Modine Manufacturing Company
Shareholder Annual Meeting in a DEF 14A on 06/21/2022   Download
SEC Document
SEC Filing


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


 
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)


 
Filed by the Registrant  ☒
 
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)) 

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

Modine Manufacturing Company
(Name of Registrant as Specified In Its Charter)
 
Name of Person(s) Filing Proxy Statement if other than the Registrant)
 
Payment of Filing Fee (Check all boxes that apply):

No fee required

Fee paid previously with preliminary materials

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11



1500 DeKoven Avenue
Racine, Wisconsin  53403-2552
 
Notice of Annual Meeting of Shareholders
 
To the Shareholders of Modine Manufacturing Company:
 
Notice is hereby given that the Annual Meeting of Shareholders of Modine Manufacturing Company will be held in virtual format at the following date and time:
 
Date:
Thursday, July 21, 2022
Time:
8:00 a.m. CST

You may access the Annual Meeting by visiting https://www.virtualshareholdermeeting.com/MOD2022 where you will be able to attend and participate online, vote your shares electronically, and submit questions prior to and during the meeting.  The Annual Meeting will be conducted in virtual format only – there will be no physical location for the Annual Meeting.
 
The Record Date for the Annual Meeting is May 27, 2022.
 
Matters to vote on:

1.
Election of the Company-nominated slate of three directors for terms expiring in 2025;

2.
Approval of amendments to the Modine Manufacturing Company 2020 Incentive Compensation Plan;

3.
Advisory approval of the Company’s named executive officer compensation;

4.
Ratification of the appointment of the Company’s independent registered public accounting firm; and

5.
Consideration of any other matters properly brought before the shareholders at the meeting.

 
By order of the Board of Directors,
 
 
 
Sylvia A. Stein
  Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer

June 21, 2022
 
Your vote at the Annual Meeting is important to us.  You may vote your shares of common stock by Internet or telephone using the instructions in this proxy statement and on the enclosed proxy card.  If you prefer, you may sign and date the enclosed proxy card and return it in the postage-paid envelope.  This proxy statement is solicited on behalf of the Board of Directors for use at the 2022 Annual Meeting of Shareholders.  This proxy statement and accompanying proxy card are first being sent to shareholders on or about June 21, 2022.
 
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on July 21, 2022 – the Notice and Proxy Statement and 2022 Annual Report on Form 10-K are available at www.proxyvote.com and www.modine.com.
 

TABLE OF CONTENTS
 
1
   
9
   
14
   
15
   
17
   
19
   
34
   
TABLES
 
   
35
   
36
   
38
   
40
   
41
   
42
   
43
   
45
   
48
   
48
   
54
   
55
   
56
   
59
   
59
   
60
   
A-1

ITEM 1 – ELECTION OF DIRECTORS
 
The Board of Directors (the “Board of Directors” or the “Board”) of Modine Manufacturing Company (the “Company” or “Modine”) nominated three current members of the Board, Neil D. Brinker, Katherine C. Harper, and David J. Wilson, to stand for election at the 2022 Annual Meeting of Shareholders (the “Annual Meeting”). A third-party search firm identified Mr. Wilson for consideration by the Corporate Governance and Nominating Committee, and Mr. Wilson was appointed to the Board on May 9, 2022. If elected, each director would serve until the 2025 Annual Meeting of Shareholders and the election of his or her successor.  The persons appointed as proxies will vote “FOR” the election of these nominees, unless instructions to the contrary are given to them.  The nominees have indicated that they are able and willing to serve as directors.  While it is not anticipated that any of the nominees will be unable to take office, if that happens, the proxies will vote “FOR” the substitute nominee(s) designated by the Board of Directors.
 
Charles P. Cooley is retiring and will not be standing for reelection at the Annual Meeting.  The Company is grateful to Mr. Cooley for his dedicated service to the Company and its shareholders.
 
The Company’s Amended and Restated Articles of Incorporation provide that the Board of Directors shall be divided into three classes, as nearly equal in number as possible, serving staggered three-year terms.  The Board of Directors currently consists of ten members.  Following the Annual Meeting, each class will consist of three directors.
 
In accordance with the Company’s Bylaws, a director shall hold office until (i) the end of such director’s term and until the director’s successor shall have been elected, (ii) there is a decrease in the allowable number of directors, or (iii) his or her death, resignation or removal.  Vacancies may be filled by the shareholders or the remaining directors. See Selection of Nominees to the Board of Directors below. The Company’s Bylaws require that each director retire at the close of the term in which he or she attains the age of 72 years, except that the provision will not apply to any director who has been exempted from it by a resolution passed by a two-thirds vote of the Board of Directors.
 
Qualifications of Modine’s Board of Directors
 
Qualifications of Modine’s Board of Directors as a Governing Entity
 
Modine’s Board consists of proven leaders from various industries, disciplines and end markets who have the knowledge and experience necessary for a deep understanding of Modine, its products and its businesses.  That knowledge and experience has been gained or enhanced in a wide variety of ways, including through years of service on Modine’s Board, employment with industry leaders that have business models and strategies similar to the Company’s or product markets important to the Company, and leadership positions in technologically innovative institutions.  The Board benefits from the interplay among a group of directors who have diverse and distinguished backgrounds, which are described in further detail in this section.  Modine’s directors are dedicated individuals with high integrity and discipline who have a strong desire to use their skills to govern Modine in a responsible manner.
 
Individual Qualifications of the Members of Modine’s Board of Directors
 
The Board of Directors’ Corporate Governance and Nominating Committee (the “Governance Committee”), a committee consisting of five independent directors of the Company, has determined that the Board needs certain specialized expertise as well as broad leadership experience to direct the Company to achieve its strategic goals.  The Governance Committee considers the following qualities and experiences to be necessary for the proper functioning of a Board of a responsible, global, diversified industrial company:
 
 
Business operations leadership;

 
Relevant industry experience;

 
Global business experience;

 
Financial expertise;

 
Technological expertise;

 
Corporate governance expertise;

 
Financial markets experience; and

 
Strategic planning and execution expertise, including mergers and acquisitions experience.

In addition, from time to time, the Governance Committee considers additional attributes that are more specific to the Company’s strategic and business emphasis at any given point.
 
A description of the qualities provided by each Board member is included below with the description of the individual’s experience and public company directorships, all as of May 27, 2022.
 
Board Skills Matrix
 
The chart below summarizes the specific qualifications, attributes, and skills for each continuing director.  An “X” in the “Skills” section of the chart below indicates that the item is a specific reason that the director was nominated to serve on the Board.  The lack of an “X” does not mean that the director does not possess that qualification or skill.  Rather, an “X” indicates a specific area of focus or expertise of a director on which the Board currently relies.
 
 
Mr.
Ashleman
Mr.
Brinker 
Dr.
Garimella
Ms.
Harper
Mr.
Moore
Mr.
Patterson
Ms.
Williams
Mr.
Wilson
Ms. Yan
Skills
                 
Business Operations Leadership
X
X
   
X
X
 
X
X
Relevant Industry Experience
X
X
   
X
X
 
X
X
Global Business Experience
X
X
 
X
X
X
X
X
X
Financial Expertise
X
   
X
   
X
X
 
Technological Expertise
   
X
 
X
   
X
X
Corporate Governance Expertise
X
   
X
 
X
X
 
X
Financial Markets Experience
     
X
   
X
   
Strategic Planning and Execution Expertise
X
X
X
X
X
X
X
X
X
Demographics
                 
Race/Ethnicity
                 
African American
       
X
       
Asian/Pacific Islander
   
X
         
X
White/Caucasian
X
X
 
X
 
X
X
X
 
Gender
                 
Male
X
X
X
 
X
X
 
X
 
Female
     
X
   
X
 
X

2022 Nominees for Director
 
Based upon the recommendation of the Governance Committee, the Board approved the nominations of Mr. Neil D. Brinker, Ms. Katherine C. Harper and Mr. David J. Wilson for election as directors.  Ms. Harper and Mr. Wilson are considered independent under the New York Stock Exchange (“NYSE”) corporate governance rules.  Mr. Brinker is not considered independent due to his position as President and CEO of the Company.  Mr. Brinker, Ms. Harper and Mr. Wilson were appointed by the Board following an independent search process to fill vacant Board positions.  As a result, they have not been previously elected to the Board by the Company’s shareholders.
 
The Board of Directors recommends a vote “FOR” Mr. Neil D. Brinker, Ms. Katherine C. Harper, and Mr. David J. Wilson.
 
Vote Required for Approval
 
Directors in an uncontested election are elected by a majority of the votes cast by holders of shares of the Company’s common stock entitled to vote in the election at a shareholder meeting at which a quorum is present.  Because abstentions and broker non-votes are not considered votes cast, they will not have an effect on the vote.
 
Nominees to be Elected for Terms Expiring in 2025:

Neil D. Brinker
Age 46
Director since 2020

Current Position:
 
Experience:
 
 
 
 
 
 
 
 
President and Chief Executive Officer of Modine since 2020.
 
Prior to joining Modine, Mr. Brinker was President and Chief Operating Officer of Advanced Energy Industries, Inc. (“AE”) since May of 2020, and joined AE in June of 2018 as its Executive Vice President & Chief Operating Officer.  Before joining AE, Mr. Brinker served as a Group President at IDEX Corporation from July 2015 to June 2018 after holding leadership roles at IDEX from April of 2012 to July 2015.  Mr. Brinker also held numerous management roles at  Danaher Corporation from 2007 to 2012, as well as various operations roles at General Motors from 2001 to 2007.
 
Specific Attributes and Skills for Mr. Brinker:
 
Expertise
Discussion of Skills and Attributes
   
Business Operations
Leadership
Mr. Brinker serves as President and Chief Executive Officer of the Company. He has obtained substantial business operations leadership experience through his roles at AE, IDEX and Danaher.
   
Relevant Industry
Experience
As an Executive Officer of AE, and a business leader at both IDEX and Danaher, Mr. Brinker has significant experience in leading and transforming diversified industrial companies.
   
Global Business
Experience
At AE, IDEX and Danaher, and now as President and Chief Executive Officer of Modine, Mr. Brinker’s responsibilities have included global oversight of P&L, operations, M&A, human capital and strategy.
   
Strategic Planning and
Execution Expertise
In addition to his direct responsibility for M&A activity at AE, IDEX and Danaher, Mr. Brinker has extensive experience in both setting and overseeing the execution of strategy and growth for diversified industrial companies.
     
Katherine C. Harper
Age 59
Director since 2022

Current Position:
 
Experience:
Chief Financial Officer of BDP International
 
Ms. Harper is Chief Financial Officer of BDP International, a private global logistics and transportation solutions company.  Prior to BDP International, Ms. Harper served as Chief Financial Officer of AgroFresh Solutions, a global public agricultural solutions provider, where she oversaw Finance, Strategy, Business Development and Investor Relations.  She was also previously SVP and Chief Financial Officer of Tronox, a global public chemicals and mining company, and held various senior roles with Rio Tinto Diamonds and Minerals Group, one of the world’s largest metals and mining corporations.
   
Public Company Directorships:
Sasol Limited (South Africa)


 
Specific Attributes and Skills for Ms. Harper:
 
Expertise
Discussion of Skills and Attributes
   
Global Business
Experience
Ms. Harper has had a distinguished financial career across a number of global industries including chemicals, mining, industrial manufacturing, distribution and security services.
   
Financial Expertise
Ms. Harper is a financial expert with extensive experience in compliance, assurance and enterprise risk management.  In addition, Ms. Harper also serves as a member of the audit committee of Sasol.
   
Corporate Governance
Expertise
 
In her role as Chief Financial Officer of BDP International, Ms. Harper gained significant experience implementing effective corporate governance practices.   In addition, Ms. Harper currently serves on the board and the audit committee of Sasol Limited.
   
Financial Markets
Experience
As Chief Financial Officer of BDP International, Ms. Harper has significant experience in the financial markets in which the Company competes for financing.
   
Strategic Planning and
Execution Expertise
Ms. Harper has been heavily engaged in strategic planning activities throughout her career, particularly through her role as SVP and Chief Financial Officer of Tronox and roles with Rio Tinto Diamonds and Minerals Group.

David J. Wilson
Age 53
Director since 2022

Current Position:
 
Experience:
President and Chief Executive Officer, Columbus McKinnon
 
Mr. Wilson is President and Chief Executive Officer of Columbus McKinnon Corporation, one of North America’s largest producers of equipment for lifting, positioning, or securing all kinds of large materials.  Prior to joining
Columbus McKinnon, Mr. Wilson led the significant transformation of
Flowserve Corporation’s Pumps Division while serving as its President.  Prior to Flowserve, Mr. Wilson served as the President of SPX FLOW’s Industrial Segment and before that, SPX Corporation’s Industrial Segment.
   
Public Company Directorships:
Columbus McKinnon Corporation


 
Specific Attributes and Skills for Mr. Wilson:
 
Expertise
Discussion of Skills and Attributes
   
Business Operations
Leadership
 
Mr. Wilson serves as President and Chief Executive Officer of Columbus McKinnon Corporation.  Mr. Wilson also gained significant business operations leadership experience in his roles as President of Flowserve Corporation, President of SPX Flow’s Industrial Segment and President of SPX Corporation’s Industrial Segment.
   
Relevant Industry
Experience
 
Mr. Wilson has an extensive understanding of highly engineered equipment and technologies, including engineered flow components such as heat pumps and heat exchangers.  Mr. Wilson also has experience in the heating, ventilation and air conditioning markets as well as the power transmission and generation markets.
   
Global Business
Experience
Mr. Wilson’s experience at SPX included the leadership of multiple global operating businesses along with tenure as an expatriate living in China for six years where he developed extensive global P&L management experience.
   
Financial Expertise
 
Mr. Wilson has developed substantial financial expertise through his roles at Columbus McKinnon Corporation, Flowserve Corporation and SPX Corporation.
   
Technological
Experience
Through his engineering background and his roles at Flowserve Corporation and SPX Corporation, Mr. Wilson has acquired significant experience in application-based technology.
   
Strategic Planning and
Execution Expertise
Mr. Wilson has been heavily engaged in strategic planning activities throughout his career, particularly through his numerous roles with SPX where he led several successful corporate development initiatives.

Directors Continuing in Service for Terms Expiring in 2024:

Dr. Suresh V.
Garimella
Age 58
Director since 2011

Current Position:
 
Experience:
President, University of Vermont
 
Dr. Garimella was appointed President of the University of Vermont (“UVM”) in 2019. Under his leadership, UVM has achieved record enrollment figures and grown its research funding by nearly 50%. Since 2018, Dr. Garimella has been a member of the National Science Board (“NSB”), which oversees the National Science Foundation and serves as an independent body of advisers to both the President of the United States and Congress on science and technology policy. He chairs the NSB’s Committee on Strategy. He also serves on the Sandia National Laboratories’ Research Advisory Board, and is a Fellow of the National Academy of Inventors.
 
From 2014 to 2019, Dr. Garimella was Executive Vice President for Research and Partnerships at Purdue University, where he was Goodson Distinguished Professor of Mechanical Engineering and Founding Director of the Cooling Technologies Research Center. Dr. Garimella also served as a Jefferson Science Fellow at the U.S. Department of State and as a Senior Fellow for Energy and Climate Partnership of the Americas for five years.
 
Dr. Garimella received his Bachelor of Technology from Indian Institute of Technology, Madras, India, his Master of Science from The Ohio State University, and his Ph.D. from the University of California at Berkeley, all in Mechanical Engineering.

Specific Attributes and Skills for Dr. Garimella:

Expertise
Discussion of Skills and Attributes
   
Technological Expertise
Dr. Garimella is a renowned expert in thermal management and heat transfer technology, which is central to the success of the Company.
   
Strategic Planning and
Execution Expertise
In his current position, Dr. Garimella is responsible for setting the strategy for the UVM to achieve its mission and vision, all in collaboration with the University’s Board of Trustees.  Dr. Garimella has promoted the UVM’s longstanding commitment to sustainability, a commitment that was underscored in July 2020 when the University’s Board of Trustees voted unanimously to divest the University’s endowment of fossil fuel investments. Previously, he was deeply engaged with the development and execution of Purdue University’s strategic plans and, in particular, the plans relating to the University’s strategic research initiatives and partnerships, both within and outside the United States.  In addition, Dr. Garimella is Chair of the NSBs Committee on Strategy, which is responsible for setting short- and long-term strategy and objectives for the National Science Foundation.
   
Christopher W.
Patterson
Age 68
Director since 2010

Current Position:
 
Experience:
 
Retired.
 
Mr. Patterson retired as President and Chief Executive Officer of Daimler Trucks North America LLC, a leading producer of heavy-duty and medium-duty trucks and specialized commercial vehicles in North America.  Mr. Patterson served in this capacity from 2005 until his retirement in 2009.  Prior to this, he held senior positions, including as Senior Vice President, Service & Parts, with Freightliner LLC (predecessor to Daimler Trucks North America), and other international, commercial truck producers.
   
Public Company Directorships:
Finning International Inc., Vancouver, B.C. (Canada)


   
   
   
 
Specific Attributes and Skills for Mr. Patterson:
 
Expertise
Discussion of Skills and Attributes
   
Business Operations
Leadership
Mr. Patterson gained his business operations leadership experience as President and Chief Executive Officer of Daimler Trucks North America LLC and brings extensive strategic sales and marketing experience to the Company’s Board.
   
Relevant Industry
Experience
Mr. Patterson has a significant understanding of commercial truck markets and the operations of global commercial vehicle OEMs.
   
Global Business
Experience
Mr. Patterson’s extensive executive and leadership experience, as described above, gives him valuable insight into the complexities, challenges and issues facing global manufacturing businesses.
   
Corporate Governance
Expertise
 
Mr. Patterson has significant corporate governance experience from his role as President and Chief Executive Officer of Daimler Trucks North America LLC. In addition, Mr. Patterson serves on the board of another public company and also serves on the boards of several privately-held companies.  In these board roles, Mr. Patterson serves on audit and compensation committees, as well as a safety, environment and social responsibility committee of a publicly traded company. Through these engagements, Mr. Patterson has gained a significant understanding of corporate governance matters.
   
Strategic Planning and
Execution Expertise
Through his many roles at Daimler Trucks North America LLC, and particularly in his position as President and Chief Executive Officer, Mr. Patterson obtained significant experience in establishing and executing on that entity’s short- and long-term strategic plans.

Christine Y. Yan
Age 56
Director since 2014



Current Position:
 
Experience:
Retired.
 
Ms. Yan retired from Stanley Black & Decker, Inc., a diversified global provider of power and hand tools, Engineered Fastening Systems for Automotive and other industries, and Electronic Security and Monitoring Systems in November 2018. Ms. Yan held a number of executive roles with the company, including President of Asia, Stanley Black & Decker, Inc.; President of Storage and Workspace Systems; integration leader of Stanley Engineered Fastening Group; President of the Americas business of Stanley Engineered Fastening; and President of Stanley Engineered Fastening’s Global Automotive business.
   
Public Company Directorships:
Onsemi; Ansell Limited; and Cabot Corporation
   
Specific Attributes and Skills for Ms. Yan:
 
Expertise
Discussion of Skills and Attributes
   
Business Operations Leadership
Ms. Yan gained her business operations experience as the leader of various business units within Stanley Black & Decker, Inc.
   
Relevant Industry Experience
Ms. Yan gained experience in vehicular, electronics and general industrial sectors through her roles as President of Asia of Stanley Black and Decker, President of Americas and President of Global Automotive of Stanley Engineered Fastening.
   
Global Business Experience
Ms. Yan has gained a significant understanding of a variety of industrial markets through her experience as President of Asia, President of Storage and Workplace Systems, and President of Americas for Stanley Black & Decker, Inc.
   
Corporate Governance
Expertise
In addition to her tenure as a director of Modine, Ms. Yan serves on the board of three other public companies.
   
Technological Expertise
Ms. Yan’s engineering background and past and current positions at Stanley Black & Decker, Inc. have provided her with significant exposure to and experience with technologically sophisticated business operations.
   
Strategic Planning and Execution Expertise
Ms. Yan has acquired substantial expertise in strategic planning as the leader of numerous significant business units within Stanley Black & Decker, Inc.

Directors Continuing in Service for Terms Expiring in 2023:

Eric D. Ashleman
Age 55
Director since 2019

 
Current Position:
Experience:

Chief Executive Officer & President, IDEX Corporation.
 
Mr. Ashleman became the Chief Executive Officer of IDEX Corporation in December 2020 after becoming President in February 2020.  Since 2008, Mr. Ashleman has served in a variety of capacities at IDEX, which is a developer, designer and manufacturer of fluidics systems and specialty engineered products.  Prior to becoming the Chief Executive Officer and President of IDEX Corporation, Mr. Ashleman served in the following capacities at IDEX: President of Gast Manufacturing; President, Gast Manufacturing and Global Dispensing; Vice President and Group Executive, Fire, Safety and Diversified Segment; Senior Vice President and Group Executive, Health and Science Technology, and Fire, Safety and Diversified Segments; Senior Vice President and Chief Operating Officer; and President and Chief Operating Officer.  Prior to joining IDEX, Mr. Ashleman served as President of Schutt Sports from 2006 to 2008.
   
Public Company Directorships:
IDEX Corporation
 
Specific Attributes and Skills for Mr. Ashleman:
   
Expertise
Discussion of Skills and Attributes
   
Business Operations
Leadership
Mr. Ashleman has acquired business operations leadership through his many roles at IDEX Corporation, and particularly in his current role as Chief Executive Officer and President, where he is responsible for leading and managing a diversified industrial company.
   
Relevant Industry
Experience
Mr. Ashleman serves as Chief Executive Officer and President of IDEX Corporation, a global, diversified industrial company that manufactures for and sells into numerous markets also served by the Company, including the automotive, energy and industrial sectors.

Expertise
Discussion of Skills and Attributes
Global Business
Experience
Mr. Ashleman has acquired substantial global business experience through his roles with IDEX Corporation, and particularly in his current role as Chief Executive Officer and President, as he leads and manages  a global, diversified industrial company.
   
Financial Expertise
Mr. Ashleman has acquired significant financial expertise through his roles at IDEX Corporation and through his previous role as President of Schutt Sports.
   
Corporate Governance
Expertise
Through his roles at IDEX Corporation, including as a member of its Board of Directors, and through his previous role as President of Schutt Sports, Mr. Ashleman has obtained considerable corporate governance expertise.
   
Strategic Planning and
Execution Expertise
Mr. Ashleman has developed short- and long-term strategic planning and execution expertise through his numerous roles at IDEX Corporation, and through his previous role as President of Schutt Sports.
   
Larry O. Moore
Age 72
Director since 2010

 
Current Position:
 
Experience:
 
Retired.
 
Mr. Moore retired as Senior Vice President, Module Centers & Operations of Pratt & Whitney, a division of United Technologies and a manufacturer of aircraft engines.  Mr. Moore served in this capacity from 2002 until his retirement in 2009.  Immediately prior to joining Pratt & Whitney, Mr. Moore served in various management positions with Cummins and Ford Motor Company.
Specific Attributes and Skills for Mr. Moore:
 
Expertise
Discussion of Skills and Attributes
   
Business Operations
Leadership
Mr. Moore gained his business operations leadership experience, including experience in low-cost country sourcing and operational excellence, at United Technologies where he served as Senior Vice President, Module Centers & Operations of Pratt & Whitney, and at Cummins where he served in various operations management positions.
   
Relevant Industry
Experience
Mr. Moore has a deep understanding of the diesel engine markets for off-highway and commercial truck markets gained over his 23-year career in various positions with Volkswagen of America, Inc., General Motors Corporation and Ford Motor Company, as well as Cummins and Pratt & Whitney.
   
Global Business
Experience
Mr. Moore has extensive experience working with global industrial companies.
   
Technological Expertise
Mr. Moore has acquired significant technological expertise through his roles in multiple technology-driven business enterprises.
   
Strategic Planning and
Execution Expertise
Through his affiliations with Pratt & Whitney, Cummins, Ford Motor Company and other global industrial companies, Mr. Moore has obtained significant experience in a variety of strategic planning and execution strategies.

Marsha C. Williams
Age 71
Director since 1999

Current Position:
 
Experience:
 
 
 
Retired.
 
Ms. Williams retired as Senior Vice President and Chief Financial Officer of Orbitz Worldwide, Inc., an online travel company (July 2007 - December 2010).  Prior to joining Orbitz Worldwide, Inc., Ms. Williams was Executive Vice President and Chief Financial Officer (2002 – February 2007) of Equity Office Properties Trust, a real estate investment trust.  Prior to that time, Ms. Williams was Chief Administrative Officer of Crate and Barrel and served as Vice President and Treasurer of Amoco Corporation; Vice President and Treasurer of Carson Pirie Scott & Company; and Vice President of The First National Bank of Chicago.
   
Public Company Directorships:
Fifth Third Bancorp; Crown Holdings, Inc.; and Davis Funds.
   
 
Ms. Williams was previously a Director for Chicago Bridge & Iron N.V. from 1999-2018, and for McDermott International Inc. from 2018-2020 following its acquisition of Chicago Bridge & Iron N.V.
 
Specific Attributes and Skills for Ms. Williams:
   
Expertise
Discussion of Skills and Attributes
   
Global Business
Experience
Ms. Williams was an executive officer of Orbitz Worldwide, Inc. and is currently a director of several public companies with global operations.  In these roles, Ms. Williams has accumulated extensive knowledge of global finance, capital management, internal controls and human resources.
   
Financial Expertise
As Vice President and Chief Financial Officer of Orbitz Worldwide, Inc., and Executive Vice President and Chief Financial Officer of Equity Office Properties Trust, Ms. Williams gained significant financial acumen relating to complex, global companies.
   
Corporate Governance
Expertise
Ms. Williams serves on the board of several public companies, and was the Lead Director of the Fifth Third Bancorp Board of Directors.
   
Financial Markets
Experience
As the former Vice President and Chief Financial Officer of Orbitz Worldwide, Inc., Executive Vice President and Chief Financial Officer of Equity Office Properties Trust, and former Lead Director of Fifth Third Bancorp, Ms. Williams has significant experience in the financial markets in which the Company competes for financing.
   
Strategic Planning and
Execution Expertise
Ms. Williams has engaged in all facets of strategic planning and execution, particularly through her roles with Orbitz Worldwide, Inc. and Equity Office Properties Trust.

CORPORATE GOVERNANCE
 
The Company’s business is managed under the direction of its Board of Directors, pursuant to its Amended and Restated Articles of Incorporation, its Bylaws and the laws of the State of Wisconsin.  Members of the Board of Directors are kept informed of the Company’s operations through discussions with the CEO and key members of management, by reviewing materials provided to them, and by participating in meetings of the Board of Directors and its committees.
 
The Company reviews and evaluates its corporate governance policies and practices, particularly in light of the rules of the Securities and Exchange Commission (“SEC”) and the NYSE, and believes that its current policies and practices meet these requirements.  The Company’s corporate governance policies, including its Guidelines on Corporate Governance and charters for committees of the Board, are available on its website, www.modine.com, and are also available in print to any shareholder or other interested person upon request.
 
Code of Conduct
 
The Company’s Code of Conduct (the “Code”) summarizes the compliance and ethical standards and expectations the Company has for all of its employees (including the principal executive officer, principal financial officer and principal accounting officer) and directors with respect to their conduct in furtherance of Company business.  It contains procedures for reporting suspected violations of the Code, including procedures for the reporting of questionable accounting or auditing matters or other concerns regarding accounting, internal accounting controls or auditing matters.  The Company has established a Business Ethics Program that includes an Internet and phone Helpline through which employees and others may report concerns regarding such matters in confidence and, if desired, anonymously.  A copy of the Code, as well as further information regarding the Business Ethics Program, is available on the Company’s website, www.modine.com.  These materials are also available in print to any shareholder or other interested person upon request.  If we make any substantive amendment to the Code, we will disclose the nature of such amendment on our website or in a current report on Form 8-K.  In addition, if a waiver of the Code is granted to an executive officer or director, we will disclose the nature of such waiver on our website, in a press release or in a current report on Form 8-K.
 
Director Independence
 
The Company’s Guidelines on Corporate Governance require that a majority of the Board’s members be independent.  The Company also believes it is in its best interest to have the President and CEO of the Company serve as a director.  At a minimum, to qualify as “independent,” a director must meet the independence standards of the NYSE.  The Governance Committee assesses independence on a regular basis, and each director is responsible for bringing any changes in his or her status that may affect his or her independence to the attention of the Governance Committee.  In addition, on an annual basis the directors complete a questionnaire prepared by the Company that is designed to elicit information that the Board uses to assess director independence.  At least annually, the Board reviews the relationships that each director has with the Company.  Only those directors that the Board affirmatively determines have no material relationship with the Company, and who do not have any of the relationships that prevent independence under the standards of the NYSE, are considered to be independent directors.
 
The Board has determined that all of the current directors, other than Mr. Brinker, are independent within the meaning of the listing standards of the NYSE.  The Board concluded that none of these directors has any of the relationships with the Company set forth in the NYSE listing standards or any other business or other relationships with the Company that would preclude a determination of his or her independence.  Mr. Brinker is not independent due to his position as President and CEO of the Company.
 
Certain Relationships and Related Party Transactions
 
The Code requires that all officers, employees and directors of the Company avoid any situation that conflicts with the proper discharge of his or her responsibility to the Company or that impairs his or her ability to exercise independence of judgment with respect to the transactions in which he or she is involved for the Company.  Significant transactions with the Company’s officers, employees or directors, their relatives, or enterprises in which they have material interests, are not permitted unless such transactions are fully disclosed and approved by the Board of Directors or the Audit Committee as being in the best interest of the Company.
 
Modine is a large global organization that engages in thousands of purchases, sales and other transactions annually.  Modine may enter into purchase and sale transactions with other companies, universities and entities in which members of the Board of Directors are employed or are members of the Board of Directors for such entities.  Modine enters into these arrangements in the ordinary course of business and at competitive prices and terms.  The Company anticipates that similar transactions may occur in the fiscal year ending March 31, 2023.
 
At the end of each fiscal year, each director and officer must respond to a questionnaire that requires him or her to identify certain information about his or her immediate family and any transaction or relationship that occurred during the year or any proposed transaction that involves Modine (or any subsidiary or affiliate of Modine) and that individual, his or her immediate family, or any entity with which he, she or such immediate family member is associated.  All responses to the questionnaires are reviewed by the Company’s Legal Department and shared with the President and CEO, as appropriate.  In addition, the Company independently searches its records for potential transactions with known related parties.  Based upon such review, there were no related party transactions with respect to persons who were officers or directors during fiscal 2022.
 
Board Chairperson
 
Marsha C. Williams was appointed Chairperson of the Board in October 2020, having served in the position of Lead Director since July 2013.  As Chairperson, Ms. Williams presides over meetings of the shareholders, the Board of Directors, and executive sessions of the Board of Directors, and carries out such other duties as directed by the Board of Directors and as listed in the Company’s Guidelines on Corporate Governance.  The Company believes this leadership structure is in the best interest of the Company’s shareholders at present because it allows the Company to benefit from the unique leadership ability that Ms. Williams possesses and from her business and corporate governance experience.
 
Risk Oversight
 
The Board of Directors has overall responsibility for risk oversight for the Company.  Management provides the Board with information on a regular basis to keep the members of the Board of Directors apprised of identified risks.  These risks, including financial, organizational, reputational, strategic, and cybersecurity risks, are reviewed and discussed with the Board as part of the business and operating review conducted at each of the Board’s regular meetings.  As described below under Committees of the Board of Directors, the Board of Directors has delegated certain responsibilities to its committees.  The committees have oversight of risks that fall within their areas of responsibility.  The Governance Committee has general oversight responsibility for risks related to the Company’s environmental, social and corporate governance strategy and practices, except to the extent delegated to the Audit and Human Capital and Compensation committees, as discussed below under Environmental, Social and Governance (ESG) Matters. The Audit Committee has primary oversight of the Company’s financial reporting, internal control and compliance risks.  The Human Capital and Compensation Committee evaluates the risks arising from the Company’s compensation policies and programs.  Management is responsible for managing risk and the Company’s enterprise risk management program.
 
Selection of Nominees to the Board of Directors
 
The Governance Committee considers prospective candidates for Board membership who are recommended by its members, as well as those recommended by management, shareholders and professional search firms hired by the Governance Committee.  The Governance Committee may also decide to engage a professional search firm to assist in identifying qualified candidates.  When such a search firm is engaged, the Governance Committee sets its fees and scope of engagement.
 
Once the Governance Committee identifies a prospective nominee, it initially determines whether to conduct a full evaluation of the candidate.  The Governance Committee makes its initial determination based on the information provided to it with the recommendation of the prospective candidate, as well as the Governance Committee’s own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others.
 
The Governance Committee evaluates the prospective nominee, considering factors it deems appropriate, including the current composition of the Board and the evaluations of other prospective nominees.  In assessing candidates, the Board considers the required areas of expertise set forth above in the Board Skills Matrix (business operations leadership; relevant industry experience; global business experience; financial expertise; technological expertise; corporate governance expertise; financial markets experience; and strategic planning, including mergers and acquisitions); additional attributes that are more specific to the Company’s strategic direction and business emphasis at any given point; and such additional factors as the individual’s education, contribution to the diversity of the Board, and other factors frequently encountered by a global business.
 
In choosing a candidate for Board membership, every effort is made to complement and supplement skills within the existing Board and to strengthen any identified areas.  Further criteria include a candidate’s personal and professional ethics, integrity and values, as well as his or her willingness and ability to devote sufficient time to attend meetings and participate effectively on the Board.
 
In connection with this evaluation, the Board determines whether to interview the prospective nominee.  If an interview is warranted, one or more members of the Board of Directors, and others as appropriate, will interview prospective nominees.  After completing the evaluation and interview, the Governance Committee makes a recommendation to the Board regarding the nomination of a candidate, and the Board acts on that recommendation.
 
Shareholder Nominations and Recommendations of Director Candidates
 
The Bylaws of the Company provide that any shareholder who is entitled to vote for the election of directors at a meeting called for such purpose may nominate persons for election to the Board of Directors.  Shareholders who desire to nominate a person or persons for election to the Board or to present business at the next annual meeting must comply with the notice requirements in the Company’s Bylaws, a copy of which is available from the Company’s Secretary.  For consideration at the 2023 Annual Meeting of Shareholders, nominations or the presentation of other business must be received by the Secretary no earlier than March 23, 2023 and no later than April 22, 2023.
 
In addition to satisfying the foregoing requirements under the Company’s Bylaws, to comply with the universal proxy rules (when effective) for the 2023 Annual Meeting of Shareholders, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that complies with Rule 14a-19 under the Exchange Act by May 22, 2023.
 
Shareholders who want to submit a recommendation for a director candidate for the Board may submit the recommendation to the Board using the procedure described below under Shareholder and Other Interested Persons’ Communication with the Board.  The Governance Committee intends to evaluate candidates recommended by shareholders in the same manner that it evaluates other candidates.
 
Shareholder and Other Interested Persons’ Communication with the Board
 
Shareholders and other interested persons wishing to communicate with the Board of Directors or with a Board member (including the Chairperson) should address communications to the Board or to the particular Board member, c/o Secretary, Modine Manufacturing Company, 1500 DeKoven Avenue, Racine, Wisconsin 53403-2552.  In accordance with a process approved by the Board of Directors, the Secretary reviews all such correspondence.  The Secretary forwards to the Board a summary of all such correspondence and copies of all correspondence that, in the opinion of the Secretary, deal with the functions of the Board or committees thereof or that she otherwise determines requires their attention.  Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Company’s Business Ethics Committee and handled in accordance with procedures established by the Audit Committee with respect to such matters.  From time to time, the Board may change the process by which shareholders and other interested persons may communicate with the Board of Directors or its members.  Please refer to the Company’s website, www.modine.com, for any changes to this process.
 
Committees of the Board of Directors
 
Audit Committee
 
The Audit Committee is a standing committee of the Board of Directors, established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  The charter of the Audit Committee is available on the Company’s website, www.modine.com.
 
The Audit Committee is responsible for, among other things, appointing and overseeing the work of the Company’s independent registered public accounting firm for the purpose of preparing and issuing an audit report and performing related work, and for discussing with the independent registered public accounting firm appropriate staffing and compensation.  The Audit Committee also oversees management’s implementation of systems of internal controls; monitors the preparation of quarterly and annual financial reports by management; determines whether the independent registered public accounting firm is independent; and reviews management’s programs to monitor and address matters associated with compliance with the Company’s Code of Conduct.  The functions of the Audit Committee are more fully described below in the Report of the Audit Committee in this proxy statement.
 
The Board of Directors has determined that each member of the Audit Committee is independent as defined in the corporate governance listing standards of the NYSE relating to audit committees.  The Board of Directors has also determined that each Audit Committee member satisfies the financial literacy and experience requirements of the NYSE, and that Mr. Cooley (the Chair of the Committee), Mr. Ashleman, Ms. Harper, and Mr. Wilson qualify as audit committee financial experts within the meaning of the SEC rules.  As a result, it is anticipated that Ms. Harper will be appointed to the role of Audit Committee Chair effective as of Mr. Cooley’s departure.
 
Human Capital and Compensation Committee
 
The Human Capital and Compensation Committee of the Board of Directors (the “HCC Committee”) is composed exclusively of non-employee, independent directors with no business relationship with the Company, other than in their capacity as directors, and there are no interlocking relationships with the Company that are subject to disclosure under the rules of the SEC related to proxy statements.  The charter of the HCC Committee is available on the Company’s website, www.modine.com.
 
The HCC Committee oversees and provides strategic direction to management regarding the Company’s executive compensation practices.  The HCC Committee reviews the performance of the executive officers, other than the CEO, and works in conjunction with the Governance Committee and all the independent directors to review the performance of the CEO; reviews candidates for positions as officers; makes recommendations to the Board on certain officer candidates; makes recommendations to the Board on compensation of the CEO; determines, with the CEO’s recommendations, the compensation of non-CEO executive officers and other officers of the Company; considers recommendations made by its independent compensation consultant relating to director compensation and presents those recommendations to the Board; administers the incentive compensation plans in which executive officers and directors participate; and reviews the Company’s benefit programs made available to some or all salaried employees of the Company.  The HCC Committee has the authority to delegate the aforementioned responsibilities to subcommittees comprised of independent Board members.
 
Mr. Brinker, as President and CEO, recommends to the HCC Committee any compensation changes affecting the Company’s officers, including the named executive officers (“NEOs”), other than himself.  Mr. Brinker presents to the HCC Committee the performance and leadership behavior goals and expectations of each such officer and the level of achievement of those goals as well as the Company’s performance during the fiscal year.  The HCC Committee reviews Mr. Brinker’s recommendations and either approves or does not approve any compensation matters affecting such officers of the Company.  Mr. Brinker has no role in setting his own compensation.
 
In fiscal 2022, the HCC Committee retained Farient Advisors LLC (“Farient”) as its independent executive compensation consultant.  Farient reports directly to the HCC Committee and provides no services to the Company.  The HCC Committee has determined that Farient is independent under the NYSE Listing Standards.  A representative of Farient attends meetings of the HCC Committee upon invitation by the Chair of the HCC Committee, either by phone or in person, and communicates with the Chair between meetings as necessary.  Farient conducted a comprehensive benchmarking analysis of the Company’s pay levels for the CEO, non-CEO executive officers and other officers of the Company, by pay component, using proxy data of the Company’s self-selected Compensation Peer Group (as discussed in the Compensation Discussion and Analysis, below) and compensation survey data. In addition, Farient benchmarked the Company’s executive pay programs and practices, including severance and change-in-control arrangements, as well as its goals and performance.  The HCC Committee considered Farient’s analyses in making its decisions; however, the HCC Committee made all decisions regarding the compensation of Modine’s officers, including its NEOs (except for the CEO, whose compensation is set by the full Board).  Additionally, Farient regularly updated the HCC Committee on regulatory and market trends and assisted with the benchmarking of Board of Director compensation practices and levels.
 
Corporate Governance and Nominating Committee
 
The Governance Committee develops and implements policies and practices relating to corporate governance matters, including reviewing and monitoring implementation of the Company’s Guidelines on Corporate Governance and the Code of Conduct; oversees the Company’s overall ESG framework and assists the Board in providing guidance and oversight concerning ESG strategy; develops and reviews background information on prospective nominees to the Board and makes recommendations to the Board regarding such persons; supervises the Board’s annual self-evaluation; and works with the HCC Committee, as appropriate, to review and monitor succession plans relating to the CEO and to evaluate the performance of the CEO.  The Governance Committee is composed exclusively of independent directors with no business relationship with the Company, other than in their capacity as directors.  The charter of the Governance Committee is available on the Company’s website, www.modine.com.
 
Technology Committee
 
The Technology Committee reviews and makes recommendations, as appropriate, to the entire Board of Directors on major strategies and other subjects related to the Company’s approach, emphasis, and direction with regard to technical innovation and opportunities; the technology acquisition process to assure ongoing business growth; and development and implementation of measurement and tracking systems important to successful innovation.  The charter of the Technology Committee is available on the Company’s website, www.modine.com.
 
HCC Committee Interlocks and Insider Participation
 
None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board of Directors or HCC Committee. None of the members of the HCC Committee is or has been one of our officers or employees, or has had any relationship requiring disclosure under Item 404 of Regulation S-K.
 
Board Meetings and Committees
 
The Board of Directors held seven meetings during the fiscal year ended March 31, 2022 and had the following four standing committees: Audit; Human Capital and Compensation; Corporate Governance and Nominating; and Technology.
 
In July of each year, the Board  selects the members of each of the committees. All incumbent directors attended at least 75 percent of the aggregate of the Board meetings and meetings of committees on which he or she served during fiscal 2022. The CEO of the Company is not a standing member of any Board Committee, but regularly attends Committee meetings at the discretion of the respective Committee Chair.
 
The following table lists the members of each of the standing committees and the number of meetings held by each committee during fiscal 2022:
 
Name
Audit
HCC
Governance
Technology
Eric D. Ashleman
X
 
X
 
David G. Bills
X
 
X
X
Neil D. Brinker
       
Charles P. Cooley
Chair
X
X
 
Suresh V. Garimella
 
X
 
Chair
Katherine C. Harper
X
X
   
Larry O. Moore
 
X
 
X
Christopher W. Patterson
X
Chair
   
Marsha C. Williams
   
X
 
Christine Y. Yan
X
 
Chair
X
Total Number of Meetings
8
4
6
2

Attendance at the Annual Meeting.  Although the Company does not have a formal policy that its directors attend the Annual Meeting of Shareholders, it expects them to do so and the Company’s directors historically have attended these meetings.  All of the directors attended the 2021 Annual Meeting of Shareholders, except for Ms. Harper, who joined the Company’s Board in January 2022.  The Board of Directors conducts a regular meeting immediately after the Annual Meeting of Shareholders.
 
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) MATTERS
 
As noted above, the Board of Directors has overall responsibility for risk oversight for the Company, but has delegated certain responsibilities to its committees. In the case of ESG matters, oversight responsibility is shared among the committees. As described in its charter, the Governance Committee oversees the Company’s overall ESG framework and assists the Board in providing guidance and oversight concerning strategy, risk management, opportunities, major capital expenditures, and investment connected to such matters.  The Audit Committee reviews and approves the Company’s ESG initiatives, metrics, tracking and reporting, and monitors the Company’s progress with respect to such initiatives and metrics. The HCC Committee reviews and approves the Company’s initiatives, metrics, and disclosures concerning human capital management, including employee engagement, diversity, equity and inclusion (DEI), pay equity, employment practices and culture.
 
We believe management’s leadership and engagement with our Board of Directors is critical to advancing our sustainability platform and implementing our companywide strategy.  That management leadership is provided by our ESG Steering Committee comprised of our Chief Executive Officer, Chief Financial Officer, General Counsel, and Vice President – Human Resources. To drive the focus of sustainability even further, our ESG Steering Committee has established subcommittees of employees focused on environmental, social and governance programs. These subcommittees gather ideas and generate conversations with mid-and senior-level subject matter experts to advance our efforts.
 
As exemplified by our new purpose of Engineering a Cleaner, Healthier World™, we are committing to advanced technology solutions with sustainable impacts because we understand the business imperative to help improve the environment, conserve resources, reduce carbon and address climate change. Modine is implementing this strategy though our 80/20 analysis – by reducing complexity and sunsetting inefficient processes and by investing our resources and human capital in those areas of the business where we have longer-term opportunities to make a difference. Building on the work disclosed in our inaugural 2020 Sustainability Report, the Company undertook significant efforts in 2021 and 2022 to further our companywide approach to sustainability and identify our most critical ESG topics for management, reporting and disclosure.
 
The Company’s 2022 Sustainability Report was recently published and is available on the Investors page of our website at www.modine.com. This report describes our new pillars (Creating Sustainable Products, Improving our Environment and Empowering Our People) and how we continue to evolve in our ESG journey to ensure our efforts are focused on the sustainable outcomes where we can have the most impact. Among other things, we are:

 
Reducing water and energy consumption in data centers.

 
Improving air quality in schools and businesses.

 
Lowering harmful emissions and enabling more efficient electric vehicles.

 
Innovating more environmentally friendly refrigerants.

 
Actively managing our operational carbon footprint by designating a plant energy owner and plant-level energy monitors at each facility and requiring plants to submit capital improvement projects that reduce energy and emissions.

 
Enhancing our data protection and cybersecurity efforts amid global threats through proactive monitoring, detailed policies and procedures, and interactive training programs.

 
Updating our Human Capital Management with a strategy organized into three pillars: Attraction and Recruitment, Retention and Engagement, and Development and Performance.

 
Increasing and tracking efforts to recruit diverse candidates, and implementing updated DE&I training.

 
Supporting programs for gender diversity in STEM education.

 
Certifying multiple Modine manufacturing locations to the OHSAS 18001/ISO 45001 standard for safety management systems.

 
Maintaining global goal to reduce our RIR by 10% annually.

 
Engaging and supporting our people in impactful activities throughout our global communities through the Modine Foundation and other philanthropic and charitable efforts.

This is important work and there is much to be done. Our new organizational structure, purpose and fully-aligned leadership team are committed to doing our part to create a cleaner, healthier world.
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
The following table sets forth information regarding the beneficial ownership of shares of the Company’s common stock as of May 27, 2022 by persons known by the Company to beneficially own more than five percent of the outstanding shares:

Name and Address of Owner (1)
 
Number of Shares
Owned and
 Nature of Interest
 
Percent of Class
         
Mario J. Gabelli and affiliates (2)
 
4,256,649
 
8.19
One Corporate Center
       
Rye, New York 10580-1435
       
         
BlackRock, Inc. (3)
 
3,921,766
 
7.55
55 East 52nd St.
       
New York, NY 10055
       
         
Frontier Capital Management Co., LLC (4)
 
3,482,030
 
6.70
99 Summer Street
       
Boston, MA 02110
       
         
Dimensional Fund Advisors LP (5)
 
3,478,241
 
6.69
Building One
       
6300 Bee Cave Road
       
Austin, Texas, 78746
       
         
The Vanguard Group (6)
 
2,881,537
 
5.54
100 Vanguard Blvd.
       
Malvern, PA  19355
       

 
(1)
The number of shares is as of the date the shareholder reported the holdings in filings under the Exchange Act, unless more recent information was provided.  The above beneficial ownership information is based on information furnished by the specified persons and is determined in accordance with Exchange Act Rule 13d-3, and other facts known to the Company.

 
(2)
Based on Amendment No. 3 to Schedule 13D filed under the Exchange Act on October 1, 2021, each reporting person included in the Schedule 13D has the sole power to vote or direct the vote of or the sole power to dispose or direct the disposition of the reported shares as follows: (i) Gabelli Funds, LLC has sole power to vote or direct the vote of or the sole power to dispose or direct the disposition of 880,200 shares; (ii) GAMCO Asset Management Inc. (“GAMCO”) has sole power to vote or direct the vote of 2,886,499 shares and the sole power to dispose or direct the disposition of 3,034,699 shares; and (iii) Teton Advisors, Inc., has sole power to vote or direct the vote and the independent power to dispose or direct the disposition of 341,750 shares.  The other reporting persons listed in Amendment No. 3, which are GGCP, Inc., GAMCO Investors, Inc., Associated Capital Group, Inc. and Mario J. Gabelli have no sole or shared power to vote or direct the vote of or the sole or shared power to dispose or direct the disposition of any shares.  The reporting persons listed in Amendment No. 3 are affiliates of one another.

 
(3)
Based on Amendment No. 9 to Schedule 13G filed under the Exchange Act on February 1, 2022, BlackRock, Inc. and certain subsidiaries of BlackRock, Inc. have the sole power to vote or direct the vote of 3,788,809 shares and the sole power to dispose or direct the disposition of 3,921,766 shares.

 
(4)
Based on Amendment No. 8 to Schedule 13G filed under the Exchange Act on January 31, 2022, Frontier Capital Management Co., LLC has the sole power to vote or direct the vote of 2,158,314 shares and the sole power to dispose or direct the disposition of 3,482,030 shares.

 
(5)
Based on Amendment No. 6 to Schedule 13G filed under the Exchange Act on February 8, 2022, Dimensional Fund Advisors LP (“DFA”) has the sole power to vote or direct the vote of 3,399,154 shares and the sole power to dispose or direct the disposition of 3,478,241 shares.  DFA is a registered investment adviser to four investment companies and serves as investment manager or sub-adviser to various other clients (the “Funds”).  In these roles, DFA or its subsidiaries (together, “Dimensional”) may possess voting and/or investment power over securities of the Company that are owned by the Funds, and it may be deemed to be the beneficial owner over such shares. Dimensional disclaims beneficial ownership of such securities.

 
(6)
Based on Amendment No. 8 to Schedule 13G filed under the Exchange Act on February 10, 2022, The Vanguard Group (“Vanguard”) has the shared power to vote or direct the vote of 73,856 shares, the sole power to dispose or direct the disposition of 2,777,469 shares, and shared power to dispose or direct the disposition of 104,068 shares.

The following table sets forth information regarding the beneficial ownership of shares of the Company’s common stock as of May 27, 2022 by:

 
Each director, director-nominee and “named executive officer” (as described below under Compensation Discussion and Analysis); and
 
all directors and executive officers of the Company as a group.

Name
 
Direct
Ownership
 
Options
Exercisable
within 60 days of
May 27, 2022
 
Held in
401(k)
Retirement
Plan
 
Restricted Stock
Units vesting within 60 days of May 27, 2022
 
Total (1)
 
Percent of Class
                         
Eric D. Ashleman
 
         40,772
 
                        -
 
NA
 
                       -
 
         40,772
 
*
David G. Bills
 
         73,692
 
                        -
 
NA
 
                       -
 
         73,692
 
*
Charles P. Cooley
 
       112,093
 
                        -
 
NA
 
                       -
 
       112,093
 
*
Suresh V. Garimella
 
         80,907
 
                        -
 
NA
 
                       -
 
         80,907
 
*
Katherine C. Harper
 
                 -
 
                        -
 
NA
 
                       -
 
                 -
 
*
Larry O. Moore
 
         81,533
 
                        -
 
NA
 
                       -
 
         81,533
 
*
Christopher W. Patterson
 
       103,633
 
                        -
 
NA
 
                       -
 
       103,633
 
*
Marsha C. Williams
 
       170,462
 
                        -
 
NA
 
                       -
 
       170,462
 
*
David J. Wilson
 
                 -
 
                        -
 
NA
 
                       -
 
                 -
 
*
Christine Y. Yan
 
         79,423
 
                        -
 
NA
 
                       -
 
         79,423
 
*
Neil D. Brinker
 
         86,249
 
                16,819
 
                 -
 
                10,267
 
       113,335
 
*
Michael B. Lucareli
 
       184,773
 
              150,988
 
              971
 
                15,151
 
       351,883
 
*
Eric S. McGinnis
 
         22,876

                  4,048
 
                 -
 
                       -
 
         26,924
 
*
Sylvia A. Stein
 
         15,015
 
                26,366
 
                 -
 
                  6,754
 
         48,135
 
*
Brian J. Agen
 
         48,538
 
                48,432
 
           1,474
 
                  5,084
 
       103,528
 
*
Matthew J. McBurney (2)
 
         33,371
 
                35,416
 
              271
 
                  3,457
 
         72,515
 
*
Joel T. Casterton (2)
 
         15,277
 
                20,917
 
                 -
 
                  4,326
 
         40,520
 
*
                         
All directors and executive officers as a group (19 persons)
 
1,194,183
 
344,970
 
2,716
 
50,682
 
1,592,551
 
3.06

*
Represents less than one percent of the class.

(1)
Includes shares of common stock issuable upon the exercise of stock options exercisable within 60 days of May 27, 2022, and restricted stock units that vest within 60 days of May 27, 2022.  Such information is not necessarily to be construed as an admission of beneficial ownership.

(2)
Ownership information is based on the Forms 4 filed on Mr. McBurney and Mr. Casterton’s behalf on October 5, 2021, the most recent date as of which such information is available to the Company.
 
COMPENSATION OF DIRECTORS
 
Employees of Modine do not receive any compensation for serving on the Board.  Non-employee directors, including the Chairperson of the Board, are entitled to receive the following: an annual retainer of $85,000, payable quarterly; an additional annual retainer of $12,500 for acting as Chair of the HCC Committee, an additional annual retainer of $10,000 for acting as Chair of the Governance Committee, an additional annual retainer of $7,500 for acting as Chair of the Technology Committee, and an additional annual retainer of $15,000 for acting as Chair of the Audit Committee; reimbursement for travel, lodging, and related expenses incurred in attending Board and/or committee meetings; and travel-accident and director and officer liability insurance.
 
The 2020 Incentive Compensation Plan (the “2020 Incentive Plan”) gives discretion to the Board, or a committee of the Board, to grant stock options and stock awards to non-employee directors.  Under the 2020 Incentive Plan, the maximum value of stock awards that can be granted to a non-employee director per year is $300,000. The Board or the HCC Committee, as applicable, has broad discretionary authority to set the terms of awards under the 2020 Incentive Plan.  It is the current practice of the Board of Directors to evaluate compensation and make grants of unrestricted stock awards to each non-employee director on an annual basis.  For the 2022 fiscal year, non-employee directors, including the Chairperson of the Board, were entitled to receive stock awards with a value of approximately $130,000.  The Chairperson was also entitled to additional equity compensation with a value of approximately $100,000.  Consistent with this, the Company granted each non-employee director of the Company (other than the Chairperson) 8,160 unrestricted shares of stock (or restricted stock units, if a director so elected) in August 2021.  The Company granted Ms. Williams, the Chairperson, 14,437 shares of stock at the same time.  As Chairperson, Ms. Williams, among other duties, generally attends all meetings of the Board’s committees but does not receive any attendance fee for those meetings.
 
Directors have the option of deferring either or both of their cash fees and/or equity compensation in accordance with the Company’s Non-Employee Director Compensation Policy.  For cash compensation, the directors may elect to defer up to 100% of their annual retainer and fees into the Modine Manufacturing Company Directors Deferred Compensation Plan and receive an investment return on the deferred funds as if the funds were invested in permitted mutual funds.  The directors’ deferred compensation accounts are unsecured obligations of the Company.  Distributions commence following termination of service as a director.
 
For fiscal 2022, the directors were entitled to defer their equity compensation by electing in advance to receive an award of restricted stock units rather than a grant of unrestricted shares of the Company’s common stock.  These grants of restricted stock units are immediately vested but are not distributed until a director’s termination of service or a fixed date, based upon a director’s election at the time of deferral.  Mr. Ashleman, Mr. Bills, Mr. Patterson, and Ms. Yan all elected to receive a grant of restricted stock units in lieu of a grant of unrestricted shares of the Company’s common stock for their August 2021 equity awards.
 
2022 Director Compensation Table
 
The following table sets forth compensation paid to non-employee members of the Company’s Board of Directors in fiscal 2022:
 
Name
 
Fees Paid in
Cash ($)
 
Stock Awards
($)(1)(2)
 
Change in Pension
Value ($)(3)
 
Total ($)
                 
Eric D. Ashleman
 
85,000
 
129,989
 
NA
 
214,989
David G. Bills (5)
 
63,750
 
129,989
 
NA
 
193,739
Charles P. Cooley
 
100,000
 
129,989
 
NA
 
229,989
Suresh V. Garimella
 
92,500
 
129,989
 
NA
 
222,489
Katherine C. Harper (6)
 
21,250
 
NA
 
NA
 
21,250
Larry O. Moore
 
85,000
 
129,989
 
NA
 
214,989
Christopher W. Patterson
 
97,500
 
129,989
 
NA
 
227,489
Marsha C. Williams
 
85,000
 
229,981
 
0
(4)
314,981
Christine Y. Yan
 
95,000
 
129,989
 
NA
 
224,989

(1)
In August 2021, all of the independent directors at that time, other than Ms. Williams, were granted 8,160 shares of unrestricted stock or restricted stock units.  As explained above, the Company granted 14,437 shares of unrestricted stock to Ms. Williams at the same time.  None of the directors included in the table above held any unvested stock awards as of the end of fiscal 2022.
 
(2)
Represents the aggregate grant date fair value of stock grants computed in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 718.  The assumptions used to determine the value of the awards are discussed in Note 5 of the Notes to Consolidated Financial Statements contained in the Company’s Form 10-K for the fiscal year ended March 31, 2022.
 
(3)
Represents the change in pension value between the end of fiscal 2021 and the end of fiscal 2022 under the Modine Manufacturing Company Director Emeritus Retirement Plan.  The change in pension value is solely a result of the change in the interest rate used to calculate the present value of the pension benefit under the Director Emeritus Retirement Plan because no benefits otherwise continue to accrue under that plan.  The Company used discount rates of 3.9 percent and 3.2 percent, respectively, to calculate the present value of the pension benefit obligation at March 31, 2022 and March 31, 2021.
 
The Board of Directors adopted the Director Emeritus Retirement Plan pursuant to which any person, other than an employee of the Company, who was or became a director of Modine on or after April 1, 1992 and who retired from the Board would be paid a retirement benefit equal to the annualized sum directors were paid for their service to the Company as directors (including Board meeting attendance fees but excluding any applicable committee attendance fees) in effect at the time such director ceased his or her service as a director.  The retirement benefit continues for the period of time equal in length to the duration of the director’s Board service.  If a director dies before retirement or after retirement during such period, his or her spouse or other beneficiary would receive the benefit.  In the event of a change in control (as defined in the Director Emeritus Retirement Plan) of Modine, each eligible director, or his or her spouse or other beneficiary entitled to receive a retirement benefit through him or her, would be entitled to receive a lump-sum payment equal to the present value of the total of all benefit payments that would otherwise be payable to such director under the Director Emeritus Retirement Plan.  The retirement benefit is not payable if the director, directly or indirectly, competes with the Company or if the director is convicted of fraud or a felony and such fraud or felony is determined by disinterested members of the Board of Directors to have damaged Modine.  Effective July 1, 2000, the Director Emeritus Retirement Plan was frozen with no further benefits accruing under it.  Ms. Williams accrued pension benefits under the Director Emeritus Retirement Plan until it was frozen on July 1, 2000.
 
(4)
The change in pension value for Ms. Williams was $(212).
 
(5)
Mr. Bills resigned from the Board in January 2022.
 
(6)
Ms. Harper joined the Board in January 2022.
 
Share Ownership Guidelines - Directors
 
Since 2008, the Board has maintained share ownership guidelines for incumbent members of the Board of Directors.  The Board believes that in order to further align the interests of members of the Board and shareholders, members of the Board should have a meaningful personal investment in the Company.  Only shares of stock, either restricted or unrestricted, including any deferred by a director in accordance with the Company’s Non-Employee Director Compensation Policy, count toward the guideline figures.  The current guidelines generally provide that, five years after joining the Board, directors are expected to hold shares of Company stock with a value of at least five times the value of the director’s current annual cash retainer.  All directors are currently in compliance with these guidelines.  The share ownership guidelines for officers of the Company are described below in the Compensation Discussion and Analysis – Share Ownership Guidelines - Officers.
 
Compensation-Related Risk Assessment
 
In fiscal 2022, the HCC Committee assessed each element of compensation – base salary, and short- and long-term incentives – as well as other plans covering employees in international locations to determine whether any of such elements or plans promotes excessive or unreasonable risk-taking.  The HCC Committee determined that the Company’s compensation policies and practices encourage behaviors that drive the performance of the Company as a whole and balance short-term results with longer-term results in the interests of shareholders.  The HCC Committee determined that any risks arising from the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.
 
COMPENSATION DISCUSSION AND ANALYSIS
 
Introduction
 
This Compensation Discussion and Analysis describes the material components of compensation paid to Modine’s Principal Executive Officer, Principal Financial Officer, and other certain highly compensated executive officers, as described in the Summary Compensation Table on page 35.  In the discussion below, we refer to this group of executives as the NEOs. This group includes the executive officers for whom specific compensation disclosure is required under the rules of the SEC.  This group includes the following current and former executive officers:
 
 
Neil D. Brinker, President and Chief Executive Officer;

 
Michael B. Lucareli, Executive Vice President, Chief Financial Officer;

 
Eric S. McGinnis, President, Climate Solutions;

 
Sylvia A. Stein, Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer;

 
Brian J. Agen, Vice President, Human Resources;

 
Matthew J. McBurney, Former Vice President, Building HVAC; and

 
Joel T. Casterton, Former Vice President, Heavy Duty Equipment.

Mr. McGinnis began employment with the Company effective August 9, 2022.
 
Mr. Casterton and Mr. McBurney ceased employment with the Company effective October 29, 2021 as the Company elected to make a change to the leadership structure of the Heavy Duty Equipment (“HDE”) organization and Building HVAC (“BHVAC”) organization, respectively.  The Company entered into a Separation Letter Agreement with Mr. Casterton dated as of October 25, 2021, which was filed as Exhibit 10.1 to the Company’s Form 10-Q for the fiscal quarter ended December 31, 2021 (the “Casterton Letter Agreement”).  The Company entered into a Separation Letter Agreement with Mr. McBurney dated as of October 30, 2021, which was filed as Exhibit 10.2 to the Company’s Form 10-Q  for the fiscal quarter ended December 31, 2021 (the “McBurney Letter Agreement”).  The Casterton and McBurney Letter Agreements both included a “Restrictive Covenant Agreement,” which entitled Mr. Casterton and Mr. McBurney to additional consideration in exchange for certain restrictions on their post-employment activities.
 
The compensation for the NEOs is listed in the tables on pages 35 through 42 of this Proxy Statement.
 
In this Compensation Discussion and Analysis, we will also explain the objectives of our compensation programs, why we pay the compensation we do, and how that fits with the Company’s commitment to provide value to our shareholders. When discussing the compensation of our CEO in this Compensation Discussion and Analysis, we are referring to the compensation of Mr. Brinker unless otherwise indicated.
 
Executive Summary
 
Executive Compensation Philosophy
 
The HCC Committee seeks to pay our NEOs fairly and to align executive compensation with the Company’s performance.  The HCC Committee believes this approach will enhance shareholder return over the long term.
 
Goals of the Executive Compensation Program
 
The HCC Committee seeks to help the Company achieve its short- and long-term financial goals and encourage its executive officers to act as owners of the Company.  The HCC Committee believes these goals can be accomplished through a compensation program that provides a balanced mix of cash and equity-based compensation.  Base salary is designed to attract and retain executives by compensating them for their day-to-day activities, level of responsibility and sustained individual performance.  The annual short-term cash incentive is intended to reward recipients for the achievement of annual operating goals that are critical to the Company’s short-term business objectives.  The equity and performance cash portions of the compensation package provides incentives that are intended to focus executives on the Company’s long-term success, align the executives’ returns with those of shareholders, encourage long-term retention, and reward the executives for the Company’s superior long-term performance.
 
Alignment of Objectives/Fiscal 2022 Financial Performance and Strategic Highlights
 
The HCC Committee believes the structure of its executive compensation program is aligned with the Company’s overall performance in fiscal 2022.  In fiscal 2022, among other things:
 
 
Mr. Neil D. Brinker completed his first full year as the Company’s President and Chief Executive Officer and a member of its Board in December 2021.  Mr. Brinker’s commitment to operational excellence and his diverse experience, along with success executing profitable growth strategies, have already established a strong foundation for the Company’s transformation;

 
Mr. Brinker laid out a vision for the Company driven by market-based verticals and led by general managers empowered to make decisions with full accountability for results;

 
The Company continued to drive change by applying 80/20 principles to its businesses, using data analytics in order to focus its resources on products and markets with the highest growth and best returns to increase the value of the Company;

 
Operating income of $119.2 million increased $216.9 million from the prior year, primarily due to impairment charges related to the Automotive segment recorded in the prior year and the reversal of a portion of those charges in the current year;

 
Despite challenging economic conditions, the Company reported net sales of $2,050.1 million, an increase of 13 percent from the prior year, which was primarily driven by higher sales in the HDE, Commercial and Industrial Solutions (CIS), and BHVAC segments, partially offset by lower sales in the Automotive segment due primarily to the sale of the air-cooled automotive business, and the impact of the ongoing semiconductor shortage on automotive production volumes;

 
In the current inflationary environment, the Company reported Adjusted EBITDA of $158.8 million (a decrease of $6.0 million from the prior year); and

 
The Company achieved $11.5 million of cash flows from operating activities and $(28.8) million of free cash flow.  Negative free cash flow for fiscal 2022 primarily resulted from unfavorable net changes in working capital and higher capital expenditures compared to the prior year.

For a reconciliation of adjusted EBITDA, adjusted earnings per share, and free cash flow, which are non-GAAP financial measures, to the most directly comparable GAAP financial measures, please see the financial tables included in Exhibit 99.1 to the Current Report on Form 8-K furnished to the SEC by Modine on May 25, 2022.
 
Fiscal 2022 Compensation Highlights
 
The HCC Committee’s actions in fiscal 2022 included the following:
 
 
Set CEO and CFO compensation at or near the median of Modine’s Compensation Peer Group and the median of a broad survey of manufacturing companies, weighted equally, and compensation for the other NEOs at or near the median of a broad survey of manufacturing companies in order to meet its objective of offering competitive compensation, utilizing an analysis provided by Farient.

 
Approved Free Cash Flow Margin (“FCF%”) and Adjusted EBITDA Growth as the equally-weighted performance metrics in the Management Incentive Plan (“MIP”) (the short-term cash bonus plan) for fiscal 2022.  These performance goals drive alignment of management and shareholders’ interests both as a measure of capital efficiency and in achieving our earnings growth targets.

 
Approved Average Cash Flow Return on Invested Capital (“Cash Flow ROI”) and Average Annual Adjusted EBITDA Growth as the performance metrics for the Long-Term Incentive Plan (the “LTIP”) for fiscal 2022 to incentivize meeting and exceeding the Company’s operating performance goals over the three-year performance cycle.  The two metrics are designed to focus management on key metrics and provide a compelling long-term incentive plan with carefully selected standards, mitigating risk by avoiding short-term gains at the expense of the long-term health of the Company.  The long-term pay orientation of the Company’s compensation system (compensation mix and time horizon of the LTIP) appropriately reflects the capital-intensive nature, the investment time horizon and customer planning time horizon (i.e., long-term orders and partnering for end-product production) of the business.

 
Reviewed the composition of the Company’s Compensation Peer Group used for CEO and CFO compensation as well as overall executive pay program design and the Performance Peer Group used for company performance comparisons.

 
Conducted a risk assessment of the Company’s compensation practices and found no evidence of unreasonable risk taking in the Company’s compensation plans and arrangements.

 
Reviewed the Company’s succession plan for each executive officer and other key employees of the Company.

 
Established compensation for the Board of Directors, utilizing analysis provided by Farient.

 
Reviewed the Company’s guidelines regarding stock ownership requirements for Company officers and members of the Board of Directors and confirmed compliance therewith.

 
Reviewed regulatory, shareholder and market changes, including governance best practices as applicable to the Company.

 
Updated the HCC Committee Charter to assume certain ESG oversight to review and approve the Company’s initiatives, metrics, and disclosures concerning human capital management and other “social” policies and practices, including but not limited to key policies and strategies for recruiting, retention, career development and progression, employee engagement, management succession, diversity, equity and inclusion (DEI), pay equity, employment practices and culture.

 
Reviewed status of equity expenditure under the 2020 Incentive Plan, the 2017 Incentive Compensation Plan, and the Amended and Restated 2008 Incentive Compensation Plan (collectively, the “Incentive Plans”).

 
Reviewed CEO pay-for-performance alignment, utilizing analysis provided by Farient.

 
Reviewed strategic human capital and compensation topics including talent assessment processes, organizational design and key talent additions in support of the Company’s transformation.

Shareholder Advisory Vote on Executive Compensation
 
A nonbinding advisory vote on the compensation of the Company’s NEOs received the affirmative vote of over 93% of the shares represented at the 2021 Annual Meeting of Shareholders, demonstrating very strong support for the Company’s executive compensation program. Nonetheless, the Company and HCC Committee are mindful of the results of the shareholder advisory vote and take the vote into consideration when determining and evaluating the Company’s executive compensation philosophy, program and disclosure.  For example, the Company has continued its ongoing efforts to be fully transparent about the link between pay and performance in its Pay for Performance discussion immediately below.  In addition, during one-on-one conversations, sponsored road shows and other regular communications with shareholders, the Company routinely discusses its performance in the context of underlying incentive compensation metrics and emphasizes management’s active use of those same metrics in the Company’s daily operations.
 
Pay for Performance
 
The HCC Committee believes that the Company’s compensation program should encourage management to create long-term, sustained value for shareholders and to act like owners of the Company. To achieve this objective, the compensation program is designed to balance short- and long-term considerations while rewarding management in a way that reflects the Company’s performance over time. The HCC Committee further supports this objective with a strong pay-for-performance philosophy.
 
The key elements of the Company’s executive compensation program that support the pay-for-performance philosophy include:
 
 
A median compensation positioning strategy that targets total pay as well as each element of compensation at the median of the market, and allows actual compensation to vary from the median based on higher or lower performance, i.e., above median for above-market performance and below median for below-market performance;

 
A significant portion of compensation tied to performance, including short-term and long-term incentives tied to strong financial/operational performance;

 
Use of measures of performance for incentives that balance strong growth and returns and provide a direct link to shareholder value over time;

 
A significant weighting on long-term incentives, particularly performance stock or performance cash; and

 
Share ownership guidelines (described on page 33), requiring that executives be meaningfully invested in the Company’s stock, and therefore be personally invested in the Company’s performance.

As has been the case in previous years, in fiscal 2022, the HCC Committee requested that Farient, the HCC Committee’s independent compensation consultant, assess the relationship between our executive compensation and performance over time, with particular focus on the CEO.
 
To conduct this analysis, Farient used its alignment methodology to test whether the Company’s Performance-Adjusted CompensationTM (“PAC”TM) is: (1) reasonable for the Company’s revenue size, industry group and total shareholder return (“TSR”) performance; and (2) sensitive to the Company’s TSR over time, given that TSR is an objective, transparent measure that shareholders generally rely upon when conducting a long-term pay-for-performance evaluation. PAC measures compensation outcomes after performance has occurred, rather than target compensation, which represents “expected” compensation before performance has occurred. Farient compared the CEO’s PAC (including actual salary, actual short-term incentive awards, and performance-adjusted long-term incentive values) over rolling 3-year periods to TSR for the same rolling 3-year periods, and tested the results against those same variables for companies in the industry groups that are most relevant to Modine, namely Capital Goods and Automobiles and Components. The Company’s PAC was then compared to a range of values, as indicated by the upper and lower boundaries on the chart below. This range reflects reasonable compensation outcomes, as determined by the companies in the relevant industries, for the performance achieved. All PAC values on the chart, current and historical, for both the Company as well as for the companies in the relevant industry groups, are adjusted to reflect the Company’s current size of approximately $2.1 billion in revenue.
 
Farient’s analysis of the Company’s pay for performance indicates that the CEO’s compensation historically has been and continues to be strongly aligned with the Company’s performance and shareholder interests in that it is both reasonable and closely correlated to Company performance over time. Farient reached this conclusion, with which the HCC Committee agreed, because the data points for the Company’s CEOs have historically been below the upper boundary, which indicates reasonable compensation, and because the PAC generally moves up as performance rises, and generally moves down as performance falls. PAC for Mr. Brinker in 2022 did not include any amount with respect to the fiscal 2022 MIP since the underlying performance goals were not achieved, nor any payout for the fiscal 2020-2022 performance stock awards cycle as he was not an employee of Modine at the time of the grant.
 
 
Market Benchmarking of Executive Pay
 
The HCC Committee has historically used a peer group, to which we refer in this proxy statement as the “Compensation Peer Group”, to target total pay and each element of compensation at the median of such Compensation Peer Group and at the median of a broad survey of manufacturing companies, weighted equally, for the CEO and CFO. For the other NEOs, the HCC Committee has used a broad survey of manufacturing companies to target total pay and each element of compensation  at the median of that survey and uses such survey data because the publicly available Compensation Peer Group information does not provide adequate data for such other NEO positions.  The HCC Committee believes that targeting the median is an objective way of ensuring that the Company’s executive compensation practices are competitive and reasonable relative to the broader market.  Actual pay may vary from the median based on differences in individual performance, job responsibilities, tenure and experience for the individuals being compared, as well as based on actual performance of the Company.
 
In addition, the HCC Committee, starting with fiscal 2021, has also used a larger peer group, to which we refer in this proxy statement as the “Performance Peer Group”, to evaluate long-term financial performance data and as a goal-setting reference.   All companies in the Compensation Peer Group are also included in the Performance Peer Group.
 
Use of Peer Groups
 
Compensation Peer Group
 
During fiscal 2022, the HCC Committee reviewed the composition of the Compensation Peer Group.  As a group, these peers have characteristics and markets similar to those of the Company.  These characteristics and markets are as follows:
 
 
U.S.-headquartered companies traded on major U.S. exchanges involved in these industries: industrial machinery; construction machinery and heavy trucks; agriculture and farm machinery; auto parts and equipment; electrical components and equipment; and building products (HVAC-related);

 
Companies with revenue between $700 million and $4.5 billion (approximately 0.4 to 2.5 times Modine’s revenue of $1.8 billion at the time of the peer group review), with proxy pay data size adjusted to approximate pay for a company with revenue of $1.8 billion as estimated at the time of the executive pay benchmarking; and

 
Technology-intensive companies with a strong focus on OEM suppliers, distributed product expertise and global industrial customers in the vehicular and industrial/commercial (e.g., HVAC&R) arena.

Based on its review, the HCC Committee utilized the same composition of the Compensation Peer Group as presented in the 2021 proxy statement.
 
The following is the Company’s current Compensation Peer Group:
 
Allison Transmission Holdings, Inc.
Hubbell Incorporated
Standex International Corporation
     
Commercial Vehicle Group, Inc.
Lennox International Inc.
Stoneridge, Inc.
     
Donaldson Company, Inc.
Meritor, Inc.
Titan International, Inc.
     
Enerpac Tool Group Corp.
Mueller Industries, Inc.
Welbilt, Inc.
     
EnerSys Inc.
Regal-Beloit Corporation
Woodward Inc.
     
Harsco Corporation
SPX Corporation
 

The HCC Committee uses the publicly available Compensation Peer Group data to assist in the evaluation of the:

 
Compensation levels of the Company’s CEO and CFO; and

 
Company’s compensation practices.

Performance Peer Group

During fiscal 2022, the HCC Committee also reviewed the composition of the Performance Peer Group that it uses to evaluate and set performance goals.  This group consists of approximately 80 companies, generally in the vehicle and capital goods manufacturing industries and generally with revenues between $750 million and $5.0 billion, which includes all of the companies in the Compensation Peer Group.  Minor adjustments were made to this group in fiscal 2022, generally to remove companies that were acquired or involved in bankruptcy proceedings, and to add new companies that were not previously on the list.  The Performance Peer Group is compiled through a collaboration between the Company’s Finance department and Farient from a group of companies that are used for other Company performance benchmarking purposes, with the final composition of the Performance Peer Group subject to approval of the HCC Committee. For both fiscal years 2021 and 2022, the performance goal data gathered from the Performance Peer Group has not resulted in a change to the goal metrics used by the HCC for the MIP or the LTIP.

Use of Compensation Survey Data
 
The HCC Committee used the 2020 Mercer U.S. Executive Benchmark Database (the “Database”), which compiles data of manufacturing companies with revenues between approximately $1.0 billion and $2.5 billion to evaluate competitive pay levels of certain corporate officers and other key employees in addition to those of the CEO and CFO, and with revenues approximating each business unit to evaluate competitive pay levels of certain officers and other key employees who are heads of business units.  Survey pay data was size adjusted to approximate pay for an approximately $1.8 billion revenue company at the time of benchmarking for corporate officers and key corporate employees, and to approximate pay for business units with revenue similar to those of Modine’s business units for officers and key employees who are heads of business units.  Mercer did not identify, and the HCC Committee was not aware of, the identities of the companies whose information is reflected in the Database.  The HCC Committee recognizes that the Company attracts employees from a broad range of companies and its comparison data reflects that fact.  The HCC Committee does not use the survey data in a formulaic manner.  If the compensation of a particular NEO is substantially greater or less than the median in the survey for the same position, the HCC Committee takes the survey information into account when setting base salary, short-term and long-term incentive target values, but also exercises its discretion, taking into consideration the individual’s performance, tenure, experience and changes in job responsibilities.
 
The overall resulting pay positioning for the corporate officers and other key employees as a group is slightly below the median of the market data as defined above.
 
Description of Executive Compensation Program
 
The HCC Committee sets the compensation philosophy at Modine in a manner intended to promote the Company’s achievement of its short- and long-term financial goals and encourage its executive officers to act as owners of the Company.  In addition, the HCC Committee focuses on attracting and retaining employees who are qualified, motivated and committed to excellence.  The HCC Committee believes these goals can be accomplished through a compensation program that provides a balanced mix of cash and equity-based compensation.  Base salary is designed to attract and retain executives by compensating them for their day-to-day activities, level of responsibility and sustained individual performance.  The short-term cash incentive is intended to reward the recipients for achievement of annual operating goals that are critical to the Company’s short-term business objectives.  The long-term portion of the compensation package provides incentives that are intended to focus executives on the Company’s long-term success, align the executives’ returns with those of shareholders, encourage long-term retention, and reward executives for the Company’s superior long-term performance.
 
The HCC Committee’s actions are guided by the following principles:
 
 
Compensation is a primary factor in attracting and retaining employees, and the Company can only achieve its goals if it attracts and retains qualified and highly skilled people;

 
All elements of executive compensation, including base salary, targeted annual incentives (cash-based), and targeted long-term incentives (both equity- and cash-based), are set to levels that the HCC Committee believes ensure that executives are fairly, but not excessively, compensated;

 
Strong financial and operational performance is expected, and shareholder value must be preserved and enhanced over time;

 
Compensation must be linked to the interests of shareholders and the most effective means of ensuring this linkage is by granting equity incentives such as stock awards, stock options and performance stock or cash awards;

 
Beginning with fiscal year 2022, the Company began using 80/20 principles to reduce complexity, improve pricing discipline and improve segment profitability. This was a shift away from our historical focus on the Company as a whole, without analyzing and adjusting for the different operating units of the Company.  To better align incentive compensation with the new structure, the HCC Committee approved a change to the fiscal 2023 MIP, which has been designed to develop segment-specific incentive plans, and a corporate-wide plan for the Company’s corporate functional employees; and

 
The executive compensation program should reflect the economic condition of the Company, as well as Company performance relative to the Performance Peer Group companies, so that in a year in which the Company underperforms, the compensation of the executive officers should be lower than in years when the Company is achieving or exceeding its objectives.

As reflected in this Compensation Discussion and Analysis, the HCC Committee believes the compensation program is aligned with these principles.
 
Treatment of the CEO
 
The CEO participates in the same programs and receives compensation generally based upon the same factors as the other NEOs.  However, the level of the CEO’s compensation is even more heavily dependent upon the Company’s performance than the compensation of other NEOs.  Mr. Brinker’s overall compensation reflects a greater degree of policy- and decision-making authority and a higher level of responsibility for the strategic direction and financial and operational results of the Company.  Given the President and Chief Executive Officer’s key role in policy- and decision-making, the HCC Committee believes that the CEO’s compensation should be weighted more heavily toward long-term incentive awards so the CEO’s compensation more directly correlates with the Company’s performance.
 
Elements of Executive Compensation for Fiscal 2022
 
The following is a summary of the elements of the Company’s executive compensation program:
 
Pay Element
Competitive
Positioning
Program Objectives
Time Horizon
Performance Measures
for Fiscal 2022
         
Base Salary
Compares to 50th
percentile, but use of
judgment to determine
actual pay
Attract and retain key
personnel; reward for
individual performance
Annual
Individual performance

Length of time in the
position and overall
experience

Consistency of
performance

Changes in job
responsibility
       
Management
Incentive Plan
Motivate and reward for
achieving objectives
Annual
FCF% (50%)

Adjusted EBITDA Growth (50%)
         
Long-Term Incentive
Plan (% of total
Long-Term Incentive
Plan Value)
Compares to 50th
percentile, but use of
judgment to determine
actual pay

 
 
 

         
Performance Cash
Awards (45%)
 
Align executive’s returns
with those of
shareholders
 
Encourage long-term
retention

Reward for superior
long-term performance
3-year performance
period with payout
upon results
certification
Three-year average Cash
Flow ROI (50%)
 
Three-year Average Annual
Adjusted EBITDA Growth (50%)
         
Retention Restricted
Stock Unit
Awards (35%)
 
Reward employees for
their continued
commitment to the
Company
4-year ratable vesting
starting on 1st
anniversary of grant
Retention
         
Stock Options (20%)
 
Focus executives on
driving long-term
performance
4-year ratable vesting
starting on 1st
anniversary of grant
(10 year term)
Stock price appreciation

Base Salary
 
Base salary is designed to attract and retain executives by compensating them for their day-to-day activities, level of responsibility and sustained individual performance.  Individual performance, based upon achievement of annual performance objectives and demonstration of leadership behaviors as reflected in each employee’s performance development plan, is a key component in determining base salary and any adjustments to base salary, and is a subjective determination made by the HCC Committee and, for the NEOs other than the CEO, the CEO.  The determination of base salary affects every other element of executive compensation because all of the other components, including short-term, performance-based awards, long-term incentive compensation payouts, retirement benefits and severance, are based on the amount of the individual’s base salary.  The HCC Committee annually reviews base salaries of the NEOs to ensure that the compensation levels are aligned with the HCC Committee’s principles, based on individual responsibility, performance and job scope.
 
The HCC Committee increased each NEO’s (other than Mr. McGinnis and Mr. McBurney) base salary in fiscal 2022.  The percentage increase for each NEO was based upon both subjective and objective criteria, including the individual performance of each NEO, the length of tenure in their current positions, and their respective compensation relative to the market midpoint for their respective functions.

The table below illustrates the base salary for each NEO in fiscal 2022, with increases effective in July 2021.
 
Name
 
Prior Salary
 
Fiscal 2022
Approved Base Salary
 
Percent
Increase
             
Mr. Brinker
 
$800,000
 
$835,000
 
4.4%
Mr. Lucareli
 
$470,000
 
$525,000
 
11.7%
Mr. McGinnis
 
NA
 
$415,000
 
NA
Ms. Stein
 
$363,000
 
$381,000
 
5.0%
Mr. Agen
 
$339,000
 
$356,000
 
5.0%
Mr. McBurney
 
$342,000
 
$342,000
 
0.0%
Mr. Casterton
 
$341,000
 
$351,500
 
3.1%

CEO Base Salary
 
For Mr. Brinker, the Governance Committee, working with the HCC Committee, evaluated his individual performance as the Company’s CEO by evaluating the achievement of his performance development plan goals.  Following discussion with the CEO, the HCC Committee recommended the CEO’s base salary to the Board of Directors based upon this evaluation.
 
Short-Term, Performance-Based Cash Award
 
The Management Incentive Plan (the “MIP”) is Modine’s broadly applicable short-term, performance cash award plan designed to motivate and reward the Company’s leaders.  All NEOs participate in the MIP.  The HCC Committee’s objectives for the MIP are to encourage continuous (short-term) operational improvements with metrics that also drive total shareholder return.  The HCC Committee believes the MIP metrics should be challenging, but achievable, and well-defined so they are understood by the MIP participants and, accordingly, actively drive results.
 
The HCC Committee approved the use of two independent and equally-weighted performance goals for the fiscal 2022 MIP.  As in fiscal 2021, the MIP continued to use the FCF% metric and the Adjusted EBITDA Growth metric for the fiscal 2022 MIP. For purposes of the MIP, FCF% is equal to Adjusted Free Cash Flow, which is “Net cash provided by operating activities,” less “Expenditures for property, plant and equipment,” plus or minus Permitted Adjustments, with such Adjusted Free Cash Flow divided by “Net Sales,” all as reported externally for the Company’s financial statements. Adjusted EBITDA Growth is the simple arithmetic percentage change in Adjusted EBITDA for fiscal 2022 less Adjusted EBITDA for fiscal 2021, with that amount divided by Adjusted EBITDA for fiscal 2021. Adjusted EBITDA represents “Operating Income” plus “Depreciation and Amortization Expenses”, both as reported for the Company’s audited financial statements, plus or minus Permitted Adjustments. Permitted Adjustments include restructuring-related expenses, acquisition- and divestiture-related costs and adjustments and certain other gains and charges. The impact of the adoption of new U.S. GAAP accounting standards and significant changes in the Company’s accounting methods is another Permitted Adjustment. The Committee has negative discretion to disregard any Permitted Adjustments if disregarding any of them would result in a reduction of payment. In addition, the HCC Committee has negative discretion to reduce the amounts otherwise payable under the MIP but may not increase such amount.
 
The HCC Committee chose to use the FCF% metric because it aligns management incentives with shareholder interests; is a measure of capital efficiency, including capital spending and working capital management.  The HCC Committee chose to use the Adjusted EBITDA Growth metric to incentivize increased earnings and shareholder return.  The HCC Committee considered the Company’s business plan, as well as eight years of historical performance results for Modine and the Performance Peer Group companies when setting the FCF% and Adjusted EBITDA Growth goals. As a result, for the fiscal 2022 MIP, with respect to the FCF%, the HCC Committee maintained the Threshold, Target and Maximum goals at 1.5%, 4.5% and 7.5%, respectively.  With respect to Adjusted EBITDA Growth, the HCC Committee maintained the Threshold, Target and Maximum goals at 2%, 6% and 12%, respectively.  The HCC Committee maintained payout percentages for each goal at the same levels as for the fiscal 2021 MIP.
 
The specific levels for the MIP metrics for fiscal 2022 were as follows:
 
     
Weight
   
Threshold
   
Target
   
Maximum
   
Actual
 
 
FCF%
   
50%

   
1.5%

   
4.5%

 
≥7.5%
     
-0.4%

 
Adjusted EBITDA Growth
   
50%

   
2%

   
6.0%

 
≥12%
     
-4.4%

 
Payout as a % of Target
   
N/A
     
10%

   
100%

   
200%

   
0%


Assuming Threshold achievement for each metric, each of the NEOs would receive 10 percent of the Target amount.  Assuming Maximum level achievement for each metric, each of the NEOs would receive 200 percent of the Target amount.  The Company pays amounts between the Threshold and Target and/or between Target and Maximum levels on a linear basis for achievement above Threshold and below Maximum.
 
Assuming achievement of the Target level for each metric, the NEOs would receive the following percentages of base salary:

 
MIP Target Payout for NEOs (Percentage of Base Salary)
 
 
Mr. Brinker
 
100%
 
 
Mr. Lucareli
 
70%
 
 
Mr. McGinnis
 
60%
 
 
Ms. Stein
 
60%
 
 
Mr. Agen
 
60%
 
 
Mr. McBurney
 
60%
 
 
Mr. Casterton
 
60%
 
 
As described above, for purposes of the MIP metrics, the Company’s FCF% and Adjusted EBITDA Growth for fiscal 2022 were both negative.  As a result, no payout was achieved under the fiscal 2022 MIP.
 
Long-Term Incentive Compensation
 
The long-term incentive element of the Company’s executive compensation program is intended to attract, retain and motivate key employees who directly impact the performance of the Company over a timeframe greater than a year.  Long-term compensation may be equity or cash-based, or a combination of each, and in any event, is structured so that the interests of the Company’s executive officers and other key employees are directly aligned with the interests of shareholders.  The long-term portion of the compensation package provides an incentive that rewards superior long-term performance and provides financial consequences for underperformance.
 
Performance Stock under the Long-Term Incentive Plan for Performance Period Ending in 2022
 
The performance period for Performance Stock under the long-term incentive compensation plan initiated in May 2019 was completed as of March 31, 2022.  The amount of the potential award varied based upon the achievement of Threshold, Target or Maximum performance levels.  The Company used two measures to determine payouts – three-year average Cash Flow ROI and three-year Average Annual Revenue Growth  (“Revenue Growth”).  For purposes of the LTIP, Cash Flow ROI means Adjusted Free Cash Flow (as defined with respect to MIP, above), plus cash interest, which is cash paid for interest expense related to outstanding debt, with the total amount divided by average capital employed.  The calculation of Cash Flow ROI is based on a three-year average Cash Flow ROI for fiscal 2020 through fiscal 2022 with average capital employed determined over five points (i.e., the last day of each fiscal quarter and prior fiscal year-end). Revenue Growth is the simple three-year average of the Company’s annual change in revenue over the performance period, as reported for the Company’s audited financial statements. Each metric for performance stock awards is calculated independently of the other metric, and each was weighted at 50 percent of the total award.  The Threshold performance goal was the minimum performance goal that must have been achieved by the Company for the NEOs to earn shares of common stock.
 
The performance goals for the LTIP metrics for performance stock awards for the period ending in fiscal 2022 were set in May 2019 and took into account the long-term performance of the Compensation Peer Group, which was the comparator group at that time.  The performance goals were as follows:
 
   
Weight
Threshold
Target
Maximum
Actual
 
Cash Flow ROI
50%
7%
10.5%
≥14%
9%
 
Average Annual Revenue Growth
50%
3%
8.0%
≥13%
-2%
 
Payout as a % of Target
N/A
10%
100%
200%
31%

For the performance period ended in fiscal 2022, the Company’s three-year average Cash Flow ROI was 9 percent, which resulted in a payout equal to 62 percent of Target for the Cash Flow ROI metric.  The Company’s Revenue Growth was negative, and therefore no payout was earned for the Revenue Growth metric.  Overall, both metrics were weighted equally, and the payout under the LTIP for the Performance Stock was 31 percent of the Target for the total award.  As part of their Restrictive Covenant Agreements entered into at the time of their termination, Mr. Casterton and Mr. McBurney received a pro-rated (based on months of service during the performance period) payout of Performance Stock, based on actual performance, equal to 31 percent of the Target for the total award, under the Long-Term Incentive Plan for the performance period ending in fiscal 2022.
 
Grants under the Long-Term Incentive Plan for Plan Commencing in Fiscal 2022 and Ending in Fiscal 2024
 
As it did in fiscal 2021, in fiscal 2022 the HCC Committee approved long-term performance grants as a percentage of base salary and included the use of performance cash awards as part of the Company’s long-term incentive compensation plan.   For fiscal 2022, the Company’s long-term incentive plan included:
 
Performance Cash Awards (45 percent of long-term incentive dollars at Target).  Performance cash is earned by achieving corporate financial goals over a three-year period (ending March 31, 2024) and will be paid after the end of that three-year period.  Payout levels vary based upon the achievement of Threshold, Target or Maximum goals in each of the Cash Flow ROI and Average Annual Adjusted EBITDA Growth metrics, as described below.  Once earned, the performance cash awards are not subject to any restriction.  Determinations of the achievement of performance goals for the performance cash awards are not made until the Company’s audited financial statements covering the last year in the performance period are completed and the results for the fiscal year are announced publicly.
 
Stock Options (20 percent of long-term incentive dollars at Target).  The HCC Committee believes that stock options focus executives on driving long-term performance.  Stock options have an exercise price equal to the fair market value of the common stock on the effective date of the grant so recipients recognize a value only if and to the extent that the value of the common stock increases.  The stock options granted in fiscal 2022 vest in four equal annual installments commencing on the first anniversary of the effective date of the grant.  The stock options expire ten years from the date of grant.
 
Retention Restricted Stock Unit Awards (35 percent of long-term incentive dollars at Target).  Retention restricted stock unit awards reward employees for their continued commitment to the Company.  The Company grants the employees restricted stock units which vest in four equal annual installments commencing on the first anniversary of the effective date of the grant.
 
The HCC Committee adjusted the relative percentages among certain components of the LTIP grants for fiscal 2022, decreasing retention restricted stock unit awards from 40 percent to 35 percent of long-term incentive dollars at Target, and increasing performance cash awards from 40 percent to 45 percent of long-term incentive dollars at Target. The HCC made this adjustment to increase the emphasis on the Company’s long-term performance and better align the Company with prevailing market practices.
 
As in fiscal 2021, the HCC Committee continued to utilize the Cash Flow ROI metric for the award of performance cash awards, but the HCC Committee replaced the Revenue Growth metric with an Average Annual Adjusted EBITDA Growth metric over the three-year performance period.  That replacement occurred to shift the focus from a revenue-based approach to an earnings-based approach as the HCC Committee believed incentivizing earnings at this time is more appropriate.  These two metrics drive alignment of management and shareholders’ interests both as a measure of capital efficiency and free cash flow generation and in achieving the Company’s earnings growth targets.  Each metric for performance cash awards is weighted at 50 percent and is calculated independently of the other metric.  The Threshold performance goal is the minimum performance goal that must be achieved by the Company for the participants to earn cash pursuant to a performance cash award.
 
For purposes of the LTIP, Cash Flow ROI has the same meaning set forth in the section above titled Performance Stock under the Long-Term Incentive Plan for Performance Period Ending in 2022, provided the calculation of such metric will be based on a three-year period beginning with fiscal 2022 and ending with fiscal 2024. Average Annual Adjusted EBITDA Growth means the simple three-year average of Adjusted EBITDA Growth during the fiscal 2022 to fiscal 2024 performance period. Adjusted EBITDA Growth is calculated as set forth in the section above titled Short-Term, Performance-Based Cash Award.
 
For the fiscal 2022 through fiscal 2024 LTIP, the HCC Committee considered the Company’s business plan as well as seven years of historical performance results for Modine and the Performance Peer Group when setting the Cash Flow ROI and Average Annual Adjusted EBITDA Growth goals.  As a result, the HCC Committee made no adjustments to the Threshold, Target or Maximum levels, or the payout percentages, compared to the fiscal 2021 through fiscal 2023 LTIP, for Cash Flow ROI.  However, because the HCC Committee utilized the Average Annual Adjusted EBITDA Growth metric, the HCC Committee set the Average Annual Adjusted EBITDA Growth Threshold, Target and Maximum goals at 2%, 7% and 12%, respectively.  The HCC Committee set the payout percentages for Average Annual Adjusted EBITDA Growth to the same level as the payout percentages for fiscal 2021 with respect to the Revenue Growth metric.  The goals at the Threshold, Target, and Maximum levels are intended to incentivize participants to achieve the Threshold level and strive for greater performance beyond the Threshold level.
 
The specific three-year performance goals for the LTIP metrics for performance cash awards granted in fiscal 2022 are as follows:
 
     
Threshold
   
Target
 
Maximum
 
Cash Flow ROI
 
7%

 
10.5%

≥14%
 
Average Annual Adjusted EBITDA Growth
 
2%

 
7%

≥12%
 
The specific levels of performance cash award metrics are set forth below:
 
 
Performance
Cash Flow ROI (50%)
Average Annual Adjusted
EBITDA Growth (50%)
 
Threshold
10% of Target Awards
10% of Target Awards
 
Target
100% of Target Awards
100% of Target Awards
 
Maximum
200% of Target Awards
200% of Target Awards

If actual Cash Flow ROI or Average Annual Adjusted EBITDA Growth for the performance period is between Threshold and Target and/or between Target and Maximum, the amount of performance cash earned will be determined on a linear basis.  In the event that either the Company’s actual Cash Flow ROI or Average Annual Adjusted EBITDA Growth does not meet the Threshold for the performance period, no performance cash will be earned under that performance cash award metric.  In the event that either the Company’s actual Cash Flow ROI or Average Annual Adjusted EBITDA Growth exceeds the Maximum for the performance period, only the Maximum percentage of the Target amount of performance cash for that metric will be earned.  Notwithstanding the foregoing, the HCC Committee retains the discretion to decrease the amount of performance cash earned under the LTIP.
 
The Company uses Cash Flow ROI (a measure indicative of the cash flow return and efficiency of invested capital) to evaluate its financial performance, so the HCC Committee used the Cash Flow ROI metric to incentivize management to continue to improve the Company’s financial performance.  Similarly, because Average Annual Adjusted EBITDA Growth is a key measure of growth of the earnings of the Company, the HCC Committee used the Average Annual Adjusted EBITDA Growth metric to incentivize management to create additional shareholder value through increased earnings of the Company.  For both metrics, the HCC Committee set the Threshold level at what it believed to be an acceptable return and set the Maximum level at what it believed to be exceptional performance with each corresponding to an appropriate competitive payout level.  Achievement and payout for each measure is calculated and paid out independently of the other measure.
 
As mentioned above, the HCC Committee and, for Mr. Brinker, the Board, approves the grants for each NEO under the long-term incentive plan as a percentage of base salary.  Assuming achievement of the Target level for each metric under the performance cash awards, the NEOs would receive the following percentages of base salary in total grants under the long-term incentive plan approved in fiscal 2022:
 
 
LTIP Target Payout for NEOs (Percentage of Base Salary)
 
 
Mr. Brinker
   
250%

 
Mr. Lucareli
   
175%

 
Mr. McGinnis
   
100%

 
Ms. Stein
   
110%

 
Mr. Agen
   
90%

 
Mr. McBurney
   
100%

 
Mr. Casterton
   
100%


Mr. Lucareli’s percentage returned to 175% in fiscal 2022 (down from 200% in fiscal 2021) following the end of his services as interim President and Chief Executive Officer during fiscal 2021.  Ms. Stein’s and Mr. Agen’s percentage was increased by the Board from 100% to 110% and 80% to 90%, respectively. These increases were made to better align Ms. Stein’s and Mr. Agen’s target payouts with the midpoint of market for their respective positions. The percentages for the remaining NEOs (except for Mr. McGinnis who was hired in fiscal 2022) were unchanged from those for fiscal 2021. The table below sets forth the number of shares subject to stock options and the number of restricted stock units issued to each NEO in fiscal 2022 as well as the value of performance cash that would be earned upon achievement of each of the long-term incentive plan metrics on March 31, 2024:

               
Performance Cash Awards
 
   
Shares Subject to
Stock Options (#)
   
Shares of Restricted Stock Units (#)
   
Threshold
   
Target
   
Maximum
 
Mr. Brinker
   
44,439
     
41,069
   
$
93,938
   
$
939,375
   
$
1,878,750
 
Mr. Lucareli
   
19,558
     
18,075
   
$
41,344
   
$
413,438
   
$
826,876
 
Mr. McGinnis (1)
   
8,284
     
7,673
   
$
12,450
   
$
124,500
   
$
249,000
 
Ms. Stein
   
8,922
     
8,245
   
$
18,860
   
$
188,595
   
$
377,190
 
Mr. Agen
   
6,821
     
6,304
   
$
14,418
   
$
144,180
   
$
288,360
 
Mr. McBurney (2)
   
7,504
     
6,935
   
$
15,863
   
$
158,625
   
$
317,250
 
Mr. Casterton (2)
   
7,483
     
6,915
   
$
15,818
   
$
158,175
   
$
316,350
 

(1)
Awards made to Mr. McGinnis under the LTIP for fiscal 2022 were prorated based on his hire date of August 9, 2021.
 
(2)
In connection with Mr. Casterton’s and Mr. McBurney’s October 2021 exits from Modine, and in accordance with the terms of the Casterton and McBurney Letter Agreements, all grants made to Mr. Casterton and Mr. McBurney pursuant to the LTIP commencing in fiscal 2022 have been forfeited.
 
In addition to the above-described awards, Mr. McGinnis was awarded certain retention restricted stock unit awards, an option award and performance cash awards (collectively, the “Make Whole Awards”) pursuant to his offer of employment to make him whole with respect to certain unvested incentive compensation that was forfeited upon the termination of employment with his prior employer in order to join Modine.  Pursuant to Mr. McGinnis’s offer of employment, the Make Whole Awards were issued subject to Modine’s standard agreements for retention restricted stock unit awards and performance cash awards; provided, however, Mr. McGinnis is required under the terms of his offer of employment to repay any Make Whole Awards received or paid if he voluntarily terminates employment or if his employment is terminated for cause, in either case, within twelve (12) months of his employment start date.  The Make Whole Awards consisted of the following:
 
 
Retention Restricted Stock Units
 
Grant Date
 
Units Granted
 
Vesting Schedule
 
August 25, 2021
 
18,894
 
50% on 2/18/22 and 2/18/23
 
August 25, 2021
 
12,936
 
33% on 2/23/22, 2/23/23, and 2/23/24
 
August 25, 2021
 
17,143
 
100% on 5/8/22
 
August 25, 2021
 
13,867
 
50% on 8/25/22 and 8/25/23

 
Incentive Stock Options
 
Grant Date
 
Options Granted
 
Vesting Schedule
 
August 25, 2021
 
12,269
 
33% on 2/23/22, 2/23/23, and 2/2/24

 
Performance Cash (Fiscal 2021-Fiscal 2023)
   
Cash Flow ROI (50%)
Average Annual Revenue
Growth (50%)
Payout Level
Potential Payout
Amount*
 
Threshold
7.0%
3.0%
10% of Target
$20,507
 
Target
10.5%
8.0%
100% of Target
$205,070
 
Maximum
≥14.0%
≥13.0%
200% of Target
$410,140
* This column shows the portion of that Target amount that could become payable assuming the threshold, target, and maximum levels of performance for each metric.
 
 
Performance Cash (Fiscal 2022-Fiscal 2024)
 
Cash Flow ROI (50%)
Average Annual Adjusted EBITDA
Growth (50%)
Payout Level
Potential Payout
Amount*
 
Threshold
7.0%
2.0%
10% of Target
$14,650
 
Target
10.5%
7.0%
100% of Target
$146,498
 
Maximum
≥14.0%
≥12.0%
200% of Target
$292,996

* This column shows the portion of that Target amount that could become payable assuming the threshold, target, and maximum levels of performance for each metric.
 
Executive Compensation in Fiscal 2023
 
The HCC Committee approved a fiscal 2023 MIP program including three distinct incentive plans – one corporate-wide plan for the corporate leadership team, and two segment-specific plans, one each for our newly formed Climate Solutions and Performance Technologies businesses.
 
Executive leadership at the segment level will participate in both the Corporate Plan and the appropriate segment-specific plan (with participation in each plan weighted equally 50/50), while all other participants will be assigned to the appropriate Business Segment or Corporate plan.
 
The Corporate and Business Segment Plans are subject to the Company’s 2020 Incentive Compensation Plan, and have two equally-weighted performance metrics: Adjusted EBITDA Margin (%) and Adjusted EBITDA Growth, with each accounting for 50%.  This focus on earnings growth and margin growth fully aligns these incentive plans with the key priorities of the Company’s 80/20 principles. In addition, the HCC Committee believes that these two measures are closely correlated with Total Shareholder Return, aligning the Company’s MIP measures with shareholder interests.
 
Adjusted EBITDA Growth is defined above and will be determined in a similar manner as in fiscal 2022.  Adjusted EBITDA Margin (%) is calculated by dividing Adjusted EBITDA by Net Sales, where Adjusted EBITDA equals “Operating Income” plus “Depreciation and Amortization Expenses,” both as reported externally for the Company’s audited financial statements, plus or minus Permitted Adjustments (as defined above).  The metrics are equally weighted, and each metric will be adjusted to account for certain approved items.
 
Payouts between Threshold and Target and between Target and Maximum levels will be calculated on a straight linear basis for each financial metric.  Payout shall not occur until after the HCC Committee has certified the level of achievement of each financial metric.  The HCC Committee retains the discretion to make negative adjustments to the final determination of any compensation earned under the Fiscal 2023 MIP.
 
For fiscal 2023, the HCC Committee determined there would be no change to the FY23-25 LTIP performance measures.  The HCC Committee approved the Company’s LTIP for fiscal 2023 through fiscal 2025 to include: retention restricted stock unit awards (35 percent of long-term incentive dollars at Target); stock options (20 percent of long-term incentive dollars at Target); and performance cash awards (45 percent of long-term incentive dollars at Target).  The vesting schedules for retention restricted stock unit awards and stock options were modified in the FY23-25 LTIP cycle, with both restricted stock units and stock options now vesting over a 3-year period, versus the 4-year vesting cycle in previous plans.  This change aligns the vesting schedule with the most prevalent vesting schedule in the Company’s Compensation Peer group, and aligns all equity vesting with the 3-year performance period of the LTIP.  Performance cash awards have a three-year performance period, which is the same duration as in prior years, and the HCC Committee approved two performance metrics – three-year Average Cash Flow ROI and three-year Average Adjusted EBITDA Growth.  The Average Cash Flow ROI metric and the Average Adjusted EBITDA Growth metric remain unchanged from fiscal 2022 and will be determined in a similar manner as in fiscal 2022.  Each metric is independent of the other and the metrics are weighted equally at 50 percent each.
 
Employment and Post-Employment Benefits
 
General Benefit
 
The NEOs receive the same basic employee benefits that are offered by the Company to all salaried employees within the region where the individual resides.  These benefits include medical and dental coverage, disability insurance and life insurance.  The cost of these benefits is partially borne by the employee, including each NEO.
 
The Company does not generally provide perquisites to any of the NEOs.

Retirement Benefits for U.S. Employees
 
The Company offers retirement benefits to its employees through tax-qualified plans, including the Modine Manufacturing Company 401(k) Retirement Plan (formerly known as the Modine 401(k) Plan for Salaried Employees), which is an employee and employer funded “Safe Harbor” plan.  In recent years, the Company has contributed to participant 401(k) accounts (including NEO participants) a Safe Harbor Matching Contribution equal to 100 percent of the first 3 percent of compensation that an employee contributes to the Plan as an Elective Deferral for the Plan Year, plus 50 percent of the next 3 percent of compensation that an employee contributes as an Elective Deferral for the Plan Year. For eligible NEOs and eligible senior managers whose eligible compensation exceeds the IRS annual compensation limit, the Company has applied this matching formula to the applicable over-the-limit compensation and this amount is contributed to the Modine Deferred Compensation Plan.  The Company did not make any additional contributions to the Modine Manufacturing Company 401(k) Retirement Plan for fiscal 2022.  
 
While the Modine Manufacturing Company 401(k) Retirement Plan “Safe Harbor” contribution is available to the Company’s eligible employees in the U.S., each individual participant’s 401(k) plan balance may vary due to a combination of differing annual amounts contributed by the employee, the investment choices of the participant (the same investment choices are available to all participants in the plan) and the number of years the person has participated in the 401(k) plan.  Additionally, each eligible NEO’s and senior manager’s Deferred Compensation Plan balance may vary due to a combination of differing annual amounts contributed by the employee, the employee’s annual eligible compensation, the investment choices of the participant (the same investment choices are available to all eligible NEOs and senior managers in the plan) and the number of years the employee has participated in the Deferred Compensation Plan.  
 
In fiscal 2022, the Company made matching contributions to an NEO’s account under the 401(k) Retirement Plan equal to the sum of 100 percent of the first 3 percent of compensation an NEO elected to contribute to the 401(k) Retirement Plan and 50 percent of the next 3 percent of compensation an NEO elected to contribute to the 401(k) Retirement Plan.  In fiscal 2022, the Company made contributions to the NEOs’ accounts under the Deferred Compensation Plan equal to the sum of 100 percent of the NEOs’ first 3 percent of eligible compensation in excess of the compensation limits applicable to 401(k) Plans and the NEOs (“over-the-limit compensation”) and 50 percent of the NEO’s next 3 percent of eligible over-the-limit compensation.
 
The Company’s defined benefit pension plan, which is frozen, is more fully described in the Pension Benefits Table for Fiscal 2022 below.  Mr. Lucareli and Mr. Agen participate in the Company’s defined benefit pension plan, as did Mr. McBurney prior to his cessation of employment effective October 29, 2021.  Mr. Brinker, Ms. Stein, Mr. Casterton, and Mr. McGinnis joined the Company after the defined benefit pension plan was closed to new participants.
 
In addition to the employee benefits applicable to U.S. employees in general, certain highly compensated employees of the Company, including the NEOs, may participate in the following plans:
 
Deferred Compensation Plan. The Deferred Compensation Plan is a nonqualified plan that allows a highly compensated employee to defer up to 10 percent of base salary.  Salary deferred pursuant to the Deferred Compensation Plan is an asset of the Company.  The sums deferred do not earn a preferential rate of return and the investment alternatives are generally the same as the 401(k) Retirement Plan.  Payments out of the Deferred Compensation Plan are not made until termination of service or retirement.  As part of the Company’s objective of restoring in this plan amounts that exceeded the allowable Company match and Company contributions to the 401(k) Retirement Plan because of statutory limits, the Company contributes an amount equal to the amount of the employer match and employer contribution that was not allowed to be contributed to the 401(k) Retirement Plan for such individuals due to statutory limits.
 
Executive Supplemental Retirement Plan (“SERP”).  The SERP is a nonqualified pension plan.  The SERP, like the defined benefit pension plan, is frozen and intended to be an extension of the Company’s qualified pension plan.  Under the SERP, salary and bonus that are in excess of statutory limits are taken into account in determining nonqualified benefits payable to an employee.
 
Severance Plan
 
The Company has a severance plan that was last updated by the HCC Committee in fiscal 2012 (the “Severance Plan”) for members of the Executive Council as recommended to the Committee by the Company’s CEO, to ensure consistent treatment of individuals in such positions in the event of an involuntary termination of employment without cause.  The Severance Plan provides that such individuals would be paid their annual base salary at the time of termination in installment payments over the course of the year following termination, and would be eligible to elect Company-paid COBRA continuation coverage for one year following termination.  In order to receive these benefits, participants are required to release the Company from any and all liability.  Additionally, the Severance Plan provides certain benefits in the event of an NEO’s termination of employment in connection with a change in control of the Company.  See Potential Post-Employment Payments below for additional information about benefits under the Severance Plan.  All NEOs other than Mr. Brinker (who has a separate employment and change in control agreement) are covered (or in the case of Mr. Casterton and Mr. McBurney who entered into the Casterton and McBurney Letter Agreements, respectively, were covered) under the Severance Plan; provided, however, Mr. Lucareli is not entitled to certain benefits in the event of his termination of employment in connection with a change in control of the Company under the Severance Plan as he has entered into a separate change in control agreement with the Company (see Potential Post-Employment Payments below for more information).
 
Share Ownership Guidelines - Officers
 
The Company has maintained share ownership guidelines for directors and officers of the Company, including the NEOs, since 2008.  The Board continues to believe that directors and officers should have a meaningful personal investment in the Company.  Only shares of stock, either restricted or unrestricted, count toward compliance with the guidelines.
 
The current guidelines provide that, on the fifth anniversary of appointment to the position, the President and CEO is expected to hold shares of Company stock with a value of at least five times his or her annual base salary.  In addition, the guidelines now do not distinguish between NEOs and other executive officers and provide that all executive officers, other than the President and CEO, are expected to hold shares of Company stock with a value of at least three times their current annual base salary.  The stock value is determined by using the higher of the stock price at the time of measurement or the average stock price over the previous three years.  The HCC Committee reviews the guidelines and compliance therewith on at least an annual basis.  The chair of the Governance Committee evaluates whether an exception should be made for any officer, who, due to his or her unique financial circumstances or other extenuating circumstances, would incur a hardship by complying with the applicable guideline after the initial five-year period and, in such an event, may make an exception to the guidelines for such individual.  Additionally, the guidelines may be temporarily waived for an officer who has an unusual personal circumstance or is approaching retirement and has a need to diversify his/her stock holdings.  Each of the NEOs who has been an officer of the Company for at least five years is currently in compliance with the stock ownership guidelines.
 
Related Policies Applicable to Executive Officers
 
Under the Company’s Insider Trading Policy, all directors and executive officers, including the NEOs, are prohibited from holding shares of Company stock in a margin account or otherwise pledging shares of Company stock in any way, and all directors and employees, including their designees, of the Company are prohibited from engaging in hedging or monetizing transactions involving Company stock.   The HCC Committee has also implemented an incentive compensation recoupment (or “clawback”) policy.  Effective beginning with awards granted in fiscal 2013, the clawback policy requires forfeiture or repayment of any awards granted under the Incentive Plan (i.e., the MIP (cash bonus) or any long-term incentive awards) if the HCC Committee determines that a participant committed an act of misconduct that is adverse, or reasonably expected to be adverse, to the best interests of the Company or its shareholders.  
 
Employment Agreements
 
The Company has an employment agreement with Mr. Brinker.  The Company did enter into the Casterton and McBurney Letter Agreements during fiscal 2022, which set forth some of the terms of Mr. Casterton’s and Mr. McBurney’s severance. See Potential Post-Employment Payments below for additional information about benefits in the event of a termination of employment under Mr. Brinker’s employment agreement, and the actual payments made to Mr. Casterton and Mr. McBurney under the Casterton and McBurney Letter Agreements.
 
The Company made an offer of employment to Mr. McGinnis pursuant to an offer letter dated July 16, 2021 that was filed as Exhibit 10.2 to the Company’s Form 10-Q for the fiscal quarter ended September 30, 2021, as amended (the “McGinnis Offer Letter”). The McGinnis Offer Letter set forth the initial compensation to which Mr. McGinnis was entitled to upon his hire (e.g., base salary, LTIP eligibility, and the Make Whole Awards described above in the section titled Grants under the Long-Term Incentive Plan for Plan Commencing in Fiscal 2022).  Additionally, the McGinnis Offer Letter provided for a lump-sum signing bonus of $25,000, subject to the Company’s clawback policies. 
 
Effective as of August 31, 2020, the Company entered into certain CEO Transition Retention Agreement Letters with Messrs. Lucareli, McBurney and Agen and Ms. Stein to provide a retention incentive for such NEOs through the transition of the CEO role from Thomas A. Burke, the former President and Chief Executive Officer of the Company, to Mr. Brinker.  The CEO Transition Retention Agreement Letters provided for a cash award incentive and a future grant of Retention Restricted Stock Units to each of the foregoing NEOs if they remain employed with the Company until August 4, 2022 (unless terminated earlier by the Company without Good Cause).  The cash award incentive under the CEO Transition Retention Agreement Letters for each of the applicable NEOs is equal to fifty percent (50%) (40% for Mr. McBurney) of the NEO’s base salary as of August 4, 2022 and the future grant of Retention Restricted Stock Units will be equal, based on grant date fair value, to fifty percent (50%) (45% for Mr. McBurney) of each applicable NEO’s target value of his or her prevailing annual LTIP award as of August 4, 2022, based on the closing stock price of the Company on August 3, 2022.  In the event of an NEO’s termination of employment without Good Cause prior to August 4, 2022, the CEO Transition Retention Agreement Letters provide for a payout of the incentive amounts as severance at the time of the termination of employment.  See Potential Post-Employment Payments below for additional information about benefits in the event of a termination of employment under the CEO Transition Retention Agreement Letters.
 
The Company has entered into change in control agreements with Mr. Brinker and Mr. Lucareli and certain other key employees.  The purpose of these agreements is to ensure continuity and, in the case of a change in control, the continued dedication of key employees during any period of uncertainty due to a proposed or pending change in control of the Company.  See Potential Post-Employment Payments below for additional information about benefits in the event of a change in control under the employment agreements and the change in control agreements.
 
Tax Implications for NEOs
 
The HCC Committee generally seeks to structure compensation amounts and arrangements so that they do not result in penalties for the NEOs under the Internal Revenue Code of 1986, as amended (the “Code”).  For example, Section 409A of the Code imposes substantial penalties and results in the loss of any tax deferral for nonqualified deferred compensation that does not meet the requirements of that section.  The HCC Committee has generally structured the elements of the Company’s compensation program so that they are either not characterized as nonqualified deferred compensation under Section 409A or meet the distribution, timing and other requirements of Section 409A.  Without these steps, certain elements of compensation could result in substantial tax liability for the NEOs.  Section 280G and related provisions of the Code impose substantial excise taxes on so-called “excess parachute payments” payable to certain executives upon a change in control and results in the loss of the compensation deductions for such payments by the executive’s employer.  When the Company entered into the change in control agreement with Mr. Lucareli, which was entered into prior to 2009, the HCC Committee structured the change in control payment to include a gross up for excise taxes imposed under Section 280G in order to preserve the after-tax value of those payments to him.  The portion of the Severance Plan applicable in a change in control, which is applicable to those joining the Company’s senior management on or after the date of adoption of the Severance Plan, does not provide excise tax gross ups in the event of a change in control.
 
Tax Implications of IRC Section 162(m)
 
Section 162(m) of the Code generally disallows a tax deduction to public companies for compensation over $1,000,000 paid in any tax year to a company’s CEO, CFO, and its three most highly compensated NEOs (other than the CEO and CFO) regardless of whether they were in service as of the end of any such tax year (each a “covered employee”). Additionally, for any NEO whose compensation was or is subject to this limitation in any tax year beginning in or after 2017, that executive officer’s compensation will remain subject to this annual deductibility limitation for any future tax year in which he or she receives compensation from Modine, regardless of whether he or she remains a NEO.
 
Accordingly, Modine is only able to deduct up to $1,000,000 per year of the compensation payable to any of our NEOs who is a “covered employee” as determined under Section 162(m), unless certain transition relief pursuant to tax reform legislation signed into law on December 22, 2017, would apply to the applicable compensation.
 
COMPENSATION COMMITTEE REPORT
 
The HCC Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis with management; and, based on that review and discussion, the HCC Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s proxy statement and the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2022.
 
THE HUMAN CAPITAL AND COMPENSATION COMMITTEE
 
Christopher W. Patterson, Chair
Charles P. Cooley
Suresh V. Garimella
Katherine C. Harper
Larry O. Moore
 
FISCAL 2022 NEO COMPENSATION
 
2022 Summary Compensation Table
 
The following table sets forth compensation awarded to, earned by, or paid to the Company’s NEOs, which include (i) the Principal Executive Officer, (ii) the Principal Financial Officer, (iii) the three most highly compensated executive officers, serving as officers as of the end of fiscal 2022, and (iv) Mr. Casterton and Mr. McBurney, who were executive officers of the Company prior to their cessation of employment in October 2021.

Name and
Principal Position
 
Fiscal Year
 
Salary ($)(1)
 
 Bonus ($)
 
Stock Awards ($)(2)
 
Option Awards ($)(3)
 
Non-Equity Incentive Plan Compensation   ($)(4)
 
Change in Pension Value ($)(5)
 
All Other Compensation ($)(6)
 
Total ($)
                                     
Neil D. Brinker
 
2022
 
825,846
 
               -
 
          730,618
 
417,282
 
                        -
 
NA
 
39,694
 
2,013,440
President and CEO
                                   
   
2021
 
258,462
 
               -
 
       2,090,225
 
132,033
 
266,667
 
NA
 
183,984
 
2,931,370
                                     
Michael B. Lucareli
 
2022
 
510,615
 
               -
 
          321,554
 
183,650
 
                        -
 
0
 
25,099
 
1,040,918
EVP, CFO
                                   
   
2021
 
514,204
 
               -
 
          520,001
 
260,212
 
507,726
 
14,691
 
11,653
 
1,828,486
                                     
   
2020
 
465,750
 
               -
 
          657,988
 
164,226
 
                        -
 
46,846
 
22,922
 
1,357,731
                                     
Eric S. McGinnis
 
2022
 
261,769
 
       25,000
 
          889,874
 
259,379
 
                        -
 
NA
 
9,893
 
1,445,915
President, Climate Solutions
                                   
                                     
Sylvia A. Stein
 
2022
 
376,292
 
               -
 
          146,679
 
83,778
 
                        -
 
NA
 
18,695
 
625,443
VP, GC, Corp. Sec. and
                                   
Chief Compliance Officer
 
2021
 
344,850
 
               -
 
          145,203
 
72,658
 
              248,298
 
NA
 
9,231
 
820,240
                                     
   
2020
 
359,750
 
               -
 
          290,394
 
72,480
 
                        -
 
NA
 
18,322
 
740,946
                                     
Brian J. Agen
 
2022
 
351,554
 
               -
 
          112,148
 
64,049
 
                        -
 
0
 
17,515
 
545,266
VP, HR
                                   
                                     
Matthew J. McBurney
 
2022
 
203,885
 
               -
 
          123,374
 
70,463
 
                        -
 
0
 
666,259
 
1,063,980
Former VP, BHVAC
                                   
   
2021
 
320,185
 
               -
 
          136,802
 
68,455
 
              229,158
 
16,023
 
8,788
 
779,411
                                     
Joel T. Casterton
 
2022
 
206,802
 
               -
 
          123,018
 
70,265
 
                        -
 
NA
 
366,093
 
766,178
Former VP, HDE
                                   
   
2021
 
323,950
 
               -
 
          136,398
 
68,256
 
              233,228
 
NA
 
8,106
 
769,938
                                     
   
2020
 
337,750
 
               -
 
          272,811
 
68,088
 
                        -
 
NA
 
16,791
 
695,440

(1)
The salary amounts include amounts deferred at the NEO’s option through contributions to the Modine 401(k) Retirement   Plan and the Modine Deferred Compensation Plan.
 
(2)
Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for retention restricted stock unit awards (inclusive of any Make Whole Awards).  For fiscal 2022, the Company granted the NEOs performance cash awards, the value of which will not appear in the Summary Compensation Table until those awards are paid.  The assumptions used to determine the fair value of the awards are discussed in Note 5 of the Notes to Consolidated Financial Statements contained in the Company’s Form 10-K for the fiscal year ended March 31, 2022.
 
(3)
Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for grants of stock options.  The assumptions used to determine the value of the options are discussed in Note 5 of the Notes to Consolidated Financial Statements contained in the Company’s Form 10-K for the fiscal year ended March 31, 2022.  The actual value, if any, that an optionee will realize upon the exercise of an option will depend on the excess of the market value of the Company’s common stock over the exercise price on the date the option is exercised, which cannot be determined until the option is exercised.
 
(4)
The amounts in the “Non-Equity Incentive Plan Compensation” column include payments under the MIP.  In fiscal 2022, no MIP payments were earned.
 
(5)
Represents the change in pension value between the end of fiscal 2021 and the end of fiscal 2022 for the NEOs who participate in the Modine Manufacturing Company Pension Plan and the Executive Supplemental Retirement Plan.  For purposes of calculating the change in benefit values from year to year, the discount rates used to determine the present value of the benefit were 3.94% as of March 31, 2022 and 3.23% as of March 31, 2021. The change in pension value of the Salaried Pension Plan for Mr. Lucareli, Mr. McBurney, and Mr. Agen was ($20,471), ($22,493), and ($14,039), respectively.
 
(6)
The amounts set forth in this column for fiscal 2022 include:
 

Company matching contributions to participant accounts in the 401(k) Retirement Plan (“401(k) Company Match”) equal to 100 percent of the amount contributed to the plan by the employee for up to 3 percent of annual income, and 50 percent of the amount contributed to the plan by the employee for up to an additional 3 percent of annual income, subject to the maximum contribution limit to the plan ($19,500 in calendar year 2021 and $20,500 in calendar year 2022);
 

Company contributions to the Deferred Compensation Plan equal to the amount of the Company match on salary that could not be contributed to the 401(k) Retirement Plan, because of statutory limits (“Company Excess Match/Contribution Overflow to Deferred Compensation Plan”);
 

Company payment of long-term disability insurance premiums (“Long-Term Disability Insurance Premiums”);
 

Company payment of life insurance premiums (“Life Insurance Premiums”);


Severance payments; and
 

Perquisites and other personal benefits.

Name
 
401(k)
Company
Match ($)
 
Company Excess Match /
Contribution Overflow to
Deferred Compensation
Plan ($)
 
Long-Term
Disability & Life
Insurance
Premiums ($)
 
Severance ($)
 
Perquisites ($)
 
Total ($)
                         
Neil D. Brinker
 
13,292
 
                            23,750
 
2,652
 
                       -
 
                       -
 
39,694
                         
Michael B. Lucareli
 
13,593
 
                              9,357
 
2,149
 
                       -
 
                       -
 
25,099
                         
Eric S. McGinnis
 
9,338
 
                                    -
 
555
 
                       -
 
                       -
 
9,893
                         
Sylvia A. Stein
 
13,233
 
                              3,696
 
1,766
 
                       -
 
                       -
 
18,695
                         
Brian J. Agen
 
13,227
 
2,593
 
1,695
     
                       -
 
17,515
                         
Matthew J. McBurney
 
10,682
 
                                    -
 
969
 
             654,608
 
                       -
 
666,259
                         
Joel T. Casterton
 
531
 
                                    -
 
977
 
             364,585
 
                       -
 
366,093

Grants of Plan-Based Awards for Fiscal 2022
 
In fiscal 2022, the Company granted stock options, retention restricted stock units, performance cash and short-term cash incentives as Plan-Based Awards.
 
Stock options have an exercise price equal to the fair market value of the Company’s common stock on the date of grant.  Except with respect to Mr. McGinnis’s Make Whole Awards, which are discussed in the Grants under the Long-Term Incentive Plan for Plan Commencing in Fiscal 2022 and Ending in Fiscal 2024 on page 28, stock options granted in fiscal 2022 vest in four annual installments commencing one year after the date of grant.  The stock options expire ten years from the date of grant.  Except with respect to Mr. McGinnis’s Make Whole Awards, which are discussed in the Grants under the Long-Term Incentive Plan for Plan Commencing in Fiscal 2022 and Ending in Fiscal 2024 on page 28, retention restricted stock units granted in fiscal 2022 vest in four annual installments commencing one year after the date of grant. Further details regarding the performance cash (including Mr. McGinnis’s Make Whole Awards) and short-term cash incentives (MIP awards) are described in the Compensation Discussion and Analysis section above.


The following table sets forth information about grants of awards made in the fiscal year ended March 31, 2022 to the NEOs.
 
Name
 
Grant Date
 
Estimated Future Payouts
 Under Non-Equity
Incentive Plan Awards
 
Estimated Future Payouts of Performance-based
 Awards Under
Equity Incentive Plan Awards
 
All Other Stock Awards; Number of Shares of Stock or Units
(#) (1)
 
All Other Option Awards; Number of Securities Underlying Options
(#) (1)
 
Exercise
or Base Price of Option Awards ($/Sh)
 
Grant Date Fair Value
of Stock
and Option Awards
($)
                                             
       
Threshold ($)
 
Target
($)
 
Max
 ($)
 
Threshold (#)
 
Target
(#)
 
Max
(#)
               
                                             
Neil D.
 
NA (2)
 
82,625
 
826,250
 
1,652,500
                         
NA
Brinker
 
6/4/21 (3)
 
93,938
 
939,375
 
1,878,750
                         
NA
   
6/4/21
                         
41,069
         
730,618
   
6/4/21
                             
44,439
 
17.79
 
417,282
                                             
Michael B.
 
NA (2)
 
35,788
 
357,875
 
715,750
                         
NA
Lucareli
 
6/4/21 (3)
 
41,344
 
413,438
 
826,875
                         
NA
   
6/4/21
                         
18,075
         
321,554
   
6/4/21
                             
19,558
 
17.79
 
183,650
                                             
Eric S.
 
NA (2)
 
24,900
 
249,000
 
498,000
                         
NA
McGinnis
 
8/25/21 (3)
 
12,450
 
124,500
 
249,000
                         
NA
   
8/25/21 (4)
 
20,507
 
205,070
 
410,140
                         
NA
   
8/25/21 (4)
 
14,650
 
146,498
 
292,996
                         
NA
   
8/25/21
                         
70,513
         
889,874
   
8/25/21
                             
8,284
 
12.62
 
55,337
   
8/25/21
                             
12,269
 
12.62
 
81,957
                                             
Sylvia A.
 
NA (2)
 
22,590
 
225,900
 
451,800
                         
NA
Stein
 
6/4/21 (3)
 
18,860
 
188,595
 
377,190
                         
NA
   
6/4/21
                         
8,245
         
146,679
   
6/4/21
                             
8,922
 
17.79
 
83,778
                                             
Brian J.
 
NA (2)
 
21,105
 
211,050
 
422,100
                         
NA
Agen
 
6/4/21 (3)
 
14,418
 
144,180
 
288,360
                         
NA
   
6/4/21
                         
6,304
         
112,148
   
6/4/21
                             
6,821
 
17.79
 
64,049
                                             
Matthew J.
 
NA (2)
 
11,970
 
119,700
 
239,400
                         
NA
McBurney (5)
6/4/21 (3)
 
15,863
 
158,625
 
317,250
                         
NA
   
6/4/21
                         
6,935
         
123,374
   
6/4/21
                             
7,504
 
17.79
 
70,463
                                             
Joel T.
 
NA (2)
 
12,145
 
121,450
 
242,900
                         
NA
Casterton (5)
6/4/21 (3)
 
15,818
 
158,175
 
316,350
                         
NA
   
6/4/21
                         
6,915
         
123,018
   
6/4/21
                             
7,483
 
17.79
 
70,265

(1)
Stock options and retention restricted stock units are made under the 2020 Incentive Compensation Plan.
 
(2)
These are the fiscal 2022 MIP awards, short-term incentive cash awards.  As discussed in the section above titled Short-Term, Performance-Based Cash Award, performance for fiscal 2022 was below threshold level and the Committee did not approve any payment for any MIP participant for fiscal 2022.
 
(3)
These are the fiscal 2022 performance cash awards, long-term performance cash awards made under the fiscal 2022 LTIP.
 
(4)
These are performance cash awards made to Mr. McGinnis as Make Whole Awards, as described in the section above titled Long-Term Incentive Compensation.
 
(5)
As a result of their October 2021 exits from Modine, all grants made to Messrs. McBurney and Casterton pursuant to the LTIP commencing in fiscal 2022 have been forfeited.



Outstanding Equity Awards at Fiscal Year End
 
   
Option Awards
 
Stock Awards
Name
 
Number of Securities Underlying Unexercised Options Exercisable
(#)(1)
 
Number of
Securities
Underlying Unexercised
Options Unexercisable
(#)(1)
 
Option Exercise Price ($)
 
Option Expiration Date
 
Number of Shares or
Units of
Stock that
Have Not
Vested
(#)(2)
 
Market
Value of Shares or Units of
Stock that Have Not Vested
($)(2)
 
Equity
Incentive Plan Awards;
Number of Unearned
Shares, Units
or Other
Rights that
Have Not
Vested (#)(3)
 
Equity Incentive
Plan Awards;
Market or
Payout Value of Unearned
Shares, Units
or Other Rights
that Have Not
Vested ($)(3)
                                 
Neil D.
 
             5,710
 
17,133
 
11.19
 
12/1/30
 
96,390
 
868,474
 
                     -
 
                       -
Brinker
 
                     -
 
44,439
 
17.79
 
6/4/31
               
                                 
Michael B.
 
3,783
 
                        -
 
5.75
 
6/5/22
 
93,826
 
845,372
 
24,811
 
223,547
Lucareli
 
13,379
 
                        -
 
10.40
 
6/3/23
               
   
10,651
 
                        -
 
14.94
 
6/2/24
               
   
15,285
 
                        -
 
11.39
 
6/2/25
               
   
27,065
 
                        -
 
10.00
 
5/31/26
               
   
17,842
 
                        -
 
15.90
 
6/1/27
               
   
15,096
 
5,035
 
17.90
 
5/30/28
               
   
14,768
 
14,769
 
13.26
 
5/29/29
               
   
19,594
 
58,783
 
6.62
 
10/2/30
               
   
                     -
 
19,558
 
17.79
 
6/4/31
               
                                 
Eric S.
 
4,048
 
8,221
 
12.62
 
8/25/31
 
56,798
 
511,750
 
                     -
 
                       -
McGinnis
 
                     -
 
8,284
 
12.62
 
8/25/31
               
                                 
Sylvia A.
 
             6,666
 
2,222
 
17.90
 
5/30/28
 
32,128
 
289,473
 
10,950
 
98,660
Stein
 
             6,518
 
6,518
 
13.26
 
5/29/29
               
   
             5,471
 
16,414
 
6.62
 
10/2/30
               
   
                     -
 
8,922
 
17.79
 
6/4/31
               
                                 
Brian J.
 
1,801
 
                        -
 
5.75
 
6/5/22
 
24,149
 
217,582
 
8,181
 
73,711
Agen
 
3,248
 
                        -
 
10.40
 
6/3/23
               
   
3,192
 
                        -
 
14.94
 
6/2/24
               
   
4,842
 
                        -
 
11.39
 
6/2/25
               
   
8,765
 
                        -
 
10.00
 
5/31/26
               
   
6,847
 
                        -
 
15.90
 
6/1/27
               
   
4,980
 
1,663
 
17.90
 
5/30/28
               
   
4,868
 
4,871
 
13.26
 
5/29/29
               
   
4,087
 
12,264
 
6.62
 
10/2/30
               
   
                     -
 
6,821
 
17.79
 
6/4/31
               
                                 
Matthew J.
 
1,323
 
                        -
 
10.40
 
10/29/22
 
16,218
 
146,124
 
9,713
 
87,514
McBurney
 
2,791
 
                        -
 
14.94
 
10/29/22
               
   
4,118
 
                        -
 
11.39
 
10/29/22
               
   
3,790
 
                        -
 
10.00
 
10/29/22
               
   
4,889
 
                        -
 
15.90
 
10/29/22
               
   
3,507
 
1,171
 
17.90
 
10/29/22
               
   
5,782
 
2,891
 
13.26
 
10/29/22
               
   
5,154
 
5,154
 
6.62
 
10/29/22
               
                                 
Joel T.
 
204
 
                        -
 
14.94
 
10/29/22
 
17,202
 
154,990
 
10,287
 
92,686
Casterton
 
632
 
                        -
 
11.39
 
10/29/22
               
   
1,569
 
                        -
 
10.00
 
10/29/22
               
   
1,355
 
                        -
 
15.90
 
10/29/22
               
   
5,979
 
1,995
 
17.90
 
10/29/22
               
   
6,122
 
3,061
 
13.26
 
10/29/22
               
   
                     -
 
5,139
 
6.62
 
10/29/22
               

 
(1)
The options vest in four equal annual installments commencing on the first anniversary of the date of grant, except with respect to Mr. McGinnis’s Make Whole Award, which is discussed in the Grants under the Long-Term Incentive Plan for Plan Commencing in Fiscal 2022 and Ending in Fiscal 2024 on page 28.
 
(2)
All of these shares are retention restricted stock unit awards (“Retention Restricted Awards”).  All Retention Restricted Awards vest in four equal annual installments commencing one year after the date of grant, except with respect to Mr. McGinnis’s Make Whole Awards, which are discussed in the Grants under the Long-Term Incentive Plan for Plan Commencing in Fiscal 2022 and Ending in Fiscal 2024 on page 28.  The market value of the awards was determined by multiplying the number of restricted stock units by $9.01, the closing price of the Company’s common stock on the NYSE on March 31, 2022 (the last trading day of fiscal 2022).  See Compensation Discussion and Analysis – Equity Incentives – Long-Term Incentive Compensation for a description of retention restricted stock unit awards.
 
The restricted stock units vest as follows:

   
Shares vesting for
 
   
Neil
Brinker (#)
   
Michael Lucareli (#)
   
Eric
McGinnis (#)
   
Sylvia
Stein (#)
   
Brian
Agen (#)
   
Matthew McBurney (#)
   
Joel
Casterton (#)
 
                                           
May 8, 2022
               
17,143
                         
May 20, 2022
   
6,717