-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Elq0b+R0vWgMNHttafFNzqP/e9G8mlW5pptr2bP+Cx3Hq34Ph71PYi6SjP2HRVPy HWLy+V7hj1buM0wgIgZuVw== 0000950148-98-000512.txt : 19980323 0000950148-98-000512.hdr.sgml : 19980323 ACCESSION NUMBER: 0000950148-98-000512 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970328 FILED AS OF DATE: 19980319 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERIOR INDUSTRIES INTERNATIONAL INC CENTRAL INDEX KEY: 0000095552 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 952594729 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-06615 FILM NUMBER: 98568996 BUSINESS ADDRESS: STREET 1: 7800 WOODLEY AVE CITY: VAN NUYS STATE: CA ZIP: 91406 BUSINESS PHONE: 8187814973 MAIL ADDRESS: STREET 1: 7800 WOODLEY AVENUE CITY: VAN NUYS STATE: CA ZIP: 91406 DEF 14A 1 DEFINITIVE 14A 1 SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant [ ] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to 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): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 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: --------------------------------------------------------------------- 2 SUPERIOR INDUSTRIES INTERNATIONAL, INC. 7800 WOODLEY AVENUE VAN NUYS, CALIFORNIA 91406 ------------------------ NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 15, 1998 To the Stockholders of SUPERIOR INDUSTRIES INTERNATIONAL, INC.: The Annual Meeting of Stockholders of SUPERIOR INDUSTRIES INTERNATIONAL, INC. will be held at the Regent Beverly Wilshire Hotel, 9500 Wilshire Boulevard, Beverly Hills, California 90212 on Friday, May 15, 1998 at 10:00 A.M. for the following purposes: (1) To elect two directors; (2) 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 16, 1998 are entitled to notice of and to vote at the Annual Meeting. On any business day from May 5, 1998 until May 15, 1998, 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 27, 1998 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. 3 SUPERIOR INDUSTRIES INTERNATIONAL, INC. 7800 WOODLEY AVENUE VAN NUYS, CALIFORNIA 91406 ------------------------ PROXY STATEMENT ------------------------ ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 15, 1998 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 Regent Beverly Wilshire Hotel, 9500 Wilshire Boulevard, Beverly Hills, California 90212 on Friday, May 15, 1998 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 27, 1998. 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. 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 27,905,378 shares of Superior's common stock, par value $0.50, on March 16, 1998, 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 1 4 Meeting, there must be present, in person or by proxy, a majority of the issued and outstanding shares of common stock. The following table sets forth information known to Superior as of March 1, 1998, with respect to beneficial ownership of (i) more than 5% of Superior's common stock, (ii) Named Officers (as defined under "Executive Compensation"), except where disclosed elsewhere in this Proxy Statement, and (iii) all directors and officers as a group:
AMOUNT PERCENT BENEFICIALLY OF NAME AND ADDRESS OF BENEFICIAL OWNER OWNED CLASS - ------------------------------------ ------------ ------- Louis L. Borick 4,570,250 16.4% 7800 Woodley Avenue Van Nuys, California 91406 FMR Corp. ("Fidelity") 2,991,500 10.7% 82 Devonshire Street Boston, Massachusetts 02109-3614 Juanita A. Borick 2,744,653 9.8% 7800 Woodley Avenue Van Nuys, California 91406 American Century Companies, Inc. 2,261,400 8.1% 4500 Main Street, P.O. Box 418210 Kansas City, MO 64141-9210 James M. Ferguson 56,432 * 7800 Woodley Avenue Van Nuys, California 91406 R. Jeffrey Ornstein 46,600 * 7800 Woodley Avenue Van Nuys, California 91406 Raymond C. Brown 28,394 * 7800 Woodley Avenue Van Nuys, California 91406 Henry C. Maldini 16,250 * 7800 Woodley Avenue Van Nuys, California 91406 Superior's Directors and Officers 4,901,037(1) 17.6% As a Group (17 persons) 7800 Woodley Avenue Van Nuys, California 91406
- ------------ * Less than 1%. (1) Includes 957,084 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 330,787 shares, or 1.2% of the class over which each has sole investment and voting power. 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. 2 5 ELECTION OF DIRECTORS The purpose of the Meeting is to elect two persons to Class II 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 II 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 two persons receiving the largest number of votes shall be elected as Class II 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 1998 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. Ausman and Evans are currently serving as directors in Class II and were elected at the 1995 Annual Meeting of Stockholders for a term of office expiring at the 1998 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 1998 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 continuing directors and in the table following such descriptions. Each of the following persons is nominated for election to Class II of the Board of Directors (to serve a three-year term ending at the 2001 Annual Meeting of Stockholders and until their respective successors are elected and qualified): Sheldon I. Ausman Mr. Ausman is a Senior Vice President and Director with the international financial printing firm of Bowne of Los Angeles. He 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 as Chairman of the Los Angeles Music Center Operating Company. 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 management disciplines, primarily in the aluminum industry. He graduated from General Motors Institute of 3 6 Technology and Management and began his career with General Motors Diesel Ltd. in London, Ontario. He joined a Canadian subsidiary of Alumax and in 1968 was made President of the Canadian company with added responsibility for European operations. On moving to the United States, he became President of Kawneer Co. in 1971 and was made a Group Vice President of Alumax Inc., an integrated aluminum company and member of the NYSE, in 1976. He was promoted to Executive Vice President in 1979 and held a series of top management positions before becoming President and CEO in 1991. Mr. Evans retired from Alumax Inc. in 1994. During the past 10 years he has served as a committee chairman and director of the Aluminum Association and a director of the International Primary Aluminum Institute. Mr. Evans serves on the Compensation and Stock Option Committees of the Board of Directors of the Company. 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 more than 45 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 the Allen Group, 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., TransPro, Inc. and Spinnaker Industries, 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 and also serves on the Western Advisory Board of Arkwright Mutual Insurance Company. CLASS III -- SERVING UNTIL THE 1999 ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR RESPECTIVE SUCCESSORS ARE ELECTED AND QUALIFIED: 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, 4 7 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 recently retired from the Company 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 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, has been engaged in the oil exploration business for over 19 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 Audit, Long Range Financial Planning and Stock Option Committees of the Board of Directors of the Company. The names of and certain stock ownership information with respect to the nominees and the incumbent directors are as follows:
COMMON STOCK FIRST OWNED BENE- PERCENT OF ELECTED FICIALLY ON OUTSTANDING NAME AGE PRINCIPAL OCCUPATION AS A DIRECTOR MARCH 1, 1997 SHARES ---- --- -------------------- ------------- ------------- ----------- NOMINEES Sheldon I. Ausman 64 Senior Vice President, 1992 6,000(1) * Bowne V. Bond Evans 63 Retired President and 1994 8,000(1) * CEO, Alumax Inc. INCUMBENTS Louis L. Borick 74 President and Chairman 1957 4,570,250(3) 16.4% of the Board Raymond C. Brown 69 Retired Senior Vice 1972 28,394(2) * President Steven J. Borick 45 President, Texakota, 1981 56,946(1) * Inc. Jack H. Parkinson 70 Retired Executive 1983 21,339(1) * Vice President, Sunroad Enterprises Philip W. Colburn 69 Chairman, 1991 10,930(1) * Allen Group, Inc. R. Jeffrey Ornstein 55 Vice President & CFO 1991 46,600(2) *
- ------------ * Less than 1%. (1) Includes 9,000, 6,800, 10,930, 8,000, and 6,000 shares for Messrs. S. Borick, Parkinson, Colburn, Evans, and Ausman, 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. 5 8 (2) Includes 5,000 and 38,800 shares for Messrs. Brown and Ornstein, 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) See "Voting Securities and Principal Holders." COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS During 1997, 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 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 Steven J. Borick, Sheldon I. Ausman and Philip W. Colburn. The Audit Committee met twice during 1997. The Stock Option Committee administers the Company's stock option plans. It is presently comprised of Steven J. Borick and V. Bond Evans. The Stock Option Committee met four times during 1997. 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 1997. 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 met once during 1997. 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 1997, Superior paid $1,140,142 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 of the Company, and two other of Mr. L. Borick's children. During fiscal 1997, Superior paid Keswick Properties $292,102 in rentals under the lease. The plant facilities at 14617 Keswick Street were leased by the Company from the Borick Building Corporation, a company owned jointly by Mr. L. Borick and Juanita A. Borick, until the building was sold in July, 1997. During fiscal 1997, Superior paid to Borick Building Corporation $87,920 in rentals under the lease. 6 9 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 life insurance policies have a face value of $2,500,000 and the Company as the beneficiary. 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. The agreement also provides for a $2,000,000 payment to Mr. L. Borick's beneficiaries upon his death. See "Compensation Committee 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 1997, 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. 7 10 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 1995 through 1997 of those persons who were, at December 31, 1997, (i) the chief executive officer and (ii) the other four most highly compensated executive officers of the Company (the "Named Officers"). SUMMARY COMPENSATION TABLE
LONG-TERM ANNUAL COMPENSATION(1) COMPENSATION - FISCAL ----------------------- STOCK ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(2) --------------------------- ------ ---------- ---------- -------------- --------------- Louis L. Borick 1997 $1,018,213 $1,752,000 -0- $ 900 President and Chairman of the 1996 994,194 1,265,000 -0- 990 Board 1995 751,262 1,248,000 -0- 2,310 Raymond C. Brown 1997 $ 291,846 $ 360,000 -0- $ 900 Senior Vice President 1996 287,665 360,000 -0- 990 1995 274,349 360,000 15,000 2,310 R. Jeffrey Ornstein 1997 $ 211,523 $ 200,000 5,000 $ 900 Vice President & CFO 1996 207,514 200,000 -0- 990 1995 200,681 200,000 10,000 2,310 James M. Ferguson 1997 $ 184,738 $ 100,000 3,000 $ 900 Vice President, OEM Marketing 1996 169,820 90,000 -0- 461 Group 1995 163,248 85,000 5,000 2,139 Henry C. Maldini 1997 $ 160,832 $ 88,000 3,000 $ 764 Vice President, Engineering 1996 143,575 80,000 -0- 528 1995 138,661 80,000 5,000 2,196
- --------------- (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. OPTION GRANTS The following table shows information on grants of stock options during the fiscal year 1997 to the Named Officers reflected in the Summary Compensation Table. OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE AT PERCENTAGE OF ASSUMED ANNUAL RATES OF STOCK TOTAL OPTIONS PRICE APPRECIATION FOR OPTION GRANTED TO TERM(3) OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION ------------------------------ NAME GRANTED(1) FISCAL 1997 PER SHARE(2) DATE 5% 10% ---- ------------ ---------------- ----------------- ------------- ------------- ------------- R. Jeffrey Ornstein........... 5,000 6.5% $26.625 4/14/07 $ 83,722 $ 212,167 James M. Ferguson.... 3,000 3.9 26.625 4/14/07 50,233 127,300 Henry C. Maldini..... 3,000 3.9 26.625 4/14/07 50,233 127,300
8 11 - --------------- (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 for the options of the other Named Officers. 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 1997 and unexercised options to purchase the Company's common stock for the Named Officers. AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED, OPTIONS HELD AT IN-THE-MONEY OPTIONS SHARES DECEMBER 31, 1997 AT DECEMBER 31, 1997(2) ACQUIRED ON VALUE --------------------------- --------------------------- NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ----------- ----------- ----------- ------------- ----------- ------------- Louis L. Borick......... -0- $ -0- 750,000 -0- $1,044,375 $ -0- Raymond C. Brown........ -0- -0- 92,500 5,000 840,606 11,563 R. Jeffrey Ornstein..... 7,500 98,700 39,866 8,334 359,715 28,647 James M. Ferguson....... 12,600 292,320 29,133 4,667 362,403 16,417 Henry C. Maldini........ -0- -0- 13,833 4,667 100,869 16,417
- --------------- (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, 1997 and the option exercise price. 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 9 12 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. 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 1997 bonus paid to Mr. Borick pursuant to the Plan was $1,752,000. 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 6% 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 10 13 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. Brown (July 1, 1995), Mr. Ornstein (January 1, 1998), Mr. Ferguson (January 1, 1997), and Mr. Maldini (January 1, 1998). The foregoing report has been furnished by -- Sheldon I. Ausman V. Bond Evans Jack H. Parkinson 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*
'SUPERIOR DOW JONES MEASUREMENT PERIOD INDUSTRIES DOW JONES EQUITY INDUSTRY GROUP (FISCAL YEAR COVERED) INTERNATIONAL, INC.' MARKET INDEX INDEX 1992 100 100 100 1993 229.13 109.95 130.87 1994 141.18 110.76 114.84 1995 142.16 152.49 141.62 1996 125.72 187.63 161.49 1997 147.3 251.34 207.78
- --------------- * Assumes that the value of the investment in Superior Industries common stock and each Index was $100 on December 31, 1992, and that all dividends were reinvested. 11 14 STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS Stockholder proposals complying with appropriate Securities and Exchange Commission and proxy rules to be presented at the 1999 Annual Meeting of Stockholders must be received at the Company's executive offices at 7800 Woodley Avenue, Van Nuys, California 91406 by November 30, 1998 in order to be included in the Company's Proxy Statement and form of proxy relating to that meeting. 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 1998. 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 1997. SUPERIOR INDUSTRIES INTERNATIONAL, INC. Louis L. Borick, President and Chairman of the Board 12 15 PROXY SUPERIOR INDUSTRIES INTERNATIONAL, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY FOR ANNUAL MEETING OF STOCKHOLDERS -- MAY 15, 1998 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 Regent Beverly Wilshire Hotel, 9500 Wilshire Boulevard, Beverly Hills, California 90212 on Friday, May 15, 1998 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 16 ___ Please mark your vote X as this ___ 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: Sheldon I. Ausman ____ ____ V. Bond Evans If you expect to ____ (Instructions: To withhold authority to vote attend the meeting, for any individual nominee, write that please check box. ____ nominee's name in the space provided below.) ___________________________________________ ______ / / / Signature(s)__________________________________________ Date _________________ NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. - ------------------------------------------------------------------------------ Fold and detach here -----END PRIVACY-ENHANCED MESSAGE-----