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 ss.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 15, 2004
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 13, 2004, 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 13, 2004
------------------------
TO OUR STOCKHOLDERS:
Core Molding Technologies, Inc. ("Core Molding Technologies") will hold its
2004 Annual Meeting of Stockholders on May 13, 2004 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 seven (7) directors to comprise the Board of Directors of Core
Molding Technologies, each to serve a one-year term expiring at the 2005
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, 2004; 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 March 31, 2004, 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, 2004
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 13, 2004
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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 13, 2004, 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, 2004.
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, 2004, 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.
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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. 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
("Deloitte & Touche"), as the auditors for Core Molding Technologies for
the year ending December 31, 2004.
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, 2003,
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
2005 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, 2004, 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
2005 annual meeting of stockholders. Core Molding Technologies may confer on the
proxies for the 2005 annual meeting of stockholders discretionary authority to
vote on any proposal, if Core Molding Technologies does not receive notice of
the proposal by February 22, 2005.
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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 owner, as of March 31, 2004, 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.
4201 Winfield Drive.............................. 4,264,000(1) 43.6%
P.O. Box 1488
Warrenville, Illinois 60555
Jeffrey L. Gendell, et al.......................... 1,453,200(2) 14.9%
55 Railroad Avenue, 3rd Floor
Greenwich, CT 06830
Gabelli Asset Management, Inc., et al.............. 1,323,500(3) 13.5%
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 Schedule 13G, as filed with the
Securities and Exchange Commission ("SEC") on January 28, 2004 by Jeffrey L.
Gendell and certain entities which he directly or indirectly controls or for
which he acts as chief investment officer, including Tontine Partners, L.P.,
Tontine Management, L.L.C., Tontine Overseas Associates, L.L.C., Tontine
Capital Partners, L.P. and Tontine Management, L.L.C. According to the
Schedule 13G filing, Jeffrey Gendell is deemed to have beneficial ownership
of 1,453,200 shares owned beneficially by Tontine Partners, L.P., Tontine
Management, L.L.C., Tontine Overseas Associates, L.L.C., Tontine Capital
Partners, L.P. and Tontine Management, L.L.C. and, except as otherwise
provided in the Schedule 13G 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.
(3) The information presented is derived from Amendment No. 7 to Schedule 13D,
as filed with the SEC on January 22, 2004 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
1,323,500 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, 2004, 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
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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
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------- ----------------------- ----------------
Kevin L. Barnett........................... 34,152(1) *
Thomas R. Cellitti......................... 29,950(2) *
James F. Crowley........................... 52,250(3) *
Herman F. Dick, Jr. ....................... 11,215(4) *
Ralph O. Hellmold.......................... 124,250(5) 1.3%
Thomas M. Hough............................ 43,250(6) *
Stephen J. Klestinec....................... 47,961(7) *
Malcolm M. Prine........................... 166,761(8) 1.7%
James L. Simonton.......................... 168,343(9) 1.7%
John P. Wright............................. -(10) *
All directors, nominees and executive
officers as a group (10 persons)......... 678,132 6.5%
---------------
* Less than 1 % of the outstanding shares of common stock.
(1) Includes: (i) 31,152 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) 19,950 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) 33,250 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) 10,830 shares of common stock, which Mr. Dick has the right to
acquire within 60 days through the exercise of stock options; and (ii) 385
shares of common stock held by Mr. Dick in the Core Molding Technologies,
Inc. Employee Stock Purchase Plan.
(5) Includes: (i) 33,250 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) 33,250 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) 31,152 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) 4,809 shares of common stock held by Mr.
Klestinec in the Core Molding Technologies, Inc. Employee Stock Purchase
Plan.
(8) 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) 1,011
shares of common stock held by Mr. Prine's wife; (iii) 5,000 shares of
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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) 64,402 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."
(10) Mr. Wright was granted 35,000 stock options on October 22, 2003, but as of
March 31, 2004 none of the options had vested.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information as of December 31, 2003,
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
TO BE ISSUED UPON WEIGHTED-AVERAGE NUMBER OF SECURITIES FOR
EXERCISE OF EXERCISE PRICE OF ISSUANCE UNDER EQUITY
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, COMPENSATION PLANS
WARRANTS AND RIGHTS WARRANTS AND RIGHTS (EXCLUDING SECURITIES
(A) (B) REFLECTED IN COLUMN (A))
-------------------- -------------------- --------------------------
Equity Compensation plans approved by
shareholders (1)..................... 214,000 $2.93 2,778,400
Equity compensation plans not approved
by shareholders...................... -- -- --
------- ----- ---------
Total.................................. 214,000 $2.93 2,778,400
---------------
(1) Equity compensation plans approved by shareholders include the Long-Term
Equity Incentive Plan.
CODE OF ETHICS
Core Molding Technologies has adopted 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
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,
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2003, except that Mr. Barnett, Mr. Cellitti, Mr. Crowley, Mr. Dick, Mr.
Hellmold, Mr. Hough, Mr. Klestinec, Mr. Prine and Mr. Simonton inadvertently
failed to timely file a Form 4 relating to the disclosure of the cancellation of
each individual's stock options.
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.................. 41 Vice President-Manager Columbus
Operations and Secretary
Thomas R. Cellitti................ 52 Director
James F. Crowley.................. 57 Director
Herman F. Dick, Jr. .............. 44 Treasurer and Chief Financial
Officer
Ralph O. Hellmold................. 63 Director
Thomas M. Hough................... 58 Director
Stephen J. Klestinec.............. 54 Vice President, Sales and
Marketing
Malcolm M. Prine.................. 75 Chairman of the Board of Directors
James L. Simonton................. 63 President, Chief Executive Officer
and Director
John P. Wright.................... 48 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 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 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
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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 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 Edelbrock Corporation
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,
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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."
John P. Wright. John P. Wright has served as a director of Core Molding
Technologies since October 22, 2003. He is the Chairman of the Board of Ariel
Corporation, a manufacturer of large industrial compressors used in the natural
gas business. Mr. Wright has been with Ariel Corporation since 1983 and has been
Chairman since 1998. Mr. Wright is a graduate of Ohio State University with a
degree in accounting.
COMPENSATION, MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
COMPENSATION OF BOARD OF DIRECTORS
For the fiscal year ended December 31, 2003, each director of Core Molding
Technologies, other than Mr. Prine and Mr. Simonton, received a director's fee
of $3,500 per quarter, except for the first quarter of the year when the
director's fee was $3,000. Mr. Prine received a director's fee of $13,000 per
quarter, except for the first quarter of the year when the director's fee was
$5,000, 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. Beginning in the second quarter, each director received a $1,000 fee
for each board meeting that they were in attendance. Also beginning in the
second quarter, 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 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 seven times during the fiscal year ended
December 31, 2003. 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, 2003. 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, Hough and Wright. Effective as of the date of this
Annual Meeting, Mr. Hough will resign from the
8
Audit Committee in light of newly implemented SEC and AMEX audit committee
independence requirements. Upon Mr. Hough's resignation, the Audit Committee
will be comprised 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 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 four
times during the fiscal year ended December 31, 2003. 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
In 2003, the Board of Directors acted as the nominating committee. As a
result of recently adopted AMEX listing requirements, Core Molding Technologies
has established a Nominating Committee consisting of Messrs. Hellmold, Hough and
Prine. Messrs. Hellmold and Prine are "independent", as that term is defined
under AMEX listing standards. Mr. Hough is not considered independent due to his
position as an officer of International Truck & Engine Corporation (see
Compensation Committee Interlocks and Insider Participation). The Board will
determine immediately after the annual meeting whether Mr. Hough should remain
as a member of the Nominating Committee pursuant to the "exceptional and limited
circumstance" exception permitted by AMEX listing standards. The principal
function of the Nominating Committee is to recommend candidates for membership
on the Board of Directors. The Nominating Committee does not have a written
charter.
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.
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.
9
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 except Mr. Wright, who, at that time, was not a member of the Board,
attended the 2003 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
ANNUAL LONG TERM COMPENSATION
COMPENSATION --------------------------------------
---------------- AWARDS-SECURITIES
NAME AND SALARY BONUS UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR ($) ($) OPTIONS/SARS(#) COMPENSATION($)(2)
------------------ ---- ------- ------ ----------------- ------------------
James L. Simonton................... 2003 230,756 0 0 15,731
President, Chief Executive Officer 2002 230,756 10,465 0 15,750
and Director 2001 227,423 20,000 0 15,312
Kevin L. Barnett.................... 2003 166,173 0 0 10,025
Vice President-Manager Columbus 2002 146,559 6,635 0 8,750
Operations and Secretary 2001 143.543 24,800 0 8,320
Stephen J. Klestinec................ 2003 151,173 0 0 12,030
Vice President Sales and Marketing 2002 142,077 6,433 0 11,264
2001 139,183 23,000 0 10,836
Herman F. Dick, Jr. (1)............. 2003 112,963 0 0 6,819
Treasurer and Chief Financial
Officer 2002 106,742 4,834 0 6,375
---------------
(1) Mr. Dick was elected Treasurer and Chief Financial Officer on August 7,
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.
(2) 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, 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. 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 $5,060 for
Mr. Dick.
The following table sets forth information with respect to stock options
granted during the fiscal year ended December 31, 2003 to the executive officers
named in the Summary Compensation Table. In accordance with Securities and
Exchange Commission rules, the hypothetical realizable values for each option
grant are shown based on the compound annual rates of stock price appreciation
of 5% and 10% from the grant date to the expiration date. The assumed rates of
appreciation are prescribed by the Securities and Exchange Commission and are
for illustration purposes only. The assumed rates of appreciation are not
intended to predict future stock
11
prices, which will depend upon market conditions and the future performance and
prospects of Core Molding Technologies.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
% OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION/SAR TERM
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED(#) FISCAL YEAR ($/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, 2003. 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, 2003.
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....... -- -- -- 150,000 0 $ 25,500
Kevin L. Barnett........ -- -- -- -- 0 0
Stephen J. Klestinec.... -- -- -- -- 0 0
Herman F. Dick, Jr. .... -- -- -- -- 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, 2003 ($2.92) less the exercise price of in-the
money options/SARs at the end of the fiscal year ended December 31, 2003.
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 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, 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.
12
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. No profit sharing was paid out to any employee
under this bonus/profit sharing plan in 2004 for the performance achieved in
2003.
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 (the
"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.
BASIS FOR CHIEF EXECUTIVE OFFICER'S COMPENSATION
The Board of Directors established compensation for Mr. Simonton for 2003
in accordance with the information discussed above.
13
REPORTS ON REPRICING
The Board of Directors of Core Molding Technologies believes that hiring
and retaining key executive officers and employees is central to implementing
its business plan. Therefore, in June 2003, Core Molding Technologies commenced
a tender offer to acquire all outstanding options to purchase shares of Core
Molding Technologies common stock and in return grant to those individuals who
accepted the offer new options for 95% of the number of shares covered by their
existing stock options, carrying an option price equal to the greater of (i)
$1.70 per share or (ii) the market price of Core Molding Technologies' common
stock at the time of the grant of the new options. The offer expired on July 31,
2003, whereby options to purchase 978,000 shares were tendered to Core Molding
Technologies, representing 83.6% of the total number of outstanding options
eligible for tender. New options were granted to each optionee who tendered
options on February 9, 2004. New options granted to employees were granted under
the Core Molding Technologies Amended and Restated Long-Term Equity Incentive
Plan (the "Plan"). Non-employees were granted options outside the Plan.
Optionees are immediately vested in the new options in the same proportion and
to the same extent as under the old options.
The following table sets forth certain information concerning the tender
offer, including (i) the name of each executive officer who participated in the
tender offer, (ii) the date of acceptance of tender, (iii) the number of
securities underlying options tendered, (iv) the price per share of the
underlying security at the time of the acceptance of tender, (v) the original
price or exercise price of the canceled option at the time of the acceptance of
tender, (vi) the new exercise price, and (vii) the original option term
remaining at the date of the acceptance of tender. The exercise price of the
replacement option was determined as of February 2, 2004, the date of the grant
of the new options.
TEN YEAR OPTION REPRICING
NUMBER OF MARKET PRICE EXERCISE LENGTH OF
SECURITIES OF STOCK AT PRICE OF ORIGINAL TERM
DATE OF UNDERLYING DATE OF STOCK AT DATE NEW REMAINING AT
ACCEPTANCE OF TENDERED ACCEPTANCE OF OF ACCEPTANCE EXERCISE DATE OF
NAME TENDER OPTIONS TENDER OF TENDER PRICE REPRICING
---- ------------- ---------- ------------- ------------- -------- -------------
James L. Simonton (1)....... July 28, 2003 185,000 $2.02 $3.20 $3.21 6.2 years
Kevin L. Barnett (2)........ July 31, 2003 100,000 1.96 2.75 3.21 3.8 years
Stephen J. Klestinec (3).... July 30, 2003 100,000 1.92 3.50 3.21 5.3 years
Herman F. Dick, Jr. (4)..... July 21, 2003 40,000 1.96 2.75 3.21 6.3 years
---------------
(1) Mr. Simonton received replacement options for the purchase of 175,750 shares
of common stock
(2) Mr. Barnett received replacement options for the purchase of 95,000 shares
of common stock
(3) Mr. Klestinec received replacement options for the purchase of 95,000 shares
of common stock
(4) Mr. Dick received replacement options for the purchase of 38,000 shares of
common stock
Stock options are intended to provide incentives to Core Molding
Technologies' officers, directors, employees and consultants. The Compensation
Committee believes that the outstanding stock options were not achieving the
purpose for which they were intended because at the time of the tender offer
they carried option prices significantly higher than the then current market
price for Core Molding Technologies' common stock. The Board believed that the
tender offer would allow Core Molding Technologies to adequately compensate
officers, directors and employees for the substantial contributions they have
made and to motivate them to maximize stockholder value and, therefore, the
Board determined that the tender offer was in the best interest of Core Molding
Technologies and its stockholders.
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
14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Core Molding Technologies did not have a Compensation Committee during the
fiscal year ended December 31, 2003. 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. Since April 1, 2000,
Mr. Prine has 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 $8,000 in cash compensation for such service during the year
ended December 31, 2003, $32,000 for the year ended December 31, 2002, and
$32,000 for the year ended December 31, 2001.
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 55% of the total
revenues of Core Molding Technologies for the fiscal year ended December 31,
2003. 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 55% of the total revenues of
Core Molding Technologies for the fiscal year ended December 31, 2003.
International is also a 44% stockholder in Core Molding Technologies.
15
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors ("Committee") is composed of
four 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, 2003 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.
During the year ended December 31, 2003, 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 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, 2003, 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, 2003, for filing with the Securities and
Exchange Commission.
AUDIT COMMITTEE
James F. Crowley, Chairman
Ralph O. Hellmold
Thomas M. Hough
John P. Wright
16
AUDIT FEES
During the fiscal years ended December 31, 2003 and 2002, 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 $184,740 and $99,780,
respectively, which were paid to Deloitte & Touche.
TAX FEES
The aggregate fees billed to Core Molding Technologies for tax services by
Deloitte & Touche for the fiscal years ended December 31, 2003 and 2002 were
$31, 285 and $41,385, respectively.
ALL OTHER FEES
The aggregate fees billed for professional services rendered by Deloitte &
Touche for all other products and services provided for the fiscal years ended
December 31, 2003 and 2002 were $12,960 and $15,800, respectively. The services
rendered by Deloitte & Touche in 2002 and 2003 primarily related to valuation
services related to Core Molding Technologies postretirement benefit programs.
17
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, 2003. 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
---------------------------------------------------
12/98 12/99 12/00 12/01 12/02 12/03
------ ------ ------ ------ ------ ------
Core Molding Technologies Inc. 100.00 66.09 21.43 42.00 31.43 83.43
S & P Small Cap 600 100.00 112.40 125.67 133.89 114.30 158.63
S & P Construction & Farm Machinery & Heavy Trucks 100.00 123.44 124.35 139.82 132.83 230.88
* $100 INVESTED 12/31/98 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
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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 55% of total revenues of Core
Molding Technologies during the fiscal year ended December 31, 2003. 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
19
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 seven members. At the annual
meeting, the stockholders will elect seven 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, 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 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 seven 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, SIMONTON AND WRIGHT.
20
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
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, 2004. Core Molding Technologies expects a representative of
Deloitte & Touche 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. The Board has adopted policies requiring the Audit Committee to
pre-approve all audit and non-audit services provided by Core Molding
Technologies' independent auditors. All auditing services and non-audit services
provided by Deloitte & Touche for the year ended December 31, 2003 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.
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, 2004
21
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 independent
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 every year.
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. Select and retain the independent public accountant 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. Present 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 13, 2004
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 13, 2004, 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 JOHN P. WRIGHT
(2) To ratify the appointment of Deloitte & Touche LLP as auditors
for the Company for the year ending December 31, 2004.
[ ] 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).