<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ____)
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
/X/ Definitive Proxy Statement Commission only (as permitted
/ / Definitive Additional Materials by Rule 14a-6 (e) (2))
/ / Soliciting Material Pursuant to
Rule 14a-11 (c) or Rule 14a-12
SUPREME INDUSTRIES, INC.
- ------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
/X/ No fee required.
/ / 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.
(2) Aggregate number of securities to which transaction applies.
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set fourth the amount on which
the filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction.
(5) Total fee paid.
/ / 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 indentify 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.
<PAGE>
SUPREME INDUSTRIES, INC.
65140 U.S. 33 East
P.O. Box 237
Goshen, IN 46526
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 29, 1997
To Shareholders of
SUPREME INDUSTRIES, INC.:
The annual meeting of shareholders of Supreme Industries, Inc.
(the "Company") will be held at the Courtyard by Marriott, 1930 Lincolnway
East, Goshen, Indiana on April 29, 1997 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; and
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 February 28, 1997 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
March 15, 1997 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.
<PAGE>
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 Courtyard by Marriott, 1930 Lincolnway East,
Goshen, Indiana, 10:00 a.m. Eastern Standard Time on April 29, 1997, 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
March 15, 1997.
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 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, 1996, 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
February 28, 1997, 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 7,980,535 shares of Class A Common Stock and 1,402,975
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.
<PAGE>
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 February 28, 1997 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 February 28, 1997
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
February 28, 1997, there were 7,980,535 Class A shares and 1,402,975 Class B
shares outstanding.
The following tabulation also includes Class A shares covered by options
granted under the Company's 1992 Stock Option Plan, which options are
collectively referred to as "Stock Options". The Stock Options have no
voting or dividend rights.
<PAGE>
<TABLE>
Amount and Nature
Name and Address of Beneficial Percent
of Beneficial Owner Title Class Ownership of Class (1)
<S> <C> <C> <C>
Massachusetts Mutual
Life Ins. Co. Class A 761,992 9.5%
1295 State Street
Springfield, MA 01111
MassMutual Corporate
Investors Class A 536,049 6.7%
1295 State Street
Springfield, MA 01111
Pioneering Management
Corporation Class A 737,440 9.2%
60 State Street
Boston, MA 02109
Wilen Management
Corporation Class A 470,407 5.9%
2360 West Joppa Road
Lutherville, MD 21093
Wellington Management
Company Class A 401,377 5.0%
75 State Street
Boston, MA 02109
Thomas Cantwell Class A 574,001 (6) 6.8%
3949 Ann Arbor Dr. Class B 474,257 33.8%
Houston, TX 77063
Herbert M. Gardner Class A 571,438 (3)(6) 6.9%
26 Braodway, Suite 815 Class B 352,705 (3) 25.1%
New York, NY 10004
William J. Barrett Class A 820,646 (4)(6) 9.8%
26 Braodway, Suite 815 Class B 403,998 (4) 28.8%
New York, NY 10004
Omer G. Kropf Class A 389,273 (2) 4.9%
16500 County Road 38
Goshen, IN 46526
<PAGE>
Robert J. Campbell Class A 99,173 (5)(6) 1.2%
1304 Summit Avenue Class B 33,392 2.4%
Suite 2
Plano, TX 75074
Rice M. Tilley, Jr. Class A 18,943 (2) *
3200 Bank One Tower
500 Throckmorton
Fort Worth, TX 76102
Robert W. Wilson Class A 30,703 (2) *
16500 County Road 38
Goshen, IN 46526
H. Douglas Schrock Class A 61,966 (2) *
P.O. Box 65
New Paris, IN 46553
Rick L. Horn Class A 7,333 (2) *
16500 County Road 38
Goshen, IN 46526
All directors and
officers as a group Class A 2,573,476 (6) 27.8%
of (9) persons Class B 1,264,352 90.1%
* Less than 1%
</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 Stock 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 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 1992 Stock
Option Plan.
<PAGE>
<TABLE>
Incentive Nonstatutory
Stock Options Stock Options
<S> <C> <C>
Omer G. Kropf 27,500 -0-
Rice M. Tilley, Jr. -0- 11,000
Robert W. Wilson 5,500 -0-
H. Douglas Schrock -0- 11,000
Rick L. Horn 7,333 -0-
All directors and officers
as a group 40,333 22,000
</TABLE>
(3) Includes 6,246 shares of Class A Common Stock and 36,565 shares of
Class B Common Stock owned by Mr. Gardner's wife. Mr. Gardner has
disclaimed beneficial ownership of these shares.
(4) Includes 52,779 shares of Class A Common Stock and 6,365 shares of
Class B Common Stock owned by Mr. Barrett's wife. Mr. Barrett has
disclaimed beneficial ownership of these shares.
(5) Includes 272 shares of Class A Common Stock owned beneficially by Mr.
Campbell's wife, as custodian for their children. Mr. Campbell has
disclaimed beneficial ownership of these shares.
(6) 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.
Depositories such as The Depository Trust Company (Cede & Company) as of
February 28, 1997 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.
<PAGE>
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 nine 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, 1996. 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 1996.
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
Executive Positions With
Name, Age, and Business Experience Officer Since Company
Herbert M. Gardner, 57 1979 Chairman of the
Senior Vice President of Janney Board, President
Montgomery Scott Inc., investment
bankers, since 1978; Chairman of the
Board of the Company since 1979;
Shelter Components Corporation,
Director, a supplier to the
manufactured housing and recreational
vehicle industries; Nu Horizons
Electronics Corporation, Director, an
electronic component distributor;
Transmedia Network, Inc., Director,
a company that markets a charge card
offering savings to the company's card
members at participating restaurants
and also provides savings on the
purchase of certain other products and
services; Hirsch International
Corporation, Director, importer of
computerized embroidery machines,
supplies, and developer of embroidery
machine application software and
provider of other value-added services
to the embroidery industry; TGC
Industries, Inc., Director, a company
engaged in the geophysical services
industry; Chase Packaging Corporation,
Director, a specialty agriculture
packaging products company; The Western
Systems Corporation, Director, a company
seeking to redeploy its cash assets
through suitable investments and
business combinations.
Omer G. Kropf, 55 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; President of a
specialized truck body manufacturing
company from 1974 through 1983, the
predecessor of Supreme Corporation.
<PAGE>
William J. Barrett, 57 1979 Secretary and
Senior Vice President of Janney Assistant Treasurer
Montgomery Scott Inc., investment
bankers, since 1966; Secretary and
Assistant Treasurer of the Company and
a Director since 1979; Esmor Correctional
Services, Inc., Director, private
management and operation of secure and
non-secure corrections and detention
facilities for federal, state and local
corrections agencies; Frederick's of
Hollywood, Inc., Director, an apparel
marketing company; Shelter Components
Corporation, Director, a supplier to
the manufactured housing and recreational
vehicle industries; TGC Industries, Inc.,
Director, a company engaged in the
geophysical services industry; Chase
Packaging Corporation, Director, a
specialty agriculture packaging
products company; The Western Systems
Corporation, Director, a company
seeking to redeploy its cash assets
through suitable investments and
business combinations.
Robert W. Wilson, 52 1990 Executive Vice
Treasurer, Executive Vice President, and President, Treasurer
Chief Financial Officer of the Company and Chief Financial
since December 1992; Vice President of Officer
Finance of Supreme Corporation since 1988;
Senior Auditor Price Waterhouse LLP, 1969
through 1973; Controller Riblet Products
Inc., 1973 through 1979; and Vice President
Riblet Products Inc., 1979 through 1988.
Robert J. Campbell, 65 1979 None
Vice Chairman and Chief Executive Officer
of TGC Industries, Inc., a company engaged
in the geophysical services industry,
since July 1993 to July 1996; 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.
<PAGE>
Dr. Thomas Cantwell, 69 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; October 1992 to
present, Director of Discreet Logic, Inc.,
a software development company.
H. Douglas Schrock, 48 1990 None
President of Smoker Craft, Inc., a
pleasure boat manufacturer, since 1978;
President of Earthway Products, Inc. a
gardening supplies manufacturer; and
President of Goshen Iron Metal Company,
a scrap and metal trader; Executive Vice
President of Goshen Sash and Door Company,
a distributor of windows and doors;
Director of Society Bank of Indiana.
Rice M. Tilley, Jr., 60 1981 None
Member of the law firm of Law, Snakard &
Gambill, a Professional Corporation, since
1965.
Rick L. Horn, 44 1995 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.
<PAGE>
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 Dr. Cantwell and Messrs. Gardner and Barrett.
The Executive Committee, which met four times during the fiscal year ended
December 31, 1996, 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, 1996.
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, 1996, the Board of Directors held
three 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.
<PAGE>
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.
<TABLE>
Summary Compensation Table
Name and Annual Compensation Long Term All Other
Principal Position Year Salary $ Bonus $ Compensation Compensation $ (4)
<S> <C> <C> <C> <C> <C>
Herbert M.
Gardner (1) 1996 $ 108,000 $ 97,134 - -
Chairman of the 1995 108,000 80,025 - -
Board and President 1994 96,000 66,291 - -
William J.
Barrett (1) 1996 108,000 97,134 - -
Secretary and 1995 108,000 80,025 - -
Assistant Treasurer 1994 96,000 66,291 - -
Omer G. Kropf (2) 1996 210,000 432,193 - 6,070
Executive Vice 1995 210,000 421,000 - 4,576
President 1994 190,000 332,000 - 3,320
Robert W.
Wilson (3) 1996 104,000 100,000 - 3,702
Treasurer, 1995 100,000 90,000 - 2,236
Executive Vice 1994 94,016 80,000 - 1,064
President and
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.
(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 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.
<PAGE>
(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.
(4) Includes the Company's matching contribution to its Section 401 (k)
Retirement Plan and payment of premiums for disability and life insurance
coverage for the named executive.
Director Compensation
Outside directors, with the exception of Mr. Campbell who received $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
Messrs. Kropf and Wilson were granted 14,000 and 5,000 incentive stock
options, respectively during the year, as set forth in the following table.
There were no stock appreciation rights granted in the last fiscal year to
any of the executive officers of the Company.
<TABLE>
Potential
% of Total Realizable Value
Options at Assumed Annual
Granted Exercise Rates of Stock Price
to Employees Price Appreciation for
Options in Fiscal Per Expiration Option Term
Name (1) Granted Year Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Omer G.
Kropf 14,000 28% $7.125 May 1, 2001 $27,559 $60,898
Robert W.
Wilson 5,000 10% 7.125 May 1, 2001 9,842 21,750
</TABLE>
(1) The options granted to Messrs: Kropf and Wilson were granted under the
terms of the Company's 1992 Stock Option Plan. The options were granted
May 2, 1996 and are exercisable as follows: up to one-third in the second
year following the date of grant, up to two-thirds in the third year
following the date of grant and in the fourth year following the date of
grant all options may be exercised until expiration date.
<PAGE>
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, 1996. Mr. Wilson exercised 22,000 options during
the year. No options were exercised by the Company's other executive
officers during the year. There are no stock appreciation rights
outstanding.
<TABLE>
Value of
Number of Unexercised
Options at the Options at the
Shares Value Year-End(1) Year-End(1)
Acquired Realized Exercisable/ Exercisalbe/
Name On Exercise At Exercise Unexercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Omer G. Kropf - - 27,500 14,000 $22,041 -
Robert W. Wilson 22,000 $137,250 5,500 5,000 4,408 -
</TABLE>
(1) The value of outstanding options is based on the December 31, 1996
closing stock price which was $5.6875.
<PAGE>
The Board of Directors Report on Executive Compensation
The Company's compensation policy 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 financial 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. The Board of Directors considers the Company's compensation
policy in light of Section 162(m) of the Internal Revenue Code of 1986 and
related regulations regarding the deductibility of certain compensation. No
executive has received compensation which is non-deductible under such
Section; however, the Board of Directors may determine to pay compensation
which is non-deductible in certain circumstances. In accordance with the
above compensation 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 M. 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, 1999. In consideration of services to
be provided to the Company, the Consulting Agreements provide 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 an 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 minimum 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 the Company's financial
performance and a consideration of Management's recommendation as to an
appropriate allocation to reward such contributions. Supreme Corporation's
significantly increased pre-tax earnings during 1995 resulted in bonus
payments to Mr. Kropf of $432,193 in 1996.
<PAGE>
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 and 3 months beginning October 1, 1994 and ending December 31, 1997.
In consideration of his services 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 minimum 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. Supreme
Corporation's significantly increased pre-tax earnings during 1995 resulted
in a bonus payment to Mr. Wilson of $100,000 in 1996.
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
Rick L. Horn
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 330,000
(adjusted for the 10% stock dividend) 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, 1996,
194,430 options were outstanding under this plan, of which 138,930 were
exercisable.
<PAGE>
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 be 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 that 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.
<PAGE>
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.
<PAGE>
401 (k) Retirement Plan
The Company has a Section 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, 1996, 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 15% of his compensation. Through 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 $1,425 respectively, and for all executive officers as a
group was $2,850.
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.
<TABLE>
Comparison of 5-Year Comulative Total Return
Performance Table for Supreme Industries, Inc.
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
<S> <C> <C> <C> <C> <C> <C>
Supreme
Industries, Inc. $100 $485 $692 $738 $1,134 $770
Dow Jones-
Transportation
Equipment Sector $100 $127 $136 $114 $109 $141
American Stock
Exchange Market
Value Index $100 $101 $121 $110 $139 $148
</TABLE>
<PAGE>
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 interests 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, 1996, 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, 1996, the Company's subsidiary purchased from Shelter
materials and supplies having an aggregate purchase price of approximately
$834,727, and such purchases were without special terms or conditions. In
addition, as of December 31, 1996, 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. 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, 1996,
Supreme Corporation purchased $1,289,000 and $32,000 from Quality and
Ideal, respectively. All purchases were without special terms or conditions
and were as favorable as those that the Company could have obtained from
non affiliated third parties.
<PAGE>
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, 1997.
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 1998 must be received by the Company at its
principal executive offices in Goshen, Indiana, on or before December 1, 1997
in order to be included in the Company's proxy statement and form of proxy
relating to that meeting.
FINANCIAL STATEMENTS
The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1996, is enclosed herewith.
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
March 15, 1997 William J. Barrett
<PAGE>
CLASS A COMMON STOCK PROXY
SUPREME INDUSTRIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 1997
The undersigned hereby appoint(s) Robert W. Wilson, Herbert M. Gardner and
Rice M. Tilley, Jr., or any of them, each with full power of substitution,
as proxies, to vote all Class A Common Stock in Supreme Industries, Inc.
which the undersigned would be entitled to vote on all matters which may
come before the 1997 Annual Meeting of Shareholders of the Company and any
adjournments thereof.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
Please mark your
X votes as in this
example. 1 10029000006 2302 0033000000 1
001-000094
The Board of Directors recommends a vote FOR each of the following items:
1. Election of Directors:
___ For all nominees ___ Withhold authority Nominees: H. Douglas Schrock
listed at right to vote for the Rice M. Tilley, Jr.
except as marked nominees listed at Rick L. Horn
to the contrary right
below
INSTRUCTIONS: To withhold authority to vote for
any individual nominee, vote for
all nominees and write that nominee's
name on the line below
---------------------------------
2. RATIFICATION OF SELECTION ___ FOR ___ AGAINST ___ ABSTAIN
OF COOPERS & LYBRAND L.L.P.
AS INDEPENDENT AUDITORS.
RETURNED PROXY CARDS WHEN PROPERLY EXECUTED WILL BE VOTED:
(1) AS SPECIFIED ON THE MATTER(S) LISTED ABOVE; (2) IN ACCORDANCE WITH
THE DIRECTORS' RECOMMENDATIONS WHERE A CHOICE IS NOT SPECIFIED; AND
(3) IN ACCORDANCE WITH THE JUDGMENT OF THE PROXIES ON ANY MATTERS THAT
MAY PROPERLY COME BEFORE THE MEETING.
PLEASE DATE AND SIGN AS SHOWN HERE AND MAIL PROMPTLY IN THE
ENCLOSED ENVELOPE.
SIGNATRUE(S) _______________________ DATE _________________
Note: Executors, trustees, and others signing in a representative
capacity should indicate their names and capacity in which they sign.
