SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
CORE MOLDING TECHNOLOGIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:____________________________
2) Form, Schedule or Registration Statement No.:_____________________
3) Filing Party:____________________________
4) Date Filed:_______________________
CORE MOLDING TECHNOLOGIES, INC.
800 Manor Park Drive
Columbus, Ohio 43228
(614) 870-5000
April 17, 2006
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Core Molding Technologies, Inc. to be held at the Company's Corporate
Headquarters, 800 Manor Park Drive, Columbus, Ohio 43228, on May 17, 2006, at
9:00 a.m., Eastern Daylight Savings Time. Further information about the meeting
and the matters to be considered is contained in the formal Notice of Annual
Meeting of Stockholders and Proxy Statement on the following pages.
It is important that your shares be represented at this meeting. Whether or
not you plan to attend, we hope that you will sign, date and return your proxy
promptly in the enclosed envelope.
Sincerely,
Malcolm M. Prine
Chairman of the Board
CORE MOLDING TECHNOLOGIES, INC.
800 MANOR PARK DRIVE
COLUMBUS, OHIO 43228
(614) 870-5000
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 2006
------------------------
TO OUR STOCKHOLDERS:
Core Molding Technologies, Inc. ("Core Molding Technologies") will hold its
2006 Annual Meeting of Stockholders on May 17, 2006 at 9:00 a.m., Eastern
Daylight Savings Time, at its corporate headquarters, 800 Manor Park Drive,
Columbus, Ohio 43228, for the following purposes:
1. to elect seven (7) directors to comprise the Board of Directors of Core
Molding Technologies;
2. to approve the Core Molding Technologies, Inc. 2006 Long-Term Equity
Incentive Plan;
3. to amend the 2002 Employee Stock Purchase Plan;
4. to ratify the appointment of Deloitte & Touche LLP as the independent
registered public accounting firm for Core Molding Technologies for the
year ending December 31, 2006; and
5. to consider and act upon other business as may properly come before the
meeting and any adjournments or postponements of the meeting.
The foregoing matters are described in more detail in the Proxy Statement,
which is attached to this notice. Only stockholders of record at the close of
business on March 31, 2006, the record date, are entitled to receive notice of
and to vote at the meeting.
We desire to have maximum representation at the meeting and respectfully
request that you date, execute and promptly mail the enclosed proxy in the
postage-paid envelope provided. You may revoke a proxy by notice in writing to
the Secretary of Core Molding Technologies at any time prior to its use.
BY ORDER OF THE BOARD OF DIRECTORS
Herman F. Dick, Jr.
Treasurer, Chief Financial Officer,
and Secretary
April 17, 2006
CORE MOLDING TECHNOLOGIES, INC.
800 MANOR PARK DRIVE
COLUMBUS, OHIO 43228
(614) 870-5000
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 2006
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To Our Stockholders:
Core Molding Technologies, Inc. (hereinafter referred to as "Core Molding
Technologies" or the "Company") is furnishing this Proxy Statement in connection
with the solicitation by its Board of Directors of proxies to be used and voted
at its annual meeting of stockholders, and at any adjournment of the annual
meeting. Core Molding Technologies will hold its annual meeting on May 17, 2006,
at its corporate headquarters, 800 Manor Park Drive, Columbus, Ohio 43228 at
9:00 a.m. Eastern Daylight Savings Time. Core Molding Technologies is holding
the annual meeting for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders.
Core Molding Technologies is first sending this Proxy Statement, the
accompanying proxy card and the Notice of Annual Meeting of Stockholders on or
about April 17, 2006.
GENERAL INFORMATION
SOLICITATION
The Board of Directors of Core Molding Technologies is soliciting the
enclosed proxy. In addition to the use of the mail, directors and officers of
Core Molding Technologies may solicit proxies, personally or by telephone or
telegraph. Core Molding Technologies will not pay its directors and officers any
additional compensation for the solicitation.
In addition, the stock transfer agent of Core Molding Technologies,
American Stock Transfer & Trust Co., New York, New York will conduct proxy
solicitations on behalf of Core Molding Technologies. Core Molding Technologies
will reimburse American Stock Transfer & Trust Co. for reasonable expenses
incurred by it in the solicitation. Core Molding Technologies also will make
arrangements with brokerage firms and other custodians, nominees and fiduciaries
for the forwarding of proxy solicitation material to beneficial owners of the
common stock of Core Molding Technologies. Core Molding Technologies will
reimburse those brokerage firms, custodians, nominees and fiduciaries for their
reasonable expenses.
Core Molding Technologies will pay all expenses of the proxy solicitation.
Except as otherwise provided, Core Molding Technologies will not use specially
engaged employees or other paid solicitors to conduct any proxy solicitation.
VOTING RIGHTS AND VOTES REQUIRED
Holders of shares of the common stock of Core Molding Technologies at the
close of business on March 31, 2006, the record date for the annual meeting, are
entitled to notice of, and to vote at, the annual meeting. On the record date,
Core Molding Technologies had 10,071,217 shares of common stock outstanding.
Each outstanding share of common stock on the record date is entitled to
one vote on all matters presented at the annual meeting. The presence, in person
or by proxy, of stockholders entitled to cast a majority of all the votes
entitled to be cast will constitute a quorum for the transaction of business at
the
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annual meeting. No business, other than adjournment, can be conducted at the
annual meeting unless a quorum is present in person or by proxy.
Abstentions will count as shares present in determining the presence of a
quorum for a particular matter. Abstentions, however, will not count as votes
cast in determining the approval of any matter by the stockholders. If a broker
or other record holder or nominee indicates on a proxy that it does not have
authority to vote certain shares on a particular matter or if a broker or other
record holder or nominee does not return proxies for any shares, those shares
will not count as either present for purposes of determining a quorum or as
votes cast in determining the approval of any matter by the stockholders.
In the election of directors, each of the seven directors will be elected
by a plurality of votes cast by stockholders of record on the record date and
present at the annual meeting, in person or by proxy. Cumulative voting in the
election of directors will not be permitted.
Passage of the proposals to approve the Core Molding Technologies, Inc.
2006 Long-Term Equity Incentive Plan and the amendments to the 2002 Employee
Stock Purchase Plan requires the approval of a majority of the votes cast by the
stockholders of record on the record date and present at the annual meeting, in
person or by proxy.
Core Molding Technologies is seeking stockholder ratification of the
appointment of its independent registered public accounting firm, but
ratification is not required by law.
VOTING OF PROXIES
Shares of common stock represented by all properly executed proxies
received prior to the annual meeting will be voted in accordance with the
choices specified in the proxy. Unless contrary instructions are indicated on
the proxy, the shares will be voted:
- FOR the election as directors of the nominees named in this Proxy
Statement until their successors are elected and qualified;
- FOR the approval of the Core Molding Technologies, Inc. 2006 Long-Term
Equity Incentive Plan;
- FOR the amendment of the 2002 Employee Stock Purchase Plan; and
- FOR the ratification of the appointment of Deloitte & Touche LLP
("Deloitte & Touche"), as the independent registered public accounting
firm for Core Molding Technologies for the year ending December 31, 2006.
Management of Core Molding Technologies and the Board of Directors of Core
Molding Technologies know of no matters to be brought before the annual meeting
other than as set forth in this Proxy Statement. If, however, any other matter
is properly presented to the stockholders for action, it is the intention of the
holders of the proxies to vote at their discretion on all matters on which the
shares of common stock represented by proxies are entitled to vote.
REVOCABILITY OF PROXY
A stockholder who signs and returns a proxy in the accompanying form may
revoke it at any time before the authority granted by the proxy is exercised. A
stockholder may revoke a proxy by delivering a written statement to the
Secretary of Core Molding Technologies that the proxy is revoked.
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ANNUAL REPORT
The Annual Report on Form 10-K for the fiscal year ended December 31, 2005,
of Core Molding Technologies, which includes financial statements and
information concerning the operations of Core Molding Technologies, accompanies
this Proxy Statement. The Annual Report is not to be regarded as proxy
solicitation materials.
STOCKHOLDER PROPOSALS
Any stockholder who desires to present a proposal for consideration at the
2007 annual meeting of stockholders must submit the proposal in writing to Core
Molding Technologies. If the proposal is received by Core Molding Technologies
prior to the close of business on December 15, 2006, and otherwise meets the
requirements of applicable state and federal law, Core Molding Technologies will
include the proposal in the proxy statement and form of proxy relating to the
2007 annual meeting of stockholders. Core Molding Technologies may confer on the
proxies for the 2007 annual meeting of stockholders discretionary authority to
vote on any proposal, if Core Molding Technologies does not receive notice of
the proposal by February 28, 2007.
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OWNERSHIP OF COMMON STOCK
BENEFICIAL OWNERS
The table below sets forth, to the knowledge of Core Molding Technologies,
the only beneficial owners, as of March 31, 2006, of more than 5% of the
outstanding shares of common stock of Core Molding Technologies.
NUMBER OF SHARES OF COMMON STOCK BENEFICIALLY OWNED
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------- -------------------- ----------------
International Truck and Engine Corp. ............... 4,264,000(1) 42.3%
4201 Winfield Drive
P.O. Box 1488
Warrenville, Illinois 60555
Gabelli Asset Management, Inc., et al............... 758,000(2) 7.5%
One Corporate Center
Rye, NY 10580
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(1) International Truck and Engine Corp. (formerly known as Navistar
International Transportation Corp.) has sole voting and investment power
over these shares and received these shares of common stock on December 31,
1996, pursuant to the terms of an asset purchase agreement, which provided
for the acquisition by Core Molding Technologies of the Columbus Plastics
operating unit of International Truck and Engine Corp. The terms and
conditions of the asset purchase agreement are discussed in greater detail
below under the heading "Certain Relationships and Related Transactions."
International Truck and Engine Corp. is a wholly owned subsidiary of
Navistar International Corporation.
(2) The information presented is derived from Amendment No. 13 to Schedule 13D,
as filed with the SEC on June 9, 2005 by Mario J. Gabelli and certain
entities which he directly or indirectly controls or for which he acts as
chief investment officer, including MJG Associates, Inc., GGCP, Inc.,
formerly known as Gabelli Group Capital Partners, Inc., Gabelli Asset
Management, Inc., Gabelli Funds, LLC, Gabelli Advisers, Inc. GAMCO
Investors, Inc., Gabelli Securities, Inc., Gabelli & Company, Inc., Gabelli
& Company, Inc. Profit Sharing Plan, Gabelli Foundation, Inc., Lynch
Corporation and Lynch Interactive Corporation. According to the Schedule 13D
filing, Mario Gabelli is deemed to have beneficial ownership of 758,000
shares owned beneficially by Gabelli Funds, LLC, Gamco Investors, Inc.,
Gabelli Advisors, Inc. and MJG Associates, Inc. and, except as otherwise
provided in the Schedule 13D filing, each entity has the sole power to vote
or direct the vote and sole power to dispose or to direct the disposition of
the shares reported for it, either for its own benefit or for the benefit of
its investment clients or its partners, as the case may be.
MANAGEMENT
The table below sets forth, as of March 31, 2006, the number of shares of
common stock beneficially owned by each director of Core Molding Technologies,
by each nominee for election as director of Core Molding Technologies, by each
executive officer named in the Summary Compensation Table contained in this
Proxy Statement, and by all of the foregoing directors, nominees and executive
officers as a group. The information concerning the persons set forth below was
furnished in part by each of those persons.
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NUMBER OF SHARES OF COMMON STOCK BENEFICIALLY OWNED
NAME OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------- ----------------------- ----------------
Kevin L. Barnett........................... 87,066(1) *
Thomas R. Cellitti......................... 43,250(2) *
James F. Crowley........................... 28,650(3) *
Herman F. Dick, Jr. ....................... 29,747(4) *
Ralph O. Hellmold.......................... 99,500(5) *
Thomas M. Hough............................ 0 *
Stephen J. Klestinec....................... 81,163(6) *
Malcolm M. Prine........................... 161,261(7) 1.5%
James L. Simonton.......................... 206,801(8) 2.0%
John P. Wright............................. 14,000(9) *
All directors, nominees and executive
officers as a group (10 persons)......... 751,438 7.2%
---------------
* Less than 1% of the outstanding shares of common stock.
(1) Includes: (i) 72,200 shares of common stock, which Mr. Barnett has the right
to acquire within 60 days through the exercise of stock options; (ii) 7,500
shares of common stock as to which Mr. Barnett shares voting and investment
power with his wife; and (iii) 7,366 shares of common stock held by Mr.
Barnett in the Core Molding Technologies, Inc. 401(k) Retirement Savings
Plan.
(2) Includes: (i) 33,250 shares of common stock, which Mr. Cellitti has the
right to acquire within 60 days through the exercise of stock options; and
(ii) 10,000 shares of common stock as to which Mr. Cellitti has sole voting
and investment power.
(3) Includes: (i) 22,650 shares of common stock, which Mr. Crowley has the right
to acquire within 60 days through the exercise of stock options; (ii) 5,000
shares of common stock as to which Mr. Crowley has sole voting and
investment power; and (iii) 1,000 shares of common stock as to which Mr.
Crowley shares voting and investment power with his wife.
(4) Includes: (i) 18,750 shares of common stock, which Mr. Dick has the right to
acquire within 60 days through the exercise of stock options; and (ii) 5,000
shares of common stock as which Mr. Dick has sole voting and investment
power; and (iii) 1,281 shares of common stock held by Mr. Dick in the Core
Molding Technologies, Inc. Employee Stock Purchase Plan; and (iv) 4,716
shares of common stock held by Mr. Dick in the Core Molding Technologies,
Inc. 401(k) Retirement Savings Plan.
(5) Includes: (i) 33,500 shares of common stock, which Mr. Hellmold has the
right to acquire within 60 days through the exercise of stock options; and
(ii) 66,000 shares of common stock as to which Mr. Hellmold has sole voting
and investment power.
(6) Includes: (i) 54,150 shares of common stock, which Mr. Klestinec has the
right to acquire within 60 days through the exercise of stock options; (ii)
19,000 shares of common stock as to which Mr. Klestinec has sole voting and
investment power; (iii) 1,648 shares of common stock held by Mr. Klestinec
in the Core Molding Technologies, Inc. Employee Stock Purchase Plan; and
(iv) 6,365 shares of common stock held by Mr. Klestinec in the Core Molding
Technologies, Inc. 401(k) Retirement Savings Plan.
(7) Includes: (i) 99,750 shares of common stock, which Mr. Prine has the right
to acquire within 60 days through the exercise of stock options; (ii) 511
shares of common stock held by Mr. Prine's wife; and (iv) 61,000 shares of
common stock as to which Mr. Prine has sole voting and investment power.
(8) Includes: (i) 51,054 shares of common stock, which Mr. Simonton has the
right to acquire within 60 days through the exercise of stock options; (ii)
144,500 shares of common stock as to which Mr. Simonton has sole voting and
investment power; and (iii) 5,410 shares of common stock held by Mr.
Simonton in the Core Molding Technologies, Inc. Employee Stock Purchase
Plan; and (iv) 5,837 shares of common stock held by Mr. Simonton in the Core
Molding Technologies, Inc. 401(k) Retirement Savings Plan.
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(9) Includes: (i) 14,000 shares of common stock, which Mr. Wright has the right
to acquire within 60 days through the exercise of stock options.
CODE OF ETHICS
Core Molding Technologies has a Code of Conduct and Business Ethics which
applies to all employees of Core Molding Technologies, including Core Molding
Technologies' principal executive officer, principal financial officer and
principal accounting officer or persons performing similar functions. The Core
Molding Technologies' Board believes that the Code of Conduct and Business
Ethics complies with the code of ethics required by the rules and regulations of
the Securities Exchange Commission.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the following persons to file initial statements of beneficial ownership on a
Form 3 and changes of beneficial ownership on a Form 4 or Form 5 with the
Securities and Exchange Commission and to provide Core Molding Technologies with
a copy of those statements:
- executive officers and directors of Core Molding Technologies; and
- persons who beneficially own more than 10% of the issued and outstanding
shares of common stock of Core Molding Technologies.
Core Molding Technologies believes that its executive officers, directors
and greater than 10% beneficial owners complied with all applicable section
16(a) filing requirements for the fiscal year ended December 31, 2005.
DIRECTORS AND EXECUTIVE OFFICERS OF CORE MOLDING TECHNOLOGIES
The following biographies provide information on the background and
experience of the persons nominated to become directors at the annual meeting
and the executive officers of Core Molding Technologies. Core Molding
Technologies is not aware of any family relationships among any of the following
persons or any arrangements or understandings pursuant to which those persons
have been, or are to be, selected as a director or executive officer of Core
Molding Technologies, other than arrangements or understandings with directors
or executive officers acting solely in their capacity as directors or executive
officers.
NAME AGE POSITION(S) CURRENTLY HELD
---- --- ----------------------------------
Kevin L. Barnett.................. 43 Group Vice President
Thomas R. Cellitti................ 54 Director
James F. Crowley.................. 59 Director
Herman F. Dick, Jr................ 46 Treasurer, Chief Financial Officer
and Secretary
Ralph O. Hellmold................. 65 Director
Thomas M. Hough................... 60 Director
Stephen J. Klestinec.............. 56 Vice President, Operations
Malcolm M. Prine.................. 77 Chairman of the Board of Directors
James L. Simonton................. 65 President, Chief Executive Officer
and Director
John P. Wright.................... 50 Director
Kevin L. Barnett. Kevin L. Barnett joined Core Molding Technologies on
April 1, 1997 and was elected Vice President, Secretary, Treasurer and Chief
Financial Officer on April 24, 1997. Mr. Barnett served in this capacity until
August 7, 2002, when he became Vice President-Manager Columbus Operation and
Secretary. On January 3, 2006 Mr. Barnett was promoted to Group Vice President,
to support Core Molding Technologies' succession planning and professional
development program. Mr. Barnett joined Core Molding
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Technologies after approximately five years of working with Medex Inc., a
publicly held manufacturer and marketer of injection molded products used for
medical and surgical applications. Mr. Barnett served as Vice President,
Treasurer, and Corporate Controller of Medex Inc. from October, 1995 to January,
1997. He served as Vice President and Corporate Controller of Medex Inc. from
May, 1994 to October, 1995 and as Assistant Treasurer from April, 1992 to May,
1994. Prior to joining Medex Inc., Mr. Barnett served as a certified public
accountant with Deloitte & Touche LLP from August, 1984 to April, 1992.
Thomas R. Cellitti. Thomas R. Cellitti has served as a director of Core
Molding Technologies since February 10, 2000. Mr. Cellitti is the Vice President
and General Manager, Medium Truck, for International Truck and Engine
Corporation. Prior to such time, Mr. Cellitti served as Vice President and
General Manager, Bus Vehicle Center for International. Mr. Cellitti serves on
the Board of Directors of IC Corp. in Conway, Arkansas. International Truck and
Engine Corp. is a 42% stockholder and a significant customer of Core Molding
Technologies. The relationship of International Truck and Engine Corporation to
Core Molding Technologies is described below under "Certain Relationships and
Related Transactions."
James F. Crowley. James F. Crowley has served as a director of Core
Molding Technologies since May 28, 1998 and is Chairman of the Audit Committee.
Mr. Crowley is currently the President of Brookside Capital Incorporated, a
private investment and advisory firm head-quartered in New York, which he
founded in 1993 and Chairman and Managing Partner of the Strategic Research
Institute, a business to business conference company also headquartered in New
York. From 1984 to 1992, Mr. Crowley served in various capacities with
Prudential Securities, Inc. including President of Global Investment & Merchant
Banking. Prior to joining Prudential Securities, Inc., Mr. Crowley was a First
Vice President and Partner at Smith Barney, Harris Upham & Co. in its Investment
Bank and Capital Markets Division. Mr. Crowley also serves on the board of
various private organizations and universities. Mr. Crowley graduated from
Villanova University, BS/BA and from the Wharton School at the University of
Pennsylvania, MBA.
Herman F. Dick, Jr. Herman F. Dick, Jr. joined Core Molding Technologies
as an employee on September 10, 1999 as Controller and was elected to the
position of Treasurer and Chief Financial Officer on August 7, 2002, to support
Core Molding Technologies' succession planning and professional development
program. Mr. Dick was then elected to Secretary of Core Molding Technologies on
May 12, 2005. Mr. Dick joined Core Molding Technologies after approximately
eleven years of working with Boehringer Ingelheim, GMBH, a privately held
research based manufacturer of pharmaceuticals and other healthcare products.
Mr. Dick served as the Assistant Controller of Boehringer's Roxane Laboratories
subsidiary from November 1995 to September 1999. Mr. Dick also held positions at
Boehringer Ingelheim in reengineering project management and internal audit.
Prior to joining Boehringer Ingelheim, Mr. Dick served as a management
consultant with KPMG LLP from June 1986 to September 1988.
Ralph O. Hellmold. Ralph O. Hellmold has served as a director of Core
Molding Technologies since December 31, 1996. He is Chairman of The Private
Investment Banking Company, LLC, Managing Member of Hellmold & Co., LLC and
founder and President of Hellmold Associates, Inc., all investment banking
boutiques specializing in raising capital, doing mergers and acquisitions and
working with troubled companies or their creditors. Prior to forming Hellmold
Associates in 1990, Mr. Hellmold was a Managing Director at Prudential-Bache
Capital Funding, where he served as co-head of the Corporate Finance Group,
co-head of the Investment Banking Committee and head of the Financial
Restructuring Group. From 1974 until 1987, Mr. Hellmold was a partner at Lehman
Brothers and its successors, where he worked in Corporate Finance and co-founded
Lehman's Financial Restructuring Group.
Thomas M. Hough. Thomas M. Hough has served as a director of Core Molding
Technologies since December 31, 1996. He has served as Vice President Strategic
Initiatives of International Truck and Engine Corporation since March 2003.
Prior to this, he served as the Vice President and Treasurer of Navistar
International Corporation and its principal operating subsidiary, International
Truck and Engine Corporation, since October 1992. International Truck and Engine
Corporation is a 42% stockholder and a significant customer of Core Molding
Technologies. The relationship of International Truck and Engine Corporation to
Core Molding Technologies is described below under "Certain Relationships and
Related Transactions." Previously, Mr. Hough served as Assistant Treasurer and
Assistant Controller of International Truck and
7
Engine Corporation and as Controller of Navistar Financial Corporation, a
principal financial subsidiary of International Truck and Engine Corporation.
Stephen J. Klestinec. Stephen J. Klestinec joined Core Molding
Technologies as an employee on April 1, 1998, was elected to the position of
Vice President, Sales and Marketing on May 28, 1998, and was promoted to Vice
President, Operations on January 3, 2006. Mr. Klestinec was employed by Atlanta
based Georgia-Pacific Resin, Inc., a manufacturer of thermoset resins, from 1981
until joining Core Molding Technologies on April 1, 1998. At Georgia-Pacific,
Mr. Klestinec served as market manager of fiber reinforced products. In such
capacity, Mr. Klestinec commercialized products for both the North American and
International markets in the aerospace, mass transit, electrical and electronic
industries. Mr. Klestinec also managed the abrasives, adhesives and specialty
market segment. Mr. Klestinec also held positions at Georgia-Pacific in market
development, quality assurance and manufacturing. Prior to joining
Georgia-Pacific, Mr. Klestinec served as plant manager for Pacific Resins and
Chemicals.
Malcolm M. Prine. Malcolm M. Prine has served as a director of Core
Molding Technologies and Chairman of Core Molding Technologies since December
31, 1996. Mr. Prine also served as a director of RYMAC Mortgage Investment
Corporation from May 1992 to December 31, 1996. RYMAC merged with Core Molding
Technologies on December 31, 1996, as described below under "Certain
Relationships and Related Transactions." Mr. Prine has been self-employed while
acting as a consultant for the last fifteen years. He also serves on the board
of various private organizations and universities.
James L. Simonton. James L. Simonton has served as President and Chief
Executive Officer of Core Molding Technologies since January 15, 2000 and as a
director of Core Molding Technologies since May 28, 1998. From 1992 until
December 31, 1999, Mr. Simonton served as the Vice President of Purchasing and
Supplier Development for International Truck and Engine Corporation. In such
capacity, Mr. Simonton was in charge of purchasing of all production materials,
in-bound and out-bound freight and logistics and the development of suppliers.
International Truck and Engine Corporation is a 42% stockholder and a
significant customer of Core Molding Technologies. The relationship of
International Truck and Engine Corporation to Core Molding Technologies is
described below under "Certain Relationships and Related Transactions."
John P. Wright. John P. Wright has served as a director of Core Molding
Technologies since October 22, 2003. He served as Chairman of the Board of Ariel
Corporation from 1998-2004. Mr. Wright was the President of Ariel Corporation
from 1996 to 2001. Ariel is a manufacturer of large industrial compressors used
in the natural gas business. Mr. Wright is a co-founder of Optigas Incorporated.
Optigas builds pipelines and compressor stations for the natural gas industry.
COMPENSATION, MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
COMPENSATION OF BOARD OF DIRECTORS
For the fiscal year ended December 31, 2005, each director of Core Molding
Technologies, other than Mr. Prine and Mr. Simonton, received a director's fee
of $3,500 per quarter. Mr. Prine received a director's fee of $13,000 per
quarter to reflect his role as chairman. Mr. Simonton does not receive a
director's fee. Mr. Crowley received an additional $1,000 fee per quarter,
beginning in the second quarter, to reflect his role as audit committee
chairman. Each director received a $1,000 fee for each regularly scheduled board
meeting that they were in attendance and each audit committee member received a
$1,000 fee for each audit committee meeting that they were in attendance. In
addition, the Core Molding Technologies, Inc. Long-Term Equity Incentive Plan
provides for a one-time grant of a director option to each of the non-employee
directors of Core Molding Technologies to purchase 35,000 shares of common
stock, which option vests in increments of 20% over a five year period. Mr.
Hellmold, Mr. Hough and Mr. Prine received this one-time grant of a director
option during the fiscal year ended December 31, 1997. Mr. Simonton and Mr.
Crowley received this one-time grant of a director option upon their election to
the Board of Directors on May 28, 1998. Mr. Cellitti received this one-time
grant of a director's option upon his election to the Board of Directors on
February 10, 2000. Mr. Wright received this one-time grant of a director's
option upon his election to the Board of Directors on October 22, 2003. Core
Molding Technologies also has entered into certain
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compensation arrangements with members of its Board of Directors. These
compensation arrangements are discussed below under the heading "Compensation
Committee Interlocks and Insider Participation."
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met six times during the fiscal year ended December
31, 2005. During that period, each of the directors attended at least 75% of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings of all committees of the Board of Directors on which
each director served. Of the seven directors currently serving on the Board, the
Board has determined that each of Messrs. Crowley, Hellmold, Prine and Wright
are independent under American Stock Exchange ("AMEX") listing standards.
COMPENSATION COMMITTEE
Core Molding Technologies did not have a Compensation Committee during the
fiscal year ended December 31, 2005. The entire Board of Directors performed the
functions of a Compensation Committee during that period, including recommending
the form and amount of compensation to be paid to the executive officers and
directors of Core Molding Technologies.
AUDIT COMMITTEE
Core Molding Technologies has an Audit Committee, which currently consists
of Messrs. Crowley, Hellmold and Wright, each of whom is "independent" as that
term is defined under AMEX listing standards. The Board has determined that Mr.
Crowley qualifies as an "audit committee financial expert" as defined by
Securities and Exchange Commission rules. The principal function of the Audit
Committee is to review and approve the scope of the annual audit undertaken by
the independent registered public accounting firm of Core Molding Technologies
and to meet with them to review and inquire as to audit functions and other
financial matters and to review the year-end audited financial statements. For a
more detailed description of the role of the Audit Committee, see "Report of the
Audit Committee" below. The Audit Committee met four times during the fiscal
year ended December 31, 2005. In addition, the Committee chair, as
representative of the Committee, discussed the interim financial information
contained in quarterly earnings announcements with both management and the
independent auditors prior to the public release of quarterly information.
NOMINATING COMMITTEE AND STOCKHOLDER NOMINATIONS
Core Molding Technologies has a Nominating Committee consisting of all
members of the Board of Directors, with a majority of directors who are
independent under AMEX listing standards required to effect a decision. The
principal function of the Nominating Committee is to recommend candidates for
membership on the Board of Directors. A copy of the Nominating Committee Charter
was attached as Exhibit B to the proxy statement for the Core Molding
Technologies 2005 Annual Stockholders Meeting.
In identifying and evaluating nominees for director, the Nominating
Committee seeks to ensure that the Board possesses, in the aggregate, the
strategic, managerial and financial skills and experience necessary to fulfill
its duties and to achieve its objectives, and seeks to ensure that the Board is
comprised of directors who possess knowledge in areas that are of importance to
Core Molding Technologies. In addition, the Nominating Committee believes it is
important that at least one director have the requisite experience and expertise
to be designated as an "audit committee financial expert." The Nominating
Committee looks at each nominee on a case-by-case basis regardless of who
recommended the nominee.
The Nominating Committee will consider persons recommended by stockholders
to become nominees for election as directors. Recommendations for consideration
by the Nominating Committee should be sent to the Secretary of Core Molding
Technologies in writing together with appropriate biographical information
concerning each proposed nominee.
9
The Bylaws of Core Molding Technologies set forth procedural requirements
pursuant to which stockholders may make nominations to the Board of Directors.
The Board of Directors or the Nominating Committee may not accept
recommendations for nominations to the Board of Directors in contravention of
these procedural requirements.
In order for a stockholder to nominate a person for election to the Board
of Directors, the stockholder must give written notice of the stockholder's
intent to make the nomination either by personal delivery or by United States
mail, postage prepaid, to the Secretary of Core Molding Technologies not less
than fifty nor more than seventy-five days prior to the meeting at which
directors will be elected. In the event that less than sixty days prior notice
or prior public disclosure of the date of the meeting is given or made to
stockholders, Core Molding Technologies must receive notice not later than the
close of business on the tenth day following the day on which notice of the date
of the meeting was mailed or public disclosure was made, whichever occurred
first.
The notice must set forth:
- the name and address of record of the stockholder who intends to make the
nomination;
- a representation that the stockholder is a holder of record of shares of
the capital stock of Core Molding Technologies entitled to vote at the
meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice;
- the name, age, business and residence addresses and principal occupation
or employment of each proposed nominee;
- a description of all arrangements or understandings between the
stockholder and each proposed nominee and any other person or persons,
naming such person or persons, pursuant to which the nomination or
nominations are to be made by the stockholder;
- other information regarding each proposed nominee as would be required to
be included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission; and
- the written consent of each proposed nominee to serve as a director of
Core Molding Technologies if elected.
Core Molding Technologies may require any proposed nominee to furnish other
information as it may reasonably require to determine the eligibility of the
proposed nominee to serve as a director. The presiding officer of the meeting of
stockholders may, if the facts warrant, determine that a stockholder did not
make a nomination in accordance with the foregoing procedure. If the presiding
officer makes such a determination, the officer shall declare such determination
at the meeting and the defective nomination will be disregarded.
BOARD POLICIES REGARDING COMMUNICATION WITH THE BOARD OF DIRECTORS AND
ATTENDANCE AT ANNUAL MEETINGS
Stockholders may communicate with the full Board, non-management directors
as a group or individual directors, including the Chairman of the Board, by
submitting such communications in writing to the Core Molding Technologies
Secretary, c/o the Board of Directors (or, at the stockholder's option, c/o a
specific director or directors), 800 Manor Park Drive, Columbus, Ohio 43228.
Such communications will be delivered directly to the Board.
Core Molding Technologies does not have a policy regarding Board member
attendance at the annual meeting of stockholders. All Core Molding Technologies
directors attended the 2005 annual meeting of stockholders.
10
EXECUTIVE COMPENSATION
The following table sets forth compensation information for James L.
Simonton, Kevin L. Barnett, Stephen J. Klestinec and Herman F. Dick, Jr.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
----------------------------
BLACK-SCHOLES TOTAL OF ALL
ANNUAL COMPENSATION AWARDS-SECURITIES VALUE OF ALL OTHER COMPENSATION
-------------------- UNDERLYING OPTION COMPENSATION COMPONENTS
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)/SARS AWARDS($) ($)(1) ($)(2)
--------------------------- ---- --------- -------- ----------------- ------------- ------------ ------------
James L. Simonton................... 2005 281,795 224,198 0 17,160 523,153
President, Chief Executive 2004 257,500 109,467 175,750 282,958 15,731 665,656
Officer and Director 2003 230,756 0 0 15,750 246,506
Kevin L. Barnett.................... 2005 184,615 146,881 0 11,077 342,573
Group Vice President 2004 172,500 80,856 95,000 152,950 10,388 416,694
2003 166,173 0 0 10,025 176,198
Stephen J. Klestinec.............. .. 2005 169,519 134,871 0 13,380 317,770
Vice President, Operations 2004 157,500 74,043 95,000 152,950 12,638 397,131
2003 151,173 0 0 12,030 163,203
Herman F. Dick, Jr. ................ 2005 139,326 110,850 0 12,050 262,226
Treasurer, Chief Financial Officer 2004 120,000 67,009 98,000 148,180 9,466 344,655
and Secretary 2003 112,963 0 0 6,819 119,782
---------------
(1) Includes contributions by Core Molding Technologies to its 401(k) plan for
salaried employees. Core Molding Technologies makes contributions to its
401(k) plan in two ways. Core Molding Technologies makes a "matching
contribution" which is based on the employee's salary reduction
contribution. Core Molding Technologies also makes a "retirement
contribution" which is based on the age and regular earnings of the employee
as of the year the contribution is made. Matching contributions for the
fiscal year ended December 31, 2003 were $2,731 for Mr. Simonton, $2,188 for
Mr. Barnett, $2,253 for Mr. Klestinec and $1,759 for Mr. Dick. Retirement
contributions during the fiscal year ended December 31, 2003 were $13,000
for Mr. Simonton, $7,444 for Mr. Barnett, $9,777 for Mr. Klestinec and
$5,060 for Mr. Dick. Matching contributions for the fiscal year ended
December 31, 2004 were $3,429 for Mr. Simonton, $2,625 for Mr. Barnett,
$2,400 for Mr. Klestinec and $1,666 for Mr. Dick. Retirement contributions
during the fiscal year ended December 31, 2004 were $13,000 for Mr.
Simonton, $7,763 for Mr. Barnett, $10,238 for Mr. Klestinec and $7,800 for
Mr. Dick. Matching contributions for the fiscal year ended December 31, 2005
were $4,160 for Mr. Simonton, $2,769 for Mr. Barnett, $2,361 for Mr.
Klestinec and $2,994 for Mr. Dick. Retirement contributions during the
fiscal year ended December 31, 2005 were $13,000 for Mr. Simonton, $8,308
for Mr. Barnett, $11,019 for Mr. Klestinec and $9,056 for Mr. Dick.
(2) Consists of a sum of the compensation amounts that are reflected in this
table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION/SAR TERM
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ------------ ------------ --------- ---------- --------- ---------
James L. Simonton....... -- -- -- -- -- --
Kevin L. Barnett........ -- -- -- -- -- --
Stephen J. Klestinec.... -- -- -- -- -- --
Herman F. Dick, Jr. .... -- -- -- -- -- --
11
The following table sets forth information with respect to the exercise of
options by each of the executive officers named in the Summary Compensation
Table during the fiscal year ended December 31, 2005. The table also sets forth
information with respect to all vested (exercisable) and unvested
(unexercisable) options held by each of the executive officers named in the
Summary Compensation Table as of December 31, 2005.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SECURITIES AT FISCAL YEAR END(#) AT FISCAL YEAR END($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
James L. Simonton(2).......... 150,883 $796,385 71,054 80,196 $315,480 $356,070
Kevin L. Barnett.............. -- -- 62,304 32,696 276,630 145,170
Stephen J. Klestinec(2)....... 690 468 54,150 40,850 240,426 181,374
Herman F. Dick, Jr.(2) ....... 347 254 23,750 74,250 108,072 354,648
---------------
(1) "Value of Unexercised In-the-Money Options/SARs at Fiscal Year End" is based
upon the fair market value of the shares of common stock of Core Molding
Technologies on December 31, 2005 $7.65 less the exercise price of in-the
money options/SARs at the end of the fiscal year ended December 31, 2005.
(2) Securities acquired on exercise for Messrs. Simonton, Klestinec and Dick
include shares purchased pursuant to the Core Molding Technologies Employee
Stock Purchase Plan. Securities acquired on exercise for Mr. Simonton also
includes 150,000 phantom stock units which were exercised by Mr. Simonton
during 2005, pursuant to a Phantom Stock Agreement dated as of January 15,
2000. Pursuant to such agreement, Mr. Simonton received within 30 days after
exercise of such units a cash payment in an amount equal to the excess of
the fair market value of a share of Core Molding Technologies' common stock
on the date of exercise over $2.75. Values realized represents the
difference between the market price of the shares on the applicable purchase
dates and the purchase prices paid by such officers.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The purpose of the compensation program of Core Molding Technologies is to
attract and retain qualified executive officers by providing a total
compensation package, which is competitive with comparable corporations, and to
also provide incentives to create short-term and long-term improvements in the
performance of Core Molding Technologies.
The compensation philosophy of Core Molding Technologies is based on the
belief that:
- Core Molding Technologies must attract and retain qualified individuals
and motivate and reward those individuals for performance;
- a substantial portion of an executive's compensation should depend upon
the performance of Core Molding Technologies; and
- incentives should exist which align the interests of the executives with
those of the stockholders of Core Molding Technologies and which create
long-term stockholder value.
12
Following this philosophy, Core Molding Technologies has developed a
compensation program for its executives which includes the following components:
BASE SALARY
Core Molding Technologies has established base salaries for its executive
officers based upon the experience and capabilities of the executives, as
determined in the subjective judgment of the Board of Directors, and the
salaries of comparable companies.
BONUS/PROFIT SHARING
The Board of Directors has established a bonus/profit-sharing program for
all nonrepresented and salaried employees, including its executive officers, of
Core Molding Technologies. This program is designed to align the interests of
such individuals with those of the stockholders of Core Molding Technologies by
directly tying profit sharing payments to the performance of Core Molding
Technologies. This program creates a profit sharing pool for all employees based
upon percentages of the earnings before taxes of Core Molding Technologies above
pre-established thresholds. The thresholds are established by the Board of
Directors and are intended to begin creating a profit sharing pool only after
earnings before taxes exceeds a reasonable level. A total of $2,467,000 was paid
out to all non-represented and salaried employees, including its executive
officers, under this bonus/profit sharing plan in 2006 for the performance
achieved in 2005.
STOCK OPTIONS AND EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors grants stock options under the Core Molding
Technologies, Inc. Long-Term Equity Incentive Plan to executives and salaried
employees, which are intended to align the long-term interests of these
individuals with the interests of the stockholders of Core Molding Technologies.
The Board of Directors determines the options awarded to the executive officers
based upon the subjective judgment and experience of the directors in
compensating executive officers. Options for the executive officers are
generally granted at or above fair market value and are subject to a ten-year
vesting schedule.
In addition to the Long-Term Equity Incentive Plan, the stockholders of
Core Molding Technologies approved in 2002 an Employee Stock Purchase Plan. Once
effective, all eligible employees, including executive officers, may purchase
shares pursuant to the Stock Purchase Plan through payroll deductions at a price
equal to 85% of the fair market value of Core Molding Technologies' common
stock.
The 2006 Long-Term Equity Incentive Plan and the amendments to the 2002
Employee Stock Purchase Plan, as submitted for stockholder approval as described
in this Proxy are reflective of the intent of the Board of Directors to continue
to align the long-term interests of executives and salaried employees with the
interests of the stockholders of Core Molding Technologies.
BASIS FOR CHIEF EXECUTIVE OFFICER'S COMPENSATION
The Board of Directors established compensation for Mr. Simonton for 2005
in accordance with the information discussed above.
Submitted by the Board of Directors,
Thomas R. Cellitti
James F. Crowley
Ralph O. Hellmold
Thomas M. Hough
Malcolm M. Prine
James L. Simonton
John P. Wright
13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Core Molding Technologies did not have a Compensation Committee during the
fiscal year ended December 31, 2005. Accordingly, the Board of Directors made
all compensation decisions. Core Molding Technologies has entered into the
following compensation arrangements with members of its Board of Directors:
RELATIONSHIP WITH MR. PRINE
Mr. Prine is the Chairman of the Board of Core Molding Technologies. Core
Molding Technologies compensated Mr. Prine as a consultant for special services
and advice that he provided to Core Molding Technologies. Beginning April 1,
2000, Mr. Prine had been compensated at a rate of $8,000 per quarter for such
service. This consulting service was terminated in the second quarter of 2003.
Mr. Prine received a total of $0 in cash compensation for such service during
the years ended December 31, 2005 and 2004, and $8,000 for the year ended
December 31, 2003.
Finally, Mr. Prine was granted a stock option to purchase 70,000 shares of
Core Molding Technologies' stock on February 4, 1998, as consideration for his
services. The option vests in increments of 20% over a five-year period and
expires on February 4, 2008. The option was granted at an exercise price of
$3.97 per share, representing the fair market value on the date of grant. In
July 2003, Mr. Prine elected to have these options canceled as a part of Core
Molding Technologies' option repricing tender offer. Mr. Prine was reissued
66,500 options on February 9, 2004 at an exercise price of $3.21. The options
are fully vested and expire on February 9, 2014.
RELATIONSHIP WITH MR. SIMONTON
On January 15, 2000, Mr. Simonton was elected President and Chief Executive
Officer of Core Molding Technologies. Mr. Simonton has served as a director at
Core Molding Technologies since May 28, 1998 and prior to becoming President of
Core Molding Technologies, was an officer of International Truck and Engine
Corporation. Sales to International represented approximately 51% of the total
revenues of Core Molding Technologies for the fiscal year ended December 31,
2005. International is also a 42% stockholder in Core Molding Technologies. As a
director, Mr. Simonton participates in deliberations of Core Molding
Technologies' Board of Directors concerning executive officer compensation.
However, Mr. Simonton has and intends to continue to abstain from participating
in any actions of the Board of Directors affecting his compensation.
RELATIONSHIP WITH MR. HOUGH AND MR. CELLITTI
Mr. Hough and Mr. Cellitti are officers of International Truck and Engine
Corporation and members of the Board of Directors of Core Molding Technologies.
Sales to International represented approximately 51% of the total revenues of
Core Molding Technologies for the fiscal year ended December 31, 2005.
International is also a 42% stockholder in Core Molding Technologies.
RELATIONSHIP WITH MR. HELLMOLD
Mr. Hellmold is a member of the Board of Directors who has, from time to
time, provided financial advisory services to International Truck and Engine
Corporation through Hellmold Associates, Inc. and/or The Private Investment
Banking Company, LLC, investment advisory firms in which Mr. Hellmold is
principal. International is a 42% stockholder in Core Molding Technologies.
14
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors ("Committee") is composed of
three directors, none of whom is an employee of Core Molding Technologies. The
Committee is governed by a charter as approved by the Board of Directors
("Board") on March 27, 2000, and thereafter ratified by the Board at the Boards'
May 12, 2005 meeting. A copy of the Audit Committee Charter was attached as
Exhibit A to the proxy statement for the Core Molding Technologies 2005 Annual
Stockholders Meeting. In accordance with its written charter, the Committee
assists the Board in fulfilling its responsibility for oversight of the quality
and integrity of the accounting, auditing and financial reporting practices of
Core Molding Technologies.
During the year ended December 31, 2005, the Committee met four times and
the Committee chair, as representative of the Committee, discussed the interim
financial information contained in quarterly earnings announcements with both
management and the independent registered public accounting firm prior to the
public release of quarterly information.
In discharging its oversight responsibility as to the audit process, the
Committee obtained from Deloitte & Touche a formal written statement describing
all relationships between Deloitte & Touche and Core Molding Technologies that
might bear on Deloitte & Touche 's independence consistent with Independence
Standards Board Standard No. 1 "Independence Discussions with Audit Committees,"
discussed with Deloitte & Touche any relationships that may impact their
objectivity and independence and satisfied itself as to their independence. The
Committee also discussed with management and Deloitte & Touche the quality and
adequacy of Core Molding Technologies' internal controls. The Committee reviewed
with Deloitte & Touche their audit scope and their identification of audit
risks.
The Committee discussed and reviewed with Deloitte & Touche all
communications required by auditing standards generally accepted in the United
States of America, including those described in Statement on Auditing Standards
No. 61, as amended "Communication with Audit Committees" and, with and without
management present, discussed and reviewed the results of Deloitte & Touche 's
examination of the financial statements. Management also discussed with Deloitte
& Touche those matters required to be discussed under the Securities and
Exchange Commission and U.S. Public Company Accounting Oversight Board.
The Committee reviewed the audited consolidated financial statements of
Core Molding Technologies as of and for the year ended December 31, 2005, with
management and Deloitte & Touche. Management has the responsibility for the
preparation of the Company's financial statements and Deloitte & Touche has the
responsibility for the examination of those statements.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Committee recommended to the Board that audited
consolidated financial statements be included in its Annual Report on Form 10-K
for the fiscal year ended December 31, 2005, for filing with the Securities and
Exchange Commission.
AUDIT COMMITTEE
James F. Crowley, Chairman
Ralph O. Hellmold
John P. Wright
15
AUDIT FEES
During the fiscal years ended December 31, 2005 and 2004, the aggregate
fees billed for professional services rendered for the audit of the Core Molding
Technologies annual financial statements and the review of financial statements
included in Core Molding Technologies' Forms 10-Q were $142,500 and $131,630,
respectively, which were paid to Deloitte & Touche.
AUDIT RELATED FEES
The aggregate fees billed for professional services rendered by Deloitte &
Touche for assurance related services for the fiscal years ended December 31,
2005 and 2004 were $30,100 and $0, respectively. The services rendered by
Deloitte & Touche in 2005 primarily related to a response to a Securities and
Exchange Commission comment letter and due diligence related to an acquisition.
TAX FEES
The aggregate fees billed to Core Molding Technologies for tax consulting
and compliance services by Deloitte & Touche for the fiscal years ended December
31, 2005 and 2004 were $77,558 and $50,577, respectively.
ALL OTHER FEES
The aggregate fees billed to Core Molding Technologies for all other
products and services provided by Deloitte & Touche for the fiscal years ended
December 31, 2005 and 2004 were $0 and $0, respectively.
16
PERFORMANCE GRAPH
The following graph sets forth a comparison of the cumulative total returns
on (i) the common stock of Core Molding Technologies, (ii) the S & P Small Cap
600 Index and (iii) the S & P Construction & Farm Machinery & Heavy Trucks Index
for the five-year period ended December 31, 2005. The stock price performance
shown on the graph is not necessarily indicative of future price performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG CORE MOLDING TECHNOLOGIES INC., THE S & P SMALLCAP 600 INDEX
AND THE S & P CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS INDEX
(PERFORMANCE GRAPH)
CUMULATIVE TOTAL RETURN
----------------------------------------------------
12/00 12/01 12/02 12/03 12/04 12/05
------ ------ ------ ------ ------ -------
CORE MOLDING TECHNOLOGIES INC 100.00 196.00 146.67 389.33 369.33 1020.00
S & P SMALLCAP 600 100.00 106.54 90.95 126.23 154.82 166.71
S & P CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS 100.00 112.44 106.82 185.67 229.46 240.50
* $100 INVESTED ON 12/31/00 IN STOCK OR INDEX--INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
COPYRIGHT(R) 2006, STANDARD & POOR'S, A DIVISION OF THE MCGRAW-HILL COMPANIES,
INC. ALL RIGHTS RESERVED. WWW.RESEARCHDATAGROUP.COM/S&P.HTM
17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RELATIONSHIP WITH INTERNATIONAL TRUCK AND ENGINE CORPORATION (INTERNATIONAL)
On October 8, 1996, RYMAC Mortgage Investment Corporation, a Maryland
corporation, formed Core Molding Technologies as a wholly owned subsidiary under
the laws of the State of Delaware. RYMAC incorporated Core Molding Technologies
in order to acquire substantially all of the assets of the Columbus Plastics
operating unit of International Truck and Engine Corp.
Pursuant to the terms of the asset purchase agreement with International,
Core Molding Technologies acquired substantially all of the assets and
liabilities of Columbus Plastics on December 31, 1996. As consideration,
International received a secured note in the principal amount of $25,504,000.
International also received 4,264,000 shares of newly issued common stock of
Core Molding Technologies, representing approximately 45% of the total number of
shares of common stock issued and outstanding at the time of the acquisition.
The principal amount of the secured note and the number of shares of common
stock received by International were subject to adjustment pursuant to the terms
of the asset purchase agreement.
International's acquisition of common stock of Core Molding Technologies
made it the largest stockholder of Core Molding Technologies. The certificate of
incorporation of Core Molding Technologies protects this position by limiting
the possibility of a change in ownership or control. For instance, the
certificate of incorporation requires a super-majority vote to remove directors
or to approve certain extraordinary corporate transactions, including mergers
and acquisitions. The certificate of incorporation also restricts transfers of
securities, which could result in a change of ownership of a specified
percentage in Core Molding Technologies. This restrictive transfer provision is
discussed below under the heading "Limitation on Ownership."
International's status as the largest stockholder of Core Molding
Technologies has allowed International in the past, and will allow International
at the annual meeting, to influence the composition of the Board of Directors.
Core Molding Technologies anticipates that the stockholders will elect Mr. Hough
and Mr. Cellitti, currently officers of International, as directors of Core
Molding Technologies at the annual meeting.
In addition to being the largest stockholder of Core Molding Technologies,
International is also a significant customer of Core Molding Technologies with
sales to International representing approximately 51% of total revenues of Core
Molding Technologies during the fiscal year ended December 31, 2005. Core
Molding Technologies and International entered into a registration rights
agreement at the time of the merger and acquisition under which Core Molding
Technologies granted to International demand and piggy-back rights with respect
to the registration for sale under the Securities Act of 1933 of the shares of
common stock received pursuant to the asset purchase agreement.
OTHER MATERIAL RELATIONSHIPS
Core Molding Technologies has entered into material arrangements with
members of its Board of Directors which arrangements are discussed above under
the heading "Compensation Committee Interlocks and Insider Participation."
LIMITATION ON OWNERSHIP
The certificate of incorporation of Core Molding Technologies contains a
prohibited transfer provision, which was designed at the time of the merger and
acquisition to help assure the continued availability of Core Molding
Technologies' substantial net operating losses by seeking to prevent an
ownership change in Core Molding Technologies.
The prohibited transfer provision prohibits a transfer of stock of Core
Molding Technologies if the transfer will cause the transferee to hold a
prohibited ownership percentage or if the transferee's ownership percentage
already exceeds the prohibited ownership percentage. The prohibited transfer
provision defines "stock" as including all classes of stock, options to purchase
stock or any other interest in Core Molding
18
Technologies that could be treated as stock. A prohibited ownership percentage
generally means direct and indirect ownership of 4.5% or more of the stock or
any other percentage that would cause a transferee to be considered a five
percent stockholder under the federal income tax rules referenced in the
certificate of incorporation.
The prohibited transfer provision did not apply to the issuance of stock to
International pursuant to the asset purchase agreement and will not restrict
certain transfers that are made in compliance with exceptions set forth in the
prohibited transfer provision.
In addition, Core Molding Technologies' Certificate of Incorporation and
Bylaws contain certain provisions designed to discourage specific types of
transactions involving an actual or threatened change of control of Core Molding
Technologies. These provisions, which are designed to make it more difficult to
change majority control of the Board of Directors without its consent, include
the following:
Removal of Directors -- This provision provides that a director of
Core Molding Technologies may be removed with or without cause only upon
the vote of the holders of at least 80% of the voting power of the
outstanding shares of capital stock entitled to vote generally in the
election of directors.
Supermajority Approval -- This provision requires that a merger and
certain other transactions (as outlined in the Certificate of
Incorporation) be approved by the affirmative vote of the holders of at
least 66 2/3% of the then outstanding shares of Core Molding Technologies'
common stock. Such affirmative vote is required not withstanding the fact
that no vote may be required, or that a lesser percentage may be specified
by law.
Amendments -- This provision requires that any amendment to the
provisions relating to the removal of directors be approved by the holders
of at least 80% of the then outstanding shares of voting stock, and any
amendment to provisions requiring the approval of the holders of at least
66 2/3% of the then outstanding shares of voting stock be approved by the
holders of at least 66 2/3% of the then outstanding shares of voting stock.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
COMPOSITION OF THE BOARD OF DIRECTORS
The Board of Directors currently consists of seven (7) members. At the
annual meeting, the stockholders will elect seven directors to hold office until
the election and qualification of their successors or until their earlier
resignation, death, disqualification or removal from office.
The intention of the proxies is to vote the shares of common stock they
represent for the election of Thomas R. Cellitti, James F. Crowley, Ralph O.
Hellmold, Thomas M. Hough, Malcolm M. Prine, James L. Simonton and John P.
Wright unless the proxy is marked to indicate that such authorization is
expressly withheld. Each of the nominees is currently a member of the Board of
Directors. All of the nominees have stated their willingness to serve and Core
Molding Technologies is not aware of any reason that would cause any of the
nominees to be unavailable to serve as a director should they be elected at the
annual meeting. If any of the nominees should become unavailable for election,
the proxies may exercise discretionary authority to vote for a substitute
nominee proposed by the Board of Directors. Information with respect to the
background and experience of each of the seven nominees is set forth above under
the heading "Directors and Executive Officers of Core Molding Technologies."
Under Delaware law and the Bylaws of Core Molding Technologies, the
stockholders will elect as directors the seven (7) nominees receiving the
greatest number of votes. Core Molding Technologies will count shares of common
stock as to which voting authority is withheld for quorum purposes but will not
count those shares toward the election of directors or toward the election of
individual nominees specified in the form of proxy.
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YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MESSRS.
CELLITTI, CROWLEY, HELLMOLD, HOUGH, PRINE, SIMONTON AND WRIGHT.
PROPOSAL 2
APPROVAL OF THE CORE MOLDING TECHNOLOGIES, INC. 2006
LONG-TERM EQUITY INCENTIVE PLAN
PROPOSED PLAN
The Board of Directors has adopted and recommends that you approve the Core
Molding Technologies, Inc. 2006 Long-Term Equity Incentive Plan (the "Plan").
This Plan will replace the Core Materials' Long-Term Equity Incentive Plan which
is set to expire on December 31, 2006. Under the Plan, Core Molding Technologies
will be authorized to issue three million (3,000,000) shares under the Plan. You
are being asked to approve the adoption of the Plan.
The full text of the Plan is attached as Exhibit A and we encourage you to
reference it for important details on the Plan. A Form S-8 registering
additional shares under the Plan is expected to be filed by December 31, 2006.
OVERVIEW OF PLAN
The objectives of the Plan are to optimize the profitability and growth of
the Company through incentives which are consistent with the Company's goals and
which link and align the personal interests of participants with an incentive
for excellence in individual performance and to promote teamwork. The Plan
provides for the grant of incentive and nonqualified stock options, restricted
stock, stock appreciation rights ("SARs"), performance shares, performance units
and other incentive awards (individually, an "Award" or, collectively,
"Awards"). No Award under the Plan may be granted after December 31, 2015. As
noted above, the maximum number of shares of common stock available to be issued
under the Plan is three million (3,000,000). The maximum number of shares of
common stock (including SARs) for which certain individuals (including the Chief
Executive Officer and certain other officers) may receive Awards is limited to
200,000 shares of common stock over a one-year period. The shares of common
stock to be delivered under the Plan will be made available from authorized but
unissued common stock or from common stock held in treasury. The common stock
issued under the Plan is further subject to applicable tax withholding by Core
Molding which, to the extent permitted by Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), may be satisfied by the
withholding of shares of common stock issuable under the Plan. The Plan contains
customary provisions with respect to adjustments for stock splits and similar
transactions and the rights of participants upon mergers and other business
combinations. The Board of Directors approved the Plan on March 30, 2006.
ADMINISTRATION OF PLAN
The Plan provides that it is to be administered by the Compensation
Committee of the Board of Directors (the "Committee") or by any other committee
appointed by the Board. The Committee has the discretion to select from among
eligible employees those to whom Awards are granted and to determine the size
and type of each Award, as well as the terms and conditions applicable to each
Award. The Awards are subject to vesting according to vesting schedules
established by the Committee. The Committee also has the sole and complete
authority to interpret the provisions of the Plan. The Committee's decisions are
binding on Core Molding and the participants in the Plan. Key employees of Core
Molding and any subsidiaries of Core Molding who can make substantial
contributions to the successful performance of Core Molding are eligible to be
granted Awards under the Plan. The Committee's determinations of which eligible
individuals are granted Awards and the terms thereof are generally based on each
individual's present and potential contribution to the success of Core Molding
and its subsidiaries. Approximately 60 employees and all non-employee directors
will participate in various portions of the Plan.
20
STOCK OPTIONS
The Committee or the Board may grant both non-qualified stock options and
incentive stock options to eligible employees. The exercise price of such
options shall be at least equal to the fair market value of a share on the date
the option is granted. In the case of an incentive stock option granted to a 10%
stockholder of Core Molding, the exercise price may not be less than 110% of the
fair market value of the common stock at the date of grant. The Committee also
has broad discretion as to the terms and conditions under which options will be
exercisable. Incentive stock options expire not later than ten years after the
date on which they were granted (or five years in the case of an incentive stock
option granted to a 10% stockholder of Core Molding). The exercise price of the
options may be satisfied in cash or, in the discretion of the Committee, by
exchanging shares of common stock owned by the optionee, or by a combination of
the preceding.
RESTRICTED STOCK AWARDS
An award of restricted stock is an Award of shares of common stock that is
subject to such restrictions as the Committee deems appropriate, including
forfeiture conditions and restrictions on transfer for a period specified by the
Committee. Awards of restricted stock may be granted under the Plan for or
without consideration. Restrictions on restricted stock may lapse in
installments based on factors selected by the Committee. The Committee, in its
sole discretion, may waive or accelerate the lapsing of restrictions in whole or
in part. Prior to the expiration of the restricted period, except as otherwise
provided by the Committee, a participant who has been granted restricted stock
has, from the date of grant, the rights of a stockholder of Core Molding in
respect of such common stock, including the right to vote such common stock and
to receive dividends and other distributions thereon, subject to the
restrictions set forth in the Plan and in the instrument evidencing such Award.
The shares of restricted stock are held by Core Molding, or by an escrow
agent designated by Core Molding, during the restricted period and may not be
sold, assigned, transferred, pledged or otherwise encumbered until the
restrictions have lapsed. The Committee has authority to determine the duration
of the restricted period and the conditions under which restricted stock may be
forfeited, as well as the other terms and conditions of such awards.
PERFORMANCE UNIT AND PERFORMANCE SHARE AWARDS
A performance unit or performance share award is an Award of a number of
units/shares that represent the right to receive a specified number of shares of
common stock or cash, or both, upon satisfaction of certain specified
performance goals, subject to such terms and conditions as the Committee
determines. Each performance unit shall have an initial value that is
established by the Committee at the time of grant. Each Performance Share shall
have an initial value equal to the fair market value of a share on the date of
grant. Performance Awards are earned to the extent such performance goals
established by the Committee are achieved over a period of time specified by the
Committee. The Committee has discretion to adjust the performance goals as it
deems equitable to reflect events affecting Core Molding or changes in law or
accounting principles or other factors, and to determine the extent to which
performance Awards that are earned may be paid in the form of cash, common stock
or a combination of both.
STOCK APPRECIATION RIGHTS
The Committee, in its discretion, may grant SARs at any time and from time
to time. The Committee may grant Freestanding SARs, Tandem SARs, or any
combination of these forms of SARs. The Committee shall have complete discretion
in determining the number of SARs granted to each participant and the terms and
conditions pertaining to such SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable. With respect to a Tandem SAR granted in conjunction with an
incentive stock option: (i) the Tandem SAR will expire no later than the
expiration of the underlying incentive stock option; (ii) the value of the
payout with respect to the Tandem SAR may be for no more than 100% of the
difference between the then
21
fair market value on the date of exercise of the common stock subject to such
incentive stock option or portion thereof surrendered by the optionee, and the
aggregate option exercise price of such common stock; and (iii) the Tandem SAR
may be exercised only when the fair market value of the shares subject to the
incentive stock option exceeds the option price of the incentive stock option.
Freestanding SARs may be exercised upon whatever terms and conditions the
Committee, in its sole discretion, imposes on them.
The terms of each Award are to be evidenced by a written instrument
delivered to the participant. However, the term of an SAR shall not exceed ten
years. Any SARs granted under the Plan may not be assigned or transferred except
by will or the laws of descent and distribution.
OTHER INCENTIVE AWARDS
Other Incentive Awards may be granted to participants in such amounts, upon
such terms, and at any time and from time to time as shall be determined by the
Committee. Each Other Incentive Award grant shall be evidenced by an award
agreement that shall specify the amount of the Other Incentive Award granted and
the terms and conditions applicable to such award. Except as otherwise provided
in an award agreement, Other Incentive Awards may not be assigned or transferred
except by will or the laws of descent and distribution.
PERFORMANCE MEASURES
The performance measure(s) to be used for purposes of grants to named
executive officers shall be chosen from among the following alternatives, as
reported on the Company's annual 10-K report:
- Return on Assets, which equals net income divided by total assets
- Return on Sales, which equals net income divided by net sales
- Return on Equity, which equals net income divided by total equity
- Cash Flow Return on Investment, which equals net cash flows divided by
owners' equity
- Operating Income
- Earnings Before Income Taxes, which equals net income plus taxes
- Net Earnings, which equals net earnings as reported
- Earnings Per Share
AMENDMENT OR TERMINATION OF THE PLAN
The Plan may be altered, amended, suspended or terminated at any time by
the Board of Directors in whole or in part; provided, however, that no such
alteration, amendment, suspension or termination may adversely affect an
optionee's or grantee's rights under any Award theretofore granted under the
Plan, except with the consent of such optionee or grantee.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
STOCK OPTIONS. When an optionee exercises a non-qualified stock option,
the difference between the option price and any higher fair market value of the
shares of common stock, generally on the date of exercise, will be ordinary
income to the optionee and generally will be allowed as a deduction for federal
income tax purposes to Core Molding. Any gain or loss realized by an optionee on
disposition of the common stock acquired upon exercise of a non-qualified stock
option generally will be capital gain or loss to such optionee, long-term or
short-term depending on the holding period, and will not result in any
additional tax consequences to Core Molding. The optionee's basis in the common
stock for determining gain or loss on the disposition will be the fair market
value of such common stock determined generally at the time of exercise.
When an optionee exercises an incentive stock option while employed by Core
Molding Technologies or a subsidiary or, to the extent permitted under the
specific provisions of the Plan, within three months (one year
22
for death or disability) after termination of employment, no ordinary income
will be recognized by the optionee at that time, but the excess (if any) of the
fair market value of the common stock acquired upon such exercise over the
option exercise price will be an adjustment to taxable income for purposes of
the federal alternative minimum tax applicable to individuals. If the shares of
common stock acquired upon exercise of the incentive stock option are not
disposed of prior to the expiration of one year after the date of acquisition
and two years after the date of grant of the option, the excess (if any) of the
sales proceeds over the aggregate option exercise price of such shares of common
stock will be long-term capital gain, but the employer will not be entitled to
any tax deduction with respect to such gain. Generally, if the shares of common
stock are disposed of prior to the expiration of such periods (a "disqualifying
disposition"), the excess of the fair market value of such common stock at the
time of exercise over the aggregate option price (but not more than the gain on
the disposition if the disposition is a transaction on which a loss, if
realized, would be recognized) will be ordinary income at the time of such
disqualifying disposition (and Core Molding will generally be entitled to a
federal income tax deduction in like amount). Any gain realized by the optionee
as a result of a disqualifying disposition that exceeds the amount treated as
ordinary income will be capital in nature, long-term or short-term depending on
the holding period. If an incentive stock option is exercised more than three
months (one year after death or disability) after termination of employment, the
tax consequences are the same as described above for non-qualified options.
RESTRICTED STOCK. In the absence of an election by a participant pursuant
to Section 83(b) of the Internal Revenue Code of 1986, as amended (the "Code"),
the grant of restricted common stock will not result in taxable income to the
participant or a deduction for Core Molding in the year of grant. The value of
such restricted common stock will be taxable to the participant in the year in
which the restrictions lapse. Alternatively, a participant may elect to treat as
income in the year of grant the fair market value of the restricted common stock
on the date of grant pursuant to Section 83(b) of the Code, by making the
election within 30 days after the date of such grant. If such an election were
made, such participant would not be allowed to deduct at a later date the amount
included as taxable income if he or she should forfeit the restricted common
stock to Core Molding. Core Molding will generally be entitled to a federal
income tax deduction equal to the amount of ordinary income recognized by the
participant in the year such income is recognized. Prior to the lapse of
restrictions, dividends paid on the common stock subject to such restrictions
will be taxable to the participant as additional compensation in the year
received free of restrictions, and Core Molding will be allowed a corresponding
federal income tax deduction.
SARS. A participant is not taxed upon the grant of SARs. Rather,
participants will generally be taxed upon the exercise date, at ordinary income
tax rates, on the amount of cash received and the fair market value of any
shares of common stock received. However, if the sale of shares of common stock
could subject a participant to liability under Section 16(b) of the Exchange
Act, such participant generally will not recognize ordinary income with respect
to such common stock until the participant is no longer subject to such
liability, at which time the participant will recognize ordinary income in an
amount equal to the fair market value of the shares of common stock on such
date.
SPECIAL RULES. Special rules apply to a participant who is subject to
Section 16(b) of the Exchange Act. Certain additional special rules apply if the
exercise price for a stock option is paid in shares of common stock previously
owned by the optionee rather than in cash and if the Award is held, following
the death of a participant, by the executors of the participant's estate.
OTHER MATTERS
The Plan is designed so that particular Awards may comply with Section
162(m) of the Code. Section 162(m) of the Code prohibits a publicly held
corporation, such as Core Molding, from claiming a deduction on its federal
income tax return for compensation in excess of $1 million paid for a given
fiscal year to the chief executive officer (or person acting in that capacity)
at the close of the corporation's fiscal year and the four most highly
compensated officers of the corporation, other than the chief executive officer,
at the end of the corporation's fiscal year who receive compensation in excess
of $100,000. The $1 million compensation deduction limitation does not apply to
"performance-based compensation". To the extent that any Award is designed to
comply with Section 162(m) of the Code, the Committee shall satisfy the
requirements contained
23
in Section 1.162-27(c)(4) of the final regulations promulgated by the Internal
Revenue Service under Section 162(m) (the "Final Regulations"). The Final
Regulations set forth a number of additional provisions which compensatory plans
must contain if the compensation paid thereunder is to qualify as "performance-
based" for purposes of Section 162(m). The Plan is intended to satisfy the
requirements of the Final Regulations with respect to Awards granted thereunder.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 2006
LONG-TERM EQUITY INCENTIVE PLAN.
PROPOSAL 3
AMENDMENT OF 2002 EMPLOYEE STOCK PURCHASE PLAN
On March 30, 2006, the Board of Directors approved certain amendments to
the 2002 Employee Stock Purchase Plan (the "2002 Plan") as described below. The
2002 Plan provides eligible employees with an opportunity to purchase shares of
common stock at a discount through regular payroll deductions.
PROPOSED AMENDMENTS TO THE 2002 PLAN
Board of Directors has proposed to amend the 2002 Plan to remove the
requirement that eligibility to participate in the 2002 Plan is contingent upon
one year of employment with the Company or a subsidiary thereof. The 2002 Plan
currently states that any employee of the Company or its subsidiaries is
eligible to participate in the 2002 Plan, provided that each such employee has
been employed by Core Molding Technologies or a subsidiary thereof for at least
one year and does not own 5% or more of the total combined voting power or value
of all classes of shares of the Company.
The Board of Directors further approved an amendment to the 2002 Plan to
allow eligible employees to participate in the 2002 Plan as of the February 1st,
May 1st, August 1st or December 1st following the date on which the employee
commences employment, as well as approving certain conforming changes throughout
the 2002 Plan as related to such amendment. The 2002 Plan currently states that
participation by eligible employees may commence as of the August 1st or
February 1st following on the date on which the employee satisfies any
eligibility requirements.
The Board of Directors further approved an amendment to the 2002 Plan to
increase the number of shares of common stock that are available for issuance
under the 2002 Plan from 200,000 shares to 300,000 shares.
The above description of the amendments to the 2002 Plan and the
descriptions set forth below are qualified in their entirety by reference to the
full text of the revised 2002 Plan, as set forth in Exhibit B to this Proxy
Statement and made a part hereof. The 2002 Plan as set forth in Exhibit B, is
marked to highlight the proposed amendments as approved by the Board of
Directors.
SUMMARY OF THE REVISED 2002 STOCK PURCHASE PLAN
PURPOSE OF THE STOCK PURCHASE PLAN. The purpose of the 2002 Plan is to
provide eligible employees of Core Molding Technologies with an opportunity to
acquire an equity interest in Core Molding Technologies through the purchase of
shares of common stock, and thereby develop an incentive for such employees to
remain with Core Molding Technologies, provide a means for such employees to
share in the future success of Core Molding Technologies, and link and align the
personal interests of such employees to those of Core Molding Technologies'
stockholders.
PLAN ADMINISTRATION. The 2002 Plan will be administered by the
Compensation Committee of the Board of Directors or such other committee of at
least three directors as may be appointed by the Board of Directors (the
"Committee"). The Committee members will serve at the pleasure of the Board of
Directors. None of the members of the Committee may be an employee of Core
Molding Technologies or be eligible to participate in the 2002 Plan. The
Committee will have the authority to prescribe, amend and rescind rules and
regulations relating to the 2002 Plan. The Committee also will have authority to
interpret the 2002 Plan and
24
correct any defect or supply any omission or reconcile any inconsistency in the
2002 Plan to the extent necessary for the effective operation of the 2002 Plan.
Any such determination, decision or action taken by the Committee with respect
to the construction, interpretation, administration or application of the 2002
Plan will be conclusive.
ELIGIBLE EMPLOYEES. Any employee of Core Molding Technologies or its
subsidiaries will be eligible to participate in the 2002 Plan. An eligible
employee may begin to participate in the 2002 Plan as of the February 1st, May
1st, August 1st or December 1st following the date on which the employee
commences employment.
SECURITIES SUBJECT TO THE PLAN. A maximum of 300,000 shares of common
stock are available for issuance under the 2002 Plan (subject to adjustment as
described below under the heading "Adjustments Upon Stock Dividend, Stock Split
or Other Recapitalization"). The shares of common stock subject to the 2002 Plan
generally shall be previously issued Common Shares acquired by Core Molding
Technologies. The Board of Directors, however, may determine, in its sole
discretion, that the shares of common stock to be purchased under the 2002 Plan
will be authorized and unissued shares of common stock. To the extent that Core
Molding Technologies issues shares of common stock under the 2002 Plan, the
amounts received by Core Molding Technologies will provide additional capital
for Core Molding Technologies and may be used for any corporate purpose of Core
Molding Technologies.
RIGHTS TO PURCHASE. Upon effectiveness of the 2002 Plan, the Committee
will authorize one or more offerings ("Offering" or "Offerings"), pursuant to
which eligible employees may purchase, through authorized payroll deductions,
shares of common stock subject to the 2002 Plan. Each Offering shall be made
over the course of an offering period (the "Offering Period") which will consist
of one fiscal quarter of the plan year (running the twelve month period
beginning each August 1st and ending the following July 31st) (the "Plan Year").
Each eligible employee who desires to become a participant in the 2002 Plan
may do so by completing and submitting an Enrollment/Change Form. The employee
will specify on such Enrollment/Change Form a contribution percentage or amount
that the employee wishes to authorize Core Molding Technologies to deduct at
regular payroll intervals, which amount shall not be less than $5.00 per pay
period. The amounts withheld through such payroll deductions will be credited to
a cash account ("Cash Account") for each participating employee. Interest will
not accrue on amounts deposited in an employee's Cash Account.
Each participating employee who has enrolled in the 2002 Plan will be
granted a right to purchase shares of common stock subject to the 2002 Plan (a
"Right to Purchase"), on the last business day of each Offering (the "Right to
Purchase Date"). A custodian ("Custodian") appointed by Core Molding
Technologies for the 2002 Plan will purchase the maximum number of whole shares
of common stock that the Custodian can purchase with the amounts in the
employee's Cash Account. The Custodian will make such purchases beginning on the
Right to Purchase Date. Amounts remaining in the Cash Account after such
purchase will remain in the Cash Account for use during the next Offering
Period.
The purchase price for the shares of common stock (the "Right to Purchase
Price") will be 85% of the fair market value of the shares of common stock as of
the Right to Purchase Date. Fair market value will equal the average of the high
and low price per share of common stock (or, if applicable, the price per share
of common stock paid by the Custodian) on the American Stock Exchange, or on any
national stock exchange, on the Right to Purchase Date or, if no sales of shares
of common stock were made on such date, on the next preceding date on which
sales of common stock were made on the American Stock Exchange or other national
stock exchange.
The Custodian will establish and maintain a share account for each
participating employee and will credit to such account the number of shares of
common stock purchased for such employee. A participating employee may withdraw
all or a portion of the shares of common stock credited to the employee's share
account by written notice to the Custodian given at least twenty days in advance
of each February 1, May 1, August 1 or December 1. The employee can withdraw
such shares of common stock on a first-in first-out basis. The Custodian will
charge the employee a fee (agreed to by Core Molding Technologies and the
25
Custodian) for such withdrawal and deliver to the participating employee a share
certificate issued in the employee's name for the number of whole shares of
common stock that the employee wishes to withdraw from the employee's share
account. Shares of common stock withdrawn by a participating employee will be
registered and issued only in the name of such participating employee.
Any cash dividends paid with respect to the shares of common stock credited
to a participating employee's share account will be added to the employee's Cash
Account and applied to the exercise of Rights to Purchase on the immediately
succeeding Right to Purchase Date. Accordingly, an election by an employee to
leave shares of common stock with the Custodian will constitute an election to
apply any cash dividends with respect to such shares of common stock to the
exercise of Rights to Purchase. A participating employee may, by written notice
to Core Molding Technologies at least twenty days prior to each February 1, May
1, August 1 or December 1, increase or decrease the amount of the participating
employee's payroll deduction. In addition, the participating employee may
discontinue payroll deductions, as of any future date specified by Core Molding
Technologies for making the payroll deductions (the "Payroll Deduction
Date(s)"), by written notice delivered to Core Molding Technologies at least
twenty days in advance of such Payroll Deduction Date. The employee thereafter
may not resume deductions until the next following February 1, May 1, August 1
or December 1. Amounts remaining in a participating employee's Cash Account who
ceases payroll deductions will be used on the next Right to Purchase Date to
purchase shares of common stock. The Committee may impose such other
restrictions on the right to cease payroll deductions as it deems appropriate.
The Company at its option, at any time after the end of an Offering Period,
may close the Cash Account of an eligible employee not participating in another
Offering under the 2002 Plan. In that event, any balance remaining in the
employee's Cash Account will be refunded to the employee. In addition, Core
Molding Technologies at its option, at any time after the end of an Offering
Period, may close the share accounts related to such Offering. In that event,
the Custodian will deliver to each participating employee in that Offering a
share certificate issued in the employee's name for the number of whole Common
Shares credited to the employee's share account without charging a withdrawal
fee.
LIMITATIONS ON GRANT OF RIGHT TO PURCHASE AND GOVERNMENT REGULATION. The
number and market value of the shares of common stock purchased by any
participating employee under the 2002 Plan may not exceed certain limitations.
These limitations prohibit the grant of a Right to Purchase (i) if, immediately
after such Right to Purchase is granted, such employee would own, and/or hold
outstanding options or rights to purchase, shares of Core Molding Technologies
possessing 5% or more of the total combined voting power or value of all classes
of shares of Core Molding Technologies; or (ii) which permits an employee's
rights to purchase shares of common stock under all employee stock purchase
plans of Core Molding Technologies to accrue at a rate which exceeds $25,000 of
fair market value of such shares of common stock (determined as of the date such
Right to Purchase is granted) for each calendar year in which such Right to
Purchase is outstanding.
The Company's obligation to issue, sell or deliver any shares of common
stock under the 2002 Plan also is subject to all applicable laws and regulations
and to the approval of any governmental or regulatory authority required in
connection with such issuance, sale or delivery. The Company will not be
required to issue, sell or deliver any shares of common stock under the 2002
Plan prior to (i) approval of such shares of common stock for any required
listing on any national stock exchange; and (ii) the completion of any
registration or other qualification of such shares of common stock under any
state or federal law or any ruling or regulation of any governmental or
regulatory authority which Core Molding Technologies in its sole discretion
determines to be necessary or advisable.
RIGHTS AS STOCKHOLDERS. A participating employee will not have any of the
rights or privileges of a stockholder with respect to shares of common stock
subject to an unexercised Right to Purchase. A participating employee who has
exercised a Right to Purchase will have all the rights and privileges of a
stockholder immediately following such exercise.
TERMINATION OF EMPLOYMENT. If the employment of a participating employee
terminates for any reason, including death, disability, retirement or other
cause, the employee's participation in the 2002 Plan will
26
terminate automatically as of the date of the employee's termination. As soon as
practicable following the former employee's termination, Core Molding
Technologies will refund to such former employee (or beneficiary in the case of
the former employee's death) any and all amounts in the former employee's Cash
Account. In addition, the Custodian will deliver to the former employee (or
beneficiary) a share certificate issued in the former employee's name for the
number of whole shares of common stock credited to the former employee's share
account through prior Offerings.
RESTRICTION UPON ASSIGNMENT. Rights to Purchase are not assignable or
transferable (including by pledge or hypothecation) and are exercisable during a
participating employee's lifetime only by such employee. The Company will not
recognize and has no duty to recognize any assignment or purported assignment by
a participating employee of such employee's Rights to Purchase or of any rights
under the Rights to Purchase.
ADJUSTMENTS UPON STOCK DIVIDEND, STOCK SPLIT OR OTHER RECAPITALIZATION. In
the event of any change in the outstanding shares of common stock, by reason of
a stock dividend, recapitalization, merger, consolidation, split-up, combination
or exchange of shares, or the like, appropriate adjustments shall be made to the
aggregate number and class of shares subject to the 2002 Plan, the number and
class of shares subject to outstanding Rights to Purchase, the purchase price
per share (in the case of shares subject to outstanding Rights to Purchase), and
the number and class of shares which may be subscribed to by any one employee.
The Committee may make such other adjustments as it deems equitable.
DURATION AND AMENDMENT OF THE PLAN. The 2002 Plan will continue in effect
until the earlier to occur of (i) the purchase by eligible employees of all
shares of common stock subject to the 2002 Plan; or (ii) the termination of the
2002 Plan by the Board of Directors. No termination of the 2002 Plan may affect
any Rights to Purchase previously granted under the 2002 Plan.
The Company reserves the right to amend, suspend, modify or terminate the
2002 Plan at any time. The Committee, however, generally may not make any
changes or additions that would adversely affect Rights to Purchase previously
granted under the 2002 Plan. In addition, the Committee generally may not make
any amendment without prior stockholder approval if such amendment would (i)
increase the aggregate number of shares of common stock subject to the 2002 Plan
or which may be subscribed to by an eligible employee; (ii) decrease the minimum
purchase price for a share of common stock, or (iii) change any of the
provisions of the 2002 Plan relating to eligibility for participation in
Offerings.
INTEREST OF ELIGIBLE EMPLOYEES IN THE PLAN. All employees of Core Molding
Technologies will be able to participate in the 2002 Plan if they satisfy the
eligibility requirements of the 2002 Plan detailed above. As of December 31,
2005, Core Molding Technologies employed a total of 1,377 employees.
The Company's employees currently include the executive officers named in
the Summary Compensation Table set forth above under the heading "EXECUTIVE
COMPENSATION". No current director or person nominated to become a director at
the annual meeting is currently an employee of Core Molding Technologies, other
than James L. Simonton, President and Chief Executive Officer.
All eligible employees will have discretion to determine whether or not
they wish to participate in the 2002 Plan. Accordingly, Core Molding
Technologies has not and cannot determine the benefits or amounts that will be
received by or allocated to any employee of Core Molding Technologies.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
AMENDMENTS TO THE 2002 EMPLOYEE STOCK PURCHASE PLAN.
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors has appointed the firm of Deloitte & Touche to audit
the financial statements of Core Molding Technologies for the fiscal year ending
December 31, 2006. Core Molding Technologies expects a representative of
Deloitte & Touche to attend the annual meeting. Core Molding Technologies will
provide
27
the representative with an opportunity to make a statement if he or she desires
to do so. Core Molding Technologies expects that the representative will be
available to respond to appropriate questions.
Core Molding Technologies is presenting the appointment of Deloitte &
Touche as independent registered public accounting firm for ratification at the
annual meeting. While ratification by stockholders of this appointment is not
required by law or the Certificate of Incorporation or Bylaws of Core Molding
Technologies, management believes that such ratification is desirable. In the
event this appointment is not ratified by a majority vote of stockholders, the
Board of Directors will consider that fact when it appoints an independent
registered public accounting firm for the next fiscal year. The Board has
adopted policies requiring the Audit Committee to pre-approve all audit and
non-audit services provided by Core Molding Technologies' independent registered
public accounting firm. All auditing services and non-audit services provided by
Deloitte & Touche for the year ended December 31, 2005 have been approved by the
Audit Committee.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF DELOITTE & TOUCHE LLP.
The management of Core Molding Technologies and the Board of Directors of
Core Molding Technologies know of no matters to be brought before the annual
meeting other than as set forth above. If, however, any other matters are
properly presented to the stockholders for action, it is the intention of the
persons named in the proxy to vote at their discretion on all matters on which
the shares of common stock represented by such proxies are entitled to vote.
BY ORDER OF THE BOARD OF DIRECTORS
Malcolm M. Prine
Chairman of the Board
Dated: April 17, 2006
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EXHIBIT A
CORE MOLDING TECHNOLOGIES, INC.
2006 LONG-TERM EQUITY INCENTIVE PLAN
ARTICLE ONE
ESTABLISHMENT, OBJECTIVES AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Core Molding Technologies, Inc., a
Delaware corporation (the "Company"), hereby adopts, effective March 30, 2006,
the Core Molding Technologies, Inc. 2006 Long-Term Equity Incentive Plan as set
forth in this document. The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares and Performance Units, and Other Incentive Awards.
1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize
the profitability and growth of the Company through incentives which are
consistent with the Company's goals and which link and align the personal
interests of Participants with an incentive for excellence in individual
performance; and to promote teamwork.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date,
as described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 16 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after December 31, 2015.
ARTICLE TWO
DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
"Award" means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Performance Shares or Performance Units, or Other Incentive
Awards.
"Award Agreement" means an agreement entered into by the Company and each
Participant setting forth the terms and provisions applicable to Awards granted
under this Plan.
"Beneficial Owner" or "Beneficial Ownership" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
"Board" or "Board of Directors" means the Board of Directors of the
Company.
"Change in Control" of the Company means any one or more of the following:
(a) The Company is merged, consolidated or reorganized into or with
another corporation, partnership, limited liability company, trust, or
other legal person (collectively referred herein as a "Business Entity"),
and immediately after such merger, consolidation, or reorganization less
than fifty percent (50%) of the combined voting power of the
then-outstanding securities of such Business Entity immediately after such
transaction are held in the aggregate by the holders of voting stock of the
Company immediately prior to such transaction;
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(b) The Company sells all or substantially all of its assets to any
other Business Entity, and less than fifty percent (50%) of the combined
voting power of the then-outstanding securities of such Business Entity
immediately after such sale are held in the aggregate by the holders of
voting stock of the Company immediately prior to such sale; or
(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934 ("Exchange Act"), disclosing that any
person (as the term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) or group of persons acting in concert has
become the beneficial owner (as the term "beneficial owner" is defined
under Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act) of securities representing fifty percent (50%) or more of the
voting stock of the Company.
(d) The Company files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in response
to Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) that a change in control of the Company has or may have
occurred or will or may occur in the future pursuant to any then-existing
contract or transaction; or
(e) If during any period of two consecutive years, individuals who at
the beginning of any such period constitute the Directors of the Company
cease for any reason to constitute at least a majority thereof, provided,
however, that for purposes of this paragraph (e) each Director who is first
elected, or first nominated for election by the Company's stockholders, by
a vote of at least two-thirds of the Directors of the Company (or a
committee thereof) then still in office who were Directors of the Company
at the beginning of any such period will be deemed to have been a Director
of the Company at the beginning of such period.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the Compensation Committee of the Board, as specified in
Article 3 herein, or such other Committee appointed by the Board to administer
the Plan with respect to grants of Awards.
"Common Stock" means the common stock of the Company.
"Company" means Core Molding Technologies, Inc., a Delaware corporation,
and the Company's Subsidiaries, as well as any successor to any of such entities
as provided in Article 19 herein.
"Director" means any individual who is a member of the Board of Directors
of the Company.
"Disability" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan. To the extent that a
Participant is not covered under a long-term disability plan, the term
"Disability" shall have the meaning ascribed to the term "permanent and total
disability" under Section 22(e)(3) of the Code, or any successor provision
thereto.
"Effective Date" shall have the meaning ascribed to such term in Section
1.1 hereof.
"Employee" means any employee of the Company. Nonemployee Directors shall
not be considered Employees under this Plan unless specifically designated
otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.
"Fair Market Value" shall be determined on the basis of the average of the
high and low sale prices on the principal securities exchange on which the
Shares are publicly traded or, if there is no such sale on the relevant date,
then on the last previous day on which a sale was reported.
"Freestanding SAR" means an SAR that is granted independently of any
Options, as described in Article 7 herein.
"Incentive Stock Option" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.
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"Insider" shall mean an individual who is, on the relevant date, an
officer, director or ten percent (10%) beneficial owner of any class of the
Company's equity securities that it registered pursuant to Section 12 of the
Exchange Act, as defined under Section 16 of the Exchange Act.
"Named Executive Officer" means a Participant who, as of the date of
vesting and/or payout of an Award, as applicable, is one of the group of
"covered employees," as defined in the regulations promulgated under Code
Section 162(m), or any successor statute.
"Nonemployee Director" means an individual who is a member of the Board of
Directors of the Company but who is not an Employee of the Company or a
Subsidiary.
"Nonqualified Stock Option" or "NQSO" means an option to purchase Shares
granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
"Option" means an Incentive Stock Option or a Nonqualified Stock Option, as
described in Article 6 herein.
"Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
"Other Incentive Award" means an award granted pursuant to Article 10
hereof.
"Participant" means an Employee or Nonemployee Director who has outstanding
an Award granted under the Plan.
"Performance-Based Exception" means the performance-based exception from
the tax deductibility limitations of Code Section 162(m).
"Performance Period" means the time period during which performance goals
must be achieved with respect to an Award, as determined by the Committee.
"Performance Share" means an Award granted to a Participant, as described
in Article 9 herein.
"Performance Unit" means an Award granted to a Participant, as described in
Article 9 herein.
"Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, and/or upon the occurrence of other events
as determined by the Committee at its discretion), and the Shares are subject to
a substantial risk of forfeiture, as provided in Article 8 herein.
"Person" shall have the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) thereof.
"Restricted Stock" means an Award granted to a Participant pursuant to
Article 8 herein.
"Retirement" means the normal retirement date on which a Participant
qualifies for full retirement benefits under the Company's qualified retirement
plan, as identified by the Committee. In the event that a Participant is not
covered under any qualified retirement plan maintained by the Company, the term
'Retirement' shall mean the date on which such Participant attains age 65.
"Shares" means the shares of common stock of the Company.
"Share Pool" means the number of shares authorized for issuance under
paragraph 4.1, as adjusted for awards and payouts under paragraph 4.2 and as
adjusted for changes in corporate capitalization under paragraph 4.3.
"Stock Appreciation Right" or "SAR" means an Award, granted alone or in
connection with a related Option, designated as an SAR, pursuant to the terms of
Article 7 herein.
"Subsidiary" means any corporation, partnership, joint venture, affiliate
or other entity in which the Company has a majority voting interest, and which
the Committee designates as a participating entity in the Plan.
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"Tandem SAR" means an SAR that is granted in connection with a related
Option pursuant to Article 7 herein, the exercise of which shall require
forfeiture of the right to purchase a Share under the related Option (and when a
Share is purchased under the Option, the Tandem SAR shall similarly be
canceled).
ARTICLE THREE
ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board or by any other Committee appointed by the Board. The
members of the Committee shall be appointed from time to time by, and shall
serve at the discretion of, the Board of Directors. Notwithstanding any
provision contained herein, to the extent that any Award is designed to comply
with the Performance-Based Exception, the Committee shall satisfy the
requirements contained in Section 1.162-27(c)(4) of the final regulations
promulgated by the Internal Revenue Service under Section 162(m) of the Code.
For purposes of granting Awards under the Plan, the Committee shall be composed
of not less than the minimum number of persons from time to time required by
Rule 16b-3 under the Exchange Act, each of whom shall be a "non-employee
director" within the meaning of Rule 16b-3 under the Exchange Act, or any
successor rule or regulation.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws. of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees and
Nonemployee Directors who shall participate in the Plan; determine the sizes and
types of Awards; determine the terms and conditions of Awards in a manner
consistent with the Plan; construe and interpret the Plan and any agreement or
instrument entered into under the plan; establish, amend or waive rules and
regulations for the Plan's administration; and (subject to the provisions of
Article 16 herein) amend the terms and conditions of any outstanding Award to
the extent such terms and conditions are within the discretion of the Committee
as provided in the Plan. Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration of the
Plan. As permitted by law, the Committee may delegate its authority as
identified herein.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Employees, Participants and their
estates and beneficiaries.
ARTICLE FOUR
SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as
provided in Section 4.3 herein, the number of Shares hereby reserved for
issuance under the Plan shall be Three Million (3,000,000). The Committee shall
determine the appropriate methodology for calculating the number of Shares
issued pursuant to the Plan.
Unless and until the Committee determines that an Award to a Named
Executive Officer shall not be designed to comply with the Performance-Based
Exception, the following rules shall apply to grants of such Awards under the
Plan:
(a) The maximum aggregate number of Shares (including Options, SARs,
Restricted Stock, Performance Units and Performance Shares paid out in
Shares, or Other Incentive Awards paid out in Shares) that may be granted
or that may vest, as applicable, in any fiscal year pursuant to any Award
held by any Named Executive Officer shall be Two Hundred Thousand
(200,000). For this purpose, to the extent that any Option is canceled (as
described in Section 1.162-27 (e) (2) (vi) (B) of the final regulations
under Section 162(m) of the Code, such canceled Option shall continue to be
counted against the maximum number of Shares for which Options may be
granted to a Named Executive Officer under the Plan; and
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(b) The maximum aggregate cash payout (including Performance Units and
Performance Shares paid out in cash, or Other Incentive Awards paid out in
cash) with respect to Awards granted in any fiscal year which may be made
to any Named Executive Officer shall be One Hundred Twenty-Five Thousand
Dollars ($125,000).
4.2 LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available for the grant of an
Award under the Plan.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368), or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares available in the Share Pool and
in the number and class of and/or price of Shares subject to outstanding Awards
granted under the Plan, as may be determined to be appropriate and equitable by
the Committee, in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that the number of Shares subject to any Award shall
always be a whole number.
ARTICLE FIVE
ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include (a)
all officers and key employees of the Company, as determined by the Committee,
including Employees who are members of the Board and Employees who reside in
countries other than the United States of America and (b) all Nonemployee
Directors.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees and
Nonemployee Directors those to whom Awards shall be granted and shall determine
the nature and amount of each Award.
ARTICLE SIX
STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted, either by the Committee or the Board, to one or more
Participants in such number, and upon such terms, and at any time and from time
to time as shall be determined by the Committee. The Committee or the Board
shall have the authority to grant Incentive Stock Options or to grant
Nonqualified Stock Options or to grant both types of Options. In the case of
Incentive Stock Options, the terms and conditions of such grants shall be
subject to, and comply with, such rules as may be prescribed by Section 422 of
the Code, as from time to time amended, and any regulations implementing such
statute, including, without limitation, the requirements of Code Section 422(d)
which limit the aggregate Fair Market Value of Shares (determined at the time
that such Option is granted) for which Incentive Stock Options are exercisable
for the first time to $100,000 per calendar year, and the requirement that
Incentive Stock Options may only be granted to Employees. Each provision of the
Plan and of each written Award Agreement relating to an Option designated as an
Incentive Stock Option shall be construed so that such Option qualifies as an
Incentive Stock Option, and any provision that cannot be so construed shall be
disregarded.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO or an NQSO.
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6.3 OPTION PRICE. The Option Price for each grant of an Option under this
Plan shall be at least equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted. Notwithstanding any
provision contained herein, in the case of an Incentive Stock Option, the
exercise price at the time such Incentive Stock Option is granted to any
Employee who, at the time of such grant, owns (within the meaning of Section
424(d) of the Code) more than ten percent of the voting power of all classes of
stock of the Company or a Subsidiary, shall not be less than 110% of the per
Share Fair Market Value on the date of grant.
6.4 DURATION OF OPTIONS. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that in the
case of an Incentive Stock Option, an Employee may not exercise such Incentive
Stock Option after the date which is ten years (five years in the case of a
Participant who owns more than ten percent of the voting power of the Company or
a Subsidiary) after the date on which such Incentive Stock Option is granted.
6.5 EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6 PAYMENT. Options granted under this Article 6 shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price (provided that the Shares that are
tendered must have been held by the Participant for at least six (6) months
prior to their tender to satisfy the Option Price), or (c) by a combination of
(a) and (b).
As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
6.8 TERMINATION OF EMPLOYMENT. Each Option Award Agreement shall set
forth the extent to which the Participant shall have the right to exercise the
Option following termination of the Participant's employment with (or service
to) the Company and/or its Subsidiaries. Such provisions shall be determined in
the sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Options issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of employment or service.
6.9 NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all ISOs
granted to a Participant under the Plan shall be exercisable during his or her
lifetime only by such Participant.
(b) NON-QUALIFIED STOCK OPTIONS. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this Article 6 may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all NQSOs granted to a
Participant under this Article 6 shall be exercisable during his or her lifetime
only by such Participant.
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ARTICLE SEVEN
STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARs. Subject to the terms and conditions of the Plan, SARs
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee may grant Freestanding SARs, Tandem
SARs, or any combination of these forms of SAR.
The Committee shall have complete discretion in determining the number of
SARs granted to each Participant (subject to Article 4 herein) and, consistent
with the provisions of the Plan, in determining the terms and conditions
pertaining to such SARs.
Unless otherwise designated by the Committee at the time of grant, the
grant price of a Freestanding SAR shall equal the Fair Market Value of a Share
on the date of grant of the SAR. The grant price of Tandem SARs shall equal the
Option Price of the related Option.
7.2 EXERCISE OF TANDEM SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO exceeds the Option
Price of the ISO.
7.3 EXERCISE OF FREESTANDING SARs. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes upon them.
7.4 SAR AGREEMENT. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, and such
other provisions as the Committee shall determine.
7.5 TERM OF SARs. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that
unless otherwise designated by the Committee, such term shall not exceed ten
(10) years.
7.6 PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant shall
be entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a Share on the
date of exercise over the grant price; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, in Restricted Shares of equivalent value,
or in some combination thereof.
7.7 TERMINATION OF EMPLOYMENT. Each SAR Award Agreement shall set forth
the extent to which the Participant shall have the right to exercise the SAR
following termination of the Participant's employment with (or service to) the
Company and/or its Subsidiaries. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award Agreement entered
into with Participants, need not be uniform among all SARs issued pursuant to
the Plan, and may reflect distinctions based on the reasons for termination of
employment or service.
7.8 NON-TRANSFERABILITY OF SARs. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
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otherwise provided in a Participant's Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.
ARTICLE EIGHT
RESTRICTED STOCK
8.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine.
8.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by an Award Agreement that shall specify the Period(s) of Restriction,
the number of Shares of Restricted Stock granted, and such other provisions as
the Committee shall determine.
8.3 TRANSFERABILITY. Except as provided in this Article 8, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Restricted Stock
Award Agreement, or upon earlier satisfaction of any other conditions, as
specified by the Committee in its sole discretion and set forth in the
Restricted Stock Agreement. All rights with respect to the Restricted Stock
granted to a Participant under the Plan shall be available during his or her
lifetime only to such Participant.
8.4 OTHER RESTRICTIONS. Subject to Article 11 herein, the Committee may
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock, a requirement that Participants own a certain
amount of Shares before vesting shall occur, restrictions based upon the
achievement of specific performance goals (Company-wide, divisional, and/or
individual), time-based restrictions on vesting following the attainment of the
performance goals, requirement and/or restrictions under applicable federal or
state securities laws.
The Company shall retain the certificates representing Shares of Restricted
Stock in the Company's possession until such time as all conditions and/or
restrictions applicable to such Shares have been satisfied.
Except as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction.
8.5 VOTING RIGHTS. Unless otherwise designated by the Committee at the
time of grant, Participants holding Shares of Restricted Stock granted hereunder
may exercise full voting rights with respect to those Shares during the Period
of Restriction.
8.6 DIVIDENDS AND OTHER DISTRIBUTIONS. Unless otherwise designated by the
Committee at the time of grant, Participants holding Shares of Restricted Stock
granted hereunder may be credited with regular cash dividends paid with respect
to the underlying Shares while they are so held during the Period of
Restriction. The Committee may apply any restrictions to the dividends that the
Committee deems appropriate. Without limiting the generality of the preceding
sentence, if the grant of vesting of Restricted Stock granted to a Named
Executive Officer is designed to comply with the requirements of the
Performance-Based Exception, the Committee may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to such Restricted
Stock, such that the dividends and/or the Restricted Stock maintain eligibility
for the Performance-Based Exception.
8.7 TERMINATION OF EMPLOYMENT. Each Restricted Stock Award Agreement
shall set forth the extent to which the Participant shall have the right to
receive unvested Restricted Shares following termination of the Participant's
employment with (or service to) the Company and/or its Subsidiaries. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Shares of Restricted Stock issued pursuant to the Plan, and
may reflect distinctions based on the reasons for termination of employment
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or service; provided, however, that, except in the cases of terminations
connected with a Change in Control, terminations by reason of death or
Disability, and except for Restricted Shares paid to Participants upon SAR
exercise, the vesting of Shares of Restricted Stock which qualify for the
Performance-Based Exception and which are held by Named Executive Officers shall
not occur prior to the time they otherwise would have, but for the employment
termination.
ARTICLE NINE
PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE UNITS AND PERFORMANCE SHARES. Subject to the
terms of the Plan, Performance Units and/or Performance Shares may be granted to
Participants in such amounts and upon such terms, and at any time and from time
to time, as shall be determined by the Committee.
9.2 VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall have
an initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the number and/or value of Performance Units/Shares that will be paid out to the
Participant. For purposes of this Article 9, the time period during which the
performance goals must be met shall be called a "Performance Period."
9.3 EARNING OF PERFORMANCE UNITS/SHARES. Subject to the terms of this
Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Shares shall be entitled to receive payout on the number and
value of Performance Units/Shares earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding
performance goals have been achieved, as established by the Committee.
9.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES. Subject to
the terms of this Plan, the Committee, in its sole discretion, may pay earned
Performance Units/Shares in the form of cash or in Shares (or in a combination
thereof) which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period. Such Shares may be granted subject to any restrictions deemed
appropriate by the Committee.
At the discretion of the Committee, Participants may be entitled to receive
any dividends declared with respect to Shares which have been earned in
connection with grants of Performance Units and/or Performance Shares which have
been earned, but not yet distributed to Participants (such dividends shall be
subject to the same accrual, forfeiture, and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set forth in
Section 8.6 herein). In addition, Participants may, at the discretion of the
Committee, be entitled to exercise their voting rights with respect to such
Shares.
9.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR RETIREMENT.
Unless otherwise designated by the Committee, and set forth in the Participant's
Award Agreement, in the event the employment (or service) of a Participant is
terminated due to death, Disability or Retirement during a Performance Period,
the Participant shall receive a prorated payout of the Performance Units/Shares.
The prorated payout shall be determined by the Committee, shall be based upon
the length of time that the Participant held the Performance Units/Shares during
the Performance Period and shall further be adjusted based on the achievement of
the preestablished performance goals.
Payment of earned Performance Units/Shares shall be made at a time
specified by the Committee in its sole discretion and set forth in the
Participant's Award Agreement. Notwithstanding the foregoing, with respect to
Named Executive Officers who retire during a Performance Period, payments shall
be made at the same time as payments are made to Participants who did not
terminate employment during the applicable Performance Period.
9.6 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that a
Participant's employment (or service) terminates for any reason other than those
reasons set forth in Section 9.5
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herein, all Performance Units/Shares shall be forfeited by the Participant to
the Company unless determined otherwise by the Committee, as set forth in the
Participant's Award Agreement.
9.7 NONTRANSFERABILITY. Except as otherwise provided in a Participant's
Award Agreement, Performance Units/Shares may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, a Participant's rights under the Plan shall be
exercisable during the Participant's lifetime only by the Participant or the
Participant's legal representative.
ARTICLE TEN
OTHER INCENTIVE AWARDS
10.1 GRANT OF OTHER INCENTIVE AWARDS. Subject to the terms and provisions
of the Plan, Other Incentive Awards may be granted to Participants in such
amount, upon such terms, and at any time and from time to time as shall be
determined by the Committee.
10.2 OTHER INCENTIVE AWARD AGREEMENT. Each Other Incentive Award grant
shall be evidenced by an Award Agreement that shall specify the amount of the
Other Incentive Award granted, the terms and conditions applicable to such
grant, the applicable Performance Period and performance goals, and such other
provisions as the Committee shall determine, subject to the terms and provisions
of the Plan.
10.3 NONTRANSFERABILITY. Except as otherwise provided in a Participant's
Award Agreement, Other Incentive Awards may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution.
10.4 FORM AND TIMING OF PAYMENT OF OTHER INCENTIVE AWARDS. Payment of
Other Incentive Awards shall be made at such times and in such form, in cash, in
Shares, or in Restricted Shares (or a combination thereof), as established by
the Committee subject to the terms of the Plan. Such Shares may be granted
subject to any restrictions deemed appropriate by the Committee. Without
limiting the generality of the foregoing, annual incentive awards may be paid in
the form of Shares and/or Other Incentive Awards (which may or may not be
subject to restrictions, at the discretion of the Committee).
ARTICLE ELEVEN
PERFORMANCE MEASURES
Unless and until the Committee proposes for shareholder vote and
shareholders approve a change in the general performance measures set forth in
this Article 11, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Named Executive Officers which are
designed to qualify for the Performance-Based Exception, the performance
measure(s) to be used for purposes of such grants shall be chosen from among the
following alternatives, as reported on the Company's annual 10-K report:
(a) Return on Assets ("ROA") which equals net income divided by total
assets.
(b) Return on Sales ("ROS") which equals net income divided by net
sales.
(c) Return on Equity ("ROE") which equals net income divided by total
equity.
(d) Cash Flow Return on Investment ("CFROI") which equals net cash
flows divided by owners' equity.
(e) Operating Income.
(f) Earnings Before Income Taxes ("EBIT") which equals net income plus
taxes.
(g) Net Earnings which equals net earnings as reported.
(h) Earnings Per Share.
A-10
The Committee shall have the discretion to adjust the determinations of the
degree of attainment of the preestablished performance goals; provided, however,
that Awards which are designed to qualify for the Performance-Based Exception,
and which are held by Named Executive Officers, may not be adjusted upward (the
Committee shall retain the discretion to adjust such Awards downward).
In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee may make such grants for the
Performance-Based Exception, the Committee may make such grants without
satisfying the requirements of Code Section 162(m) and, thus, which use
performance measures other than those specified above. To the extent that the
Committee determines that it is advisable to grant Awards in compliance with the
Performance-Based Exception, the Committee must certify, in writing, prior to
the payment of any compensation under the Award, that the performance goals and
any other material terms were in fact satisfied.
ARTICLE TWELVE
BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed the Company, and will be effective only when filed by the Participant
in writing with the Company during the Participant's lifetime. In the absence of
any such designation, benefits remaining unpaid at the Participant's death shall
be paid to the Participant's estate.
ARTICLE THIRTEEN
DEFERRALS
The Committee may permit a Participant to defer such Participant's receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant by virtue of the exercise of an Option or SAR, the lapse or
waiver of restrictions with respect to Restricted Stock, or the satisfaction of
any requirements or goals with respect to Performance Units/Shares or Other
Incentive Awards. If any such deferral election is required or permitted, the
Committee shall, in its sole discretion, establish rules and procedures for such
payment deferrals. Any such deferral shall be made in a manner consistent with
the requirements of Section 409A of the Code.
ARTICLE FOURTEEN
RIGHTS OF EMPLOYEES AND NONEMPLOYEE DIRECTORS
14.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Company.
14.2 PARTICIPATION. No Employee or Nonemployee Director shall have the
right to be selected to receive an Award under this Plan or, having been so
selected, to be selected to receive a future Award.
A-11
ARTICLE FIFTEEN
CHANGE IN CONTROL
15.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges:
(a) Any and all Options and SARs granted hereunder shall become
immediately exercisable, and shall remain exercisable throughout their
entire term, and any cash or property received upon exercise of any Option
or SAR shall be free from further restriction;
(b) Any restriction periods and restrictions imposed on Restricted
Shares shall lapse; and
(c) Unless otherwise specified in Participant's Award Agreement at
time of grant, the target payout opportunities attainable under all
outstanding Awards of Performance Units and Performance Shares and Other
Incentive Awards shall be deemed to have been fully earned for the entire
Performance period(s) as of the effective date of the Change in Control.
The vesting of all such Awards shall be accelerated as of the effective
date of the Change in Control and, in full settlement of such Awards, there
shall be paid out to Participants (in Shares for Awards normally paid in
Shares and in cash for Awards normally paid in cash) within thirty (30)
days following the effective date of the Change in Control a pro rata
portion of all targeted Award opportunities associated with such
outstanding Awards, based on the number of complete and partial calendar
months within the Performance Period which had elapsed as of such effective
date.
15.2 TERMINATION, AMENDMENT AND MODIFICATIONS OF CHANGE IN CONTROL
PROVISIONS. Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 15 may not be terminated,
amended or modified to affect adversely any Award theretofore granted under the
Plan without the prior written consent of the Participant with respect to said
Participant's outstanding Awards.
ARTICLE SIXTEEN
AMENDMENT, MODIFICATION AND TERMINATION
16.1 AMENDMENT, MODIFICATION AND TERMINATION. The Board may at any time
and from time to time alter, amend, suspend or terminate the Plan in whole or in
part.
16.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award.
16.3 COMPLIANCE WITH CODE SECTION 162(m). At all times when Code Section
162(m) is applicable, all Awards granted under this Plan to Named Executive
Officers shall comply with the requirements of Code Section 162(m); provided,
however, that in the event the Committee determines that such compliance is not
desired with respect to any Award or Awards available for grant under the Plan,
then compliance with Code Section 162(m) will not be required. In addition, in
the event that changes are made to Code Section 162(m) to permit greater
flexibility with respect to any Award or Awards available under the Plan, the
Committee may, subject to this Article 16, make any adjustments it deems
appropriate.
ARTICLE SEVENTEEN
WITHHOLDING
17.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.
A-12
17.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax which could be imposed on the transaction.
All such elections shall be irrevocable, made in writing, signed by the
Participant, and shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate.
ARTICLE EIGHTEEN
INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified by the Company against and from any loss, cost,
liability or expense that may be imposed upon or reasonably incurred by him or
her in connection with or resulting from any claim, action, suit or proceeding
to which he or she may be a party or in which he or she may be involved by
reason of any action taken or failure to act under the Plan. Such person shall
be indemnified by the Company for all amounts paid by him or her in settlement
thereof, with the Company's approval, or paid by him or her in satisfaction of
any judgment in any such action, suit or proceeding against him or her, provided
he or she shall give the Company an opportunity, at its own expense, to handle
and defend the same before he or she undertakes to handle and defend it on his
or her own behalf. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company's Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
ARTICLE NINETEEN
SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE TWENTY
LEGAL CONSTRUCTION
20.1 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein shall also include the feminine, the plural shall
include the singular, and the singular shall include the plural.
20.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
20.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
20.4 GOVERNING LAW. To the extent not preempted by federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of Delaware, without giving effect to the conflict of
laws principles thereof.
A-13
EXHIBIT B
2002 CORE MOLDING TECHNOLOGIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF THE PLAN. The purpose of the Core Molding Technologies,
Inc. Employee Stock Purchase Plan (the "Plan") is to provide eligible employees
of Core Molding Technologies, Inc. (the "Company") and its subsidiaries with an
opportunity to acquire an equity interest in the Company through the purchase of
Common Shares, and thus develop an incentive to remain with the Company, provide
a means for employees to share in the future success of the Company, to and to
link and align the personal interests of such employees to those of the Company'
stockholders. If the Company issues Common Shares under the Plan, the proceeds
therefrom will provide additional capital for the Company, which will be used
for general corporate purposes. It is the intention of the Company to have the
Plan qualify as an "employee stock purchase plan" under Section 423 of the Code
and the Plan is to be construed accordingly.
2. DEFINITIONS. For purposes of this Plan, the following terms when
capitalized shall have the meanings designated herein unless a different meaning
is plainly required by the context. Where applicable, the masculine pronouns
shall include the feminine and the singular shall include the plural.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Cash Account" shall mean the account established for each
Participant to which amounts withheld through payroll deductions shall be
credited.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the regulations and rulings thereunder.
(d) "Committee" shall mean the Compensation Committee of the Board or
such other committee of at least three directors as may be appointed by the
Board from time to time to serve at the pleasure of the Board.
(e) "Common Shares" shall mean the shares of common stock of the
Company.
(f) "Company" shall mean Core Molding Technologies, Inc.
(g) "Custodian" shall mean the person selected by the Company to hold
the amounts withheld through Participants' payroll deductions pending the
purchase of Common Shares pursuant to the Plan and to hold the Common
Shares so purchased for the benefit of Participants until such Common
Shares are withdrawn pursuant to the terms of the Plan. The Custodian shall
qualify as an "agent independent of the issuer" as that term is used in
Regulation M promulgated under the Securities Exchange Act of l934, as
amended.
(h) "Effective Date" shall mean the last business day of each Offering
Period under the Plan.
(i) "Offering" shall mean an opportunity provided by the Committee to
purchase Common Shares under the Plan.
(j) "Offering Period" shall mean the period during which an Offering
shall be made under the Plan and shall consist of a fiscal quarter of the
Plan.
(k) "Participant" shall include any employee who has satisfied the
requirements of the Plan to acquire Common Shares under the Plan and has
elected to have payroll deductions made pursuant to the Plan.
(l) "Payroll Deduction Date(s)" shall mean the date or dates specified
by the Company on which withholdings for each fiscal quarter of the Plan
shall be made.
(m) "Plan Year" shall mean the fiscal year of the Plan which shall be
the twelve (12) month period beginning each August 1st and ending on the
following July 31st.
B-1
(n) "Right to Purchase" shall mean an option to purchase Common Shares
granted to a Participant who elects to participate in an Offering under the
provisions of the Plan.
(o) "Right to Purchase Date" shall mean the Effective Date of an
Offering Period.
(p) "Share Account" shall mean the account established for each
Participant to which Common Shares purchased on each Right to Purchase Date
for the Participant shall be credited.
3. ADMINISTRATION. The Plan shall be administered by the Committee. Each
member of the Committee must be an outside director of the Company and shall not
be eligible to participate in the Plan. Subject to express provisions of the
Plan and to such instructions and limitations as the Board may establish from
time to time, the Committee shall have the authority to prescribe, amend and
rescind rules and regulations relating to the Plan. The Committee may interpret
the Plan and may correct any defect or supply any omission or reconcile any
inconsistency in the Plan to the extent necessary for the effective operation of
the Plan. Any determination, decision or action taken by the Committee on the
matters referred to in this paragraph shall be conclusive.
4. EFFECTIVENESS OF THE PLAN. The Plan shall become effective upon (i)
stockholder approval of the Plan at the 2002 annual meeting of stockholders of
the Company (held on May 15, 2002) or any adjournment thereof, and (ii) Board
ratification of the Plan at the Board meeting immediately following the 2002
annual meeting of the stockholders of the Company or any adjournment thereof.
5. COMMON SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided
in Paragraph 17 herein, not more than [200,000]300,000 Common Shares shall be
-------
offered under the Plan. The Common Shares subject to the Plan generally shall be
previously issued Common Shares acquired by the Company. The Board, however,
also may determine, in its sole discretion, that the Common Shares to be
purchased under the Plan shall be authorized and unissued Common Shares.
6. OFFERINGS UNDER THE PLAN. After the Plan has become effective, one or
more Offerings, as determined by the Committee, may be made to eligible
employees to purchase Common Shares subject to the Plan. The Offerings may be
consecutive or concurrent as determined by the Committee. Each Offering shall be
made during an Offering Period. Common Shares not sold under one Offering may be
offered again in any subsequent Offering.
[7. ELIGIBILITY. Subject to the terms of this Plan, any employee of the
Company or a subsidiary thereof who has been employed by the Company or a
subsidiary thereof, for at least one (1) year may participate in the Plan.]
7. ELIGIBILITY. Subject to the terms of this Plan, any employee of the
------------------------------------------------------------------------
Company or a subsidiary thereof may participate in the Plan. Notwithstanding the
-------------------------------------------------------------
previous sentence, any employee of the Company or a subsidiary thereof who owns
greater than 5% of the total combined voting power or value of all classes of
shares of the Company shall not be eligible to participate in any Offerings
under the Plan."
An eligible employee may begin to participate in the Plan as of the
[August 1st or] February 1st, May 1st, August 1st, or November 1st following the
-------------------------------------
date on which he or she [satisfies the requirements of the previous paragraph]
commences employment.
Nothing contained herein and no rules and regulations prescribed by the
Committee shall permit or deny participation in any offering contrary to the
requirements of the Code (including, without limitation, Sections 423(b)(3),
423(b)(4) and 423(b)(8) thereof).
Nothing contained herein and no rules and regulations prescribed by the
Committee shall permit any employee to be granted a Right to Purchase under the
Plan:
(a) if, immediately after such Right to Purchase is granted, such
employee would own, and/or hold outstanding options or rights to purchase,
shares of the Company possessing five percent (5%) or more of the total
combined voting power or value of all classes of shares of the Company; or
B-2
Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
Language indicated as being shown as inserted language in the typeset document
is also shown with underlines in the electronic format.
(b) which permits an employee's rights to purchase Common Shares under
all employee stock purchase plans of the Company to accrue at a rate which
exceeds Twenty-Five Thousand Dollars ($25,000.00) of fair market value of
Common Shares (determined as of the date such Right to Purchase is granted)
for each calendar year in which such Right to Purchase is outstanding at
any time.
For purposes of this paragraph, the provisions of Section 424(d) of the
Code, shall apply in determining the stock ownership of each employee. For
purposes of clause 7(b) above, the provisions of Section 423(b)(8) of the Code
shall apply in determining whether an employee's Rights to Purchase and other
rights are permitted to accrue at a rate in excess of the permitted rate.
8. PAYROLL DEDUCTIONS. In order to participate in the Plan, an eligible
employee must indicate on an Enrollment/Change Form (to be provided by the
Committee) the contribution percentage or amount that he wishes to authorize the
Company to deduct at regular payroll intervals. The minimum deduction for each
eligible employee, during each Offering Period, shall be an amount equal to five
dollars ($5.00) per pay period. Each Enrollment/Change Form will include
authorization for the Company to make payroll deductions from the eligible
employee's compensation.
The amounts withheld through such payroll deductions shall be credited to
each Participant's Cash Account. The withholdings for each fiscal quarter of the
Plan from the compensation of a Participant shall be made on the Payroll
Deduction Dates specified by the Company. Such amounts will be delivered to the
Custodian and held pending the purchase of Common Shares as described in
Paragraph 10 hereof.
Any employee of the Company or a subsidiary thereof who [has satisfied]
satisfies the eligibility requirements of [Paragraph 7 as of August 1, 2002, may
---------
complete an Enrollment/Change Form and authorize payroll deductions pursuant to
this Paragraph 8 to be effective as of such date. Each other employee of the
Company or a subsidiary thereof] Section 7 hereof shall be eligible to complete
----------------
an Enrollment/Change Form and to begin payroll deductions hereunder as of the
[August 1 or] February 1st, May 1st, August 1st, or November 1st following the
----------------------------------------
date on which [such employee satisfies the eligibility requirements of Paragraph
7.] he or she commences employment. Subject to the other limitations of this
-------------------------------
Paragraph 8, a Participant may, by written notice to the Company at least twenty
(20) days prior to each February 1st, May 1st, August 1st, or [February]
----------------------- -
November 1st, increase or decrease the amount of his payroll deduction as of
--------
each Payroll Deduction Date.
Notwithstanding the foregoing, a Participant may by written notice to the
Company at least twenty (20) days prior to any Payroll Deduction Date
discontinue payroll deductions as of such Payroll Deduction Date. Payroll
deductions may not thereafter be resumed until the next following February 1st,
-------------
May 1st, August 1st, or [February] November 1st. In the event that a Participant
-------- - --------
ceases his payroll deductions as provided herein, such Participant's Cash
Account balance will be used, as of the next Right to Purchase Date, to purchase
Common Shares. The Committee may impose such other restrictions on the right to
cease payroll deductions as it may deem appropriate.
9. NO INTEREST ON CASH ACCOUNTS. The payroll deductions and other monies
held in Participants' Cash Accounts shall bear no interest.
10. PURCHASE PRICE AND EXERCISE OF RIGHT TO PURCHASE. The purchase price
for a Common Share under each Offering shall be determined by the Committee as
of the Right to Purchase Date of each Offering and shall be stated as a
percentage of the fair market value of a Common Share on the Right to Purchase
Date of the Offering. Such purchase price shall be equal to eighty-five percent
(85%) of the per share fair market value of the Common Shares as of the Right to
Purchase Date.
The fair market value of a Common Share on any date shall be the average of
the high and low price per share of the Common Shares (or, if applicable, the
price paid by the Custodian) on the American Stock Exchange or on any national
stock exchange on such date or, if no such sales of Common Shares are made on
such date, on the next preceding date on which sales of Common Shares were made
on the American Stock Exchange or on any national stock exchange.
B-3
Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
Language indicated as being shown as inserted language in the typeset document
is also shown with underlines in the electronic format.
Each Participant shall be deemed to have been granted a Right to Purchase
on the Effective Date of each offering for the number of whole Common Shares
which the Participant would be able to purchase with the balance in his Cash
Account. Each outstanding Right to Purchase will be exercised automatically on
the Right to Purchase Date to purchase the number of whole Common Shares which
the amount in the Participant's Cash Account at that time is sufficient to
purchase at the applicable purchase price. Any amounts remaining in a
Participant's Cash Account after such application will remain in the Cash
Account for use during the next Offering Period.
The Custodian shall purchase the number of Common Shares with respect to
which Rights to Purchase have been exercised beginning on the Right to Purchase
Date. The Custodian shall establish and maintain a separate Share Account for
each Participant, which shall be credited with the number of whole Common Shares
purchased on the Right to Purchase Date on behalf of each Participant. A
Participant may withdraw the Common Shares credited to his Share Account on a
first-in-first-out basis by written notice to the Custodian at least twenty (20)
days prior to any February 1st, May 1st, August 1st, or [February] November 1st.
----------------------- - --------
A Participant may withdraw all or a portion of the Common Shares which were
credited to his Share Account on or prior to the Right to Purchase Date
immediately preceding such February 1st, May 1st, August 1st, or [February]
----------------------
November 1st. A Participant will be charged a fee by the Custodian for each such
--------
withdrawal. The amount of such fee shall be as agreed from time to time by the
Custodian and the Company. The Custodian shall deliver to such Participant a
share certificate issued in his name for the number of whole Common Shares he
wishes to withdraw from his Share Account. At least annually, there shall be
delivered to each Participant a statement of his Share Account showing the
number of Common Shares purchased during the preceding twelve months (or lesser
period of existence of the Offering), the Right to Purchase prices paid for the
Common Shares, the dates of purchase of the Common Shares, and the amount to be
included in the ordinary income of the Participant at such time as the Common
Shares are sold, as prescribed by Section 423(c) of the Code.
The initial Custodian shall be selected by the Company prior to the initial
Offering under the Plan. The Company may remove any Custodian, and any Custodian
may resign, upon 60 days' notice in writing to the other party, as the case may
be. Any successor custodian shall be appointed by the Company. The Company shall
pay all fees and costs of the Custodian as agreed between the Company and the
Custodian from time to time, except for the withdrawal fees payable by
Participants as described above.
The Company may, at any time after the end of an Offering Period, close the
Cash Accounts of eligible employees not participating in another Offering under
the Plan, in which case any balance in such Cash Accounts will be refunded to
such eligible employees. Any balance remaining in the Cash Account of a
Participant after the end of an offering Period shall remain in the
Participant's Cash Account for use in the next Offering.
The Company may, at any time after the end of an Offering Period, close the
Share Accounts related to such Offering, in which case the Custodian shall
deliver to each Participant in that Offering a share certificate issued in his
name for the number of whole Common Shares credited to his Share Account,
without charging a withdrawal fee.
11. REGISTRATION OF CERTIFICATES. Common Shares withdrawn by Participants
will be registered, and share certificates therefore will be issued, only in the
name of the Participant.
12. RIGHTS AS SHAREHOLDERS. With respect to Common Shares subject to a
Right to Purchase, pending exercise of such Right to Purchase, the Participant
shall not be deemed to be a stockholder of the Company and shall not have any of
the rights or privileges of a stockholder. A Participant who has exercised a
Right to Purchase shall have the rights and privileges of a stockholder
immediately following such exercise.
13. USE OF PLAN FUNDS. Subject to Paragraph 10 hereof, to the extent the
Company issues Common Shares to Participants upon exercise of Rights to Purchase
granted under the Plan, the amounts received by the Company may be used for any
corporate purpose or purposes of the Company.
B-4
Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
Language indicated as being shown as inserted language in the typeset document
is also shown with underlines in the electronic format.
14. TERMINATION OF EMPLOYMENT. If the employment of a Participant
terminates for any reason, including death, disability, retirement or other
cause, his participation in the Plan automatically and without any act on his
part shall terminate as of the date of termination of his employment. As soon as
practicable following the Participant's termination of employment, the Company
shall refund to such Participant (or his beneficiary, in the case of the
participant's death) any and all amounts in his Cash Account and the Custodian
shall deliver to such Participant (or beneficiary) a share certificate issued in
his name for the number of whole Common Shares credited to his Share Account
through prior Offerings.
15. RESTRICTION UPON ASSIGNMENT. Rights to Purchase granted to a
Participant under the Plan shall not be transferable (including pledge or
hypothecation), and shall be exercisable during the Participant's lifetime only
by the Participant. The Company shall not recognize and shall be under no duty
to recognize assignment or purported assignment by a Participant of his Rights
to Purchase or of any rights under his Rights to Purchase.
16. GOVERNMENT REGULATIONS. The Company's obligation to issue, sell or
deliver any Common Shares under this Plan is subject to all applicable laws and
regulations and to the approval of any governmental or regulatory authority
required in connection with the issuance, sale or delivery of such Common
Shares. The Company shall not be required to issue, sell or deliver any Common
Shares under this Plan prior to
(a) the approval of such Common Shares for listing on any national
stock exchange (if such approval must be obtained), and
(b) the completion of any registration or other qualification of such
Common Shares under any state or Federal law or any ruling or regulation of
any governmental or regulatory authority which the Company in its sole
discretion shall determine to be necessary or advisable.
17. ADJUSTMENT OF SHARES UPON CHANGES IN CAPITALIZATION. Notwithstanding
any other provision of the Plan, in the event of any change in the outstanding
Common Shares, by reason of a dividend payable in Common Shares,
recapitalization, merger, consolidation, split-up, combination or exchange of
shares, or the like, appropriate adjustments shall be made to the aggregate
number and class of shares subject to the Plan, the number and class of shares
subject to outstanding Rights to Purchase, the purchase price per share (in the
case of shares subject to outstanding Rights to Purchase), and the number and
class of shares which may be subscribed to by any one employee, and such other
adjustments shall be made as may be deemed equitable by the Committee.
18. DIVIDEND REINVESTMENT. All cash dividends paid, if any, with respect
to the Common Shares credited to a Participant's Share Account shall be added to
the Participant's Cash Account and thereby shall be applied to exercise Rights
to Purchase to purchase whole Common Shares on the Right to Purchase Date next
following the date such cash dividends are paid by the Company. An election to
leave Common Shares with the Custodian shall constitute an election to apply the
cash dividends with respect to such shares to the exercise of Rights to Purchase
hereunder. Common Shares so purchased shall be applied to the Common Shares
credited to each Participant's Share Account.
B-5
19. AMENDMENT OF THE PLAN. To the extent permitted by law, the Committee
may at any time and from time to time make such changes in the Plan and
additions to it as the Committee deems advisable; provided, however, that,
except as provided in Paragraph 17 hereof, and except with respect to changes or
additions in order to make the Plan comply with Section 423 of the Code, the
Committee may not make any changes or additions which would adversely affect
Rights to Purchase previously granted under the Plan and may not, without
approval of the stockholders of the Company, make any changes or additions which
would (a) increase the aggregate number of Common Shares subject to the Plan or
which may be subscribed to by an eligible employee, (b) decrease the minimum
purchase price for a Common Share, or (c) change any of the provisions of the
Plan relating to eligibility for participation in Offerings.
20. DURATION AND TERMINATION OF THE PLAN. The Plan shall terminate upon
the earlier to occur of the following two events:
(a) The purchase by eligible employees of all of the Common Shares
subject to the Plan; or
(b) The termination of the Plan by the Board.
No termination of the Plan shall affect Rights to Purchase previously
granted under this Plan.
B-6
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P R O X Y
CORE MOLDING TECHNOLOGIES, INC.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS
FOR AN ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 2006
The undersigned stockholder appoints James L. Simonton and Herman F. Dick,
Jr., as proxies with full power of substitution, to vote the shares of voting
securities of Core Molding Technologies, Inc. (the "Company") that the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
at the Company's corporate headquarters, 800 Manor Park Drive, Columbus, Ohio
43228, on May 17, 2006, at 9:00 a.m., Eastern Daylight Savings Time, and at any
adjournments thereof, upon matters properly coming before the meeting, as set
forth in the Notice of Annual Meeting of Stockholders and Proxy Statement, both
of which have been received by the undersigned. Without otherwise limiting the
general authorization given hereby, such proxies are instructed to vote as
follows:
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE PROPOSALS INDICATED ON THIS CARD AND AS SUCH
PROXIES DEEM ADVISABLE WITH DISCRETIONARY AUTHORITY ON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR ADJOURNMENTS
THEREOF.
(1) [ ] FOR ALL NOMINEES LISTED HEREIN (EXCEPT AS MARKED UP TO
THE CONTRARY BELOW).
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED
BELOW.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME LISTED BELOW)
THOMAS R. CELLITTI JAMES F. CROWLEY RALPH O. HELLMOLD
THOMAS M. HOUGH MALCOLM M. PRINE JAMES L. SIMONTON
JOHN P. WRIGHT
(2) To approve the 2006 Long-Term Equity Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) To approve the amendment of the 2002 Employee Stock Purchase
Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) To ratify the appointment of Deloitte & Touche LLP as the
independent registered public accounting firm for the Company
for the year ending December 31, 2006.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE CHECK THE BOXES ABOVE AND SIGN, DATE AND RETURN THIS PROXY TO AMERICAN
STOCK TRANSFER & TRUST COMPANY, 59 MAIDEN LANE, NEW YORK, NEW YORK, 10038, IN
THE SELF-ADDRESSED ENVELOPE PROVIDED.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting.
DATED:
---------------- ---------------------------
Signature
---------------------------
Signature (if held jointly)
---------------------------
Print Names
(Please sign exactly as your name appears
hereon. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title. If shares are jointly
held, each holder must sign. If a
corporation, please sign in full corporate
name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person).