Nominee for Election as a Director with a Term Expiring in 20162020

Kenneth Kaczmarek (age 75) has been a Director since 2003.  Mr. Kaczmarek brings nearly four decades of automotive and heavy-truck industry experience to the Board of Directors.  Prior to joining the Board of Directors, Mr. Kaczmarek was an independent consultant to the automotive industry from 1996 to 2000.  From 1994 to 1996, Mr. Kaczmarek had various executive responsibilities, including service as President of Volvo Truck Finance during its start-up phase.  From 1981 to 1994, he was the Chief Financial Officer and Executive Vice President of Finance of Volvo GM Heavy Truck Corporation. Mr. Kaczmarek's vast experience within the automotive industry, and the heavy truck industry in particular, is valuable to his participation on the Board of Directors. See "Retirement of Directors" below for information about Mr. Kaczmarek's expected retirement from the Board in 2016.

 Directors with Terms Expiring in 2017

Richard R. Current (age 70) has been a Director since 2008. From November 1999 to December 2010, Mr. Current, a CPA, served as Vice President and Chief Financial Officer of Neogen Corporation.  Prior to joining Neogen, Mr. Current served as Executive Vice President and Chief Financial Officer of Integral Vision, Inc. from 1994 to 1999 and as Vice President and Chief Financial Officer of The Shane Group, Inc., a privately held company, from 1991 to 1994. Prior to this, Mr. Current practiced with the public accounting firm Ernst & Young LLP for 24 years.  He served as Managing Partner from 1986 to 1991 at its Lansing, Michigan office. Mr. Current's 19 years' experience as a Chief Financial Officer of two separate public companies and one private company, in addition to his 24 years as an auditor and experience on several boards of directors, allows him to provide valuable insight and expertise to the Board.  This is particularly true with respect to the Board's oversight of financial reporting, internal controls, and similar issues.  Mr. Current currently serves as the Chairman of the Audit Committee of the Board.

Hugh W. Sloan, Jr. (age 74) has been a Director since 2007 and has served as Chairman of the Board since 2010.  From 1998 to 2008, Mr. Sloan served as the Deputy Chairman of the Board of Directors of Woodbridge Foam Corporation, a leading supplier of urethane technologies to the automotive industry. He continues to serve on Woodbridge's Board of Directors.  For more than 20 years, Mr. Sloan held various management positions with Woodbridge, including President of the company's automotive group.  From 1985 to 2013, Mr. Sloan served as a Director of Manulife Financial Corporation, a leading Canadian-based financial services group whose stock trades on the New York, Toronto, and Pacific Stock Exchanges. From 1998 to March 2013, Mr. Sloan also served as a Director of Wescast Industries, an automotive supplier whose stock traded on the Toronto Stock Exchange.  Mr. Sloan's current and previous roles with companies within the automotive industry, including publicly-held companies, allow him to provide valuable insight and experience to the Board.

Andrew M. Rooke (age 57)59) was appointed to the Board of Directors in February of 2012. Mr. Rooke currently serves as President and Chief Operating Officer of Manitex International, Inc., a manufacturer of engineered lifting equipment, a position he has held since 2007. From 2002 until 2006, Mr. Rooke served as Vice President of Finance for GKN Sinter Metals, a Tier 1 supplier of components to the auto industry, and, from 1999 until 2002, as Finance Director of various GKN off highway and auto components divisions. Mr. Rooke holds a Bachelor of Arts degree in Economics from the University of York, England, and is a Chartered Accountant. Mr. Rooke's experience and knowledge in finance, international business, manufacturing, and the automotive industry allow him to provide valuable insight and experience to the Board.

Nominee for Election as Director with Term Expiring in 2018

Richard R. Current (age 72) has been a Director since 2008. From November 1999 to December 2010, Mr. Current, a CPA, served as Vice President and Chief Financial Officer of Neogen Corporation. Prior to joining Neogen, Mr. Current served as Executive Vice President and Chief Financial Officer of Integral Vision, Inc. from 1994 to 1999 and as Vice President and Chief Financial Officer of The Shane Group, Inc., a privately held company, from 1991 to 1994. Prior to this, Mr. Current practiced with the public accounting firm Ernst & Young LLP for 24 years. He served as Managing Partner from 1986 to 1991 at its Lansing, Michigan office. Mr. Current's 19 years of experience as a Chief Financial Officer of two separate public companies and one private company, in addition to his 24 years as an auditor and experience on several boards of directors, allows him to provide valuable insight and expertise to the Board. This is particularly true with respect to the Board's oversight of financial reporting, internal controls, and similar issues. Mr. Current currently serves as the Chairman of the Audit Committee of the Board.

Directors with Terms Expiring in 20162019

Ronald Harbour (age 58)60) has been a Director since 2009. Mr. Harbour serves as Senior Partner – Global Automotive Manufacturing for Oliver Wyman, a global management consulting firm. He was the President of Harbour Consulting prior to its acquisition by Oliver Wyman in 2007. Mr. Harbour also serves on the Board of Directors of two privately held automotive companies: Techform Products, a manufacturer of body hardware; and Empire Electronics Remanufacturing Company, an automotive wiring manufacturer.components remanufacturer; and Light Guide Systems, a producer of quality assurance process equipment. In addition, Mr. Harbour serves on the Board of Lincoln Educational, a public company providing schooling for automotive repair skills. Over his 3030-plus years of experience as a management consultant, Mr. Harbour has gained a deep and broad knowledge of the automotive industry and particular expertise in the various unique management and operational issues facing participants in the industry. Mr. Harbour currently serves as the Chairman of the Human Resources and Compensation Committee of the Board.

RichRichardard F. Dauch (age 54)56) has been a Director since 2010. In 2011, Mr. Dauch became President and CEO of Accuride Corporation, a manufacturer and supplier of commercial vehicle components. Prior to that, Mr. Dauch served as President and CEO of global mechanical fastener supplier, Acument Global Technologies, Inc. He held prior leadership roles during a 13-year career at American Axle & Manufacturing, a global supplier of driveline, drive train and chassis systems, as well as at United Technologies Carrier Corporation, after concluding an 11-year career in the United States Army. Mr. Dauch is a member of the board of directors of Accuride Corporation, an SEC registrant and is a member of the Heavy Duty Business Forum. He also serves on the board of directors of the Army Football Club at West Point. Mr. Dauch is a graduate of the United States Military Academy at West Point and the MIT "Leaders For Manufacturing" program. Mr. Dauch's 3030-plus years of cumulative leadership experience in a broad range of disciplines allow him to provide valuable insight and experience to the Board. Mr. Dauch currently serves as the Chairman of the Nominating and Corporate Governance Committee of the Board.

James A. SharmanRetirement (age 58) was appointed as a Director in January 2016. Beginning with the annual meeting of shareholders on May 24, 2017, Mr. Sharman will begin serving as the Chairman of Spartan's Board of Directors. Since 2014, Mr. Sharman has served as Chief Operating Officer of Coyote Logistics, a freight broker and logistics services provider and a wholly owned subsidiary of United Parcel Service, Inc. From 2006 through 2014, Mr. Sharman served as Managing Partner of Truecast Capital, LLC, an investment firm. His work history includes President and CEO of World Kitchen, Inc. and Rubicon Technology, Inc. He was Senior Vice President of Global Supply Chain for CNH as well as Vice President and General Manager, Latin America, for the Case Corporation. He served as the Commanding Officer of an Engineering Company in the United States Army and was an Assistant Professor at the United States Military Academy, West Point. Mr. Sharman also serves on the Board of Directors of Standard Solar, Inc., a privately held solar electric systems company. Mr. Sharman is a graduate of the United States Military Academy at West Point and Duke’s Fuqua School of Business. Mr. Sharman’s extensive business experience, including international management experience, allows him to provide valuable insight to the Board.

In connection

Directors with his retirement asTerms Expiring in 2018

Daryl M. Adams (age 55) was appointed President and CEO of Spartan Motors effective February 19, 2015, and was appointed to the Board on December 10, 2014. Mr. SztykielAdams joined the Company in connection with his appointment as Chief Operating Officer on July 31, 2014. Prior to joining Spartan Motors, Mr. Adams served for seven years as CEO of Midway Products Group, a privately-held Tier One automotive supplier. Prior to that, he held a succession of management positions over a 17-year career with Lear Corporation, including senior leadership and international roles in Lear's North American and European operations. Mr. Adams holds a Master of Business Administration degree from Michigan State University and a Bachelor of Science degree in Industrial Management and Manufacturing from Lawrence Institute of Technology and is alsoactive in various manufacturing associations including: Business Leaders of Michigan, the Capital Area Manufacturers Council, and Lansing Economic Area Partners where he serves on the executive board. As the current President and CEO of the Company, Mr. Adams' participation on the Board is of critical importance in terms of the Board's oversight of the Company's operations and strategic direction.

James C. Orchard (age 66) was appointed as a Director of Spartan Motors on February 6, 2015. From 2008 until 2014, Mr. Orchard served as CEO of Dayco, LLC, a privately-held supplier of engine parts and systems to the automotive industry. Mr. Orchard has served in executive and leadership positions in the automotive, truck, and aftermarket parts industries for the past 48 years, and currently serves on the Board of Directors of BBB Industries, a leading supplier and re-manufacturer of rotating electrical, steering gear and caliper products to the North American vehicle aftermarket. Mr. Orchard's vast experience and leadership in the automotive industry allow him to provide valuable insight and expertise to the Board.

Retirement of Director

After 10 years of Board service and 7 years as serving as the Chairman of the Board, Mr. Hugh W. Sloan, Jr. is retiring from the Board of Directors at the expiration of his current term, which ends as of the 2015 annual meeting of shareholders. Mr. Sztykiel served the Company for over 30 years, including 24 years as its President and 12 years as its CEO. In anticipation of his retirement, the Board of Directors has decreased the size of the Board from nine directors to eight directors, to be effective upon Mr. Sztykiel's retirement on May 20, 2015.

Pursuant to the Company's Corporate Governance Principles, each director is required to offer his resignation as of the first annual meeting of shareholders immediately following the date he reaches age 74. In accordance with these Corporate Governance Principles, Mr. Kaczmarek offered his resignation as of the 2014 annual meeting of shareholders and Mr. Sloan offered his resignation as of the 2015 annual meeting of shareholders. The Board of Directors has not accepted either of these resignations as the Board believes it is in the best interests of the Company for Messrs. Kaczmarek and Sloan to continue serving on the Board through the successful transition of the role of President and CEO from Mr. Sztykiel to Mr. Adams. As a result, the Board has nominated Mr. Kaczmarek for an additional one-year term of office, to expire at the 2016 annual meeting of shareholders. Mr. Sloan's current term as a director expires at the 2017 annual meeting of shareholders. No decision has been made yet as to the date Mr. Sloan will retire from the Board.

Executive Officers Who Are Not Directors

Frederick J. SohmLori L. Wade (age 51) was appointed Interim Chief Financial Officer and Treasurer in March of 2013 and was appointed(age 47) joined Spartan Motors as its Chief Financial Officer effective February 24, 2014. Prior to that, Ms. Wade served as Executive Director of Finance since joining the Company in February of 2008.September 28, 2015. Prior to joining the Company, Ms. Wade spent more than 21 years at Eaton Corporation where sheMr. Sohm most recently served as Worldwide Sarbanes-Oxley Manager, Logistics Center Controllerthe Treasurer of ALTe Technologies, a start-up company that engineers and produces hybrid electric powertrain systems for the commercial vehicle market. Prior to joining ALTe Technologies in 2015, Mr. Sohm was the CFO of Warrior Sports, Inc., a position he held from 2009 to 2014. Prior to that, he held several executive and leadership positions in finance and accounting at various other financial management positions. Over the course of her career with the Company, Ms. Wade has developed a thorough knowledge of the Company's businessorganizations including ArvinMeritor, Inc., Kmart Corporation and financial operations.DaimlerChrysler Corporation.

John A. Forbes (age 55)57) has been serving as the President of Utilimaster Corporation, a subsidiary of Spartan Motors,our Fleet Vehicles and Services business unit since July 2010. Prior to that, he was the CFO of Utilimaster from May 2009 to July 2010, the CFO of Nautic Global Group LLC from 2007 to 2009, and the CFO of Adorn LLC from 2003 to 2007. Mr. Forbes has over 30 years of experience in serving various manufacturing industries in senior financial leadership roles. Mr. Forbes also has extensive experience with operations management, acquisitions, strategic planning, risk management, and banking relations. He currently serves on the Board of Directors of Patrick Industries, an SEC registrant that is a major manufacturer of component products and distributor of building products and materials to the RV and manufactured housing industries.

John W. Slawson (age 51) was appointed President of the Emergency Response business unit effective November 5, 2015. Prior to joining Spartan, Mr. Slawson served as the President and CEO of Horton Emergency Vehicles, a market-leading manufacturer of ambulances in North America and a member company of Allied Specialty Vehicles (ASV). Prior to joining Horton in 2011, he was the President and an equity partner of U.S. Tanker Fire Apparatus LLC. Mr. Slawson was previously the President of Oshkosh Specialty Vehicles, a manufacturer of command and law enforcement vehicles, and Director of Dealer Development and Distribution for Pierce Manufacturing, the largest fire apparatus manufacturer in North America. His career spans over 25 years, during which he has held executive positions and led teams within many world-class companies.

Thomas C. Schultz (age 52) was appointed Chief Administrative Officer (CAO) in July 2016 after joining Spartan Motors as the Corporate VP of Human Resources in 2014. Prior to joining Spartan, Mr. Schultz served as Director, North America where he led the Human Resources corporate function at BASF in 2013. Prior to that Mr. Schultz served as Senior Vice President of Human Resources at Energy Conversion Devices and United Solar Ovonics from 2008 until 2012. Previous to that, Mr. Schultz was Director, North America at Carrier Commercial Refrigeration, a United Technologies Corporation. Mr. Schultz began his career at American Axle & Manufacturing where he held various progressive manufacturing, labor relations and human resources roles over an 11 year period. Mr. Schultz earned a Juris Doctorate degree from the University of Detroit, a Master’s degree in Labor and Industrial Relations from Michigan State University and a Bachelor of Science degree in Political Science/Public Administration from Western Michigan University.

Steve Guillaume (age 49) was appointed as President of the Specialty Chassis and Vehicles business unit effective May 11, 2015. Mr. Guillaume joined Spartan Motors in January 2015 as Vice President of New Business Development and Joint Ventures. In this role, Guillaume was responsible for managing Spartan's joint ventures and leading business development initiatives across the organization. Prior to joining the Company, Mr. Guillaume began his career in finance and accounting, before eventually progressing into a plant controller role. Later, he transitioned to business development and general management where he held numerous senior leadership positions with Navistar, a leading manufacturer of commercial trucks, buses, defense vehicles and engines.

Arthur D. Ickes (age 69) was appointed71) is our Executive Officer – Special Projects, a position he has held since May 11, 2015. Prior to that role, Mr. Ickes served as the President of the Specialty Chassis and Vehicles segment infrom June of 2013. Prior2013 to that, Mr. Ickes servedMay 2015, as Senior Vice President of Operations of Spartan Motors from 2009 to 2013, and as Vice President of Operations of Spartan Motors from 2007 until 2010. Mr. Ickes has over 40 years of manufacturing and business leadership experience, much of which was with General Motors Corporation. Mr. Ickes also has extensive experience with operations management, acquisitions, strategic planning, manufacturing and product engineering, quality, materials management and product launch management.

Daniel J. Slater (age 59) was appointed President of the Emergency Response Vehicle segment in January of 2015. From 2006 through 2014, Mr. Slater served as Vice President and General Manager of Terex Cranes North America, Inc., a manufacturer of rough terrain cranes, truck cranes and boom trucks. Prior to joining Terex Cranes, he served as President of the Manufacturing Performance Solutions group of RWD, Inc., a management consulting and training firm. Mr. Slater has also held manufacturing management positions for BMW Manufacturing Corporation, Toyota Motor Manufacturing USA and Volkswagen of America.

Thomas T. Kivell (age 62)64) joined the Company as Vice President and General Counsel in November of 2008. Mr. Kivell joined Spartan from GE Aviation, where he served as general counsel to its Digital Systems business unit, and its predecessor, Smiths Aerospace, since 1996. During his tenure there, he was the senior legal staff member responsible for the Electronic Systems unit of Smiths Aerospace, and served as the sole attorney for Smiths Aerospace in the United States over a four-year period. In 2002, he was a founder of a new legal and compliance department for Smiths Aerospace, unifying several other legal and compliance departments. Prior to his position with GE Aviation and Smiths Aerospace, he was co-owner and CEO of a general design and contracting firm. Mr. Kivell also founded and managed a private law practice. In his career, he has also served in legal counsel and contract management positions for Armored Vehicle Technologies Associated, a joint venture between General Dynamics Land Systems and FMC Corporation, and with General Dynamics Land Systems. Before beginning his legal career, Mr. Kivell was a project engineer for tracked military vehicle programs. Mr. Kivell also serves as a Vice President and as Secretary of Spartan Motors, Inc.

Board Meetings, Annual Meeting, and Committees 

Spartan Motors'Motors' Board of Directors held seven11 meetings during 2014.2016. Each director who served as a director during 20142016 attended at least 75% of the aggregate of (1) the total number of Board of Directors meetings and (2) the total number of meetings held by all committees of the Board of Directors on which he served (held during the periods that he served on such committees). Pursuant to the Company's Corporate Governance Principles, the Company expects all directors to attendparticipate in the annual shareholder meeting, and typically all directors do attend the annual shareholder meeting. In 2014, five2016, all of the sevenboard members who were then directors of Spartan Motors attended the annual meeting of shareholders. Independent directors also meet regularly in executive sessions without the presence of management.

The Board of Directors has determined that Messrs. Current, Kaczmarek, Sloan, Harbour, Dauch, Rooke, and Orchardall directors, other than Mr. Adams, are "independent," as that term is defined in Rule 4200(a)(15) of the Nasdaq Marketplace Rules.

The Board of Directors has three standing committees: the Audit Committee, the Human ResourcesResources and Compensation Committee, and the Corporate Governance and Nominating Committee. Information regarding each of the committees as of the mailing date of this Proxy Statement is as follows:

Audit Committee. The Audit Committee has been established in accordance with the Securities Exchange Act of 1934. Its primary purpose is to provide assistance to the Board of Directors in fulfilling its oversight responsibility relating to: Spartan Motors' financial statements and the accounting and financial reporting process; Spartan Motors' systems of internal accounting and financial controls; the qualification and independence of its independent registered public accounting firm; the annual independent audit of Spartan Motors' financial statements; legal and regulatory compliance; and ethics issues. Among other things, the Audit Committee oversees the integrated audit of the financial statements and internal control over financial reporting and is directly responsible for the selection, appointment, compensation, retention and oversight of the work of the independent registered public accounting firm engaged by Spartan Motors, and exercises direct oversight of the Company's Manager of Business Risk.Internal Audit. The Audit Committee operates pursuant to a written charter adopted by the Board of Directors that is available for viewing at the Company's website, www.spartanmotors.com.

The Audit Committee has a Pre-Approval Policy related to the audit and non-audit services performed by the independent registered public accountingaccounting firm. All services provided by the independent registered public accounting firm engaged by the Company are within general pre-approval limits; or, up to a certain dollar amount, approved by the Chairman of the Audit Committee, who must communicate the approval to the full Audit Committee; or, above a certain dollar amount, approved by the full Audit Committee. The general pre-approval limits are detailed as to each particular service and are limited by a specific dollar amount for each type of service.

The Audit Committee meets the definitions of an "audit"audit committee" under applicable Nasdaq and SEC rules. Each member of the Audit Committee satisfies the applicable Nasdaq and SEC independence standards for such committee members. Messrs. Current (Chairman), Sloan, Kaczmarek, Dauch, Harbour, Rooke, and OrchardSharman are members of the Audit Committee. The Board of Directors has determined that Messrs. Current Rooke, and KaczmarekRooke are audit committee "financial experts" as the term is defined in rules of the Securities and Exchange Commission and all seventhree are Independent Directors as defined by Nasdaq. The Audit Committee held nine10 meetings during 2014.2016.

Human Resources & Compensation Committee. The responsibilities of the Human Resources & Compensation Committee include exercising oversight over the development of competitive compensation plans that ensure the attraction, retention and motivation of key associates, as well as recommending the cash and other incentive compensation, if any, to be paid to Spartan Motors' executive officers.officers and board members based on independent third party benchmarking analyses. In addition, the Human Resources & Compensation Committee is responsible for reviewing and making recommendations to the Board of Directors regarding stock incentives awarded under Spartan Motors' stock incentive plans, reviewing all material proposed stock incentive plan changes and determining the employees to whom stock incentives will be granted, the number of shares covered by stock incentive, and the terms and other matters associated with equity-based compensation awards.

The Human Resources and Compensation Committee operates pursuant to a written charter adopted by the Board of Directors. The Human Resources and Compensation Committee charter is available on our website, www.spartanmotors.com. The Human Resources and Compensation Committee does not delegate to other persons the duties with which it is charged under the charter. For specific information regarding the processes and procedures of the Human Resources and Compensation Committee, see the "Compensation Discussion and Analysis" section of this Proxy Statement.

Messrs. Harbour (Chairman), Sloan, Kaczmarek, Current, Dauch, Rooke and Orchard are members of the Human Resources and Compensation Committee. Each member of the Human Resources and Compensation Committee satisfies the applicable Nasdaq and SEC independence standards for such committee members. The Human Resources and Compensation Committee held five meetings during 2014.2016.

The Human Resources and Compensation Committee has reviewed all componentscomponents of the Chief Executive Officer's compensation and the compensation of the other executive officers who are named in the Summary Compensation Table set forth later in this Proxy Statement, including salary, bonuses, equity and other incentive compensation, accumulated realized and unrealized stock options, stock appreciation rights and restricted stock gains, the dollar value to the executive and the cost to Spartan Motors of all perquisites and other personal benefits.

Corporate Governance andNominating Committee. The Corporate Governance and Nominating Committee develops and recommends to Spartan Motors' Board of Directors criteria for the selection of candidates for director, seeks out and receives suggestions concerning possible candidates, reviews and evaluates the qualifications of possible candidates, and recommends to the Board of Directors candidates for vacancies occurring from time to time and for the slate of directors to be proposed on behalf of the Board of Directors at each annual meeting of shareholders. In addition to its responsibilities regarding director nominations, the Corporate Governance and Nominating Committee assists the Board of Directors in fulfilling its responsibility to the shareholders and in complying with applicable rules and regulations relating to corporate governance. Specifically, the Corporate Governance and Nominating Committee develops and recommends corporate governance principles that address Board independence and leadership, Board size and composition, meetings and committee structure, and other governance matters. In addition, the Committee reviews the Company's adherence to established corporate governance principles and provides reports and recommendations to the Board of Directors.

The Corporate GovernanceGovernance and Nominating Committee operates pursuant to a written charter that is available for viewing at the Company's website, www.spartanmotors.com.

The Corporate Governance and Nominating Committee will consider candidates who display high character and integrity; are free of any conflict of interest that would violate any applicable law or regulation or interfere with the proper performance of the responsibilities of a director; possess substantial and significant experience that would be of particular importance to Spartan Motors in the performance of the duties of a director; have sufficient time available to devote to the affairs of Spartan Motors in order to carry out the responsibilities of a director; and have the capacity and desire to represent the balanced, best interests of the shareholders as a whole.

The Committee believes the foregoing qualities are the most important qualifications for any director or director nominee; however, in identifying candidates for directors, the Board considersconsiders other attributes that may make a person a strong director. One such attribute that is considered is the potential diversity of viewpoint that a potential candidate would likely bring to the Board of Directors, which could be the result of the person's background, current occupation, career history, and other factors.

As the need to make changes or additions to the Board arises, the Committee gives consideration to the Board size, experiences, and needs. The Committee may use outside resources, including consultants retained by the Committee, to assist in the process of establishing the criteria for director candidates, establish a process to identify potential candidates, and assist in the introduction of potential candidates to the Committee. Regardless of how they are identified, candidates must understand, accept, and value the culture and history of Spartan Motors, Inc.

Nominations of candidates for election to the Board of Directors of Spartan Motors at any annual meeting of shareholders or at any special meeting of shareholders called for election of directors may be made by the Board of Directors or, pursuant to the process described below, by a shareholder of record of shares of a class entitled to vote at such annual or special meeting of shareholders. The Corporate Governance and Nominating Committee applies the same standards and qualification requirements to all director nominees, regardless of the party making the director nomination.

Each member of the Corporate Governance and Nominating CommitteeCommittee satisfies the applicable Nasdaq and SEC independence standards for such committee members. Messrs. Dauch (Chairman), Sloan, Harbour, and Current are the members of the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee held four meetings during 2014.2016.

Shareholder Nominations of Directors. The Corporate Governance and Nominating Committee will consider nominees for election to the Board of Directors submitted by shareholders. Spartan Motors' bylaws provide that any shareholder entitled to vote generally in the election of directors may nominate one or more persons for election as directors at a meeting only if written notice of the shareholder's intent to make a nomination or nominations has been given to Spartan Motors' Secretary at least 120 days before the one-year anniversary date of the notice of the previous year's annual meeting if the meeting is an annual meeting, and not more than seven days following the date of notice of the meeting if the meeting is a special meeting at which directors will be elected. Each such notice to the Secretary must include:

Board Leadership Structure; Role in Risk Oversight

The Company believes the leadership structure of its Board of Directors is appropriate in light of the size of the Company, its organizational structure, its strategies, and similar factors. Although Mr. Adams, our President and CEO, serves as a director, the Board of Directors is chaired by Mr. Hugh Sloan, a non-employee director who meets Nasdaq standards for being an independent director. Upon Mr. Sloan’s retirement from the Board at the 2017 annual meeting of shareholders, Mr. James Sharman will take over the chairman role. Mr. Sharman is also a non-employee director who meets Nasdaq standards for being an independent director. The Company believes this separation of responsibility is appropriate in order to provide independent Board oversight of and direction for the Company's executive management team, led by Mr. Adams. The Company has maintained this leadership structure (i.e., with separate individuals serving as the President/CEO and Chairman of the Board) since 2002.

The Company believes the Board plays an appropriate role in the risk oversight of the Company and its business. The Board's risk oversight function is largely carried out through the Board's independent oversight of the executive management team and, in particular, its oversight of the various operational, industries,industry, economic, and other risk factors faced by the Company. The Board is an active Board that meets regularly with consistent input from all directors. All directors except for Messrs.Mr. Adams and Sztykiel have been determined to meet the independence standards of applicable Nasdaq rules. In addition, the Company believes that the strength and experience of its directors is important to their independent oversight of the executive management team.  Those members of the executive management team who have particular risk management responsibilities, including the CEO, the CFO, the CAO, General Counsel, and the Manager of Business RiskInternal Audit report directly to the Board of Directors on a regular basis. In addition, the Board regularly holdholds sessions of the independent directors only, without the presence of any employee directors or other executives of the Company.

In addition to the foregoing, the Board of Directors of the Company conducts certain risk oversight activities through its committees with direct oversight over specific functional areas. These functional areas are described in more detail on the preceding pages for each Committee's responsibilities.

Finally, the Board works to ensure that management is properly focused on the appropriate strategic risks and initiatives toprofitably grow the business through acquisitions, organic growth and alliances by, among other things, reviewing and discussing the performance of executive management and conducting succession planning for key leadership positions.

Communicating with the Board

Shareholders and interested parties may communicate with members of Spartan Motors'Motors' Board of Directors by sending correspondence addressed to the Board as a whole, a specific committee, or a specific Board member c/o Thomas T. Kivell, Secretary, Spartan Motors, Inc., 1541 Reynolds Road, Charlotte, Michigan 48813. All such communications are forwarded to the appropriate recipient(s).

Compensation Discussion and Analysis –

Compensation Philosophy and Objectives

The Company'sCompany's executive compensation philosophy is to provide competitive levels of compensation and incentives to achieve strong financial performance. The Company's executive compensation policies are designed to achieve the following five primary objectives:

The Human Resources and Compensation Committee sets management compensation at levels that the Compensation Committee believes are competitive with other companies in Spartan Motors'Motors' industry.

The advisory vote on executive compensation was conducted at our annual meeting of shareholders in 2014,2016, based on the disclosure of our executive compensation in the proxy statement for that meeting.  Of the shares of common stock represented at that meeting in person or by proxy, approximately 95% of the shares voted to approve the resolution, 3% voted against the resolution, and 2% abstained. Our Board considered the results of this vote to be supportive of the Company's compensation policies and programs and did not make any changes to such policies and programs as a result of such vote.

Elements of Compensation

Executive compensation consists of both cash and equity and is comprised of the following elements, each of which is described below:

Each component of executive compensation is designed to accomplish one or more of the five compensation objectives described above. The total compensation for executives is structured so that a majority of the total earnings potential is derived from performance-based incentives to encourage management to adopt an ownership mentality and take appropriate risks. The elements of the executive compensation program are described in detail below.

The Human Resources and Compensation Committee believes that the percentage of an executive'sexecutive's total compensation that is "at risk" should increase as the executive's responsibilities and ability to influence profits increase. For this reason, the percentage of executive officers' potential compensation that is based upon bonuses and stock plan awards is larger relative to other employees.

Base Salary

The Spartan Motors, Inc. Leadership Team Compensation Plan (the "LTC Plan") sets forth the framework for compensation of the Company's executive officers and other key employees, including each of the named executive officers shown in the tables below. The LTC Plan is intended to provide management with incentives to choose strategies and investments that maximize shareholder value, utilize a financial measurement consistent with the market's evaluation of Spartan Motors' performance, and communicate Spartan Motors' financial objectives in a clear and quantifiable manner. The Human Resources and Compensation Committee is responsible for annually reviewing the provisions of the LTC Plan and reviewing all payouts under the plan. The LTC Plan was adopted by the Board of Directors on April 6, 2015 and approved by shareholders on May 25, 2016.

Base Salary

Base salary is a fundamental component of the Company'sCompany's compensation system, and overall competitive salary levels are necessary to attract and retain well-qualified executives. The Company generally setsCompany’s intention is to set base salary levels of its executive officers slightly lower than prevailingat median market rates, with the expectation that cash bonuses and equity based compensation will allow the executive to receive overall compensation that is at or above market rates, providing that certain performance objectives are met. The Human Resources and Compensation Committee determines recommended base salaries for executive officers by evaluating the responsibilities of the position, the experience of the individual, the performance of Spartan Motors, the performance of the individual, the competitive marketplace for similar management talent, and other relevant factors. The Committee does not give specific weight to any particular factor. Using these same factors, the Committee may recommend base salary adjustments on a periodic basis to maintain the desired levels of base salaries for Spartan Motors' executives. As stated above, total compensation for executives is structured so that a majority of the total earnings potential is derived from performance-based incentives to encourage management to adopt an ownership mentality.

In 2014 and 2016, Mercer was engaged to benchmark the salaries of the executive officers of Spartan Motors. Details regarding thisthese benchmarking processprocesses appear below under the heading "Human Resources and Compensation Committee Processes and Procedures; Participation of Management; Benchmarking Process." The Mercer benchmarking process wasprocesses were completed in January of 2015.2015 and December of 2016. Based on the results of thisthese benchmarking process,processes and to align the salaries of our executive officers with median market rates, the annual base salary of Mr. Adams (our CEO) increased from $572,000 to $620,000 in April, 2016, to $645,000 in August, 2016, and to $665,000 in April, 2017. The annual base salary for Mr. Sohm (our CFO) increased from $250,000 to $300,000 in August, 2016, and to $320,000 in April, 2017. The annual base salaries of Mr. Adams and Ms. Wade were increased to $480,000 and $242,000, respectively. The base salaries of Messrs. Forbes and Ickesour other three NEOs did not change significantly from their 2014prior levels.

Prior to this benchmarking process in 2014, the Company had not engaged a consultant to perform a benchmarking analysis since 2010. That earlier benchmarking process was completed in 2011 and resulted in certain salary adjustments that took effect in 2012.

The base salary for Ms. Wade was increased in connection with her appointment to Interim CFO in March, 2013, as disclosed in the table below. In 2014, her base salary was increased to $220,000 in connection with her appointment to CFO in February, 2014. Mr. Forbes and Mr. Ickes each received increases in their annual base salaries in 2013 and 2014, as shown in the table below, based on their respective performances and the performance of their respective business units.

Cash Incentive Bonuses

In 2011, theThe Board of Directors adoptedmay increase the ELT Plan for the Company's executive management team, including eachbase salaries of the namedour executive officers shownfrom time to time, and such increases may be made at any time (i.e., not just in the tables below. The ELT Plan utilizes pre-determined financial and operational goals and is intended to provide management with incentives to choose strategies and investments that maximize shareholder value, utilize a financial measurement consistentconjunction with the market's evaluation of Spartan Motors'Board's customary annual performance and communicate Spartan Motors' financial objectives in a clear and quantifiable manner. The Human Resources and Compensation Committee is responsible for annually reviewing the provisions of the ELT Plan, setting the management objectives and business goals, and approving all payouts under the plan. The Committee has the authority and discretion to modify the ELT Plan, to modify the vesting or terms of any outstanding award, and to set the goals for the ELT Plan each year. compensation review).

Cash Incentive Bonuses

At the discretion of the Human Resources and Compensation Committee, any bonus payable under the ELTLTC Plan may be paid in the form of the Company's common stock.

The LTC Plan provides an opportunity for our named executives to earn an annual cash bonus based upon achievement of the top priorities for business performance which can include key metrics. The LTC Plan requires our CEO to annually revise the metrics and weightings based upon current business conditions and to obtain approval of the proposed framework from the Human Resources and Compensation Committee.

Each participant'sparticipant's annual bonus is determined by multiplying (1) his or her target bonus percentage (which is determined separately for different categories of employees) by (2) a Bonus Multiplier (described below) by (3) the participant's annual salary.

The target bonus percentage is a percentage of the participant'sparticipant's salary. For 2014,The LTC Plan establishes a target bonus percentage of 80% of base salary for our CEO and 60% for the other named executives. In February 2017, the Human Resources and Compensation Committee set the target bonus percentage for our CEO at 60%100% of base salary for Mr. Adams2017 and 55% for Ms. Wade and Messrs. Sztykiel, Forbes and Ickes. Mr. Gorman was not eligible forbeyond in order to better align our CEO’s compensation with median market rates as a cash incentive bonus in 2014 due to his retirement in Marchresult of 2014. For 2015, the Committee has set the target bonus percentage at 80% for the Chief Executive Officer and 55% for the other named executive officers (other than Messrs. Sztykiel and Gorman, both of whom have retired from their officer positions).Mercer benchmarking analyses described above.

The Bonus MultiplierMultiplier is a fraction or multiple of the target bonus percentage. For example, achievement of bonus metrics at exactly their target amounts would result in a Bonus Multiplier of 1X,1.0X, while achievement of the bonus metrics at double their target amounts would result in a Bonus Multiplier of 2X.2.0X. The threshold Bonus Multiplier is 0.5X. The Bonus Multiplier is calculated to one decimal place. Annually, based on a proposal by our CEO, the Human Resources and Compensation Committee will evaluate and establish, based upon the current key metrics, the incremental improvements required to attain an incremental Bonus Multiplier. The final Bonus Multiplier for a year may be a fractional value based upon prorating results within the target matrix.

The LTC Plan prohibits an annual cash bonus to our named executives for any year in which Spartan Motors incurs a net loss. However, the Board of Directors retains the right to make adjustments or grant discretionary bonuses that it deems appropriate.

Executives subject to the plan for a partial year are eligible for annual bonuses on a prorated basis.

20120146 Annual Incentive Compensation

The Bonus Multiplier for any individual metric, as well as the overall Bonus Multiplier, is capped at 3X for 2014. For 2014, the Bonus Multiplier was determined based on2016, the following metrics:  metrics were established for our named executives to earn an annual cash bonus pursuant to the LTC Plan:

Corporate Officers (Messrs. SztykielCEO, CFO and Adams andCAOMs. Wade)): The Bonus Multiplier for the corporate-level officers was determined based on the achievement of certain pre-determined company-wide financial goals along withrelating to (1) Company-wide adjusted operating income (adjusted to exclude the achievement on certainimpact of restructuring charges), and (2) cash conversion cycle; and (3) pre-determined management objectives. In determining the overallobjectives and key performance indicators (the "MBO Goals"). The final Bonus Multiplier the company-wide financial goals receivedwas determined using a weighting of 65% while55% for Company-wide adjusted operating income, 15% for cash conversion cycle and 30% for the management objectives received a weighting of 35%.  For the year ended December 31, 2014, the achieved Bonus Multiplier was 0.358XMBO Goals. The actual achievement for each of Mr. Sztykiel, Ms. Wade, and Mr. Adams. Mr. Adams was guaranteed a minimum cash bonus of $125,000goal for 2014the Corporate Officers for 2016 is as part of his employment offer, and Mr. Sztykiel was guaranteed a minimum cash bonus of $150,000 for 2014 as part of his retirement compensation package.follows (dollar amounts in thousands):