<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
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Check the appropriate box:
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[ ] 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 240.14a-11(c) or 240.14a-12
SUPERIOR INDUSTRIES INTERNATIONAL, 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):
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<PAGE> 2
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
7800 WOODLEY AVENUE
VAN NUYS, CALIFORNIA 91406
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 7, 1999
To the Stockholders of
SUPERIOR INDUSTRIES INTERNATIONAL, INC.:
The Annual Meeting of Stockholders of SUPERIOR INDUSTRIES INTERNATIONAL,
INC. will be held at the Airtel Plaza Hotel, 7277 Valjean Avenue, Van Nuys,
California 91406 on Friday, May 7, 1999 at 10:00 A.M. for the following
purposes:
(1) To elect three directors;
(2) To approve and ratify the adoption of an amendment to the Superior
Industries International, Inc. 1993 Stock Option Plan to increase
the shares available for grant thereunder by 500,000; and
(3) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only stockholders of record at the close of business on March 12, 1999 are
entitled to notice of and to vote at the Annual Meeting. On any business day
from April 27, 1999 until May 7, 1999, during ordinary business hours,
stockholders may examine the list of stockholders for any purpose relevant to
the Annual Meeting at the Company's executive offices at 7800 Woodley Avenue,
Van Nuys, California 91406.
You are urged to execute the enclosed proxy and return it in the
accompanying envelope at your earliest convenience. Such action will not affect
your right to vote in person should you find it possible to attend the Meeting.
By Order of the Board of Directors
Daniel L. Levine
Secretary
Van Nuys, California
Dated: March 31, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE PAID
ENVELOPE.
<PAGE> 3
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
7800 WOODLEY AVENUE
VAN NUYS, CALIFORNIA 91406
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 7, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors to be used at the Annual Meeting of
Stockholders of Superior Industries International, Inc. ("Superior" or the
"Company"), to be held at the Airtel Plaza Hotel, 7277 Valjean Avenue, Van Nuys,
California 91406 on Friday, May 7, 1999 at 10:00 A.M. and at all adjournments
thereof. The approximate date on which Superior anticipates first sending this
Proxy Statement and form of proxy to its stockholders is March 31, 1999.
The solicitation of the proxy accompanying this statement is made by the
Board of Directors of Superior, and the cost of such solicitation will be borne
by Superior. The solicitation will be by mail, telephone, or oral communication
with stockholders.
The matters to be considered and voted upon at the Annual Meeting are set
forth in the Notice of Annual Meeting which accompanies this Proxy Statement.
A proxy for use at the Annual Meeting is enclosed. A proxy, if properly
executed, duly returned and not revoked, will be voted in accordance with the
instructions contained thereon. If the proxy is executed and returned without
instruction, the proxy will be voted FOR the election as directors of the
individuals named below and FOR the adoption of the amendment to the Superior
Industries International, Inc. 1993 Stock Option Plan. If the proxy is not
returned, your vote will not be counted. Any stockholder who executes and
delivers a proxy has the right to revoke it at any time before it is exercised,
by filing with the Secretary of Superior a written notice revoking it or a duly
executed proxy bearing a later date, or if the person executing the proxy is
present at the meeting, by voting his shares in person.
VOTING SECURITIES AND PRINCIPAL HOLDERS
There were issued and outstanding 27,147,285 shares of Superior's common
stock, par value $0.50, on March 12, 1999, which has been set as the record date
for the purpose of determining the stockholders entitled to notice of and to
vote at the Annual Meeting. Each holder of common stock will be entitled to one
vote, in person or by proxy, for each share of common stock standing in his name
on the books of Superior as of the record date; votes may not be cumulated. To
constitute a quorum for the transaction of business at the Annual Meeting, there
must be present, in person or by proxy, a majority of the issued and outstanding
shares of common stock.
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The following table sets forth information known to Superior as of March 1,
1999, with respect to beneficial ownership of the Company's common stock by each
person known to the Company to be the beneficial owner of more than 5% of the
Company's common stock, by each director, by the Named Officers (as defined
under "Executive Compensation"), and by all directors and officers as a group:
<TABLE>
<CAPTION>
AMOUNT PERCENT
BENEFICIALLY OF
NAME AND ADDRESS(+) OF BENEFICIAL OWNER OWNED CLASS
- --------------------------------------- ------------ -------
<S> <C> <C>
Louis L. Borick 4,264,738(1) 15.7%
American Century Companies, Inc. 2,959,400 10.9%
4500 Main Street, P.O. Box 418210
Kansas City, MO 64141-9210
Juanita A. Borick 2,712,955 10.0%
Steven J. Borick 124,461(1) *
James M. Ferguson 57,182(2) *
R. Jeffrey Ornstein 31,550(2) *
Raymond C. Brown 28,394(1) *
Jack H. Parkinson 18,339(1) *
Michael J. O'Rourke 14,516(2) *
Henry C. Maldini 14,000(1) *
Philip W. Colburn 10,930(1) *
V. Bond Evans 8,000(1) *
Sheldon I. Ausman 6,000(1) *
Superior's Directors and Officers 4,640,049(3) 17.1%
As a Group (17 persons)
</TABLE>
- ------------
+ All persons have the Company's principal office as their address, except as
indicated.
* Less than 1%.
(1) Includes 750,000, 14,000, 9,000, 6,800, 10,930, 8,000, 6,000 and 5,000
shares for Messrs. L. Borick, Maldini, S. Borick, Parkinson, Colburn, Evans,
Ausman, and Brown, respectively, of which they have the right to acquire
beneficial ownership through the exercise within 60 days from the date
hereof of non-statutory stock options that have been previously granted.
(2) Includes 32,300, 23,750 and 14,516 shares for Messrs. Ferguson, Ornstein and
O'Rourke, respectively, of which they have the right to acquire beneficial
ownership through the exercise within 60 days from the date hereof of
incentive stock options that have been previously granted.
(3) Includes 934,894 shares of which the directors and officers have the right
to acquire beneficial ownership through the exercise within 60 days from the
date hereof of stock options that have previously been granted. Excluding
Mr. L. Borick, the directors and officers beneficially own 375,311 shares,
or 1.4% of the class. Each of such directors and officers has sole
investment and voting power over his shares.
A COPY OF SUPERIOR'S ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED TO ANY STOCKHOLDER WITHOUT
CHARGE ON WRITTEN REQUEST TO R. JEFFREY ORNSTEIN, VICE PRESIDENT & CFO, SUPERIOR
INDUSTRIES INTERNATIONAL, INC., 7800 WOODLEY AVENUE, VAN NUYS, CALIFORNIA 91406.
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PROPOSAL ONE
ELECTION OF DIRECTORS
One of the purposes of the Meeting is to elect three persons to Class III
of the Board of Directors in accordance with the Company's Articles of
Incorporation. Unless instructed to the contrary, the persons named in the
accompanying proxy will vote the shares for the election of the nominees named
herein to Class III of the Board of Directors as described below. Although it is
not contemplated that any nominee will decline or be unable to serve, the shares
will be voted by the proxy holders in their discretion for another person if
such a contingency should arise. The term of each person elected as a director
will continue until the director's term has expired and until his or her
successor is elected and qualified. The three persons receiving the largest
number of votes shall be elected as Class III directors. Since there is no
particular percentage of either the outstanding shares or the shares represented
at the meeting required to elect a director, abstentions and broker non-votes
will have the same effect as the failure of shares to be represented at the
meeting, except that the shares subject to such abstentions or non-votes will be
counted in determining whether there is a quorum for taking shareholder action,
under California law and the Company's Articles of Incorporation and Bylaws.
The Company's Articles of Incorporation provides that its eight directors
be divided into three classes. The term of office of those directors in Class I
expires at the 2000 Annual Meeting of Stockholders; the term of office of those
directors in Class II expires at the 2001 Annual Meeting of Stockholders; and
the term of office of those directors in Class III expires at the 1999 Annual
Meeting of Stockholders. Directors elected to succeed those directors whose
terms expire are elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election.
NOMINEES FOR DIRECTORS
Messrs. L. Borick, Brown and S. Borick are currently serving as directors
in Class III and were elected at the 1996 Annual Meeting of Stockholders for a
term of office expiring at the 1999 Annual Meeting of Stockholders. All nominees
were recommended for re-election by the Board of Directors. The name, age and
principal business or occupation of each nominee and each of the other directors
who will continue in office after the 1999 Annual Meeting, the year in which
each first became a director of the Company, committee memberships, ownership of
equity securities of the Company and other information are shown below in the
brief description of each of the nominees and incumbent directors and in the
table following such descriptions.
Each of the following persons is nominated for election to Class III of the
Board of Directors (to serve a three-year term ending at the 2002 Annual Meeting
of Stockholders and until their respective successors are elected and
qualified). THE BOARD OF DIRECTORS RECOMMEND THAT YOU VOTE FOR THE FOLLOWING
NOMINEES:
Louis L. Borick
Mr. L. Borick has been President and Chairman of Superior's Board of
Directors since 1957 and has been responsible for the formation of the overall
corporate policy of the Company and its subsidiaries. His son, Steven J. Borick,
serves on Superior's Board of Directors. Mr. Borick also serves as a member of
the Long Range Financial Planning Committee of the Board of Directors of the
Company.
Raymond C. Brown
Mr. Brown retired from the Company in 1998 after a distinguished career
spanning thirty years of service. Mr. Brown joined the Company in 1967 and
became Senior Vice President in 1975. His duties included
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<PAGE> 6
strategic and product planning and involvement in all of the Company's major
projects. He was directly responsible for marketing and sales of products for
original equipment manufacturers and was also responsible for Corporate Quality.
Steven J. Borick
Mr. S. Borick, who is a son of Louis L. Borick, was appointed Vice
President, Strategic Planning, effective March 19, 1999. He has been engaged in
the oil exploration business for over 20 years in his capacity as President of
Texakota, Inc. and general partner of Texakota Oil Co. Mr. S. Borick also serves
on the Board of Directors of M.D.C. Holdings, Inc., a New York Stock Exchange
Company. He serves on the Long Range Financial Planning Committee of the Board
of Directors of the Company.
INCUMBENT DIRECTORS
Directors in the other two classes of directors whose terms are not
currently expiring are as follows:
CLASS I -- SERVING UNTIL THE 2000 ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR
RESPECTIVE SUCCESSORS ARE ELECTED AND QUALIFIED:
Jack H. Parkinson
Mr. Parkinson has 50 years experience in the automotive industry. He
retired from Chrysler Corporation after 24 years in its international
organization. He was Managing Director of Chrysler's Mexico operations from 1974
to 1982 and was Executive Vice President of Sunroad Enterprises, an entity
involved in real estate development, banking and car dealerships, from 1983 to
1994. He serves on the Long Range Financial Planning and Compensation Committees
of the Board of Directors of the Company.
Philip W. Colburn
Mr. Colburn has more than 30 years experience in the automotive industry.
He currently is the Chairman of Allen Telecom, Inc., a New York Stock Exchange
listed manufacturer of electronic and other mobile communications products for
the wireless telecommunications industry. He has held his current position since
March 1988 and has served as a member of the Board of Directors of Allen since
1975. Mr. Colburn serves on the Audit and Long Range Financial Planning
Committees of the Board of Directors of the Company. Mr. Colburn is also a
Director of Earl Scheib, Inc., and TransPro, Inc.
R. Jeffrey Ornstein
Mr. Ornstein, a certified public accountant, joined the Company in June
1984 as Vice President, Finance and Treasurer and is Chief Financial Officer of
the Company. He became Vice President and CFO in 1995. Mr. Ornstein serves as an
ex officio member on the Long Range Financial Planning Committee of the Board of
Directors of the Company.
CLASS II -- SERVING UNTIL THE 2001 ANNUAL MEETING OF STOCKHOLDERS AND UNTIL
THEIR RESPECTIVE SUCCESSORS ARE ELECTED AND QUALIFIED:
Sheldon I. Ausman
Mr. Ausman is Vice Chairman of Compensation Resource Group, Inc. (CRG), a
national executive compensation and benefits consulting firm. Prior to joining
CRG in 1998, Mr. Ausman served as Senior Vice
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President and Director with the international financial printing firm of Bowne
of Los Angeles. He also served with Arthur Andersen & Co. for 34 years and was
managing partner of the firm's practice in Southern California, Honolulu and Las
Vegas before his retirement. Mr. Ausman is very active in the community and
among other responsibilities serves on the board of the Los Angeles Music Center
Operating Company and the Autry Museum of Western Heritage. Mr. Ausman serves on
the Audit, Compensation and Long Range Financial Planning Committees of the
Board of Directors of the Company.
V. Bond Evans
Mr. Evans has over 35 years of domestic and international experience in
engineering, manufacturing and general management disciplines, primarily in the
aluminum industry. He graduated from General Motors Institute of Technology and
Management and began his career with General Motors Diesel Ltd. Canada. In 1960
he joined Kawneer Company Canada Limited. He became President with
responsibility for Canadian and European operations in 1968. He was named
President of the parent Company in 1970 with responsibility for worldwide
operations. Following the acquisition of Kawneer, Inc. by Alumax, Inc. (NYSE) he
held a succession of upper management positions in Alumax, becoming President
and CEO in 1991. During his career Mr. Evans served as a Director and Committee
Chairman in the Aluminum Association and the International Primary Aluminum
Institute. Mr. Evans serves on the Compensation and Stock Option Committees of
the Board of Directors of the Company.
The names of, and certain information with respect to, the nominees and the
incumbent directors are as follows:
<TABLE>
<CAPTION>
FIRST
ELECTED
AS A
NAME AGE PRINCIPAL OCCUPATION DIRECTOR
- ---------------------- -- -------------------------------- ----
<S> <C> <C> <C>
NOMINEES
Louis L. Borick 75 President and Chairman of the 1957
Board
Raymond C. Brown 70 Retired Senior Vice President 1972
Steven J. Borick 46 Vice President, Strategic 1981
Planning(1)
INCUMBENTS
Sheldon I. Ausman 65 Vice Chairman, Compensation 1992
Resource Group, Inc.
V. Bond Evans 64 Retired President and CEO, 1994
Alumax Inc.
Jack H. Parkinson 71 Retired Executive Vice 1983
President,
Sunroad Enterprises
Philip W. Colburn 70 Chairman, Allen Telecom, Inc. 1991
R. Jeffrey Ornstein 56 Vice President & CFO 1991
</TABLE>
- ---------------
(1) Effective March 19, 1999, Mr. S. Borick was appointed Vice President,
Strategic Planning.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During 1998, the Board of Directors of the Company held five regularly
scheduled meetings. Each of the directors attended at least 75% of the aggregate
number of meetings of the Board of Directors and meetings of the committees of
the Board on which he served. In addition to meeting as a group to review the
Company's
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<PAGE> 8
business, certain members of the Board of Directors also devote their time and
talents to certain standing committees. Significant committees of the Board of
Directors of the Company and the respective members are set forth below.
The Audit Committee establishes and oversees the Company's audit policy. It
is presently comprised of Sheldon I. Ausman, Jack H. Parkinson and Philip W.
Colburn. The Audit Committee met twice during 1998.
The Stock Option Committee administers the Company's stock option plans. It
is presently comprised of Sheldon I. Ausman, Philip W. Colburn and V. Bond
Evans. The Stock Option Committee met five times during 1998.
The Compensation Committee reviews and approves the non-stock compensation
for the Company's officers and key employees. The committee consists of Sheldon
I. Ausman, V. Bond Evans and Jack H. Parkinson. The Compensation Committee met
once during 1998. See "Compensation Committee Report" located elsewhere in this
Proxy Statement.
The Long Range Financial Planning Committee reviews the Company's long-term
strategic financial objectives and the methods to accomplish them. The committee
consists of Steven J. Borick, Sheldon I. Ausman, Louis L. Borick, Philip W.
Colburn, Jack H. Parkinson and R. Jeffrey Ornstein as an ex officio member. The
Long Range Financial Planning Committee did not meet during 1998.
The Company does not have a standing nominating committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Superior's main office and manufacturing facilities located at 7800 Woodley
Avenue, Van Nuys, California, are leased from Mr. L. Borick and Juanita A.
Borick. One of the two buildings on the property is a casting plant containing
approximately 85,000 square feet and the other is a combined office,
manufacturing and warehouse structure. The offices comprise approximately 24,000
square feet and the manufacturing and warehouse area 236,000 square feet. During
fiscal 1998, Superior paid $1,203,035 in rentals under the lease.
Superior leases the plant and office facilities at 14721 Keswick Street,
Van Nuys, California from Keswick Properties, owned jointly by Steven J. Borick,
a director and officer of the Company, and two other of Mr. L. Borick's
children. During fiscal 1998, Superior paid Keswick Properties $243,418 in
rentals under the lease.
The Company believes that the terms of the above mentioned lease agreements
are as favorable to the Company as those obtainable from an unaffiliated third
party.
EMPLOYMENT AGREEMENTS
On January 1, 1994, Superior renewed its employment agreement with Mr. L.
Borick. The agreement provides for a five-year evergreen term, an annual base
compensation, use of a company automobile, life insurance and other customary
employee benefits. Mr. L. Borick's annual base salary in effect as of January 1,
1996 is $1,000,000. The Company provided life insurance policies to Mr. Borick
with a face value of $2,500,000. The agreement also provides, in the event of
Mr. L. Borick's death or disability during the employment term, for a payment
over 60 months of the balance of Mr. L. Borick's compensation under the
agreement at the time of his death or disability. Upon an early termination of
the agreement or Mr. L. Borick's retirement, he will receive, for life,
one-twelfth of his annual base compensation during each of the ensuing 60 months
and one-half such amount during each of the 120 months following. See
"Compensation Committee
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Report" located elsewhere in this Proxy Statement for more discussion regarding
Mr. L. Borick's compensation.
RETIREMENT BENEFITS
The Company entered into agreements with its directors and executive
employees which provide for Superior to pay to the individual, upon his
retirement after having reached his specified vesting date, or in the event of
his death while in the employ of the Company prior to retirement, a monthly
retirement benefit equal to 30% of his final average compensation over the
preceding 36 months. Such payments are to continue through the later of 120
months or, if subsequent to his retirement, the individual's death.
COMPENSATION OF DIRECTORS
During 1998, all non-employee directors of the Company were each
compensated $20,000 for services as directors and $500 for each committee
meeting attended. Management members of the Board of Directors are not
compensated for their service as directors.
PROPOSAL TWO
APPROVAL OF AN AMENDMENT TO THE 1993 STOCK OPTION PLAN
The Company's 1993 Stock Option Plan (the "1993 Plan") was initially
adopted by the Board of Directors on March 10, 1993, and approved by the
stockholders on May 21, 1993. The purpose of the 1993 Plan is to strengthen the
Company by providing additional means of retaining and attracting competent
management personnel by providing to participating directors, officers and key
employees who render valuable services to the Company added incentive for high
levels of performance and for unusual efforts to increase the earnings of the
Company. The use of stock options as supplements to other forms of compensation
paid by the Company is desirable to secure for the Company and its stockholders
the advantages of stock ownership by plan participants, upon whose efforts,
initiative and judgment the Company is largely dependent for the successful
conduct of its business.
As of March 1, 1999, only 144,183 shares remained available for future
grants to directors, officers and key employees under the 1993 Plan. Based on
the Board's estimate of projected future needs for option grants, the Board
believes 500,000 shares could be added to the 1993 Plan, thereby preserving the
benefits of the 1993 Plan to the Company and its shareholders. Accordingly, the
Board of Directors, on March 19, 1999, unanimously approved a 500,000 share
increase to shares available for grant under the 1993 Plan. No other amendments
to the 1993 Plan are being proposed.
The amendment to the 1993 Plan is subject to the affirmative vote of at
least a majority of the outstanding shares of the common stock present and
voting at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF
AMENDING THE 1993 PLAN BY INCREASING BY 500,000 SHARES THE MAXIMUM SHARES
AVAILABLE FOR GRANT.
Certain features of the 1993 Plan are summarized below. The summary,
however, does not purport to be a complete description of the 1993 Plan. A copy
of the 1993 Plan, as currently in effect, may be obtained by a stockholder,
without charge, upon request to R. Jeffrey Ornstein, Vice President & CFO,
Superior Industries International, Inc., 7800 Woodley Avenue, Van Nuys,
California 91406.
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Administration. The 1993 Plan will be administered by a Stock Option
Committee (the "Committee") appointed by the Board of Directors. The Committee
will consist of two non-employee directors, each of whom is a "disinterested
person," within the meaning of Rule 16b-3 of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
Participation. Directors, officers and key employees of the Company, or of
any corporation of which 50% or more of the total combined voting power of all
classes of stock is owned directly or indirectly by the Company (a
"subsidiary"), shall be eligible for selection to participate in the 1993 Plan.
Subject to the express provisions of the 1993 Plan, the Committee shall
determine from this eligible class the individuals who shall receive options,
the terms and provisions of the respective option agreements (which need not be
identical), the times at which such options shall be granted, and the number of
shares subject to each option. Such options shall be granted by the Committee.
An individual who has been granted an option may, if he is otherwise eligible,
be granted an additional option or options if the Committee shall so determine.
Such options may be granted in lieu of outstanding options previously granted
under this 1993 Plan or may be in addition to such options. The Committee shall
have discretion to determine whether options granted under the 1993 Plan shall
be options intended to qualify as "incentive stock options" under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code") or non-statutory
options.
Option Price. The option price under the 1993 Plan is to be not less than
100% of the fair market value of the common stock on the date the option is
granted, which is to be the date on which the Committee awards the option. The
purchase price of any shares purchased upon exercise of an option is to be paid
in full in cash at the time of such exercise. On March 1, 1999, the closing
price on the New York Stock Exchange of a share of common stock underlying the
options granted under the 1993 Plan was $25.50.
Option Period. Each option and all rights or obligations thereunder are to
expire on such date as the Committee may determine, but not later than the day
immediately preceding the tenth anniversary of the date on which the option is
granted. Options granted under the 1993 Plan are to be subject to earlier
termination as described below.
Termination of Employment or Services Rendered. If an option holder who is
an employee ceases to be employed by the Company or any subsidiary for any
reason (other than death), including retirement, any option or unexercised
portion thereof is to expire unless exercised within one (1) month of the date
on which he ceases to be an employee, and in any event no later than the date of
expiration of the option period. If an option holder is not an employee but is a
director of the Company or any subsidiary, his option is to expire upon
termination of association with the Company, or upon earlier termination
pursuant to the 1993 Plan.
Acceleration of Outstanding Options. In the event of one or more of the
following transactions ("Corporate Transactions"): (i) a merger in which the
Company is not the surviving entity (except for a transaction the principal
purpose of which is to change the State of the Company's incorporation), (ii)
the sale or other disposition of all or substantially all of the assets of the
Company, or (iii) if granted to the participant by the Committee, (a) any other
corporate reorganization or business combination in which 25% or more of the
Company's outstanding voting stock is transferred to different holders in a
single transaction or a series of related transactions, or (b) if the majority
of any class of directors become comprised of individuals who were not either
nominated by the then existing Board of Directors or had not been appointed by
the then existing Board of Directors, each outstanding option will become
immediately exercisable for up to the full number of shares covered by the
option. In no event will any option be accelerated if the terms of the Corporate
Transaction require each outstanding option to be assumed by the successor
corporation or to be replaced by a comparable option to purchase shares of the
successor corporation. Upon the consummation of
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the Corporate Transaction, all outstanding options will, to the extent not
exercised or assumed, terminate and cease to be exercisable.
Duration and Amendment of the 1993 Plan. The 1993 Plan shall remain in
effect until terminated by the Committee; provided that no options may be
granted after March 10, 2003. The Board of Directors may amend or suspend the
1993 Plan at any time; provided that an amendment which (i) materially increases
the maximum shares available for grant under the 1993 Plan, (ii) changes the
minimum exercise price of an option (provided, however, that the Committee may
cancel and regrant at a lower price all or any options granted under the 1993
Plan), (iii) materially modifies the requirements as to eligibility for
participation in the 1993 Plan, or (iv) materially increases the benefits
accruing to participants under the 1993 Plan must be approved by the affirmative
vote of the holders of a majority of securities of the Company present, or
represented, and entitled to vote at a meeting duly held in accordance with the
applicable law.
EXECUTIVE COMPENSATION
The following table shows information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
1996 through 1998 of those persons who were, at December 31, 1998, (i) the chief
executive officer and (ii) the other four most highly compensated executive
officers of the Company (the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION -
FISCAL ----------------------- STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(2)
--------------------------- ------ ---------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Louis L. Borick 1998 $1,000,001 $1,734,000 250,000 $10,347
President and Chairman of the 1997 1,018,213 1,752,000 -0- 900
Board 1996 994,194 1,265,000 -0- 990
R. Jeffrey Ornstein 1998 $ 221,209 $ 200,000 5,000 $ 3,705
Vice President & CFO 1997 211,523 200,000 5,000 900
1996 207,514 200,000 -0- 990
James M. Ferguson 1998 $ 187,874 $ 100,000 5,000 $ 3,233
Vice President, OEM Marketing 1997 184,738 100,000 3,000 900
Group 1996 169,820 90,000 -0- 461
Henry C. Maldini(3) 1998 $ 193,387 $ 90,000 -0- $ 3,194
Vice President, Engineering 1997 160,832 88,000 3,000 764
1996 143,575 80,000 -0- 528
Michael J. O'Rourke 1998 $ 122,652 $ 100,000 5,000 $ 2,768
Vice President, OEM Program 1997 119,915 75,000 3,000 990
Administration 1996 93,645 60,000 2,000 932
</TABLE>
- ---------------
(1) While the executive officers enjoy certain perquisites, such perquisites do
not exceed the lesser of $50,000 or 10% of such officer's salary and bonus,
and, accordingly, are not reflected on this table.
(2) These amounts represent the Company's contributions to the employee
retirement savings plans covering substantially all of its employees.
(3) Mr. Maldini retired from the Company effective January 29, 1999.
9
<PAGE> 12
OPTION GRANTS
The following table shows information on grants of stock options during the
fiscal year 1998 to the Named Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
PERCENTAGE OF ASSUMED ANNUAL RATES OF
TOTAL OPTIONS STOCK PRICE APPRECIATION FOR
GRANTED TO OPTION TERM(3)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION ------------------------------
NAME GRANTED(1) FISCAL 1998 PER SHARE(2) DATE 5% 10%
---- ------------ ---------------- ----------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Louis L. Borick........ 250,000 60.5% $25.5625 12/11/08 $4,019,030 $10,185,010
R. Jeffrey Ornstein.... 5,000 1.2% 20.625 9/3/08 64,855 164,355
James M. Ferguson...... 5,000 1.2% 20.625 9/3/08 64,855 164,355
Michael J. O'Rourke.... 5,000 1.2% 20.625 9/3/08 64,855 164,355
Henry C. Maldini....... -0-
</TABLE>
- ---------------
(1) All options granted are exercisable in cumulative equal installments
commencing one year from date of grant, with full vesting on the fourth
anniversary date. Vesting may be accelerated in certain events relating to
the change of the Company's ownership or certain corporate transactions.
(2) All stock options were granted at market value (closing price on the New
York Stock Exchange -- Composite Transactions of the Company's common
stock) on the date of grant.
(3) Reported net of the option exercise price. These amounts represent certain
assumed rates of appreciation only. Actual gains, if any, on stock option
exercises are dependent on the future performance of the common stock,
overall stock conditions, as well as the option holders' continued
employment through the vesting period. The amounts reflected in this table
may not be indicative of the value that will actually be achieved or
realized.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table shows information with respect to stock options
exercised during fiscal year 1998 and unexercised options to purchase the
Company's common stock for the Named Officers.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED,
OPTIONS HELD AT IN-THE-MONEY OPTIONS
SHARES DECEMBER 31, 1998 AT DECEMBER 31, 1998(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Louis L. Borick......... -0- $ -0- 750,000 250,000 $1,794,375 $562,500
R. Jeffrey Ornstein..... 21,950 365,687 22,500 8,750 137,850 55,391
James M. Ferguson....... -0- -0- 31,550 7,250 400,949 47,609
Henry C. Maldini........ 3,000 26,918 13,250 2,250 85,947 11,672
Michael J. O'Rourke..... -0- -0- 13,766 8,250 151,775 52,172
</TABLE>
- ---------------
(1) Represents the difference between the market value on the date of exercise
and the option exercise price.
(2) Represents the difference between the market value at December 31, 1998 and
the option exercise price.
10
<PAGE> 13
COMPENSATION COMMITTEE REPORT
The Compensation Committee (the "Committee"), as currently constructed, is
comprised of Messrs. Ausman, Evans and Parkinson, individuals who have never
been employees of the Company. Its responsibility is to develop and make
recommendations to the full Board with respect to executive compensation. Also,
the Compensation Committee establishes the annual compensation of the Company's
President and Chief Executive Officer ("CEO") and reviews the compensation
policy related to the Company's other executive officers. Its executive
compensation philosophy is to set levels of overall compensation that will allow
the Company to successfully compete for exceptional executives, to tie part of
each executive's compensation to the success of the Company in attaining its
short and long-term objectives, and to recognize individual effort and
achievement.
The Committee considers the competitiveness of overall compensation,
solely, and evaluates the performance of the executive officers and adjusts
salaries accordingly. For individuals other than the CEO, adjustments are made
based on subjective recommendations of the CEO to the Committee of the
individual executive's performance and also take into account the profitability
of the Company but without regard to a specified formula. The Committee believes
these criteria for salary adjustments are in accordance with sound overall
compensation guidelines.
Pursuant to this philosophy, the Committee reviews published compensation
surveys covering a wide array of public companies, both larger and smaller than
the Company. Periodically it reviews the compensation paid and to be paid to
each of the Company's executive officers and receives an evaluation of their
performance from the Company's CEO. The Company's CEO has an employment contract
which is discussed under "Employment Agreements."
The compensation surveys that are utilized for executives other than the
Company's CEO were prepared by a nationally recognized independent management
consulting firm based on the compilation of over nine (9) individual surveys
contained in their internal data base. The names of the companies in the survey
are not identified.
The compensation surveys utilized for CEO compensation are published in
national magazines and contain certain of the companies comprising the peer
group (see "Common Stock Performance Graph") but include a variety of other
public companies. Compensation levels for the CEO were not solely based by
reference to peer company compensation levels.
The Committee does not specifically target a level of compensation relative
to comparative compensation data collected for the CEO or other executive
officers, but rather refers to this data for subjective review and confirmation
of reasonableness of salaries paid to executives.
In 1994, the Board of Directors and the stockholders approved an Incentive
Bonus Plan (the "Bonus Plan") for Mr. L. Borick, the Company's CEO. The purpose
of the Bonus Plan is to provide Mr. Borick an additional incentive to continue
the extraordinary efforts, initiative and judgment he has exercised on behalf of
the Company and its stockholders by establishing his yearly bonus on a specific
formula basis. Under the Bonus Plan, the amount of Mr. Borick's annual bonus
will equal 2.0% of the Company's annual income before income taxes and before
deducting any annual awards under the Bonus Plan or any other executive
incentive arrangements. However, if such annual income does not equal at least
90% of the planned level for the year, as approved by the Compensation
Committee, the 2.0% figure will be reduced to 1.8%, ranging down to 1.0% at 70%
of the planned level. In no event, however, will Mr. Borick's annual bonus under
the Bonus Plan be less than 1.0% of annual income, as defined.
11
<PAGE> 14
The Compensation Committee administers the Bonus Plan and determines the
amount payable under it in accordance with its terms. The Compensation Committee
has the right to amend or terminate the Bonus Plan at any time. The 1998 bonus
paid to Mr. Borick pursuant to the Plan was $1,734,000.
The Omnibus Budget Reconciliation Act of 1993 ("the Act") enacted in August
1993 limits the deductibility by the Company of the annual compensation paid
over $1,000,000 to the Named Officers, unless such compensation was
"performance-based," as defined in the Act. The intent of the Compensation
Committee is that compensation paid under the Bonus Plan will qualify as
performance-based compensation under the Act.
The overall amount of the bonus pool is approximately 5.5% of pre-tax
income. The pool is utilized for all employee bonuses including the Bonus Plan
for the CEO. The determination as to the portion of the bonus pool awarded to
each executive, other than the CEO, is entirely subjective and discretionary
based on an evaluation of their performance and contribution for the year. The
Committee approved the establishment of the pool and the amount; and individual
bonus awards, other than for the CEO, are based on recommendations of the CEO
and reviewed and approved by the Committee.
The stock option awards to each executive are determined subjectively based
on an evaluation of their performance and contribution to the Company and also
take into account the relative financial performance of the Company without
regard to any specified formula.
Base salaries are generally reviewed no sooner than every 12 to 18 months
and adjusted when deemed necessary. The last salary review for each of the Named
Officers is as follows: Mr. L. Borick (December 11, 1995), Mr. Ornstein (January
1, 1998), Mr. Ferguson (August 1, 1998), Mr. Maldini (January 1, 1998) and Mr.
O'Rourke (January 1, 1998).
The foregoing report has been furnished by --
Sheldon I. Ausman
V. Bond Evans
Jack H. Parkinson
12
<PAGE> 15
COMMON STOCK PERFORMANCE GRAPH
The following graph compares the five year cumulative total return of the
Company's common stock to that of the Dow Jones Equity Market Index and the Dow
Jones Automobile Parts and Equipment Excluding Tire and Rubber Makers Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
<TABLE>
<CAPTION>
SUPERIOR INDUSTRIES DOW JONES EQUITY MARKET DOW JONES INDUSTRY GROUP
INTERNATIONAL, INC. INDEX INDEX
------------------- ----------------------- ------------------------
<S> <C> <C> <C>
'1993' 100.00 100.00 100.00
'1994' 61.62 100.74 87.75
'1995' 62.04 138.69 108.21
'1996' 54.87 170.65 123.40
'1997' 64.29 228.60 158.77
'1998' 67.42 293.45 156.88
</TABLE>
- ---------------
* Assumes that the value of the investment in Superior Industries common stock
and each Index was $100 on December 31, 1993, and that all dividends were
reinvested.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING OF STOCKHOLDERS
Stockholder proposals complying with appropriate Securities and Exchange
Commission and proxy rules to be presented at the 2000 Annual Meeting of
Stockholders must be received at the Company's executive offices at 7800 Woodley
Avenue, Van Nuys, California 91406 by November 30, 1999 in order to be included
in the Company's Proxy Statement and form of proxy relating to that meeting.
13
<PAGE> 16
OTHER MATTERS
Management does not know of any matters to be presented to the Meeting
other than those described above. However, if other matters properly come before
the Meeting, it is the intention of the persons named in the accompanying proxy
to vote said proxy in accordance with their judgment on such matters, and
discretionary authority to do so is included in the proxy.
Management has not selected or recommended any auditors for the forthcoming
year. Management believes that this decision is premature at this time although
it expects to retain Arthur Andersen LLP as the Company's auditors for 1999. A
representative of Arthur Andersen LLP is expected to be present at the Meeting
and available to respond to appropriate questions.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
A regulation under the Securities Exchange Act of 1934 (the "Act") requires
the Company to disclose all late filings of reports, of which it is aware,
required to be filed under Section 16(a) of the Act by directors and officers
during the past fiscal year. Pursuant to this regulation, the Company believes
that no late filings were made during 1998.
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
By: Louis L. Borick, President and
Chairman of the Board
14
<PAGE> 17
PROXY
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS -- MAY 7, 1999
The undersigned hereby appoints R. JEFFREY ORNSTEIN and DANIEL L. LEVINE,
and each of them, the attorney, agent and proxy of the undersigned, with full
power of substitution, to vote all stock of SUPERIOR INDUSTRIES INTERNATIONAL,
INC., which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of said corporation to be held at the Airtel Plaza Hotel, 7277
Valjean Avenue, Van Nuys, CA 91406 on Friday, May 7, 1999 at 10:00 A.M., and at
any and all adjournments thereof, as fully and with the same force and effect as
the undersigned might or could do if personally thereat.
THE PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. IF NO
SPECIFICATION IS INDICATED, THE PROXY WILL BE VOTED FOR THE ELECTION OF ALL
NOMINEES AS DIRECTORS.
(continued on backside)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 18
Please mark [X]
your votes as
indicated in
this example.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS.
FOR
all nominees WITHHOLD
listed below AUTHORITY
(except as to vote for
indicated to the all nominees
contrary below) listed below
1. The election of directors [ ] [ ]
Nominees: Louis L. Borick
Raymond C. Brown
Steven J. Borick
(Instructions: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
________________________________________________________________________________
FOR AGAINST ABSTAIN
2. Amendment to Stock Option Plan. [ ] [ ] [ ]
Proposal to amend 1993 Stock Option
Plan to increase the number of
shares of the Company's Common
Stock available for grant thereunder
by 500,000 shares.
If you expect to attend the [ ]
meeting, please check box.
Signature(s)_______________________________________________ Date________________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, trustee or guardian, please give full title as
such.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
