SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant: [X]
Filed by a Party other than the Registrant: [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For use of the Commission Only (as permitted by Rule
14a-6 (e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11 (c) or Section
240.14a-12
SHELTER COMPONENTS CORPORATION
(Name of Registrant As Specified In Its Charter)
SHELTER COMPONENTS CORPORATION
2831 Dexter Drive
Elkhart, Indiana 46514
___________________________________________________
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 22, 1997
___________________________________________________
To the Shareholders of SHELTER COMPONENTS CORPORATION:
Notice is hereby given that the 1997 Annual Meeting of the
Shareholders of Shelter Components Corporation will be held at
The Varsity Clubs of America Hotel, 3800 North Main Street,
Mishawaka, Indiana on Thursday, May 22, 1997 at 9:00 a.m. local
time, for the following purposes:
1. To elect a class of three Class A directors to serve for a
term of three years;
2. To approve an amendment to the Corporation's Articles of
Incorporation, to increase the number of authorized shares of
Common Stock from 10,000,000 to 25,000,000;
3. To consider and ratify the selection by the Board of
Directors of Price Waterhouse LLP as certified public accountants
for the Corporation for the fiscal year ending December 31, 1997;
and
4. To transact any other business that may properly come before
the Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on April
17, 1997 as the record date for determination of shareholders
entitled to notice of and to vote at the Meeting and any
adjournments thereof. A list of shareholders entitled to vote at
the meeting will be available for examination for any purpose
germane to the meeting in the Office of the Secretary of the
Corporation for a period of at least ten days prior to the
meeting.
By order of the Board of Directors
Mark C. Neilson
Secretary/Treasurer
April 21, 1997
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING IN
PERSON ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED
PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
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SHELTER COMPONENTS CORPORATION
2831 Dexter Drive
Elkhart, Indiana 46514
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 22, 1997
This Proxy Statement is being mailed on or about April 21, 1997
to shareholders of Shelter Components Corporation (the
"Corporation") in connection with the Board of Directors'
solicitation of proxies for use at the Annual Meeting of
Shareholders (the "Meeting") to be held at The Varsity Clubs of
America Hotel, 3800 North Main Street, Mishawaka, Indiana on
Thursday, May 22, 1997 at 9:00 a.m. local time, and at such other
time and place to which the Meeting may be adjourned.
All shares represented by valid Proxies, unless the shareholder
otherwise specifies, will be voted (i) FOR the election of the
persons named herein under "Election of Directors" as nominees
for election as director of the Corporation for the term
described therein; (ii) FOR the proposal to amend the
Corporation's Articles of Incorporation to increase the number of
shares of Common Stock authorized for issuance from 10,000,000 to
25,000,000; (iii) FOR the ratification of the selection of Price
Waterhouse LLP as the Corporation's independent auditors for the
fiscal year ending December 31, 1997; and (iv) at the discretion
of the Proxyholders with regard to any other matters that may
properly come before the Meeting and any adjournments thereof.
Any shareholder executing a Proxy retains the right to revoke it
at any time prior to exercise at the Meeting. A Proxy may be
revoked by delivery of written notice of revocation to the
Secretary of the Corporation, by execution and delivery of a
later Proxy or by voting the shares in person at the Meeting. If
not revoked, all shares represented by properly executed Proxies
will be voted as specified therein or as noted above, as
applicable.
The Annual Report to Shareholders for the year ended December 31,
1996 accompanies this Proxy Statement.
EXPENSES OF SOLICITATION
The Corporation will bear the cost of preparing and mailing this
statement with the accompanying proxy and other material. In
addition to the use of the mails, officers and employees of the
Corporation and its subsidiaries may solicit proxies personally
or by fax, telegram or telephone. Banks, brokerage houses, and
other institutions, nominees or fiduciaries may be requested to
forward the soliciting material to their principals to obtain
authorizations for the execution of proxies. The Corporation
will, upon request, reimburse banks, brokerage houses, and other
institutions, nominees and fiduciaries for reasonable expenses in
forwarding proxy material to their principals.
RECORD DATE AND VOTING SECURITIES
The record date for determining the shareholders entitled to
notice of and to vote at the Meeting and any adjournments thereof
is the close of business on April 17, 1997 (the "Record Date"),
at which time approximately 7,680,000 shares of Common Stock were
issued and outstanding. Common Stock is the only class of
outstanding voting securities of the Corporation.
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QUORUM AND VOTING
The presence at the Meeting, in person or by proxy, of the
holders of a majority of the Common Stock issued and outstanding
and entitled to vote at the Meeting is necessary to constitute a
quorum to transact business. Each share represented at the
Meeting in person or by proxy will be counted toward a quorum.
In deciding all questions and other matters, a holder of Common
Stock on the Record Date shall be entitled to cast one vote for
each share of Common Stock registered in such holder's name.
Approval of Proposal No. 1 requires the affirmative vote of a
plurality of the shares of Common Stock present or represented at
the Meeting and entitled to vote thereon. Votes may be cast in
favor or withheld with respect to the proposal. Votes that are
withheld will be counted toward a quorum, but will be excluded
entirely from the tabulation for the proposal and therefore, will
not otherwise affect the outcome of the vote on the proposal.
Approval of Proposal No. 2 requires that the votes cast in favor
exceed the votes cast against the proposal. Votes that are
withheld will be counted toward a quorum, but will be excluded
entirely from the tabulation for the proposal and therefore, will
not otherwise affect the outcome of the vote on the proposal.
Approval of Proposal No. 3 requires that the votes cast in favor
exceed the votes cast against the proposal. Votes that are
withheld will be counted toward a quorum, but will be excluded
entirely from the tabulation for the proposal and therefore, will
not otherwise affect the outcome of the vote on the proposal.
The Board of Directors knows of no other matter which may come up
for action at the meeting. However, if any other matter properly
comes before the meeting, the persons named in the proxy form
enclosed will vote in accordance with their judgment upon such
matter.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Corporation's by-laws divide the Board of Directors into
three classes, as nearly equal in number as possible, each of
whom serves for three years. The term of office of one class of
directors expires each year in rotation so that one class is
elected at each Annual Meeting for a full three-year term. Mr.
Richard E. Summers, a Class A director, died in 1996. The terms
of the two other Class A directors will expire at this Annual
Meeting. In order to more closely equalize the number of
directors in each class, one director, Mr. Renbarger, has
resigned as a Class B director and has been nominated to serve as
a Class A director.
The three individuals named below have been nominated for
election for three-year terms expiring at the Annual Meeting in
2000, or until their successors are elected and qualified. The
other seven directors will continue in office for the remainder
of their terms as indicated.
If the enclosed form of proxy is returned duly executed, it is
intended that the shares represented thereby will be voted for
the nominees hereinafter named unless authority to vote for a
particular nominee or all nominees is withheld. Should any such
nominee become unavailable for election, which is not
anticipated, the persons authorized to vote the enclosed form of
proxy may vote the shares for a substitute nominee as may be
selected by the Board. The statements hereinafter contained in
regard to principal occupation or employment, other directorships
and beneficial ownership of stock of the Corporation are based on
information furnished to the Corporation by the nominees and the
directors.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE
NOMINEES LISTED BELOW
CLASS "A" DIRECTOR NOMINEES - FOR TERM EXPIRING IN 2000
ARTHUR M. BORDEN, age 76, has been a director since 1985. He is
of counsel to the law firm of Rosenman & Colin and also a
director of Scientific Industries, Inc., a manufacturer of
laboratory testing instruments and equipment.
WILLIAM B. RIBLET, age 58, is Vice President of Sales and
Director of Lippert Components, Inc., a private company supplying
steel components to the manufactured housing, office unit, and
recreational vehicle industries. He was an Executive Vice
President and Vice Chairman of the Board of Directors of
Thunander Corporation, a predecessor corporation, from March 1986
until May 1990.
LARRY D. RENBARGER, age 58, has been a director since 1979. He
became Chief Executive Officer of Shelter Components, Inc. in
1979. Mr. Renbarger had served as the President of Shelter
Components of Indiana, Inc., a major subsidiary of the
Corporation from August 1987 through May 1992. Mr. Renbarger was
President of the Corporation from May 1992 until December 1996
and has been Chief Executive Officer since May 1992.
OTHER DIRECTORS
CLASS "B" DIRECTORS - TERM EXPIRING IN 1998
WILLIAM N. HARPER, age 52, is retired. Prior to June 30, 1996,
Mr. Harper was Senior Vice President and Chief Financial Officer
of National Steel Corporation, an integrated steel company, since
October 1995. Previously, Mr. Harper was employed as Vice
President and Controller of Clark Equipment Company, a
manufacturer, for 10 years. Mr. Harper has been Chairman of the
Board since May 1995 and a Director since May 1990.
RONALD D. MINZEY, age 66, has served as a director from 1983
until 1986 and since May 1990. For over ten years, he has been a
private investor investing in companies primarily in the Northern
Indiana area. Prior to that Mr. Minzey was President of Kinder
Manufacturing, a furniture supplier to the Manufactured Housing
and Recreational Vehicle industries. He is also a director of
Barger Packaging Corporation and Director Emeritus of KeyBank
National Association, a national bank.
MARK C. NEILSON, age 38, has served as a director since May 1992.
He has served as Chief Financial Officer of the Corporation since
1986 and as Secretary of the Corporation since 1990. Mr. Neilson
Prior to 1986, Mr. Neilson was employed as a CPA with McGladrey &
Pullen since 1980.
CLASS "C" DIRECTORS - TERM EXPIRING IN 1999
WILLIAM J. BARRETT, age 57, has been a director since 1981. He
has been a Senior Vice President of Janney Montgomery Scott Inc.,
investment bankers, since January 1978. Mr. Barrett had been
Chairman of the Board from August 1987 to May 1995. Mr. Barrett
is also a director of Supreme Industries, Inc., a specialized
truck body and shuttle bus manufacturer, Fredericks of Hollywood,
Inc., an apparel marketing company, TGC Industries, Inc., a
geophysical services company, The Western Systems Corp., a
company seeking to redeploy its assets through investments and
business combinations, and Chase Packaging Corp., a specialty
packaging supplier primarily to the agricultural market.
HERBERT M. GARDNER, age 57, has been a director since 1981. He
has been a Senior Vice President of Janney Montgomery Scott Inc.,
investment bankers, since January 1978. Mr. Gardner is also
Chairman of the Board of Supreme Industries, Inc., a specialized
truck body and shuttle bus manufacturer, and a director of The
Western System Corp., a company seeking to redeploy its assets
through investments and business combinations, Nu Horizons
Electronics Corp., an electronic components distributor, TGC
Industries, Inc. a geophysical services company, Hirsch
International Corp., a distributor of computerized embroidery
machines and application software, and Chase Packaging Corp., a
specialty packaging supplier primarily to the agricultural
market.
CORNELIUS J. MURPHY, age 59, is retired. He has been a director
since January 1979. Mr. Murphy is the former President of Danube
Carpet Mills, Inc., a major subsidiary of the Corporation and
former Vice Chairman of the Board of the Corporation.
GERALD R. STULTS, age 48, has been a director since May 1996. He
has served as the Chief Operating Officer of the Corporation
since August 1995. He also served as Executive Vice President
since August 1995 until December 1996, at which time he became
President of the Corporation. Mr. Stults was the President and
owner of BABSCO, Inc. from January 1981 until January 1995 when
the Corporation acquired BABSCO, Inc. from him. Mr. Stults is
also the President and owner of Galleries, Ltd., a retail
lighting company; a director of Zorn Industries, Inc., a
manufacturer of storage tanks; and a director and part owner of
CopperCon Wire and Cable, LLP, a manufacturer of wire products.
PAGE 3
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The business of the Corporation is managed under the direction of
the Board of Directors. The Board generally meets on a quarterly
basis to review significant developments affecting the
Corporation and to act on matters requiring Board approval. It
also holds special meetings and acts by written consent when
important matters require Board action between scheduled
meetings. The Board of Directors held six meetings during 1996.
During 1996, all members of the Board of Directors participated
in at least 75% of all Board and applicable committee meetings.
The Board of Directors has two standing committees: the Audit
Committee and the Compensation Committee. The functions of these
committees, their current members, the number of meetings held
during 1996 are described below.
The Audit Committee was established to review the professional
services and independence of the Corporation's independent
accountants and to review the Corporation's financial statements,
procedures and internal controls. The Audit Committee is
comprised of Directors Gardner (Chairman), Harper and Minzey.
The Audit Committee met four times during 1996.
The Compensation Committee has the responsibility of fixing
annual salaries and bonuses for the officers of the Corporation
and administering the Corporation's Key Employee Stock Incentive
Plan. The Compensation Committee is comprised of Directors
Barrett and Murphy. The Compensation Committee met three times
during 1996.
DIRECTOR COMPENSATION
Directors who are also employees of the Corporation or its
subsidiaries receive no compensation in their capacities as
directors. Nonemployee directors receive an annual retainer of
$6,000 plus a fee of $1,500 for each Board meeting attended, $500
for each telephonic Board meeting in which the director
participates, $250 for each committee meeting attended and $100
for each telephonic committee meeting in which the director
participates. The Chairmen of the Board and of the Board's
Committees receive $1,800 and $300, respectively, for each
meeting attended and $600 and $125, respectively, for each
telephonic meeting in which the Chairman participates. All
directors are reimbursed for expenses connected with attendance
at Board or committee meetings. Commencing in 1996, each
nonemployee director received annual automatic grants of stock
options to purchase 2,500 shares of Common Stock based on market
prices at or around the date of grant.
PAGE 4
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PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following tables set forth, as of February 28, 1997,
information concerning the only parties known to the Corporation
having beneficial ownership of more than 5% of its outstanding
Common Stock and information with respect to the stock ownership
of all directors and executive officers of the Corporation as a
group.
Certain Beneficial Owners
Amount and Percent
Name and Address of Beneficial Nature of of
Owner Beneficial Class
Ownership
FMR Corp.(Fidelity Investments) 762,725 9.9%
82 Devonshire Street
Boston, MA 02109
Wellington Management Company
75 State Street 580,124 7.6%
Boston, MA 02109
Larry D. Renbarger
2831 Dexter Drive 434,000 (1) 5.6%
Elkhart, Indiana 46514
Gerald R. Stults
2831 Dexter Drive 430,198 (2) 5.5%
Elkhart, Indiana 46514
Beneficial Ownership of Directors and Officers
Amount and Percent
Name Nature of of
Beneficial Class
Ownership
Larry D. Renbarger
434,000 (1) 5.6%
Gerald R. Stults
430,198 (2) 5.5
Cornelius J. Murphy
167,495 (3) (7) 2.2
William J. Barrett
131,783 (4) (7) 1.7
Herbert M. Gardner
106,210 (5) (7) 1.4
Mark C. Neilson
49,906 (6) *
Arthur M. Borden
20,086 (7) *
William N. Harper
8,983 (7) *
William B. Riblet
7,312 (7) *
Ronald D. Minzey
6,593 (7) *
All officers and directors as a
group (12 persons) 1,375,066 17.6%
(* Less than 1% of class of stock owned.)
(1) Includes option to purchase 15,625 shares, not yet exercised
and 62,500 shares owned by Mrs. Renbarger, to which Mr.
Renbarger disclaims any beneficial ownership.
(2) Includes option to purchase 15,625 shares, not yet
exercised.
(3) Includes 64,925 shares owned by Mrs. Murphy, to which Mr.
Murphy disclaims any beneficial ownership.
(4) Includes 1,406 shares owned by Mrs. Barrett, to which Mr.
Barrett disclaims any beneficial ownership.
(5) Includes 7,616 shares owned by Mrs. Gardner, to which Mr.
Gardner disclaims any beneficial ownership.
(6) Includes option to purchase 25,000 shares, not yet exercised
(7) Includes option to purchase 5,000 shares, not yet exercised.
PAGE 5
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following Summary Compensation Table shows compensation paid
by the Corporation for services rendered during fiscal years
1996, 1995 and 1994 for the person who was Chief Executive
Officer at the end of the last fiscal year and the other most
highly compensated executive officers of the Corporation whose
salary and bonus exceeded $100,000 in 1996.
Long Term
Compensation
Annual Compensation Awards
All Other
Name and Salary Bonus Compensation Options
Principal Year ($) (1) ($) (2) (#) (3) (#)
Position
Larry D.Renbarger (4) 1996 $220,000 $ 99,000 $8,232 0
CEO 1995 161,000 165,000 8,239 15,625
1994 161,000 165,000 8,210 0
Gerald R. Stults (4) 1996 $150,000 $ 67,500 $1,032 0
President and COO 1995 120,000 41,000 743 15,625
Mark C. Neilson 1996 $110,000 $ 49,500 $7,032 0
CFO, Secretary 1995 77,000 77,000 7,039 25,000
and Treasurer 1994 77,000 77,000 6,950 0
77,000
(1) Compensation deferred at the election of the Executive,
pursuant to the Corporation's 401(k) plan, is included in the
year earned.
(2) Cash bonuses for services rendered in fiscal year 1996, 1995
and 1994 have been listed in the year earned, but in some
cases were paid in the subsequent year. Bonuses were
calculated based on the consolidated operations of the
Corporation.
(3) Comprised of automobile allowance and the Corporation's
contribution to the Executive's 401(k) account.
(4) Mr. Stults succeeded Mr. Renbarger as President in December
1996.
Stock Option Exercises and Values Table
The following table shows information with respect to options for
the Corporation's Common Stock either exercised during 1996 or
having value outstanding at December 31, 1996 under the
Corporation's Key Employees Stock Incentive Plan.
Aggregated Option Exercises in Fiscal 1996 and Year End Option Values
Number of Value of
Securities Under- Unexercised
Options lying Unexercised In-the-Money
Exercised Options at Options at
in 1996 December 31, 1996 December 31, 1996(*)
----------------- --------------------- -----------------
Shares
Acquired
on Value Exer- Unexer- Exer- Unexer-
Exercise Realized cisable cisable cisable cisable
Larry D. Renbarger --- --- 3,906 11,719 11,913 34,743
Gerald R. Stults --- --- 3,906 11,719 11,913 34,743
Mark C. Neilson --- --- 6,250 18,75 0 19,063 57,188
* Amounts reflecting value on outstanding options are based on
the December 31, 1996, closing stock price, which was $12 1/4.
PAGE 6
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is comprised
of Messrs. Barrett and Murphy and has overall responsibility to
review and approve broad-based compensation plans of the
Corporation as well as to recommend specific salary levels for
corporate officers including the Chief Executive Officer, the
President and Chief Operating Officer, the Secretary/Treasurer,
and any corporate vice-presidents. The Compensation Committee is
also charged with the responsibility of approving specific
compensation plans for the heads of subsidiaries or divisions.
The Corporation's compensation programs are designed to attract,
retain, and motivate the finest talent possible and the
Compensation Committee and management of the Corporation are
committed to the principle that compensation should be
commensurate with the performance of the Corporation. As a
result, a large part of executive compensation can be in the form
of bonuses based on criteria established by the Compensation
Committee and which, for the most part, relate to a combination
of benchmarks such as return on equity, overall earnings, and the
responsibility of particular executives for specified operations.
In 1993, Congress enacted the Omnibus Reconciliation Act of 1993
(OBRA) which, among other things, establishes certain
requirements in order for compensation exceeding $1 million
earned by certain senior executives to be deductible. The
Committee will attempt to conform executive compensation programs
and payments to OBRA's deductibility requirements.
Salaries
The executive salaries are reviewed annually. In setting
executive salaries, the Compensation Committee considered various
national surveys of companies of comparable size and the salary
levels of executives with similar responsibilities at comparable
companies as well as the average level of compensation compiled
from the national surveys. Executive salaries were accordingly
increased significantly in 1996. The committee fixed the
salaries for the CEO, the President and other executive officers
at levels in the lower range of such companies and then devised a
"bonus plan" which would allow those persons to earn significant
bonuses based on the required performance under the plan.
Annual Incentive
The bonus plan for executive officers gives them the opportunity
to earn significant additional compensation based on the
performance of the Corporation. At the beginning of the year,
the Compensation Committee establishes certain performance
benchmarks which the committee feels should be attained before
bonuses are paid and after the attainment of those benchmarks,
bonuses are paid based on various levels of profitability of the
Corporation. In 1996, the bonus criteria and the benchmarks for
earning bonuses for the executive officers were based on the
return on assets of the Corporation in excess of a pre-determined
target level. In 1997, the Compensation Committee adopted the
EVA Incentive Plan. The new plan provides for awards based on
improvements in Economic Value Added (EVA) measurements. EVA is
a measure of adjusted net operating income after tax, less a cost
of capital charge. The bonus earned is credited to the "bonus
bank," and the bonus paid to the participant is equal to the
amount of the bonus bank balance, up to the amount of the
participant's target bonus, plus one third of the bonus bank
balance in excess of the target bonus. There is no bonus cap for
superior levels of EVA improvement. The Compensation Committee
believes that excess EVA improvement provides the best operating
performance measure of shareholder returns in excess of
expectations.
Stock Options
In addition to the foregoing, current medium and long-term
incentive plans, namely, incentive stock options, are based on
the value of the Corporation's common stock which along with EVA-
based bonuses more closely align the interest of the executives
with the long-term interest of the shareholders. During 1996, no
executive officers of the Corporation were granted options.
PAGE 7
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Senior Management Compensation
In the early part of each year, the Compensation Committee
reviews with the Chief Executive Officer an annual salary plan
for the Corporation and its subsidiaries' and divisions' senior
executives. This salary plan is based on industry, peer group
and performance judgments as to the past and expected future
contributions of the individual senior executives. The Chief
Executive Officer makes recommendations to the Compensation
Committee which then approves or revises such salary plans.
Interlocks and Insider Participation In Compensation Decisions
Mr. Murphy, who is a member of the Corporation's Compensation
Committee, had been President and a director of Shelter
Components, Inc. since January 1979. Mr. Murphy is the former
President of Danube Carpet Mills, Inc., a major subsidiary of the
Corporation and former Vice Chairman of the Board of the
Corporation.
The Compensation Committee of the Board of Directors of
Shelter Components Corporation:
William J. Barrett
Cornelius J. Murphy
SHARE OWNER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly change in
the cumulative total share owner return on the Corporation's
common stock against the S&P Homebuilding Index, which is an
industry or line-of-business index and is considered to include
certain peers of the Corporation, and the total return of the
S&P Composite 500 Stock Index.
SHELTER COMPONENTS CORPORATION
Comparison of 5-Year Cumulative Total Return
Shelter Components Corporation, S&P Homebuilding Index and S&P
500 Index**
1991 1992 1993 1994 1995 1996
Shelter Components Corporation $100 $481 $564 $557 $805 $756
S & P 500 100 108 118 120 165 203
S & P Homebuilding 100 123 162 94 134 122
Assumes $100 invested on December 31, 1991 in Shelter Components Corporation
Stock, S&P Homebuilding Index and S&P 500 Index, inlcuding reinvestment of
dividends.
** Fiscal year ending December 31.
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PROPOSAL NO. 2
AMENDMENT TO ARTICLES OF INCORPORATION
The Board of Directors unanimously approved an amendment to the
Corporation's Articles of Incorporation, subject to approval by
the shareholders, to increase the number of common shares that
the Corporation is authorized to issue, from 10,000,000 common
shares to 25,000,000 common shares.
The Articles of Incorporation currently authorize 10,000,000
common shares, par value $0.01 and 1,000,000 special shares, par
value $0.01, of which 7,680,000 common shares and no special
shares were issued and outstanding as of April 17, 1997. In
addition, as of December 31, 1996 there were outstanding options
to purchase 348,765 common shares.
The Board of Directors has the authority to issue common shares,
up to the maximum number authorized in the Articles of
Incorporation, in the Board of Directors' discretion, for such
consideration as the Board of Directors deems appropriate. The
purpose and effect of the proposed amendment is to permit the
maximum number of common shares to be 25,000,000 rather than
10,000,000. The proposed amendment would provide the Board of
Directors with the flexibility for potential acquisitions,
financing, raising capital, stock splits, dividends and other
corporate purposes.
There is no present plan to issue in the future additional shares
beyond the 10,000,000 common shares currently authorized. Should
additional shares be issued, the effect on the existing
shareholders may be to dilute their current percentage interest
in the Corporation. Shareholders of the Corporation do not have
preemptive rights to acquire any additional shares that may be
issued by the Corporation.
The text of the proposed amendment to Article V Section 5.1 of
the Articles of Incorporation is as follows:
The total number of shares which the Corporation has
authority to issue shall be Twenty-Six Million (26,000,000)
shares, consisting of Twenty-Five Million (25,000,000)
common shares (the "Common Shares") and One Million
(1,000,000) special shares (the "Special Shares"). The
Corporation's shares shall have a par value of $.01 per
share.
Approval of the amendment to the Articles of Incorporation
requires that the votes cast in favor exceed the votes cast
against the amendment. If approved by the shareholders, such
amendments will be effective upon the filing of the amended
Articles of Incorporation with the Indiana Secretary of State.
Unless otherwise instructed or restricted, it is the intent of
the persons named in the Proxy to vote all Proxies "FOR" the
adoption of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED
AMENDMENT TO THE CORPORATION'S ARTICLES OF INCORPORATION.
PAGE 9
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TRANSACTIONS WITH MANAGEMENT AND DIRECTORS
The Corporation leases office and warehouse facilities from ELJO
Investments, a partnership of which Directors Minzey, Murphy and
Renbarger are partners. The Corporation also leases office and
warehouse facilities from Stults Realty, Inc. of which Director
Stults is the sole owner. Such leases are described in the Notes
to Consolidated Financial Statements which are a part of the 1996
Annual Report to Shareholders which accompanies this Proxy. None
of such leases provided for annual payments during 1996 in excess
of $60,000. During 1996, the Corporation exercised its option to
purchase certain real estate totalling $3.6 million from ELJO
Investments. The Corporation also purchased a facility from
Stults Realty, Inc. pursuant to a provision in the January 1995
agreement to purchase the assets of BABSCO, Inc. The purchase
price was approximately $600,000.
The Corporation believes that the terms of the foregoing leases
and purchases are at least as favorable to the Corporation as
those which could have been obtained from unrelated parties.
The Corporation also made purchases during 1996 of electrical
products for resale totalling approximately $3 million from
CopperCon Wire and Cable, LLP, a manufacturer of electrical wire
products of which Mr. Stults is a 16% owner. These purchases are
believed to have been at a price and terms equal to or better
than general market prices and terms for similar products.
EMPLOYEES' SAVINGS AND INVESTMENT PLAN
The Corporation has a contributory defined contribution plan.
The plan covers substantially all employees and the Corporation
contributes to the plan on a discretionary basis. Expenses under
the plan aggregated $271,000, including administrative expenses
of the plan, for the year ended December 31, 1996.
PROPOSAL NO. 3
INDEPENDENT ACCOUNTANTS
Upon the recommendation of the Audit Committee and subject to
ratification by the shareholders at the Meeting, the Board of
Directors has selected Price Waterhouse LLP to audit the
consolidated financial statements of the Corporation for 1997.
Price Waterhouse LLP has served the Corporation in this capacity
since October 1995. Representatives of Price Waterhouse LLP are
expected to be present at the Meeting, will have the opportunity
to make a statement if they desire to do so, and will be
available to respond to appropriate questions.
In October 1995, the Audit Committee of the Corporation's Board
of Directors replaced its previous auditors, Coopers & Lybrand
L.L.P., by engaging Price Waterhouse LLP as its independent
accountants. There were no disagreements between the Corporation
and Coopers & Lybrand L.L.P. during the 1993 and 1994 audit
engagements nor during 1995 on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure which would have caused them to make
reference thereto in their reports.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE SELECTION OF PRICE WATERHOUSE LLP AS CERTIFIED PUBLIC
ACCOUNTANTS FOR THE CORPORATION FOR 1997.
PAGE 10
<PAGE>
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 1998
Annual Meeting of shareholders must be received by the Secretary
of the Corporation no later than December 16, 1997 for
consideration for inclusion in the proxy statement and form of
proxy for that meeting.
SECTION 16 REQUIREMENTS
Section 16(a) of the Exchange Act requires the Corporation's
directors and officers, and persons who own more than 10% of a
registered class of the Corporation's equity securities, to file
reports of ownership and changes of ownership with the
Commission. Based solely on its review of the copies of such
forms received by it, and written representations from certain
reporting persons, the Corporation believes that during 1996 all
filing requirements applicable to its directors, officers and
greater than 10% beneficial owners were complied with.
OTHER BUSINESS
The Corporation is not aware of any other matters which may be
presented for action at the Annual Meeting other than the matters
set forth herein. Should any other matters be presented for a
vote of the shareholders, the proxy in the enclosed form provides
for discretionary voting authority upon the persons voting such
proxy.
FINANCIAL INFORMATION
A copy of the Corporation's Annual Report on Form 10-K will be
provided without charge to shareholders upon written request to:
Investor Relations
Shelter Components Corporation
2831 Dexter Drive
Elkhart, Indiana 46514
By Order of the Board of Directors
Mark C. Neilson
Secretary/Treasurer
April 21, 1997
<PAGE>
[PROXY CARD]
P
R
O
X
Y
SHELTER COMPONENTS CORPORATION
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1997
THIS PROXY IS SUBMITTED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gerald R. Stults or Mark C. Neilson, or either
of them, as proxies, with full power to appoint their substitutes, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of Common Stock held of record by the undersigned at the Annual Meeting of
Shareholders of Shelter Components Corporation to be held on May 22, 1997 at
9:00 a.m. Local Time, at The Varsity Club Hotel, 3800 N. Main Street,
Mishawaka, Indiana or any adjournment thereof.
To elect a class of three Class A directors to (change of address)
serve for a term of three years, Nominees: ________________________
________________________
Arthur M. Borden, William B. Riblet and ________________________
Larry D. Renbarger ________________________
(If you have written in
the above space, please
mark the corresponding
box on the reverse side
of this card.)
You are encouraged to specify your choices by marking the appropriate boxes,
SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The Proxies cannot
vote your shares unless you sign and return this Card. This Proxy grants
authority to vote for the above nominees unless such authority is withheld.
SEE REVERSE
SIDE
DETACH CARD
<PAGE>
[X] Please mark your
votes as in this
example. SHARES IN YOUR NAME REINVESTMENT SHARES
1. Election of FOR WITHHELD Nominees: Arthur M. Borden
Directors [ ] [ ] William B. Riblet
(see reverse) Larry D. Renbarger
For, except vote withheld from the following nominee(s):
___________________________________________________
FOR AGAINST ABSTAIN
2. To approve an amendment to [ ] [ ] [ ]
the Corporation's Articles of
Incorporation as set forth in
the proxy statement;
3. To ratify the selection of Price [ ] [ ] [ ]
Waterhouse LLP as certified public
accountants for the Corporation for
the fiscal year ending December 31,
1997;
4. To transact any other business that may properly come before the Meeting
and adjournments thereof.
Change of Address [ ]
Attend Meeting [ ]
SIGNATURE(S) _________________________ DATE ___________________
SIGNATURE(S) _________________________ DATE ___________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title of such.
DETACH CARD
