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
/X / Definitive Proxy Statement the Commission only (as
/ / Definitive Additional Materials permitted by Rule 14a-6
/ / Soliciting Material Pursuant to (e) (2))
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):
/ / 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 trnasaction applies.
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filling 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 identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filling.
(1) Amount Previously Paid.
(2) Form, Schedule or Registration Statement No.
(3) Filing Party.
(4) Date Filed.
SUPREME INDUSTRIES, INC.
65140 U.S. 33 East
P.O. Box 237
Goshen, IN 46528
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 29, 1999
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, 1999 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 approve the Company's 1998 Stock Option Plan;
3. To ratify the selection of PricewaterhouseCoopers LLP as independent
auditors; and
4. 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 1, 1999 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 22, 1999 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
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, 1999, 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 22, 1999.
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, 1998, 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 1, 1999, 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 9,819,305 shares of Class A Common Stock and 1,682,328 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 PriceWaterhouseCoopers LLP as independent auditors.
In addition, shareholders will be asked to approve the Company's 1998 Stock
Option Plan (see "1998 Stock Option Plan"). 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.
2
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. The approval of
the 1998 Stock Option Plan and the 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 1, 1999 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 1, 1999 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 March 1, 1999, there were 9,819,305
Class A shares and 1,682,328 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
Name and Address Amount and Nature of Percent
of Beneficial Owner Title Class Beneficial Ownership of Class (1)
Massachusetts Mutual
Life Ins. Co. Class A 862,468 8.8%
1295 State Street
Springfield, MA 01111
MassMutual Corporate
Investors Class A 607,460 6.2%
1295 State Street
Springfield, MA 01111
Wilen Management
Corporation Class A 778,242 7.9%
2360 West Joppa Road
Lutherville, MD 21093
Wellington Management
Company Class A 693,559 7.1%
75 State Street
Boston, MA 02109
Thomas Cantwell Class A 600,458 (6) 5.8%
3949 Ann Arbor Dr. Class B 576,461 34.3%
Houston, TX 77063
Herbert M. Gardner Class A 694,577 (3)(6) 6.8%
26 Broadway, Suite 815 Class B 428,712 (3) 25.5%
New York, NY 10004
William J. Barrett Class A 997,482 (4)(6) 9.7%
26 Broadway, Suite 815 Class B 491,053 (4) 29.1%
New York, NY 10004
Omer G. Kropf Class A 474,975 (2) 4.8%
16500 County Road 38
Goshen, IN 46528
4
Name and Address Amount and Nature of Percent
of Beneficial Owner Title Class Beneficial Ownership of Class (1)
Robert J. Campbell Class A 111,006 (5)(6) 1.1%
1304 Summit Avenue, Class B 34,588 2.1%
Suite 2
Plano, TX 75074
Rice M. Tilley, Jr. Class A 20,863 (2) *
3200 Bank One Tower
500 Throckmorton
Fort Worth, TX 76102
Robert W. Wilson Class A 39,458 (2) *
16500 County Road 38
Goshen, IN 46528
H. Douglas Schrock Class A 61,614 *
P.O. Box 65
New Paris, IN 46553
Rick L. Horn Class A 17,420 (2) *
16500 County Road 38
Goshen, IN 46528
All directors and
officers as a group Class A 3,017,852 (6) 26.5%
of (9) persons Class B 1,530,814 91.0%
* 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
Incentive
Stock Option
------------
Omer G. Kropf 11,344
Robert W. Wilson 4,051
Rick L. Horn 17,420
------------
All directors and officers as a group 32,815
(3) Includes 7,590 shares of Class A Common Stock and 44,443 shares of Class
B Common Stock owned by Mr. Gardner's wife. Mr. Gardner has disclaimed
beneficial ownership of these shares.
(4) Includes 64,150 shares of Class A Common Stock and 7,735 shares of Class
B Common Stock owned by Mr. Barrett's wife. Mr. Barrett has disclaimed
beneficial ownership of these shares.
(5) Includes 324 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 1, 1999 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
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, 1998. 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 1998.
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
Served as
Executive Positions With
Name, Age, and Business Experience Officer Since Company
Herbert M. Gardner, 59 1979 Chairman of the
Senior Vice President of Janney Montgomery Board, President
Scott Inc., investment bankers, since 1978;
Chairman of the Board of the Company since
1979 and President since 1993; 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; Inmark Enterprises, Inc.,
Director, a marketing and sales promotion
company.
Omer G. Kropf, 57 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, 59 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
Served as
Executive Positions With
Name, Age, and Business Experience Officer Since Company
Robert W. Wilson, 54 1990 Executive Vice
Treasurer, Executive Vice President, and President,
Chief Financial Officer of the Company Treasurer and
since December 1992; Vice President of Chief Financial
Finance of Supreme Corporation since 1988. Officer
Robert J. Campbell, 67 1979 None
Retired Chief Executive Officer of TGC
Industries, Inc., from March 1996 to
December, 1998, 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, 71 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, 50 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.
9
Served as
Executive Positions With
Name, Age, and Business Experience Officer Since Company
Rice M. Tilley, Jr., 62 1981 None
Member of the law firm of Law,
Snakard & Gambill, a Professional
Corporation, since 1965.
Rick L. Horn, 46 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
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, 1998, 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, 1998.
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, 1998, the Board of Directors held
four regularly scheduled 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
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.
Gardner (1) 1998 $108,000 $109,000 $ --- $ ---
Chairman of the 1997 108,000 76,548 --- ---
Board and President 1996 108,000 97,134 --- ---
William J.
Barrett (1) 1998 108,000 109,000 --- ---
Secretary and 1997 108,000 76,548 --- ---
Assistant Treasurer 1996 108,000 97,134 --- ---
Omer G. Kropf (2) 1998 225,000 490,000 --- 7,786
Executive Vice 1997 210,000 470,000 --- 6,639
President 1996 210,000 432,193 --- 4,576
Robert W. Wilson (3) 1998 110,000 120,000 --- 4,878
Treasurer, Executive 1997 107,000 96,000 --- 3,781
Vice President and 1996 104,000 100,000 --- 2,236
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. The
terms of the agreement call for Mr. Gardner and Mr. Barrett to receive annual
consulting fees of $108,000 annually, 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, 1998, the Company's wholly-owned subsidary, Supreme
Corporation, entered into a four-year employment contract with Mr. Kropf
through April 30, 2002. The terms of this agreement provide for a minimum
base salary of $240,000 per year plus a bonus subject to approval by the
Board of Directors, based upon the Company's pre-tax operating performance.
12
(3) On January 1, 1998 the Company's wholly-owned subsidary, Supreme
Corporation, 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 $110,000 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.
Option/SAR Grants in Last Fiscal Year
During the year ended December 31, 1998, Messrs. Gardner, Barrett, Kropf and
Wilson were granted 26,250 incentive stock options (adjusted for the November
1998 stock dividend) 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.
Potential
Realizable
Value at Assumed
Annual Rates
% of Total of Stock Price
Options Appreciation
Granted to Exercise for Option Term
Options Employees in Price Expiration _________________
Name (1) Granted Fiscal Year Per Share Date 5% 10%
Herbert M.
Gardner 26,250 11.2% 8.27 Oct. 28, 2003 60,005 132,595
William J.
Barrett 26,250 11.2% 8.27 Oct. 28, 2003 60,005 132,595
Omer G.
Kropf 26,250 11.2% 8.27 Oct. 28, 2003 60,005 132,595
Robert W.
Wilson 26,250 11.2% 8.27 Oct. 28, 2003 60,005 132,595
(1) The options granted to Messrs. Gardner, Barrett, Kropf and Wilson were
granted under the terms of the Company's 1992 Stock Option Plan. The options
were granted October 29, 1998 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.
13
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, 1998. There are no stock appreciation rights
outstanding.
Shares Value Value of Unexercised
Acquired Realized Number of Unexercised In-the-Money Options
on at Options at the Year-End at the Year-End (1)
Name Exercise Exercise Exercisable/Unexercisable Exercisable/Unexercisable
Herbert
M. Gardner --- $ --- --- 26,250 $ --- $35,464
William
J. Barrett --- --- --- 26,250 --- 35,464
Omer G.
Kropf 31,833 337,135 11,344 31,922 42,690 56,814
Robert W.
Wilson 6,366 67,418 4,051 28,275 15,245 43,093
(1) The value of outstanding options is based on the December 31, 1998
closing stock price which was $9.625.
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 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.
14
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 four
years beginning on May 1, 1998, and ending on April 30, 2002. 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
$240,000 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.
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 $110,000 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
1998 Stock Option Plan
On October 29, 1999, the Company's Board of Directors approved and adopted,
subject to shareholder approval, the Company's 1998 Stock Option Plan, a
copy which is attached here to as Exhibit A (the "1998 Stock Option Plan").
Shareholders will be asked to approve the 1998 Stock Option Plan at the
Annual Meeting to be held April 29, 1999. The following paragraphs summarize
certain provisions of the 1998 Stock Option Plan and are qualified in their
entirety by reference thereto.
15
The 1998 Stock Option Plan provides for the granting of options
(collectively, the "1998 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 1998 Stock
Option Plan authorizes the granting of options to acquire up to 650,000
(682,500 as adjusted for the November 1998 stock dividend) shares of Class A
Common Stock, subject to certain adjustments described below, to be
outstanding at any time. Subject to such limitations, there is no limit on
the absolute number of awards that may be granted during the life of the 1998
Stock Option Plan. At the present time, there are approximately 40 employees
of the Company, including officers and directors of the Company, who, in
management's opinion, would be considered eligible to receive grants under
the 1998 Stock Option Plan, although fewer employees may actually receive
grants. At December 31, 1998, 50,925 options (pending shareholder approval)
were outstanding, none of which were exercisable.
Authority to administer the 1998 Stock Option Plan has been delegated to a
committee (the "Committee") of the Board of Directors. Except as expressly
provided by the 1998 Stock Option Plan, the Committee has the authority, in
its discretion, to award 1998 Options and to determine the terms and
conditions (which need not be identical) of such 1998 Options, including the
persons to whom, and the time or times at which, 1998 Options will be
awarded, the number of 1998 Options to be awarded to each such person, the
exercise price of any such 1998 Options, and the form, terms and provisions
of any agreement pursuant to which such 1998 Options will be awarded. The
1998 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 1998 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 1998 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 1998
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.
16
Payment for Class A Common Stock issued upon the exercise of a 1998 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 1998 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 1998 Option for a number
of shares equal to the number of shares delivered by such holder to pay the
exercise price of the previous 1998 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 1998 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.
In addition, the 1998 Stock Option Plan provides two methods for the cashless
exercise of options. Under the Sale Method, with the consent of the
Committee, payment in full of the exercise price of the option may be made
through the Company's receipt of a copy of instructions to a broker directing
such broker to sell the stock for which the option is being exercised, to
remit to the Company an amount equal to the aggregate exercise price of such
option, with balance being remitted to the holder. Under the Net Method,
with consent of the Committee, payment in full of the exercise price of the
option may be made based on written instructions received from the holder, by
Company's issuance to the holder of that number of shares of stock having a
fair market value equal to only the "profit portion" of his, her, or its
option (i.e. the excess of the then fair market value of the stock over the
holder's exercise price).
The duration of each 1998 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 1998 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 1998
Option, and the exercise price of each outstanding 1998 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 or 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 1998 Options then outstanding to
terminate, but such holder shall have the right, immediately prior to such
transaction, to exercise such 1998 Options without regard to the
determination as to the periods and installments of exercisability made
pursuant to such holder's option agreement if (and only if) such options
have not at that time expired or been terminated.
The 1998 Stock Option Plan will terminate on October 29, 2008, 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.
17
The 1998 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 1998 Stock Option
Plan, (b) changes the designation of the class of employees eligible to
receive 1998 Options, (c) decreases the price at which ISOs may be granted,
(d) removes the administration of the 1998 Stock Option Plan from the
Committee, or (e) without the consent of the affected holder, causes the
ISO's granted under the 1998 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.
The Company's Board of Directors recommends that your vote for approval of
the Company's 1998 Stock Option Plan.
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 401,117 (adjusted for all
subsequent stock dividends) 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, 1998, 250,603 options were
outstanding under this plan, of which 51,710 were exercisable.
Authority to administer the 1992 Stock Option Plan has been delegated to a
committee (the "Committee") of the Board of Directors. Except as expressly
provided by the 1992 Stock Option Plan, the Committee has the authority, in
its discretion, to award 1992 Options and to determine the terms and
conditions (which need not be identical) of such 1992 Options, including the
persons to whom, and the time or times at which, 1992 Options will be
awarded, the number of 1992 Options to be awarded to each such person, the
exercise price of any such 1992 Options, and the form, terms and provisions
of any agreement pursuant to which such 1992 Options will 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.
18
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.
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.
19
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
determination as to the periods and installments of exercisability made
pursuant to such holder's option agreement if (and only if) such options have
not at that time expired or been terminated.
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.
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, 1998, 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. On February 11, 1999 the Board of Directors
approved an increase to thirty cents on each dollar of the first 7% of
compensation contributed by participants effective March 1, 1999. 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 $2,500 respectively, and for all executive officers as a group was
$5,000.
20
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.
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
Supreme
Industries, Inc. $100 $107 $164 $111 $194 $229
Dow Jones -
Transportation
Equipment Sector $100 $ 84 $ 80 $104 $155 $127
American Stock
Exchange Market
Value Index $100 $ 91 $115 $122 $148 $144
Transactions With Management
As part of its original acquisition on January 19, 1984, of the specialized
vehicle 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.
21
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, 1999, 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
secretary-treasurer of Quality Transportation. In addition, Mr. Kropf is the
sole shareholder of Quality Transportation. The Company's Subsidiary,
Supreme Corporation, purchases delivery services from Quality in the ordinary
course of business. During the year ended December 31, 1998, Supreme
Corporation purchased delivery services of $2,497,894 from Quality
Transportation. 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.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP to serve as
auditors for the Company during the ensuing year. The Firm of
PricewaterhouseCoopers LLP has served as auditors for the Company since
October 1990. It is expected that a representative of PricewaterhouseCoopers
LLP 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 PricewaterhouseCoopers LLP as the Company's auditors for the
fiscal year ending December 31, 1999.
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.
22
SHAREHOLDER PROPOSALS
A shareholder proposal intended to be presented at the Company's Annual
Meeting of Shareholders in 2000 must be received by the Company at its
principal executive offices in Goshen, Indiana, on or before December 1, 1999
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, 1998, 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 22, 1999 William J. Barrett
23
SUPREME INDUSTRIES, INC.
65140 U.S. 33 East, Goshen, Indiana 46528
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Robert W. Wilson, Herbert M. Gardner and
Rice M. Tilley, Jr., as Proxies, each with the power to appoint his
substitute, and hereby authorizes them, to represent and vote, as designated
below, all shares of Common Stock of Supreme Industries, Inc. (the "Company")
held of record by the undersigned on March 1, 1999 at the Annual Meeting of
Shareholders to be held on April 29, 1999 or any adjourment thereof.
(TO BE SIGNED ON REVERSE SIDE)
Please mark your
A. X votes as in this
example using
dark ink only.
WITHHOLD
FOR AUTHORITY NOMINEES: H. Douglas Schrock
(1) ELECTION OF Rice M. Tilley, Jr.
DIRECTORS --- --- Rick L. Horn
FOR, except vote withhold from the following nominees:
__________________________________
FOR AGAINST ABSTAIN
(2) RATIFICATION OF SELECTION
OF PRICEWATERHOUSECOOPERS L.L.P.
AS INDEPENDENT AUDITORS. --- --- ---
(3) TO APPROVE THE COMPANY'S 1998
STOCK OPTION PLAN. --- --- ---
______________________ Date_____, 1999 __________________ Date_____, 1999
SIGNATURE SIGNATURE IF HELD JOINTLY
Please sign exactly as name appears on the certificate or certificates
representing shares to be voted by this proxy as shown on the label above.
When signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If a corporation, please sign full
corporation name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person(s).
