<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. Indentify 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>
<PAGE>
SUPREME INDUSTRIES, INC.
65140 U.S. 33 East
P.O. Box 237
Goshen, IN 46528
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 12, 1998
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 May 12, 1998 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 March 18, 1998 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 30, 1998 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.
1
</PAGE>
<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 May 12, 1998, 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 30, 1998.
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, 1997, 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
March 18, 1998, 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 8,850,177 shares of Class A Common Stock and 1,546,773 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 neverless 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. Futhermore, such person may nevertheless elect to attend the meeting
and vote in person, in which event, the proxy will be suspended.
2
</PAGE>
<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 by entitled to
elect the 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 March 18, 1998 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 March 18, 1998 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
benefical 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 March 18, 1998, there were 8,850,177
Class A shares and 1,546,773 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.
3
</PAGE>
<PAGE>
Name and Address Amount and Nature of Percent
of Beneficial Owner Title Class Beneficial Ownership of Class (1)
______________________________________________________________________________
Massachusetts Mutual Class A 738,058 8.3%
Life Ins. Co.
1295 State Street
Springfield, MA 01111
MassMutual Corporate Class A 519,747 5.9%
Investors
1295 State Street
Springfield, MA 01111
Wilen Management Class A 657,453 7.4%
Corporation
2360 West Joppa Road
Lutherville, MD 21093
Wellington Management Class A 790,885 8.9%
Company
75 State Street
Boston, MA 02109
Thomas Cantwell Class A 544,635 (6) 5.8%
3949 Ann Arbor Dr. Class B 522,868 33.8%
Houston, TX 77063
Herbert M. Gardner Class A 630,006 (3)(6) 6.8%
26 Broadway, Suite 815 Class B 388,856 (3) 25.1%
New York, NY 10004
William J. Barrett Class A 904,755 (4)(6) 9.7%
26 Broadway, Suite 815 Class B 455,405 (4) 28.8%
New York, NY 10004
Omer G. Kropf Class A 434,315 (2) 4.9%
16500 County Road 38
Goshen, IN 46528
4
</PAGE>
<PAGE>
Name and Address Amount and Nature of Percent
of Beneficial Owner Title Class Beneficial Ownership of Class (1)
- ------------------------------------------------------------------------------
Robert J. Campbell Class A 106,133 (5)(6) 1.2%
1304 Summit Avenue, Suite 2 Class B 36,815 2.4%
Plano, TX 75074
Rice M. Tilley, Jr. Class A 20,882 (2) *
3200 Bank One Tower
500 Throckmorton
Fort Worth, TX 76102
Robert W. Wilson Class A 35,684 (2) *
16500 County Road 38
Goshen, IN 46528
H. Douglas Schrock Class A 68,316 *
P.O. Box 65
New Paris, IN 46553
Rick L. Horn Class A 13,964 (2) *
16500 County Road 38
Goshen, IN 46528
All directors and officers Class A 2,746,563 (6) 26.7%
as a group of (9) persons Class B 1,393,944 90.1%
* Less than 1%
(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
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.
5
</PAGE>
<PAGE>
Incentive Nonstatutory
Stock Option Stock Option
____________________________________
Omer G. Kropf 35,463 -0-
Rice M. Tilley, Jr. -0- 12,127
Robert W. Wilson 7,900 -0-
Rick L. Horn 13,964 -0-
____________________________________
All directors and officers as a group 57,327 12,127
(3) Includes 6,685 shares of Class A Common Stock and 40,312 shares of Class
B Common Stock owned by Mr. Gardner's wife. Mr. Gardner has disclaimed
beneficial ownership of these shares.
(4) Includes 58,187 shares of Class A Common Stock and 7,017 shares of Class
B Common Stock owned by Mr. Barrett's wife. Mr. Barrett has disclaimed
beneficial ownership of these shares.
(5) Includes 296 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
March 18, 1998 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.
6
</PAGE>
<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, 1997. 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 1997.
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.
7
</PAGE>
<PAGE>
Served as
Executive Positions With
Name, Age, and Business Experience Officer Since Company
- ------------------------------------------------------------------------------
Herbert M. Gardner, 58 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 and
President since 1992; 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; American Country Holdings
Company, Inc., Director, a property
and casualty insurance holding company
with focus on transportation and
hospitality markets; Inmark Enterprises,
Inc., Director, a marketing and sales
promotion company.
Omer G. Kropf, 56 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.
William J. Barrett, 58 1979 Secretary and
Senior Vice President of Janney Assistant
Montgomery Scott Inc., investment bankers, Treasurer
since 1976; Secretary and Assistant
Treasurer of the Company and a Director
since 1979; TGC Industries, Inc., a
Director since 1986, a geophysical
services company; and Director
American Country Holdings Company, Inc.,
a property and casualty insurance holding
company with focus on transportation and
hospitality markets.
8
</PAGE>
<PAGE>
Served as
Executive Positions With
Name, Age, and Business Experience Officer Since Company
- ------------------------------------------------------------------------------
Robert W. Wilson, 53 1990 Executive Vice
Treasurer, Executive Vice President, President,
and Chief Financial Officer of the Treasurer and
Company since December 1992; Vice Chief Financial
President of Finance of Supreme Officer
Corporation since 1988.
Robert J. Campbell, 66 1979 None
Chief Executive Officer of TGC Industries,
Inc., since March 1996, 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.
Dr. Thomas Cantwell, 70 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. 1997 to Present, Director,
Paradigm Entertainment Inc., a company that
produces and sells entertainment software;
1997 to present, Director, Locus Speech, Inc.,
a company in the voice recognition and
computer telephoning fields.
H. Douglas Schrock, 49 1990 None
President of Smoker Craft, Inc., a pleasure
boat manufacturer, since 1978; President of
Earthway Products, Inc. a gardening
supplies manufacturer; Executive Vice
President of Goshen Sash and Door Company,
a distributor of windows and doors;
Director of Society Bank of Indiana.
9
</PAGE>
<PAGE>
Served as
Executive Positions With
Name, Age, and Business Experience Officer Since Company
- -------------------------------------------------------------------------------
Rice M. Tilley, Jr., 61 1981 None
Member of the law firm of Law, Snakard
& Gambill, a Professional Corporation,
since 1965.
Rick L. Horn, 45 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.
10
</PAGE>
<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, 1997, 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, 1997.
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, 1997, the Board of Directors held
three special meetings in addition to its regular meetings. 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.
11
</PAGE>
<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.
Summary Compensation Table
Annual Compensation
Name and _______________________ Long Term All Other
Principal Position Year Salary $ Bonus $ Compensation Compensation $ (4)
- ------------------------------------------------------------------------------
Herbert M. 1997 $ 108,000 $ 76,548 --- ---
Gardner (1) 1996 108,000 97,134 --- ---
Chairman of the 1995 108,000 80,025 --- ---
and President
William J. 1997 108,000 76,548 --- ---
Barrett (1) 1996 108,000 97,134 --- ---
Secretary and 1995 108,000 80,025 --- ---
Assistant Treasurer
Omer G. Kropf (2) 1997 210,000 470,000 --- 6,639
Executive Vice 1996 210,000 432,193 --- 4,576
President 1995 210,000 421,000 --- 3,320
Robert W. 1997 107,000 96,000 --- 3,781
Wilson (3) 1996 104,000 100,000 --- 2,236
Treasurer, 1995 100,000 90,000 --- 1,064
Executive Vice
President and Chief
Financial Officer
(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.
12
</PAGE>
<PAGE>
(3) On January 1, 1998 the Company entered into a three-year employment
contract with Mr. Wilson through December 31, 2000. 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 are paid $600 per regular board meeting attended and an
additional $6,000 annually. Members of the Audit Committee are paid $600 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.
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, 1997. No options were exercised by the Company's
executive officers during the year. There are no stock appreciation rights
outstanding.
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at the
Shares Value the Year-End Year-End (1)
Acquired Realized Exercisable/ Exercisable/
Name On Exercise At Exercise Unexercisable Unexercisable
- ------------------------------------------------------------------------------
Omer G. Kropf --- --- 35,463 10,290 $ 151,540 ---
Robert W. Wilson --- --- 7,900 3,675 32,352 ---
(1) The value of outstanding options is based on the December 31, 1997
closing stock price which was $9.00.
13
</PAGE>
<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, 2000. In consideration of services to
be provided to the Company, the Consulting Agreements provide for Messrs.
Gardner and Barrett to each 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 Directos 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 Surpeme 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.
14
</PAGE>
<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 beginning January 1, 1998 and ending December 31, 2000. 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.
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 cetain 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 363,825
(adjusted for all subsequent stock dividends) shares of Class A Common Stock,
subject to certain adjustments described below. Subject to 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 managements'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, 1997
187,663 options were outstanding under this plan, of which 150,182 were
exercisable.
15
</PAGE>
<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.
16
</PAGE>
<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 condsolidations
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.
17
</PAGE>
<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, 1997, 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. On
August 29, 1997, the Board of Directors approved an increase to twenty-five
cents on each dollar of the first 6% of compensation contributed by
participants effective December 1, 1997. 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.
Comparison of 5-Year Comulative Total Return
Performance Table for Supreme Industries, Inc.
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
Supreme $100 $143 $152 $234 $159 $277
Industries, Inc.
Dow Jones- $100 $108 $ 90 $ 86 $111 $167
Transportation
Equipment Sector
American Stock $100 $120 $109 $137 $146 $177
Exchange Market
Value Index
18
</PAGE>
<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, 1998, 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.
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 from Quality and Ideal in the ordinary course of
business. During the year ended December 31, 1997, Supreme Corporation
purchased delivery services of $2,147,000 and $5,400 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.
19
</PAGE>
<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, 1998.
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 1999 must be received by the Company at its
principal executive offices in Goshen, Indiana, on or before
December 1, 1998 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, 1997, is enclosed herewith.
A COPY OF THE COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10-K IS AVAILABLE,
WITHOUT CHARGE, UPON WRITTEN REQUEST TO THE TREASURER, SUPREME INDUSTRIES,
INC., P.O. BOX 237, 65140 U.S. 33 EAST, GOSHEN, INDIANA 46528
By Order of the Board of Directors
Goshen, Indiana
March 30, 1998 William J. Barrett
20
</PAGE>
<PAGE>
CLASS A COMMON STOCK PROXY
SUPREME INDUSTRIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
May 12, 1998
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 1998 Annual Meeting of Shareholders of the Company and any
adjournments thereof.
(TO BE SIGNED ON REVERSE SIDE)
</PAGE>
<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.
SIGNATURE(S) ________________________________ DATE __________________
Note: Executors, trustees, and others signing in a representative capacity
should indicate their names and capacity in which they sign.
</PAGE>
