Where and when is the annual meeting?

Our annual meeting will be held on Wednesday, May 22, 2019, at 10:00 a.m. (Eastern Daylight Time) by means of remote communication via the Internet at www.virtualshareholdermeeting.com/SPAR19. If you need help accessing the annual meeting, please contact Brian Read at (517) 543-6400 or at Brian.Read@SpartanMotors.com.

Who can vote at the annual meeting?

You are entitled to vote your shares of common stock at our annual meeting if you were a stockholder at the close of business on March 25, 2019, the record date for our annual meeting.

The total number of shares of common stock outstanding and entitled to vote on March 25, 2019 was 35,192,540. Holders of common stock have the right to one vote for each share registered in their names as of the close of business on the record date.

What is the quorum requirement for the annual meeting?

In order to conduct business at our annual meeting, a quorum must be present. The presence in person or by proxy of stockholders holding a majority of the outstanding shares of common stock entitled to vote is necessary for a quorum at the meeting. If 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.

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.

How 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 19. 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.

Our annual meeting will be held on Wednesday, May 20, 2020, at 10:00 a.m. (Eastern Daylight Time) by means of remote communication via the Internet at www.virtualshareholdermeeting.com/SPAR20. If you need help accessing the annual meeting, please contact Juris Pagrabs at (517) 997-3862 or at Juris.Pagrabs@SpartanMotors.com.

Who can vote at the annual meeting?

You are entitled to vote your shares of common stock at our annual meeting if you were a stockholder at the close of business on March 23, 2020, the record date for our annual meeting.

The total number of shares of common stock outstanding and entitled to vote on March 23, 2020 was 35,427,135. Holders of common stock have the right to one vote for each share registered in their names as of the close of business on the record date.

What is the quorum requirement for the annual meeting?

In order to conduct business at our annual meeting, a quorum must be present. The presence in person or by proxy of stockholders holding a majority of the outstanding shares of common stock entitled to vote is necessary for a quorum at the meeting. If 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.

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.

How 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/SPAR20. 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 any other matter to be voted upon.

How do I vote my shares?

Registered shareholders may vote in one of three ways:

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.

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:

Spartan Motors, Inc.

1541 Reynolds Rd.

Charlotte, Michigan 48813

Email: Ryan.Roney@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?

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. 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., 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.

Proposal 2 - Ratification of Independent Auditors. 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

What vote is required to approve each proposal? Proposal 1 - Election of 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., 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. Our Nominating and Corporate 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 and broker non-votes will be counted as not voted and therefore will not affect the outcome of the election. Proposal 2 – Amendment of Articles of Incorporation.The proposal to amend our Articles of Incorporation will be approved if a majority of the shares outstanding as of the record date 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 impact the outcome of the election (because of the need to obtain the approval of a majority of the shares outstanding as of the record date). Proposal 3 – Amendment of Stock Incentive Plan. The proposal to amend the Stock Incentive Plan to make an additional 1,500,000 shares of common stock available for issuance under the plan 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 4 - Ratification of Independent Auditors. 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 5 - Advisory Vote to Approve 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 expect to engage any paid solicitors to assist us in the solicitation of proxies.

Corporate Governance Highlights

The Board of Directors of Spartan Motorsthe Company is responsible for use at the annual meetingproviding guidance and any adjournmentoversight of the meeting.strategic and operational direction of the Company and overseeing the Company's executive management. These tasks ensure that the Company operates in ways that support the long-term interest of our stockholders. The follow is a list of governance features that demonstrate the Company's commitment to success, transparency, and accountability:

Who is paying the expenses of this proxy solicitation?

Executive Compensation Highlights

The Company will pay all expenses in connection withCompany’s executive compensation philosophy is to provide competitive levels of compensation and incentives to achieve strong financial performance. The Company’s executive compensation policies are designed to achieve the 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.following five primary objectives:

How will the Company solicit proxies?

Key Executive Compensation Practices

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 expect to engage any paid solicitors to assist us in the solicitation of proxies.

●Long-Term Equity-Based Compensation. Encourage long-term investment in the Company by participating executives and employees, more closely align executive and shareholder interests, and reward executive officers and other employees for building shareholder value. ●Base Salary. Set competitive salary levels to attract and retain well-qualified executives. Set compensation levels at median market rates, considering responsibilities of the position, expertise, Company performance, and other relevant factors. ●Annual Advisory Vote to Approve Compensation. Provide transparency to shareholders, increase accountability of directors to shareholders, and maintain alignment with Company objectives and performance. ●Clawback. Retract incentive compensation awards if made to an executive as the result of a material misrepresentation.

●Annual Cash Incentive. Encourage achievement of top priority financial and nonfinancial goals. ●Benchmarking. Compare executive compensation and Company performance to relevant peer group companies to remain competitive. ●No Hedging.Ensure accountability to the full risks and rewards of ownership of Company stock and maintain alignment with the long-term interests of the shareholders. ●Pricing and Timing of Equity Awards. Set exercise price for awards equal to the closing market price on the grant date or an average of the closing market prices over a period of time prior to the grant date. No backdating of awards or timing of the release of public information in any way that would take advantage of the disclosure.

Proposal: Election of Directors

Nominees for Election

The Board of Directors proposes that the following individuals be elected as directors of Spartan Motors for three-year terms expiring at the annual meeting of shareholders to be held in 2022:2023:

Richard F. DauchAngela K. Freeman

Ronald E. HarbourDominic A. Romeo

James A. SharmanAndrew M. Rooke

Each nominee is presently a director of Spartan Motors whose term will expire at the annual meeting. Biographical information concerning the nominees appears below under the heading “Spartan Motors’ Board of Directors and Executives,” beginning on page 9..

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 servecontinue serving 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 aany 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).nominees. Proxies will not be voted for more than three 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 Motors’ outstanding shares of common stock as of March 25, 2019:23, 2020:

Security Ownership of Board and Management

The following table sets forth the number of shares of common stock that each of Spartan Motors’ directors and nominees for director, each of the named executive officers, (asas that term is defined in the Summary Compensation Table below)below (referred to in this proxy statement as our “named executives”), and all directors and executive officers (including all named persons)executives) as a group beneficially owned as of March 25, 2019:23, 2020:

*Less than 1%.

Board MemberOur directors and executives are required to maintain certainly minimum levels of ownership of our stock. Please see “Risk Mitigation – Director and Executive Stock Ownership Requirements

As of the May 22, 2019 annual shareholder meeting, Spartan Motors’ Board members and executives will be required to attain ownership of stock, within five years of being named to their position, at least equal to the following minimums: Non-employee directors – five times annual retainer; CEO – five times annual salary; all other named executive officers – three times annual salary. Shares owned directly by Board members or executives, shares owned through a 401(k) plan or individual retirement account, unvested restricted shares or restricted share units that are subject to time-based vesting, shares previously owned by executives but placed in irrevocable trustsRequirements” below for family members or in revocable trusts, and shares determined to have actually been earned and issuable pursuant to outstanding performance share units (PSUs) are counted toward these ownership requirements. Unexercised options, unexercised stock appreciation rights, and shares underlying PSUs (except to the limited extent described in the preceding sentence) are not counted toward the ownership requirements.more information.

Spartan Motors’ Board of Directors and Executives

Spartan Motors’ Board of Directors currently consists of eightnine directors. The Board of Directors is divided into three classes, with each class as nearly equal in number as possible. Each class of directors serves a successive three-year term.

Biographical information concerning Spartan Motors’ directors (including the persons who are nominated for election to the Board of Directors) and executives is presented below. The matrix below highlights the key skills contributed to our Board by each of our directors:

Board Meetings, Annual Meeting, and Committees

Spartan Motors’ Board of Directors held seveneight meetings during 2018.2019. Each director who served as a director during 20182019 attended at least 75% of the aggregate of (1) the total number of Board of Directors meetings (held during the periods that he or she served on the Board) and (2) the total number of meetings held by all committees of the Board of Directors on which he or she served (held during the periods that he or she served on such committees)., except for Mr. Dauch, who attended two-thirds of such meetings. Pursuant to the Company’s Corporate Governance Principles, the Company expects all directors to participate in the annual shareholder meeting, and typically all directors do attend the annual shareholder meeting. In 2018, allAt the time of the board members who were thenour 2019 annual meeting of shareholders, we had eight directors, and six of Spartan Motorsthem attended the annual meeting of shareholders.meeting. Independent directors also meet regularly in executive sessions without the presence of management.

The Board of Directors has three standing committees: the Audit Committee, the Human Resources and Compensation Committee, and the Corporate Governance and Nominating Committee. Membership on each of the committees is as follows:

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

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

The Audit Committee meets the definitions of an “audit committee” under applicable Nasdaq and SEC rules.

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

The Human Resources and Compensation Committee operates pursuant to a written charter adopted by the Board of Directors. The Human Resources and Compensation Committee charter is available on our website, www.spartanmotors.com. For specific information regarding the processes and procedures of the Human Resources and Compensation Committee, see the “Compensation Discussion and Analysis” section of this Proxy Statement.proxy statement.

The Human Resources and Compensation Committee has reviewed all components of the Chief Executive Officer’s compensation and the compensation of the other executive officers who are named executives, as reflected in the Summary Compensation Table set forth later in this Proxy Statement,below, including salary, bonuses, equity and other incentive compensation, and the dollar value to the executive and the cost to Spartan Motors of all perquisites and other personal benefits.

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

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

The Corporate Governance and Nominating Committee will consider candidates for nomination to the Board of Directors 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, inIn identifying candidates for directors, the Corporate Governance and Nominating Committee and the full Board of Directors also considers other attributes that may make a person a strong director. One such attribute that is considered is the potential diversity of viewpoint that a potential candidate would likely bring to the Board of Directors, which could be the result of the person’s background, current occupation, career history, ethnicity, gender, and other factors.

As the need to make changes or additions to the Board arises, the Corporate Governance and Nominating Committee gives consideration to the Board size, experiences, and needs. The Committeecommittee may use outside resources, including consultants retained by the Committee,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.committee. Regardless of how they are identified, candidates must understand, accept, and value the culture and history of Spartan Motors, Inc.Motors.

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 Motors’ bylaws provide that any shareholder entitled to vote generally in the election of directors may nominate one or more persons for election as directors at a meeting only if written notice of the shareholder’s intent to make a nomination or nominations has been given to Spartan Motors’ Secretary by the deadline specified in the bylaws. That deadline is at least 120 days before the one-year anniversary date of the notice of the previous year’s annual meeting if the meeting is an annual meeting and not more than seven days following the date of notice of the meeting if the meeting is a special meeting at which directors will be elected. Each such notice to the Secretary must include:

Board Leadership Structure

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. James Sharman, a non-employee director who meets Nasdaq standards for being an independent director. The Company believes this separation of responsibility is appropriate in order to provide independent Board oversight of and direction for the Company’s executive management team, led by Mr. Adams. The Company has maintained this leadership structure (i.e.(i.e., with separate individuals serving as the President/CEO and Chairman of the Board) since 2002.

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 Board’s risk oversight function is largely carried out through the Board’s independent oversight of the executive management team and, in particular, its oversight of the various operational, industry, economic, and other risk factors faced by the Company. The Board is an active Board that meets regularly with consistent input from all directors. All directors except for Mr. Adams have been determined to meet the independence standards of applicable Nasdaq rules. In addition, the Company believes that the strength and experience of its directors is important to their independent oversight of the executive management team. Those members of the executive management team who have particular risk management responsibilities, including the CEO, the CFO, the CAO, CLO andas well as the Manager of Internal Audit (together with outside resources, including consultants, that may assist in the internal audit process), report directly to the Board of Directors on a regular basis. In addition, the Board regularly holds sessions of the independent directors only, without the presence of any employee directorsthe Company’s CEO or other executives of the Company.executives.

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

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 Motors’ Board of Directors by sending correspondence addressed to the Board as a whole, a specific committee, or a specific Board member c/o Ryan L. Roney, Secretary, Spartan Motors, Inc., 1541 Reynolds Road, Charlotte,41280 Bridge Street, Novi, Michigan 48813.48375. All such communications are forwarded to the appropriate recipient(s).

Executive Compensation

Compensation Discussion and Analysis

Compensation Philosophy and Objectives

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

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

What We Do		What We Don’t Do
	Link executive pay to Company performance through our annual and long-term incentive plans		No single-trigger change-in-control provisions
	Balance among short- and long-term incentives, cash and equity, and fixed and variable pay		No hedging by executives or directors of equity holdings
	Compare executive compensation and Company performance to relevant peer group companies		No aspect of the pay policies or practices pose material adverse risk to the Company
	Require executives to meet minimum stock ownership requirements
	Maintain a compensation clawback policy to recapture unearned incentive pay
	Provide only limited perquisites

Say-on-Pay Vote and Shareholder Engagement

The advisory vote on executive compensation was conducted at our annual meeting of shareholders in 2018,2019, based on the disclosure of our executive compensation in the proxy statement for that meeting. Of the shares of common stock represented at that meeting in person or by proxy, approximately 95%91% of the shares voted to approve the resolution, 3% voted against the resolution, and 2% abstained.resolution. Our Board considered the results of this vote to be supportive of the Company’s compensation policies and programs and did not make any changes to such policies and programs as a result of such vote; however, as described below,vote.

The Company takes meaningful measures to engage with its shareholders, including through attendance at multiple investor conferences throughout the year and regular phone calls, in-person meetings, and other communications with large shareholders. The Company works to be responsive to all shareholder inquiries raised with the Company’s management and/or Board has made various changesof Directors in an effort to our executive compensation program for 2019.fully engage with shareholders and address any shareholder concerns.

Pay Mix

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

Each component of executive compensation is designed to accomplish one or more of the five compensation objectives described above. The total compensation for executives is structured so that a majority of the total earnings potential is derived from performance-based incentives to encourage management to adopt an ownership mentality and take appropriate risks. The elements of the executive compensation program are described in detail below. In 2018, 71%2019, 78% of our CEO’s target pay was performance-based and between 54% and 61% (depending on the executive) of our other NEOs’named executives’ target pay was performance based.performance-based.

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

The Spartan Motors, Inc. Leadership Team Compensation Plan (the “LTC Plan”) sets forth the framework for compensation of the Company’s executive officers and other key employees, including each of the named executive officersexecutives shown in the tables below. The LTC Plan is intended to provide management with incentives to drive strategies and investments that maximize shareholder value, utilize financial measurements consistent with the market’s evaluation of Spartan Motors’ performance, and communicate Spartan Motors’ financial objectives in a clear and quantifiable manner. Total compensation is targeted at the median of comparable market data. The Human Resources and Compensation Committee is responsible for annually reviewing the provisions of the LTC Plan and reviewing all payouts under the plan. On April 15,

In 2019, following a recommendation by the Human Resources and Compensation Committee, the Board of Directors restatedmodified the LTC Plan. The newA summary of the primary features of the LTC Plan, is effective for performance years starting with 2019. Changes implemented foras modified in 2019 are summarized below.as follows:

Benchmarking

The Human Resources and Compensation Committee periodically engages independent third-party consultants to provide data and analysis regarding the compensation of executives at our peer group companies and at companies with whom we compete for talent. The Human Resources and Compensation Committee uses this data to design and implement competitive compensation programs. Independent consultants engaged by the Human Resources and Compensation Committee do not answer to management.

In 2018, the committee engaged Mercer to benchmark total direct compensation (consisting of base salary, target bonus opportunity, and the value of long-term incentive grants) of the named executives at the median of the peer group, with the intention that the total direct compensation of these named executives would be set at amounts that are in the market median range. In performing this analysis, Mercer conducted benchmarking analysis of the named executives’ compensation, including base salaries, long-and short-term incentives, and severance practices, utilizing information from proxy disclosures and published surveys. A peer group was selected consisting of companies that are:

Market median total direct compensation information in the study reflects the pay for an executive with a median level of experience. The list of identified peer companies in this survey include:

In 2019, the Human Resources and Compensation Committee, after review with its executive compensation consultant, made the following changes to the peer group: Methode Electronics, Inc. was removed from the peer group due to somewhat limited business similarities to Spartan Motors, and Astec Industries, Inc. and REV Group Inc. were added as compensation peers due to similarities to Spartan Motors in terms of size, complexity, and industry. The revised peer group was utilized for compensation benchmarking conducted in late 2019.

The Human Resources and Compensation Committee used this benchmarking data from 2018 to establish the amount and form of compensation for the Company’s named executives effective in 2019. Mercer updated its benchmarking analysis in late 2019, which was used to aid the committee in setting total compensation for the named executives for 2020.

Neither Mercer nor any of its affiliates provided any services to the Company or any of its affiliates during 2019 for which it received fees in excess of $120,000.

Base Salary

Base salary is a fundamental component of the Company’s compensation system, and overall competitive salary levels are necessary to attract and retain well-qualified executives. The Company’s intention is to set total compensation levels of its executive officers at median market rates. The Human Resources and Compensation Committee determines recommended compensation for executive officers by evaluating the responsibilities of the position, the experience of the individual, the performance of Spartan Motors, the performance of the individual, the competitive marketplace for similar management talent, and other relevant factors. The Committeecommittee does not give specific weight to any particular factor. Using these same factors, the Committeecommittee may recommend base salary adjustments on a periodic basis to maintain the desired levels of base salaries for Spartan Motors’ executives. 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.

The 2018 annual base salaries of our named executive officers did not change significantly from their 2017 levels. In 2018,As noted above, Mercer was engaged in 2018 to benchmark the salaries of the executive officers of Spartan Motors. Details regarding this benchmarking process appear below under the heading “Human Resources and Compensation Committee Processes and Procedures; Participation of Management; Benchmarking Process.” This Mercer benchmarking process was completed in July of 2018. The Human Resources and Compensation Committee made recommendations for 2019 base salaries consistent with this competitive benchmarking process. These recommendations adviseFor 2019, the annualCompany increased base salaries as shown below. Base salary adjustments are generally implemented in April of the applicable year.

The base salary changes summarized in the table above served to provide greater alignment of Mr. Adams (our CEO) to be increased from $678,300 in April, 2018, to $700,000 in April, 2019. The annual base salary for Mr. Sohm (our CFO) will increase from $326,400 in April, 2018, to $375,000 in April, 2019. The annual base salary for Mr. Schultz (our CAO) will increase from $292,740 in April, 2018, to $320,000 in April, 2019. The annual base salary for Mr. Guillaume (our President at Specialty Chassis and Vehicles) will increase from $246,477 in April, 2018, to $305,000 in April, 2019. The annual base salary for Mr. Heminover (our President at Fleet Vehicles and Services) will increase from $250,000 in April, 2018, to $294,000 in April, 2019.executive total compensation levels with Spartan Motors’ stated compensation philosophy of targeting a market median range.

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 Board’s customary annual performance and compensation review or as the result of the completion of a benchmarking analysis).

Annual Cash Incentive BonusesAwards

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 includebased on key metrics. The LTC Plan requires management to annually review the metrics and weightings based upon current business conditions and to obtain approval of the proposed framework from the Human Resources and Compensation Committee.

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

The target bonus percentage is a percentage of the participant’s salary. TheseThe LTC Plan establishes the target bonus percentages are subject topercentage at 150% of base salary for our CEO and 60% of base salary for each of our other named executives. Although the annual review and approval of the Human Resources and Compensation Committee. For 2018,LTC Plan gives the Human Resources and Compensation Committee setthe discretion to change the target bonus percentage for our CEO at 100% of base salaryany executive for 2018 andany particular year, the target bonus percentagescommittee did not exercise this discretion for our other named executives at 60% of their respective base salaries for 2018.2019.

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

The annual cash incentive award opportunities for our named executives for 2019 were as follows:

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. The Board did not grant any discretionary bonuses for 2019 performance.

At the discretion of the Human Resources and Compensation Committee, any cash bonus payable under the LTC Plan may be paid in the form of the Company’s common stock. All cash incentive bonuses for 2019 were paid in cash.

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

20182019 Annual Cash Incentive Compensation

For 2018,2019, the followingtables below show the metrics were established for our named executives to earn an annual cash incentive bonus pursuant to the LTC Plan:Plan. The Human Resources and Compensation Committee selected Company-wide adjusted EBITDA as the key metric (65% weighting) for all of our named executives because it is viewed as the primary indicator of the performance and strength of our business on a long-term basis. For similar reasons, the adjusted EBITDA of a business unit is used as a metric for the leader of that business unit. Free cash flow is used as a metric for our corporate officers because of its relationship to the Company’s profitability. For each executive, the annual cash incentive bonus is also based in part on specific objectives established for that executive’s near-term performance. The 2019 performance targets were set for these awards and the payouts were determined prior to the recent events associated with the COVID-19 crisis.

Corporate Officers Officer Incentive Plan Metrics

(Messrs. Adams, Sohm, Schultz, and Long): The Bonus Multiplier for the corporate-level officers was determined based on the achievement of goals relating to (1) adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) on a Company-wide basis, (2) free cash flow on a Company-wide basis, and (3) pre-determined management objectives and key performance indicators (the “MBO Goals”). The final Bonus Multiplier was determined using a weighting of 65% for Adjusted EBITDA, 15% for free cash flow, and 20% for the MBO Goals. Please see the GAAP reconciliations in Appendix A for our computations of Adjusted EBITDA and free cash flow. The actual achievement for each goal for the corporate officers for 2018 is as follows (dollar amounts in thousands)Schultz):

Corporate Officers

Specialty Chassis and Vehicles Business Unit Incentive Plan Metrics

(Mr. Guillaume):

Fleet Vehicles and Services Business Unit Presidents (Messrs. Guillaume andUnit Incentive Plan Metrics

(Mr. Heminover): The Bonus Multiplier for the Business Unit Presidents was determined based on the achievement of goals relating to (1) Company-wide Adjusted EBITDA, (2) the segment Adjusted EBITDA, and (3) pre-determined operation and strategic objectives. The segment Adjusted EBITDA is the adjusted EBITDA for the reportable segment as disclosed in Note 16, Business Segments in the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K filed with the SEC on March 5, 2019. The final Bonus Multiplier was determined using a weighting of 65% for Company-wide Adjusted EBITDA, 20% for the individual business unit Adjusted EBITDA, and 15% for the operational and strategic objectives. Please see the GAAP reconciliation in Appendix A for our computation of Company-wide Adjusted EBITDA. The actual achievement for each goal for the Business Unit Presidents for 2018 is as follows (dollar amounts in thousands):

Specialty Chassis and Vehicles business unit (Mr. Guillaume)

Fleet Vehicles and Services business unit (Mr. Heminover)

20192020 Annual Cash Incentive Compensation

The new LTC Plan approved byNo changes were made to the Board on April 15, 2019 did not make any material changes related to annual cash incentive bonuses.

Corporate Officers: For 2019, the metricscompensation framework described above for annual cash2020. Cash incentive awards for our corporate officers include: (1) Company-wide Adjusted EBITDA; (2) free cash flow; and (3) MBO Goals. The final bonus multiplier2020 will be determined using weightings of 65% for Company-wide Adjusted EBITDA, 15% for free cash flow and 20%based upon the same key metrics for the MBO Goals.

Business Unit Presidents: Fornamed executives as were used for 2019, theincluding both financial and non-financial metrics, and weightings for annual cash incentive awards for our business unit presidents include: (1) Company-wide Adjusted EBITDA; (2) individual business unit Adjusted EBITDA; and (3) pre-determined operational and strategic objectives. The final Bonus Multipliereach metric will be determined using a weighting of 65%the same as they were for Company-wide Adjusted EBITDA, 20% for the individual business unit Adjusted EBITDA and 15% for the pre-determined operational and strategic objectives.2019.

Long-Term Equity IncentivesIncentive Awards

Spartan Motors’ equity compensation plans are designed to encourage long-term investment in Spartan Motors by participating executives and employees, more closely align executive and shareholder interests, and reward executive officers and other employees for building shareholder value. The Human Resources and Compensation Committee believes stock ownership by management and other employees is beneficial to all Spartan Motors Inc. stakeholders. See the minimum stock ownership requirements for executive officers under “Security“Risk Mitigation - Director and Executive Stock Ownership of Board and Management” above.Requirements” below.

Spartan Motors currently has the ability to grant equity-based compensation to its named executives pursuant to the Stock Incentive Plan of 2016. The Human Resources and Compensation Committee administers all aspects of the plan.

Since 2008, the Company has utilized grants of restricted stock for its equity-based compensation. The Company believes that restricted stock awards can be more effective at retaining key personnelStarting in a volatile or depressed stock market. Additionally, the Company believes that restricted stock helps the executives focus on creating shareholder value and encourages executive officers to manage the Company from the perspective of an owner, while the time-based vesting feature provides a strong incentive for the executives to commit themselves to the Company for the long-term.

In connection with the new LTC Plan approved by the Board on April 15, 2019, long-term equity incentives for named executives for 2019 will include (1) a grant of restricted stock units (“RSUs”) with time-based vesting, and (2) a grant of performance share units (“PSUs”), which are payable in shares of Spartan common stock, subject to the achievement of certain cumulative performance metrics over a cumulative three-year period of 2019-2021. See “2019 Long-Term Incentive Compensation” below for more information.

For 2018, stock-based compensation forperiod. Prior to 2019, the Company’s practice was to grant all long-term equity compensation to named executives wasin the form of restricted stock with the number of shares granted based on the achievement of various metrics established by the Company. In consultation with its executive compensation consultant, the committee determined consideringthat utilizing a combination of PSUs and RSUs would further enhance alignment of executive compensation with shareholder value creation and achievement of key business objectives. As such, starting in 2019, 30% of a named executive’s target long-term incentive compensation (“LTIC”) targetsaward will be made in RSUs and multiples. The amountthe other 70% of the LTIC toaward will be awarded to an executivemade in the form of PSUs. These awards are described in more detail below.

Each named executive’s target LTIC award for 2018 (the “LTIC Award”) was determined by multiplying (1)a particular year will be based on a percentage of his or her target percentage (which is determined separately for different categories of employees) by (2) a LTIC Multiplier (described below) by (3) the participant’s annual salary.

The target percentage is a percentage of the participant’sbase salary. For 2018, theThe LTC Plan established aestablishes the target percentage for LTIC equity awards of 150%award at 200% of base salary for our CEO, 100% of base salary for our CFO, 90% of base salary for our CAO, and 60% of base salary for theeach of our other named executives. Although the LTC Plan gives the Human Resources and Compensation Committee the discretion to change the target LTIC award for any executive for any particular year, the committee did not exercise this discretion for 2019.

Restricted Stock Units (RSUs)

The LTC Plan provides that the value of each annual LTIC Multiplier can range from 0%award to 200% (referredbe made in the form of RSUs will be equal to 30% of the executive’s target LTIC award for that year. The award is generally to be made on March 30 of each year (or, if March 30 is not a business day, on the immediately preceding business day), with the number of RSUs to be issued determined by using the average stock price over the preceding 30 calendar days. The RSUs vest ratably over a three-year period, subject to any exceptions set forth in the award agreement reflecting the grant of such RSUs.

Performance Share Units (PSUs)

The portion of each annual LTIC award to be made in the form of PSUs is designed to reward the named executives based upon achievement of cumulative financial performance over a three-year period (with cliff vesting to occur at the end of such three-year performance period) starting with the performance year in which the annual LTIC award is granted. This cumulative financial performance is measured by two metrics:

The LTC Plan provides that the number of PSUs earned with respect to a three-year performance period is to be determined as “0X” through “2.0X”)follows:

With respect to both the Company’s stock and isthe stock of each company in the Index, the TSR performance will be calculated (a) using a 20-trading day average of the stock price ending on the first day and last day of the performance period, and (b) assuming all dividends declared during the performance period are reinvested at the closing price on the applicable ex-dividend date. Achievement between the stated percentages will be interpolated on a straight-line basis.

Achievement between the stated dollar amounts will be interpolated on a straight-line basis.

At the end of the three-year performance period, the executive may be issued shares of the Company’s common stock in settlement of the PSUs, with the number of shares calculated based on the combinedCompany’s TSR over the three-year performance on three metrics:

Each year,period relative to the Board will determineIndex and the weightingCompany’s cumulative net income over the three-year performance period. The aggregate number of shares actually granted to the executive may be between 0% and 200% of the individual metrics, which may range from 0% up to 50% for anynumber of the three metrics.PSUs granted.

20182019 Long-Term Equity Incentive Compensation

For 2018, the following metrics were established for2019, our named executives to earnwere granted the following LTIC awards pursuant toawards:

All of these RSUs and PSUs were granted on April 15, 2019 and were calculated using the LTC Plan:average stock price of Spartan Motors’ common stock over the preceding 30 calendar days, which was $8.78 per share.

Company-wide Adjusted EBITDA:

Spartan Motors’ company-wide Adjusted EBITDA for 2018. Please seeAll of the reconciliation of Adjusted EBITDA to net incomeRSUs granted in Appendix A.2019 will vest ratably over a three-year period.

TSR Metric:

The TSR goal was set asAll of the PSUs granted in 2019 will be earned (or forfeited) based on the Company’s TSR percentile rank forperformance over the three year period from January 1, 20182019 through December 31, 20182021, based on companies included in the 2015 Dow Jones Commercial Vehicles and Trucks index along with related peer companies.metrics described above.

ROIC:

Spartan Motors’ company-wide ROIC. ROIC is defined as adjusted net income after tax less dividends divided by invested capital, where invested capital is total equity plus total debt. Please see the computation of ROIC in Appendix A.

The final LTIC multiplier for 2018 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 2018 is as follows (dollar amounts in thousands):

20192020 Long Term-Term Equity Incentive Compensation

The Human ResourcesNo changes were made to the long-term equity incentive compensation framework described above for 2020. RSUs and Compensation Committee reviewed the designPSUs were granted to each of the long-term incentive compensation plannamed executives on March 30, 2020. The RSUs will vest ratably over a three year period, and in order to further ensure that our executive compensation aligns with pay-for-performance and facilitates long-term shareholder value creation, on April 15, 2019, approved performance-based awards (PSUs) as part of our equity incentive compensation. For the fiscal year 2019, PSUs will represent 70% of our named executives’ long-term incentive compensation and RSUs will represent the remaining 30%. The PSUs, which reflect a target number of shares that will be issued to the award recipient at the end of a three-year award cycle, areearned based on the achievementsame metrics described above (TSR compared to the Index and cumulative net income) over the three-year performance period of performance metrics established at the time of the grant. These metrics are three-year cumulative GAAP net income (40% weighting) and three-year relative TSR (60% weighting). PSUs are capped at 200% of target. The time-based RSUs will have a three-year ratable vesting period.2020 through 2022.

Human Resources and Compensation Committee Processes and Procedures; Participation of Management; Benchmarking ProcessProcedures

The Human Resources and Compensation Committee of the Board of Directors develops and recommends to the Board of Directors Spartan Motors’ executive compensation policies. The Human Resources and Compensation Committee also administers Spartan Motors’ executive compensation program and recommends for approval to the Board of Directors the compensation to be paid to the Chief Executive Officer and other executive officers. The Human Resources and Compensation Committee is made up of independent directors, none of whom is a current or former employee of Spartan Motors.

The Company’s CAO serves as a coordinator of the Human Resources and Compensation Committee meetings, but does not participate in any decisions regarding executive or boardBoard compensation. The Company’s CEO and CFO participate only to assist in the process of determining the compensation for executives other than themselves and to provide information to the committee regarding Company performance, operations, strategies, and other information requested by the committee. Other than the CEO, the CAO and the CFO, none of the Company’s named executives participate in the discussions with the Human Resources and Compensation Committee.

The Human Resources and Compensation Committee’s written charter provides that the Committee will review and make recommendations regarding the compensation of executive officers. The Committee’s policy is to conduct benchmarking of officer’s salaries at least once every two years. Executive compensation decisions must be approved by a majority of the independent members of the Board of Directors.

Personal Benefits and Perquisites

We believe that compensation in the form of perquisites and personal benefits does not provide transparency for shareholders or serve our compensation philosophy. Consequently, such benefits play a very minor role in our compensation program. The limited perquisites and personal benefits we do provide are disclosed in the Summary Compensation Table below and detailed in footnote 4 to that table.

Severance Benefits

We maintain a Management Severance Plan for the primary purpose of providing certain severance benefits to a select group of our key management employees designated by our Human Resources and Compensation Committee periodically engages independent third-party consultantsCommittee. All of our named executives have been designated for participation in this Management Severance Plan.

Pursuant to provide data and analysis regarding the compensation of executives at our peer group companies and at companies against whom we must compete for talent. The Human Resources and Compensation Committee uses this data to design and implement competitive compensation programs. Independent consultants engagedManagement Severance Plan, a participant who is terminated by the Human Resources and Compensation Committee do not answer to management. In 2018, the Committee engaged Mercer to benchmark total direct compensation (consisting of base salary, target bonus opportunity, and the value of long-term incentive grants) of the named executive officers at the median of the peer group, with the intention that the total direct compensation of these named executive officers would be set at amounts that areCompany without cause (as defined in the market median range. This engagement was completed in July of 2018 and was a factor utilized in determiningManagement Severance Plan) is entitled to receive the alignment of the total direct compensation of our executive officers with median market rates in April 2019.

In performing the compensation benchmarking that was completed in 2018, Mercer conducted benchmarking analyses of the named executive officers’ compensation, including base salaries, long-and short-term incentives, andfollowing severance practices, utilizing information from proxy disclosures and published surveys. A peer group was selected consisting of durable goods manufacturers with revenues ranging from one-half to double that of Spartan Motors. Market median total direct compensation information in the study reflects the pay for an executive with a median level of experience. All market data comparisons were aged forward to January 1, 2019. The list of identified peer companies in this survey include:benefits:

Pricing Equity Awards; DisclosureNotwithstanding the foregoing, if the employment of Informationa named executive is terminated by the Company for cause (as determined by the Human Resources and Compensation Committee) or by the executive for “good reason” following a “change in control” of the Company, as each of those terms is defined in our Stock Incentive Plan, then the severance benefit payable to our CEO is equal to twice his annual salary plus the target annual incentive cash award (without proration), and the severance benefit payable to our other named executives is equal to their annual salary plus the target annual incentive cash award (without proration).

Spartan Motors has long observedAn executive’s receipt of these severance benefits is conditioned on the participant executing a policyrelease of settingclaims in favor of the exercise priceCompany and complying with certain non-competition, non-solicitation, confidentiality, and other provisions in favor of the Company for the applicable salary continuation period (18 months for our CEO and 12 months for our other named executives).

This summary of the Management Severance Plan is subject in its entirety to the actual provisions of the plan.

Retirement and Other Benefits

We do not provide a defined benefit pension to our named executives, although we do provide a defined contribution plan (401(k) plan). In addition, we provide a Supplemental Executive Retirement Plan (SERP), which is a non-qualified defined contribution plan that allows our executives to defer compensation and provides for certain matching contributions by the Company. The SERP is described in more detail under “Non-Qualified Deferred Compensation” below.

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.

Risk Mitigation

We believe our compensation policies and programs are designed in a manner such that they do not create incentives or risks that are reasonably likely to result in a material adverse effect on the Company. These policies and programs are designed to balance our executive compensation among appropriate short- and longer-term incentives and create the appropriate mix of fixed compensation as well as compensation that is contingent on the achievement of objectives we believe will enhance shareholder value. In addition, we have several policies and practices in place designed to mitigate risks associated with our executive compensation practices, including:

Director and Executive Stock Ownership Requirements

Our Board members and executives are required to attain ownership of our common stock, within five years of being named to their position, at least equal to the following minimums:

Shares owned directly by Board members or executives, shares owned through a 401(k) plan or IRA, unvested restricted shares or restricted share units that are subject to time-based vesting, shares previously owned by executives but placed in irrevocable trusts for family members or in revocable trusts, and shares determined to have actually been earned and issuable pursuant to outstanding performance share units (PSUs) are counted toward these ownership requirements. Unexercised options, unexercised stock appreciation rights, and other share-based awards equalshares underlying PSUs (except to the closing market price onlimited extent described in the date of the grant (or most recent closing price if the date of the grant is not a trading day). Stock options and stock appreciation rightspreceding sentence) are not repriced. counted toward the ownership requirements.

Clawback Provision

Our LTC Plan contains a provision stating that compensation awarded under the plan will be retracted to the extent a grant was made to an executive as the result of a material misrepresentation.

Anti-Hedging Policy

We do not “backdate”consider it inappropriate for any of our directors or executive officers to hedge or monetize transactions to lock in the value of his or her ownership of Spartan stock. These transactions potentially allow the holder to own our stock optionswithout the full risks of ownership. Our Corporate Governance Principles prohibit our directors and executive officers from engaging in any transaction with respect to any of our securities the purpose of which is to hedge against or offset any other share based payments. decrease in the market value of our securities.

Pricing of Equity Awards

The price used to determine the number of restricted shares granted to our executives is generally an average of the closing share price for the 30 calendar days prior to the grant date.

We do not “backdate” any equity-based awards. The Board of Directors is committed to maintaining the integrity of theour compensation philosophy and programs. As part of this commitment, Spartan Motors believes that the disclosure of material nonpublic information should never be manipulated for the purpose of enriching compensation awards. We do not time the release of public information to affect the value of share based awards, and we do not time the grant of share based awards to take advantage of the disclosure of information.

Personal Benefits; Perquisites

Summary Compensation Table