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
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-1(c) or Rule 14a-12
Cruise America, Inc.
-----------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)((1) or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
-----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
(1) Amount Previously Paid:
---------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------
(3) Filing Party:
---------------------------------------------
(4) Date Filed:
---------------------------------------------
<PAGE>
[CRUISE AMERICA LOGO]
CRUISE AMERICA, INC.
11 WEST HAMPTON AVENUE
MESA, ARIZONA 85210
OFFICE OF THE CHAIRMAN
August 16, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Cruise America, Inc., on October 16, 1996, at 9:00 a.m., at the Company's
headquarters at 11 West Hampton Avenue, Mesa, Arizona. Only shareholders of
record at the close of business on August 15, 1996 will be entitled to vote at
the meeting or any adjournments thereof.
The meeting will be held for the following purposes: (i) to vote on the
election of the Board of Directors; and (ii) to ratify the appointment of our
independent auditors.
The Notice of the Annual Meeting and Proxy Statement, which you are
urged to give your prompt attention, follows this page. As an owner of Cruise
America, Inc. stock, your vote is important. The recommendations of your Board
of Directors are provided for your assistance and guidance. The Directors have
devoted considerable thought to the matters to be brought before the meeting,
and we feel that such recommendations are in the best interest of Cruise
America, Inc. and its shareholders.
Your Board of Directors joins me in urging you to sign and mail the enclosed
proxy card in the postpaid envelope provided, regardless of whether you plan to
attend the meeting. Your prompt response will also help us avoid the expense of
writing to you again.
If you find that you will be attending the meeting after mailing your signed
proxy, you may, of course, revoke your proxy at the meeting and cast your vote
in person.
Thank you for your cooperation.
Sincerely yours,
/S/ Robert A. Smalley
---------------------
ROBERT A. SMALLEY
<PAGE>
[CRUISE AMERICA LOGO]
CRUISE AMERICA, INC.
11 WEST HAMPTON AVENUE
MESA, ARIZONA 85210
(602) 464-7300
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 16, 1996
To the Shareholders of
Cruise America, Inc.
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Cruise America, Inc., a Florida corporation (the "Corporation"),
will be held on October 16, 1996, at 9:00 a.m., at the Corporation's
headquarters at 11 West Hampton Avenue, Mesa, Arizona, for the following
purposes:
(1) To elect six (6) persons to the Corporation's Board of Directors, to
hold office until the next annual meeting of shareholders and until
their respective successors are duly elected and qualified.
(2) To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors of the Corporation for the 1997 fiscal year.
Only shareholders of record at the close of business on August 15, 1996 will
be entitled to vote in person or by proxy at the Annual Meeting or any
adjournments thereof.
CRUISE AMERICA, INC.
By Order of the Board of Directors
/S/ Eric R. Bensen
--------------------------
ERIC R. BENSEN, Secretary
August 16, 1996
WE URGE YOU TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE, REGARDLESS OF WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING IN
PERSON. IF YOU DO ATTEND THE ANNUAL MEETING, YOU MAY WITHDRAW YOUR PROXY AND
VOTE IN PERSON IF YOU SO DESIRE.
<PAGE>
CRUISE AMERICA, INC.
11 WEST HAMPTON AVENUE
MESA, ARIZONA 85210
(602) 464-7300
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 16, 1996
SOLICITATION--REVOCATION OF PROXY
This Proxy Statement is furnished in connection with the solication by the
Board of Directors of CRUISE AMERICA, INC., a Florida corporation (the
"Corporation"), of proxies to be voted at the Annual Meeting of Shareholders
(the "Annual Meeting") to be held October 16, 1996 and at any adjournments
thereof. Shares represented by proxies that are properly executed and returned
to the Board of Directors shall be voted in favor of the election of the
Directors nominated herein and in favor of each proposal described herein,
unless a contrary specification is made on such proxy. If a shareholder giving a
proxy specifies a choice with respect to any matter to be acted upon, the proxy
will be voted in accordance with said specifications. Any shareholder giving a
proxy may revoke it by notice to the proxy holder or the Corporation at any time
prior to the voting thereof. The Corporation's Annual Report to Shareholders for
the fiscal year ended April 30, 1996 accompanies this Proxy Statement, but does
not form a part hereof. This Proxy Statement and the accompanying proxy are
being distributed to shareholders beginning on or about August 16, 1996.
VOTING SECURITIES
Only holders of Common Stock of record at the close of business on August
15, 1996, the record date fixed by the Board of Directors for determining the
shareholders entitled to notice of, and to vote at, the Annual Meeting, will be
entitled to vote at the Annual Meeting or at any adjournments thereof. As of
August 15, 1996 there were 5,741,068 shares of Common Stock outstanding. Each
share of Common Stock entitles the holder to one vote on all matters brought
before the Annual Meeting, and the shares of Common Stock have no cumulative
voting rights. The quorum necessary to conduct business at the Annual Meeting
consists of a majority of the outstanding shares of Common Stock. To be elected,
nominees for Director must receive a plurality of the votes cast by holders of
shares of Common Stock present or represented at the Annual Meeting. The
ratification of the appointment of KPMG Peat Marwick LLP as independent auditors
will also require the affirmative vote of a plurality of votes cast by the
shares of Common Stock present or represented at the Annual Meeting. Abstentions
are considered as shares present and entitled to vote for purposes of
determining the presence of a quorum and for purposes of determining the outcome
of any matter submitted to the shareholders for a vote, but are not counted as
votes "for" or "against" any matter. The Corporation will treat shares referred
to as "broker or nominee non-votes" (shares held by brokers or nominees as to
which instructions have not been received from the beneficial owners or persons
entitled to vote and the broker or nominee does not have discretionary voting
power on a particular matter) as shares that are present and entitled to vote
for purposes of determining the presence of a quorum. For purposes of
determining the outcome of any matter as to which the proxies reflect broker or
nominee non-votes, shares represented by such proxies
1
<PAGE>
will be treated as not present and not entitled to vote on that subject matter
and therefore would not be considered by the Corporation when counting votes
cast on the matter (even though those shares are considered entitled to vote for
quorum purposes and may be entitled to vote on other matters). If less than a
majority of the outstanding shares of Common Stock are represented at the Annual
Meeting, a majority of the shares so represented may adjourn the Annual Meeting
without further notice.
The following table sets forth, as of June 30, 1996, the beneficial
ownership of the Corporation's Common Stock by (i) each person known to the
Corporation to be the beneficial owner of more than 5% of the outstanding shares
of Common Stock, (ii) each of the named executive officers (defined below) and
(iii) all Directors and executive officers of the Corporation as a group. Except
as indicated below, each person has sole dispositive and voting power with
respect to the shares of Common Stock indicated.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS OF COMMON STOCK OF CLASS
- ------------------------------------------------------------ ---------------- --------
<S> <C> <C>
Robert A. Smalley(1)(2)(4)(5)(8) ............................ 952,584 15.8%
11 West Hampton Avenue
Mesa, Arizona 85210
Randall S. Smalley(1)(2)(4)(5)(8) ........................... 339,184 5.6%
11 West Hampton Avenue
Mesa, Arizona 85210
Robert A. Smalley, Jr.(1)(2)(3)(4)(5)(8) .................... 332,156 5.5%
11 West Hampton Avenue
Mesa, Arizona 85210
Sally Smalley DiLucente(1)(2)(4) ............................ 309,285 5.1%
P.O. Box 650869
Vero Beach, Florida 32965-0869
Eric R. Bensen(5) ........................................... 61,130 1.0%
11 West Hampton Avenue
Mesa, Arizona 85210
Interstate Properties(6) .................................... 765,600 12.7%
Glenpoint Centre West
500 Frank W. Burr Boulevard
Teaneck, New Jersey 07666
Gruber & McBaine Capital Management, Inc.(7) ................ 498,700 8.3%
50 Osgood Place
San Francisco, California 94133
All Executive Officers and Directors as a group (six persons,
including four persons named above)(1)(2)(3)(5) ............. 1,736,926 29.2%
</TABLE>
- ----------
(1) Includes 36,882, 8,577, 3,500 and 3,971 shares held by the spouses of Robert
A. Smalley, Randall S. Smalley, Robert A. Smalley, Jr. and Sally Smalley
DiLucente, respectively.
(2) Does not include 42,786 shares held as co-trustee for the grandchildren of
Robert A. Smalley.
(3) Includes 10,000 shares held in trust for the children of Randall S. Smalley.
2
<PAGE>
(4) Robert A. Smalley is the father of Robert A. Smalley, Jr., Randall S.
Smalley and Sally Smalley DiLucente. The beneficial ownership of shares of
Common Stock of each of these persons and the trusts they control does not
include the shares of Common Stock beneficially owned by the others.
(5) Includes immediately exercisable options to purchase 60,000 shares of common
stock for each of Robert A. Smalley, Robert A. Smalley, Jr., Randall S.
Smalley and Eric R. Bensen and 290,000 for all executive officers and
directors as a group.
(6) Information taken from the Form 4 dated February 23, 1994 of Interstate
Properties, a New Jersey partnership and Russell B. Wight, Jr. and the Form
4 of Steven Roth dated February 24, 1994. The Form 4 list shared voting and
dispositive power of 301,500 shares and sole voting and dispositive power of
225,100 shares held by Mr. Wight. In addition, Steven Roth, a general
partner of Interstate, owns 39,000, which are included in the table above.
(7) Information taken from the Schedule 13D dated June 6, 1996 of Gruber &
McBaine Capital Management, Inc. a California corporation, Jon D. Gruber, J.
Patterson McBaine, Laqunitas Partners, L.P., a California limited
partnership, GMJ Investments, L.P., a California limited partnership, Gruber
McBaine Capital Management International and Thomas O. Lloyd-Butler
(collectively, the "Reporting Persons"). The Schedule 13D lists sole voting
and dispositive power of 107,000 shares and shared voting and dispositive
power of 391,700 shares.
(8) Includes 2,600, 13,900 and 20,400 shares held in trust for the
children/grandchildren of Robert A. Smalley, Randall S. Smalley and Robert
A. Smalley, Jr., respectively.
3
<PAGE>
ELECTION OF DIRECTORS
Six Directors are to be elected to hold office until the next Annual Meeting
or until their respective successors are duly elected and qualified. Unless a
proxy specifies that it is not to be voted for a Director, the shares covered by
the proxy will be voted for the nominees listed below. In the event any nominee
shall decline or be unable to serve, it is intended that the proxies will be
voted for a nominee designated by the Board of Directors. The Board of Directors
knows of no reason to anticipate that this will occur. The following table sets
forth as of June 30, 1996 certain information concerning the nominees for
Director, all of whom are presently serving as Directors:
<TABLE>
<CAPTION>
SHARES OF
SERVED AS COMMON STOCK
DIRECTOR BENEFICIALLY PRINCIPAL OCCUPATION
NAME AND AGE SINCE OWNED (%) FOR THE PAST 5 YEARS
- ----------------------------- ----------- -------------- ----------------------------------------
<S> <C> <C> <C>
Robert A. Smalley, 72(1) ........ 1972 952,584(15.8) Chairman of the Board of the
Corporation. President and Chief
Executive Officer from 1972 to March
1992 Formerly President and Director,
Hertz Corporation
Randall S. Smalley, 46(1) ....... 1972 339,184(5.6) President and Chief Executive Officer of
the Corporation since March 1992. Vice
President--Rental Division and
Secretary from 1972 to March 1992
Robert A. Smalley, Jr., 47(1) ... 1972 332,156(5.5) Executive Vice President, Chief
Operating Officer and Assistant
Secretary of the Corporation since
March 1992. Vice President--Sales
Division from 1972 to March 1992
Eric R. Bensen, 41(1) ........... 1989 61,130(1.0) Chief Financial Officer and Secretary of
the Corporation since March 1992. Vice
President--Finance and Assistant
Secretary from 1984 to March 1992
Formerly with the accounting firm of
KPMG Peat Marwick
Fred A. Mudgett, 75(2) .......... 1983 25,826* Consultant to the car rental industry.
Previously, President of Fred A.
Mudgett and Associates, Inc.
(consulting firm), and Group Vice
President, Hertz Corporation
Dr. Edward R. Annis, 83(2) ...... 1983 26,046* Physician, Spokesman for the medical
profession and served as president of
the American Medical Association,
World Medical Association, and
International College of Surgeons
</TABLE>
- ----------
* Less than one percent
(1) See Footnotes 1, 2, 3, 4, 5 and 8 to the table set forth under the caption
"Voting Securities" above.
(2) Includes immediately exercisable options to purchase 25,000 shares of common
stock held by each of Fred A. Mudgett and Dr. Edward R. Annis.
4
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has established standing Audit and Finance,
Compensation, Executive and Nominating Committees. The Directors who served upon
and the functions performed by the various committees during fiscal 1996 were as
follows:
Messrs. Randall S. Smalley, Fred A. Mudgett and Dr. Edward R. Annis served
as members of the Audit and Finance Committee. The Audit and Finance Committee
(a) meets with the independent public accountants to review the plan and results
of the audit including review of the management letter; (b) reviews and approves
nonaudit services of the independent public accountants; (c) recommends to the
Board of Directors the engagement of independent auditors for the next fiscal
year; (d) meets with financial executives of the Corporation to review
accounting and financial policies; (e) reviews the application of new accounting
rules; and (f) reviews various other matters, such as the adequacy of internal
controls.
Messrs. Robert A. Smalley, Robert A. Smalley, Jr., Fred A. Mudgett and Dr.
Edward R. Annis served as members of the Compensation Committee. The
Compensation Committee has been designated to administer the Corporation's 1987
Stock Option Plan, and also reviews, examines and makes recommendations to the
Board of Directors regarding (a) compensation of senior officers of the
Corporation and certain of its subsidiaries; (b) salary ranges, incentive
programs, guidelines for merit and promotional increases for the Corporation and
its subsidiaries; (c) insurance and other fringe benefits; and (d) management
proposals regarding any of the foregoing areas.
Messrs. Robert A. Smalley, Robert A. Smalley, Jr., Randall S. Smalley and
Eric R. Bensen served as members of the Executive Committee. The Executive
Committee has been established to act when the full Board of Directors is
unavailable.
Messrs. Robert A. Smalley, Robert A. Smalley, Jr., and Randall S. Smalley
served as members of the Nominating Committee. The Nominating Committee (a)
recommends candidates to fill any vacancies or increase in the Board of
Directors or Executive Committee; (b) makes recommendations with respect to the
composition of the management slate of Directors to be proposed to the
shareholders at the Annual Meeting; (c) annually recommends to the Board of
Directors candidates to serve on the Executive Committee and candidates to be
designated Chairman and Vice Chairman of the Executive Committee; and (d)
reviews shareholder suggestions of nominees and makes recommendations to the
Board of Directors regarding these suggestions.
The Board of Directors met four times during fiscal 1996. During fiscal
1996, the Audit and Finance, Compensation and Nominating Committees held the
following number of formal meetings: Audit and Finance, four; Compensation,
four; and Nominating, one. Each Director attended 75% or more of the fiscal 1996
Board and Committee meetings held during the period that they served.
The Corporation's Directors who are not officers of the Corporation receive
a payment of $1,000 per meeting plus reasonable expenses for attendance at
Directors' meetings.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation for the past three fiscal years
of the Chief Executive Officer and the Corporation's other executive officers
whose total annual salary and bonus exceeded $100,000 (the "named executive
officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- --------------
FISCAL OTHER ANNUAL OPTION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARDS(#)
- -------------------------------------- -------- ---------- ------- ---------------- --------------
<S> <C> <C> <C> <C>
Robert A. Smalley 1996 $108,810 -- --
Chairman of the Board 1995 105,726 -- --
1994 102,258 -- --
Randall S. Smalley 1996 233,847 -- --
President and Chief Executive Officer 1995 227,220 -- --
1994 219,765 -- --
Robert A. Smalley, Jr. 1996 233,847 -- --
Executive Vice President and 1995 227,220 -- --
Chief Operating Officer 1994 219,765 -- --
Eric R. Bensen 1996 165,089 -- --
Chief Financial Officer 1995 160,497 -- --
1994 155,231 -- --
</TABLE>
- ----------
(1) The Corporation has concluded that the amount of personal benefits furnished
to the named executive officers do not meet the disclosure thresholds
established under SEC regulations. Accordingly, none of such personal
benefits is included in this table.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The objectives of the Corporation's compensation program are to enhance the
profitability of the Corporation, and thus shareholder value, by aligning
compensation with business goals and performance and attracting, retaining and
rewarding executive officers who contribute to the long-term success of the
Corporation. In furtherance of these goals, the Corporation's compensation
program for executive officers includes base salary, an annual bonus and stock
option awards.
BASE COMPENSATION: The salaries paid to the named executive officers during
the fiscal year 1996 were determined pursuant to their respective employment
agreements, which were entered into in 1989. In October 1994, the Compensation
Committee and the full Board approved amendments to the employment agreements of
the named executive offices. See "Employment Agreements." The Corporation's
approach to base compensation is to offer competitive salaries in comparison to
market practices for positions involving similar responsibility and experience.
Increases in base compensation are based on the competence and performance of
the Company's executives and takes into account the performance of the
Corporation.
BONUS COMPENSATION: The Corporation has a policy of paying discretionary
bonuses to executive officers based on performance of the individual and
performance of the Corporation. A balance is made
6
<PAGE>
between overall corporate performance and performance of the specific areas of
the Corporation under an executive's direct control. This balance supports the
accomplishment of overall objectives and rewards individual contributions.
During the fiscal year ended April 30, 1996, no bonuses were paid.
STOCK OPTION PROGRAM: The objective of stock option awards is to motivate
grantees to maximize long-term growth and profitability of the Corporation.
Grantees can recognize value from options granted only if the Corporation's
stock price increases after the date on which such options are granted, since
the exercise price of options granted must at least equal the fair market value
of the Corporation's stock on the date of grant. The award of options thus
aligns the long-range interests of the grantees with those of shareholders.
Grants of options to the Corporation's executive officers and other key
employees are made pursuant to the 1987 Stock Option Plan. Grants of options are
generally considered annually. The number of options granted to a participant is
generally based on such person's level of responsibility and contributions to
the Corporation's performance. The Compensation Committee approves the size and
conditions of grants to the executive officers of the Corporation. During the
fiscal year ended April 30, 1996, no options were granted.
Compensation Committee
Robert A. Smalley
Robert A. Smalley Jr.
Fred A. Mudgett
Dr. Edward R. Annis
EMPLOYMENT AGREEMENTS
In October 1994, the Company amended the employment agreements of each of
Robert A. Smalley, Robert A. Smalley, Jr., Randall S. Smalley and Eric R.
Bensen. The term of each of the employment agreements currently expires on April
30, 1999 and will automatically be extended for additional one-year periods
unless the Corporation or the executive gives written notice to the other at
least 90 days prior to the date two years prior to the then scheduled expiration
date. Pursuant to such employment agreements, Messrs. Robert A. Smalley, Robert
A. Smalley, Jr., Randall S. Smalley and Eric R. Bensen will receive during
fiscal 1997 annual salaries of $108,393, $232,950, $232,950 and $164,546,
respectively, plus such bonuses or increases as the Board of Directors may
determine. Each employment agreement generally provides that (i) if the
executive's employment is terminated by the Corporation for any reason other
than death, Disability (as defined) or Cause (as defined), or by the executive
for Good Reason (generally defined as the diminution of the executive's duties
or other breach by the Corporation of the agreement), the executive will
receive, in addition to any base salary, bonus and other compensation accrued
through the date of termination, a lump sum equal to the product of the
executive's then-existing base salary and most recent annual bonus times a
fraction, the numerator of which is the number of days remaining until the then
scheduled expiration date and the denominator of which is 365, and (ii) if the
executive's employment is terminated as a result of his Disability, the
executive will receive in monthly installments for a period of one year 50% of
his base salary in effect on the date of termination. Each employment agreement
also prohibits the executive from directly or indirectly competing with the
Corporation during the term of the agreement and for a period of one year after
termination of his employment, other than a termination by the executive for
Good Reason or a termination by the Corporation without Cause.
7
<PAGE>
The employment agreements also provide for the executive's continued
employment for a period of three years following a Change in Control (as
defined) of the Corporation, and that, following a Change in Control, if the
executive's employment is terminated by the Corporation for any reason other
than death, Disability or Cause, or by the executive for Good Reason, the
executive will receive, in addition to the base salary, bonus and other
compensation accrued through the date of termination, a lump sum cash payment
equal to three times the executive's then-existing base salary and most recent
annual bonus. All of the Corporation's payments to the executives will be
reduced to the extent necessary to avoid the payments being nondeductible
pursuant to Section 280G of the Internal Revenue Code.
REDEMPTION AGREEMENT
During 1984, the Corporation entered into a redemption agreement with Robert
A. Smalley, Chairman, which provides that upon his death and at the request of
his personal representative, the Corporation will purchase up to $1,000,000 of
Common Stock of the Corporation from his estate at the average bid price for the
60-day period prior to his death. The Corporation has funded its obligation by
purchasing a term insurance policy on the life of Robert A. Smalley in the
amount of $1,000,000. The policy premium has been paid for by the Corporation
and the related expenses incurred during the year ended April 30, 1996 were
approximately $40,000.
AGGREGATED FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning unexercised
stock options held by the named executive officers as of April 30, 1996. No
stock options were exercised by any of the named executive officers during
fiscal 1996.
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NAME AT APRIL 30, AT APRIL 30, 11996($)(2)
- --------------------- ------------------------------ ------------------------
Randall S. Smalley . 60,000 $228,750
Robert A. Smalley ... 60,000 228,750
Robert A. Smalley, Jr 60,000 228,750
Eric R. Bensen ...... 60,000 228,750
- ----------
(1) All of the stock options held by the named executive officers at fiscal
year-end were exercisable.
(2) In-the-money stock options are those for which the fair market value of the
underlying stock exceeds the exercise price of the stock option.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996, the Compensation Committee was comprised of Robert A.
Smalley, Robert A. Smalley, Jr., Fred A. Mudgett and Dr. Edward R. Annis.
Messrs. Robert A. Smalley and Robert A. Smalley, Jr. were also executive
officers of the Corporation during fiscal 1996. Messrs. Robert A. Smalley and
Robert A. Smalley, Jr. participated in Compensation Committee deliberations
concerning executive officer compensation, other than deliberations directly
related to their own compensation.
8
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the Corporation's cumulative total shareholder
return on Common Stock with (i) the cumulative total return of the Russell 2000
Index and (ii) the cumulative total return of five companies involved in
Recreational vehicle manufacturing or sales (the "Peer Group") over the period
from May 1, 1991 to April 30, 1996. The companies in the Peer Group are Coachmen
Industries, Inc., Holiday RV Superstores, Inc., Rexhall Industries, Inc., Thor
Industries, Inc. and Winnebago Industries, Inc., The graph assumes an initial
investment of $100 and reinvestment of dividends.
<TABLE>
<CAPTION>
Cumulative Total Return
-------------------------------------------------------
4/91 4/92 4/93 4/94 4/95 4/96
<S> <C> <C> <C> <C> <C> <C> <C>
Cruise America Inc. RVR 100 88 80 56 67 107
PEER GROUP PPEER1 100 135 189 269 234 254
RUSSELL 2000 IR20 100 117 136 156 167 222
</TABLE>
9
<PAGE>
APPOINTMENT OF AUDITORS
The Board of Directors, upon recommendation of the Audit and Finance
Committee, has selected KPMG Peat Marwick LLP, independent certified public
accountants, to serve as the Corporation's independent auditors for the fiscal
year ending April 30, 1997. The Board recommends ratification of this
appointment by the shareholders. This firm has served as the Corporation's
auditors for the last twelve years. The Corporation has been advised that a
representative of the firm will be present at the Annual Meeting to make a
statement if they so desire to do so and to be available to respond to
appropriate questions from shareholders.
The Board of Directors recommends a vote FOR the ratification of the
appointment of KPMG Peat Marwick LLP, as the Corporation's independent auditors
for fiscal 1997.
COST OF SOLICITATION
The cost of soliciting proxies will be borne by the Corporation. In addition
to solicitation by mail, proxies may be solicited by telephone, telegraph or
personal interview. Banks, brokerage houses and other institutions, nominees and
fiduciaries will be requested to forward soliciting material to beneficial
owners and to obtain authorization for the execution of proxies. The Corporation
will reimburse such banks, brokerage houses and other institutions, nominees and
fiduciaries for their expenses in forwarding such material, upon request.
Directors, executive officers and regular employees of the Corporation may also
solicit proxies without additional remuneration.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who own more than 10
percent of the Common Stock to file with the Securities and Exchange Commission
the ("SEC") initial reports of ownership and reports of changes in ownership of
Common Stock. Officers, directors and greater than 10 percent shareholders are
required by SEC regulation to furnish the Corporation with copies of all Section
16(c) forms they file.
To the Corporation's knowledge, based solely on review of the copies of such
reports furnished to the Corporation and representations that no other reports
were required, during the fiscal year ended April 30, 1996, all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10
percent shareholders were complied with.
10
<PAGE>
OTHER MATTERS
Management does not know of any matters to be presented at the Annual
Meeting other than those set forth herein. If any other matters properly come
before the Annual Meeting, it is intended that the proxy holders will vote
thereon at their discretion and in accordance with their best judgment.
Proposals of shareholders intended to be presented at the 1997 Annual Meeting
must be received at the principal executive offices of the Corporation, 11 West
Hampton Avenue, Mesa, Arizona 85210, Attention: Corporate Secretary no later
than April 20, 1997. The Corporation's Amended and Restated Bylaws provide that:
(i) no person (other than a person nominated by or on behalf of the Board of
Directors) shall be eligible for election as a director at any shareholders
meeting unless a written request that such person's name be placed in
nomination, together with certain other information including the written
consent of the nominee to serve as a director, is received by the Secretary of
the Corporation not later than 120 days prior to the date one year from the date
of the immediately preceding annual meeting; and (ii) no shareholder proposal
shall be eligible for consideration at any annual meeting unless a written
request of the shareholder's intent to bring such business before the annual
meeting is received by the Secretary of the Corporation not later than 120 days
prior to the date one year from the date of the immediately preceding annual
meeting.
Sincerely yours,
/S/Robert A. Smalley
--------------------
ROBERT A. SMALLEY,
Chairman
11
<PAGE>
CRUISE AMERICA, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
This Proxy is solicited on behalf of the Board of Directors of
Cruise America, Inc.
The undersigned hereby appoints Eric R. Bensen and Robert A. Smalley,
Jr., and each of them, proxies for the undersigned, with full power of
substitution to vote all shares of Cruise America, Inc. Common Stock which the
undersigned may be entitled to vote at the Annual Meeting of Shareholders of
Cruise America, Inc., in Mesa, Arizona on Wednesday, October 16, 1996 at 9:00
A.M., or at any adjournment thereof, upon such matters set forth below and
described in the accompanying Proxy Statement and upon such other business as
may properly come before the meeting or any adjournment thereof.
Please mark this Proxy as indicated on reverse to vote on any item. If
you wish to vote in accordance with the Board of Directors recommendations,
please sign on the reverse side; no boxes need to be checked.
(Continued and to be signed on the other side)
Where no voting Instructions are given, the shares represented by this Proxy
will be VOTED FOR Items No. 1 and 2.
1. ELECTION OF DIRECTORS
Nominees: Robert A. Smalley, Robert A. Smalley, Jr., Randall S. Smalley,
Fred A. Mudgett, Dr. Edward Annis and Eric R. Bensen.
[ ] VOTE FOR all nominees listed to right except vote withheld from those
whose names are crossed out
[ ] VOTE WITHHELD from all nominees listed right
2. RATIFICATION OF REAPPOINTMENT OF AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Receipt is hereby acknowledged of the Notice of Annual Meeting and Proxy
Statement.
Dated:__________________________________________,1996.
______________________________________________________
______________________________________________________
______________________________________________________
(Signature of Shareholders(s))
IMPORTANT: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, both holders should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such. If the signer is a corporation, execute in full corporate name by
authorized officer.
PLEASE COMPLETE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
