UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) 14(a) of the Securities
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)) |
| Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to § 240.14a-12 |
SPARTAN MOTORS, INC.
(Name of Registrant as Specified in Its Charter) |
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) |
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required. |
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i) |
(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,Inc. | |
1541 Reynolds Rd. - Charlotte, MI48813 - USA Telephone 517.543.6400 - Facsimile 517.543.5403 WebPage- www.spartanmotors.com |
April 13, 201712, 2018
To Our Shareholders:
You are cordially invited to attend the annual meeting of shareholders of Spartan Motors, Inc. on Wednesday, May 24, 2017,23, 2018, at 10:00 a.m. Eastern Daylight Time. The meeting will be held by means of remote communication only via the Internet at www.virtualshareholdermeeting.com/SPARSPAR1178.
At the annual meeting, we will vote on a number of important matters, as listed in the enclosedenclosed Notice of Annual Meeting of Shareholders and as described in detail in the enclosed Proxy Statement. In addition, you will hear a report on Spartan Motors'Motors’ business activities. On the following pages, you will find the Notice of Annual Meeting of Shareholders and the Proxy Statement. We are pleased to take advantage of Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their stockholders on the Internet. We believe these rules allow us to provide you with the information you need while lowering the costs of printing and delivery and reducing the environmental impact of the Annual Meeting.
It is important that your shares be represented at the annual meeting, regardless of how many shares you own. Whether or not you plan to attend the virtual annual meeting, please sign, date, and return the enclosed proxy card as soon as possible or vote by Internet following the instructions on the proxy card. Sending a proxy card or voting by Internet prior to the meeting will not affect your right to vote if you attend the virtual meeting.
| Sincerely, Daryl M. Adams President and Chief Executive Officer |
Your vote is important.
PLEASE SIGN, DATE,AND RETURN THE ENCLOSED PROXYCARDPROMPTLY. |
Spartan Motors,Inc. | |
1541 Reynolds Rd. - Charlotte, MI48813 - USA Telephone 517.543.6400 - Facsimile 517.543.5403 WebPage- www.spartanmotors.com |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Our Shareholders:
You are cordially invited to attend the 20172018 annual meeting of shareholders of Spartan Motors, Inc. The meeting will be held on Wednesday, May 24, 2017,23, 2018, at 10:00 a.m., Eastern Daylight Time, by means of remote communication via the Internet at www.virtualshareholdermeeting.com/SPARwww.virt17ualshareholdermeeting.com/SPAR18. At the meeting, you will be invited to:
(1) | vote on the election of two directors | |
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| vote on the ratification of the appointment of BDO USA, LLP as Spartan | |
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| transact such other business as may properly come before the annual meeting. |
You may vote at the meeting only if you were a shareholder of record of Spartan Motors common stock at the close of business on March 27, 2017.26, 2018. Please note that this year'syear’s annual meeting will be held via the Internet only.
We are pleased to take advantageadvantage of Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their stockholders on the Internet. We believe these rules allow us to provide you with the information you need while lowering the costs of printing and delivery and reducing the environmental impact of the annual meeting.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held onMay 24, 201723, 2018:Our Proxy Statement, proxy card and Annual Report to Shareholders\Form 10-K are available on the Internet at www.proxyvote.com. You may also contact John Bober at (517) 543-6400 or John.Bober@SpartanMotors.com to request these materials.
| Sincerely, |
Charlotte, Michigan April | |
Thomas T. Kivell Secretary |
Your vote is important.Even if you plan to attend the meeting, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY. |
SPARTAN MOTORS, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 24, 201723, 2018
PROXY STATEMENT
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Use of Terms
In this Proxy Statement, "“we," "” “us," "” “our,"” the "“Company," "” “Spartan Motors,"” and "“Spartan"” refer to Spartan Motors, Inc., and "���you"” and "“your"” refer to shareholders of Spartan Motors.
Time and Place ofFrequently Asked Questions About the Annual Meeting
You are cordially invited to attendWhere and when is the 2017 annual meeting of shareholders of Spartan Motors, Inc. Themeeting?
Our annual meeting will be held on Wednesday, May 24, 2017,23, 2018, at 10:00 a.m., Eastern (Eastern Daylight Time,Time) by means of remote communication via the Internet at www.virtualshareholdermeeting.com/SPAR17SPAR18. If you need help accessing the annual meeting, please contact Maryjane ShanceJohn Bober at (517) 543-6400 or at MJShance@SpartanMotors.com.John.Bober@SpartanMotors.com.
HowWho can vote at the annual meeting?
You are entitled to Participatevote your shares of common stock at our annual meeting if you were a stockholder at the close of business on March 26, 2018, the record date for our annual meeting.
The total number of shares of common stock outstanding and entitled to vote on March 26, 2018 was 35,089,684. Holders of common stock have the right to one vote for each share registered in their names as of the Electronic Meetingclose of business on the record date.
What is the quorum requirement for the annual meeting?
In order to participate in this year'sconduct business at our annual meeting of shareholders and submit your questions during the meeting, please log on to www.virtualshareholdermeeting.com/SPAR17. You will need to enter the 11-digit control number shown on your proxy card.
Solicitation of Proxies
This Proxy Statement and the enclosed proxy card are being furnished to you in connection with the solicitation of proxies by Spartan Motors' Board of Directors for use at the annual meeting, and any adjournment of the meeting.
Availability Date
This Proxy Statement and the proxy card are being given or made available (via the internet) on and after April 13, 2017 to Spartan Motors' shareholders as of the record date.
Purposes of the Meeting
The purposes of the annual meeting are to:
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We do not know of any other matters to be presented for consideration at the annual meeting. If any other matters are presented, the persons named as proxies on the enclosed proxy card will have discretionary authority to vote on those matters in accordance with their judgment.
Record Date
You may vote at the meeting if you were a shareholder of record of Spartan Motors common stock on March 27, 2017. Each such shareholder is entitled to one vote per share on each matter presented for a shareholder vote at the meeting.
As of March 27, 2017, there were 34,367,241 shares of Spartan Motors common stock outstanding.
How to Vote Your Shares
By Mail: If you are a shareholder of record, that is, your common stock is registered directly in your name with the transfer agent, American Stock Transfer & Trust Co., you may vote by returning the enclosed proxy card. If you properly complete and sign the enclosed proxy card and return it so that we receive it before the meeting, the shares of Spartan Motors common stock represented by your proxy will be voted at the annual meeting and any adjournment of the annual meeting, as long as you do not revoke the proxy before or at the meeting.
By Internet Before the Annual Meeting: If voting by Internet before the annual meeting, go to the website printed on the proxy card or www.proxyvote.com and enter the control number printed on the proxy card. Your control number is the 11-digit number located beneath the Company name and account number on the upper right side of your proxy material. Proceed to follow the instructions provided.
By Internet During the Annual Meeting: Use your computer to access the website printed on the proxy card or www.virtualshareholdermeeting.com/SPAR17 and follow the instructions to vote during the meeting.
Regardless of how you vote, if you specify a choice, your shares will be voted as specified. If you do not specify a choice on your signed, returned proxy, your shares will be voted: (1) for the election of all nominees for director named in this Proxy Statement, (2) for the approval of the proposed amendment to our Articles of Incorporation to increase the number of authorized shares of our common stock, (3) for the ratification of the appointment of BDO USA, LLP as Spartan Motors' independent registered public accounting firm for the current fiscal year, (4) for the approval of the compensation of our executives, (5) for the approval of our Board's recommendation to hold a shareholder advisory vote for the approval of our executive compensation every year, and (6) with respect to any other matters that may come before the meeting or any adjournment of the meeting, in accordance with the discretion of the persons named as proxies on the proxy card.
"Street Name" Shareholders
If you hold your shares in "street name," that is, your shares are registered in the name of a bank, broker or other nominee, which we will collectively refer to as your "broker," your broker must vote your shares if you provide it with proper and timely voting instructions. Please check the voting forms and instructions provided by your broker or its agent.
How to Revoke Your Proxy
If you are a shareholder of record, you may revoke your proxy at any time before it is voted at the meeting by doing any of the following four things:
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Your last vote properly received before the polls are closed at the meeting is the vote that will be counted. Please note that attending the meeting will not by itself revoke your proxy.
If you are a street name holder and have instructed your broker to vote your shares, you must follow directions from your broker to change your vote.
Quorum
In order for business to be conducted at the meeting, a quorum must be present. The presence in person or by properly executed proxy of the holders of at leaststockholders holding a majority of all of the issued and outstanding shares of Spartan Motors common stock entitled to vote is necessary for a quorum at the meeting. For purposesIf a quorum is not present, a vote cannot occur, and our annual meeting may be adjourned to a subsequent date for the purpose of obtaining a quorum. Proxies voted as “withheld,” abstentions, and broker non-votes are counted for the purpose of determining whether a quorum is present, we will include shares that are present or represented by proxy, including abstentions and broker non-votes.
Adjournmentpresent.
The shareholders present at the meeting, in person or represented by proxy, may by a majority vote adjourn the meeting despite the absence of a quorum. If there is not a quorum at the meeting, we expect to adjourn the meeting to solicit additional proxies.
Required VotesHow do I know whether I am a registered shareholder or a beneficial shareholder?
You are a registered shareholder if your shares of common stock are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company.
You are a beneficial shareholder if your shares are held in an account at a bank, broker or other holder of record (also referred to as holding shares “in street name”).
How do I participate in the annual meeting?
In order to participate in this year’s annual meeting and submit your questions during the meeting, please visit www.virtualshareholdermeeting.com/SPAR 18. You will need to enter the control number shown on your proxy card.
What is the effect of not casting my vote?
If you are a registered shareholder and you do not vote your shares, your shares will not be taken into consideration in determining the outcome of the matters that are acted upon.
If you are a beneficial shareholder and you do not instruct your bank or broker how to vote your shares, under Nasdaq rules, your bank or broker will only be able to vote your shares on the ratification of BDO USA, LLP as our independent registered public accounting firm. Your bank or broker will not be able to vote your shares on the election of directors or the advisory resolution to approve the compensation of our named executive officers, resulting in “broker non-votes” on those items.
How do I vote my shares?
Registered shareholders may vote in one of four ways:
● | Vote by Mail: If you are a shareholder of record (that is, your common stock is registered directly in your name with our transfer agent, American Stock Transfer & Trust Co.), you may vote by returning the enclosed proxy card. If you properly complete, sign, date, and return your proxy card in the enclosed postage-paid envelope so that we receive it before the meeting, the shares of Spartan Motors common stock represented by your proxy card will be voted at the annual meeting and any adjournment of the annual meeting, so long as you do not revoke the proxy before or at the meeting. |
● | Vote by Internet: Go to the website listed on your proxy card to vote by Internet. You will need to follow the instructions on your proxy card and the website. |
● | Vote by Telephone: Call the telephone number on your proxy card to vote by telephone. You will need to follow the instructions on your proxy card and the voice prompts. |
If you vote by Internet or by telephone, your electronic vote authorizes the named proxies to vote on your behalf in the same manner as if you completed, signed, dated, and returned your proxy card. If you vote by Internet or by telephone, you do not need to return your proxy card.
If you are a beneficial shareholder, you should receive instructions from your bank, broker, or other holder of record that you must follow in order to have your shares voted.
Can I change my vote after I have voted?
Proxies are revocable at any time before they are exercised at our annual meeting. If you are a registered shareholder and you originally voted by mail, Internet, or telephone, you may revoke your proxy by:
● | completing and returning a timely and later-dated proxy card, or using the Internet or telephone to timely transmit your later voting instructions, |
● | casting a subsequent vote via the internet, or |
● | contacting Thomas Kivell, Secretary of the Company, at the following address to notify him that your proxy is revoked: |
Spartan Motors, Inc. |
1541 Reynolds Rd. |
Charlotte, Michigan 48813 |
Email: Thomas.Kivell@SpartanMotors.com |
Fax: (517) 543-5403 |
If you are a beneficial shareholder, you must follow the directions provided by your bank, broker or other holder of record to change or revoke any prior voting instructions.
Your last vote properly received before the polls are closed at the meeting is the vote that will be counted.
What are my voting options and how does the Board of Directors recommend that I vote?
Proposal | Voting Options | Board of Director's Recommendation | |||
1. | Election of Directors | For All, Withhold All, or For All Except Any Individual Nominee | For All | ||
2. | Ratification of the appointment of BDO USA, LLP | For, Against, or Abstain | For | ||
3. | Advisory Vote on the Compensation of our Named Executive Officers | For, Against, or Abstain | For |
We do not know of any other matters to be presented for consideration at the annual meeting. In the absence of instructions, proxies will be voted in accordance with the recommendation of the Board of Directors of the Company with respect to all proposals and in accordance with the best judgment of the individuals named as proxies with respect to any other matter properly brought before the meeting.
What vote is required to approve each proposal?
Proposal 1 - Election of Directors.Directors. Under Michigan law and our bylaws, directors are elected by a plurality of the shares voting. This means that the nominees who receive the most votes will be elected to the open director positions. However, pursuant to our Corporate Governance Principles, because this is an uncontested election of directors (i.e.(i.e., the number of persons nominated for election is equal to the number of directors to be elected), any nominee for director who receives a greater number of votes "withheld" for his or her election than votes "for" such election is required to promptly tender his or her offer of resignation to the Chairman of the Board. The Governance Committee will promptly consider the resignation offer and recommend to the Board whether to accept or reject it. The Board will then make a final decision not later than 90 days following the date of the shareholder meeting at which the election occurred. In counting votes on the election of directors, abstentions, broker non-votes, and other shares not voted will be counted as not voted and therefore will not affect the outcome of the election.
Amendment to Articles of Incorporation. The proposal to amend our Articles of Incorporation will be approved only upon an affirmative vote of a majority of the outstanding shares. For the purpose of counting votes on this proposal, abstentions, broker non-votes, and other shares not voted will have the same effect as a vote against the proposal.
Advisory Vote on Executive Compensation. The proposal to approve the compensation of our executives, as described in this Proxy Statement, is an advisory vote only. The Company will disclose the results of this vote, but is not required to take action based upon the outcome of this vote. However, the Human Resources and Compensation Committee of the Board intends to consider the outcome of the vote when considering future executive compensation arrangements.
Advisory Vote on Frequency of Shareholder Consideration of Executive Compensation.The proposal to determine how frequently our shareholders will be given the opportunity to participate in an advisory vote to approve our executive compensation is an advisory vote only. After the meeting, the Company will disclose both the results of this vote and the Board's decision regarding how frequently the executive compensation advisory vote will take place in the future. However, in making such decision, the Board is not required to abide by the outcome of the shareholder advisory vote. However, the Board of Directors intends to consider the decision made by our shareholders on this matter when determining the frequency of future advisory votes on executive compensation.
Proposal 2 - Ratification of Independent AuditorsAuditors.. The proposal to ratify the appointment of BDO USA, LLP as Spartan Motors' independent registered public accounting firm for the current fiscal year will be approved if a majority of the shares voted at the meeting are voted in favor of the proposal. In counting votes on this proposal, abstentions and broker non-votes will be counted as not voted and therefore will not affect the outcome of the election.
Proposal 3 - Advisory Vote on Executive Compensation. The proposal to approve the compensation of our executives, as described in this Proxy Statement, is an advisory vote only. The Company will disclose the results of this vote, but is not required to take action based upon the outcome of this vote. However, the Human Resources and Compensation Committee of the Board intends to consider the outcome of the vote when considering future executive compensation arrangements.
Who is soliciting this proxy?
This Proxy Statement and the enclosed proxy card are being furnished to you in connection with the solicitation of proxies by the Board of Directors of Spartan Motors for use at the annual meeting and any adjournment of the meeting.
Who is paying the expenses of this proxy solicitation?
The Company will pay all expenses in connection with the solicitation of proxies by our Board of Directors for use at our annual meeting. We will also pay banks, brokers, or other holders of record their out-of-pocket and reasonable clerical expenses incurred in sending our proxy materials to beneficial owners for the purpose of obtaining their proxies.
How will the Company solicit proxies?
We will primarily solicit proxies by mail; however, certain of our directors, officers, or employees may solicit by telephone, electronically, or by other means of communication. Our directors, officers, and employees will receive no additional compensation for any such solicitation. We do not knowexpect to engage any paid solicitors to assist us in the solicitation of any other matters to be presented for shareholder action at the annual meeting.
Broker Non-Votes.A broker non-vote occurs when a shareholder holds his or her stock through a broker and the broker does not vote those shares. This usually occurs because the broker has not received timely voting instructions from that shareholder and the broker does not have discretionary voting power for the particular item upon which the vote is taken. It is important that you instruct your broker how to vote shares held by you in street name using the vote instruction form provided by your broker. Your broker should vote your shares as you direct if you provide timely instructions on how to vote by following the information provided to you by your broker.proxies.
Proposal: Election of Directors
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Nominees for Election
The Board of Directors proposes that the following individualindividuals be elected as a directordirectors of Spartan Motors for a three-year termterms expiring at the annual meeting of shareholders to be held in 2020:2021:
AndrewDaryl M. RookeAdams
In addition, the Board of Directors proposes that the following individual be elected as a director of Spartan Motors for a one-year term expiring at the annual meeting of shareholders to be held in 2018:
RichardThomas R. CurrentClevinger
Each nominee is presently a director of Spartan Motors whose term willwill expire at the annual meeting. Mr. Current andAdams, who is the Company’s Chief Executive Officer has been a director since 2014. Mr. Rooke have been directors since 2008 and 2012, respectively.Clevinger is a new director who was appointed to the Board on April 6, 2018. Biographical information concerning the nominees appears below under the heading "Spartan Motors'“Spartan Motors’ Board of Directors and Executive Officers,"Executives,” beginning on page .
The persons named as proxies in the proxy card intend to vote for the election of each of the nominees. The proposed nominees are willing to be elected and to serve as directors of Spartan Motors. However, if any or all of the nominees become unable to serve or otherwise unavailable for election, which we do not anticipate, the incumbent Board of Directors may or may not select a substitute nominee or nominees. If a substitute nominee or nominees is or are selected, the shares represented by your proxy card will be voted for the election of the substitute nominee(s), unless you give other instructions. If a substitute is not selected, all proxies will be voted for the election of the remaining nominee(s). Proxies will not be voted for more than two nominees.
Your Board of Directors recommends that you vote FOR the election of each nominee.
Ownership of Spartan Motors Stock Five Percent Shareholders
The following table sets forth information as to each person or other entity (including any group) known to Spartan Motors to have been the beneficial owner of more than 5% of Spartan
Security Ownership of Board and Management
The following table sets forth the number of shares of common stock that each of Spartan
*Less than 1%.
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Board Member and Executive Stock Ownership Requirement Spartan
Spartan Spartan Motors’ Board of Directors currently consists of
Biographical information concerning Spartan Nominees for Election as Directors with Terms Expiring in 2021
Directors with Terms Expiring in 2019
Directors with Terms Expiring in 2020
Retirement of Directors
Executive Officers Who Are Not Directors
Thomas T. Kivell (age 65) 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 and Chief Compliance Officer of Spartan Motors, Inc. Significant Management Team Member Board Meetings, Annual Meeting, and Committees Spartan The Board of Directors has three standing committees: the Audit Committee, the Human Human Resources and Compensation Committee Corporate Governance and Nominating Committee Independent Director (1) James A. Sharman ✔ ✔ Daryl M. Adams Thomas R. Clevinger ✔ Richard R. Current (2) Chair ✔ ✔ Richard F. Dauch ✔ Chair ✔ Ronald E. Harbour Chair ✔ ✔ James C. Orchard ✔ ✔ Dominic A. Romeo (2) ✔ ✔ Andrew M. Rooke (2) ✔ ✔ Number of meetings held in 2017 9 6 4 (1) The directors indicated are independent as that term is defined in Rule 4200(a)(15) of the Nasdaq Marketplace Rules. Members of the Audit Committee also satisfy applicable SEC independence standards for audit committee members. (2) The directors indicated are audit committee “financial experts” as the term is defined in SEC rules. 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 The Audit Committee has a Pre-Approval Policy related to the audit and non-audit services performed by the independent registered public The Audit Committee meets the definitions of an 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 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 has reviewed all Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee develops and recommends to Spartan The Corporate 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 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. Shareholder Nominations of Directors. The Corporate Governance and Nominating Committee will consider nominees for election to the Board of Directors submitted by shareholders. Spartan ● the name, age, business address and residence of each nominee proposed in the notice; ● the principal occupation or employment of each nominee; ● the number of shares of capital stock of Spartan Motors that each nominee beneficially owns; ● a statement that each nominee is willing to be nominated; and ● such other information concerning each nominee as would be required under the rules of the Securities and Exchange Commission in a proxy statement soliciting proxies for the election of such nominees. Board Leadership 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. Board’s Role in Oversight of Risk The Company believes the Board plays an appropriate role in the risk oversight of the Company and its business. The 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 Finally, the Board works to ensure that management is properly focused on the appropriate strategic risks and initiatives to profitably 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 Executive Compensation Compensation Discussion and Analysis Compensation Philosophy and Objectives The ● Attract and retain qualified management; ● Align the interests of management with those of shareholders to encourage achievement of continuing increases in shareholder value; ● Align ● Reward excellent corporate performance; and ● Recognize individual and team initiatives and achievements. The Human Resources and Compensation Committee sets management compensation at levels that the Compensation Committee believes are competitive with other companies in Spartan The advisory vote on executive compensation was conducted at our annual meeting of shareholders in Executive compensation consists of both cash and equity and is comprised of the following elements, each of which is described below: ● Base salary; ● Annual ● Long-term 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. In 2017, 71% of our CEO’s target pay and 54% of our other NEO’s target pay was performance based. The Human Resources and Compensation Committee believes that the percentage of an The Spartan Motors, Inc. Leadership Team Compensation Plan Base Salary Base salary is a fundamental component of the In The 2018 annual base salaries of our named executive officers have not changed significantly from their prior levels. Mercer has again been engaged to benchmark the salaries of the executive officers, which is expected to be completed in July 2018. The Board of Directors may increase the base salaries of our executive officers from time to time, and such increases may be made at any time (i.e., not just in conjunction with the Cash Incentive Bonuses 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 Each The target bonus percentage is a percentage of the The Bonus 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. At the discretion of the Human Resources and Compensation Committee, any bonus payable under the LTC Plan may be paid in the form of the Company’s common stock. Executives subject to the plan for a partial year are eligible for annual bonuses on a prorated basis. For Corporate Officers ( Corporate Officers Corporate Officers Performance Criteria for payouts at: Actual Payout Percentage Range Actual Weighted Metric Min. Target Max. Performance Min. Target Max. Payout % Weight Percentage Operating Income (1) 3,250 5,416 7,582 9,720 50% 100% 200% 200% 55% 110% Cash Conversion Cycle (days) 70.1 66.8 63.5 58.0 50% 100% 200% 200% 15% 30% MBO Achievement 0% 100% 200% 200% 0% 100% 200% 200% 30% 60% Total Multiplier 200% Performance Criteria for payouts at: Metric Min. (50% payout) Target payout) Max. (200% payout) Actual Performance Actual Payout % Weight Weighted Percentage Company-wide Adjusted EBITDA(1) Free Cash Flow (1) MBO Goals Achievement Total Multiplier (2) (1) (2) Total multiplier is rounded to one decimal per the LTC Plan. Business Unit Presidents: The Bonus Multiplier for the Business Unit Presidents was determined based on the achievement of goals relating to (1) Company-wide Specialty Chassis and Vehicles business unit (Mr. Guillaume) Mr. Forbes Performance Criteria for payouts at: Actual Payout Percentage Range Actual Weighted Metric Min. Target Max. Performance Min. Target Max. Payout % Weight Percentage Consolidated Operating Income (1) 3,250 5,416 7,582 9,720 50% 100% 200% 200% 55% 110% Adjusted Business Unit Operating Income 9,334 15,556 21,778 23,189 50% 100% 200% 200% 25% 50% MBO Achievement 0% 100% 200% 200% 0% 100% 200% 200% 20% 40% Total Business Unit Multiplier 200% Performance Criteria for payouts at: Metric Min. (50% payout) Target payout) Max. (200% payout) Actual Performance Actual Payout % Weight Weighted Percentage Company-wide Adjusted EBITDA(1) Segment Adjusted EBITDA Business unit operational and strategic plan Total Multiplier (2) (1) Mr. Slawson Performance Criteria for payouts at: Actual Payout Percentage Range Actual Weighted Metric Min. Target Max. Performance Min. Target Max. Payout % Weight Percentage Consolidated Operating Income (1) $ 5,416 7,582 9,720 50% 100% 200% 200% 55% 110% Adjusted Business Unit Operating Income $ (7,784) (4,670) (4,826) 50% 100% 200% 200% 25% 50% MBO Achievement 100% 200% 200% 0% 100% 200% 200% 20% 40% Total Business Unit multiplier 200% Corporate Officers: For Business Unit Presidents: For Long Term Incentives Spartan Spartan Motors currently has the ability to Since 2008, In connection with the Stock-based compensation for the The target percentage is a percentage of the The LTIC Multiplier can range from 0% to 200% (referred to as ● Total Shareholder Return (TSR); ● Spartan ● Established Strategic Objectives (MBOs). Each year, TSR Metric: Up to one half of the LTIC Multiplier is based on performance relative to a TSR metric. The TSR metric is a comparison of Spartan Motors’ TSR to a peer group of companies in similar industries for the previous 12 months. The TSR is Spartan Strategic Objectives Metric: Up to one-half of the LTIC Multiplier is based on achievement of established strategic objectives. On an annual basis, the CEO will propose to the Human Resources and Compensation Committee the strategic objectives (and measurement metrics) based upon the priorities discussed and derived during the annual planning process. Unless specifically weighted differently by the Board of Directors, each of the objectives will be equally weighted. For Company-wide Adjusted EBITDA: Spartan Motors’ company-wide Adjusted EBITDA for 2017. Please see the reconciliation of Adjusted EBITDA to net income in Appendix A. TSR Metric: The TSR goal was set as the Spartan Performance Criteria for payouts at: Payout Percentage Range Actual Weighted Metric Min. Target Max. Performance Min. Target Max. Payout % Weight Percentage Consolidated Operating Income (1) $3,250 5,416 7,582 9,720 50% 100% 200% 200% 40% 80% Total Shareholder Return (percentile) 20 40 80 96 50% 100% 200% 200% 40% 80% MBO Goals Achievement 0% 100% 200% 200% 0% 100% 200% 200% 20% 40% Total Multiplier 200% The final LTIC multiplier for 2017 was determined using weightings of 40% for Company-wide Adjusted EBITDA, 30% for the TSR Metric, and 30% for ROIC, as set by the Human Resources and Compensation Committee. The actual achievement for each goal for all NEOs for 2017 is as follows (dollar amounts in thousands): Performance Criteria for payouts at: Metric Min. (50% payout) Target payout) Max. (200% payout) Actual Performance Actual Payout % Weight Weighted Percentage Company-wide Adjusted EBITDA (1) ROIC (2) TSR (percentile) 28 40 52 82 200 Total Multiplier (3) (1) See GAAP reconciliation in Appendix A. (2) See the computation of ROIC in Appendix A. (3) Total multiplier is rounded to one decimal per the LTC Plan. 2018 Long Term Incentive Compensation For 2018, LTIC awards targets were established by the Human Resources and Compensation Committee using Adjusted EBITDA, TSR, and ROIC. The final LTIC multiplier will be determined using weightings of 40% for Adjusted EBITDA, 30% for TSR, and 30% for ROIC. Chief Executive Officer The Chief Executive Human Resources and Compensation Committee Processes and The Human Resources and Compensation Committee of the Board of Directors develops and recommends to the Board of Directors Spartan The The Human Resources and Compensation The Human Resources and Compensation Committee periodically engages independent In performing the compensation benchmarking that was completed in ● Alamo Group, Inc. ● Altra Industrial Motion Corp. ● Commercial Vehicle Group, Inc. ● ESCO Technologies, Inc. ● Federal Signal Corp. ● LCI Industries, Inc. ● Methode Electronics, Inc. ● Miller Industries, Inc. ● Shiloh Industries, Inc. ● Standard Motor Products ● Supreme Industries, Inc. ● Twin Disc, Inc. ● Winnebago Industries Pricing Equity Awards; Disclosure of Information Spartan Motors has long observed a policy of setting the exercise price for stock options, stock appreciation rights, and other share-based awards The Board of Directors is Personal Benefits; Perquisites We believe that compensation in the form of perquisites and personal benefits do not provide transparency for shareholders or serve our compensation philosophy. Consequently, such benefits play a very minor role in the compensation program. Clawback Provision Our LTC plan contains a provision stating that compensation awarded under the LTC Plan will be retracted to the extent a grant was made to an executive as the result of a material misrepresentation. CEO Pay Ratio Spartan Motors’ policy is to pay our employees competitively with similar positions in the applicable labor market by providing a combination of competitive base pay, incentives, and other benefits. We benchmark our compensation levels by position and adjust compensation to match the applicable labor market. By doing so, we believe we maintain a high quality and stable workforce. We are disclosing the following pay ratio, which compares the annual total compensation of our employees (including full-time, part-time and contract employees employed directly by Spartan, but excluding contract employees employed through a third party) other than Mr. Adams (our President and CEO) and the annual total compensation of Mr. Adams, as required by the Dodd-Frank Act. We identified our median employee using the following methodology, consistent with SEC rules: We first examined the annual compensation paid to each of our full-time and part-time employees as well as contract employees directly employed by Spartan, that were employed as of December 31, 2017, a total of 2,070 employees (excluding Mr. Adams), all located within the United States. The annual compensation used for this analysis included each element of compensation listed in the Summary Compensation Table below, along with benefits such as health insurance that are available on an equal basis to all employees. We annualized the total compensation for any employee who was not employed for all of 2017. We did not annualize the compensation for contract employees employed directly by Spartan who were not employed for all of 2017. We did not make any other adjustments to any employee’s compensation or exclude any employees for this analysis. We then ranked all of our employees (except for Mr. Adams) in terms of total compensation from highest to lowest, and identified the employee that ranked as the median (1,035 on the list of 2,070 employees). Following this methodology, the components of our pay ratio disclosure for 2017 were reasonably estimated as follows: ● The median of the total annual compensation of all of our employees other than Mr. Adams was $54,583. ● The total compensation of Mr. Adams was $2,988,239 (including benefits available on an equal basis to all employees that are not required to be included in compensation disclosed in the summary compensation table). ● The ratio of Mr. Adams’ compensation to the compensation of the median employee was 55:1. Other Information We do not provide a defined benefit pension to our named executive officers, although we do provide a defined contribution plan. Our typical practice when hiring a new executive is to set forth the principal terms of their employment in an employment offer letter. These employment letters often commit us to provide certain benefits to these executives, including upon their termination of employment. Those commitments are described in this Proxy Statement. Summary Compensation Table The following table shows certain information concerning the compensation earned by Daryl M. Adams, our President and CEO; Frederick J. Sohm, our CFO; Summary Compensation Table Name and Principal Position Year Salary ($) Bonus (1) ($) Stock Awards (2) ($) Non-Equity Incentive Plan Compen- sation (3) ($) All Other Compen- sation (4) ($) Total ($) Daryl M. Adams, 2016 $ 620,385 $ 337,385 $ 1,662,500 $ 992,615 $ 29,905 3,642,790 President and CEO (5) 2015 520,692 320,320 728,119 - 23,462 $ 1,592,593 2014 173,654 - - 125,000 496 299,150 Frederick J. Sohm, 2016 269,231 75,000 325,385 325,385 27,796 1,022,797 CFO (6) 2015 67,308 45,913 352,000 - 288 465,509 2014 - - - - - - John A. Forbes 2016 237,899 - 288,096 288,096 7,376 821,467 President, Delivery and 2015 230,625 109,086 94,095 - 5,792 439,598 Service Vehicles 2014 225,000 - 77,100 175,000 5,150 482,250 Thomas C. Schultz 2016 257,620 75,000 434,190 313,890 9,936 1,090,636 President, Chief 2015 - - - - - - Administrative Officer (7) 2014 - - - - - - John Slawson 2016 250,000 39,250 300,000 300,000 22,378 911,628 President, Emergency 2015 43,269 20,000 352,000 - - 415,269 Response Vehicles 2014 - - - - - - Name and Principal Position Year Salary ($) Bonus(1) ($) Stock Awards(2) ($) Non-Equity Incentive Plan Compen- sation(3) ($) All Other Compen- sation(4) ($) Total ($) Daryl M. Adams, 2017 President and CEO(5) 2016 2015 Frederick J. Sohm, 2017 CFO(6) 2016 2015 Thomas C. Schultz 2017 Chief Administrative 2016 Officer(9) 2015 Stephen K. Guillaume 2017 President, Specialty 2016 Chassis and Vehicles(7) 2015 Thomas T. Kivell 2017 Vice President, Secretary 2016 and General Counsel(8) 2015 (1) Amounts in this column reflect one-time cash bonuses earned and expensed by the Company in the respective year. (2) Amounts shown in this column for (3) Consists of performance-based non-equity The Name 401(k) Matching Contribution ($) SERP Matching Contribution ($) Dividends Paid on Restricted Stock ($) Relocation Payments ($) Country Club Dues Paid ($) Total ($) Daryl M. Adams $ 2,710 $ - $ 36,444 $ - $ 8,876 $ 48,030 Frederick J. Sohm 3,942 6,934 10,420 - - 21,296 Thomas C. Schultz 3,109 - 12,124 91,495(a) - 106,728 Stephen K. Guillaume 2,807 - 5,690 - - 8,497 Thomas T. Kivell 3,444 - 3,736 - - 7,180 (5) Mr. Adams joined the Company as COO in August 2014. He was appointed as President and CEO effective February 19, 2015. Mr. Sohm joined the Company as CFO effective September 28, 2015. Mr. Guillaume was appointed President of the Specialty Chassis and Vehicle business unit in May 2015. (8) Mr. Kivell joined the company as Vice President and General Counsel in November 2008. (9) Mr. Schultz joined the Company as Corporate Vice President of Human Resources in July 2014, and was promoted to Chief Administrative Officer in July 2016. Grants of Plan-Based Awards During 2017 The following table provides information concerning each grant of a plan based award made to the named executive officers in the last completed fiscal year. Grants of Plan-Based Awards Date the Compensation Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) Estimated Possible Payouts Under Equity Incentive Plan Awards(2) All Other Stock Awards: Number of Shares of Stock or Units (#)(3) Grant Date Fair Value of Stock and Option Awards(4) Name Grant Date Committee Took Action Threshold ($) Target ($) Maxi mum ($) Threshold (#) Target (#) Maxi mum (#) Daryl M. 2/24/16 $ 248,154 $ 496,308 $ 992,616 - - - - $ - Frederick J. 2/24/16 81,346 162,692 325,385 - - - - - John A. 2/24/16 72,024 144,048 288,096 - - - - - Thomas C. 2/24/16 78,472 156,945 313,890 - - - - - John W. Slawson 2/24/16 3/30/17 2/24/16 75,000 - 150,000 - 300,000 - - 9,107 - 18,215 - 36,430 - - - 300,000 Date the Compen- Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) Estimated Possible Payouts Under Equity Incentive Plan Awards(2) All Other Awards: Grant Date Grant Date sation Commit- tee Took Action Threshold ($) Target ($) Maximum ($) Threshold (#) Target (#) Maximum (#) Number of Shares of Stock or Units (#)(3) Fair Value of Stock and Option Awards(4) Daryl M. Adams 2/15/17 $ 332,500 $ 665,000 $ 1,330,000 - - - - $ - 3/30/18 2/15/17 - - - 66,500 133,000 266,000 - 1,197,000 Frederick J. Sohm 2/15/17 96,000 192,000 384,000 - - - - - 3/30/18 2/15/17 - - - 12,800 25,600 51,200 - 230,400 Thomas C. Schultz 2/15/17 86,100 172,200 344,400 - - - - - 3/30/18 2/15/17 - - - 11,480 22,960 45,920 - 206,640 Stephen K. Guillaume 2/15/17 72,493 144,986 289,973 - - - - - 3/30/18 2/15/17 - - - 9,666 19,332 38,663 - 173,984 Thomas T. Kivell 2/15/17 68,301 136,601 273,203 - - - - - 3/30/18 2/15/17 - - - 9,107 18,214 36,427 - 163,922 (1) The amounts reported in these columns are not actual payouts. They represent the possible threshold, target, and maximum payouts that could have been earned by each named executive officer for fiscal year (2) These columns represent possible payouts of common stock under the (3) The (4) Amounts reported represent the aggregate grant date fair value of stock awards. The fair values for plan based awards were determined based on the probable outcome of the performance conditions specified in the LTC Plan at the time the performance conditions were approved by the Board. The fair values of any discretionary awards made during the year were determined in accordance with FASB ASC Topic 718. The Company paid the compensation set forth in the Summary Outstanding Equity Awards at December 31, The following table provides information concerning unexercised options, SARs, and restricted stock that had not vested for each named executive outstanding as of December 31, Outstanding Equity Awards at Fiscal Year-End OPTION AWARDS STOCK AWARDS Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options: Exercisable (#) Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested(1) (#) Market Value of Shares or Units of Stock That Have Not Vested(2) ($) Number of Securities Underlying Unexercised Options: Exercisable (#) Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested(1) (#) Market Value of Shares or Units of Stock That Have Not Vested(2) ($) Daryl M. Adams - - - 190,421 1,761,394 Frederick J. Sohm - - - 87,550 809,838 John A. Forbes - - - 34,241 316,729 Thomas C. Schultz - - - 69,886 646,446 John W. Slawson - - - 90,692 838,901 Stephen K. Guillaume Thomas T. Kivell The vesting dates for shares of restricted stock that have not vested as of December 31, Named Vesting Dates Daryl M. Adams 20,000 shares on 8/10/2018 78,052 shares on 3/30/2020 Frederick J. Sohm 44,459 shares on each of 3/30/2018 and 3/30/2019 Thomas C. Schultz 44,035 shares on 3/30/2019 25,711 shares on 3/30/2020 Stephen K. Guillaume 22,474 shares on 3/30/2018 13,282 shares on 3/30/ Thomas T. Kivell ( The market value of the unvested restricted stock is determined by multiplying the closing market price of the Spartan Stock Vested in The following table provides information concerning the vesting of restricted stock during Option Awards Stock Awards Name Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) Number of Shares Acquired on Vesting (#) Value Realized on Vesting (1) ($) Daryl M. Adams - $ - 42,076 $ 270,230 Frederick J. Sohm - - - - John A. Forbes - - 8,537 36,128 Thomas C. Schultz - - 7,457 29,903 John W. Slawson - - - - Option Awards Stock Awards Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) Number of Shares Acquired on Vesting (#) Value Realized on Vesting(1) ($) Daryl M. Adams - $ - 70,140 $ 564,077 Frederick J. Sohm - - 29,184 224,717 Thomas C. Schultz - - 25,781 198,514 Stephen K. Guillaume - - 9,193 70,786 Thomas T. Kivell - - - - The amounts in this column are determined by multiplying the number of shares of stock vesting by the market value of the underlying shares on the vesting date (or, if the vesting date is not a trading day, the trading day immediately preceding the vesting date). Non-Qualified Deferred Compensation Name Plan Executive Contributions In Last FY ($) Registrant Contributions In Last FY(1) ($) Aggregate Earnings In Last FY(2) ($) Aggregate Withdrawals/ Distributions In Last FY ($) Aggregate Balance At Last FYE ($) Daryl M. Adams SERP $ - $ - $ - $ - $ - Frederick J. Sohm SERP 13,680 - 1,380 - 15,061 John A. Forbes SERP - - - - - Thomas C. Schultz SERP - - - - - John W. Slawson SERP - - - - - (1) Participant contributions to the SERP are matched by the Company at the discretion of the Board of Directors and included in the "All Other Compensation" column in the Summary Compensation Table above. (2) Earnings on the SERP are determined by investment choices made by the SERP participants from options determined by the Company. The investment choices consist of specified mutual funds (primarily those offered by Fidelity Investments). The following table provides information concerning non-qualified deferred compensation for 2017. This table should be read in conjunction with the narrative discussion that follows the table. Non-Qualified Deferred Compensation Name Plan Executive Contributions In Last FY ($) Registrant Contributions In Last FY(1) ($) Aggregate Earnings In Last FY(2) ($) Aggregate Withdrawals/ Distributions In Last FY ($) Aggregate Balance At Last FYE ($) Daryl M. Adams SERP $ - $ - $ - $ - $ - Frederick J. Sohm SERP 21,996 - 5,337 - 42,394 Thomas C. Schultz SERP - - - - - Stephen K. Guillaume SERP - - - - - Thomas T. Kivell SERP - - - - - (1) Participant contributions to the SERP are matched by the Company at the discretion of the Board of Directors and included in the “All Other Compensation” column in the Summary Compensation Table above. No company match was paid during fiscal year 2017. (2) Earnings on the SERP are determined by investment choices made by the SERP participants from options determined by the Company. The investment choices consist of specified mutual funds (primarily those offered by Fidelity Investments). The Supplemental Executive Retirement Plan (the The SERP is a non-qualified defined contribution plan administered by the Human Resources and Compensation Committee that allows eligible participants to defer compensation and incentive amounts and The SERP allows participants to defer up to 25% of their base salary and up to Contributions to the SERP are transferred to an irrevocable rabbi trust where each participant has a bookkeeping account in his name. Earnings on each All participants are always fully vested in their elective deferrals, and such deferrals will be distributed upon termination of employment, death, disability, or a change in control of the Company. Amounts are also distributable upon an unforeseeable emergency. Matching and profit-sharing contributions contributed by the Company will vest at a rate of 20% per year over a five-year period and may be distributed upon the later of attainment of age 60 and termination of employment, or upon earlier death, disability, or change in control of the Company. Any unvested matching or profit-sharing contributions will become fully vested if a participant retires upon reaching age 60, dies, or becomes disabled. Matching contributions and profit-sharing contributions may be forfeited if the participant enters into competition with the Company, divulges confidential information about the Company, or induces Company employees to leave their employment to compete with the Company. Potential Payments Upon Termination or Change-in-Control The following table summarizes the potential payments and benefits payable to the Triggering Event and Payments/Benefits Change in Control Death or Disability Retirement Without Cause (5) Daryl M. Adams Early vesting of restricted stock (1) $ 1,761,394 $ 1,761,394 $ - $ - Severance (2) 2,322,000 - - 645,000 Pro-rated bonus (3) - 992,616 - - SERP Plan (4) - - - - Total $ 4,083,394 $ 2,754,010 $ - $ 645,000 Frederick J. Sohm Early vesting of restricted stock (1) $ 809,838 $ 809,838 $ - $ - Severance (2) 480,000 - - 300,000 Pro-rated bonus (3) - 325,385 - - SERP Plan (4) 15,061 15,061 15,061 15,061 Total $ 1,304,899 $ 1,150,284 $ 15,061 $ 315,061 John A. Forbes Early vesting of restricted stock (1) $ 316,729 $ 316,729 $ - $ - Severance (2) 386,630 - - 241,644 Pro-rated bonus (3) - 288,096 - - SERP Plan (4) - - - - Total $ 703,359 $ 604,825 $ - $ 241,644 Thomas C. Schultz Early vesting of restricted stock (1) $ 646,446 $ 646,446 $ - $ - Severance (2) 448,000 - - 280,000 Pro-rated bonus (3) - 313,890 - - SERP Plan (4) - - - - Total $ 1,195,753 $ 960,336 $ - $ 280,000 John W. Slawson Early vesting of restricted stock (1) $ 838,901 $ 838,901 $ - $ - Severance (2) 400,000 - - 250,000 Pro-rated bonus (3) - 300,000 - - SERP Plan (4) - - - - Total $ 1,363,901 $ 1,138,901 $ - $ 250,000 Change in Control Death or Disability Retirement Without Cause(5) Daryl M. Adams Early vesting of restricted stock(1) $ 5,582,367 $ 5,582,367 $ - $ - Severance(2) 1,330,000 - - 665,000 Pro-rated bonus(3) 1,330,000 1,064,000 - - SERP Plan(4) - - - - Total $ 8,242,367 $ 6,646,367 $ - $ 665,000 Frederick J. Sohm Early vesting of restricted stock(1) $ 1,641,071 $ 1,641,071 $ - $ - Severance(2) 320,000 - - 320,000 Pro-rated bonus(3) 192,000 307,200 - - SERP Plan(4) 42,394 42,394 42,394 42,394 Total $ 2,195,465 $ 1,990,665 $ 42,394 $ 362,394 Thomas C. Schultz Early vesting of restricted stock(1) $ 1,909,483 $ 1,909,483 $ - $ - Severance(2) 287,000 - - 287,000 Pro-rated bonus(3) 172,200 275,520 - - SERP Plan(4) - - - - Total $ 2,368,683 $ 2,185,003 $ - $ 287,000 Stephen K. Guillaume Early vesting of restricted stock(1) $ 896,128 $ 896,128 $ - $ - Severance(2) 241,644 - - 241,644 Pro-rated bonus(3) 144,986 217,480 - - SERP Plan(4) - - - - Total $ 1,282,758 $ 1,113,608 $ - $ 241,644 Thomas T. Kivell Early vesting of restricted stock(1) $ 588,404 $ 588,404 $ - $ - Severance(2) 227,669 - - 227,669 Pro-rated bonus(3) 136,601 218,562 218,562 - SERP Plan(4) - - - - Total $ 952,674 $ 806,966 $ 218,562 $ 227,669 (1) (2) In (3) In accordance with the LTC Plan, Amounts reported in this column reflect severance payments the Company would expect to make to the named executive upon any termination of employment without cause. Messrs. Adams, Sohm In July 2017, the Company adopted the Spartan Motors, Inc. Management Severance Plan (the “Severance Plan”). Pursuant to the Severance Plan, in the event of an executive officer’s termination without cause (as defined by the Severance Plan), Mr. Adams is entitled to severance payments totaling 18 months base salary, a pro rata bonus at his target rate, Company-paid COBRA benefits for 18 months, outplacement services for up to 18 months, and immediate vesting of any outstanding unvested equity awards. The remaining NEOs are entitled to severance payments totaling 12 months base salary, a pro rata bonus at the target rate, Company-paid COBRA benefits for 12 months, outplacement services for up to 12 months and immediate vesting of any outstanding unvested equity awards. The Severance Plan became effective in February 2018. Compensation of Directors Compensation for the Board of Directors is established by the full Board based on input from external compensation experts. The following table provides information concerning the compensation of directors for Director Compensation - 2017 Name (1)(2) Fees Earned or Paid in Cash (3) ($) Stock Awards (4) ($) Total ($) Hugh W. Sloan, Jr. $ 107,000 $ 95,574 $ 202,574 Name(1)(3) Fees Earned or Paid in Cash(4) ($) Stock Awards(5) ($) Total ($) James A. Sharman $ 75,986 75,914 151,900 Richard R. Current 60,986 75,914 136,900 Richard F. Dauch 69,692 47,787 117,479 58,486 75,914 134,400 Ronald Harbour 72,192 47,787 119,979 Richard R. Current 71,000 47,787 118,787 Ronald E. Harbour 60,986 75,914 136,900 James C. Orchard 50,986 75,914 126,900 Dominic A. Romeo (2) 12,500 - 12,500 Andrew M. Rooke 62,192 47,787 109,979 50,986 75,914 126,900 James C. Orchard 61,000 47,787 108,787 James A. Sharman 50,692 47,787 98,479 (1) Mr. Adams received no additional compensation for his service as a director. All compensation paid to Mr. Adams is reported in the Summary Compensation Table above. (2) Mr. Romeo was appointed to the Board of Directors on October 23, 2017, and only received fees for the fourth quarter of 2017. As of December 31, Name Outstanding Stock Awards - # of shares Outstanding Option/SAR Awards - # of shares James A. Sharman - Richard R. Current - - Ronald E. Harbour 9,859 - James C. Orchard 9,859 - - Andrew M. Rooke 9,859 - Includes dividends paid on unvested restricted stock. Amounts shown in this column represent the aggregate grant date fair value of the stock awards granted during In In 2017, each non-employee director received Directors are also eligible to participate in the Spartan Motors, Inc. Human Resources and Compensation Committee Report The Human Resources and Compensation Committee has reviewed and discussed with management the information provided under the heading Respectfully submitted, Ronald E. Harbour, Richard F. Dauch James C. Orchard Human Resources and Compensation Committee Interlocks and Insider Participation Messrs. Harbour (Chair), Dauch, and Orchard served as members of the Human Resources and Compensation Committee during Transactions with Related Persons The Code of Ethics and Compliance, available for viewing at the Additionally, it is the Proposal: Advisory Vote on Executive Compensation Our Therefore, at the annual meeting of shareholders, our shareholders will be given the opportunity to vote, on an advisory The Company evaluates the compensation of its executives at least once each year to assess whether our compensation policies and programs are achieving their primary objectives and are competitive with ● Independent Compensation Committee. All members of our Human Resources and Compensation Committee are independent directors. Meetings of this committee include executive sessions in which management is not present. ● ● Restricted Stock Grants. A significant percentage of our For these reasons, our Board of Directors recommends that you vote FOR the adoption of the following resolution: Audit Committee Report The Audit Committee reviews and supervises on behalf of the Board of Directors Spartan The Audit Committee has also discussed with In addition, the Audit Committee has received from the independent registered public accounting firm the written disclosures required by the PCAOB and has discussed their After and in reliance upon the reviews and discussions described above, the Audit Respectfully submitted, Richard R. Current, Chairman Dominic A. Romeo Andrew M. Rooke Proposal: Ratification of Appointment of Independent Auditors Subject to the ratification of shareholders, Spartan Your Board of Directors recommends that you vote FOR ratification of the appointment of BDO USA, LLP. BDO USA, All fees paid to BDO USA, LLP for services performed in 2016 2015 2017 2016 Audit Fees(1) $ 379,976 $ 374,758 Audit-Related Fees(2) 66,224 76,892 Tax Fees(3) 149,237 112,664 All Other Fees(4) 28,923 192,878 Audit Fees(1) $ 480,313 $ 379,976 Audit-Related Fees(2) 49,544 66,224 Tax Fees(3) 235,153 149,237 All Other Fees(4) 63,214 28,923 (1) Represents the aggregate fees billed for professional services rendered by the principal accountant for the audit of the (2) Represents the aggregate fees billed by the principal accountant for completion of the employee benefit plan audit and general accounting consultations and services that are reasonably related to the annual audit. (3) Represents the aggregate fees for professional services rendered by the principal accountant for tax compliance. (4) Represents the aggregate fees for professional services rendered by the principal accountant for analysis related to acquisition due diligence activities in 2017 and legal entity reorganization in Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires Spartan Shareholder Proposals Shareholder proposals intended to be presented at the annual meeting of shareholders in the year Solicitation of Proxies We will initially solicit proxies by mail. In addition, directors, officers, and employees of Spartan Motors 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 that may mail materials to or otherwise communicate with the beneficial owners of shares held by them. Spartan Motors 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. Important Notice Regarding Delivery of We are pleased to take advantage of Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their stockholders on the Internet. We believe these rules allow us to provide you with the information you Internet: www.proxyvote.com E-mail: sendmaterial@proxyvote.com Form 10-K Report Spartan Motors BY ORDER OF THE BOARD OF DIRECTORS Thomas T. Kivell Secretary Charlotte, Michigan April Appendix A Non-GAAP Reconciliations This Proxy Statement contains adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), free cash flow, and return on invested capital (ROIC), which are non-GAAP financial measures. Adjusted EBITDA is calculated by excluding items that we believe to be infrequent or not indicative of our continuing operating performance. For the periods covered by this Proxy Statement such items include expenses associated with restructuring actions taken to improve the efficiency and profitability of certain of our manufacturing operations, expenses related to product recall campaigns, expenses related to a recent business acquisition, the impact of the step-up in inventory value associated with the recent business acquisition, and the impact of the business acquisition on the timing of chassis revenue recognition. Free cash flow is calculated as operating cash flow less capital expenditures. ROIC is calculated as adjusted net income less dividends, divided by total shareholders’ equity plus long term debt. Adjusted net income is calculated by excluding items that we believe to be infrequent or not indicative of our continuing operating performance. For the periods covered by this Proxy Statement such items include expenses associated with restructuring actions taken to improve the efficiency and profitability of certain of our manufacturing operations, expenses related to product recall campaigns, expenses related to a recent business acquisition, the impact of the step-up in inventory value associated with the recent business acquisition, the impact of the business acquisition on the timing of chassis revenue recognition, the impact of tax adjustments related to our deferred tax asset valuation allowance that we recorded in 2015, the impact of a tax deduction for the write-off of an investment in a subsidiary, and the impact of the Tax Cuts and Jobs Act on tax expense recorded in 2017. Adjusted EBITDA is used, along with free cash flow and ROIC, for purposes of determining annual and long-term incentive compensation for our management team. The following table reconciles Net income attributable to Spartan Motors, Inc. to Adjusted EBITDA for 2017. 2017 Net Income attributable to Spartan Motors, Inc. Interest expense Income tax Depreciation & Amortization EBITDA Restructuring charges Impact of intercompany chassis sales to Smeal Acquisition related expenses Impact of inventory fair value step-up Product recall expenses Joint venture expenses Adjusted EBITDA The following table reconciles Net increase in cash and cash equivalents to free cash flow for 2017. Operating Activities Net earnings Depreciation & amortization Accruals for warranty Other non-cash charges Change in working capital Net cash provided by operating activities (A) Capital expenditures (B) Acquisition of business, net of cash acquired Proceeds from long-term debt Payments on long-term debt Dividends Other Net increase in cash and cash equivalents Free cash flow (A+B) The following table shows the calculation of ROIC used for the LTIC award for 2017. Net Income attributable to Spartan Motors, Inc. Restructuring charges Impact of intercompany chassis sales to Smeal Acquisition related expenses Impact of inventory fair value step-up Product recall expenses Deferred tax asset valuation allowance adjustments Deferred tax asset adjustment for 2018 tax rate change Tax effect of adjustments Joint venture expenses Adjusted net income (A) Dividends declared (B) Total shareholders' equity (C) Total long-term debt (D) ROIC [(A)-(B)] / [(C)+(D)] |