della Ventura (d) ............. 2000 164,000 0 (b)
President, G&O Division 1999 157,500 23,940 (b)
1998 138,462 46,200 (b)
Kevin O'Connor ........................ 2000 194,000 0 (b)
Executive Vice President -- 1999 187,000 103,224 (b)
Go/Dan Industries Division 1998 180,000 70,600 (b)
Timothy E. Coyne ...................... 2000 175,000 0 (b)
Vice President, Treasurer, 1999 168,000 49,728 (b)
Secretary and Chief Financial 1998 133,749 58,200 (b)
Officer
Jeffrey L. Jackson .................... 2000 146,420 0 (b)
Vice President -- Human 1999 135,000 29,970 (b)
Resources 1998 126,880 35,100 (b)
Michael T. Hooper ..................... 2000 66,767 0 (b)
Former President, Crown Divisions 1999 168,000 0 (b)
1998 158,462 48,000 (b)
LONG-TERM COMPENSATION
AWARDS
----------------------------
RESTRICTED SECURITIES ALL
STOCK UNDERLYING OTHER
AWARDS OPTIONS/ COMP.
NAME AND PRINCIPAL POSITION ($) SARS(#) ($)(A)
--------------------------- ---------- ---------- -------
Henry P. McHale ....................... $ 0 0 $ 8,517
Former President and Chief 0 25,000 9,322
Executive Officer 0 0 9,729
John F. Della Ventura (d) ............. 0 0 4,242
President, G&O Division 0 15,000 3,874
17,050(e) 11,400 4,417
Kevin O'Connor ........................ 0 0 7,617
Executive Vice President -- 0 0 6,756
Go/Dan Industries Division 0 14,000 5,491
Timothy E. Coyne ...................... 0 0 4,985
Vice President, Treasurer, 0 20,000 4,080
Secretary and Chief Financial 0 20,000 4,733
Officer
Jeffrey L. Jackson .................... 0 0 4,322
Vice President -- Human 0 10,000 4,265
Resources 0 0 3,513
Michael T. Hooper ..................... 0 0 377,834(f)
Former President, Crown Divisions 0 20,000 5,208
20,150(e) 13,700 4,246
----------
(a) All Other Compensation includes for 1998, 1999 and 2000, respectively, (i)
contributions made by each named executive officer's employer under its
defined contribution plan in the following amounts: Mr. McHale -- $6,346,
7
$6,663 and $5,829; Mr. Della Ventura -- $1,038, $1,123 and $1,370; Mr.
O'Connor -- $3,596, $5,147 and $5,934; Mr. Coyne -- $2,675, $2,573 and
$3,407; Mr. Jackson -- $2,538, $3,489 and $3,513; and Mr. Hooper -- $675,
$2,154 and $3,266; and (ii) insurance premiums paid by TransPro in 1998,
1999 and 2000 for the benefit of the named executive officers in the
following amounts: Mr. McHale -- $3,383, $2,659 and $2,688; Mr. Della
Ventura -- $3,379, $2,752 and $2,872; Mr. O'Connor -- $1,895, $1,609 and
$1,683; Mr. Coyne -- $2,058, $1,507 and $1,578; Mr. Jackson -- $975, $776
and $809; and Mr. Hooper -- $3,571, $3,054 and $3,092.
(b) Aggregate amount of such compensation is less than the lesser of $50,000 or
10% of the total salary and bonus reported for each indicated Named
Executive Officer.
(c) Other Annual Compensation for Mr. McHale in 1998 includes (i) personal
travel reimbursements in the amount of $16,462, (ii) reimbursed housing
expenses in the amount of $13,000, and (iii) company car payments in the
amount of $16,862.
(d) Mr. Della Ventura joined the Company in February 1998.
(e) Represents the value of 2,600 shares and 2,200 shares of restricted
TransPro common stock issued to Messrs. Hooper and Della Ventura,
respectively, which vest on April 29, 2002. Dollar values reflect the value
of TransPro common stock on the date of award. Mr. Hooper's shares were
forfeited in connection with his departure from TransPro in 2000. At
December 31, 2000, Messrs. McHale, Della Ventura, O'Connor, Coyne, Jackson
and Hooper held an aggregate of 0, 2,200, 0, 1,200, 1,500 and 0 shares,
respectively, of restricted TransPro common stock which had an aggregate
value (calculated by multiplying such amounts by $2.56, the closing price
of TransPro common stock on December 29, 2000) of $0, $5,632, $0, $3,072,
$3,840 and $0, respectively. Dividends are paid on restricted stock at the
same rate as unrestricted TransPro common stock.
(f) Includes severance payments of $371,476 made to Mr. Hooper in 2000. Mr.
Hooper was no longer an employee of TransPro effective May 4, 2000.
No grants of stock options were made during the year ended December 31,
2000 to the named executive officers.
The following table sets forth information with respect to unexercised
options to purchase the TransPro common stock held by the named executive
officers at December 31, 2000. No options to purchase common stock were
exercised in 2000 by these persons.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN- THE-MONEY OPTIONS
AT FISCAL YEAR-END # AT FISCAL YEAR-END($) (A)
------------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Henry P. McHale ............... 163,025 37,675 $ 0 $ 0
John F. Della Ventura ......... 5,700 20,700 0 0
Kevin O'Connor ................ 11,000 7,000 0 0
Timothy E. Coyne .............. 18,900 31,500 0 0
Jeffrey L. Jackson ............ 17,350 11,950 0 0
Michael T. Hooper ............. 58,600 0 0 --
----------
(a) Computed based upon the difference between the closing price of TransPro
common stock on December 29, 2000 ($2.56) and the exercise price.
RETIREMENT PLANS
We maintain a defined benefit retirement plan covering all of the
full-time salaried employees of the G&O division in the United States and
Messrs. Hooper and Della Ventura. The other full-time salaried employees of
TransPro and its GDI division 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
8
(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 TransPro 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 2000 and application of the
current U.S. Social Security covered compensation base.
YEARS OF SERVICE (A)
FINAL AVERAGE ----------------------------------------------------------------
EARNINGS (B) 10 15 20 25 30 35
------------ -- -- -- -- -- --
$125,000............ $15,120 $22,680 $ 30,240 $ 37,800 $ 45,360 $ 45,360
150,000............. 18,495 27,743 36,990 46,238 55,485 55,485
175,000............. 21,870 32,805 43,740 54,675 65,610 65,610
200,000............. 25,245 37,868 50,490 63,113 75,735 75,735
225,000............. 28,620 42,930 57,240 71,550 85,860 85,860
250,000............. 31,995 47,993 63,990 79,988 95,985 95,985
300,000............. 38,745 58,118 77,490 96,863 116,235 116,235
350,000............. 45,495 68,243 90,990 113,738 136,485 136,485
400,000............. 52,245 78,368 104,490 130,613 156,735 156,735
450,000............. 58,995 88,493 117,990 147,488 176,985 176,985
500,000............. 65,745 98,618 131,490 164,363 197,235 197,235
----------
(a) Years of credited service under the Retirement Plan for Messrs.
Della Ventura and Hooper are 11 and 4, respectively.
(b) The current final average earnings for Messrs. Della Ventura and
Hooper during 2000 were $160,613 and $163,269 respectively.
GO/DAN Industries Retirement Plan
Messrs. McHale, O'Connor, 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
9
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,
O'Connor's, Jackson's and Coyne's estimated annual pension benefits under the
cash balance plan are $7,396, $17,299, $15,267 and $25,439, respectively.
EMPLOYMENT, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Charles E. Johnson
Effective March 12, 2001, we entered into an employment agreement with
Charles E. Johnson, our President and Chief Executive Officer. The agreement
has a two-year term with automatic one-year extensions upon each anniversary
date of the agreement unless either party gives at least 90 days' notice to the
contrary. The employment agreement can be terminated by TransPro for "serious
cause" (as defined in the employment agreement) or in the event Mr. Johnson
becomes disabled, and Mr. Johnson can terminate the agreement for "good reason"
(as defined in the agreement). The employment agreement provides annual pension
benefits, supplemental to the annual benefits paid under our retirement plans,
in an amount determined in accordance with the applicable TransPro retirement
plan, without giving effect to limits imposed by the Internal Revenue Code and
regulations of the IRS on the amount of benefits payable or compensation that
may be used in determining benefits that may be paid to an individual under a
Federal income tax qualified plan. The employment agreement provides for an
annual salary of $360,000 and a bonus of up to 150% of base salary determined
based upon performance targets set annually by the Board. In addition, under
the agreement, in March 2001 Mr. Johnson received options to purchase 60,000
shares of common stock under our 1995 Stock Plan and he is entitled to a
further grant for an additional 40,000 shares with vesting to be determined
based upon mutually agreed performance criteria. We also agreed to pay Mr.
Johnson's reasonable relocation expenses.
Mr. Johnson's employment agreement contains additional provisions which
provide that, in the event we terminate Mr. Johnson's employment other than for
"serious cause" or his disability, death or retirement, or if Mr. Johnson
terminates his employment for "good reason," we would pay him an amount equal
to his salary for one year and would provide his life, disability, accident,
medical and hospitalization insurance benefits during a period of one year
after termination. In addition, we would pay Mr. Johnson accrued vacation pay
and all other amounts to which he is entitled under the agreement prior to
termination.
Henry P. McHale
We entered into an employment agreement with Mr. McHale, our former
President and Chief Executive Officer, which initially extended through
December 31, 1996, with automatic one-year extensions upon each anniversary
date of the agreement unless either party gave at least 90 days' notice to the
contrary. No such notice was given with regard to Mr. McHale's agreement prior
to 2000. The employment agreement could be terminated by TransPro for "cause"
(as defined in the employment agreement) or in the event Mr. McHale became
disabled, and Mr. McHale could terminate the agreement for "good reason" (as
defined in the agreement). The employment agreement provided annual pension
benefits, supplemental to the annual benefits paid under our retirement plans,
in an amount determined in accordance with the applicable TransPro retirement
plan, without giving effect to limits imposed by the Internal Revenue Code and
regulations of the IRS on the amount of benefits payable or compensation that
may be used in determining benefits that may be paid to an individual under a
Federal income tax qualified plan. The employment agreement provided 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) and fringe benefits in accordance with our policies adopted from
time to time. The initial base salary under the employment agreement with Mr.
McHale was $300,000. 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. Effective February 1999, Mr. McHale's base salary was increased to
$386,250. In addition, under the agreement, Mr. McHale previously received
awards of options to purchase 125,000 shares of common stock under our 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.
In 1999 Mr. McHale received options to purchase an additional 25,000 shares of
Common Stock. See "Executive Compensation -- Annual and Long-Term Executive
Compensation." Mr. McHale's employment agreement was amended
10
effective October 1, 1998 to provide that at all times after October 15, 1998,
during the term of the employment agreement, Mr. McHale shall have his
principal residence in Connecticut within a 45 mile radius of the Company's New
Haven, Connecticut headquarters. In order to induce Mr. McHale to amend his
employment agreement, the Company agreed to reimburse Mr. McHale's temporary
housing costs in an amount not to exceed $18,000 and further agreed to
reimburse Mr. McHale for the reasonable costs of relocation from Florida to
Connecticut, consisting of the costs of two trips from Florida to Connecticut
by Mr. McHale's spouse to search for a home in Connecticut, moving costs, and
reasonable and customary closing costs related to the purchase of a new home in
Connecticut (excluding any prepaid mortgage interest or "points"). The
foregoing cost reimbursements did not include any closing costs or ancillary
costs (i.e. brokerage fees) related to the sale of Mr. McHale's previous home.
Mr. McHale's employment agreement contained additional provisions which
provided that, in the event we terminated Mr. McHale's employment other than
for "cause" or his disability, or if Mr. McHale terminated his employment for
"good reason," we would pay him an amount equal to his salary for one year and
would provide his life, disability, accident, medical and hospitalization
insurance benefits during a period of one year after such termination. In
addition, we would pay Mr. McHale accrued vacation pay and all other amounts to
which he is entitled under any compensation plan. All severance payments and
all insurance benefits would be discontinued if, following the Company's
termination of his employment for "cause" or "disability" or Mr. McHale's
termination of his employment other than for "good reason", Mr. McHale engages
in competition with the Company or engages in conduct which is injurious to the
Company.
Mr. McHale resigned from TransPro effective December 31, 2000. In lieu of
any payments due to Mr. McHale pursuant to his employment agreement, we agreed
to make certain payments and provided other consideration to Mr. McHale as
described below. See "-- Severance Payments."
Severance Agreements
Messrs. Hooper, Della Ventura, O'Connor, Coyne and Jackson entered into
severance agreements with the Company. Pursuant to their respective severance
agreements, if either Mr. Hooper, Mr. Della Ventura, Mr. O'Connor, Mr. Coyne or
Mr. Jackson lost his current position (except for termination for "cause" as
defined in each severance agreement), or if during the term thereof should
there be a material change in ownership, or the sale of a portion of the
business, which results in his not having a position similar to his current
position including similar pay and benefits then his base salary will continue
to be paid until he either secures other full-time employment, or for one year,
whichever occurs first.
In addition to their severance agreements, Messrs. Hooper and Della
Ventura each entered into a stay pay agreement with the Company. Each agreement
provides for a cash bonus in the amount of sixteen months base salary, payable
one-half upon a closing of the sale of the division of which he is President
and one-half if he is still employed on the six-month anniversary of the
closing or at the time he has been terminated (except for termination for
"cause" as defined in each stay pay agreement) by the purchaser of the
respective division prior to the end of the six month period. The stay pay
agreements also provided for a bonus payment in the event their respective
divisions were sold for more than certain threshold sale prices. Mr. Della
Ventura's stay pay agreement was terminated in 2000.
Severance Payments
We entered into a Separation and Release Agreement with Mr. McHale
pursuant to which Mr. McHale resigned from TransPro effective December 31,
2000. As part of this agreement TransPro and Mr. McHale generally released one
another from all claims and we agreed to pay Mr. McHale in equal monthly
installments an aggregate amount of $386,250 and also agreed to provide McHale
with insurance benefits equivalent to those which he was receiving while
employed with TransPro and the use of a company automobile for one year. We
also agreed to pay Mr. McHale his legal fees and expenses in connection with
the preparation of the Separation and Release Agreement together with $15,800,
representing accrued vacation pay and additional consideration for his release.
In May 2000 we sold our Crown Division to Leggett & Platt, Incorporated.
In connection with the sale, we made payments to Mr. Hooper in accordance with
his stay pay agreement. Mr. Hooper complied
11
with the terms of the agreement by remaining with TransPro through the date of
the sale and remaining with Leggett & Platt for six months following the sale.
We therefore paid Mr. Hooper $233,334, representing sixteen months base salary
and $138,542 representing a bonus based upon the sale price of the Crown
Division. We also agreed to accelerate the vesting of all of Mr. Hooper's
TransPro stock options although no options were exercised by Mr. Hooper prior
to their expiration in February 2001.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our Compensation Committee currently consists of three non-employee
directors -- Messrs. Lederer, Banducci and Ms. Oster. The Board of Directors
unanimously determined not to accept the automatic option grant due in May
2000. 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 our
executive officers and directors, and persons who beneficially own more than
ten percent of our 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 us with copies of all Section 16(a) forms
they file.
Based upon a review of the copies of these forms furnished to us and
written representations from our executive officers and directors, we believe
that during fiscal 2000 all Section 16(a) filing requirements applicable to our
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
TransPro common stock since January 1, 1996, 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.
12
TRANSPRO, INC.
COMPARISON OF CUMULATIVE TOTAL RETURN 1/96-12/00
VS. NYSE MARKET VALUE INDEX
AND SIC -- MOTOR VEHICLE PARTS AND ACCESSORIES INDEX
[GRAPHIC OMITTED]
Assumes $100 invested January 1, 1996 in TransPro common stock, NYSE
Market Value Index and SIC -- Motor Vehicle Parts and Accessories Index;
assumes dividend reinvestment.
1/96 12/96 12/97 12/98 12/99 12/00
---- ----- ----- ----- ----- -----
TRANSPRO . ....................... $100 $ 88.15 $ 88.85 $ 49.71 $ 67.97 $ 27.59
NYSE MARKET VALUE INDEX .......... $100 $120.46 $158.48 $188.58 $206.49 $211.42
SIC INDEX ........................ $100 $123.38 $159.39 $158.84 $128.54 $ 97.54
13
STOCK OWNERSHIP
PRINCIPAL STOCKHOLDERS
The following tables set forth information as of March 5, 2001 with
respect to the only persons known to us to be the beneficial owners (for
purposes of the rules of the SEC) of more than 5% of the outstanding shares of
our common stock as of that date.
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNERS OWNERSHIP OF CLASS
----------------- ----------- --------
Gabelli Funds, LLC ............................. 1,072,120(a) 16.3%
GAMCO Investors, Inc.
Gabelli Performance Partnership L.P.
Gemini Capital Management Limited
Gabelli Advisers, Inc.
One Corporate Center
Rye, New York 10580
State of Wisconsin Investment Board ............ 710,100(b) 10.8%
P.O. Box 7842
Madison, Wisconsin 53707
Fidelity Management & Research Company ......... 660,925(c) 10.0%
FMR Corp.
Edward C. Johnson 3d
Abigail P. Johnson
82 Devonshire Street
Boston, Massachusetts 02109
Ironwood Capital Management, LLC ............... 458,600(d) 7.0%
Warren J. Isabelle
Richard L. Droster
Donald Collins
21 Custom House Street
Boston, MA 02109
Franklin Resources, Inc. ....................... 334,500(e) 5.1%
Franklin Advisory Services, LLC
Charles B. Johnson
Rupert H. Johnson, Jr.
One Parker Plaza, 16th Floor
Fort Lee, New Jersey 07024
----------
(a) This figure is based on information set forth in a Schedule 13D Amendment
No. 13 filed with the SEC on October 18, 2000. GAMCO Investors, Inc.
("GAMCO") holds sole voting and dispositive power over 634,620 shares of
Common Stock. Gabelli Funds, LLC holds sole voting and dispositive power
over an aggregate of 402,200 shares of Common Stock. Gabelli Performance
Partnership L.P. ("GPP") holds sole voting and dispositive power over
10,000 shares of Common Stock, and Gemini Capital Management Ltd. holds
sole voting and dispositive power over 5,200 shares of Common Stock,
respectively. Gabelli Advisers, Inc. holds sole voting and dispositive
power over 20,100 shares of Common Stock. Mario J. Gabelli is the majority
stockholder and Chairman of the Board of Directors and Chief Executive
Officer of Gabelli Asset Management Inc., which is the sole parent of GAMCO
and Gabelli Funds, LLC. Mr. Gabelli is also a portfolio manager of GPP.
14
(b) This figure is based upon information set forth in a Schedule 13G Amendment
No. 6 filed with the SEC on February 9, 2001. The State of Wisconsin
Investment Board has sole voting and dispositive power over all of the
indicated shares.
(c) This figure is based on information set forth in a Schedule 13G Amendment
No. 4 filed with the SEC on June 9, 1999. FMR Corp. ("FMR") and Edward C.
Johnson 3d have sole dispositive power over all of the indicated shares but
do not hold voting power over the shares. Fidelity Management & Research
Company, a wholly-owned subsidiary of FMR, holds sole voting power over the
indicated shares under written guidelines established by its Board of
Trustees.
(d) This figure is based on information set forth in a Schedule 13G filed with
the SEC on February 12, 2001. Each of the listed parties holds shared
voting power over 245,200 shares and shared dispositive power over all of
the indicated shares.
(e) This figure is based on information set forth in a Schedule 13G Amendment
No. 2 filed with the SEC on February 9, 2001. Franklin Advisory Services,
LLC ("FAS") holds sole voting and dispositive power over all of the
indicated shares. Franklin Resources, Inc. ("FRI") is the parent company of
FAS and Charles B. Johnson and Rupert H. Johnson, Jr. each own in excess of
10% of the common stock of FRI.
DIRECTORS AND OFFICERS
The following table sets forth information as of March 5, 2001, with
respect to shares of our common stock beneficially owned (for purposes of the
rules of the SEC) by each director and each executive officer named in the
Summary Compensation Table above and by all directors and current executive
officers as a group, except that the information with respect to shares held by
the trustee under TransPro's 401(k) Savings Plan is as of December 31, 2000
(the most recent practicable date for such information).
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------------ ----------- --------
Barry R. Banducci ................................................... 116,600(a) 1.8%
Charles E. Johnson .................................................. 0 --
William J. Abraham, Jr. ............................................. 50,750(b)(c) *
Philip Wm. Colburn .................................................. 34,938(b) *
Paul R. Lederer ..................................................... 12,500(b)(d) *
Sharon M. Oster ..................................................... 15,561(b) *
F. Alan Smith ....................................................... 9,500(b) *
Timothy E. Coyne .................................................... 34,289(e) *
John F. Della Ventura ............................................... 23,454(f) *
Michael T. Hooper ................................................... 873 *
Jeffrey L. Jackson .................................................. 47,724(g) *
Henry P. McHale ..................................................... 181,930(h) 2.7%
Kevin O' Connor ..................................................... 32,826(i) *
All directors and Executive officers as a Group (11 persons) ........ 378,142(j) 5.6%
----------
* Less than 1%
(a) Includes 19,600 shares issuable upon exercise of options exercisable within
60 days. Also includes 53,000 shares held by The Banducci Family LLC.
(b) Includes 9,500 shares issuable upon exercise of options exercisable within
60 days.
(c) Includes 10,000 shares held in Mr. Abraham's Keogh account.
(d) Includes 3,000 shares held by the Paul R. Lederer Revocable Trust.
(e) Includes 1,200 restricted shares of common stock awarded under the 1995
Stock Plan, 1,989 shares held by the trustee under the TransPro, Inc.
401(k) Savings Plan and 30,400 shares issuable upon exercise of options
exercisable within 60 days.
(f) Includes 2,200 restricted shares of common stock awarded under the 1995
Stock Plan, 3,204 shares held by the trustee under the TransPro, Inc.
401(k) Savings Plan and 16,050 shares issuable upon exercise of options
exercisable within 60 days.
15
(g) Includes 1,500 restricted shares of common stock awarded under the 1995
Stock Plan, 20,198 shares held by the trustee under the TransPro, Inc.
401(k) Savings Plan and 24,300 shares issuable upon exercise of options
exercisable within 60 days.
(h) Consists of 18,905 shares held by the trustee under the TransPro, Inc.
401(k) Savings Plan and 163,025 shares issuable upon exercise of options
exercisable within 60 days. Mr. McHale's options expire on March 31, 2001.
(i) Includes 6,826 shares held by the trustee under the TransPro, Inc. 401(k)
Savings Plan and 11,000 shares issuable upon exercise of options
exercisable within 60 days.
(j) Consists of 192,175 shares owned by or on behalf of directors and executive
officers; 32,217 shares held on behalf of certain executive officers by the
trustee under the TransPro, Inc. 401(k) Savings Plan; 4,900 restricted
shares of common stock awarded under the TransPro 1995 Stock Plan and
148,850 shares issuable upon exercise of options exercisable within 60
days.
PROPOSAL NO. 2 -- RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Our Board of Directors has selected PricewaterhouseCoopers LLP as our
independent auditors for the year ending December 31, 2001, and has directed
that management submit the selection of independent auditors for ratification
by stockholders at the annual meeting. PricewaterhouseCoopers LLP and its
predecessor Coopers & Lybrand L.L.P. has audited our financial statements since
we were spun-off from Allen Telecom Inc. (formerly The Allen Group Inc.) in
1995. A representative of PricewaterhouseCoopers LLP is expected to be present
at the annual meeting and will have an opportunity to make a statement if he or
she desires and will be available to respond to appropriate questions.
Stockholder ratification of the selection of PricewaterhouseCoopers LLP as
our independent auditors is not required by our Bylaws or otherwise. However,
the Board is submitting the selection of PricewaterhouseCoopers LLP 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 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 TransPro 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 TRANSPRO AND ITS
STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL OF THIS PROPOSAL.
16
AUDITOR MATTERS
REPORT OF THE AUDIT COMMITTEE
The Audit Committee reviews TransPro's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process. TransPro's independent
auditors are responsible for expressing an opinion on the conformity of our
audited financial statements to generally accepted accounting principles.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the audited financial statements for
the fiscal year ended December 31, 2000. The Audit Committee has discussed with
the independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees). In addition,
the Audit Committee has received from the independent auditors the written
disclosures required by Independence Standards Board No. 1 (Independence
Discussions with Audit Committees) and discussed with them their independence
from TransPro and its management. The Audit Committee has also considered
whether the independent auditors provision of information technology services
and other non-audit services to TransPro is compatible with the auditor's
independence.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved,
that the audited financial statements for the fiscal year ended December 31,
2000 be included for filing in TransPro's annual report on SEC Form 10-K for
the year ended December 31, 2000.
Audit Committee of the Board of
Directors
- F. ALAN SMITH, CHAIRMAN
- WILLIAM J. ABRAHAM
- PHILIP WM. COLBURN
AUDIT FEES
The aggregate fees billed to TransPro by our auditors
PricewaterhouseCoopers LLP for professional services rendered in connection
with the audit of our annual financial statements for the 2000 fiscal year and
the reviews of the interim financial statements included in our quarterly
reports on Form 10-Q were approximately $530,000.
ALL OTHER FEES
The aggregate fees billed to TransPro for professional services rendered
in 2000 by our auditors PricewaterhouseCoopers LLP, other than for services
specifically described above, were approximately $100,000.
CERTAIN TRANSACTIONS
We have from time to time retained the law firm of Foley & Lardner to
perform legal services on our behalf. Payments made by us to Foley & Lardner in
2000 were approximately $387,416. William J. Abraham, one of our directors, is
a partner with Foley & Lardner.
17
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the 2002
annual meeting of stockholders must be received by us no later than December 1,
2001 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.
Our annual report, including financial statements, for the year 2000 is
enclosed with this proxy mailing but is not a part of the proxy soliciting
material.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend
the annual meeting, please sign the proxy and return it in the enclosed
envelope.
By Order of the Board of Directors
TIMOTHY E. COYNE
Secretary
Dated: March 29, 2001
18
EXHIBIT A
TRANSPRO, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 2, 2001
Barry R. Banducci and Timothy E. Coyne, 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 5,
2001, at the Annual Meeting of Stockholders to be held at 11:00 a.m. on
Wednesday, May 2, 2001, at The St. Regis Hotel, 2 East 55th Street, New York,
New York and at any adjournment thereof. Any and all proxies heretofore given
are hereby revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED
BY THE UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR
PROPOSALS NO. 1 AND 2.
1. Election of Directors - Nominees:
Barry R. Banducci
William J. Abraham, Jr.
Philip Wm. Colburn
Charles E. Johnson
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 PricewaterhouseCoopers LLP as
the Company's Independent Auditors:
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
Discretionary authority is hereby granted with respect to such
other matters as may properly come before the meeting.
[ ] Mark here for address change and note at left.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND THE PROXY STATEMENT FURNISHED THEREWITH.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
IMPORTANT: PLEASE SIGN EXACTLY AS NAME APPEARS AT LEFT. EACH JOINT OWNER
SHOULD SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD GIVE
FULL TITLE AS SUCH. IF SIGNER IS A CORPORATION, PLEASE GIVE FULL
CORPORATE NAME BY DULY AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE
SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
Signature:_________________________ Date:_________________________
Signature:_________________________ Date:_________________________
-2-
EXHIBIT B
TRANSPRO, INC.
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
I. PURPOSE
The function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibility. While the
Audit Committee has the duties and responsibilities set forth in
this charter, the Audit Committee does not have the duty or
responsibility to plan or conduct audits, to determine if the
Corporation's financial statements are complete and accurate and in
accordance with generally accepted accounting principles or to
assure compliance with laws and regulations to which the Corporation
may be subject.
II. COMPOSITION
1. The Audit Committee shall be comprised of three or more
directors as determined by the Board of Directors.
2. The members of the Audit Committee shall be elected by the
Board of Directors annually. Unless a Chairman is elected by
the full Board, the members of the Committee may designate a
Chairman by majority vote of the full Committee membership.
3. Each member of the Audit Committee shall be an independent
director, and free from any relationship that, in the business
judgment of the Board, would interfere with the exercise of his
or her independent judgment as a member of the Committee.
4. Each member of the Audit Committee shall be financially
literate, in the business judgment of the Board of Directors.
5. At least one member of the Audit Committee shall possess
accounting or related financial management expertise, in the
business judgment of the Board of Directors.
III. MEETINGS
The Committee shall meet at least four times annually, at least two
of which will be in person, or more frequently as circumstances
dictate.
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IV. RESPONSIBILITITIES AND DUTIES
1. Review and update the Charter annually or when conditions
dictate, and submit it to the Board of Directors for approval.
2. Review the annual audited financial statements with management
and the independent accountants.
3. Review and discuss with management and the independent
accountants the adequacy of the Corporation's system of
internal controls that could have a significant effect on the
financial statements.
4. Review with management and the independent accountants
significant financial reporting issues and judgments made in
the preparation of the financial statements.
5. Review and discuss the quarterly financial results with
management and the independent accountants.
6. Review with management the Corporation's major risk exposures
and the steps management has taken to monitor and control such
exposures.
7. Review the scope of internal audit activity, significant
issues identified and management's responses to those issues.
8. Review major changes to the Corporation's auditing and
accounting principles and practices as suggested by management
or the independent accountants.
9. Recommend to the Board of Directors the selection of the
independent accountants and approve the fees and other
compensation to be paid to the independent accountants.
10. Discuss with the independent accountants the matters required
to be communicated to Audit Committees pursuant to Statements
of Auditing Standards issued by the Auditing Standards Board
of the American Institute of Certified Public Accountants.
11. Review and discuss with the independent accountants all
significant relationships the independent accountants have
with the Corporation to determine the accountants'
independence and recommend that the Board of Directors take
appropriate action to assure the independence of the
independent accountants when circumstances warrant.
12. Evaluate the performance of the independent accountants and
recommend that the Board of Directors discharge the
independent accountants when circumstances warrant.
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13. Following completion of the annual audit, review with each of
management and the independent accountants any significant
difficulties encountered during the course of the audit,
including any restrictions on the scope of work, access to
required information, or changes to the planned scope of the
audit.
14. Prepare the report required by the rules of the Securities and
Exchange Commission for inclusion in the Corporation's annual
proxy statement.
15. Review management's monitoring of the Corporation's compliance
with the Corporation's Business Conduct policy.
16. Review with the Corporation's counsel any legal matter that
could have a material impact on the organization's financial
statements.
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