SUPREME INDUSTRIES, INC.
65140 U.S. 33 East
P.O. Box 237
Goshen, IN 46526
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 22, 1995
To Shareholders of
SUPREME INDUSTRIES, INC.:
The annual meeting of shareholders of Supreme Industries, Inc. (the
"Company") will be held at the Goshen Holiday Inn, U.S. 33 East and
Fairfield Street, Goshen, Indiana on June 22, 1995 at 10:00 a.m.
Eastern Standard Time for the following purposes:
1. To elect nine directors to serve until the next annual meeting
of shareholders and until their respective successors shall be
elected and qualified;
2. To ratify the selection of Coopers & Lybrand L.L.P. as
independent auditors;
3. To transact such other business as may properly come before the
meeting and any adjournment thereof.
Information regarding matters to be acted upon at this meeting is
contained in the accompanying Proxy Statement. Only shareholders
of record at the close of business on May 5, 1995 are entitled to
notice of and to vote at the meeting and any adjournment thereof.
All shareholders are cordially invited to attend the meeting.
Whether or not you plan to attend, please complete, sign, and
return promptly the enclosed proxy in the accompanying addressed
envelope for which postage is prepaid. You may revoke the proxy at
any time before the commencement of the meeting.
By Order of the Board of Directors
Goshen, Indiana William J. Barrett
May 9, 1995 Secretary
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING,
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. PLEASE COMPLETE,
SIGN, AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING.
SOLICITATION OF PROXIES
This Proxy Statement and accompanying Proxy are furnished to
shareholders in connection with the solicitation of proxies by the
Board of Directors of Supreme Industries, Inc. (the "Company") for
use at the Annual Meeting of Shareholders to be held at the Goshen
Holiday Inn, U.S. 33 East and Fairfield Street, Goshen, Indiana,
10:00 a.m. Eastern Standard Time on June 22, 1995, or at any
adjournment thereof. The Notice of Meeting, the form of Proxy, and
this Proxy Statement are being mailed to the Company's shareholders
on or about May 9, 1995.
The expense of proxy solicitation will be borne by the Company.
Although solicitation is to be made primarily through the mails,
the Company's officers and/or employees and those of its transfer
agent may solicit proxies by telephone, telegram, or personal
contact, but in such event no additional compensation will be paid
by the Company for such solicitation. Further, brokerage firms,
fiduciaries, and others may be requested to forward solicitation
material regarding the meeting to beneficial owners of the
Company's common stock, and in such event the Company will
reimburse them for all accountable costs so incurred.
A copy of the Annual Report to Shareholders of the Company for its
fiscal year ended December 31, 1994, is being mailed with this
Proxy Statement to all such shareholders entitled to vote, but does
not form any part of the information for solicitation of proxies.
RECORD DATE AND VOTING SECURITIES
The Board of Directors of the Company has fixed the close of
Business on May 5, 1995, as the record date for determination of
shareholders entitled to notice of and to vote at the Annual
Meeting. As of the record date, there were 5,758,404 shares of
Class A Common Stock and 1,658,000 shares of Class B Common Stock
of the Company issued and outstanding. The presence, in person or
by proxy, of the holders of a majority of the outstanding shares of
Common Stock as of the record date is necessary to constitute a
quorum at the Annual Meeting with respect to matters upon which
both classes of Common Stock are entitled to vote.
ACTION TO BE TAKEN AND VOTE REQUIRED
Action will be taken at the meeting to elect a Board of Directors
and to ratify the selection of Coopers & Lybrand L.L.P. as
independent auditors. The proxy will be voted in accordance with
the directions specified thereon, and otherwise in accordance with
the judgment of the persons designated as proxies. Any proxy on
which no directions are specified will be voted for the election of
directors named herein, and otherwise in accordance with the
judgment of the persons designated as proxies. Any person
executing the enclosed proxy may nevertheless revoke it at any time
prior to the actual voting thereof by filing with the Secretary of
the Company either a written instrument expressly revoking it or a
duly executed proxy bearing a later date. Furthermore, such person
may nevertheless elect to attend the meeting and vote in person, in
which event, the proxy will be suspended.
The Company's Certificate of Incorporation authorizes two classes
of $.10 par value Common Stock (designated Class A and Class B) as
well as one class of $1.00 par value preferred stock. No shares of
the preferred stock are outstanding. In voting on all matters
expected to come before the meeting, a shareholder of either Class
A or Class B Common Stock will be entitled to one vote, in person
or by proxy, for each share held in his name on the record date,
except that the holders of Class A Common Stock shall be entitled
to elect that number (rounded down) of directors equal to the total
number of directors to be elected divided by three, i.e., three
directors, and the holders of Class B Common Stock shall be
entitled to elect the remaining directors. The election of three
directors by the holders of the Class A Common Stock requires the
affirmative vote of a majority of the shares of Class A Common
Stock represented in person or by proxy at a meeting at which a
majority of the outstanding Class A shares is present. The
Company's Certificate of Incorporation prohibits cumulative voting.
Ratification of the selection of auditors requires the affirmative
vote of the holders of a majority of the outstanding shares of the
Common Stock present, in person or by proxy, at the annual meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following tabulation sets forth the names of those persons who
are known to Management to be the beneficial owners as of April 6,
1995 of more than five percent of the Company's Class A or Class B
Common Stock. Such tabulation also sets forth the number of shares
of the Company's Class A or Class B Common Stock beneficially owned
as of April 6, 1995 by all of the Company's directors and nominees
(naming them) and all directors and officers of the Company as a
group (without naming them). Persons having direct beneficial
ownership of the Company's common stock possess the sole voting and
dispositive power in regard to such stock. Class B Common Stock is
freely convertible on a one-for-one basis into an equal number of
shares of Class A Common Stock, and ownership of Class B shares is
deemed to be beneficial ownership of Class A shares under Rule 13d-
3(d)(1) promulgated under the Securities Exchange Act of 1934. As
of April 6, 1995, there were 5,758,404 Class A shares and 1,658,000
Class B shares outstanding.
The following tabulation also includes Class A shares covered by
options granted under the Company's 1982 Incentive Stock Option
Plan and 1992 Stock Option Plan, which options are collectively
referred to as "Stock Options". The Stock Options have no voting
or dividend rights.
<PAGE>
<TABLE>
Name and Address Title Amount and Nature of Percent
of Beneficial Owner Class Beneficial Ownership of Class (1)
<S> <C> <C> <C>
Massachusetts Class A 688,153 (2)(8)(9) 10.9%
Mutual Life Ins. Co. Class B 181,222 10.9%
1295 State St.
Springfield, MA 01111
MassMutual Class A 502,891 (2)(8)(9) 8.2%
Corporate Investors Class B 181,222 10.9%
1295 State St.
Springfield, MA 01111
Thomas Cantwell Class A 488,865 (8)(9) 7.9%
3949 Ann Arbor Dr. Class B 446,261 26.9%
Houston, TX 77063
Herbert M. Gardner Class A 480,086 (4)(8)(9) 7.9%
26 Broadway, Suite 815 Class B 320,641 (4) 19.3%
New York, NY 10004
William J. Barrett Class A 700,849 (5)(8)(9) 11.4%
26 Broadway, Suite 815 Class B 382,519 (5) 23.1%
New York, NY 10004
Omer G. Kropf Class A 334,193 (3)(6)(9) 5.8%
16500 County Road 38
Goshen, IN 46526
Robert J. Campbell Class A 84,722 (7)(8)(9) 1.5%
1304 Summit Avenue Class B 30,357 1.8%
Suite 2
Plano, Texas 75074
Rice M. Tilley, Jr Class A 12,857 (3)(9) *
3200 Bank One Tower
500 Throckmorton
Fort Worth, TX 76102
Robert W. Wilson Class A 23,367 (3)(9) *
16500 County Road 38
Goshen, IN 46526
H. Douglas Schrock Class A 48,667 (3)(9) *
P.O. Box 65
New Paris, IN 46553
All directors and Class A 2,173,606 (8)(9) 31.1%
officers as a group Class B 1,179,778 71.2%
of (10) persons
* Represents less than 1.0% of the outstanding Class A Common Stock.
</TABLE>
(1) The percentage calculations have been made in accordance with
Rule 13d-3(d)(1) promulgated under the Securities Exchange Act of
1934. In making these calculations, shares beneficially owned by
a person as a result of the ownership of certain convertible notes,
warrants, or options, or ownership of Class B Common Stock, were
deemed to be currently outstanding solely with respect to the
holders of such notes, options or Class B shares.
(2) Includes 370,524 shares as to Massachusetts Mutual Life
Insurance Company and 185,262 shares as to MassMutual Corporate
Investors deemed beneficially owned as a result of the holding of
8.6% Convertible Subordinated Notes, Series B, issued by the
Company and convertible at any time prior to maturity in 1995 and
1996. Massachusetts Mutual Life Insurance Company is an investment
advisor to MassMutual Corporate Investors.
(3) Includes the number of Class A Shares set forth opposite the
persons named in the following table, which shares are beneficially
owned as a result of the ownership of Stock Options under the
Company's 1982 and 1992 Stock Option Plans.
<PAGE>
<TABLE>
Incentive Nonstatutory
Stock Stock
Options Options
<S> <C> <C>
Omer G. Kropf 8,333 -0-
Robert W. Wilson 21,667 -0-
H. Douglas Schrock -0- 6,667
Rice M. Tilley, Jr. -0- 6,667
All directors and
officers as a group 30,000 13,334
</TABLE>
(4) Includes 1,914 of Class A Common Stock and 33,241 shares of
Class B Common Stock owned beneficially by Mr. Gardner's wife. Mr.
Gardner has disclaimed beneficial ownership of these shares.
(5) Includes 45,969 shares of Class A Common Stock and 21,034
shares of Class B Common Stock owned beneficially by Mr. Barrett's
wife, and his son, Christopher. Mr. Barrett has disclaimed
beneficial ownership of these shares.
(6) Includes 578 shares of Class A Common Stock beneficially owned
by Mr. Kropf 's wife. Mr. Kropf has disclaimed beneficial
ownership of these shares.
(7) Includes 236 shares owned by Mr. Campbell's wife, as custodian
for their children. Mr. Campbell has disclaimed beneficial
ownership of these 236 shares.
(8) Includes the number of shares of Class A Common Stock which are
deemed to be beneficially owned as a result of ownership of shares
of Class B Common Stock, which Class B shares are freely
convertible on a one-for-one basis into Class A shares.
(9) Excludes 1993 Callable Warrants owned by such holders issued
in connection with the spin-off of Contempri Homes, Inc. at
December 31, 1992. Each holder received one 1993 Callable Warrant
for every three shares of the Company's Common Stock held at
December 31, 1993. Each 1993 Callable Warrant entitles a holder
thereof to purchase one-half share of Supreme Industries, Inc. at
a full share price of $6.00. The 1993 Callable Warrants are
trading as a unit with Contempri Homes, Inc. ("Contempri") Common
Stock. The Warrants are not exercisable until the separation of
the Units on a date (the "Separation Date") determined by Contempri
not earlier than June 9, 1994, and not later than June 9, 1995,
unless extended.
Depositories such as The Depository Trust Company (Cede & Company)
as of April 6, 1995 held, in the aggregate, more than 5% of the
Company's then outstanding Class A voting shares. The Company
understands that such depositories hold such shares for the benefit
of various participating brokers, banks, and other institutions
which are entitled to vote such shares according to the
instructions of the beneficial owners thereof. The Company has no
reason to believe that any of such beneficial owners hold more than
5% of the Company's outstanding voting securities.
ELECTION OF DIRECTORS
Nine directors are to be elected at the annual meeting of
shareholders. Unless otherwise instructed, the proxy holders will
vote the proxies received by them for the nominees shown below for
the term of one year and until their successors are duly elected
and have qualified. The Company's Board of Directors is currently
comprised of eight members. Of the persons named below, Messrs.
Tilley, Schrock, and Horn have been nominated for election by the
holders of Class A Common Stock, and the remaining persons have
been nominated for election by the holders of Class B Common Stock.
Messrs. Gardner, Barrett, Kropf and Wilson were the executive
officers of the Company as of December 31, 1994. Officers are
elected annually by the Board of Directors at the Annual Meeting of
Directors held immediately following the Annual Meeting of
Shareholders. Except as otherwise noted below, each of the
Company's executive officers has served as such since 1979.
Although it is not contemplated that any nominee will be unable to
serve as a director, in such event the proxies will be voted by the
holders thereof for such other person as may be designated by the
current Board of Directors. The Management of the Company has no
reason to believe that any of the nominees will be unable or
unwilling to serve if elected to office, and to the knowledge of
Management, the nominees intend to serve the entire term for which
election is sought.
There are no family relationships by blood, marriage, or adoption
between any director or executive officer, except Mr. Schrock who
is Mr. Barrett's brother-in-law. Mr. Rice Tilley is a member of
the law firm of Law, Snakard & Gambill, a Professional Corporation,
which performed legal services for the Company during 1994.
Only nine nominees for director are named, even though the
Company's bylaws allow a maximum of fifteen, since the proposed
size of the board is deemed adequate to meet the requirements of
the Board of Directors. The proxies given by the Class A
Shareholders cannot be voted for more than three persons and the
proxies given by Class B shareholders cannot be voted for more than
six persons. The information set forth below with respect to each
of the nominees has been furnished by each respective nominee.
<PAGE>
Served as
Name, Age, and Executive Positions
Business Experience Officer Since With Company
Herbert M. Gardner, 55 1979 Chairman of the
Senior Vice President of Janney Board and
Montgomery Scott Inc., investment President
bankers, since 1978; Chairman of the
Board of the Company since 1979 and
President of the Company since June
1992; Chairman of the Board and
a Director of Contempri Homes, Inc.,
a manufacturer of modular homes,
since 1987; Director of Shelter
Components Corporation, a supplier to
the manufactured housing and recreational
vehicle industries; Director of Nu Horizons
Electronics Corp., an electronic
component distributor; Director of
Transmedia Network, Inc., a specialized
charge card company; Director of Hirsch
International Corp., an importer of
computerized embroidery machines,
supplies and developer of software;
Director of TGC Industries, Inc., a
company engaged in geophysical
services industry and a specialty packaging
manufacturer and distributor; and Director
of The Western Transmedia Company, Inc.,
a franchisee of Transmedia Network for the
State of California, a specialized finance
charge card Company.
Omer G. Kropf, 53 1984 Executive Vice
Executive Vice President of the Company President
since August 1985; President and Chief
Executive Officer of Supreme Corporation,
a subsidiary of the Company, since January
19, 1984; Vice President of Contempri
Homes, Inc. from 1987 to February, 1994;
and President of a specialized truck body
manufacturing company from 1974 through
1983, the predecessor of the Company's
subsidiary Supreme Corporation.
William J. Barrett, 55 1979 Secretary and
Senior Vice President of Janney Assistant
Montgomery Scott Inc., investment Treasurer
bankers, since 1978; Secretary and
Assistant Treasurer of the Company
since 1979; Secretary and Assistant
Treasurer of Contempri Homes, Inc.,
a manufacturer of modular homes,
and a Director of Contempri Homes,
Inc. since 1987; Director of Esmor
Correctional Services, Inc., a private
manager and operator of secure
and non-secure corrections and detention
facilities for federal, state, and local
corrections agencies; Director of
Frederick's of Hollywood, Inc., an
apparel marketing company; Director
of Shelter Components Corporation, a
supplier to the manufactured housing
and recreational vehicle industries;
Director of TGC Industries, Inc., a
geophysical services company and
specialty packaging manufacturer and
distributor; and Director of The Western
Transmedia Company, Inc. a franchisee
of Transmedia Network principally for
the State of California, a specialized
finance charge card Company.
Robert W. Wilson, 50 1990 Executive Vice
Treasurer, Executive Vice President, President,
and Chief Financial Officer of the Treasurer
and Company since December 1992; Chief Financial
Vice President of Finance of Supreme Officer
Corporation since 1988; Senior Auditor
Price Waterhouse Co., 1969 through 1973;
Controller Riblet Products Inc., 1973
through 1979; and Vice President Riblet
Products Inc., 1979 through 1988.
<PAGE>
Robert J. Campbell, 63 1979 None
Vice Chairman of the Board of TGC
Industries, Inc., a geophysical services
company and specialty packaging
manufacturer and distributor, since
July 1993; Chairman of the Board and
Chief Executive Officer of TGC Industries,
Inc. from July 1986 to July 1993. Prior to
such time, President and Chief Executive
Officer of the Company for more than
five years.
Thomas Cantwell, 67 1979 None
1978 to present, independent oil and
gas consultant and personal investor;
September 1987 to present, President of
Technical Computer Graphics, Inc., a
software/hardware integrator in the
computer graphics field; November 1991
to present, President of ASA, Inc., a
mining and exploration company;
October 1992 to present, Director of
Discreet Logic, Inc., a software
development Company; Director of TGC
Industries, Inc., a geophysical services
company and specialty packaging
manufacturer and distributor since 1986;
and Director of Contempri Homes, Inc.,
a manufacturer of modular homes, since 1987.
H. Douglas Schrock, 46 1990 None
President of Smoker-Craft, Inc., since
1978, a pleasure boat manufacturer;
President of Earthway Products, Inc.,
a gardening supplies manufacturer;
President of Goshen Iron & Metal
Company, a scrap and metal trader;
President of Goshen Sash and Door
Co., a distributor of windows and
doors; Director of Society Bank of
Indiana; and Director of Contempri
Homes, Inc., a manufacturer of modular
homes, since November 1990.
<PAGE>
Rice M. Tilley, Jr., 58 1981 Assistant
Member of the law firm of Law, Secretary
Snakard & Gambill, a Professional
Corporation, since 1965.
Rick L. Horn, 42 None
Vice President of Sales and Marketing
of Supreme Corporation since September
1994, a position held from May 1980 to
January 1988; President and Chief Executive
Officer of Iowa Mold Tooling Company,
a manufacturer of truck mounted cranes
from July 1991 to August 1994; President
of Stahl - A Scott Fetzer Company, a
manufacturer of utility and service truck
bodies from January 1988 to July 1991;
and various sales and marketing positions
with Holiday Rambler Corporation, a
recreational vehicle manufacturer, from
June 1975 to January 1980.
The Company's Board of Directors recommends that you vote FOR the
nominees named above for the election to the Board of Directors.
COMMITTEES AND MEETINGS OF
THE BOARD OF DIRECTORS
The Board of Directors has an Executive Committee comprised of Dr.
Cantwell and Messrs. Gardner, Barrett, and Kropf, an Audit
Committee comprised of Messrs. Tilley, Schrock and Campbell, and
a Stock Option Committee comprised of Messrs. Gardner, Barrett and
Cantwell.
The Executive Committee, which met four times during the fiscal
year ended December 31, 1994, is charged by the Company's bylaws
with the responsibility of exercising such authority of the Board
of Directors as is specifically delegated to it by the Board,
subject to certain limitations contained in the bylaws.
The Audit Committee met twice during the fiscal year ended December
31, 1994. The purpose and functions of the Audit Committee are to
recommend the appointment of independent auditors; review the scope
of the audit proposed by the independent auditors; review year end
financial statements prior to issuance; consult with the
independent auditors on matters relating to internal financial
controls and procedures; and make appropriate reports and
recommendations to the Board of Directors.
The Stock Option Committee met twice during the year. The
Committee is responsible for awarding Stock Options to key
employees or individuals who provide substantial advice or other
assistance to the Company so that they will apply their best
efforts for the benefit of the Company.
The Board of Directors does not have nominating or compensation
committees.
During the fiscal year ended December 31, 1994, the Board of
Directors held six special meetings in addition to its regular
meeting. All of the Directors listed herein attended 75% or more
of the total meetings of the Board and of the committees on which
they serve.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or accrued by
the Company and its subsidiaries for services rendered during the
last three fiscal years to the Company's chief executive officer
and each of the most highly compensated executive officers of the
Company whose cash compensation exceeds $100,000.
<PAGE>
<TABLE>
Summary Compensation Table
Name and Annual Compensation Long Term All Other
Principal Position Year Salary $ Bonus $ Compensation Compensation
<S> <C> <C> <C> <C> <C>
Herbert M. Gardner 1994 $ 96,000(1) $ 66,291 $ --- $ ---
Chairman of the Board 1993 84,000 --- --- ---
and President 1992 69,000 --- --- 15,000
William J. Barrett 1994 96,000(1) 66,291 --- ---
Secretary and Assistant 1993 84,000 --- --- ---
Treasurer 1992 69,000 --- --- 15,000
Omer G. Kropf 1994 190,000 332,000 --- 3,320
Executive Vice President 1993 176,000(2) 167,650 --- 1,340
1992 150,000 68,809 --- 803
Robert W. Wilson 1994 94,016(3) 80,000 --- 1,064
Treasurer, Executive 1993 86,488 37,000 --- 968
Vice President and 1992 69,750 25,000 --- 684
Chief Financial Officer
</TABLE>
(1) On January 1, 1993, the Company entered into three year
consulting agreements commencing on January 1, 1993 with Mr.
Gardner and Mr. Barrett for financial and advisory consulting
services. On September 22, 1994 the Board of Directors approved an
amendment to the contracts so that on December 31st of each year
the contracts will be extended for an additional year so as to have
a term ending three years thereafter. The terms of the agreement
call for Mr. Gardner and Mr. Barrett to receive annual consulting
fees of $84,000 in 1993, $96,000 in 1994 and $108,000 in 1995 and
thereafter, plus a cash incentive performance fee in the amount of
$36,000 if the pre-tax earnings of the Company exceed $2,000,000
plus an amount equal to 0.6% of the amount by which such pre-tax
earnings exceed $2,000,000. Mr. Gardner and Mr. Barrrett
voluntarily deferred their compensation in excess of $69,000 for
1992.
(2) On May 1, 1993, the Company entered into a five-year employment
contract with Mr. Kropf through April 30, 1998. The terms of this
agreement provide for a minimum annual base salary of $190,000 per
year plus a bonus subject to approval by the Board of Directors,
based upon the Company's pre-tax operating performance.
(3) On October 1, 1994 the Company entered into a three-year
employment contract with Mr. Wilson through December 31, 1997. The
terms of the agreement provide for a minimum base salary of
$100,000 per year plus a bonus subject to approval by the Board of
Directors, based upon the Company's pre-tax operating performance.
Director Compensation
Outside directors, with the exception of Mr. Campbell who receives
$1,000 per month as an outside director, are paid $500 per regular
board meeting attended and an additional $5,000 annually. Members
of the Audit Committee, with the exception of Mr. Campbell, are
paid $500 per meeting. Non-employee members of the Executive
Committee are paid $2,000 per month. Each Director is reimbursed
for out-of-pocket expenses incurred in attending Board or Committee
meetings.
Option/SAR Grants in Last Fiscal Year
There were no stock options or stock appreciation rights granted in
the last fiscal year to any of the executive officers of the
Company.
Aggregate Option/SAR Exercises in Last Fiscal
Year and Fiscal Year-End Option/SAR Values
The following table sets forth certain information regarding the
year-end value of Options held by the Company's executive officers
during the fiscal year ended December 31, 1994. No options were
exercised by the Company's executive officers during the year.
There are no stock appreciation rights outstanding.
<PAGE>
<TABLE>
Shares Value Value of
Acquired Realized Number of Unexercised Unexercised In-the-money
On At Options at the Year-End Options at the Year-End(1)
Name Exercise Exercise Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Omer G. Kropf - - 8,333 16,667 $ 49,998 $ 100,002
Robert W. Wilson - 21,667 3,333 $ 130,002 $ 19,998
</TABLE>
(1) The value of outstanding options is based on the December 31,
1994 closing stock price which was $6.00.
The Board of Directors Report on Compensation
Compensation policies and annual compensation applicable to the
Company's executive officers are the responsibility of the Board of
Directors. Executive officers of the Company who are also members
of the Board do not participate in setting their own compensation.
The Board of Directors reviews the individual performance of each
executive officer and the overall performance of the Company. The
Board also takes into account salary levels, bonus plans, stock
incentive plans and other compensation packages made available to
executive officers of companies of similar size and nature. In
accordance with this policy, the Board of Directors has established
certain compensation arrangements as set forth below.
The Board has approved Consulting Agreements between the Company
and Mr. Herbert Gardner, Chairman of the Board and President of the
Company and Mr. William J. Barrett, Secretary and Assistant
Treasurer of the Company. These Consulting Agreements went into
effect January 1, 1993, and, as amended, continue through December
31, 1997. In consideration of services to be provided to the
Company, the Consulting Agreements provides for each of Messrs.
Gardner and Barrett to receive (in addition to certain fringe
benefits): (1) a monthly fee of $7,000 during 1993, $8,000 during
1994, and $9,000 during 1995 and in each year thereafter (which
monthly payments are to be offset by all other fees paid to Messrs.
Gardner and Barrett, respectively, for serving as members of the
Board of Directors and any committee of the Company and it's
subsidiaries); and (2) if the pre-tax earnings of the Company
exceed $2,000,000, an incentive bonus of $36,000 plus an amount
equal to 0.6% of the amount by which such pre-tax earnings exceed
$2,000,000.
The Company's wholly-owned subsidiary, Supreme Corporation, has
entered into an Employment Contract with Mr. Omer G. Kropf
employing Mr. Kropf as President of Supreme Corporation (Mr. Kropf
is also and Executive Vice President of the Company). The
Employment Contract is for a term of five years beginning on May 1,
1993, and ending on April 30, 1998. In consideration of his
services rendered as President of Supreme Corporation, the
Employment Contract provides that Supreme Corporation will pay to
Mr. Kropf (in addition to certain fringe benefits) a base salary of
$190,000 per year plus a pre-tax incentive bonus if earned under
Supreme Corporation's Bonus Payment Plan. Under this Plan, an
amount equal to ten percent (10%) of Supreme Corporation's pre-tax
profits is (subject to Board approval) placed into a bonus pool
which is then allocated among, and is distributed to, Supreme
Corporation's key executives. The allocation of such bonus pool is
approved by the Board of Directors based upon an analysis of the
contributions of key executives to Supreme Corporation's financial
performance and a consideration of Management's recommendation as
to an appropriate allocation to reward such contributions. For
1994, Supreme Corporation's significantly increased pre-tax
earnings resulted in bonus payments to Mr. Kropf of $332,000.
The Company's wholly-owned subsidiary, Supreme Corporation, has
also entered into an Employment Contract with Mr. Robert W. Wilson
employing Mr. Wilson as Vice President of Finance, Treasurer and
Assistant Secretary of Supreme Corporation (Mr. Wilson is also
Executive Vice President, Treasurer and Chief Financial Officer of
the Company). The Employment Contract is for a term of 3 years 3
months beginning October 1, 1994 and ending December 31, 1997. In
consideration of his service rendered as Executive Vice President,
Treasurer and Chief Financial Officer of the Corporation, the
Employment Contract provides that Supreme Corporation will pay to
Mr. Wilson (in addition to certain fringe benefits) a base salary
of $100,000 per year plus a pre-tax incentive bonus if earned under
Supreme Corporation's Bonus Payment Plan described in the preceding
paragraph. For 1994, Supreme Corporation's significantly increased
pre-tax earnings resulted in a bonus payment to Mr. Wilson of
$80,000.
The Board of Directors
William J. Barrett Omer G. Kropf
Robert J. Campbell H. Douglas Schrock
Thomas Cantwell Rice M. Tilley, Jr.
Herbert M. Gardner Robert W. Wilson
Stock Option Plans
1992 Stock Option Plan
On April 7, 1992, the Company's Board of Directors approved and
adopted, subject to shareholder approval, the Company's 1992 Stock
Option Plan. The plan was approved by the shareholders at the
annual meeting held on June 11, 1992. The following paragraphs
summarize certain provisions of the 1992 Stock Option Plan and are
qualified in their entirety by reference thereto. The 1992 Stock
Option Plan provides for the granting of options (collectively, the
"1992 Options") to purchase shares of the Company's Class A Common
Stock to certain key employees of the Company and/or its
affiliates, and certain individuals who are not employees of the
Company or its affiliates but who from time to time provide
substantial advice or other assistance or services to the Company
and/or its affiliates. The 1992 Stock Option Plan authorizes the
granting of options to acquire up to 300,000 shares of Class A
Common Stock, subject to certain adjustments described below.
Subject to such limitations, there is no limit on the absolute
number of awards that may be granted during the life of the 1992
Stock Option Plan. At the present time, there are approximately 40
employees of the Company, including 16 officers of the Company (5
of whom are also directors), who, in management's opinion, would be
considered eligible to receive grants under the 1992 Stock Option
Plan, although fewer employees may actually receive grants. At
December 31, 1994, 156,500 options were outstanding under this
plan, of which 47,167 were exercisable.
Authority to administer the 1992 Stock Option Plan has been
delegated to a committee (the "Committee") of the Board of
Directors. Except as expressly provided by the 1992 Stock Option
Plan, the Committee has the authority, in its discretion, to award
1992 Options and to determine the terms and conditions (which need
not be identical) of such 1992 Options, including the persons to
whom, and the time or times at which, 1992 Options will be awarded,
the number of 1992 Options to be awarded to each such person, the
exercise price of any such 1992 Options, and the form, terms and
provisions of any agreement pursuant to which such 1992 Options
will are awarded. The 1992 Stock Option Plan also provides that
the Committee may be authorized by the Board of Directors to make
cash awards as specified by the Board of Directors to the holder of
a 1992 Option in connection with the exercise thereof. Subject to
the limitation set forth below, the exercise price of the shares of
stock covered by each 1992 Option will be determined by the
Committee on the date of award.
Unless a Holder's option agreement provides otherwise, the
following provisions will apply to exercises by the Holder of his
or her option: No options may be exercised during the first twelve
months following grant. During the second year following the date
of grant, options covering up to one-third of the shares covered
thereby may be exercised, and during the third year options
covering up to two-thirds of such shares may be exercised.
Thereafter, and until the options expire, the optionee may exercise
options covering all of the shares. Persons over sixty-five on the
date of grant may exercise options covering up to one-half of the
shares during the first year and thereafter may exercise all
optioned shares. Subject to the limitations just described,
options may be exercised as to all or any part of the shares
covered thereby on one or more occasions, but, as a general rule,
options cannot be exercised as to less than one hundred shares at
any one time.
The exercise price of the shares of stock covered by each incentive
stock option ("ISO"), within the meaning of Sec. 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), will not be
less than the fair market value of stock on the date of award of
such ISO, except than an ISO may not be awarded to any person who
owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company,
unless the exercise price is at least one hundred ten percent
(110%) of the fair market value of the stock at the time the ISO is
awarded, and the ISO is not exercisable after the expiration of
five years from the date it is awarded. The exercise price of the
shares of Class A Common Stock covered by each 1992 Option that is
not an ISO ("NSO") will not be less than fifty percent (50%) of the
fair market value of the stock on the date of award.
Payment for Class A Common Stock issued upon the exercise of a 1992
Option may be made in cash or, with the consent of the Committee,
in whole shares of Class A Common Stock owned by the holder of the
1992 Option for at least six months prior to the date of exercise
or, with the consent of the Committee, partly in cash and partly in
such shares of Class A Common Stock. If payment is made, in whole
or in part, with previously owned shares of Class A Common Stock,
the Committee may issue to such holder a new 1992 Option for a
number of shares equal to the number of shares delivered by such
holder to pay the exercise price of the previous 1992 Option having
an exercise price equal to not less than one hundred percent (100%)
of the fair market value of the Class A Common Stock on the date of
such exercise. A 1992 Option so issued will not be exercisable
until the later of the date specified in an individual option
agreement or six months after the date of grant.
The duration of each 1992 Option will be for such period as the
Committee determines at the time of award, but not for more than
ten years from the date of the award in the case of an ISO, and in
either case may be exercised in whole or in part at any time or
only after a period of time or in installments, as determined by
the Committee at the time of award, except that after the date of
award, the Committee may accelerate the time or times at which a
1992 Option may be exercised.
In the event of any change in the number of outstanding shares of
Class A Common Stock effected without receipt of consideration
therefor by the Company, by reason of a stock dividend, or split,
combination, exchange of shares or other recapitalization, merger,
or otherwise, in which the Company is the surviving corporation,
the aggregate number and class of reserved shares, the number and
the class of shares subject to each outstanding 1992 Option, and
the exercise price of each outstanding 1992 Option shall be
automatically adjusted accurately and equitably to reflect the
effect thereon of such change. Unless a holder's option agreement
provides otherwise, a dissolution or liquidation of the Company,
certain mergers of consolidations in which the Company is not the
surviving corporation, or certain transactions in which another
corporation becomes the owner of fifty percent (50%) or more of the
total combined voting power of all classes of stock of the Company,
shall cause such holder's 1992 Options then outstanding to
terminate, but such holder shall have the right, immediately prior
to such transaction, to exercise such 1992 Options without regard
to the period and installments of exercisable applicable pursuant
to such holder's option agreement.
The 1992 Stock Option Plan will terminate on April 7, 2002, or on
such earlier date as the Board of Directors may determine. Any
stock options outstanding at the termination date will remain
outstanding until they have been exercised, terminated, or have
expired.
The 1992 Stock Option Plan may be terminated, modified, or amended
by the Board of Directors at any time without further shareholder
approval, except that shareholder approval is required for any
amendment that: (a) changes the number of shares of Class A Common
Stock subject to the 1992 Stock Option Plan, (b) changes the
designation of the class of employees eligible to receive 1992
Options, (c) decreases the price at which ISOs may be granted, (d)
removes the administration of the 1992 Stock Option Plan from the
Committee, or (e) without the consent of the affected holder,
causes the ISO's granted under the 1992 Stock Option Plan and
outstanding at such time that satisfied the requirements of Sec.
422 of the Code to no longer to satisfy such requirements.
1982 Incentive Stock Option Plan
The Company previously maintained a 1982 Incentive Stock Option
Plan (the "1982 Plan") under which 338,771 shares of Class A Common
Stock were reserved for grant. The 1982 Plan expired January 19,
1992 and no additional options under the Plan can be granted. One-
third of the shares granted can be exercised each year beginning
with the second year following the date of grant. All options
expire five years from date of grant. At December 31, 1994, 20,000
options were outstanding under this plan of which all were
exercisable.
401 (k) Retirement Plan
The Company has a Sec. 401 (k) Retirement Plan (the "Retirement
Plan") which offers employees tax advantages pursuant to Section
401 (k) of the Internal Revenue Code. During the year ended
December 31, 1994, all of the employees of the Company and one of
its subsidiaries (collectively, the "Employer") were eligible to
participate in the Retirement Plan if they had reached the age of
21 and had been employed by the Employer for at least one full
calendar year. Under the terms of the Retirement Plan, a
participant may elect to defer up to 10% of his compensation. Thru
February 1994, the Company contributed ten cents on each dollar of
the first 6% of compensation contributed by participants. On
February 4, 1994, the Board of Directors approved an increase to
fifteen cents on each dollar of the first 6% of compensation
contributed by participants effective March 1, 1994.Payments are
made by the Company and the Participants, the latter by means of a
payroll deduction program. Within specified limits, a participant
has the right to direct his or her savings into certain kinds of
investments. The total aggregate amount of the Company's
contribution for Messrs. Kropf and Wilson was $843. respectively,
and for all executive officers as a group was $1,686.
Stock Price Performance
The following Stock Performance Graph shows the changes over the
past five year period in the value of $100 invested in: (1) the
Company's Class A Common Stock, (2) the American Stock Exchange
Market Value Index, and (3) the common stock of the peer group of
companies comprising the Dow Jones - Transportation Equipment
Sector. The Transportation Equipment Sector is principally
comprised of manufacturers of rail cars, buses and commercial land
vehicles, including trucks and truck parts. The year-end values of
each investment are based on share price appreciation and the
reinvestment of dividends. The stock price performance shown below
is not necessarily indicative of future performance.
Stock Price Performance Graph*
1989 1990 1991 1992 1993 1994
Supreme Industries, Inc. $100 $ 31 $ 50 $242 $346 $369
DJ-Transportation
Equipment Sector 100 78 109 138 149 125
AMEX Market Value Index 100 82 105 106 126 115
Assumes $100 invested on Jan. 1, 1990 in Supreme Industries, Inc.
Stock, the Dow Jones-Transportation Equipment Sector and the American
Stock Exchange Market Value Index.
*Original graph filed with Branch Chief of Branch 4, Letty G. Lynn.
Transactions With Management
As part of its original acquisition on January 19, 1984, of the
specialized truck body manufacturing business now being operated by
it, Supreme Corporation acquired an option to purchase certain real
estate and improvements, at its Goshen, Indiana, and Griffin,
Georgia facilities, leased to it by lessors controlled by the
sellers of such business (one of whom is Omer G. Kropf). The
option agreement provided that the option would expire on January
8, 1989, and that, prior to that time, it could be assigned to
either or both of William J. Barrett and Herbert M. Gardner,
members of the Company's Board of Directors.
On July 25, 1988, Supreme Corporation assigned the option (with the
consent of the grantors of the option) to a limited partnership
(the "Partnership"). The general partner of the Partnership is
Supreme Corporation, and the limited partnership interest therein
are owned directly or indirectly by individuals including Mr.
Barrett, Mr. Gardner, Mr. Kropf, Dr. Cantwell, and Mr. Campbell,
all of whom are members of the Company's Board of Directors.
In a transaction consummated on July 25, 1988, the Partnership
exercised the option and purchased all of the subject real estate
and improvements. Also on July 25, 1988, the Partnership and
Supreme Corporation entered into new leases covering Supreme
facilities in Goshen, Indiana and Griffin, Georgia at initial
rental rates equivalent to those paid pursuant to the lease
agreements with the prior lessors. The leases granted to Supreme
Corporation certain options to purchase the properties for an
aggregate initial price of $2,765,000 (subject to increases after
the first year based upon increases in the Consumer Price Index).
During the current fiscal year ending December 31, 1995, Supreme
Corporation is obligated to pay approximately $474,000 in minimum
annual lease payments to the Partnership.
In order to carry out the purchase of the subject real estate and
improvements, the Partnership borrowed from a bank $2,363,000
collateralized by mortgages on such real estate, a security
interest in specified personal properties, and the assignments of
the leases. The initial capital contribution of the Partnership's
limited partners covered the balance of the purchase price.
Messrs. Gardner and Barrett, who are members of the Company's Board
of Directors, are also directors of Shelter Components Corporation
("Shelter"). The Company's Subsidiary -- Supreme Corporation--
purchases materials and supplies from Shelter in the ordinary
course of business. During the year ended December 31, 1994, the
Company's subsidiary purchased from Shelter materials and supplies
having an aggregate purchase price of approximately $168,000, and
such purchases were without special terms or condition. In
addition, as of December 31, 1994, Messrs. Gardner and Barrett
owned, in the aggregate, approximately 3% of the outstanding stock
of Shelter.
Mr. Kropf, Executive Vice President and Director of the Company, is
also President of Ideal Transportation and secretary-treasurer of
Quality Transportation. In addition, Mr. Kropf is the sole
shareholder of both Ideal and Quality Transportation as of December
31, 1994. The Company's Subsidiary, Supreme Corporation, purchases
delivery services form Quality and Ideal in the ordinary course of
business. During the year ended December 31, 1994, Supreme
Corporation purchased $782,000 and $55,000 from Quality and Ideal
respectively. All purchases were without special terms and
conditions.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Coopers & Lybrand L.L.P. to
serve as auditors for the Company during the ensuing year. The
Firm of Coopers & Lybrand L.L.P. has served as auditors for the
Company since October 1990. It is expected that a representative
of Coopers & Lybrand L.L.P. will be present at the shareholders'
meeting with the opportunity to make a statement if he desires to
do so and also will be available to respond to appropriate
questions at the meeting.
The Company's Board of Directors recommends that you vote FOR
ratification of the selection of Coopers & Lybrand L.L.P. as the
Company's auditors for the fiscal year ending December 31, 1995.
OTHER MATTERS
The Company's management knows of no other matters that may
properly be, or which are likely to be, brought before the meeting.
However, if any other matters are properly brought before the
meeting, the persons named in the enclosed proxy, or their
substitutes, will vote in accordance with their best judgment on
such matters.
SHAREHOLDER PROPOSALS
A shareholder proposal intended to be presented at the Company's
Annual Meeting of Shareholders in 1996 must be received by the
Company at its principal executive offices in Goshen, Indiana on or
before December 1, 1995 in order to be included in the Company's
proxy statement and form of proxy relating to that meeting.
FINANCIAL STATEMENTS
Consolidated Financial Statements of the Company and Management's
Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") are contained in the Annual Report to
Shareholders for the fiscal year ended December 31, 1994, enclosed
herewith, and such statements and MD&A are incorporated herein by
reference.
A COPY OF THE COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10-K WILL
BE MADE AVAILABLE, WITHOUT CHARGE, UPON WRITTEN REQUEST TO THE
TREASURER, SUPREME INDUSTRIES, INC., P.O. BOX 237, 65140 U.S. 33
EAST, GOSHEN, INDIANA 46526
By Order of the Board of Directors
Goshen, Indiana
May 9, 1995 William J. Barrett
