Item 9A. Controls and Procedures
ITEM 9A . CONTROLS AND PROCEDURES .
Conclusion Regarding Disclosure Controls and Procedures
As of the end of the period covered by this Annual Report on Form 10-K, management of the Company, under the supervision, and with the participation, of the Company’s President and Chief Executive Officer and Executive Vice President, Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures, at a reasonable assurance level, as defined in the Securities Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon that evaluation, the President and Chief Executive Officer and Executive Vice President, Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective, at a reasonable assurance level, as of March 31, 2021.
Management’s Report on Internal Control Over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is a process designed by, or under the supervision of, the Company’s President and Chief Executive Officer and Executive Vice President, Chief Financial Officer, and effected by the Company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of its financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management, with the participation of the Company’s President and Chief Executive Officer and Executive Vice President, Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2021. In making its assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “ Internal Control—Integrated Framework (2013). ” Based upon this assessment, management concluded that, as of March 31, 2021, the Company’s internal control over financial reporting was effective.
The effectiveness of the Company’s internal control over financial reporting as of March 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control Over Financial Reporting
There have been no changes in internal control over financial reporting during the fourth quarter of fiscal 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B . OTHER INFORMATION .
None.
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PART III
ITEM 10 . DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE .
Directors
The Company incorporates by reference the information appearing in the Company’s Proxy Statement for the 2021 Annual Meeting of Shareholders to be held on July 22, 2021 (the “2021 Annual Meeting Proxy Statement”) under the caption “Election of Directors.”
Executive Officers
The information in response to this Item appears under the caption “Information about our Executive Officers” in this Form 10-K.
Code of Conduct
The Company incorporates by reference the information appearing in the 2021 Annual Meeting Proxy Statement under the caption “Corporate Governance – Code of Conduct.” The Company’s Code of Conduct is included on its website, www.modine.com (About Modine link). We intend to satisfy our disclosure requirements under Item 5.05 of Form 8-K regarding amendments to, or waivers of, any provision of our Code of Conduct that applies to our principal executive, financial and accounting officers and our directors by posting such information on our website.
Board Committee Charters
The Board of Directors has approved charters for its Audit Committee, Human Capital and Compensation Committee, Corporate Governance and Nominating Committee and Technology Committee. These charters are included on the Company’s website, www.modine.com (Investors link).
Audit Committee Financial Expert
The Company incorporates by reference the information appearing in the 2021 Annual Meeting Proxy Statement under the caption “Committees of the Board of Directors – Audit Committee.”
Audit Committee Disclosure
The Company incorporates by reference the information appearing in the 2021 Annual Meeting Proxy Statement under the captions “Committees of the Board of Directors – Audit Committee” and “Board Meetings and Committees.”
Guidelines on Corporate Governance
The Board of Directors has adopted Guidelines on Corporate Governance. The Company’s Guidelines on Corporate Governance are included on its website, www.modine.com (Investors link).
Security Holder Recommendation of Board Nominees
The Company incorporates by reference the information appearing in the 2021 Annual Meeting Proxy Statement under the caption “Shareholder Nominations and Recommendations of Director Candidates.”
Delinquent Section 16(a) Reports
The Company incorporates by reference the information appearing in the 2021 Annual Meeting Proxy Statement under the caption “Delinquent Section 16(a) Reports.”
We do not intend to incorporate our internet website and the information contained therein or incorporated therein into this annual report on Form 10-K.
ITEM 11 . EXECUTIVE COMPENSATION .
The information appearing in the 2021 Annual Meeting Proxy Statement under the captions “Compensation Discussion and Analysis,” “Compensation of Directors,” “Committees of the Board of Directors – Human Capital and Compensation Committee: Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report” is incorporated herein by reference.
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ITEM 12 . SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS .
Other than the information below, the information required by this Item 12 is incorporated by reference to the section under the caption “Security Ownership of Certain Beneficial Owners and Management” in the 2021 Annual Meeting Proxy Statement.
Each of the Company’s equity compensation plans, listed below, has been approved by its shareholders:
•
Amended and Restated 2008 Incentive Compensation Plan;
•
2017 Incentive Compensation Plan; and
•
2020 Incentive Compensation Plan.
The following table sets forth required information about equity compensation plans as of March 31, 2021:
Plan Category
Number of shares
to be issued upon
exercise of
outstanding
options, warrants
or rights (a)
Weighted-average
exercise price of
outstanding
options, warrants
and rights (b)
Number of shares
remaining available for
future issuance
(excluding securities
reflected in 1st column)
(c)
Equity Compensation Plans approved by security holders
2,175,851
11.63
1,739,787
Equity Compensation Plans not approved by security holders
-
-
-
Total
2,175,851
11.63
1,739,787
(a)
Includes shares issuable under the following type of awards: options – 1,050,191 shares; restricted stock units – 904,980 shares; and performance stock assuming Target performance – 220,680 shares, regardless of any potential actual payout. The number of shares subject to options were granted under the following plans: 2008 Incentive Plan – 389,687 shares, 2017 Incentive Plan – 302,421 shares, 2020 Incentive Plan – 358,083 shares. Shares issuable under performance stock awards and restricted stock unit awards were granted under the following plans: 2008 Incentive Plan – 22,247 shares, 2017 Incentive Plan – 504,801 shares, 2020 Incentive Plan – 598,612 shares.
(b)
The weighted average exercise price does not take into account awards of restricted stock units or performance stock which do not have an exercise price.
(c)
Includes the number of shares remaining available for future issuance under the 2020 Incentive Compensation Plan.
ITEM 13 . CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE .
The Company incorporates by reference the information contained in the 2021 Annual Meeting Proxy Statement under the captions “Certain Relationships and Related Party Transactions” and “Director Independence.”
ITEM 14 . PRINCIPAL ACCOUNTANT FEES AND SERVICES .
The Company incorporates by reference the information contained in the 2021 Annual Meeting Proxy Statement under the caption “Independent Auditor’s Fees for Fiscal 2021 and 2020.”
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PART IV
ITEM 15 . EXHIBITS AND FINANCIAL STATEMENT SCHEDULES .
(a) Documents Filed . The following documents are filed as part of this Report:
Page in Form 10-K
1. The consolidated financial statements of Modine Manufacturing Company and its subsidiaries filed under Item 8:
Consolidated Statements of Operations for the years ended March 31, 2021, 2020 and 2019
44
Consolidated Statements of Comprehensive Income for the years ended March 31, 2021, 2020 and 2019
45
Consolidated Balance Sheets at March 31, 2021 and 2020
46
Consolidated Statements of Cash Flows for the years ended March 31, 2021, 2020 and 2019
47
Consolidated Statements of Shareholders’ Equity for the years ended March 31, 2021, 2020 and 2019
48
Notes to Consolidated Financial Statements
49-84
Report of Independent Registered Public Accounting Firm
85-86
2. Financial Statement Schedules
The following financial statement schedule should be read in conjunction with the consolidated financial statements set forth in Item 8:
Schedule II -- Valuation and Qualifying Accounts for the years ended March 31, 2021, 2020 and 2019
91
Schedules other than those listed above are omitted because they are not applicable, not required, or because the required information is included in the consolidated financial statements and the notes thereto.
3. Exhibits and Exhibit Index.
92-94
See the Exhibit Index included as the last part of this report, which is incorporated herein by reference. Each management contract and compensatory plan or arrangement required to be filed as an exhibit to this report is identified in the Exhibit Index by an asterisk following its exhibit number.
ITEM 16 . FORM 10-K SUMMARY .
None.
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MODINE MANUFACTURING COMPANY AND SUBSIDIARIES
(A Wisconsin Corporation)
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the years ended March 31, 2021, 2020 and 2019
(In millions)
Additions
Description
Balance at
Beginning of
Period
Charged
(Benefit) to
Costs and
Expenses
Charged to
Other
Accounts
Reclassified
as Held for
Sale
Balance at
End of Period
2021: Valuation Allowance for Deferred Tax Assets
$
46.9
$
86.2
$
2.8
(a)
$
( 45.2
)
$
90.7
2020: Valuation Allowance for Deferred Tax Assets
$
43.4
$
4.5
$
( 1.0
) (a)
$
-
$
46.9
2019: Valuation Allowance for Deferred Tax Assets
$
48.9
$
( 1.6
)
$
( 3.9
) (a)
$
-
$
43.4
(a)
Foreign currency translation and other adjustments.
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MODINE MANUFACTURING COMPANY
(THE “REGISTRANT”)
(COMMISSION FILE NO. 1-1373)
EXHIBIT INDEX
TO
2021 ANNUAL REPORT ON FORM 10-K
Exhibit No.
Description
Incorporated Herein By
Referenced To
Filed
Herewith
2.1*
Securities and Asset Purchase Agreement, dated as of November 2, 2020, by and between the Company and Dana Incorporated.
Exhibit 2.1 to Registrant’s Current Report on Form 8-K dated November 2, 2020
3.1
Amended and Restated Articles of Incorporation, as amended.
Exhibit 3.1 to Form 10-K for the fiscal year ended March 31, 2018
3.2
Bylaws, as amended.
Exhibit 3.1 to Registrant’s Current Report on Form 8-K dated June 17, 2020
4.1
Form of Stock Certificate of the Registrant.
Exhibit 4(a) to Form 10-K for the fiscal year ended March 31, 2003 (“2003 10-K”)
4.2
Amended and Restated Articles of Incorporation, as amended.
See Exhibit 3.1 hereto.
4.3**
Amended and Restated Collateral Agency Intercreditor Agreement (the “Original Intercreditor Agreement”) dated as of August 12, 2010 among the Lenders (as defined therein), the Noteholders (as defined therein) and JPMorgan Chase Bank, N.A. as Collateral Agent.
Exhibit 4.3 to August 12, 2010 8-K
4.4**
First Amendment to the Original Intercreditor Agreement, among the Lenders, the Note Holders and JPMorgan as Collateral Agent, pursuant to which the Lenders, the Note Holders and JPMorgan amended the Original Intercreditor Agreement.
Exhibit 4.3 to August 30, 2013 8-K
4.5
Credit Facility Agreement among Modine Holding GmbH, Modine Europe GmbH and Deutsche Bank AG dated as of April 27, 2012.
Exhibit 4.10 to Registrant’s Form 10-K for the fiscal year ended March 31, 2012
4.6
Description of Registrant’s securities
Exhibit 4.14 to Registrant’s Form 10-K for fiscal year ended March 31, 2020
4.7
Fourth Amended and Restated Credit Agreement dated as of June 28, 2019.
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated June 28, 2019
4.8
Second Amended and Restated Note Purchase and Private Shelf Agreement dated as of August 6, 2019
Exhibit 4.1 to Registrant’s Form 10-Q for the third quarter ended December 31, 2019
4.9
First Amendment to Second Amended and Restated Note Purchase and Private Shelf Agreement dated as of January 31, 2020
Exhibit 4.2 to Registrant’s Form 10-Q for the third quarter ended December 31, 2019
4.10
First Amendment to Fourth Amended and Restated Credit Agreement dated as of May 19, 2020
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated May 19, 2020 (“May 19, 2020 8-K”)
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Table of Contents
4.11
Second Amendment to Second Amended and Restated Note Purchase and Private Shelf Agreement dated as of May 19, 2020
Exhibit 4.2 to May 19, 2020 8-K
4.12
Amendment No. 2 to Fourth Amended and Restated Credit Agreement dated as of May 18, 2021
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated May 18, 2021 (“May 18, 2021 8-K”)
4.13
Third Amendment to Second Amended and Restated Note Purchase and Private Shelf Agreement dated as of May 18, 2021
Exhibit 4.2 to May 18, 2021 8-K
10.1***
Director Emeritus Retirement Plan effective April 1, 1992 (and frozen as of July 1, 2000).
Exhibit 10(a) to Registrant’s Form 10-K for the fiscal year ended March 31, 2002
10.2***
Employment Agreement between the Registrant and Thomas A. Burke dated as of June 15, 2007.
Exhibit 10.3 to Registrant’s Current Report on Form 8-K dated June 15, 2007
10.3***
Form of Amendment No. 1 to Employment Agreement entered into as of July 1, 2008 with Thomas A. Burke.
Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated July 1, 2008
10.4***
Form of Change in Control and Termination Agreement (amended and restated) between the Registrant and officers other than Neil Brinker.
Exhibit 10(f) to Registrant’s Form 10-K for the fiscal year ended March 31, 2004
10.6***
Executive Supplemental Retirement Plan (as amended).
Exhibit 10(f) to Registrant’s Form 10-K for the fiscal year ended March 31, 2000
10.7***
Deferred Compensation Plan (as amended).
Exhibit 10(y) to 2003 10-K
10.8***
2008 Incentive Compensation Plan
(Amended and Restated effective May 7, 2014).
Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated July 17, 2014
10.9***
Form of Fiscal 2021 Performance Cash Award Agreement.
Exhibit 10.1 to Registrant’s Form 8-K dated September 30, 2020 (“September 30, 2020 8-K”)
10.10***
Form of Fiscal 2021 Incentive Stock Option Award Agreement.
Exhibit 10.2 to September 30, 2020 8-K
10.11***
Form of Fiscal 2021 Non-Qualified Stock Option Award Agreement.
Exhibit 10.3 to September 30, 2020 8-K
10.12***
Form of Fiscal 2021 Restricted Stock Unit Award Agreement.
Exhibit 10.4 to September 30, 2020 8-K
10.13***
Amendment No. 1 to Form of Change in Control and Termination Agreement (amended and restated) between the Registrant and Officers other than Neil Brinker.
Exhibit 10.17 to Registrant’s Form 10-K for the fiscal year ended March 31, 2011
10.14***
Supplemental Severance Policy.
Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated October 17, 2011
10.15***
2017 Incentive Compensation Plan.
Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated July 20, 2017
10.16***
Form of Fiscal 2021 Non-Employee Director Restricted Stock Unit Award.
Exhibit 10.2 to Registrant’s Current Report on Form 8-K dated July 23, 2020 (“July 23, 2020 8-K”)
10.17***
Transition and Separation Agreement between Thomas A. Burke and Modine Manufacturing Company effective as of August 4, 2020.
Exhibit 10.6 to the Registrant’s Form 10-Q for the second quarter ended September 30, 2020
10.18***
[Corrected] Offer Letter dated as of November 10, 2020, by and between the Company and Neil Brinker.
Exhibit 10.1 to the Registrant’s Form 10-Q for the third quarter ended December 31, 2020 (“December 31, 2020 10-Q”)
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10.19***
Employment Retention Agreement for Scott Wollenberg, dated as of July 26, 2019.
Exhibit 10.5 to the Registrant’s Form 10-Q for the first quarter ended June 30, 2019
10.20***
Form of Make-Whole RSU Award Agreement with Neil Brinker.
Exhibit 10.2 to December 31, 2020 10-Q
10.21***
Form of Make-Whole Performance Cash Award Agreement with Neil Brinker.
Exhibit 10.3 to December 31, 2020 10-Q
10.22***
2020 Incentive Compensation Plan.
Exhibit 10.1 to July 23, 2020 8-K
10.23***
Separation Letter Agreement between the Company and Scott L. Bowser, effective as of March 16, 2021.
X
10.24***
Form of Retention Letter, effective August 31, 2020, between the Company and each of Michael B. Lucareli, Scott L. Bowser and Sylvia A. Stein.
Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated August 31, 2020
21
List of subsidiaries of the Registrant.
X
23
Consent of independent registered public accounting firm.
X
31.1
Rule 13a-14(a)/15d-14(a) Certification of Neil D. Brinker, President and Chief Executive Officer.
X
31.2
Rule 13a-14(a)/15d-14(a) Certification of Michael B. Lucareli, Executive Vice President, Chief Financial Officer.
X
32.1
Section 1350 Certification of Neil D. Brinker, President and Chief Executive Officer.
X
32.2
Section 1350 Certification of Michael B. Lucareli, Executive Vice President, Chief Financial Officer.
X
101.INS
Instance Document
X
101.SCH
XBRL Taxonomy Extension Schema
X
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
X
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
X
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
X
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
X
104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
X
* Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K because they are not material and would likely cause competitive harm to the Company if publicly disclosed.
** Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, the Registrant has omitted certain agreements with respect to long-term debt not exceeding 10% of consolidated total assets. The Registrant agrees to furnish a copy of any such agreements to the Securities and Exchange Commission upon request.
*** Denotes management contract or executive compensation plan or arrangement required to be filed as an exhibit pursuant to Item 15 of Form 10-K.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 27, 2021
Modine Manufacturing Company
By:
/s/ Neil D. Brinker
Neil D. Brinker, President
and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.
/s/ Neil D. Brinker
Neil D. Brinker
President, Chief Executive Officer and Director
(Principal Executive Officer)
May 27, 2021
/s/ Michael B. Lucareli
Michael B. Lucareli
Executive Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
May 27, 2021
/s/ Marsha C. Williams
Marsha C. Williams
Chairperson, Board of Directors
May 27, 2021
/s/ Eric D. Ashleman
Eric D. Ashleman
Director
May 27, 2021
/s/ David G. Bills
David G. Bills
Director
May 27, 2021
/s/ Charles P. Cooley
Charles P. Cooley
Director
May 27, 2021
/s/ Suresh V. Garimella
Suresh V. Garimella
Director
May 27, 2021
/s/ Larry O. Moore
Larry O. Moore
Director
May 27, 2021
/s/ Christopher W. Patterson
Christopher W. Patterson
Director
May 27, 2021
/s/ Christine Y. Yan
Christine Y. Yan
Director
May 27, 2021
95