Urges Stockholders to Vote WHITE Proxy
Card
Superior Industries International, Inc. (NYSE:SUP), the largest
manufacturer of aluminum wheels for passenger cars and light-duty
vehicles in North America, today announced that, in connection with its
2016 Annual Meeting of Stockholders to be held on April 26, 2016, its
Board of Directors has issued a letter to Superior’s stockholders. In
addition to its letter to stockholders, the Company also recently filed
its presentation to Institutional Shareholder Services (ISS) with the
Securities and Exchange Commission, which can be found on the investor
relations page of Superior’s website, www.supind.com.
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The letter, which includes a WHITE
proxy card, outlines the significant and decisive actions that
Superior’s Board and management have taken to enhance Superior’s
long-term prospects and best position Superior to create value for its
stockholders, and recommends that stockholders vote on the WHITE
proxy card FOR the election of all
of Superior's highly qualified and very experienced nominees.
Stockholders are therefore urged to promptly vote the WHITE
proxy card via internet, telephone or mail by following the instructions
provided.
As previously disclosed, GAMCO Asset Management Inc. (“GAMCO”) has
indicated that it intends to conduct a proxy contest and seek the
election at the 2016 Annual Meeting of three director candidates in
opposition to the highly qualified and very experienced nominees
unanimously recommended by the Superior Board. The Board also urges
stockholders to discard any blue proxy card or voting instruction form
they may receive from GAMCO.
The full text of the letter is as follows:
April 4, 2016
Dear Fellow Superior Stockholder,
Enclosed you will find Superior’s proxy materials for the 2016 Annual
Meeting of Stockholders of Superior Industries International, Inc., to
be held on Tuesday, April 26, 2016. Please vote TODAY by telephone,
Internet or by signing, dating and returning the enclosed WHITE
proxy card in the postage-paid envelope provided and vote FOR
ALL your Board’s highly qualified and very experienced
nominees – Michael R. Bruynesteyn, Margaret S. Dano, Jack A.
Hockema, Paul J. Humphries, James S. McElya, Timothy C. McQuay, Donald
J. Stebbins and Francisco S. Uranga. You may also vote by phone or
Internet by following the instructions on the enclosed WHITE
proxy card.
RESULTS DEMONSTRATE SIGNIFICANT PROGRESS AND MOMENTUM
Your Board of Directors and management team are focused on creating
lasting value for all Superior stockholders. As demonstrated by
Superior’s 2015 performance, Superior has shown significant progress
over the past year, which has been spearheaded by Superior’s refreshed
Board and management team. As we have been open about in the past,
following the financial crisis, Superior faced a number of challenges
that were reflected in our poor stock performance. We realized, in order
to drive improved performance and enhanced returns, a need for change
was warranted. Over the last several years that realization has driven
us to take aggressive action and we have undertaken a comprehensive set
of deliberate steps to reposition the Company for improved performance,
profitable growth and long-term value creation. Building upon the strong
foundation that was laid in place many years ago by our late founder,
Louis Borick, and former Chairman and CEO, Steven Borick, and under the
leadership of your Board, we reshaped our management team, refocused our
strategy and significantly altered our Board with the addition of five
new directors since December 2013.
The result of these actions is clearly evident in Superior’s
dramatically improved performance over the past year:
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In fiscal 2015 we delivered year-over-year EPS growth of 173% and
adjusted EBITDA growth of 36%
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Improved cash generation of $59 million – five times the year prior
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The fourth quarter of 2015 represented the highest quarterly
production of wheel shipments since 2007
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Returned $38.7 million of capital to stockholders through dividends
and stock repurchases in 2015
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Returned additional $11 million through share repurchases since year
end 2015
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Received the 2015 supplier of the year award from GM
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Reduced our average tenure for directors to just under 4 years
SUPERIOR HAS SIGNIFICANTLY OUTPERFORMED MAJOR INDEXES AS WELL AS ITS
PEER GROUP
While Superior’s evolution is well underway and we are proud of the
results we have already achieved, it remains a critical juncture for the
Company. There is still work to be done and we remain focused on further
strengthening our manufacturing platform, driving increased operating
efficiencies through best-in-class processes, and further diversifying
into more value-added segments while growing value-added sales. Through
continued execution of our strategic plan we are confident in Superior’s
future and the opportunities that lie ahead. We have the right strategy
and the right Board in place to drive continued improvement across the
business and are confident that our progress will deliver market share
gains, additional EBITDA margin expansion and strong stockholder returns.
HISTORY UNFORTUNATELY KEEPS REPEATING ITSELF – GAMCO CONDUCTING YET
ANOTHER
DISRUPTIVE AND COSTLY PROXY CONTEST
Superior’s Board is comprised of eight highly qualified directors who
are dedicated to serving the best interests of all stockholders and who
we believe represent the right Board to help Superior achieve its
strategic plan. Despite the clear strategy we have in place and the
progress we have already achieved, once again, GAMCO Asset Management
Inc. (GAMCO) is waging another needless, costly and distracting proxy
contest to elect its own director candidates to Superior’s Board. This
will mark the fourth consecutive year of GAMCO trying to elect nominees
to the Board (including Ryan Morris who was nominated by GAMCO and
soundly rejected by stockholders in 2014), with each previous attempt
having resulted in an increasingly decisive NO from stockholders.
As was the case in 2013, 2014 and 2015, GAMCO has not shared with
management or your Board an alternative strategic plan for improving
Superior’s prospects or enhancing stockholder value. At the same time,
GAMCO continues to propose underqualified director candidates that lack
experiences or skillsets unique to our current directors.
Superior is committed to engaging with stockholders, including GAMCO. We
have made numerous efforts to engage in constructive dialogue with GAMCO
and again participated in their annual Automotive Aftermarket Symposium.
Despite Superior’s good faith efforts to engage, GAMCO remains acutely
interested in carrying forward its ongoing agenda for the Company, which
is not entirely clear to say the least. In fact, to date, we have not
received any form of an agenda or strategy from GAMCO.
Given the significant margin by which stockholders voted not to elect
previous GAMCO director nominees, including Mr. Morris at the 2014
annual meeting, we are once again baffled as to why GAMCO fails to
respect the clear message from stockholders and instead chooses to
nominate another slate of director nominees who bring no additional
value to our Board.
Putting the above aside, in 2015, your Board reached out to GAMCO to
seek their input on potentially adding a new independent director with
capital markets experience to address one of GAMCO’s prior criticisms.
Throughout our search process, GAMCO declined to provide any meaningful
input – essentially abandoning their original initiative. We however,
moved forward with our search process and appointed Michael Bruynesteyn,
a highly qualified and seasoned financial executive, to the Board as an
independent director. As a result, we have already addressed the role
that GAMCO’s nominees would fill on the Board – so why is GAMCO
continuing to nominate director candidates?
In short, we believe GAMCO views its ownership in Superior’s stock as an
automatic entitlement to Board representation – that is simply not
something we agree with. We feel strongly that each of our Board members
should be representative of all stockholders, not beholden to one.
SUPERIOR HAS THE RIGHT BOARD OF DIRECTORS TO DRIVE LASTING
STOCKHOLDER VALUE
It is evident that our directors have a proven track record of creating
and returning value to all stockholders. Furthermore, we believe our
nominees are highly qualified and each possesses the knowledge and
breadth of relevant and diverse experience and commitment necessary to
continue guiding Superior down its current path of success.
MICHAEL R. BRUYNESTEYN - Director since 2015 Treasurer
and Vice President, Strategic Finance – Turner Construction Company
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Holds over 20 years of finance experience largely focused on the
automotive industry in a variety of global senior roles spanning
corporate finance, investment banking and equity research.
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Has served as a member of the Advisory Board of Levant Power
Corporation since 2013.
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Served as Managing Director at the investment banking firm
Strauss Capital Partners from 2008 to 2012.
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Previously served as a Senior Equity Research Analyst at
Prudential Equity Group covering the world’s largest automotive
manufacturers and suppliers.
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Spent 7 years at General Motors where he held various domestic
and international positions in finance.
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Brings to the Board a deep understanding of and experience
within capital markets.
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MARGARET S. DANO – Director since 2007
Retired Vice President, Worldwide Operations – Garrett
Engine Boosting Systems
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Has served as Chairman since 2014 and Lead Director since 2010.
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Brings over 30 years of experience in large, industry leading
companies.
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Has served as a member of the Douglas Dynamics, Inc. Board of
Directors since 2012.
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Currently serves on the Board of Directors and a member of the
Nominating and Corporate Governance Committee for Neenah Paper,
Inc.
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Currently serves as Lead Director and a member of the
Compensation Committee for Industrial Container Services, Inc.
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Served as Vice President, Worldwide Operations of Garrett Engine
Boosting Systems from 2002 until 2005.
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Provides the Board with expertise in strategic planning, product
management, start-up and global operations, and cost and quality
improvements.
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JACK A. HOCKEMA – Director since 2014
Chairman and Chief Executive Officer – Kaiser Aluminum
Corporation
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Has held C-level and senior leadership roles in a publicly
traded company since 1996.
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Member of the Board of Trustees of The Conference Board.
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Served on the Board of Directors of Clearwater Paper Corp. from
2008 to 2009.
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Contributes to the Board significant expertise in areas of
automotive and aluminum knowledge, metals fabrication and
operations, strategic planning and financial acumen.
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PAUL J. HUMPHRIES – Director since 2014
President – High Reliability Solutions
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Since 2011, has served as President of High Reliability
Solutions, a business group at Flextronics International Ltd, a
global end-to-end supply chain solutions company that serves the
energy, medical, automotive and aerospace and defense markets.
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Currently serves as Chairman of the Board for the Silicon Valley
Education Foundation.
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Has held various senior roles at a handful of publicly traded
companies throughout his career.
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Brings extensive experience and expertise in the automotive
supplier industry, specifically in strategy, growth, human
resources and global operations.
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Provides the Board with experience in planning, implementing and
integrating mergers and acquisitions.
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JAMES S. MCELYA – Director since 2013
Retired Chief Executive Officer – Cooper-Standard Holdings,
Inc.
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Currently serves as currently Chairman of the Board of Directors
of Affinia Group Intermediate Holdings Inc.
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Previously served as President of Cooper Standard Automotive, a
publicly traded leading global supplier of systems and
components for the automotive industry.
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Previously served as Chairman of the Motor Equipment
Manufacturers Association and Chairman of the Board of Directors
of the Original Equipment Supplier Association.
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Brings to the Board seasoned experience within the automotive
industry while also contributing valuable leadership and
strategy experience combined with operation and management
expertise.
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TIMOTHY C. MCQUAY – Director since 2011
Retired Managing Director, Investment Banking – Noble
Financial Capital Markets
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Has nearly 34 years of investment banking and financial advisory
experience.
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Has served as Managing Director at various leading investment
banks.
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Currently serves as the Chairman of the Board of Directors of
Perseon Corp.
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Previously served on the Board of Directors of Keystone
Automotive Industries, Inc., including as Chairman of the Audit
Committee.
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Previously served as Chairman of the Board of Meade Instruments
Corp.
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Provides the Board with extensive business and financial
experience and public company board experience, which includes
representation on various compensation and audit committees.
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DONALD J. STEBBINS – Director since 2014
President and Chief Executive Officer – Superior Industries
International, Inc.
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Has successfully organized and led revamping process since being
appointed as President and CEO of Superior Industries in May
2014.
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Previously served as Chairman, President and CEO of Visteon
Corporation, a global supplier of automotive systems, modules
and components to global automotive original equipment
manufacturers, for 6 years.
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Currently serves as member of the Board of Directors of Snap-On
Incorporated.
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Held various senior roles around the globe with the Lear
Corporation, a supplier of automotive seating and electrical
distribution systems.
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Brings to the Board significant experience in the automotive
industry and background in corporate finance and growth.
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FRANCISCO S. URANGA – Director since 2007
Corporate Vice President & Chief Business Operations
Officer, Latin America – Foxconn
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Previously served as Secretary of Industrial Development for the
state government of Chihuahua, Mexico.
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Formerly Deputy Chief of Staff for the Mexican Commerce and
Trade Secretary, Herminio Blanco.
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Critical asset to Superior in relation to the Company’s
cross-border business initiatives, government relations and
regulatory compliances.
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If each of our nominees are re-elected at the 2016 Annual Meeting, your
Board will be composed of eight highly qualified directors, dedicated to
serving the best interests of all stockholders. Of these eight
directors, seven are independent and five have joined the Board since
December 2013, bringing fresh perspectives and relevant business
experience. Further, the Board will collectively possess a broad and
diverse set of skills, experiences and insights in the areas of
automotive operations, global manufacturing, accounting, finance,
investment banking, mergers and acquisitions, capital markets, capital
allocation, capital structure, risk management, strategic planning,
lean, six sigma and human resources.
While we have carefully been assembling a high quality Board, possessing
a broad set of skills, GAMCO has proposed less qualified individuals
which do not enhance the skills already possessed by our current
directors. Consider the following with respect to GAMCO’s three proposed
director candidates:
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GAMCO Nominee Matthew Goldfarb – Mr. Goldfarb has
never been involved with a company in the automotive parts industry.
His previous leadership experiences raise a red flag – In November
2013, Mr. Goldfarb resigned as CEO of Xinergy, Ltd. and less than two
years later the company was forced to file for bankruptcy protection
under Chapter 11. Furthermore, Institutional Shareholder Services
(ISS) recommended for stockholders to withhold their votes against Mr.
Goldfarb while he served on the Boards of Xinergy (2010 and 2012),
Ltd. and Sevcon, Inc. (2016).
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GAMCO Nominee Frederic “Jack” Liebau Jr. –
Only relevant experience includes serving as a Board Member of The Pep
Boys – Manny, Moe & Jack as part of a settlement between the company
and GAMCO.
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GAMCO Nominee Ryan Morris – Mr. Morris, who
is 31 years old and has never been involved with a company in the
automotive parts industry, was a nominee for the Superior
Board previously in 2014, but was rejected soundly for election by
stockholders. From June 2011 through July 2012, Mr. Morris served as a
member of the Equity Committee responsible for maximizing value to the
stockholders of HearUSA, Inc. (subsequently HUSA Liquidating
Corporation), a publicly traded Company in Chapter 11 bankruptcy,
which has since liquidated its assets and ceased operations.
As part of Superior’s commitment to engaging constructively and in good
faith with our stockholders, the Nominating and Corporate Governance
Committee thoroughly reviewed the GAMCO nominees’ qualifications and
interviewed each of the GAMCO director nominees. Based on this review
and the interviews, the Board unanimously opposes the election of
GAMCO’s nominees and believes the candidates’ track records provide
no confidence that their election would benefit the Company or lead to
further stockholder value.
Superior’s Board is committed to maintaining the highest standards of
corporate governance and also values input from our stockholders. As
such, in connection with a review of our corporate governance practices
and the consideration of input from our stockholders (including a recent
receipt of a stockholder proxy access proposal from GAMCO for the 2017
Annual Meeting of Stockholders), Superior has decided to include in the
proxy statement a proxy access proposal for evaluation by our
stockholders. If supported by our stockholders and adopted by our Board,
this would permit any stockholder or group of stockholders that has
maintained ownership of 3% or more of the Company’s shares continuously
for at least 3 years the ability to nominate a specified number of
director candidates within the Company’s proxy materials. Greater detail
can be found under Proposal No. 4 in the enclosed proxy materials.
PROTECT YOUR INVESTMENT BY SUPPORTING YOUR BOARD’S HIGHLY QUALIFIED
NOMINEES
VOTE THE WHITE PROXY
CARD TODAY!
Unlike GAMCO and its nominees, we have a plan
in place – a plan that is already delivering and that we
trust will continue to drive positive results and strong momentum. Now
is not the time to threaten the success we have already achieved with
the unnecessary election of unqualified Board nominees.
We respectfully ask that stockholders send a clear message to GAMCO that
their efforts to force another needless, costly and distracting proxy
contest are unwelcomed by voting on the WHITE
proxy card to support the Company’s nominees. Instead of dealing with
what seems to be an annual disturbance from GAMCO, Superior’s Board and
management team are better served using their time and resources to
focus on continuing to lead the Company down a path of success and
long-term value creation. Your vote is important – no matter how many
shares you own – as no stockholder is too small. Whether or not you
plan to attend the Annual Meeting, we urge you to sign and return the
enclosed WHITE proxy card in the
postage-paid envelope provided and vote FOR ALL
your Board’s highly qualified and very experienced nominees – Michael
R. Bruynesteyn, Margaret S. Dano, Jack A. Hockema, Paul J. Humphries,
James S. McElya, Timothy C. McQuay, Donald J. Stebbins and Francisco S.
Uranga. You may also vote by phone or Internet by following the
instructions on the enclosed WHITE
proxy card.
We also urge you to discard any blue proxy card or voting instruction
card you may receive from GAMCO. Even a WITHHOLD vote with respect to
GAMCO’s nominees on its blue proxy card will cancel any proxy previously
given to Superior. If you previously signed a blue proxy card sent to
you by GAMCO, you can revoke that proxy card and vote for your Board’s
recommended nominees by voting a new WHITE
proxy card. Only your latest-dated proxy card will count.
On behalf of your Board of Directors, we thank you for your continued
support. We look forward to communicating further with you in the coming
weeks.
Sincerely,
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/s/ Margaret S. Dano
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/s/ Donald J. Stebbins
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Margaret S. Dano
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Donald J. Stebbins
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Chairman of the Board of Directors
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President, Chief Executive Officer and Director
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Superior is being advised in connection with the proxy contest by
Winston & Strawn, LLP. Okapi Partners LLC is serving as Superior’s proxy
solicitor.
About Superior Industries
Headquartered in Southfield, Michigan, Superior is the largest
manufacturer of aluminum wheels for passenger cars and light-duty
vehicles in North America. From its plants in the U.S. and Mexico, the
company supplies aluminum wheels to the original equipment market. Major
customers include BMW, FCA, Ford, General Motors, Mazda, Nissan, Subaru,
Tesla, Toyota and Volkswagen. For more information, visit www.supind.com.
Forward-Looking Statements
We caution readers that this press release contains statements that are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include all
statements that do not relate solely to historical or current facts and
can generally be identified by the use of future dates or words such as
"may," "should," "could," “will,” "expects," "seeks to," "anticipates,"
"plans," "believes," "estimates," "intends," "predicts," "projects,"
"potential" or "continue" or the negative of such terms and other
comparable terminology. These statements also include, but are not
limited to, statements regarding the anticipated proxy contest by GAMCO
Asset Management, Inc. and the other participants in its solicitation,
our initiatives to strengthen the Company’s manufacturing platform, our
plan to increase our operating efficiencies, our objectives to increase
our diversification and value-added sales and our strategic plan, and
are based on current expectations, estimates, and projections about the
Company's business based, in part, on assumptions made by management.
These statements are not guarantees of future performance and involve
risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from what
is expressed or forecasted in such forward-looking statements due to
numerous factors, risks, and uncertainties discussed in the company's
Securities and Exchange Commission filings and reports, including the
Company's Annual Report on Form 10-K for the fiscal year 2015 and our
reports from time to time filed with the Securities and Exchange
Commission. You are cautioned not to unduly rely on such forward looking
statements when evaluating the information presented in this press
release. Such forward-looking statements speak only as of the date on
which they are made and the Company does not undertake any obligation to
update any forward-looking statement to reflect events or circumstances
after the date of this release.
Important Additional Information And Where To Find It
Superior, its directors and certain of its executive officers are deemed
to be participants in the solicitation of proxies from Superior
stockholders in connection with the matters to be considered at
Superior’s 2016 Annual Meeting. On March 25, 2016, Superior filed a
definitive proxy statement (as it may be amended from time to time, the
“Proxy Statement”) and definitive form of WHITE proxy card with the SEC
in connection with such solicitation of proxies from Superior’s
stockholders.
INVESTORS AND STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY
STATEMENT, THE ACCOMPANYING WHITE PROXY CARD AND OTHER DOCUMENTS FILED
BY SUPERIOR WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION.
Additional information regarding the identity of participants, and their
direct or indirect interests, by security holdings or otherwise, is set
forth in the Proxy Statement, including the appendices thereto.
Stockholders can obtain the Proxy Statement, any amendments or
supplements to the Proxy Statement and other documents filed by Superior
with the SEC for no charge at the SEC’s website at www.sec.gov.
Copies will also be available at no charge under the “Investors” page of
our corporate website at www.supind.com,
by writing to Superior’s Corporate Secretary at 26600 Telegraph Road,
Suite 400, Southfield, Michigan 48033, by calling Superior at (248)
234-7104, or by contacting Superior’s proxy solicitor, Okapi Partners
LLC, toll free at (877) 629-6356.
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