<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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-11(c) or Rule
14a-12
[ ] Confidential, For Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
SPARTAN MOTORS, INC.
- ---------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- ---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- ---------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
<PAGE>
- ---------------------------------------------------------------------------
(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 filing.
(1) Amount previously paid:
- ---------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- ---------------------------------------------------------------------------
(3) Filing party:
- ---------------------------------------------------------------------------
(4) Date filed:
- ---------------------------------------------------------------------------
<PAGE>
[SPARTAN MOTORS INC. LOGO]
1000 Reynolds Road
Post Office Box 440
Charlotte, Michigan 48813
April 22, 1998
To our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders
of Spartan Motors, Inc. on May 19, 1998, at 5:30 p.m., local time. The
annual meeting will be held in the Plant I building at Spartan Motors, Inc.
Corporate Headquarters located at 1000 Reynolds Road, Charlotte, Michigan.
On the following pages you will find the Notice of Annual Meeting of
Shareholders and the Proxy Statement. The Proxy Statement and enclosed
form of proxy are being furnished to shareholders on or about April 22,
1998. At the annual meeting, in addition to voting on the election of
directors, you will hear a report on Spartan Motors' activities and outlook
for the future.
It is important that your shares be represented at the annual meeting,
regardless of the size of your holdings. Whether or not you plan to attend
the annual meeting, please SIGN, DATE and RETURN AS SOON AS POSSIBLE the
enclosed form of proxy. Sending a proxy will not affect your right to vote
in person in the event you attend the meeting.
Sincerely,
/s/ George W. Sztykiel
George W. Sztykiel
Chairman of the Board of Directors
- ---------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY.
- ---------------------------------------------------------------------------
<PAGE>
[SPARTAN MOTORS INC. LOGO]
1000 Reynolds Road
Post Office Box 440
Charlotte, Michigan 48813
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To our Shareholders:
The Annual Meeting of Shareholders of Spartan Motors, Inc. will be
held on May 19, 1998, at 5:30 p.m., local time, in the Plant I building at
Spartan Motors, Inc. Corporate Headquarters located at 1000 Reynolds Road,
Charlotte, Michigan, for the following purposes:
(1) To elect three directors for three-year terms expiring in 2001.
(2) To transact such other business as may properly come before the
annual meeting.
Shareholders of record at the close of business on April 1, 1998, are
entitled to notice of and to vote at the annual meeting or any adjournment
of the meeting.
A copy of the Annual Report to Shareholders for the year ended
December 31, 1997, is enclosed with this Notice. The following Proxy
Statement and enclosed form of proxy are being furnished to shareholders on
or about April 22, 1998.
By Order of the Board of Directors
/s/ Richard J. Schalter
Charlotte, Michigan Richard J. Schalter
April 22, 1998 Secretary, Treasurer and
Chief Financial Officer
- ---------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY.
- ---------------------------------------------------------------------------
<PAGE>
SPARTAN MOTORS, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 19, 1998
PROXY STATEMENT
This Proxy Statement and the enclosed form of proxy are being
furnished to holders of common stock, $.01 par value, ("Common Stock") of
Spartan Motors, Inc. ("Spartan" or the "Company") on and after April 22,
1998, in connection with the solicitation of proxies by the Board of
Directors to be voted at the Annual Meeting of Shareholders to be held on
May 19, 1998, and any adjournment of that meeting. The annual meeting will
be held in the Plant I building at Spartan Corporate Headquarters located
at 1000 Reynolds Road, Charlotte, Michigan, at 5:30 p.m., local time.
The purpose of the annual meeting is to consider and vote upon the
election of three directors for three-year terms expiring in 2001. Proxies
in the accompanying form, if properly executed, duly returned to the
Company and not revoked, will be voted at the annual meeting. If a
shareholder specifies a choice, the shares represented by proxy will be
voted as specified. If no choice is specified, the shares represented by
proxy will be voted for the election of all nominees for director named in
this Proxy Statement and in accordance with the discretion of the persons
named as proxies on any other matters that may come before the meeting or
any adjournment. For purposes of determining the presence or absence of a
quorum for the transaction of business at the annual meeting, all shares
for which a proxy or vote is received, including abstentions and shares
represented by a broker vote on any matter, will be counted as present and
represented at the meeting.
A proxy may be revoked at any time before it is exercised by written
notice delivered to the Secretary of the Company at the address set forth
above or by attending and voting at the annual meeting.
The Company's management does not know of any matter to be presented
for consideration at the annual meeting other than the matters stated in
the Notice of Annual Meeting of Shareholders. If any other matters are
presented, the persons named as proxies will have discretionary authority
to vote in accordance with their judgment.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors proposes that the following three individuals
be elected as directors for three-year terms expiring at the annual meeting
of shareholders to be held in 2001:
Anthony G. Sommer
George Tesseris
David R. Wilson
Each nominee is presently a director of the Company whose term will
expire at the annual meeting. The persons named as proxies intend to vote
for the election of each of the named nominees. The proposed nominees are
willing to be elected and to serve. In the event that a nominee is unable
to serve or is otherwise unavailable for election, which is not
contemplated, the incumbent Board of Directors may or may not select a
substitute nominee. If a substitute nominee is selected, all proxies will
be voted for the election of the substitute nominee designated by the Board
of Directors. If a substitute is not selected, all proxies will be voted
for the election of the remaining nominees. Proxies will not be voted for
a greater number of persons than the number of nominees named above.
A plurality of the shares present in person or represented by proxy
and voting on the election of directors is required to elect directors.
For the purpose of counting votes on the election of directors,
abstentions, broker non-votes and other shares not voted will not be
counted as shares voted, and the number of shares of which a plurality is
required will be reduced by the number of shares not voted.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR ELECTION OF ALL NOMINEES AS DIRECTORS
VOTING SECURITIES
Holders of record of Common Stock, at the close of business on
April 1, 1998, are entitled to notice of and to vote at the Annual Meeting
of Shareholders and any adjournment of the meeting. As of April 1, 1998,
there were 12,566,491 shares of Common Stock outstanding, each having one
vote on each matter presented for shareholder action. Shares cannot be
voted unless the shareholder is present at the meeting or represented by
proxy.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to each person known to
the Company to have been the beneficial owner of more than 5% of the
Company's outstanding shares of Common Stock as of April 1, 1998:
-2-
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
---------------------------------------
SOLE VOTING SHARED VOTING OR
NAME AND ADDRESS OF AND DISPOSITIVE DISPOSITIVE PERCENT OF
BENEFICIAL OWNER POWER<F1> POWER<F2> CLASS
- ------------------------- --------------- ---------------- ----------
<S> <C> <C> <C>
George W. Sztykiel 545,577 485,178 8.2%
1000 Reynolds Road
Charlotte, Michigan 48813<F3>
William F. Foster 1,005,567 -- 8.0%
1000 Reynolds Road
Charlotte, Michigan 48813<F3>
David L. Babson and Company
Incorporated 1,170,900 -- 9.3%
One Memorial Drive
Cambridge, Massachusetts 02142-1300<F4>
Dimensional Fund Advisors, Inc. 702,650 -- 5.6%
1299 Ocean Avenue
11th Floor
Santa Monica, California 90401<F5>
- -----------------------
<FN>
<F1> These numbers include shares subject to options that are exercisable
within 60 days after April 1, 1998, granted under the Company's 1984
and 1994 Incentive Stock Options Plans and the 1988 Nonqualified Stock
Option Plan.
<F2> These numbers include shares over which the listed person is legally
entitled to share voting or dispositive power by reason of joint
ownership, trust or other contract or property right, and shares held
by spouses, children or other relatives over whom the listed person
may have substantial influence by reason of relationship.
<F3> Based on information provided by each individual listed.
<F4> Based on information set forth in Schedule 13G dated January 20, 1998.
The Schedule 13G indicates that David L. Babson and Company
Incorporated ("DLB") is considered the beneficial owner of
1,170,900 shares of the Company's Common Stock as a result of acting
as investment adviser to various clients. The Schedule 13G indicates
-3-
<PAGE>
that DLB has sole voting power over an aggregate of 1,170,900 shares
of Common Stock and sole dispositive power over 1,170,900 shares of
Common Stock.
<F5> Based on information set forth in Schedule 13G dated February 6, 1998.
The Schedule 13G indicates that Dimensional Fund Advisors, Inc.
("DFA") is considered the beneficial owner of 702,560 shares of the
Company's Common Stock as a result of acting as investment adviser to
various clients. The Schedule 13G indicates that DFA has sole voting
power over an aggregate of 443,150 shares of Common Stock and sole
dispositive power over 702,650 shares of Common Stock.
</FN>
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of Common Stock
beneficially owned as of April 1, 1998, by each of the Company's directors
and nominees for director, each of the named executive officers and all
directors and executive officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP <F1>
------------------------------------------------------
SOLE VOTING AND SHARED VOTING PERCENT
NAME OF DISPOSITIVE OR DISPOSITIVE TOTAL BENEFICIAL OF
BENEFICIAL OWNER POWER<F2> POWER<F3> OWNERSHIP<F2> CLASS
------------------- --------------- -------------- ---------------- -------
<S> <C> <C> <C> <C> <C>
George W. Sztykiel 545,577 485,178 1,030,755 8.2%
John E. Sztykiel 133,601 96,249 229,850 1.8%
Anthony G. Sommer 92,500 -- 92,500 <F*>
William F. Foster 1,005,567 -- 1,005,567 8.0%
Roger B. Burrows 34,000 -- 34,000 <F*>
George Tesseris 57,000 1,000 58,000 <F*>
Charles E. Nihart 42,750 -- 42,750 <F*>
David R. Wilson 11,500 -- 11,500 <F*>
James C. Penman 7,000 -- 7,000 <F*>
-4-
<PAGE>
Richard J. Schalter 13,000 -- 13,000 <F*>
All directors and executive 1,942,495 582,427 2,524,922 20.1%
officers as a group
- ------------------------
<FN>
<F*>Less than 1%.
<F1> The number of shares stated is based on information provided by each
person listed and includes shares personally owned of record by the
person and shares which, under applicable regulations, are considered
to be otherwise beneficially owned by the person.
<F2> These numbers include shares held directly and shares subject to
options which are exercisable within 60 days after April 1, 1998, that
were awarded under the Company's 1984 and 1994 Incentive Stock Option
Plans and the 1988 Nonqualified Stock Option Plan. The number of
shares subject to stock options for each listed person is shown below:
George W. Sztykiel 65,000
John E. Sztykiel 95,895
Anthony G. Sommer 80,000
William F. Foster 90,750
Roger B. Burrows 34,000
George Tesseris 47,000
Charles E. Nihart 39,000
David R. Wilson 10,500
James C. Penman 7,000
Richard J. Schalter 12,500
-------
All directors and officers
as a group 481,645
<F3> These numbers include shares over which the listed person is legally
entitled to share voting or dispositive power by reason of joint
ownership, trust or other contract or property right, and shares held
by spouses, children or other relatives over whom the listed person
may have substantial influence by reason of relationship.
</FN>
</TABLE>
BOARD OF DIRECTORS
The Company's Board of Directors currently consists of eight
directors, three of whom are standing for reelection. The Board of
Directors is divided into three classes, with each class as nearly equal in
number as possible. Each class of directors serves a successive three-year
term.
-5-
<PAGE>
Biographical information concerning the Company's directors and
nominees who are nominated for election to the Board of Directors is
presented below. Except as otherwise indicated, all directors and nominees
for director have had the same principal employment for over five years.
NOMINEES FOR ELECTION AS DIRECTORS TO TERMS EXPIRING IN 2001
ANTHONY G. SOMMER (age 39) has been a director since 1988. Mr. Sommer
has been the Executive Vice President of the Company since December 1992.
Mr. Sommer previously served as Chief Financial Officer of the Company from
December 1992 until October 1996. From 1987 to December 1992 Mr. Sommer
served as Corporate Secretary/Treasurer of the Company and, from 1982 to
1987, as Controller of the Company.
GEORGE TESSERIS (age 66) has been a director since 1984. Mr. Tesseris
has been a practicing partner with the law firm of Tesseris and Crown,
P.C., since 1981. From 1972 to 1981, Mr. Tesseris was a partner in the law
firm of Church, Wyble, Kritselis and Tesseris.
DAVID R. WILSON (age 62) has been a director since 1996. Mr. Wilson
is an independent consultant to the automotive and commercial vehicle
industry. From 1982 to 1993, Mr. Wilson was Vice President of Volvo GM
Heavy Duty Truck Corporation and from 1979 to 1982, Mr. Wilson served as
general manager of field operations for Mercedes Benz of North America.
DIRECTORS WITH TERMS EXPIRING IN 1999
GEORGE W. SZTYKIEL (age 68) has been a director since 1975.
Mr. George Sztykiel is a founder of the Company and has served as Chairman
of the Board and Chief Executive Officer of the Company since December
1992. Mr. George Sztykiel served as President of the Company from
September 1975 to December 1992. Mr. George Sztykiel is the father of
Mr. John Sztykiel, President, Chief Operating Officer and a director of the
Company.
WILLIAM F. FOSTER (age 56) has been a director since 1978.
Mr. Foster, a firefighter for over 34 years, is a founder of the Company
and has served as Staff Engineer and Vice President since 1976. From 1965
to 1975, Mr. Foster served as a designer draftsman for Diamond Reo Trucks,
Inc.
DIRECTORS WITH TERMS EXPIRING IN 2000
JOHN E. SZTYKIEL (age 41) has been a director since 1988.
Mr. Sztykiel has been President and Chief Operating Officer of the Company
since December 1992. Mr. Sztykiel previously served as the Executive Vice
President and Vice President of Sales of the Company from 1989 to 1990.
From 1985 to 1989, Mr. Sztykiel was the Director of Marketing-Diversified
-6-
<PAGE>
Products Group of the Company. Mr. Sztykiel is the son of George W.
Sztykiel, Chairman of the Board, Chief Executive Officer and a director of
the Company.
CHARLES E. NIHART (age 61) has been a director since 1984.
Mr. Nihart, a certified public accountant consultant, established the
certified public accounting firm of Nihart and Nihart, P.C., in 1972. The
Lansing offices of Nihart and Nihart merged with Maner, Costerison and
Ellis, P.C., C.P.A. on January 1, 1989. Mr. Nihart is currently affiliated
with the firm on a consulting basis. Mr. Nihart also is the owner and
President of AARO Rentals, Inc., in Lansing, Michigan, a rental company of
heavy duty equipment in Lansing, Michigan.
JAMES C. PENMAN (age 40) has been a director since March 1997.
Mr. Penman has served as Director of Corporate Finance with Roney & Co., a
regional investment banking firm, since April 1993. From April 1993 until
April 1995, Mr. Penman was a Senior Vice President--Investment Banking with
First of Michigan Corporation.
BOARD MEETINGS AND COMMITTEES
The Company's Board of Directors held eight meetings during 1997.
Each director attended at least 75% of the aggregate of (i) the total
number of Board of Directors meetings and (ii) the total number of meetings
held by all committees of the Board of Directors on which each served
(during the periods that each served).
The Board of Directors has the following standing committees:
AUDIT COMMITTEE. The Audit Committee is responsible for the following
activities: (i) recommending to the Board of Directors the selection of
independent auditors; (ii) reviewing and approving the scope of the yearly
audit plan and proposed budget for audit fees; (iii) reviewing the results
of the annual audit with the independent auditors; (iv) reviewing the
Company's internal controls with the independent auditors; (v) reviewing
non-audit services and special engagements to be performed by independent
auditors; and (vi) reporting to the Board of Directors on the Audit
Committee's activities and findings and making recommendations to the Board
of Directors on these findings. Messrs. Nihart (Chairman), Tesseris and
Penman presently are members of the Audit Committee. The Audit Committee
met once during 1997.
COMPENSATION COMMITTEE. The responsibilities of the Compensation
Committee include: (i) recommending the cash and other incentive
compensation, if any, to be paid to the Company's executive officers;
(ii) reviewing and making recommendations to the Board of Directors
regarding stock options awarded under the 1994 Incentive Stock Option Plan
-7-
<PAGE>
and the 1988 Nonqualified Stock Option Plan; and (iii) reviewing all
material proposed option plan changes. The Compensation Committee
determines the key employees to whom options will be granted, the number of
shares covered by each option, the exercise price of each option and other
matters associated with option awards. Messrs. Tesseris (Chairman), Nihart
and Penman are presently members of the Compensation Committee. The
Compensation Committee met once during 1997.
The Board of Directors does not have a standing nominating committee.
The Company will consider nominees for election to the Board of Directors
submitted by shareholders. The Company's Bylaws provide that any
shareholder entitled to vote generally in the election of directors may
nominate one or more persons for election as directors at a meeting only if
written notice of such shareholder's intent to make such nomination or
nominations has been given to the Secretary of the Company not less than
120 days before the date of notice of the meeting in the case of an annual
meeting, and not more than seven days following the date of notice of the
meeting in the case of a special meeting. Each such notice to the
Secretary shall set forth: (i) the name, age, business address and
residence address of each nominee proposed in the notice; (ii) the
principal occupation or employment of each nominee; (iii) the number of
shares of capital stock of the Company which are beneficially owned by each
nominee; (iv) a statement that the nominee is willing to be nominated; and
(e) such other information concerning each nominee as would be required
under the rules of the Securities and Exchange Commission in a proxy
statement soliciting proxies for the election of such nominees.
COMPENSATION OF DIRECTORS
Directors receive a $1,000 quarterly retainer fee plus an expense
reimbursement of $100 for each meeting of the Board of Directors.
EXECUTIVE OFFICERS
The Company's executive officers are appointed annually by, and serve
at the pleasure of, the Board of Directors. Biographical information
concerning executive officers as of December 31, 1997, who were not
directors or nominated for election to the Board of Directors is presented
below.
ROGER B. BURROWS (age 50) has been Vice President of Sales and
Marketing since January 1995, and previously served as Director of
Marketing, Sales and Service from August 1993 to January 1995. Mr. Burrows
served as National Accounts Sales Manager at General Motors Corporation for
23 years before joining the Company. Mr. Burrows also has been with the
Michigan Army National Guard since 1969 and currently holds the position of
General.
-8-
<PAGE>
RICHARD J. SCHALTER (age 44), a certified public accountant, has
served as Secretary, Treasurer and Chief Financial Officer since November
1996. From June 1989 until November 1996, Mr. Schalter served as Treasurer
and Director of Finance and Administration of Great Lakes Hybrids, an
international distributor and subsidiary of KWS a.g. From March 1986 to
June 1989, Mr. Schalter served as Treasurer and financial administrator
for Martin Systems, Inc., a worldwide supplier of electrical controls and
machine operating systems.
EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
The following table shows certain information concerning the
compensation earned during each of the last three fiscal years in the
period ended December 31, 1997, by the Chief Executive Officer and each of
the Company's four most highly compensated executive officers who served in
positions other than the Chief Executive Officer at the end of the last
completed fiscal year:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------------------- ------------
NUMBER OF
SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY<F1> BONUS <F2> OPTIONS COMPENSATION<F3>
- ---------------------- ---- ---------- ---------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
George W. Sztykiel
Chairman of the 1997 $107,061 $47,216 12,500 $2,205
Board, Chief Executive 1996 100,490 61,662 12,500 2,185
Officer and Director 1995 90,890 10,357 15,000 1,832
John E. Sztykiel 1997 $131,787 $67,461 15,000 $2,726
President, Chief 1996 122,502 88,172 15,000 2,683
Operating Officer 1995 108,399 11,448 17,500 2,142
and Director
Anthony G. Sommer 1997 $118,309 $47,811 12,500 $2,441
Executive Vice 1996 95,657 61,226 12,500 2,073
President 1995 87,518 10,167 15,000 1,768
-9-
<PAGE>
Roger B. Burrows 1997 $ 81,718 $30,896 7,500 $1,716
Vice President Sales 1996 74,171 40,014 7,500 1,677
and Marketing 1995 62,507 8,716 7,500 1,289
Richard J. Schalter 1997 $104,869 $33,528 7,500 $1,739
Secretary, Treasurer and 1996 9,126 -- 5,000 --
Chief Financial Officer<F4>
- -------------------
<FN>
<F1> Includes director fees paid by the Company.
<F2> Includes payments under the Company's Quarterly Bonus Program in which
all employees of the Company participate.
<F3> Consists solely of the Company's contribution to its profit-sharing
plans.
<F4> Mr. Schalter began his employment with the Company on November 18,
1996.
</FN>
</TABLE>
STOCK OPTIONS
The Company's stock option plans are administered by the Compensation
Committee of the Board of Directors which has authority to determine the
individuals to whom and the terms upon which options will be granted, the
number of shares to be subject to each option and the form of consideration
that may be paid upon the exercise of an option.
The following table sets forth information regarding stock options
granted to the Chief Executive Officer and the named executive officers
during the fiscal year ended December 31, 1997:
-10-
<PAGE>
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM
OPTIONS IN FISCAL PRICE PER EXPIRATION -----------------------------
NAME GRANTED<F1> YEAR SHARE DATE 0% 5% 10%
- ------------------ ----------- ---------- --------- ---------- --- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
George W. Sztykiel 12,500 3.0% $7.75 June 30, 2007 $ 0 $60,875 $154,735
John E. Sztykiel 15,000 3.6% $7.75 June 30, 2007 $ 0 $73,050 $185,250
Anthony G. Sommer 12,500 3.0% $7.75 June 30, 2007 $ 0 $60,875 $154,735
Roger B. Burrows 7,500 1.8% $7.75 June 30, 2007 $ 0 $36,525 $ 92,625
Richard J. Schalter 7,500 1.8% $7.75 June 30, 2007 $ 0 $36,525 $ 92,625
- -------------------
<FN>
<F1> On June 30, 1997, the Company granted options to purchase shares of
the Company's Common Stock over a 10-year period. Executive officers
of the Company are entitled to exercise their options at a price
determined by the Compensation Committee, which was at least 85% of
the fair market value of Common Stock on June 30, 1997. Options
terminate, subject to certain limited exercise provisions, in the
event of death or termination of employment or directorship.
</FN>
</TABLE>
The following table summarizes the total number of options held by the
Chief Executive Officer and the named executive officers as of December 31,
1997:
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR<F1>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS AT FISCAL YEAR-END
-----------------------------
NAME EXERCISABLE UNEXERCISABLE
- ------------------- ----------- -------------
<S> <C> <C>
George W. Sztykiel 65,000 --
John E. Sztykiel 95,895 --
Anthony G. Sommer 80,000 --
Roger B. Burrows 34,000 --
Richard J. Schalter 12,500 --
- -------------------
-11-
<PAGE>
<FN>
<F1> No named executive officer exercised any stock options in 1997.
<F2> On April 1, 1998, the closing market price of the Company's Common
Stock was $8.125. The numbers shown reflect the value of options at
April 1, 1998.
</FN>
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
develops and recommends to the Board of Directors the executive
compensation policies of the Company. The Committee also administers the
Company's executive compensation program and recommends for approval to the
Board of Directors the compensation to be paid to the Chief Executive
Officer and other named executive officers. The Committee consists of
three directors, none of whom is a current or former employee of the
Company.
COMPENSATION PHILOSOPHY
The Committee's executive compensation philosophy is to provide
competitive levels of compensation as well as incentives to achieve
superior financial performance. The Committee's policies are designed to
achieve the following five primary objectives: (i) integration of
management's compensation with the achievement of the Company's annual and
long-term performance goals; (ii) reward above-average corporate
performance; (iii) recognition of individual initiative and achievement;
(iv) attracting and retaining qualified management; and (v) alignment of
the interests of management with those of shareholders to encourage
achievement of continuing increases in shareholder value. The Committee
sets management compensation at levels which the Committee believes are
consistent with other companies in the Company's industry.
In 1994, the Company engaged Management Resource Center, Inc., a
compensation consulting firm, to review its compensation policies and
competitive compensation levels. The Committee has and currently intends
to continue to consider the recommendations of Management Resource Center,
Inc. in developing the Company's executive compensation program and making
specific compensation decisions.
Executive compensation consists of both cash and equity, and includes:
(i) base salary; (ii) profit-sharing incentive bonus; and (iii) long-term
incentive through participation in stock option plans. In addition, the
Company provides various benefits to its employees, including the Company's
executive officers.
-12-
<PAGE>
In 1993, Congress amended the Internal Revenue Code of 1986, as
amended, to add Section 162(m) which provides that publicly held
corporations may not deduct compensation paid to certain executive officers
in excess of $1 million annually, with certain exemptions. The Company has
examined its executive compensation policies in light of Section 162(m) and
the regulations adopted by the Internal Revenue Service to implement this
section. It is not expected that any portion of the Company's deduction
for employee remuneration will be disallowed in 1998 or in future years by
reason of awards granted in 1998.
BASE SALARY
To attract and retain well-qualified executives, it is the Committee's
policy to establish base salaries at levels and provide benefit packages
that are considered to be competitive. Base salaries for executive
officers are determined initially by evaluating the responsibilities of the
position and the experience of the individual, and by reference to the
competitive marketplace for management talent, including a comparison of
base salaries for comparable positions at similar companies within the
custom chassis industry. Some of the companies used for this comparison
are included in the indices used in the Stock Price Performance Graph
presented in this Proxy Statement.
The Committee believes that base salaries should approximate the mid-point
of the range of salaries paid for similar positions by companies in
similar industries. The Committee may recommend adjustments on a periodic
basis to maintain the desired levels of base salaries for the Company's
executives.
The Committee determines annual salary adjustments by evaluating the
competitive marketplace, the performance of the Company and the executive
officer, as well as any increased responsibilities assumed by the executive
officer. Salary adjustments are determined and implemented generally on a
12-month cycle.
ANNUAL INCENTIVE BONUS
The Committee selects members of management to participate in the
Company's incentive bonus program. The Committee considers several factors
in determining the annual incentive bonus, if any, paid to management,
including achievement of the Company's strategic and operating goals and an
individual's achievement of personal goals. In addition, the Company
considers factors such as net earnings per share, revenues, return on
assets and return on equity.
STOCK OPTION PLANS
The Company currently grants stock options under the 1988 Nonqualified
Stock Option Plan and the 1994 Incentive Stock Option Plan. The Company's
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stock option plans allow officers and key employees to purchase Common
Stock of the Company at a price established on the date of grant. Options
granted under the 1988 Nonqualified Stock Option Plan must have an exercise
price equal to at least 85% of the fair market value of the Company's
Common Stock. Incentive stock options granted under the 1994 Incentive
Stock Option Plan must have an exercise price equal to at least 100% of the
fair market value. The Committee administers all aspects of the plans and
reviews, modifies (to the extent appropriate) and approves management's
recommendations for awards.
Absent unusual circumstances, the Committee historically has granted
stock options on an annual basis to officers, key employees and directors
who are employees of the Company and on a biannual basis to directors who
are not employees of the Company. The Company's stock option plans are
designed to encourage long-term investment in the Company by participating
executives and key employees, more closely align executive and shareholder
interests and reward executive officers and other key employees for
building shareholder value. The Committee believes stock ownership by
management and other key employees is beneficial.
In determining the number of options to be awarded to an officer or
key employee, the Committee takes into consideration the levels of
responsibility and compensation of the individual. The Committee also
considers the recommendations of management (other than awards to the Chief
Executive Officer), the individual performance of the officer or employee
and the number of shares or other compensation awarded to the officer or
employee at other companies. Generally, both the number of shares granted
and their proportion relative to the total number of shares granted
increase corresponding to the level of a participant's responsibility.
Although the Committee also may consider the number of options already held
by an officer or employee, this factor is not considered to be particularly
important by the Committee in determining the amounts of awards.
CHIEF EXECUTIVE OFFICER
The Chief Executive Officer's compensation is based upon the policies
and objectives outlined above for all executive officers. Mr. George
Sztykiel's base salary in 1997 was approximately 7.0% above his 1996
salary. Mr. Sztykiel's annual incentive bonus award for 1997 was $47,216
which includes the Company's quarterly bonus program and his annual
incentive bonus. During 1997, Mr. Sztykiel was awarded options to purchase
12,500 shares of the Company's Common Stock.
All recommendations of the Committee attributable to 1997 compensation
were unanimous and were approved and adopted by the Board of Directors
without modification.
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Respectfully submitted,
George Tesseris, Chairman
Charles E. Nihart
James C. Penman
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return
on Spartan's Common Stock to the CRSP Total Return Index for The Nasdaq
Stock Market ("CRSP NASDAQ") and the CRSP Total Return Index for Trucking
and Transportation Stocks reported on The Nasdaq Stock Market ("CRSP T&T"),
over a five-year period ended December 31, 1997, using 1992 as a base
period. The CRSP NASDAQ is a broad-based equity market index developed by
the Center for Research in Security Prices at the University of Chicago.
The CRSP T&T is comprised of companies with a market capitalization similar
to that of the Company and also is developed by the Center for Research in
Security Prices. The CRSP NASDAQ index and CRSP T&T index both assume
dividend reinvestment. Cumulative total shareholder return is measured by
dividing (i) the sum of: (a) the cumulative amount of dividends for the
measurement period, assuming dividend reinvestment; and (b) the difference
between the share price at the end and the beginning of the measurement
period, by (ii) the share price at the beginning of the measurement period.
COMPARISON OF FIVE YEAR CUMULATIVE
TOTAL SHAREHOLDER RETURN
[GRAPH]
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The dollar values for total shareholder return plotted in the graph
above are shown in the table below:
<TABLE>
<CAPTION>
FISCAL
YEAR-END SPARTAN CRSP NASDAQ CRSP T&T
-------- ------- ----------- --------
<S> <C> <C> <C> <C>
1992 $100.00 $100.00 $100.00
1993 $104.16 $114.80 $121.49
1994 $ 82.27 $112.21 $110.17
1995 $ 68.05 $158.70 $128.47
1996 $ 41.76 $195.19 $141.78
1997 $ 38.28 $239.53 $181.59
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
James C. Penman, a director of the Company, is the Director of
Corporate Finance at Roney & Co. Mr. Penman received a consulting retainer
fee from the Company during 1997. This fee was for services rendered as an
advisor on acquisition opportunities for the Company. More specifically,
Mr. Penman participated as an consultant with the Company on the recent
acquisitions of CTS Holding Company, Inc. and Luverne Fire Apparatus Co.,
Ltd.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Spartan's directors and
officers and persons who beneficially own more than 10% of the outstanding
shares of Common Stock to file reports of ownership and changes in
ownership of shares of Common Stock with the Securities and Exchange
Commission (the "SEC"). Directors, officers and greater than 10%
beneficial owners are required by SEC regulations to furnish the Company
with copies of all Section 16(a) reports they file with the SEC. Based
solely upon the Company's review of the copies of such reports received by
it, or written representations from certain reporting persons that no
reports on Form 5 were required for those persons for the 1997 fiscal year,
the Company believes that its directors and officers complied with all
applicable filing requirements during the Company's last fiscal year.
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INDEPENDENT AUDITORS
Deloitte & Touche LLP has served as independent auditors of the
Company for the last 14 years. The Board of Directors believes that the
experience Deloitte & Touche LLP has acquired remains valuable to the
Company and again has selected Deloitte & Touche LLP as independent
auditors for the Company for its 1998 fiscal year. Representatives of
Deloitte & Touche LLP are expected to be present at the annual meeting,
will have the opportunity to make a statement if they desire to do so and
are expected to be available to respond to appropriate questions from
shareholders.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1999 annual
meeting of shareholders must be received by the Company not later than
December 9, 1998, to be considered for inclusion in the proxy statement and
form of proxy relating to that meeting. Proposals of shareholders should
be made in accordance with Rule 14a-8 issued under the Exchange Act and
should be addressed to the attention of the Secretary of Spartan Motors,
Inc., 1000 Reynolds Road, Post Office Box 440, Charlotte, Michigan 48813.
SOLICITATION OF PROXIES
Solicitation of proxies will be made initially by mail. In addition,
directors, officers and employees of the Company and its subsidiaries may
solicit proxies by telephone or facsimile or in person without additional
compensation. Proxies may be solicited by nominees and other fiduciaries
who may mail materials to or otherwise communicate with the beneficial
owners of shares held by them. The Company will bear all costs of the
preparation and solicitation of proxies, including the charges and expenses
of brokerage firms, banks, trustees or other nominees for forwarding proxy
material to beneficial owners.
By Order of the Board of Directors
/s/ Richard J. Schalter
Charlotte, Michigan Richard J. Schalter
April 22, 1998 Secretary and Treasurer
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