REXHALL INDUSTRIES, INC.
46147 7th Street West
Lancaster, California 93534
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Rexhall Industries, Inc.
("Company") will be held at the Lancaster plant, 46147 7th Street
West, Lancaster, California, 93534 on Tuesday, May 7, 1996, at
10:00 a.m., California time for the following purposes:
1. To elect its Board of Directors to serve for the ensuing year,
2. To ratify the selection of Deloitte & Touche as the independent
public accountants of the Company for the year ending December
31, 1996;
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The stock transfer books of the Company will not be closed, but
only holders of common stock of records at the close of business on
April 4, 1996 will be entitled to vote at the meeting.
Your proxy is enclosed. You are cordially invited to attend the
meeting, but if you do not expect to attend, or if you plan to
attend, but desire the proxy holders to vote your shares, please
date and sign your proxy and return it in the enclosed postage paid
envelope. The giving of this proxy will not affect your right to
vote in person in the event you find it convenient to attend.
Cheryl L. Rex
Secretary
DATED: April 15,1996
<PAGE>
REXHALL INDUSTRIES, INC.
46147 7th Street West
Lancaster, California 93534
PROXY STATEMENT FOR ANNUAL MEETING TO BE HELD
MAY 7,1996, 10:00 A.M.
Your proxy is solicited on behalf of the Board of Directors of
Rexhall Industries, Inc. ("Company") for use at the annual meeting
of shareholders to be held on the above date at 46147 7th Street
West, Lancaster, California, 93534. If a proxy in the accompanying
form is duly executed and returned, the shares represented by the
proxy will be voted as directed. If no direction is given, the
shares will be voted for the election of the five (5) nominees for
director named herein, for approval of the amendments of the
Company's 1989 Incentive and Non-Statutory Stock Option Plan, and
for the approval of Deloitte & Touche as the Company's independent
accountants for the year ending December 31, 1996. A proxy given
by a shareholder may be revoked at any time before it is exercised
by notifying the Secretary of the Company in writing of such
revocation, by giving another proxy bearing a later date or by
voting in person at the meeting.
The cost of this solicitation of proxies will be borne by the
Company. Solicitations will made by mail. In addition the
officers and regularly engaged employees of the Company may, in a
limited number of instances, solicit proxies personally or by
telephone. The Company will reimburse banks, brokerage firms,
other custodians, nominees and fiduciaries for reasonable expenses
incurred in sending proxy materials to beneficial owners of common
stock of the Company.
The Company's annual report, including financial statements for its
fiscal year ended December 31, 1995, is being mailed to all
shareholders concurrently herewith. The annual report is not part
of the proxy materials.
The Company's annual report on Form 10-K for the year ended
December 31, 1995, as filed with the Securities and Exchange
Commission, is available without charge upon written request from
the Secretary of the Company at the address set forth above.
Holders of common stock of record at the close of business on April
4, 1996 will be entitled to vote at the meeting. There were
2,501,000 shares of common stock outstanding on that date. Each
share is entitled to one vote and a majority of the shares of
common stock outstanding is necessary to constitute a quorum for
the meeting. The shareholders have cumulative voting rights in the
election of directors. Under the cumulative voting method, a
shareholder may multiply the number of shares owned by the number
of directors to be elected and cast this total number of votes for
any one candidate or distribute the total number of votes in any
proportion among as many candidates as the shareholder desires. A
shareholder may not cumulate his votes for a candidate unless such
candidate's name has been place in nomination prior to the voting
and unless a shareholder has given notice at the meeting prior to
the voting of his intention to cumulate his votes. If any
shareholders give such notice, all shareholders may then cumulate
their votes.
<PAGE>
ELECTION OF DIRECTORS
The Company's directors are elected annually to serve until the
next annual meeting of shareholders and until their successors are
elected and qualified. The number of directors presently
authorized by the By-laws of the Company is five (5).
Unless otherwise directed by shareholders, the proxy holders will
vote all shares represented by proxies held by them for the
election of the maximum number of the following nominees, all of
whom are now members of and constitute the Company's Board of
Directors. The Company is advised that all of the nominees have
indicated their availability and willingness to serve if elected.
In the event that any nominees become unavailable or unable to
serve as a director of the Company prior to voting, the proxy
holders will vote for a substitute nominee in the exercise of their
best judgment.
Information Concerning Nominees
Information concerning the nominees based on data furnished by them
is set forth below:
WILLIAM J. REX, AGE 45, as founder of the Company, has served as
the Company's chief executive from its inception as a general
partnership in July 1986. In January 1987, when the Company began
operations in corporate form, Mr. Rex became the Company's
President and Chairman of the Board, offices which he continues to
hold. From March 1983 until founding the Company, Mr. Rex served
in various executive capacities for Establishment Industries, Inc.,
a manufacturer of Class A and Class C motorhomes which was acquired
in June 1985 by Thor Industries, Inc., a large manufacturer of
recreational vehicles. His last position with Establishment
Industries, Inc. was President. From 1970 until March 1983, Mr.
Rex was employed in various capacities by Dolphin Trailer Company,
a manufacturer of a wide range of recreational vehicles products.
At the time he left Dolphin Trailer Company (which changed its name
to National R. V., Inc. in 1985), Mr. Rex was Plant Manager in
charge of all production and research and development.
AL J. THEIS, AGE 78, became a director in August 1987. Mr. Theis
is a consultant to the recreational vehicle industry and consults
with the Company relating to financial matters and in development
of global sales. From August 1987 to February 1991, Mr. Theis was
employed by the Company as Chief Financial Officer, from February
1982 until June 1984, he was employed by Establishment Industries,
Inc., as Chief Financial Officer and Corporate Planner.
<PAGE>
DONALD C. HANNAY, AGE 68, joined the Company in December 1987 and
is responsible for product sales and marketing. He became a
director in May 1989. From April 1982 until August 1987, he was
employed by Establishment Industries, Inc. as Vice President, Sales
and Marketing where he built the Establishment's dealer network and
was responsible for dealer sales. From August 1987 until joining
the Company, he was employed as General Sales Manager by Komfort
Industries of California, Inc., a recreational vehicle manufacturer
located in Riverside, California.
ROBERT A. LOPEZ, AGE 56, is President of Nickerson Lumber and
Plywood. Robert started his employment with Nickerson as an
outside salesman in 1969, in 1990 he became a partner and purchased
Nickerson Lumber stock. He was elected as President of Nickerson
in 1981. His background in marketing products primarily to
residential builders, manufactured housing and recreational vehicle
assemblers, is a tremendous asset in helping Rexhall market its
products in both the domestic and global arena. In his spare time,
Mr. Lopez is captain of San Fernando Rangers, a non-profit
organization working to use horses as therapeutic conditioning for
mentally and physically, disabled children.
JOHNNY J. CULBERTSON, AGE 43, joined Rexhall in November of 1994,
he is Vice President and General Manager of the Indiana plant.
From October 1992 until October 1994 he was employed by Warrick
Industries a manufacture of transit buses, ambulances and cargo
trucks, where he was responsible for manufacturing. From October
1989 until October 1992 he was employed with Damon Corp., where he
introduced them to a Class A product line. Prior to employment at
Damon Corp., Mr. Culbertson was employed by Honey R.V.s for 16
years. Honey R.V.'s product line included motorized, towable, park
model homes and truck camper recreational vehicles. Mr.
Culbertson's last position with Honey R.V.s was Vice President of
Production.
Information Concerning Directors and Committees
During 1995, there were four meetings of the Board of Directors.
Outside directors receive $350 per meeting for serving the Company
as members of the Board. Directors may also be reimbursed for
reasonable expenses relating to attendance at Meetings of the Board
or a Committee of the Board. Each director attended all of the
board meetings held during his tenure as a director in 1995.
These are the following Committees of the Board of Directors:
Audit Committee. The Audit Committee consist of William J. Rex, Al
J. Theis and Robert A. Lopez. The Audit Committee is to meet with
representatives of the Company's independent auditors and with
representatives of senior management. The committee recommends the
engagement or discharge of the Company's independent auditors,
consults with the auditors as to the adequacy of internal
accounting procedures and reviews and approves financial statements
and reports. The Audit Committee met two times in 1995.
<PAGE>
Compensation Committee. The Compensation Committee consists of
William J. Rex, Al J. Theis and Robert A. Lopez. The Compensation
Committee is responsible for reviewing and reporting to the Board
on the recommended annual compensation for officers including
salary, bonuses, and other forms of compensation and remuneration
and also administers the Company's Stock Option Plan. The
Compensation Committee met two times in 1995.
The Company has no standing nominating or similar committee whose
function is to consider or recommend nominees to the Board of
Directors.
Securities Ownership
The following table sets forth information as of April 04, 1996
concerning the ownership of the Company's Common Stock (the only
class of securities outstanding) by all persons known by the
Company to be beneficial owners of more than five percent (5%), by
all directors and nominees for director owning Common Stock, and by
all directors and officers as a group:
Number of Percent of
Shares Outstanding
Name of Beneficial Owner Beneficially Shares at
or Identity of Group Owned (1) April 1996
William J. Rex (1) 1,231,000 49.2%
c/o Rexhall Industries, Inc.
46147 7th St. West
Lancaster CA 93534
All Directors and Officers as a Group 1,244,000 49.7%
(5 persons)
(1) The person named in the table has sole voting and investment
power with respect to all shares of Common Stock shown as
beneficially owned by him, subject to applicable community
property law.
<PAGE>
Executive Compensation
The following table sets forth certain information as to each
of the five highest paid of the Company's executive officers (1)
whose cash compensation exceeds $100,000 for the year ended
December 31, 1995.
SUMMARY COMPENSATION TABLE
Annual Compensation
Other Annual
Name and Compensation
Principal Position Year Salary Bonus(S) $
William J. Rex 95 250,000 324,000 (2)
President & CEO 94 250,000 358,000(3) ---
93 250,000 254,000 ---
Donald C. Hannay, Sr. 95 53,800 168,000 ---
V.P. of Sales & Marketing 94 42,000 158,000 ---
93 42,000 73,000 ---
Juan Arias 95 85,000 114,000 ---
V.P. of Production 94 83,000 117,000 ---
93 75,000 51,000 ---
(1) Only three executive officers had cash compensations that exceeds
$100,000 for the year December 31, 1995.
(2) The total reimbursed incremental cost to the Company of providing
perquisites and other personal benefits during 1995 did not exceed
as to any named officer the lesser of $50,000 or 10% of the total
1995 salary and bonus paid to such named officer and, accordingly,
is omitted from the table. These benefits included (i)
reimbursement for medical expenses ($100 monthly) and (ii) amounts
allocated for personal use of company-owned automobile provided to
Mr. Rex.
(3) Mr. Rex's income was incorrectly reported at $390,000 in 1994 but
was actually $358,000.
<PAGE>
Compensation Committee Report
In 1994 the Company extended for 2 years an employment agreement, with
William Rex. The employment agreement provides for an annual salary of
$250,000 plus a bonus determined monthly in the amount of 10% before
bonus and taxes. Other Executive Officers are compensated based on the
following factors: (1) the financial results of the Company during the
prior year, (2) compensation paid to executive officers in prior years,
(3) extraordinary performance during the year and (4) compensation of
executive officers employed by competitors.
Directors who are not Executive Officers are paid $350 per Board Meeting
and there are four Board Meetings per year.
The Company also has an incentive program under which it pays supervisory
employees involved in sales and production a cash bonus based on specific
performance criteria. Committee members: William J. Rex, Robert A. Lopez
and Al J. Theis.
Stock Option Plan
In May 1989, the Company adopted the 1989 Incentive and Nonstatutory
Stock Option Plan (the "Option Plan"), which provides for the granting
of (i) incentive stock options pursuant to Section 422A of the Internal
Revenue Code of 1986, as amended, to key employees, and (ii) nonstatutory
stock options to key employees and directors and consultants to the
Company designated by the Board as eligible under the Option Plan. Under
the Option Plan, options for up to 225,000 share may be granted. In May
1994 an amendment of the Option Plan increased by 225,000 the number of
shares authorized for issuance under the Option Plan (from an original
225,000 shares to 450,000 shares as amended). In May 1995, the Board of
Directors agreed not to issue any additional options authorized by the
May 1994 resolution until further notice in order to protect the per
share profit of its shareholders.
<PAGE>
The following table sets forth information as to all options to purchase
Common Stock which were granted to Executive Officers specified in the table
under "Cash Compensation" above who received options during the year ended
December 31, 1995:
Option/SAR Grants in 1995
# of Securities % of Total
Underlying Options/SARs Exercise
Options/SARs Grants to Employees or Base Expiration
Name Granted In Fiscal Year Price ($/SH) Date
William J. Rex 0 0 0 0
Michael M. Hill(2) 10,000 48% $3.25 2/2000
Donald C. Hannay 11,000 42% $3.25 2/2000
Johnny J. Culbertson 0 0 0 0
Al J. Theis 0 0 0 0
Juan Arias 0 0 0 0
Option/SAR Grants Canceled
# of Securities % of Total
Underlying Option Grants Base
Options/SARs Grants Canceled Price Expiration
Name Year Canceled (#)(1) to employees ($SH) Date
William J. Rex 1995 0 0 0 0
1994 0 0 0 0
1993 65,000 72% $5.36 1995
William M. Hill(2) 1995 0 0 0 0
1994 0 0 0 0
1993 0 0 0 0
Donald C. Hannay 1995 0 0 0 0
1994 0 0 0 0
1993 10,000 11% 4.875 1995
Juan Arias 1995 11,000 39% 0 0
1994 0 0 0 0
1993 0 0 0 0
Johnny J. Culbertson 1995 0 0 0 0
1994 0 0 0 0
1993 0 0 0 0
(1) Options that were granted in 1990, that were canceled in 1993.
There were no grants, canceled prior to 1993.
(2) Mr. William M. Hill resigned from the Company in February 1995.
<PAGE>
No director who was not an Executive Officer was granted any stock
options during the year ended December 31, 1995. There were 21,000
stock options granted in February 1995. There were 28,000 shares of
stock options repurchased from key employees and canceled during the
year ended December 31, 1995.
Effective May 1, 1991, the Securities and Exchange Commission adopted
new rules (the "New Rule(s)") regarding reporting of beneficial
ownership of securities by directors, officers and persons who own more
than ten percent of the Company's Common Stock ("Reporting Persons").
Under the rules which existed prior to May 1, 1991 (the "Old Rule(s)"),
employee stock options granted under a plan which complied with Old
Rules 16b-3 were exempt from reporting under Old Rule 16a-6(c). Under
the transition provisions applicable to the New Rules, reporting persons
are required to report derivative securities acquired under the Old
Rules on the first form otherwise required to be filed after May 1, 1991.
William J. Rex, the Company's Chairman of the Board, President, Chief
Executive Officer and principal shareholder, timely filed a Form 4 in
May 1993 in which he reported the grant of employee stock options under
the Company's 1989 Incentive and Nonstatutory Stock Option Plan. In
such Form 4, and pursuant to the transition provisions applicable to the
New Rules discussed above, Mr. Rex also reported the grant of options to
him before May 1, 1991 that were exempt from earlier reporting but did
not report in that Form 4 that such previously granted options had been
canceled in exchange for the grant of additional options that were
subject to material contingencies and therefore not reportable under the
New Rules until the contingencies were satisfied. Such cancellation was
reported in an amended Form 4 filed later in May 1993.
Aggregated Option/SAR Exercises in last FY and FY-End Options/SAR Values
# of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Option/SARs at Options/SARs
Shares Acquired Value End(#)Exercisable FY-End(S) Exercisable
Name on Exercised(#) Realized($) /Unexercisable /Unexercisable(l)
William J. Rex 0 0 102,000/10,000 227,000/26,000
Donald C. Hannay 0 0 11,000/0 23,000/0
(1) 12/31/95 closing market price of$5.375 vs. option.
<PAGE>
The following table sets forth information from inception of Option
Plan through December 31, 1995 concerning the net number of options
under the Option Plan that has been received by (i) each of the
Company's current executive officers, (ii) each nominee for election as
director, (iii) all current executive officers as a group, (iv) all
current directors, who are not executive officers as a group, and (v)
all employees who are not executive officers.
No. of shares
covered by
Name of Person or Group Position with the Company Options
William J. Rex Chairman of the Board, President and 112,000
Chief Executive Officer, and Nominated Director
Donald C. Hannay, Sr. Vice President of Sales and Marketing, 11,000
and Nominated Director
All current executive officers as a group 123,000
All current directors who are not executive officers as a group 0
All employees who are not executive officers as a group 0
<PAGE>
SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche as
independent accountants of the Company for the year ending December
31, 1996 and further directed that the Company submit the selection of
independent accountants for ratification by shareholders at the
Company's annual meeting. Deloitte & Touche acted for the Company in
such capacity for the year ended December 31, 1995. Representatives
of Deloitte & Touche are expected to be present at the annual meeting
and will have the opportunity to make a statement if they desire to do
so. They will also be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1997 Annual
Meeting must be received at the Company's principal office no later
than December 28, 1996 in order to be considered for inclusion in the
proxy statement and form of proxy related to that meeting.
OTHER BUSINESS
Board of Directors knows of no other matter to be acted upon at
the meeting. However, if any other matter shall properly come before
the meeting, the proxy holders named in the proxy accompanying this
statement, will have discretionary authority to vote all proxies in
accordance with their best judgement.
By order of the Board of Directors
Cheryl L. Rex
Secretary
DATED: April 15, 1996
Lancaster, California
