SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
SPARTAN MOTORS, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- -----------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
- -----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------------------
(5) Total fee paid:
- -----------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- -----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
- -----------------------------------------------------------------------------
(1) Amount previously paid:
- -----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- -----------------------------------------------------------------------------
(3) Filing party:
- -----------------------------------------------------------------------------
(4) Date filed:
- -----------------------------------------------------------------------------
[SPARTAN MOTORS LOGO]
April 14, 1997
To Our Shareholders:
You are cordially invited to attend Spartan Motors, Inc. Annual
Meeting of Shareholders on Thursday, June 5, 1997 at 5:30 p.m. Eastern
Daylight Savings Time. The Annual Meeting will be held at Plant I, Spartan
Motors Corporate Headquarters located at 1000 Reynolds Rd., Charlotte,
Michigan.
The purpose of the meeting will be to elect three directors and to
transact such other business as may properly come before the meeting or any
adjournment thereof. This Annual Meeting also provides Shareholders the
opportunity to hear a report on Spartan Motors past and its outlook for the
future.
It is important that your shares be represented at the Annual Meeting,
regardless of the size of your holdings. Whether or not you plan to attend
the annual meeting, please vote, sign, date and return the enclosed proxy
as quickly as possible. By returning the proxy promptly, you can help
Spartan Motors avoid the expense of duplicate proxy solicitations and
possibly having to reschedule the Annual Meeting if a quorum of outstanding
shares is not present or represented by proxy. Sending a proxy will not
affect your right to vote in person in the event you attend the meeting
Sincerely,
/s/George W. Sztykiel
George W. Sztykiel
Chairman of the Board of Directors
[ YOUR VOTE IS IMPORTANT, EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY. ]
- - 1000 REYNOLDS RD. - CHARLOTTE, Ml 48813 - TELEPHONE 517/543/6400 - FACSIMILE
517/543/7728
[SPARTAN MOTORS LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 5, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Spartan Motors, Inc. will be held on Thursday, June 5, 1997 at 5:30 p.m.,
Eastern Daylight Savings Time, at Plant I, Spartan Motors Corporate
Headquarters located at 1000 Reynolds Rd., Charlotte, Michigan, for the
following purposes:
1. To elect three directors to serve until the Annual Meeting of
Shareholders in the year 2000, and until their successors have been
elected and qualified.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Shareholders of record at the close of business on April 7, 1997, are
entitled to notice of and vote at the Annual Meeting.
A copy of the Annual Report to Shareholders for the year ended
December 31, 1996, is enclosed with this Notice. The following Proxy
Statement and enclosed form of proxy are being furnished to shareholders of
record on and after April 14, 1997.
By order of the Board of Directors,
/s/Richard J. Schalter
Richard J. Schalter
Secretary, Treasurer
and Chief Financial Officer
April 14,1997
Charlotte, Michigan
[ YOUR VOTE IS IMPORTANT, EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY. ]
- - 1000 REYNOLDS RD. - CHARLOTTE, Ml 48813 - TELEPHONE 517/543/6400 - FACSIMILE
517/543/7727
[SPARTAN MOTORS LOGO]
ANNUAL MEETING OF SHAREHOLDERS
JUNE 5, 1997
PROXY STATEMENT
This Proxy Statement and the enclosed form of proxy are being
furnished to holders of common stock, $.01 par value, ("Common Stock") of
Spartan Motors, Inc. ("Spartan" or the "Company") at the close of business
April 7, 1997, in connection with the solicitation of proxies by the Board
of Directors to be voted at the Annual Meeting of Shareholders to be held
on Thursday, June 5, 1997, and any adjournment of that meeting. The annual
meeting will be held at Plant I, Spartan Corporate Headquarters located at
1000 Reynolds Rd., Charlotte, Michigan, at 5:30 p.m., Eastern Daylight
Savings Time.
The purpose of the annual meeting is to consider and vote upon the
election of three directors for three-year terms expiring in 2000. Proxies
in the accompanying form, if properly executed, duly returned to the
Company and not revoked, will be voted at the annual meeting. If a
shareholder specifies a choice, the shares represented by proxy will be
voted as specified. If no choice is specified, the shares represented by
proxy will be voted for the election of all nominees for director named in
this Proxy Statement and in accordance with the discretion of the persons
named as proxies on any other matters that may come before the meeting or
any adjournment. For purposes of determining the presence or absence of a
quorum for the transaction of business at the annual meeting, all shares
for which a proxy or vote is received, including abstentions and shares
represented by a broker vote on any matter, will be counted as present and
represented at the meeting.
A proxy may be revoked at any time before it is exercised by written
notice delivered to the Secretary of the Company at the address set forth
above or by attending and voting at the annual meeting.
The Company's management does not know of any matter to be presented
for consideration at the annual meeting other than the matters stated in
the Notice of Annual Meeting of Shareholders. If any other matters are
presented, the persons named as proxies will have discretionary authority
to vote in accordance with their judgment.
ELECTION OF DIRECTORS
The Board of Directors proposes that the following three individuals
be elected as directors for three-year terms expiring at the annual meeting
of shareholders to be held in 2000:
-1-
John E. Sztykiel
Charles E. Nihart
James C. Penman
Each nominee is presently a director of the Company whose term will
expire at the annual meeting. The persons named as proxies intend to vote
for the election of each of the named nominees. The proposed nominees are
willing to be elected and to serve. In the event that a nominee is unable
to serve or is otherwise unavailable for election, which is not
contemplated, the incumbent Board of Directors may or may not select a
substitute nominee. If a substitute nominee is selected, all proxies will
be voted for the election of the substitute nominee designated by the Board
of Directors. If a substitute is not selected, all proxies will be voted
for the election of the remaining nominees. Proxies will not be voted for
a greater number of persons than the number of nominees named above.
A plurality of the shares present in person or represented by proxy
and voting on the election of directors is required to elect directors.
For the purpose of counting votes on the election of directors,
abstentions, broker non-votes and other shares not voted will not be
counted as shares voted, and the number of shares of which a plurality is
required will be reduced by the number of shares not voted.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR ELECTION OF ALL NOMINEES AS DIRECTORS
VOTING SECURITIES
Holders of record of Common Stock, at the close of business on April
7, 1997, are entitled to notice of and to vote at the Annual Meeting of
Shareholders and any adjournment of the meeting. As of April 7, 1997,
there were 12,364,472 shares of Common Stock outstanding, each having one
vote on each matter presented for shareholder action.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to each person known to
the Company to have been the beneficial owner of more than 5% of the
Company's outstanding shares of Common Stock as of April 7, 1997:
-2-
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP
---------------------------------
SOLE VOTING SHARED VOTING OR
NAME AND ADDRESS OF AND DISPOSITIVE DISPOSITIVE PERCENT OF
BENEFICIAL OWNER POWER POWER CLASS
- ------------------- --------------- ---------------- ----------
George W. Sztykiel 622,672 581,028 9.74%
1000 Reynolds Road
Charlotte, Michigan 48813
William E. Foster 993,317 -- 8.04%
1000 Reynolds Road
Charlotte, Michigan 48813
David L. Babson and Company
Incorporated 828,100 236,300 6.50%
One Memorial Drive
Cambridge, Massachusetts
02142-1300
- -----------------------
Based on information provided by each individual listed.
These numbers may include shares subject to options that are
exercisable within 60 days after April 7, 1997, granted under the
Company's 1984 and 1994 Incentive Stock Options Plans and the 1988
Nonqualified Stock Option Plan.
These numbers include shares over which the listed person is legally
entitled to share voting or dispositive power by reason of joint
ownership, trust or other contract or property right, and shares held
by spouses, children or other relatives over whom the listed person
may have substantial influence by reason of relationship.
Based on information set forth in Schedule 13G dated February 7, 1997.
The Schedule 13G indicates that David L. Babson and Company
Incorporated ("DLB") is considered the beneficial owner of 828,100
shares of the Company's Common Stock as a result of acting as
investment adviser to various clients. The Schedule 13G indicates
that DLB has sole voting power over an aggregate of 591,200 shares of
Common Stock and sole dispositive power over 828,100 shares of Common
Stock.
-3-
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of Common Stock
beneficially owned as of April 7, 1997, by each of the Company's directors
and nominees for director, each of the named executive officers and all
directors and executive officers as a group:
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP
----------------------------------------
SOLE VOTING
AND SHARED VOTING TOTAL PERCENT
NAME OF DISPOSITIVE OR DISPOSITIVE BENEFICIAL OF
BENEFICIAL OWNER POWER POWER OWNERSHIP CLASS
- ---------------- ----------- -------------- ------------ -------
George W. Sztykiel 622,672 581,028 1,203,700 9.74%
John E. Sztykiel 112,701 92,249 204,950 1.66%
Anthony G. Sommer 80,000 -- 80,000
William F. Foster 993,317 -- 993,317 8.04%
Roger B. Burrows 26,500 -- 26,500
George Tesseris 49,000 1,000 50,000
Charles E. Nihart 35,750 -- 33,750
David R. Wilson 3,500 -- 3,500
James C. Penman -- -- -- --
All directors and executive 1,929,440 647,277 2,608,717 19.44%
officers as a group
- ----------------------
Less than 1%.
The number of shares stated is based on information provided by each
person listed and includes shares personally owned of record by the
person and shares which, under applicable regulations, are considered
to be otherwise beneficially owned by the person.
These numbers include shares held directly and shares subject to
options which are exercisable within 60 days after April 7, 1997, that
were awarded under the Company's 1984 and 1994 Incentive Stock Option
Plans and the 1988 Nonqualified Stock Option Plan. The number of
shares subject to stock options for each listed person is shown below:
-4-
George W. Sztykiel 71,645
John E. Sztykiel 80,895
Anthony G. Sommer 67,500
William F. Foster 78,500
Roger B. Burrows 26,500
George Tesseris 39,000
Charles E. Nihart 32,000
David R. Wilson 3,500
These numbers include shares over which the listed person is legally
entitled to share voting or dispositive power by reason of joint
ownership, trust or other contract or property right, and shares held
by spouses, children or other relatives over whom the listed person
may have substantial influence by reason of relationship.
BOARD OF DIRECTORS
The Company's Board of Directors currently consists of eight
directors, three of whom are standing for reelection. The Board of
Directors is divided into three classes, with each class as nearly equal in
number as possible. Each class of directors serves a successive three-year
term.
Biographical information concerning the Company's directors and
nominees who are nominated for election to the Board of Directors is
presented below. Except as otherwise indicated, all directors and nominees
for director have had the same principal employment for over five years.
NOMINEES FOR ELECTION AS DIRECTORS TO TERMS EXPIRING IN 2000
JOHN E. SZTYKIEL (age 40) has been a director since 1988. Mr.
Sztykiel has been President and Chief Operating Officer of the Company
since December 1992. Mr. Sztykiel previously served as the Executive Vice
President and Vice President of Sales of the Company from 1989 to 1990.
From 1985 to 1989, Mr. Sztykiel was the Director of Marketing-Diversified
Products Group of the Company. Mr. Sztykiel is the son of George W.
Sztykiel, Chairman of the Board, Chief Executive Officer and a director of
the Company.
CHARLES E. NIHART (age 60) has been a director since 1984. Mr.
Nihart, a certified public accountant consultant, established the certified
public accounting firm of Nihart and Nihart, P.C., in 1972. The Lansing
offices of Nihart and Nihart merged with Maner, Costerison and Ellis, P.C.,
C.P.A. on January 1, 1989. Mr. Nihart is currently affiliated with the firm
on a consulting basis. Mr. Nihart also is the owner and President of AARO
Rentals, Inc., in Lansing, Michigan, a rental company of heavy duty
equipment.
-5-
JAMES C. PENMAN (age 39) has been a director since March 1997, filling
the seat held by former director, Max Coon. Mr. Penman has served as
Director of Corporate Finance with Roney & Co., a regional investment
banking firm, since April 1993. From April 1995 to April 1993, Mr. Penman
was a Senior Vice President-Investment Banking with First of Michigan
Corporation.
DIRECTORS WITH TERMS EXPIRING IN 1999
GEORGE W. SZTYKIEL (age 67) has been a director since 1975. Mr.
George Sztykiel is a founder of the Company and has served as Chairman of
the Board and Chief Executive Officer of the Company since December 1992.
Mr. George Sztykiel served as President of the Company from September 1975
to December 1992. Mr. George Sztykiel is the father of Mr. John Sztykiel,
President, Chief Operating Officer and a director of the Company.
WILLIAM F. FOSTER (age 55) has been a director since 1978. Mr. Foster
is a founder of the Company and has served as staff engineer and Vice
President since 1976. From 1965 to 1975, he was with Diamond Reo Trucks,
Inc. as a designer draftsman.
DIRECTORS WITH TERMS EXPIRING IN 1998
ANTHONY G. SOMMER (age 38) has been a director since 1988. Mr. Sommer
has been the Executive Vice President of the Company since December 1992.
Mr. Sommer previously served as Chief Financial Officer of the Company from
December 1992 until October 1996. From 1987 to December 1992 Mr. Sommer
served as Corporate Secretary/Treasurer of the Company and, from 1982 to
1987, as Controller of the Company.
GEORGE TESSERIS (age 65) has been a director since 1984. Mr. Tesseris
has been a practicing partner with the law firm of Tesseris and Crown,
P.C., since 1981. From 1972 to 1981, Mr. Tesseris was a partner in the law
firm of Church, Wyble, Kritselis and Tesseris.
DAVID R. WILSON (age 61) has been a director since 1996. Mr. Wilson
is an independent consultant to the automotive and commercial vehicle
industry. From 1982 to 1993, Mr. Wilson was Vice President of Volvo GM
Heavy Duty Truck Corporation and from 1979 to 1982 Mr. Wilson served as
general manager of field operations for Mercedes Benz of North America.
BOARD MEETINGS AND COMMITTEES
The Company's Board of Directors held five meetings during 1996. All
directors attended at least 75% of the aggregate number of Board of
Directors meetings and committee meetings of which they were members. The
Board of Directors has the following standing committees:
-6-
AUDIT COMMITTEE. The Audit Committee is responsible for the following
activities: (i) recommending to the Board of Directors the selection of
independent auditors; (ii) reviewing and approving the scope of the yearly
audit plan and proposed budget for audit fees; (iii) reviewing the results
of the annual audit with the independent auditors; (iv) reviewing the
Company's internal controls with the independent auditors; (v) reviewing
non-audit services and special engagements to be performed by independent
auditors; and (vi) reporting to the Board of Directors on the Audit
Committee's activities and findings and making recommendations to the Board
of Directors on these findings. Messrs. Nihart (Chairman), Tesseris and
Penman presently are members of the Audit Committee. The Audit Committee
met once during 1996.
COMPENSATION COMMITTEE. The responsibilities of the Compensation
Committee include: (i) recommending the cash and other incentive
compensation, if any, to be paid to the Company's executive officers; (ii)
reviewing and making recommendations to the Board of Directors regarding
stock options awarded under the 1994 Incentive Stock Option Plan and the
1988 Nonqualified Stock Option Plan; and (iii) reviewing all material
proposed option plan changes. The Compensation Committee determines the
key employees to whom options will be granted, the number of shares covered
by each option, the exercise price of each option and other matters
associated with option awards. Messrs. Tesseris (Chairman), Nihart and
Penman are presently members of the Compensation Committee. The
Compensation Committee met once during 1996.
The Board of Directors does not have a standing nominating committee.
COMPENSATION OF DIRECTORS
Directors receive a $1,000 quarterly retainer fee plus an expense
reimbursement of $100 for each meeting of the Board of Directors.
EXECUTIVE OFFICERS
The Company's executive officers are appointed annually by, and serve
at the pleasure of, the Board of Directors. Biographical information
concerning executive officers as of December 31, 1996, who were not
directors or nominated for election to the Board of Directors is presented
below.
ROGER B. BURROWS (age 49) has been Vice President of Sales and
Marketing since January 1995, and previously served as Director of
Marketing, Sales and Service from August 1993 to January 1995. Mr. Burrows
served as National Accounts Sales Manager at General Motors Corporation for
23 years prior to joining the Company. Mr. Burrows also has been with the
Michigan Army National Guard since 1969 and currently holds the position of
Colonel.
-7-
RICHARD J. SCHALTER (age 43), a certified public accountant, has
served as Chief Financial Officer since November 1996. From June 1989
until November 1996, Mr. Schalter served as Treasurer and Director of
Finance and Administration of Great Lakes Hybrids, an international
distributor and subsidiary of KWS a.g. From March 1986 to June 1989, Mr.
Schalter served as Treasurer and financial administrator for Martin
Systems, Inc., a worldwide supplier of electrical controls and machine
operating systems.
EXECUTIVE COMPENSATION
The following table shows certain information concerning the
compensation earned during each of the last three fiscal years in the
period ended December 31, 1996, by the Chief Executive Officer and all
other executive officers whose salary and bonus for the fiscal year ended
December 31, 1996, equaled $100,000 or more:
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
-------------------------- ------------
NUMBER OF
SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTION COMPENSATION
- ------------------ ---- ---------- -------- ---------- ----------------
George W. Sztykiel 1996 $ 100,490 $ 61,662 12,500 $2,185
Chairman of the 1995 90,890 10,357 15,000 1,832
Board, Chief Executive 1994 74,502 72,165 12,500 2,710
Officer and Director
John E. Sztykiel 1996 $ 122,502 $ 88,172 15,000 $2,683
President, Chief 1995 108,399 11,448 17,500 2,142
Operating Officer 1994 86,636 103,787 15,000 3,257
and Director
Anthony G. Sommer 1996 $ 95,657 $ 61,226 12,500 $2,073
Executive Vice 1995 87,518 10,167 12,500 1,768
President 1994 65,711 85,513 12,500 2,431
Roger B. Burrows 1996 $ 74,171 $ 40,014 7,500 $1,677
Vice President Sales 1995 62,507 8,716 7,500 1,289
And Marketing 1994 55,123 16,690 4,000 --
- ----------------------
Includes director fees paid by the Company.
-8-
Includes payments under the Company's Employees Quarterly Bonus
Program in which all employees of the Company participate.
Consists solely of the Company's contribution to its profit-sharing
plans.
OPTION GRANTS IN LAST FISCAL YEAR
The Company's stock option plans are administered by the Compensation
Committee of the Board of Directors which has authority to determine the
individuals to whom and the terms upon which options will be granted, the
number of shares to be subject to each option and the form of consideration
that may be paid upon the exercise of an option.
The following table sets forth information regarding stock options
granted to the Chief Executive Officer and the named executive officers
during the fiscal year ended December 31, 1996:
INDIVIDUAL GRANTS
- ----------------------------------------------------------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS POTENTIAL REALIZABLE
SECURITIES GRANTED TO VALUE AT ASSUMED
UNDERLYING EMPLOYEES EXERCISE ANNUAL RATES OF STOCK
OPTIONS IN FISCAL PRICE PER EXPIRATION PRICE APPRECIATION
NAME GRANTED(1) YEAR SHARE DATE FOR OPTION TERM
---- ---------- ---------- --------- ---------- -------------------------
0% 5% 10%
-- -- ---
George W Sztykiel 12,500 2.9% $6.75 July 31, 2006 $0 $53,000 $134,500
John E. Sztykiel 15,000 3.5% $6.75 July 31, 2006 $0 $63,600 $161,400
Anthony B. Sommer 12,500 2.9% $6.75 July 31, 2006 $0 $53,000 $134,500
Roger B. Burrows 7,500 1.7% $6.75 July 31, 2006 $0 $31,800 $ 80,700
- ----------------------
On July 31, 1996, the Company granted options to purchase shares of
the Company's Common Stock over a 10-year period. Executive officers
of the Company are entitled to exercise their options at a price
determined by the Compensation Committee, which was at least 85% of
the fair market value of Common Stock on July 31, 1996. Options
terminate, subject to certain limited exercise provisions, in the
event of death or termination of employment or directorship.
-9-
The following table summarizes the total number of options held by the Chief
Executive Officer and the named executive officers as of December 31, 1996:
AGGREGATED OPTION EXERCISE IN LAST FISCAL YEAR
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS AT FISCAL YEAR-END
--------------------------
NAME EXERCISABLE UNEXERCISABLE
- ------------------ ----------- -------------
George W. Sztykiel 71,645 --
John E. Sztykiel 80,895 1,335
Anthony B. Sommer 67,500 --
Roger B. Burrows 26,500 --
- ----------------------
No named executive officer exercised any stock options in 1996.
On December 31, 1996, the closing market price of the Company's Common
Stock was $6.75. The numbers shown reflect the value of options at
December 31, 1996.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
develops and recommends to the Board of Directors the executive
compensation policies of the Company. The Committee also administers the
Company's executive compensation program and recommends for approval to the
Board of Directors the compensation to be paid to the Chief Executive
Officer and other named executive officers. The Committee consists of
three directors, none of whom is a current or former employee of the
Company.
COMPENSATION PHILOSOPHY
The Committee's executive compensation philosophy is to provide
competitive levels of compensation as well as incentives to achieve
superior financial performance. The Committee's policies are designed to
achieve the following five primary objectives: (i) integration of
management's compensation with the achievement of the Company's annual and
long-term performance goals; (ii) reward above-average corporate
performance; (iii) recognition of individual initiative and achievement;
(iv) attracting and retaining qualified management; and (v) alignment of
the interests of management with those of shareholders to encourage
achievement of continuing increases in shareholder value. The Committee
-10-
sets management compensation at levels which the Committee believes are
consistent with other companies in the Company's industry.
In 1994, the Company engaged Management Resource Center, Inc., a
compensation consulting firm, to review its compensation policies and
competitive compensation levels. The Committee has and currently intends
to continue to consider the recommendations of Management Resource Center,
Inc. in developing the Company's executive compensation program and making
specific compensation decisions.
Executive compensation consists of both cash and equity, and includes:
(i) base salary; (ii) profit-sharing incentive bonus; and (iii) long-term
incentive through participation in stock option plans. In addition, the
Company provides various benefits to its employees, including the Company's
executive officers.
In 1993, Congress amended the Internal Revenue Code of 1980, to add
Section 162(m) which provides that publicly held corporations may not
deduct compensation paid to certain executive officers in excess of $1
million annually, with certain exemptions. The Company has examined its
executive compensation policies in light of Section 162(m) and the
regulations adopted by the Internal Revenue Service to implement this
section. It is not expected that any portion of the Company's deduction
for employee remuneration will be disallowed in 1997 or in future years by
reason of awards granted in 1997.
BASE SALARY
To attract and retain well-qualified executives, it is the Committee's
policy to establish base salaries at levels and provide benefit packages
that are considered to be competitive. Base salaries for executive
officers are determined initially by evaluating the responsibilities of the
position and the experience of the individual, and by reference to the
competitive marketplace for management talent, including a comparison of
base salaries for comparable positions at similar companies within the
custom chassis industry. Some of the companies used for this comparison
are included in the indices used in the Stock Price Performance Graph
presented in this Proxy Statement.
The Committee believes that base salaries should approximate the mid-point
of the range of salaries paid for similar positions by companies in
similar industries. The Committee may recommend adjustments on a periodic
basis to maintain the desired levels of base salaries for the Company's
executives.
The Committee determines annual salary adjustments by evaluating the
competitive marketplace, the performance of the Company and the executive
officer, as well as any increased responsibilities assumed by the executive
officer. Salary adjustments are determined and implemented generally on a
12-month cycle.
-11-
ANNUAL INCENTIVE BONUS
The Committee selects members of management to participate in the
Company's incentive bonus program. The Committee considers several factors
in determining the annual incentive bonus, if any, paid to management,
including achievement of the Company's strategic and operating goals and an
individual's achievement of personal goals. In addition, the Company
considers factors such as net earnings per share, revenues, return on
assets and return on equity.
STOCK OPTION PLANS
The Company currently grants stock options under the 1988 Nonqualified
Stock Option Plan and the 1994 Incentive Stock Option Plan. The Company's
stock option plans allow officers and key employees to purchase Common
Stock of the Company at a price established on the date of grant. Options
granted under the 1988 Nonqualified Stock Option Plan must have an exercise
price equal to at least 85% of the fair market value of the Company's
Common Stock. Incentive stock options granted under the 1994 Incentive
Stock Option Plan must have an exercise price equal to at least 100% of the
fair market value. The Committee administers all aspects of the plans and
reviews, modifies (to the extent appropriate) and approves management's
recommendations for awards.
Absent unusual circumstances, the Committee historically has granted
stock options on an annual basis to officers, key employees and directors
who are employees of the Company and on a biannual basis to directors who
are not employees of the Company. The Company's stock option plans are
designed to encourage long-term investment in the Company by participating
executives and key employees, more closely align executive and shareholder
interests and reward executive officers and other key employees for
building shareholder value. The Committee believes stock ownership by
management and other key employees is beneficial.
In determining the number of options to be awarded to an officer or
key employee, the Committee takes into consideration the levels of
responsibility and compensation of the individual. The Committee also
considers the recommendations of management (other than awards to the Chief
Executive Officer), the individual performance of the officer or employee
and the number of shares or other compensation awarded to the officer or
employee at other companies. Generally, both the number of shares granted
and their proportion relative to the total number of shares granted
increase corresponding to the level of a participant's responsibility.
Although the Committee also may consider the number of options already held
by an officer or employee, this factor is not considered to be particularly
important by the Committee in determining the amounts of awards.
The Chief Executive Officer's compensation is based upon the policies
and objectives outlined above for all executive officers. Mr. George
-12-
Sztykiel's base salary in 1996 was approximately 10% above his 1995 salary.
Mr. Sztykiel's annual incentive bonus award which includes the Company's
quarterly bonus program for 1996 was $61,662. During 1996, Mr. Sztykiel
was awarded options to purchase 12,500 shares of the Company's Common
Stock.
All recommendations of the Committee attributable to 1996 compensation
were unanimous and were approved and adopted by the Board of Directors
without modification.
Respectfully submitted,
George Tesseris, Chairman
Charles E. Nihart
James C. Penman
-13-
STOCK PRICE COMPARATIVE PERFORMANCE ANALYSIS
The Securities and Exchange Commission requires the Corporation to
present a chart comparing the cumulative total shareholder return on its
common stock with the cumulative total shareholder return of (i) a broad
equity market index, and (ii) a published industry index or peer group.
The Center for Research in Security Prices (CRSP) at the University of
Chicago has developed historical total return indexes for the NASDAQ Stock
Market. The Corporation will use these indexes in this comparative
performance analysis.
The following chart compares the Corporation's common stock with (i)
the CRSP Total Return Index for the NASDAQ Stock Market (US) and (ii) the
CRSP Total Return Index for NASDAQ Trucking & Transportation Stocks, and
assumes an investment of $100 with dividends reinvested on December 31,
1991, in the Corporation's common stock, the stocks comprising the CRSP
NASDAQ Index and the stocks of the CRSP NASDAQ Trucking & Transportation
Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
[GRAPH]
The dollar values for total shareholder return plotted above are shown in
the table below.
COMPANY 1991 1992 1993 1994 1995 1996
- ------- ---- ---- ---- ---- ---- ----
SPARTAN MOTORS, INC. 100 129.24 134.75 106.34 87.94 54.31
CRSP T&T 100 122.38 148.68 134.82 157.21 173.50
CRSP NASDAQ 100 116.38 133.60 130.59 184.68 227.17
-14-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
James C. Penman, Director of Corporate Finance at Roney & Co., and
nominee for Board of Directors in a term that expires at the Annual Meeting
2000, received a consulting retainer fee from the Company in the year ended
December 31, 1996. This fee was for services rendered as an advisor on
acquisition opportunities for the Company. More specifically, Mr. Penman
participated as an consultant with the Company on the recent equity
purchase of Carpenter Industries, Inc.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Spartan's directors and
officers and persons who beneficially own more than 10% of the outstanding
shares of Common Stock to file reports of ownership and changes in
ownership of shares of Common Stock with the Securities and Exchange
Commission (the "SEC"). Directors, officers and greater than 10%
beneficial owners are required by SEC regulations to furnish the Company
with copies of all Section 16(a) reports they file with the SEC. Based
solely upon the Company's review of the copies of such reports received by
it, or written representations from certain reporting persons that no
reports on Form 5 were required for those persons for the 1996 fiscal year,
the Company believes that its directors and officers complied with all
applicable filing requirements during the Company's last fiscal year.
INDEPENDENT AUDITORS
Deloitte & Touche LLP has served as independent auditors of the
Company for the last 13 years. The Board of Directors believes that the
experience Deloitte & Touche LLP has acquired remains valuable to the
Company and again has selected Deloitte & Touche LLP as independent
auditors for the Company for its 1997 fiscal year. Representatives of
Deloitte & Touche LLP are expected to be present at the annual meeting,
will have the opportunity to make a statement if they desire to do so and
are expected to be available to respond to appropriate questions from
shareholders.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1998 annual
meeting of shareholders must be received by the Company not later than
December 15, 1997, to be considered for inclusion in the proxy statement
and form of proxy relating to that meeting. Proposals of shareholders
should be made in accordance with Rule 14a-8 issued under the Exchange Act
and should be addressed to the attention of the Secretary of Spartan
Motors, Inc., 1000 Reynolds Road, Charlotte, Michigan 48813.
-15-
SOLICITATION OF PROXIES
Solicitation of proxies will be made initially by mail. In addition,
directors, officers and employees of the Company and its subsidiaries may
solicit proxies by telephone or facsimile or in person without additional
compensation. Proxies may be solicited by nominees and other fiduciaries
who may mail materials to or otherwise communicate with the beneficial
owners of shares held by them. The Company will bear all costs of the
preparation and solicitation of proxies, including the charges and expenses
of brokerage firms, banks, trustees or other nominees for forwarding proxy
material to beneficial owners.
By Order of the Board of Directors
Charlotte, Michigan
Richard J. Schalter /s/Richard J. Schalter
April 14, 1997 Secretary and Treasurer
-16-