-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SGROdn1NdsJEKrmiyZlSPPycEH8/w21TXX82NOS1qWcvRFHFezGFcr9tYIKf9Sxp tcAznOQqXdkJdqpkkjErsA== 0000090896-97-000019.txt : 19970811 0000090896-97-000019.hdr.sgml : 19970811 ACCESSION NUMBER: 0000090896-97-000019 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970531 FILED AS OF DATE: 19970808 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SKYLINE CORP CENTRAL INDEX KEY: 0000090896 STANDARD INDUSTRIAL CLASSIFICATION: MOBILE HOMES [2451] IRS NUMBER: 351038277 STATE OF INCORPORATION: IN FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-04714 FILM NUMBER: 97653595 BUSINESS ADDRESS: STREET 1: 2520 BY-PASS RD STREET 2: P O BOX 743 CITY: ELKHART STATE: IN ZIP: 46515 BUSINESS PHONE: 2192946521 DEF 14A 1 SKYLINE CORPORATION 2520 By-Pass Road P.O. Box 743 Elkhart, Indiana 46515 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS September 22, 1997 NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of Skyline Corporation ("Skyline") will be held at the Shenandoah Room, in the Ramada Inn, 3011 Belvedere Road, Elkhart, Indiana, on Monday, September 22, 1997, at 9:00 a.m., Eastern Standard Time, for the following purposes: 1. To elect a Board of Directors for the ensuing year, or until their successors are elected and qualify. 2. To transact such other business as may properly come before the meeting, or any adjournment thereof. The Board of Directors has fixed the close of business on July 24, 1997, as the record date for the determination of shareholders entitled to notice of, and to vote at, said meeting. By Order of the Board of Directors RONALD F. KLOSKA Vice-Chairman, Deputy Chief Executive Officer and Chief Administration Officer August 8, 1997 IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. SKYLINE CORPORATION 2520 By-Pass Road, P.O. Box 743 Elkhart, Indiana 46515 August 8, 1997 PROXY STATEMENT The enclosed proxy is solicited by the Board of Directors of Skyline Corporation ("Skyline") for use at the Annual Meeting of Shareholders to be held September 22, 1997. The shares represented by properly executed proxies received prior to the meeting will be voted. If the shareholder directs in the proxy how the shares are to be voted, they will be voted accordingly. When no direction has been given by the shareholder, it is the intention of the proxies named in the proxy to vote the same in accordance with their best judgment. Any proxy given may be revoked by the shareholder at any time prior to the voting of the proxy. The approximate date on which this proxy statement and the form of proxy are first sent or given to security holders is August 8, 1997. VOTING SECURITIES Only shareholders of record as of the close of business on July 24, 1997, or their proxies are entitled to vote at the meeting. As of that date, Skyline had outstanding 9,666,144 shares of Common Stock having one vote per share. ELECTION OF DIRECTORS Each share of Common Stock is entitled to one vote, which means that the holders of more than 50% of the shares voting for the election of Directors can elect all of the Directors and approve any other matter as may properly come before the meeting if they choose to do so. It is proposed that nine Directors be elected at the meeting, each to serve until the next Annual Meeting of Shareholders and until his successor is elected and qualifies. It is intended that the votes authorized by the enclosed proxy will be cast for the election of the nine nominees for Directors whose names are set forth below. In the event that one or more of the nominees shall unexpectedly become unavailable for election, the votes will be cast, pursuant to authority granted by the enclosed proxy, for such person or persons as may be designated by the present Board of Directors or the Board may be reduced accordingly. All of the nominees for whom the proxies intend to vote have agreed to serve as Directors if elected. Information about the nominees for election as Directors and the beneficial ownership of Skyline Common Stock by directors as a group is as follows: Shares of Skyline Common Stock bene- Skyline ficially Owned at Percent Name, Title, Address Director July 1, 1997 of and Principal Occupation Age Since Directly or Indirectly Class(3) ARTHUR J. DECIO 66 1959 1,477,784(1) 15.3 % Chairman of the Board and Chief Executive Officer. Skyline Corporation, 2520 By-Pass Road, Elkhart, IN 46514. Mr. Decio is also a Director of NIPSCO Industries, Inc., Hammond, Indiana, Quality Dining, Inc., Mishawaka, Indiana and St. Joseph Capital Corporation, Mishawaka, Indiana. TERRENCE M. DECIO 45 1989 30,080(2) Senior Executive Vice President, Skyline Corporation, 2520 By-Pass Road, Elkhart, Indiana 46514. Mr. Decio is also a Director of KeyCorp. of Northern Indiana, South Bend, Indiana. JERRY HAMMES 65 1986 13,000 2015 West Western Avenue, South Bend, Indiana 46629. President of Romy Hammes, Inc., a bank holding company and real estate investment company, South Bend, Indiana, and Chairman of Peoples Bank of Kankakee County,a bank, Bourbonnais, Illinois. Mr Hammes is also a Director of St.Joseph Capital Corporation, Mishawaka, Indiana. RONALD F. KLOSKA 63 1965 28,600 Vice-Chairman, Deputy Chief Executive Officer and Chief Administration Officer, Skyline Corporation, 2520 By-Pass Road, Elkhart, Indiana 46514. Shares of Skyline Common Stock bene- Skyline ficially Owned at Percent Name, Title, Address Director July 1, 1997 of and Principal Occupation Age Since Directly or Indirectly Class(3) WILLIAM H. LAWSON 60 1975 3,000 400 East Spring Street, Bluffton, Indiana 46714. Chairman of the Board, Chief Executive Officer, and a Director of Franklin Electric Company, Inc., a manufacturer of electric motors, Bluffton, Indiana. Mr. Lawson is also a Director of JSJ Corporation, Sentry Insurance, a Mutual Company, and American Electronic Components, Inc. DAVID T. LINK 60 1994 600 Dean and Professor of Law, Notre Dame Law School, University of Notre Dame, Notre Dame, Indiana 46556. President Emeritus, University of Notre Dame Australia, Fremantle, W.A., Australia. ANDREW J. McKENNA 67 1971 12,300 8338 North Austin Avenue, Morton Grove, Illinois 60053. Chairman and CEO of Schwarz, a national printer, converter and distributor of packaging and promotional materials, Morton Grove, Illinois. Mr. McKenna is also a director of First National Bank of Chicago, Tribune Company, Aon Corporation, McDonalds Corporation, Dean Foods Company and First Chicago NBD. WILLIAM H. MURSCHEL 52 1992 1,610 President and Chief Operations Officer, Skyline Corporation, 2520 By-Pass Road, Elkhart, Indiana 46514. DALE SWIKERT 67 1963 8,791 224 Carnation Drive, Nampa, Idaho 83687. President, Interstate West Corp. and Private Investor. ALL NOMINEES AND OFFICERS AS A GROUP 1,576,565 16.3% (l) Includes 83,500 shares in The Arthur J. Decio Foundation, a charitable foundation, of which Mr. Decio is a trustee. Mr. Decio disclaims any beneficial interest with respect to these shares. (2) Terrence M. Decio is the son of Arthur J. Decio. (3) Less than one percent unless otherwise indicated. Information about Board and Committee meetings is as follows: The Audit Committee consisted of Messrs. Hammes, McKenna, Link and Swikert. It met two times during the fiscal year ended May 31, 1997. The Committee meets with the accounting firm which conducts the annual audit of Skyline's books, reviews auditors recommendations, reviews the independence of Skyline's auditors and considers the range of audit and non-audit fees. It also meets with the internal audit staff and Chief Financial Officer, reviews the scope and adequacy of Skyline's internal auditing program and reports its findings to the Board with any recommendations it considers appropriate. The Governance and Compensation Committee consisted of Messrs. McKenna, Hammes, Lawson and Link. It met two times during the last fiscal year. The Committee establishes compensation for the Chief Executive Officer and consults with the Chief Executive Officer concerning compensation for other elected officers of the Company. The Committee also recommends to the Board the selection of nominees for election as directors, and considers the performance of incumbent directors in determining whether to nominate them for re-election. Nominees recommended by shareholders will be considered upon their submission in writing by the shareholders to Skyline prior to the end of the fiscal year immediately preceding the next regular annual shareholders meeting. The Executive Committee of the Board of Directors consisted of Messrs. Arthur J. Decio, McKenna, Hammes, Lawson and Link, and met four times during the last fiscal year. This Committee exercises the powers of the Board of Directors in the management of the business affairs of Skyline, subject to the approval of the full Board of Directors at the next regular or special meeting. The Board of Directors met or took action six times during the last fiscal year. Every Board member was present at all Board meetings and meetings of all committees of which he was a member, except that one Director did not attend one Board meeting. CERTAIN OTHER BENEFICIAL OWNERS The following person, entities or "group" as indicated are known to Skyline to own beneficially at least five percent (5%) of Skyline's common stock or are members of management identified in the summary compensation table but who are not on Skyline's Board. The beneficial ownership of Skyline common stock by the members of its Board and its nominees for directors is shown in the table under "Election of Directors" above. Shares of Skyline Common Name and Address Stock Beneficially Owned Percent of of Beneficial Owner at July 1, 1997 Class (l) Joseph B. Fanchi 100 Vice President, Finance 2520 By-Pass Road Elkhart, Indiana 46514 Orbis Investment Management 950,000 9.8% Limited (2) Harold Hayes Frith Building 55 Par-Ia-Ville Road Hamilton, HM 11 Bermuda Orbis Asset Management Limited (2) 34,000 . .4% Harold Hayes Frith Building 55 Par-Ia-Ville Road Hamilton, HM 11 Bermuda (l) Less than one percent (1%) if not specified. (2) Orbis Investment Management Limited and Orbis Asset Management Limited may constitute a "group" owning 984,000 shares, which is 10.2% of the oustanding Skyline common stock. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Based solely on a review of forms provided to Skyline and on certain written representations, Skyline is unaware of any failure to file on a timely basis reports required by Section 16(a) of the Exchange Act by any director, officer or beneficial owner of more than ten percent of Skyline's common stock. EXECUTIVE COMPENSATION All cash compensation paid during the fiscal year ended May 31, 1997 for each of the five highest paid executive officers of Skyline, including the Chief Executive Officer. The table also shows for each such officer, the amounts set aside during the last fiscal year under Skyline's Profit Sharing Plan. All Other Annual Compensation Compensation (Vested Name and Principal Profit Position Year Salary ($) Bonus ($) Sharing) Arthur J. Decio 1997 395,000 403,000 9,000 Chairman of the Board 1996 395,000 379,200 9,000 and Chief Executive Officer 1995 395,000 264,000 9,000 Ronald F. Kloska 1997 330,000 337,000 9,000 Vice-Chairman, Deputy Chief 1996 300,000 320,000 9,000 Executive Officer and Chief 1995 245,000 181,300 9,000 Administration Officer (Secretary prior to September 18, 1995, and President prior to September 16, 1991) William H. Murschel 1997 330,000 337,000 9,000 President and Chief 1996 300,000 320,000 9,000 Operations Officer 1995 295,000 194,700 9,000 Terrence M. Decio 1997 225,000 230,000 9,000 Senior Executive 1996 225,000 216,000 9,000 Vice-President, 1995 225,000 148,500 9,000 (Senior Vice-President from September 16, 1991 to September 21, 1992) Joseph B. Fanchi 1997 160,000 60,000 9,000 Vice-President, Finance 1996 147,500 55,000 8,850 and Treasurer 1995 142,500 42,750 8,550 Compensation of Directors Directors who are not full-time employees receive an annual fee of $16,000 payable in quarterly installments and receive $500 for each Board or Committee meeting attended. Chairmen of the Board Committees who are not full-time employees of Skyline receive an additional $2,000 annually and Committee members who are not full-time employees of Skyline receive an additional $1,500 annually payable in quarterly installments. Termination of Employment Arrangements The Skyline Corporation and Affiliates Employees' Profit Sharing Plan provides benefits on death, disability or retirement for officers and executives, sales, administrative and supervisory employees. Employees hired on or after June 1, 1987 become eligible as of the June 1 or December 1 immediately following completion of six months of employment. Under the Plan, as amended effective June 1, 1989, the amount of contribution under the Plan is at the discretion of Skyline each year. However, the maximum contribution for any participant shall not exceed 12% of a participant's basic compensation. Upon retirement, death or permanent total disability, a participant is entitled to all of the funds credited to his account. In case of termination of employment by resignation or discharge, the participant is entitled to a percentage of the amount credited to his account, ranging from 0% (10% for employees hired on or before May 31, 1987) after one year of employment to 100% after seven years. For plan years beginning on or after June 1, 1987, forfeitures resulting from any employee's termination of employment prior to full vesting will be used to reduce employer contributions. Net investment earnings or net losses for each fiscal year are allocated to the account of each participant in the same ratio as the participant's account balance bears to the total account balances of all participants. Skyline reserves the right to modify, amend or terminate the Plan. In the event of termination of the plan, the entire amount theretofore contributed under the Plan must be paid to participants or their beneficiaries and under no circumstances reverts to Skyline. Under an insurance plan, payments would be made to the below named executive officers, and executive officers as a group, for a period of 10 years upon retirement from Skyline at age 60 or later, in the following annual amounts: Ronald F. Kloska, $100,000; William H. Murschel, $75,000; Terrence M. Decio, $60,000; and Joseph B. Fanchi, $40,000; and all executive officers as a group, consisting of 5 individuals, $315,000. Under the same insurance plan, in the event of the death of any of such executive officers while employed by Skyline, payments would be made for a period of 10 years in the annual amounts hereinafter specified to the beneficiaries of the following individuals and group: Ronald F. Kloska, $100,000; William H. Murschel, $75,000; Terrence M. Decio, $60,000; and Joseph B. Fanchi, $30,000; and all executive officers as a group, consisting of 5 individuals, $295,000. Skyline is the owner and beneficiary of policies insuring the lives of all such executive officers in the total amount of $1,950,984. In addition, in the event of the death of Arthur J. Decio, Skyline has agreed to pay his survivor(s) the sum of $1,920,000, which at the present income tax rates, would result in after tax cost to Skyline of approximately $1,150,000. Skyline is the owner and beneficiary of policies insuring Arthur J. Decio's life in the amount of $1,000,000. The appreciation in cash surrender value of all of the above-described insurance policies is such that there is no current cost to Skyline for their maintenance. Compensation Committee Interlocks and Insider Participation The following persons served as members of the Governance and Compensation Committee (the "Compensation Committee") of Skyline's Board of Directors during the fiscal year ended May 31, 1997: Andrew J. McKenna, Jerry Hammes, William H. Lawson and David T. Link. Arthur J. Decio is the Chairman of the Board and Chief Executive Officer of Skyline, and is a member of the Board of Directors of Schwarz. Andrew J. McKenna is an executive officer of Schwarz. Report of the Governance and Compensation Committee (the "Compensation Committee") on Executive Compensation The compensation of Skyline's executive officers is determined by the Compensation Committee of the Board of Directors. Each member of the Compensation Committee is a director who is not an employee of Skyline or any of its affiliates. The following report with respect to compensation paid to Skyline's executive officers for the fiscal year ended May 31, 1997 is furnished by the Compensation Committee. General Policies. Skyline's compensation programs are intended to enable Skyline to attract, motivate, reward and retain the executive management talent required to achieve corporate objectives. It is Skyline's policy to reward exceptional performance and contributions to the development of Skyline's business. To attain these objectives, Skyline's executive compensation program includes a competitive base salary coupled with the opportunity to participate in a bonus pool which is created based on the performance of Skyline's business. The Compensation Committee establishes the base salaries and discretionary bonuses which will be paid to Skyline's executive officers for each fiscal year. In setting salaries and bonuses, the Compensation Committee takes into account several factors, including compensation paid by competitors and other industries' compensation data as well as qualitative factors bearing on an individual's experience, responsibilities, management and job performance. The Compensation Committee evaluates the contributions to Skyline's overall performance during the last fiscal year, leadership, effectiveness and commitment of all executive officers, including the Chief Executive Officer. For the fiscal year ended May 31, 1997, each of the executive officers received a bonus, in the amounts set forth above in the summary compensation table. Salaries. Salary levels for executive officer positions are set so as to reflect the duties and level of responsibilities inherent in the position and current economic conditions relating to Skyline's business. Comparative salaries paid by other companies in the industries which Skyline does business are considered in establishing the salary level for a given position. The Compensation Committee does not, however, target a specific percentile range within the comparative group in setting salaries of Skyline's executive officers. The particular qualifications and level of experience of the individual holding the position are also considered in establishing a salary level when the individual is first appointed to a given position. Bonus. Skyline provides executive officers the opportunity to earn an annual incentive bonus based on an evaluation of the executive's individual performance and Skyline's performance. No executive officer is automatically entitled to a bonus or a bonus in any particular amount. In considering bonuses for executives other than Arthur J. Decio, the Compensation Committee consults with the Chief Executive Officer. Other. In addition, the executive officers participate in a profit sharing program and insurance and other plans described above providing payments on death or retirement. Compensation of Chief Executive Officer ("CEO"). In setting the base salary and bonus for Skyline's CEO, for the fiscal year ended May 31, 1997, the Compensation Committee considered the same factors as with other executive officers of Skyline. The Compensation Committee believes the CEO's compensation was fully supported by those standards. Andrew J. McKenna, Chairman Jerry Hammes William H. Lawson David T. Link Being all the members of Skyline's Governance and Compensation Committee (the "Compensation Committee") PERFORMANCE CHART COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* AMONG SKYLINE CORPORATION, S & P 500 INDEX AND PEER GROUP** 1992 1993 1994 1995 1996 1997 SKYLINE 100 116.65 118.93 125.44 182.36 177.82 S & P 500 100 111.61 116.36 139.86 179.63 232.25 PEER GROUP 100 127.68 162.66 160.39 270.54 251.14 *Notes: **This self constructed peer group consists of the following companies: Assumes initial investment of $100 on May 31, 1992 and compares the Champion Enterprises, Inc. return on that investment through Coachmen Industries, Inc. May 31, 1997. Fleetwood Enterprises, Inc. Liberty Homes, Inc. For comparison purposes, Total Schult Homes, Inc. Return assumes reinvestment of Thor Industries, Inc. dividends, although Skyline has no dividend reinvestment plan. The returns for each member of this peer group have been weighted Total Return is based on market according to that company's respective capitalization. stock market capitalization. INDEPENDENT PUBLIC ACCOUNTANTS Skyline's independent public accounting firm is Price Waterhouse LLP. It is expected that representatives of Price Waterhouse LLP will be present at the meeting of shareholders, will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions. SHAREHOLDER PROPOSALS Any proposal submitted for inclusion in Skyline's Proxy Statement and form of proxy for the 1998 Annual Meeting of Shareholders must be received at the address shown above on or before April 3, 1998. MISCELLANEOUS As of the date of this Proxy Statement, the Board of Directors knows of no other business which will be presented for consideration at the annual meeting. However, if other proper matters are presented at the meeting, it is the intention of the proxies named in the enclosed proxy to take such action as shall be in accordance with their best judgment. The expense of this solicitation, including the cost of preparing and mailing this Proxy Statement and accompanying material, will be paid by Skyline. Skyline expects to pay approximately $6,500 to Georgeson & Company as compensation for the solicitation of proxies, and may reimburse brokers and others for their expense for sending proxy material to principals for the purpose of obtaining signed proxies. In addition, solicitation may be by mail, telephone, telegraph and personal interview by regularly engaged officers of Skyline who will not be additionally compensated therefor. Shareholders are respectfully requested to date, sign and return promptly the enclosed proxy in the enclosed envelope. No postage is required if mailed in the United States. By Order of the Board of Directors RONALD F. KLOSKA Vice-Chairman, Deputy Chief Executive Officer and Chief Administration Officer -----END PRIVACY-ENHANCED MESSAGE-----