SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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14a-6(e)(2))
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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.
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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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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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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CORE MOLDING TECHNOLOGIES, INC.
800 Manor Park Drive
Columbus, Ohio 43228
(614) 870-5000
April 15, 2003
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 15, 2003, at
9:00 a.m., Eastern Standard 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 15, 2003
------------------------
TO OUR STOCKHOLDERS:
Core Molding Technologies, Inc. ("Core Molding Technologies") will hold its
2003 Annual Meeting of Stockholders on May 15, 2003 at 9:00 a.m., Eastern
Standard Time, at its corporate headquarters, 800 Manor Park Drive, Columbus,
Ohio 43228, for the following purposes:
1. to elect six (6) directors to comprise the Board of Directors of Core
Molding Technologies, each to serve a one-year term expiring at the 2004
annual meeting of stockholders;
2. to ratify the appointment of Deloitte & Touche LLP as auditors for Core
Molding Technologies for the year ending December 31, 2003; and
3. 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 April 2, 2003, 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
Kevin L. Barnett
Vice President and Secretary
Dated: April 15, 2003
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 15, 2003
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To Our Stockholders:
Core Molding Technologies, Inc. ("Core Molding Technologies") 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 15, 2003, at its corporate headquarters, 800
Manor Park Drive, Columbus, Ohio 43228 at 9:00 a.m. Eastern Standard 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 15, 2003.
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 April 2, 2003, 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 9,778,680 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 annual meeting. No business, other than adjournment, can be conducted at the
annual meeting unless a quorum is present in person or by proxy.
1
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 six 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. Core Molding Technologies is
seeking stockholder ratification of the appointment of independent auditors of
Core Molding Technologies, 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;
- FOR the ratification of the appointment of Deloitte & Touche LLP, as the
auditors for Core Molding Technologies for the year ending December 31,
2003.
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.
ANNUAL REPORT
The Annual Report on Form 10-K for the fiscal year ended December 31, 2002,
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
2004 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 13, 2003, 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
2004 annual meeting of stockholders. Core Molding Technologies may confer on the
proxies for the 2004 annual meeting of stockholders discretionary authority to
vote on any proposal, if Core Molding Technologies does not receive notice of
the proposal by February 26, 2004.
2
OWNERSHIP OF COMMON STOCK
BENEFICIAL OWNERS
The table below sets forth, to the knowledge of Core Molding Technologies,
the only beneficial owner, as of April 2, 2003, 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) 43.6%
4201 Winfield Drive
P.O. Box 1488
Warrenville, Illinois 60555
Gabelli Asset Management, Inc., et al.............. 1,020,300(2) 10.4%
One Corporate Center
Rye, NY 10580
---------------
(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. 4 to Schedule 13D,
as filed with the Securities and Exchange Commission ("SEC") on March 28,
2003 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., Gabelli Group Capital Partners, Inc.,
Gabelli Asset Management, Inc., Gabelli Funds, LLC, Gabelli Advisers, Inc.
and Gamco Investors, Inc. According to the Schedule 13D filing, Mario
Gabelli is deemed to have beneficial ownership of 1,020,300 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 April 2, 2003, 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.
NUMBER OF SHARES OF COMMON STOCK BENEFICIALLY OWNED
NAME OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------- ----------------------- ----------------
Kevin L. Barnett........................... 64,500(1) *
Thomas R. Cellitti......................... 31,000(2) *
James F. Crowley........................... 47,000(3) *
Herman F. Dick, Jr......................... 11,400(4) *
3
NAME OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------- ----------------------- ----------------
Ralph O. Hellmold.......................... 126,000(5) 1.3%
Thomas M. Hough............................ 45,000(6) *
Stephen J. Klestinec....................... 54,285(7) *
Malcolm M. Prine........................... 172,011(8) 1.7%
James L. Simonton.......................... 174,691(9) 1.8%
All directors, nominees and executive
officers as a group (9 persons).......... 725,887 6.9%
---------------
* Less than 1 % of the outstanding shares of common stock.
(1) Includes: (i) 57,000 shares of common stock which Mr. Barnett 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. Barnett shares voting and investment
power with his wife; and (iii) 2,500 shares of common stock held by Mr.
Barnett in the Core Molding Technologies, Inc. Employee Stock Purchase Plan.
(2) Includes: (i) 21,000 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) 28,000 shares of common stock which Mr. Crowley has the right
to acquire within 60 days through the exercise of stock options; (ii) 18,000
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) 11,400 shares of common stock which Mr. Dick has the right to
acquire within 60 days through the exercise of stock options.
(5) Includes: (i) 35,000 shares of common stock which Mr. Hellmold has the right
to acquire within 60 days through the exercise of stock options; and (ii)
91,000 shares of common stock as to which Mr. Hellmold has sole voting and
investment power.
(6) Includes: (i) 35,000 shares of common stock which Mr. Hough has the right to
acquire within 60 days through the exercise of stock options; and (ii)
10,000 shares of common stock which are held in trust for the benefit of Mr.
Hough's wife, who is trustee of the trust.
(7) Includes: (i) 38,000 shares of common stock which Mr. Klestinec has the
right to acquire within 60 days through the exercise of stock options; and
(ii) 12,000 shares of common stock as to which Mr. Klestinec has sole voting
and investment power; and (iii) 4,285 shares of common stock held by Mr.
Klestinec in the Core Molding Technologies, Inc. Employee Stock Purchase
Plan.
(8) Includes: (i) 105,000 shares of common stock which Mr. Prine has the right
to acquire within 60 days through the exercise of stock options; (ii) 1,011
shares of common stock held by Mr. Prine's wife; (iii) 5,000 shares of
common stock held by Mr. Prine's daughter; and (iv) 61,000 shares of common
stock as to which Mr. Prine has sole voting and investment power.
(9) Includes: (i) 70,750 shares of common stock, which Mr. Simonton has the
right to acquire within 60 days through the exercise of stock options; (ii)
100,000 shares of common stock as to which Mr. Simonton has sole voting and
investment power; and (iii) 3,941 shares of common stock held by Mr.
Simonton in the Core Molding Technologies, Inc. Employee Stock Purchase
Plan. Excludes 150,000 phantom stock units granted to Mr. Simonton on
January 15, 2000, in connection with his initial employment pursuant to a
Phantom Stock Agreement dated January 15, 2000, between Core Molding
Technologies and Mr. Simonton. The vesting and terms of such phantom stock
units are described below under "Executive Compensation - Phantom Stock
Agreement."
4
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information as of December 31, 2002,
concerning shares of our common stock that may be issued upon the exercise of
options and other rights under our existing equity compensation plans and
arrangements, divided between plans approved by our shareholders and plans or
arrangements not submitted to our shareholders for approval. The information
includes the number of shares covered by, and the weighted average exercise
price of, outstanding options and other rights and the number of shares
remaining available for future grants excluding the shares to be issued upon
exercise of outstanding options, warrants, and other rights.
NUMBER OF SECURITIES NUMBER OF SECURITIES
TO BE ISSUED WEIGHTED-AVERAGE FOR ISSUANCE UNDER
UPON EXERCISE OF EXERCISE PRICE OF EQUITY COMPENSATION PLANS
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, (EXCLUDING SECURITIES
WARRANTS AND RIGHTS WARRANTS AND RIGHTS REFLECTED IN COLUMN
(A) (B) (A))
-------------------- -------------------- --------------------------
Equity Compensation plans approved by
shareholders(1)...................... 1,209,000 $3.07 1,783,400
Equity compensation plans not approved
by shareholders...................... -- -- --
--------- ----- ---------
Total.................................. 1,209,000 $3.07 1,783,400
---------------
(1) Equity compensation plans approved by shareholders include the Long-Term
Equity Incentive Plan.
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, 2002, except
that Mr. Dick inadvertently failed to file a Form 3 relating to the disclosure
of his ownership in Core Molding Technologies upon his appointment as Treasurer
and Chief Financial Officer of Core Molding Technologies in a timely manner.
5
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. Executive officers of Core Molding Technologies are elected to serve
for a term of one year or until their successors have been duly elected and
qualified.
NAME AGE POSITION(S) CURRENTLY HELD
---- --- ----------------------------------
Kevin L. Barnett.................. 40 Vice President-Manager Columbus
Operations and Secretary
Thomas R. Cellitti................ 51 Director
James F. Crowley.................. 56 Director
Herman F. Dick, Jr................ 43 Treasurer and Chief Financial
Officer
Ralph O. Hellmold................. 62 Director
Thomas M. Hough................... 57 Director
Stephen J. Klestinec.............. 53 Vice President, Sales and
Marketing
Malcolm M. Prine.................. 74 Chairman of the Board of Directors
James L. Simonton................. 62 President, Chief Executive Officer
and 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 to support Core Molding Technologies' succession planning and
professional development program. Mr. Barnett joined Core Molding 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 has served as Vice
President and General Manager, Bus Vehicle Center of International Truck and
Engine Corporation. Prior to such time, Mr. Cellitti served as Plant Manager at
International's Melrose Park engine plant. His current areas of focus include
both the bus chassis business and the company's wholly owned subsidiary,
American Transportation Corporation, a major manufacturer of integrated bus and
bus bodies. Mr. Cellitti also serves on the Board of Directors of the American
Transportation Corporation in Conway, Arkansas. International Truck and Engine
Corp. is a 44% 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. 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. 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 provided financial advisory, merger, acquisition
and underwriting services as 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 in 1971 and from
the Wharton School at the University of Pennsylvania in 1976.
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
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August 7, 2002, to support Core Molding Technologies' succession planning and
professional development program. 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 the Chairman of the Private
Investment Banking Company, LLC and the founder and President of Hellmold
Associates, Inc., both investment banking boutiques, which specialize in raising
capital, doing mergers and acquisitions and working with troubled companies or
their creditors. Mr. Hellmold is also a director of International Aircraft
Investors located in Torrance, California. 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 the 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 44% 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 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 and was elected to the position of Vice
President, Sales and Marketing on May 28, 1998. 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 ten years. He is currently a director of Equitable
Resources, a natural gas utility company, and PA Capital Bank, a Pennsylvania
commercial bank serving small businesses and individuals. 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 44% 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."
7
COMPENSATION, MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
COMPENSATION OF BOARD OF DIRECTORS
For the fiscal year ended December 31, 2002, each director of Core Molding
Technologies, other than Mr. Prine and Mr. Simonton, received a director's fee
of $3,000 per quarter. Mr. Prine received a director's fee of $5,000 per quarter
to reflect his role as chairman. Mr. Simonton does not receive a director's fee.
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. Core Molding Technologies also has entered into certain
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, 2002. 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.
COMPENSATION COMMITTEE
Core Molding Technologies did not have a Compensation Committee during the
fiscal year ended December 31, 2002. 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 Hough. The principal function of the Audit
Committee is to review and approve the scope of the annual audit undertaken by
the independent certified public accountants 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 and the Audit Committee Charter, which is attached to
this Proxy Statement as Exhibit A. The Audit Committee met two times during the
fiscal year ended December 31, 2002. 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
Core Molding Technologies has a Nominating Committee, which currently
consists of Messrs. Hellmold, Hough and Prine. The principal function of the
Nominating Committee is to recommend candidates for membership on the Board of
Directors. The Nominating Committee did not meet during the fiscal year ended
December 31, 2002.
STOCKHOLDER NOMINATIONS
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
8
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.
9
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
ANNUAL LONG TERM COMPENSATION
COMPENSATION --------------------------------------
---------------- AWARDS-SECURITIES
NAME AND SALARY BONUS UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR ($) ($) OPTIONS/SARS(#) COMPENSATION($)(3)
------------------ ---- ------- ------ ----------------- ------------------
James L. Simonton(1)................ 2002 230,756 10,465 0 15,750
President, Chief Executive Officer 2001 227,423 20,000 0 15,312
and Director 2000 210,833 0 300,000(4) 55,949
Kevin L. Barnett.................... 2002 146,559 6,635 0 8,750
Vice President-Manager Columbus 2001 143,543 24,800 0 8,320
Operations and Secretary 2000 137,333 0 0 8,240
Stephen J. Klestinec................ 2002 142,077 6,433 0 11,264
Vice President Sales and Marketing 2001 139,183 23,000 0 10,836
2000 132,333 0 0 10,112
Herman F. Dick, Jr.(2).............. 2002 106,742 4,834 0 6,375
Treasurer and Chief Financial
Officer
---------------
(1) Core Molding Technologies employed Mr. Simonton on January 15, 2000. Mr.
Simonton's annual salary for 2000 was $220,000. In addition, Mr. Simonton
received $41,282 as reimbursement for his expenses to move to Columbus,
Ohio. This amount is included in "All Other Compensation."
(2) Mr. Dick was elected Treasurer and Chief Financial Officer on August 9,
2002, from his former position as Corporate Controller. Accordingly,
compensation information is not provided for Mr. Dick for periods prior to
the fiscal year ended December 31, 2002.
(3) 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, 2000 were $963 for Mr. Simonton, $2,060 for
Mr. Barnett and $1,510 for Mr. Klestinec. Retirement contributions during
the fiscal year ended December 31, 2000 were $13,704 for Mr. Simonton,
$6,180 for Mr. Barnett and $8,602 for Mr. Klestinec. Matching contributions
for the fiscal year ended December 31, 2001 were $963 for Mr. Simonton,
$1,861 for Mr. Barnett and $1,594 for Mr. Klestinec. Retirement
contributions during the fiscal year ended December 31, 2001 were $14,349
for Mr. Simonton, $6,459 for Mr. Barnett and $9,242 for Mr. Klestinec.
Matching contributions for the fiscal year ended December 31, 2002 were
$2,750 for Mr. Simonton, $2,188 for Mr. Barnett, $2,074 for Mr. Klestinec
and $1,594 for Mr. Dick. Retirement contributions during the fiscal year
ended December 31, 2002 were $13,000 for Mr. Simonton, $6,563 for Mr.
Barnett, $9,189 for Mr. Klestinec and $4,781 for Mr. Dick.
(4) Includes 150,000 stock options granted to Mr. Simonton on January 15, 2000,
under the Long-Term Equity Incentive Plan of Core Molding Technologies, Inc.
In addition, on January 15, 2000, Core Molding Technologies granted to Mr.
Simonton 150,000 phantom stock units pursuant to a Phantom Stock Agreement
dated as of January 15, 2000, between Core Molding Technologies and Mr.
Simonton. The vesting and terms of such phantom stock units are described
below under "Phantom Stock Agreement." The units are treated as the
equivalent of stock appreciation rights for purposes of this Proxy
Statement.
The following table sets forth information with respect to stock options
granted during the fiscal year ended December 31, 2002 to the executive officers
named in the Summary Compensation Table. In accordance with Securities and
Exchange Commission rules, the hypothetical realizable values for each option
grant are shown
10
based on the compound annual rates of stock price appreciation of 5% and 10%
from the grant date to the expiration date. The assumed rates of appreciation
are prescribed by the Securities and Exchange Commission and are for
illustration purposes only. The assumed rates of appreciation are not intended
to predict future stock prices, which will depend upon market conditions and the
future performance and prospects of Core Molding Technologies.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
% OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION/SAR TERM
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ------------ ------------ --------- ---------- ---------- ---------
James L. Simonton.......... -- -- -- -- -- --
Kevin L. Barnett........... -- -- -- -- -- --
Stephen J. Klestinec....... -- -- -- -- -- --
Herman F. Dick, Jr......... -- -- -- -- -- --
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, 2002. 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, 2002.
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
SECURITIES OPTIONS/SARS OPTIONS/SARS
ACQUIRED AT FISCAL YEAR END(#) AT FISCAL YEAR END($)(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
James L. Simonton......... -- -- 56,500 278,500 0 0
Kevin L. Barnett.......... -- -- 47,500 52,500 0 0
Stephen J. Klestinec...... -- -- 38,000 62,000 0 0
Herman F. Dick, Jr........ -- -- 11,400 28,600 0 0
---------------
(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, 2002 ($1.10) less the exercise price of in-the
money options/SARs at the end of the fiscal year ended December 31, 2002.
PHANTOM STOCK AGREEMENT
On January 15, 2000, Core Molding Technologies granted Mr. Simonton, in
connection with his initial employment, 150,000 phantom stock units pursuant to
a Phantom Stock Agreement dated as of January 15, 2000. Pursuant to such
agreement, Mr. Simonton is entitled to receive within 30 days after exercise of
each such unit 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. Mr. Simonton may exercise his vested units at any time
prior to their termination. All of the units vest on December 31, 2004, and no
units granted under the agreement will vest prior to such date. All of the units
will expire on the earlier of (i) December 31, 2005, (ii) 30 days after
termination of Mr. Simonton's employment (other than for cause) or if Mr.
Simonton shall die during such 30-day period, one year after Mr. Simonton's
death or (iii) the termination of Mr. Simonton's employment by Core Molding
Technologies for cause. Within 30 days after the termination of Mr. Simonton's
employment due to death or disability, Core Molding Technologies is required
under the agreement to pay Mr. Simonton the full
11
amount that would have been payable to Mr. Simonton had he exercised all of the
unexercised vested units held by him as of the date of his termination of
employment. The units were not granted to Mr. Simonton under the Core Molding
Technologies Technologies, Inc. Long-Term Equity Incentive Plan. The units do
not represent issued shares of Core Molding Technologies' common stock and do
not confer any stockholder rights on Mr. Simonton.
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.
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 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 $332,000 was paid out to all
employees under this bonus/profit sharing plan in 2003 for the performance
achieved in 2002.
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 of common stock through payroll deductions at a price equal to 85% of the
fair market value of the common stock.
12
BASIS FOR CHIEF EXECUTIVE OFFICER'S COMPENSATION
The Board of Directors established compensation for Mr. Simonton for 2002
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
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Core Molding Technologies did not have a Compensation Committee during the
fiscal year ended December 31, 2002. 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 compensates Mr. Prine as a consultant for special services
and advice that he provides to Core Molding Technologies. Since April 1, 2000,
Mr. Prine was compensated at a rate of $8,000 per quarter for such service. Mr.
Prine received a total of $32,000 in cash compensation for such service during
the year ended December 31, 2002, $32,000 for the year ended December 31, 2001,
and $46,500 for the year ended December 31, 2000.
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.
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 49% of the total
revenues of Core Molding Technologies for the fiscal year ended December 31,
2002. International is also a 44% 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 49% of the total revenues of
Core Molding Technologies for the fiscal year ended December 31, 2002.
International is also a 44% stockholder in Core Molding Technologies.
13
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 reconfirmed for appropriateness at the Board's
May 15, 2002 meeting. A copy of the charter is attached as Exhibit A. 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. The composition of the Committee complies with the requirements of
The American Stock Exchange. All members of the Committee are deemed independent
as per the guidelines of The American Stock Exchange with the exception of Mr.
Hough. Mr. Hough does not qualify as an independent Director due to his position
as Vice President Strategic Initiatives of International Truck and Engine
Corporation from which Core Molding Technologies receives more than 5% of its
revenues. The Board of Directors of Core Molding Technologies has elected to
apply the exception permitted by The American Stock Exchange for the appointment
to the Audit Committee of one director who does not meet all the independence
requirements, due to Mr. Hough's significant employment experience in finance
and accounting and his professional certification as a certified public
accountant.
During the year ended December 31, 2002, the Committee met two 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 auditors prior to the public release of quarterly
information.
In discharging its oversight responsibility as to the audit process, the
Committee obtained from the independent auditors a formal written statement
describing all relationships between the auditors and Core Molding Technologies
that might bear on the auditors' independence consistent with Independence
Standards Board Standard No. 1 "Independence Discussions with Audit Committees,"
discussed with the auditors any relationships that may impact their objectivity
and independence and satisfied itself as to the auditors' independence. The
Committee also discussed with management and the independent auditors the
quality and adequacy of Core Molding Technologies' internal controls. The
Committee reviewed with the independent auditors their audit scope and their
identification of audit risks.
The Committee discussed and reviewed with the independent auditors 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 the independent
auditors' examination of the financial statements.
The Committee reviewed the audited consolidated financial statements of
Core Molding Technologies as of and for the year ended December 31, 2002, with
management and the independent auditors. Management has the responsibility for
the preparation of the Company's financial statements and the independent
auditors have 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, 2002, for filing with the Securities and
Exchange Commission.
AUDIT COMMITTEE
James F. Crowley, Chairman
Ralph O. Hellmold
Thomas M. Hough
14
AUDIT FEES
For the fiscal year ended December 31, 2002, Deloitte & Touche LLP billed
Core Molding Technologies $97,380 for professional services in connection with
the audit of Core Molding Technologies' annual financial statements and the
review of financial statements included in Core Molding Technologies' Forms
10-Q.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
During the 2002 fiscal year, Deloitte & Touche LLP performed no
professional accounting services to design, implement or manage hardware or
software that collects or generates information significant to Core Molding
Technologies' financial statements.
ALL OTHER FEES
For the fiscal year ended December 31, 2002, Core Molding Technologies was
billed $57,185 in fees for services rendered by Deloitte & Touche LLP, for all
accounting services other than the services discussed above under "Audit Fees."
Of this amount, $41,385 is related to tax compliance services and the remainder
for other accounting services. The Audit Committee has determined that the
provision of these additional services is compatible with maintaining Deloitte &
Touche LLP's independence.
15
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, 2002. 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 TRUCK INDEX
Cumulative Total Return
-------------------------------------------------------------
12/97 12/98 12/99 12/00 12/01 12/02
CORE MOLDING TECHNOLOGIES INC. 100.00 94.92 62.73 20.34 39.86 29.83
S & P SMALLCAP 600 100.00 98.69 110.94 124.03 132.14 112.81
S & P CONSTRUCTION & FARM MACHINERY 100.00 75.99 93.80 94.49 106.25 100.94
* $100 INVESTED 12/31/97 IN STOCK OR INDEX -- INCLUDING INVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
COPYRIGHT(R) 2002, STANDARD & POOR'S, A DIVISION OF THE MCGRAW-HILL COMPANIES,
INC. ALL RIGHTS RESERVED. WWW.RESEARCHDATAGROUP.COM/S&P.HTM
16
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 49% of total revenues of Core
Molding Technologies during the fiscal year ended December 31, 2002. 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 Technologies that could be treated
as stock. A prohibited ownership percentage generally means direct and indirect
ownership of
17
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
By-laws 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 six members. At the annual
meeting, the stockholders will elect six directors to hold office until the
election and qualification of their successors at the next annual meeting of
stockholders 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 and James L. Simonton, 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 six 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 six 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.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MESSRS.
CELLITTI, CROWLEY, HELLMOLD, HOUGH, PRINE AND SIMONTON.
18
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of Deloitte & Touche LLP to
audit the financial statements of Core Molding Technologies for the fiscal year
ending December 31, 2003. Core Molding Technologies expects a representative of
Deloitte & Touche LLP to attend the annual meeting. Core Molding Technologies
will provide 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 auditors to the
stockholders 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 independent certified public accountants for the next fiscal
year.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF DELOITTE & TOUCHE LLP.
OTHER MATTERS
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 15, 2003
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EXHIBIT A
CORE MOLDING TECHNOLOGIES, INC.
AUDIT COMMITTEE CHARTER
The Audit Committee is appointed by the Board of Directors of Core Molding
Technologies, Inc. (the "Corporation") to assist the Board in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing and reporting practices of the corporation and other such duties as
directed by the Board.
The membership of the committee shall consist of at least three directors
who are generally knowledgeable in financial and auditing matters, including at
least one member with accounting or related financial management expertise. Once
a year, there will be a written affirmation of compliance to The American Stock
Exchange on the financial literacy of all Audit Committee members and the
financial management expertise of one member. Each member shall be free of any
relationship that, in the opinion of the board, would interfere with his or her
individual exercise of independent judgment, and shall meet the composition
requirements as set forth in the Audit Committee standards of The American Stock
Exchange and as both may be amended over time. One of the Audit Committee
members shall be appointed by the Board to chair the Audit Committee. He or she
shall be responsible for leadership of the committee, including reviewing the
agenda, presiding over the meetings, making committee assignments and reporting
to the board of directors. The chairperson will also maintain regular liaison
with the management of the corporation, and the lead independent audit partner.
The committee is empowered to investigate any matter brought to its
attention, with full power to retain outside counsel or other experts for this
purpose. In carrying out these responsibilities, the Committee shall have full
access to the independent public accountants, the general counsel, any of the
Corporation's non-employee attorneys and advisors, and executive and financial
management in scheduled joint sessions or private meetings. Similarly, the
Corporation's independent public accountants, general counsel, and executive and
financial management will have full access to the Committee and to the Board of
Directors and each is responsible for bringing before this Committee or its
Chair in a timely manner any matter he/she feels appropriate to the discharge of
the Committee's responsibility.
The Audit Committee will reassess the Charter annually and present it to
the Board for their formal review and approval. There will be an annual written
affirmation of compliance addressed to The American Stock Exchange that the
Board has approved the Charter. The Audit Committee will publish an annual
statement in the proxy statement, which sets forth the composition of the Audit
Committee along with a discussion of the actions taken during the year. In
addition, the Audit Committee Charter will be published in the annual report or
proxy statement at least once every three years.
The function of the Audit Committee shall be to advise Management and to
exercise the following powers and duties with respect to the following matters
involving the Corporation and, unless otherwise specified, any of its direct or
indirect subsidiaries ("Corporation"):
1. Review Corporation's annual financial statements, annual reports,
registration statements, and material amendments to any of them, as
filed with the U.S. Securities and Exchange Commission; and recommend to
the Board the inclusion of the company's audited financial statements in
the company's annual report on Form 10-K. The review shall include
consideration of the quality of the Corporation's accounting principles
as applied in its financial reporting.
2. Review with management and the independent auditor the quarterly
financial information prior to the Corporation's filing of the Form
10-Q. This review may be performed by the committee or its chairperson.
3. Review the Corporation's programs for compliance with the financial
disclosure requirements of applicable law.
4. Review the auditing of the Corporation's accounts with the independent
public accountant, including the plan, and the results of their auditing
engagements.
A-1
5. Recommend to the Board the independent public accountant to be selected
or retained to audit the financial statements of the Corporation. In so
doing, the committee will request from the public accountant a written
affirmation that the public accountant is in fact independent, discuss
with the public accountant any relationships that may impact the
auditor's independence, and recommend to the Board any actions necessary
to oversee the public accountant's independence. The independent public
accountant is ultimately accountable to the Board of Directors and the
Audit Committee.
6. Review the Corporation's processes to maintain an adequate system of
internal controls.
7. Discuss with management the status of pending litigation, taxation
matters and other areas of oversight to the legal and compliance area as
may be appropriate.
8. Recommend to the Board any proposal received from any shareholder
concerning any of the foregoing matters, which the shareholder proposes
to present for action by the Corporation's shareholders.
9. Perform such other duties and responsibilities as may be assigned to the
Audit Committee by the Board.
A-2
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 15, 2003
The undersigned stockholder appoints James L. Simonton and Kevin L.
Barnett, 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 15, 2003, at 9:00 a.m., Eastern Standard 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
(2) To ratify the appointment of Deloitte & Touche LLP as auditors for
the Company for the year ending December 31, 2003.
[ ] 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:
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Signature
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Signature (if held jointly)
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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).
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