REXHALL INDUSTRIES, INC.
46147 7th Street West
Lancaster, California 93534
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Rexhall Industries, Inc.
("Company") will be held at the Lancaster plant, 46147 7th Street West,
Lancaster, California 93534 on Thursday, May 16, 2002, at 2:00 p.m., P.D.T.,
for the following purposes:
1. To elect its Board of Directors to serve for the ensuing year;
2. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The stock transfer books of the Company will not be closed, but only
holders of common stock of record at the close of business on April 5, 2002
will be entitled to vote at the meeting.
Your proxy is enclosed. You are cordially invited to attend the
meeting, but if you do not expect to attend, or if you plan to attend, but
desire the proxy holders to vote your shares, please date and sign your proxy
and return it in the enclosed postage paid envelope. The giving of this
proxy will not affect your right to vote in person in the event that you
find it convenient to attend.
By order of the Board of Directors
REXHALL INDUSTRIES, INC.
/s/
Cheryl L. Rex
Corporate Secretary
DATED: April 5, 2002
Lancaster, California
REXHALL INDUSTRIES, INC.
46147 7th Street West
Lancaster, California 93534
ANNUAL MEETING OF SHAREHOLDER
TO BE HELD MAY 16, 2002, 2:00 P.M., P.D.T.
PROXY STATEMENT
SOLICITATION OF PROXIES
Your proxy is solicited on behalf of the Board of Directors of Rexhall
Industries, Inc. ("Company") for use at the annual meeting of shareholders to
be held on the above date at 46147 7th Street West, Lancaster, California,
93534. If a proxy in the accompanying form is duly executed and returned, the
shares represented by the proxy will be voted as directed. If no direction
is given, the shares will be voted for the election of the five (5) nominees
for director named herein. A proxy given by a shareholder may be revoked at
any time before it is exercised by notifying the Secretary of the Company in
writing of such revocation, by giving another proxy bearing a later date, or
by voting in person at the meeting.
The cost of this solicitation of proxies will be borne by the Company.
Solicitations will be made by mail. In addition, the officers and regularly
engaged employees of the Company may, in a limited number of instances,
solicit proxies personally or by telephone. The Company will reimburse
banks, brokerage firms, other custodians, nominees and fiduciaries for
reasonable expenses incurred in sending proxy materials to beneficial owners
of common stock of the Company.
The Company's annual report, including financial statements for its
fiscal year ended December 31, 2001, is being mailed to all shareholders
concurrently herewith. The annual report is not part of the proxy materials.
The Company's annual report on Form 10-K for the year ended December
31, 2001, as filed with the Securities and Exchange Commission, is available
without charge upon written request from the Secretary of the Company at the
address set forth above in the notice.
Holders of common stock of record at the close of business on April 5,
2002 will be entitled to vote at the meeting. There were 3,057,350 shares of
common stock outstanding on that date. Each share is entitled to one vote
and a majority of the shares of common stock outstanding is necessary to
constitute a quorum for the meeting. The shareholders have cumulative voting
rights in the election of directors. Under the cumulative voting method, a
shareholder may multiply the number of shares owned by the number of
directors to be elected and cast this total number of votes for any one
candidate or distribute the total number of votes in any proportion among as
many candidates as the shareholder desires. A shareholder may not cumulate
his votes for a candidate unless such candidate's name has been placed in
nomination prior to the voting and unless a shareholder has given notice at
the meeting prior to the voting of his intention to cumulate his votes. If
any shareholders give such notice, all shareholders may then cumulate their
votes.
ELECTION OF DIRECTORS
The Company's directors are elected annually to serve until the next
annual meeting of shareholders and until their successors are elected and
qualified. The number of directors presently authorized in the By-laws of
the Company is no less than four (4) but no more than seven (7).
Unless otherwise directed by shareholders, the proxy holders will
vote all shares represented by proxies held by them for the election of the
maximum number of the following nominees, all of whom are now members of and
constitutes the Company's Board of Directors. The Company is advised that all
of the nominees have indicated their availability and willingness to serve if
elected. In the event that any nominees become unavailable or unable to serve
as a director of the Company prior to voting, the proxy holders will vote for
a substitute nominee in the exercise of their best judgment.
Information Concerning Nominees: Information concerning the nominees based on
data furnished by them is set forth below:
William J. Rex, 51
Mr. Rex, a founder of the Company, has served as the Company's Chief
Executive Officer from its inception as a general partnership. Upon
commencing operations in corporate form, Mr. Rex became the Company's
President and Chairman of the Board, offices that he continues to hold. From
March 1983 until founding the Company, Mr. Rex served in various executive
capacities for Establishment Industries, Inc., a manufacturer of Class A and
Class C motorhomes which was acquired in June 1985 by Thor Industries,
Inc., a large manufacturer of recreational vehicles. His last position with
Establishment Industries, Inc. was President. From 1970 until March 1983,
Dolphin Trailer Company, a manufacturer of a wide range of recreational
vehicles products, employed Mr. Rex in various production capacities. At the
time he left Dolphin Trailer Company (which changed its name to National RV,
Inc. in 1985), Mr. Rex was Plant Manager in charge of all production and
research and development.
Donald C. Hannay, Sr., 74
Mr. Hannay, Sr. joined the Company in December 1987 and is
responsible for product sales. He became a Director on May 26, 1993. From
April 1982 until August 1987, he was employed by Establishment Industries,
Inc. as Vice President, Sales and Marketing, where he built Establishment's
dealer network and was responsible for dealer sales. From August 1987 until
joining the Company, he was employed as General Sales Manager by Komfort
Industries of California, Inc., a recreational vehicle manufacturer located
in Riverside, California.
Robert A. Lopez, 62
Mr. Lopez was elected to the Board of Directors on May 26, 1993.
He is President of Nickerson Lumber and Plywood. Mr. Lopez started his
employment with Nickerson as an outside salesman in 1969 and in 1980 he
became a partner and purchased Nickerson Lumber stock. He was elected as
President of Nickerson in 1981. His background in marketing products is
primarily to residential builders, manufactured housing and recreational
vehicle assemblers. In his spare time, Mr. Lopez is captain of the San
Fernando Rangers, a non-profit organization working to use horses as
therapeutic conditioning for mentally and physically disabled children.
Frank A. Visco, 57
Mr. Visco was elected to the Board of Directors on December 17, 1998.
He is owner of Frank A. Visco & Associates insurance agency. Mr. Visco began
his insurance career in 1970 with New York Life Insurance Company as a Sales
Manager in their Antelope Valley office. From 1975-1984, Mr. Visco was
co-owner of Antelope Valley Insurance Agency. Additionally, during 1978-1982,
he was the co-owner of APS Co. Inc., producing aircraft parts for the aircraft
industry. He has owned Frank A. Visco & Associates Insurance Agency since
1984. In 1980, in addition to his insurance activities, he began developing
properties in Los Angeles and Kern Counties.
Dr. Dennis K. Ostrom, 60
Dr. Ostrom was elected to the Board of Directors on July 12, 1999.
Dr. Ostrom received his BS, MS and Ph.D. degrees in Engineering from the
University of California, Los Angeles. He majored in structural mechanics
and dynamics. Dr. Ostrom is a Professional Civil Engineer in the State of
California. Dr. Ostrom was employed by Southern California Edison Company
from 1970 - 1996. His position was that of a Consultant. His job was
formulating technical strategy and policy and relating the same to the
California Energy Commission, California Public Utilities Commission, Nuclear
Regulatory Commission and local regulatory agencies. From 1988 to present,
Dr. Ostrom has been a member of the Board of Directors for Keysor Century,
Inc., Saugus, California. Currently Dr. Ostrom is an ongoing consultant for
San Diego Gas & Electric, Pacific Gas & Electric and Southern California
Edison. In addition to his consulting work, Dr. Ostrom is the Planning
Commissioner for the City of Santa Clarita.
Information Concerning Directors and Committees: During 2001, the Company
held its Annual Shareholders Meeting and three (3) Board of Directors
meetings, as well as numerous telephonic meetings of the Board of Directors.
There was 100% attendance during all of these meetings. Outside directors
receive $500 per meeting for serving the Company as members of the Board.
Directors may also be reimbursed for reasonable expenses relating to
attendance at Meetings of the Board or a Committee of the Board. All
committee members attended all meetings of their respective committees.
The following are the Committees of the Board of Directors:
Audit Committee: The Audit Committee consists of Robert A. Lopez, Frank A.
Visco and Dr. Dennis K. Ostrom. The Audit Committee is to meet with
representatives of the Company's independent auditors and with representatives
of senior management. The committee recommends the engagement or discharge of
the Company's independent auditors, consults with the auditors as to the
adequacy of internal accounting procedures, and reviews and approves
financial statements and reports. The Audit Committee met three times in
2001. The Audit Committee has no unusual transactions or accounting practice
changes to report, except as set forth in the financial statements and the
notes thereto.
Compensation Committee: The Compensation Committee consists of William J. Rex,
Robert A. Lopez and Frank A. Visco. The Compensation Committee is responsible
for reviewing and reporting to the Board on the recommended annual
compensation for officers including salary, bonuses, and other forms of
compensation and re-numeration and also administers the Company's Stock Option
Plan. The Compensation Committee met once in 2001.
The Company has no standing nominating or similar committee whose
function it is to consider or recommend nominees to the Board of Directors.
Security Ownership of Certain Beneficial Owners and Management: The following
table sets forth information regarding the ownership of the Company's Common
Stock by (i) each person known by the Company to be the beneficial owner of
more than 5% of the outstanding shares of Common Stock, (ii) each of the
Company's directors beneficially owning Common Stock and (iii) all of the
Company's officers and directors as a group as:
Number of Percent of
Shares Outstanding
Name of Beneficial Owner Beneficially Shares at
or Identity of Group Owned (1) March 15, 2002
William J. Rex (1) 1,623,000 53.1%
c/o Rexhall Industries
46147 7th Street West
Lancaster, California 93534
All Directors and
Officers as a Group (8 persons) 1,673,000 54.7%
(1) The persons named in the table have sole voting and investment power
with respect to all shares of Common Stock Shown as Beneficially owned by him,
subject to applicable community property law.
EXECUTIVE COMPENSATION
The following table sets forth certain information as to each of the
five highest paid (1) of the Company's employees whose cash compensation
exceeded $100,000 for the year ended December 31, 2001.
SUMMARY COMPENSATION TABLE
Annual Compensation
Bonus
Name and Accrued Other Annual
Principal Position Year Salary ($) Bonus ($) Non-Paid Compensation (2)
William J. Rex 01 237,100(3) 150,100 --- ---
President & CEO 00 250,000 See Note (4) 5,000 ---
99 250,000 445,000 411,000 ---
J. Michael Bourne (6) 01 118,700 --- --- ---
Executive Vice President
& COO
Donald C. Hannay, Sr. 01 66,100 123,400 5,800 ---
V.P. of Sales & Marketing 00 62,800 161,800 12,400 ---
99 61,400 201,600 20,700 ---
James C. Rex (5) 00 52,000 54,000 --- ---
National Director of
Service and Warranty
(1) Note: Only three executive officers received cash compensation in
excess of $100,000.
(2) The unreimbursed incremental cost to the Company of providing
perquisites and other personal benefits during 2001 did not exceed,
as to any named officer, the lesser of $50,000 or 10% of the total
2001 salary and bonus paid to such named officer and, accordingly,
is omitted from the table. These benefits included amounts allocated
for personal use of a company-owned automobile provided to Mr. Rex.
(3) Immediately following the tragic events of September 11, 2001,
William J. Rex took a 20% pay cut which is still in effect. The rest
of the officers took 10% pay cuts which were reinstated in December
2001.
(4) For 2000, William J. Rex earned a bonus of $491,000 of which he was
paid $486,000 leaving $5,000 in the accrued bonus account. Mr. Rex
used $384,000 of accrued bonus from 1999 to repay a loan, with
interest, the Company made to him in 1998 under the Company's Stock
Option Program. The remaining $27,000 of the $411,000 accrued bonus
from 1999 was paid to Mr. Rex in 2000. All combined, Mr. Rex was
paid $513,000 in cash for 1999 and 2000 bonuses in 2000, while he
used another $384,000 to repay the loan with interest.
(5) Mr. James Rex is the brother of Mr. William J. Rex. Mr. James Rex
has been employed by the Company for nine years; 2000 was the only
year that his salary exceeded $100,000.
(6) Mr. Bourne joined the Company in February 2001.
AUDIT COMMITTEE REPORT
To the Board of Directors of Rexhall Industries, Inc.:
The Audit Committee of the board is responsible for the providing
independent, objective oversight of the company's accounting functions and
internal controls. The Audit Committee is composed of three directors, named
below, each of whom is independent as defined by the National Association of
Securities Dealers' listing standards. The Audit Committee operates under a
written charter approved by the Board of Directors.
The management is responsible for the Company's internal controls and
financial reporting process. The independent accountants are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and to
issue a report thereon. The audit Committee's responsibility is to monitor and
oversee these processes.
In connection with these responsibilities, the Audit Committee met
with management and the independent accountants to review and discuss the
December 31, 2001 financial statements. The Audit Committee also discussed
with the independent accountants the matters required by the Statement on
Auditing Standards No. 61 (Communication with Audit Committees). The Audit
Committee also received written disclosures from the independent accountants
required by Independence Standards Board Standard No. 1 (Independence
Discussion with Audit Committees), and the Audit Committee discussed with the
independent accountants that firm's independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the
representations of management and the independent accountants, the Audit
Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Company's Annual Report on form 10-K
for the year ended December 31, 2001, to be filed with the Securities and
Exchange Commission.
/s/ Robert A. Lopez /s/ Dennis Ostrom /s/ Frank Visco
Chairman Secretary Board Member
COMPENSATION COMMITTEE REPORT
On July 5, 2001, the Company renewed for 5 years (expires July 31,
2006) an employment agreement with William J. Rex. The employment agreement
provides for an annual salary of $250,000 plus a bonus determined monthly
equal to 10% of income before bonus and taxes. Other executive officers are
compensated based on the following factors as determined by the Board of
Directors: (1) the financial result of the Company during the prior year or
sales commission; (2) compensation paid to executive officers in prior years;
(3) extraordinary performance during the year; and (4) compensation of
executive officers employed by competitors.
Directors who are not Executive Officers are paid $500 per Board and
Audit Committee Meeting; there are three (3) to four (4) Board and Audit
committee meetings per year.
The Company also has an incentive program under which it pays
supervisory employees involved in sales and production a cash bonus based on
specific performance criteria. The Committee members are William J. Rex,
Robert A. Lopez and Frank A. Visco.
Mr. William J. Rex does not participate in the determination of his
own compensation.
The Committee believes that the executive compensation programs and
practices described above are conservative and fair to shareholders. The
committee further believes that these programs and practices serve the best
interests of Rexhall and its shareholders.
Respectfully submitted,
William J. Rex
Robert A. Lopez
Frank A. Visco
COMPARATIVE SHARE PERFORMANCE
The graph below compares the cumulative total shareholder return on
the Common Shares of Rexhall for the last five fiscal years with the
cumulative total return on the Standard & Poor's (S&P) 500 Index over the
same period (assuming the investment of $100 in Rexhall's Common Shares, the
S & P 500 Index and the below mentioned Peer Group Index on December 31, 1997).
REXHALL INDUSTRIES, INC.
Share Price Performance
INDEXED TOTAL RETURN - BASE 100
SOURCES: IDD Information Services via Lexis BASE YEAR = 100: 12/31/97
Company Name 12/97 12/98 12/99 12/00 12/01
REXHALL INDUSTRIES, INC 100.00 167.29 181.23 110.41 133.46
S&P 500 COMP-LTD 100.00 126.67 151.40 136.05 118.30
Peer Group Index
Coachmen Industries, Inc. 100.00 121.75 70.18 48.70 55.66
Monaco Coach Corp. 100.00 103.92 100.24 69.37 85.77
Thor Industries, Inc. 100.00 74.32 88.72 57.56 107.99
(Graph not available)
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
Rexhall's directors, executive officers, and persons who own more than ten
percent (10%) of a registered class of Rexhall's equity securities to file
with the United States Securities and Exchange Commission ("SEC") initial
reports of ownership and reports of changes in ownership of Common Shares and
other equity securities of Rexhall. Officers, directors and greater than ten
percent (10%) shareholders, are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms filed by them.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no
other reports were required, all Section 16(a) filing requirements applicable
to its officer, directors and greater than ten percent (10%) beneficial owners
were complied with on a timely basis during the fiscal year ended December 31,
2001.
SELECTION OF INDEPENDENT ACCOUNTANTS
The firm of KPMG LLP will continue to serve Rexhall as independent
auditors for the fiscal year ending December 31, 2002. The shareholders will
be asked to ratify the selection of the auditors. The firm of KPMG LLP has
served as independent auditors for Rexhall since 1998. Representatives of
KPMG LLP are expected to be present at the Annual Meeting and will have the
opportunity to make statements and respond to appropriate questions.
Audit Fees: The aggregate fees billed for professional services rendered for
the audit of the Company's annual financial statements for the fiscal year
ended December 31, 2001 and the reviews of the financial statements included
in the Company's Forms 10-Q for that fiscal year were $75,000.
Financial Information Systems Design and Implementation and All Other Fees:
For the fiscal year ended December 31, 2001, the Company paid no fees to its
principal accountants for professional services rendered in connection with
the operation, supervision or management of the Company's information systems
or local area network, or for the design or implementation of a hardware
or software system for aggregating source data underlying the Company's
financial statements or generating information that is significant to such
statements, taken as a whole. Since the company paid no fees to its
principal accountants for information technology services or other fees,
other than described above, the audit committee did not consider whether the
provision of such services to the Company is compatible with maintaining the
auditor's independence.
ANNUAL REPORT
Rexhall's Annual Report, containing audited financial statements for
the fiscal years ended December 31, 2001, 2000 and 1999, accompanies or has
proceeded the mailing of this Proxy Statement. Upon your written request,
Rexhall will send you, without charge, a copy of the Annual Report on Form
10-K for the fiscal year ended December 31, 2001, including the financial
statements and schedules thereto, which Rexhall is filing with the Securities
and Exchange Commission. Rexhall's Annual Report on Form 10-K is incorporated
herein by reference. The written request must be directed to the attention
of Investor Relations at Rexhall Industries, Inc., 46147 7th Street West,
Lancaster, CA 93534.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2003 Annual
Meeting must be received at the Company's principal office no later than
December 31, 2002 in order to be considered for inclusion in the proxy
statement and form of proxy related to that meeting.
OTHER BUSINESS
The Board of Directors knows of no other matter to be acted upon at
the meeting. However, if any other matter shall properly come before the
meeting, the proxy holders named in the proxy accompanying this statement will
have discretionary authority to vote all proxies in accordance with their best
judgment.
By order of the Board of Directors
REXHALL INDUSTRIES, INC.
/s/
Cheryl L. Rex,
Corporate Secretary
DATED: April 5, 2002
Lancaster, California