Edgar Filing: PATRICK INDUSTRIES INC

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934

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240.14a-12

Patrick Industries, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

--------------------------------------------------------------------------------
(Name Of Person(S) Filing Proxy Statement, if other than the Registrant)

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PATRICK INDUSTRIES, INC.
1800 SOUTH 14TH STREET
P.O. BOX 638
ELKHART, INDIANA 46515
574-294-7511

------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 15, 2003

TO THE SHAREHOLDERS:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Patrick
Industries, Inc., an Indiana corporation, will be held at the Company's Patrick
Metals Division offices, 5020 Lincolnway East, Mishawaka, Indiana, on Thursday,
May 15, 2003 at 1:30 p.m., Mishawaka time, for the following purposes:

1. To elect three directors of the Company to serve until 2006.

2. To consider and transact such other business as may properly come before
the meeting or any adjournments thereof.

The Board of Directors has fixed the close of business on March 14, 2003,
as the record date for the determination of the holders of shares of the
Company's outstanding Common Stock entitled to notice of and to vote at the
Annual Meeting of Shareholders. Each shareholder is entitled to one vote per
share on all matters to be voted on at the meeting.

Whether or not you expect to attend the meeting, you are urged to sign,
date, and return the enclosed proxy in the enclosed envelope.

By Order of the Board of Directors,

ANDY L. NEMETH
SECRETARY

April 11, 2003

PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED WHICH
REQUIRES NO POSTAGE FOR MAILING IN THE UNITED STATES. A PROMPT RESPONSE IS
HELPFUL, AND YOUR COOPERATION WILL BE APPRECIATED.

PATRICK INDUSTRIES, INC.
1800 SOUTH 14TH STREET
P.O. BOX 638
ELKHART, INDIANA 46515
574-294-7511
---------------------

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 15, 2003
-------------------------------

This Proxy Statement is being mailed to shareholders of Patrick Industries,
Inc. (the "Company") on or about April 11, 2003, and is furnished in connection
with the Board of Directors' solicitation of proxies for the Annual Meeting of
Shareholders to be held on May 15, 2003 for the purpose of considering and
acting upon the matters specified in the Notice of Annual Meeting of
Shareholders accompanying this Proxy Statement. If the form of proxy which
accompanies this Proxy Statement is executed and returned, it may be revoked by
the person giving it at any time prior to the voting thereof by written notice
to the Secretary, by delivery of a later dated proxy or by requesting to vote in
person at the meeting. Additional solicitations, in person or by telephone or
telegraph, may be made by certain directors, officers and employees of the
Company without additional compensation. Expenses incurred in the solicitation
of proxies, including postage, printing and handling, and actual expenses
incurred by brokerage houses, custodians, nominees, and fiduciaries in
forwarding documents to beneficial owners, will be paid by the Company.

The Annual Report to shareholders for the year ended December 31, 2002,
accompanies this Proxy Statement. Additional copies of the Annual Report may be
obtained by writing the Secretary of the Company.

VOTING INFORMATION

Each shareholder is entitled to one vote for each share of the Company's
Common Stock held as of the record date. For purposes of the meeting, a quorum
means a majority of the outstanding shares. As of the close of business on March
14, 2003, the record date for shareholders entitled to vote at the annual
meeting, there were outstanding 4,584,261 shares of Common Stock, entitled to
one vote each. In determining whether a quorum exists at the meeting, all shares
represented in person or by proxy will be counted. A shareholder may, with
respect to the election of directors, (i) vote for the election of all named
director nominees, (ii) withhold authority to vote for all named director
nominees or (iii) vote for the election of all named director nominees other
than any nominee with respect to whom the shareholder withholds authority to
vote by so indicating in the appropriate space on the proxy. Proxies properly
executed and received by the Company prior to the meeting and not revoked will
be voted as directed therein on all matters presented at the meeting. In the
absence of a specific direction from the shareholder, proxies will be voted for
the election of all named director nominees.

The Directors are elected by a plurality of the votes cast by shares
present in person or by proxy at the Annual Meeting and entitled to vote.
Withholding authority to vote in the election of Directors will have no effect
on that matter. Any other matter which may properly come before the meeting may
be approved by a majority of the votes cast at a meeting at which a quorum is
present. Broker non-votes will have no effect on any matter at the Annual
Meeting.

The Board of Directors knows of no other matter which may come up for
action at the meeting. However, if any other matter properly comes before the
meeting, the persons named in the proxy form enclosed will vote in accordance
with their judgment upon such matter.

Shareholder proposals for inclusion in proxy materials for the next Annual
Meeting should be addressed to the Company's Secretary, P.O. Box 638, Elkhart,
Indiana 46515, and must be received no later than December 12, 2003. In
addition, the Company's By-laws require notice of any other business to be
brought before a meeting by a shareholder (but not included in the proxy
statement) to be delivered to the Company's Secretary, together with certain
prescribed information, not less than 20 nor more than 50 days prior to such
meeting. Likewise, the Articles of Incorporation and By-laws require that
shareholder nominations to the Board of Directors be delivered to the Secretary,
together with certain prescribed information, not less than 20 nor more than 50
days prior to a meeting at which directors are to be elected.

STOCK OWNERSHIP INFORMATION

The following table sets forth, as of the record date, information
concerning the only parties known to the Company having beneficial ownership of
more than 5 percent of its outstanding Common Stock and information with respect
to the stock ownership of all directors and executive officers of the Company as
a group.

NUMBER OF
SHARES
BENEFICIALLY PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED OF CLASS
------------------------------------ ----- --------

Mervin D. Lung . . . . . . . . . . . . . . . . . . . . . . . 1,029,911 22.47%
Chairman Emeritus of the Company
P.O. Box 638
Elkhart, Indiana 46515
Dimensional Fund Advisors, Inc. . . . . . . . . . . . . . . 378,542 8.26%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
FMR Corp . . . . . . . . . . . . . . . . . . . . . . . . . . 453,000 9.88%
25 Lovat Lane
Boston, Massachusetts 02109
Heartland Advisors, Inc. . . . . . . . . . . . .. . . . .. . 395,900 8.64%
789 North Water Street
Milwaukee, Wisconsin 53202
Directors and Executive Officers as a group (11 persons) . . 1,262,311 27.54%(1)
---------

(1) The stock ownership of the executive officers named in the Summary
Compensation Table is set forth under the heading "Election of Directors",
except for Thomas G. Baer (15,008 shares), and Alan M. Rzepka (250 shares).

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires that certain
of the Company's officers, its directors and 10% shareholders file with the
Securities and Exchange Commission and Nasdaq an initial statement of beneficial
ownership and certain statements of changes in beneficial ownership of Common
Stock of the Company. Based solely on its review of such forms received by the
Company and written representation from the directors and officers that no other
reports were required, the Company is unaware of any instances of noncompliance
or late compliance, other than the instances noted below, with such filings
during the fiscal year ended December 31, 2002.

Number of
Transactions not
Reported on a Number of
Name of Person Reporting Timely Basis Late Reports
------------------------ ------------ ------------
Harold E. Wyland 3 2
David D. Lung 2 2
Keith V. Kankel 2 2
Alan M. Rzepka 2 2

ELECTION OF DIRECTORS

The Board of Directors is divided into three classes, with the members of
each class serving staggered three-year terms. John H. McDermott, an incumbent
director until the 2004 Annual Meeting, has agreed to stand for election this
year and will resign from the 2004 Class following his election as a director to
the 2003 Class. Accordingly, at the 2003 Annual Meeting three directors will be
elected to hold office until the 2006 Annual Meeting or until their successors
are duly elected and qualified. Mr. Thomas Baer is retiring from the Board. We
would like to thank him for his many years of faithful service.

It is intended that the proxies will be voted for the nominees listed
below, unless otherwise indicated on the proxy form. It is expected that these
nominees will serve, but, if for any unforeseen cause any such nominee should
decline or be unable to serve, the proxies will be voted to fill any vacancy so
arising in accordance with the discretionary authority of the persons named in
the proxies.

The following information concerning principal occupations and the number
of shares of Common Stock of the Company owned beneficially as of March 14,
2003, has been furnished by the nominees and directors continuing in office:

Walter E. Wells, 64 . . . . . Retired President and CEO of Schult 2001 6,000 less
Homes Corporation and Director of than
Pleasant Street, LLC (home builders) 1%
David D. Lung, 55 . . . . . . President (Chief Executive Officer) 1977 76,356 1.67%
since 1989. Son of Mervin D. Lung.
John H. McDermott, 71 . . . . Of counsel to the Chicago, Illinois 1969 26,000 less
law firm of McDermott, Will & Emery, than
which firm has been retained by the 1%
Company since 1968 for certain legal
matters.

Directors to Serve Until the 2004 Annual Meeting:
-------------------------------------------------
Keith V. Kankel, 60 . . . . . Retired Vice President of Finance of 1977 16,686 less
Patrick Industries, Inc. from 1987 than
through 2002 and retired Secretary- 1%
Treasurer from 1974 through 2002.
Mervin D. Lung, 80 . . . . . Chairman Emeritus, President since 1961 1,029,911 22.47%
incorporation in 1961 until 1989,
and father of David D. Lung.
Harold E. Wyland, 66 . . . . Chairman in 2001. 1989 11,300 less
Retired Vice President of Sales, than
of Patrick Industries, Inc. from 1%
1990 through 1998.

COMMON PERCENT
FIRST STOCK OF
YEAR OF THE COMMON
PRINCIPAL OCCUPATION ELECTED COMPANY STOCK
NAME AND AGE AND OTHER DIRECTORSHIPS DIRECTOR OWNED(1) OWNED
------------ ----------------------- -------- -------- -----
Directors to Serve Until the 2005 Annual Meeting:
-------------------------------------------------
Robert C. Timmins, 81 . . . . Retired Vice President and Director 1987 51,300 1.12%
of a Musical Instrument Company and
CPA and Partner of McGladrey &
Pullen (certified public accountants)
until 1985.
Terrence D. Brennan, 64 . . . Retired President and CEO of NBD Bank, 1999 13,000 less
Elkhart, IN, from 1973 to 1997. than
1%
Larry D. Renbarger, 64. . Retired as CEO of Shelter Components 2002 16,500 less
in 1998. Currently serving on Boards for than
Planet Earth, Inc. (retail science and nature 1%
Stores), Therm-O-Lite, Inc. (manufacturer
of windows), and The Utility Bodywerks
(converter of mid-size trucks).

- - - - - - -

(1) Each individual has sole voting and dispositive power over the shares
indicated.

COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

SUMMARY COMPENSATION TABLE

LONG-TERM COMPENSATION
----------------------
ANNUAL COMPENSATION SECURITIES
--------------------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) OPTIONS(#) COMPENSATION ($)(2)
--------------------------- ---- ---------- ------------ ---------- -------------------

David D. Lung 2002 328,193 - - - - - - 480
President and CEO 2001 312,137 - - - 37,500 420
2000 244,182 - - - 12,000 700
Keith V. Kankel 2002 146,801 - - - - - - 480
Retired Vice President of Finance 2001 192,638 - - - 15,000 420
2000 151,890 - - - 7,500 700
Alan M. Rzepka 2002 186,550 - - - - - - 440
Vice President Sales/Marketing 2001 177,777 - - - 7,500 420
2000 141,615 - - - 12,000 700
Gregory J. Scharnott 2002 131,308 34,053 - - - 268
Vice President of Operations 2001 99,188 34,556 - - - - - -
Andy L. Nemeth 2002 118,163 - - - - - - 236
Secretary-Treasurer 2001 95,975 - - - 1,875 192
2000 86,098 - - - 2,000 172

- - - - - - - - -

(1) The bonus for Gregory J. Scharnott is related to compensation as an
executive director of the Midwest regional business units. Mr. Scharnott
joined the company in February 2001.
(2) Company contributions to 401(k) Savings Plan.

EMPLOYMENT CONTRACTS

The Company entered into Employment Agreements with David Lung and Alan
Rzepka, pursuant to which they agreed to serve as executive officers of the
Company. The initial term of the Employment Agreements were for three (3) years,
subject to extension at the discretion of the Board of Directors of the Company.
The Agreements with David Lung and Alan Rzepka provide for a minimum annual base
salary of $300,000 and $165,000, respectively, and expire on May 15, 2004.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES

NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FY- OPTIONS AT FY-
END (#) END ($)*
EXERCISABLE / EXERCISABLE /
NAME NONEXERCISABLE NONEXERCISABLE
---- -------------- --------------
David D. Lung . . . . . . . . . . . . . . . 34,125/15,375 $8,216/4,279
Keith V. Kankel . . . . . . . . . . . . . . 15,000/7,500 $3,806/2,231
Alan M. Rzepka . . . . . . . . . . . . . . 11,625/7,875 $3,491/2,704
Andy L. Nemeth . . . . . . . . . . . . . . 2,406/1,469 $ 680/ 483
Gregory D. Scharnott . . . . . . . . . . . 0/0 $0/0
- - - -

* Market value of the underlying stock at exercise date or year-end as the case
may be, minus the exercise price of the options.

Under the Company's 1987 Stock Option Program as Amended, the Company may
grant to key employees (including employees who may also be officers and
directors, as long as they do not serve on the committee overseeing the
administration of the Program) stock options that may either be incentive stock
options or non-qualified stock options, related stock appreciation rights and
stock awards.

Certain of the executive officers of the Company have deferred compensation
agreements which provide that the Company will pay each of these employees or
their beneficiaries 60% of their base salary for 120 months upon retirement (if
the employee continues in the employment of the Company until the age of 65) or
upon the employee's death or total disability, up to a maximum of $82,000 per
year for David D. Lung, and 40% of base salary up to a maximum $72,000 per year
for Alan M. Rzepka. The cost of these agreements is being funded with insurance
contracts purchased by the Company.

BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors has an Audit Committee comprised of Terrence D.
Brennan, Walter E. Wells, John H. McDermott, Robert C. Timmins, and Larry D.
Renbarger who are not employees of the Company. The Audit Committee's
responsibilities include recommending to the Board of Directors the independent
accountants to be employed for the purpose of conducting the annual examination
of the Company's financial statements, discussing with the independent
accountants the scope of their examination, reviewing the Company's financial
statements and the independent accountants' report thereon with Company
personnel and the independent accountants, and inviting the recommendations of
the independent accountants regarding internal controls and other matters. All
of the members of the Audit Committee are independent as defined in the Nasdaq
listing standards. The Audit Committee met six times in 2002.

The Board of Directors also has a Stock Option Committee, comprised of John
H. McDermott, Terrence D. Brennan, Walter E. Wells, Robert C. Timmins, and Larry
D. Renbarger. The Stock Option Committee met three times in 2002.

The Board of Directors also has a Compensation Committee which met four
times in 2002 and their actions are described on the following pages of this
Proxy Statement.

The Board of Directors had four regular meetings and one telephonic meeting
in 2002 and all directors attended at least four meetings. Non-employee
directors are paid an annual retainer of $5,000, $1,000 for each board meeting
they attend, and $1,000 for each committee meeting that they attend with a
maximum of $2,000 per combined event. Employee directors receive no compensation
as such. On an annual basis in May, each non-employee director is automatically
granted a restricted stock award for 3,000 shares of the Company's Common Stock
which will vest upon such director's continued service as a member of the Board
of Directors for two years or earlier upon certain events.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

This report of the Compensation Committee and the following Performance
Graph shall not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.

OVERVIEW

The Committee policy is to design compensation programs for salaries,
incentive bonus programs, other benefits, and long-term incentive programs for
all key executives, including the officers named in the Summary Compensation
Table. The goals and objectives of the Committee are to attract and retain top
quality management employees and ensure that an appropriate relationship exists
between executive pay and the creation of shareholder value. The criteria used
to determine the compensation of the Chief Executive Officer will also be used
in determining compensation for the other officers. The Committee will also
receive the recommendation of the Chief Executive Officer regarding the
compensation of the other officers.

Federal tax law imposes a $1 million limit on the tax deduction for certain
executive compensation payments. Because the compensation paid to any executive
office is significantly below the $1 million threshold, the Compensation
Committee has not yet had to address the issues relative thereto.

SALARIES

The executive salaries are reviewed annually. The Committee sets executive
salaries based on competitive market levels, experience, individual and company
performance, levels of responsibility, and pay practices of other companies
relating to executives of similar responsibility. The Committee considered the
compensation levels of executives at comparable companies and fixed the
compensation for the CEO and other executive officers at levels approximating
the midrange of such companies. The Committee includes in its consideration
comparable companies listed in the CRSP Index for lumber and wood products and
other in building products industries. See "Performance Graph."

ANNUAL INCENTIVE

The Company provides an annual bonus plan for executive officers that gives
them the opportunity to earn additional compensation based on the performance of
the Company. The Chief Executive Officer and the other officers share in this
program to achieve certain bonus amounts based on various levels of
profitability of the Company.

David D. Lung
Walter E. Wells
John H. McDermott
Terrence D. Brennan
Robert C. Timmins
Larry D. Renbarger

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

David D. Lung is President and Chief Executive Officer of the Company.
David D. Lung did not participate in the final decisions with respect to his
compensation. John H. McDermott is of counsel to the Chicago, Illinois law firm
of McDermott, Will & Emery which provides various legal services to the Company.

CERTAIN TRANSACTIONS

The Company leased a distribution warehouse and various facilities for its
manufacturing operations from Mervin D. Lung, the Company's Chairman Emeritus,
until May 2002 when it was purchased from Mervin D. Lung for $2,000,000. The
Company also leases two buildings from Mr. Lung used for distribution and
manufacturing, under an agreement expiring on September 30, 2004, with an option
to renew for five years. The agreement provides for monthly rental of $25,029,
and the payment of property taxes and insurance premiums on the property. The
Company also leases two manufacturing facilities from Mr. Lung under agreements
that expire on March 31, 2004 with options to renew for three years. The
agreements provide for monthly rentals of $11,421, and

the payment of property taxes and insurance premiums on the property. The
Company also leases three manufacturing facilities from Mr. Lung under
agreements that expire on July 31, 2004, August 31, 2003, and October 31, 2003
with options to renew for three years. The agreements provide for monthly
rentals of $25,680, and the payment for property taxes and insurance premiums on
the property. The Company also leases an aircraft from Mr. Lung under an
agreement that expires on October 31, 2004. The agreement provides for monthly
rentals of $10,600, and the payment of insurance premiums and maintenance on the
aircraft.

Mr. Lung owns a building supply firm which does not serve the Manufactured
Housing and Recreational Vehicle industries. The Company purchases certain
specialty items from and sells products to such firm. During the year ended
December 31, 2002, purchases from such firm totaled $78,177 and sales to such
firm totaled $32,406.

The Company believes that the terms of each of the above transactions are
at least as favorable as those which could have been obtained from unrelated
parties.

AUDIT COMMITTEE REPORT

The responsibilities of the Audit Committee, which are set forth in the
Audit Committee Charter adopted by the Board of Directors, include providing
oversight to the Company's financial reporting process through periodic meetings
with the Company's independent auditors, principal accounting officer, and
management to review accounting, auditing, internal controls, and financial
reporting matters. The management of the Company is responsible for the
preparation and integrity of the financial reporting information and related
systems of internal controls. The Audit Committee, in carrying out its role,
relies on the Company's senior management, including senior financial
management, and its independent auditors.

We have reviewed and discussed with senior management the Company's audited
financial statements included in the 2002 Annual Report to Shareholders.
Management has confirmed to us that such financial statements (i) have been
prepared with integrity and objectivity and are the responsibility of management
and, (ii) have been prepared in conformity with generally accepted accounting
principles.

We have discussed with McGladrey & Pullen, LLP, our independent auditors,
the matters required to be discussed by SAS 61 (Communications with Audit
Committee). SAS 61 requires our independent auditors to provide us with
additional information regarding the scope and results of their audit of the
Company's financial statements, including with respect to (i) their
responsibility under generally accepted auditing standards, (ii) significant
accounting policies, (iii) management judgements and estimates, (iv) any
significant audit adjustments, (v) any disagreements with management, and (vi)
any difficulties encountered in performing the audit.

We have received from McGladrey & Pullen, LLP a letter providing the
disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) with respect to any
relationships between McGladrey & Pullen, LLP and the Company that in their
professional judgment may reasonably be thought to bear on independence.
McGladrey & Pullen, LLP has discussed its independence with us, and has
confirmed in such letter that, in its professional judgment, it is independent
of the Company within the meaning of the federal securities laws.

Based on the review and discussions described above with respect to the
Company's audited financial statements included in the Company's 2002 Annual
Report to Shareholders, we have recommended to the Board of Directors that such
financial statements be included in the Company's Annual Report on Form 10-K for
filing with the Securities and Exchange Commission.

As specified in the Audit Committee Charter, it is not the duty of the
Audit Committee to plan or conduct audits or to determine that the Company's
financial statements are complete and accurate and in accordance with generally
accepted accounting principles. That is the responsibility of management and the
Company's independent auditors. In giving our recommendation to the Board of
Directors, we have relied on (i) management's representation that such financial
statements have been prepared with integrity and objectivity and in conformity
with generally accepted accounting principles, and (ii) the report of the
Company's independent auditors with respect to such financial statements.

Robert C. Timmins
Terrence D. Brennan
John H. McDermott
Walter E. Wells
Larry D. Renbarger

PERFORMANCE GRAPH*

Set forth below is a line graph comparing the yearly cumulative total
shareholder return on the Company's Common Stock against the cumulative total
return of the indices indicated for the period of five fiscal years commencing
December 31, 1997 and ended December 31, 2002. This graph assumes that $100 was
invested on December 31, 1997 and that all dividends were reinvested. The stock
price performance shown on the graph below is not necessarily indicative of
future price performance.

COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR PATRICK INDUSTRIES, INC.

Produced on 03/17/2003 including data to 12/31/02

[GRAPHIC OMITTED]

------------------------------------------------------------------------------------------------------------------------
LEGEND

Symbol CRSP Total Returns Index for: 12/1997 12/1998 12/1999 12/2000 12/2001 12/2002
------ ----------------------------- ------- ------- ------- ------- ------- -------

[omitted] PATRICK INDUSTRIES, INC. 100.0 105.7 64.4 41.0 51.8 48.4
[omitted] Nasdaq Stock Market (US Companies) 100.0 141.0 261.5 157.8 125.2 86.5
[omitted] NASDAQ Stocks (SIC 2400-2499 US Companies) 100.0 100.8 96.1 65.9 186.4 165.1
[omitted] Lumber and wood products, except furniture

NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/1997.
-------------------------------------------------------------------------------------------------------------------------

*Prepared by Center for Research in Securities Prices, University of
Chicago/Graduate School of Business.

ACCOUNTING INFORMATION

The Board of Directors appointed McGladrey & Pullen, LLP as independent
auditors to audit the financial statements of the Company for 2002.
Representatives of McGladrey & Pullen, LLP are expected to be present at the
annual meeting and will be given the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.

AUDIT FEES

The aggregate fees billed by the Company's independent auditors for
professional services rendered in connection with (i) the audit of the Company's
annual financial statements set forth in the Company's Annual Report on Form
10-K for the year ended December 31, 2002, and (ii) the review of the Company's
quarterly financial statements set forth in the Company's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2002, June 30, 2002, and September
30, 2002, were approximately $115,000.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

There were no fees billed by the Company's independent auditors for the
Company's most recent fiscal year for professional services in this category.

ALL OTHER FEES

The aggregate fees for all other services rendered by its independent
auditors or affiliates for the Company's most recent fiscal year were
approximately $64,000. These fees include work performed by the independent
auditors with respect to employee benefit plan audits, income tax services, and
general advisory services.

The Audit Committee has advised the Company that it has determined that the
non-audit services rendered by the Company's independent auditors during the
Company's most recent fiscal year are compatible with maintaining the
independence of such auditors.

By Order of the Board of Directors

ANDY L. NEMETH
Secretary
April 11, 2003

--------------------------------------------------------------------------------
PROXY - PATRICK INDUSTRIES, INC.
--------------------------------------------------------------------------------

1800 SOUTH 14TH STREET, P.O. BOX 638, ELKHART, INDIANA 46515
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints David D. Lung and Andy L. Nemeth, and each of
them, as the undersigned's proxies, each with full power of substitution, to
represent and to vote, as designated below, all of the undersigned's Common
Stock in Patrick Industries, Inc. at the annual meeting of shareholders of
Patrick Industries, Inc. to be held on Thursday, May 15, 2003, and at any
adjournment thereof, with the same authority as if the undersigned were
personally present.

This Proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholders. If no specific direction is made, this proxy will
be voted FOR the election of Directors.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.

(Continued and to be signed on reverse side.)

PATRICK INDUSTRIES, INC.

/ / Mark this box with an X if
you have made changes to
your name or address details
above.
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ANNUAL MEETING PROXY CARD
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A. ELECTION OF DIRECTORS:

The Board of Directors recommends a vote FOR the listed nominees.

For Withhold
01 - Walter E. Wells

02 - David D. Lung

03 - John H. McDermott

In their discretion, the Proxies are authorized
to vote upon such other business as may properly
come before the meeting.

B. AUTHORIZED SIGNATURES - SIGN HERE - This section must be completed for your
instructions to be executed.

Please sign exactly as name appears hereon. For joint accounts, all tenants
should sign. Executors, Administrators, Trustees, etc., should so indicate when
signing.

Signature 1 - Signature 2 - Date (dd/mm/yyyy)
(Please keep signature (Please keep signature
within box) within box)

/ /
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