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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box: |
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o Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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ý Definitive Proxy Statement |
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o Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Skyline Corporation
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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ý No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)4 and
0-11. |
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1) Title of each class of securities to which transaction applies: |
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2) Aggregate number of securities to which transaction applies: |
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
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4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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o Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
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1) Amount Previously Paid: |
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2) Form, Schedule or Registration Statement No.: |
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SEC 1913 (02-02) |
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number. |
TABLE OF CONTENTS
SKYLINE
CORPORATION
2520 By-Pass Road
P.O. Box 743
Elkhart, Indiana 46515
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
September 20,
2007
NOTICE IS HEREBY GIVEN that the Annual Meeting of the
Shareholders of Skyline Corporation (Skyline) will
be held at the Emerald Room, in the Ramada Inn, 3011 Belvedere
Road, Elkhart, Indiana, on Thursday, September 20, 2007, at
9:00 a.m., Eastern Daylight 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 20, 2007, 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
James R. Weigand
Vice President, Finance, Treasurer
Chief Financial Officer and Secretary
August 16, 2007
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 16, 2007
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 20, 2007. 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 16, 2007.
VOTING
SECURITIES
Only shareholders of record as of the close of business on
July 20, 2007, or their proxies are entitled to vote at the
meeting. As of that date, Skyline had outstanding
8,391,244 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. While the Corporation does not have a policy
requiring Board members to attend the annual meeting,
traditionally all Directors have attended the annual meeting and
did so at the 2006 annual meeting.
It is proposed that eight Directors be elected at the meeting,
each to serve until the next Annual Meeting of Shareholders and
until his successor qualifies and is elected.
It is intended that the votes authorized by the enclosed proxy
will be cast for the election of the eight 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
1
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:
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Shares of
Skyline
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Common Stock
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Skyline
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Beneficially
Owned
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Percent
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Name, Title,
Address
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Director
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at July 1,
2007
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of
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and Principal
Occupation
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Age
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Since
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Directly or
Indirectly
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Class(2)
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ARTHUR J. DECIO
Chairman of the Board,
serving in
a non-executive officer and consulting capacity.
Skyline Corporation
2520 By-Pass Road
Elkhart, Indiana 46514
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76
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1959
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1,477,784
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(1)
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17.6
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%
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THOMAS G. DERANEK
Vice Chairman and Chief
Executive Officer
Skyline Corporation
2520 By-Pass Road
Elkhart, Indiana 46514
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71
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2001
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0
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JOHN C. FIRTH
4220 Edison Lakes Parkway
Mishawaka, Indiana 46545
President of Quality Dining, Inc., a
restaurant holding company which owns more than
170 restaurants in six states. Mr. Firth was
Executive Vice President, Principal Financial
Officer and General Counsel to Quality
Dining, Inc. from 2000 to 2005.
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49
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2006
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500
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JERRY HAMMES
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.
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75
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1986
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13,000
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RONALD F. KLOSKA
1329 East Woodside
South Bend, Indiana 46614
Mr. Kloska currently serves Skyline in a
consulting capacity.
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73
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1965
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28,600
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2
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Shares of
Skyline
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Common Stock
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Skyline
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Beneficially
Owned
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Percent
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Name, Title,
Address
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Director
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at July 1,
2007
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of
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and Principal
Occupation
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Age
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Since
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Directly or
Indirectly
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Class(2)
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WILLIAM H. LAWSON
One Sarasota Tower,
Suite 408
Sarasota, Florida 34236
Retired March 31, 2003 as Chairman of the
Board, Chief Executive Officer and a Director
of Franklin Electric Company, Inc., a
manufacturer of electric motors, Bluffton,
Indiana.
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70
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1975
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3,000
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DAVID T. LINK
Dean Emeritus
Notre Dame Law School
University of Notre Dame
Notre Dame, Indiana 46556
Retired April 1, 2006 as President and CEO
International Centre for Healing and the Law
9292 W. KL Avenue
Kalamazoo, Michigan 49009
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70
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1994
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600
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ANDREW J. MCKENNA
8338 North Austin Avenue
Morton Grove, Illinois 60053
Chairman of Schwarz, a national printer,
converter and distributor of packaging and
promotional materials. Mr. McKenna is also a
director of Aon Corporation and Chairman of
McDonalds Corporation.
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77
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1971
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12,300
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ALL NOMINEES AND
OFFICERS AS A GROUP
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1,568,982
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18.7
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%
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(1)
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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.
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(2)
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Less than one percent unless
otherwise indicated.
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Skyline has standing Audit, Nominating and Governance and
Compensation Committees of the Board. Information about Board
and Committee meetings is as follows:
The Audit Committee consisted of Messrs. Hammes, Firth,
Lawson and Link. It met four times during the fiscal year ended
May 31, 2007. The Committee meets with the accounting firm
which conducts the annual audit of Skylines financial
statements, reviews auditors recommendations, reviews the
independence of Skylines 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 Skylines internal auditing program and reports
its findings to the Board with any recommendations it considers
appropriate. Skylines Board of Directors has adopted a
written charter for the Audit Committee. The members of
Skylines Audit Committee are all
3
independent as defined in the applicable Listing
Standards. Messrs. Hammes, Firth, Lawson and Link are all
Audit Committee Financial Experts.
The Nominating and Governance Committee consists of
Messrs. McKenna, Firth, Hammes, Lawson and Link, all of
whom are independent. It met two times during the last fiscal
year. The Nominating and Governance Committee identifies
individuals qualified to become Board Members, and recommends
that the Board nominates such individuals for election to the
Board at the next Annual Meeting of Shareholders. This Committee
also develops and reviews Skylines corporate governance
guidelines and makes recommendations to the Board relating to
the guidelines. The Committee believes that candidates for
directors should meet certain minimum qualifications including
being of the highest ethical character and sharing the values of
Skyline as reflected in our Code of Ethics, having reputations
both personal and professional consistent with the image and
reputation of Skyline, and being highly accomplished in their
respective fields with superior credentials and recognition and
having relevant experience and expertise. In general, persons
recommended by shareholders will be considered on the same basis
as candidates from other forums. The Committee retains the right
to modify these qualifications from time to time. Shareholders
may provide the Committee information on director candidates for
consideration by the Committee by writing a letter to our
assistant secretary Linda Philippsen at our principal executive
office at 2520 By-Pass Road, P.O. Box 743, Elkhart,
Indiana 46515 containing the respective candidates name,
qualifications, relevant experience, all information required
pursuant to Regulation 14A under the Securities Exchange
Act of 1934, and such candidates consent to serve as
director. The Committee retains absolute discretion and
independence in determining whether to recommend a candidate.
These letters must also identify the author as a shareholder of
Skyline, and clearly state that the intended recipients are all
members of the Nominating and Governance Committee. All such
communications received by the assistant secretary will be
delivered to members of the Nominating and Governance Committee.
Skyline has a written charter for the Nominating and Governance
Committee which is posted to Skylines website at
www.skylinecorp.com. The committee charter is also available in
paper form upon request to the Skyline assistant secretary.
The Compensation Committee consists of Messrs. Lawson,
Firth, Hammes, Link and McKenna. It met two times during the
last fiscal year. The functions of the Compensation Committee
are to discharge the Boards responsibilities relating to
compensation of Skyline executives, review and approve corporate
goals and objectives relevant to the Chief Executive
Officers compensation, evaluate Chief Executive Officer
performance in light of these goals and objectives and set the
Chief Executive Officers compensation level based on this
evaluation and to make recommendations to the Board regarding
incentive compensation plans, equity based plans and to
4
undertake any similar functions. Skyline has a written charter
for the Compensation Committee which is posted to Skylines
website at www.skylinecorp.com. The committee charter is also
available in paper form upon request to the Skyline assistant
secretary.
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.
Report of the
Audit Committee
The Audit Committee of Skylines Board of Directors has
reviewed and discussed Skylines audited financial
statements with management; has discussed with Skylines
independent registered public accounting firm Crowe Chizek and
Company LLC the matters required to be discussed by Codification
of Statements on Auditing Standards, AU § 380,
Statement on Auditing Standards No. 61; has received from
the auditors disclosures regarding the auditors
independence as required by Independence Standards Board
Standard No. 1 and has discussed with the auditors the
auditors independence; and has, based on the review and
discussions noted above, recommended to Skylines Board of
Directors that the audited financial statements be included in
Skylines Annual Report on
Form 10-K
for the fiscal year ended May 31, 2007 for filing with the
Securities and Exchange Commission. Skylines Board of
Directors has adopted a formal charter for the Audit Committee
setting forth its responsibilities. A current copy of the Audit
Committee Charter is available on our website at
www.skylinecorp.com. The committee charter is also available in
paper form upon request to the Skyline assistant secretary.
Jerry Hammes, Chairman
John C. Firth
William H. Lawson
David T. Link
5
Audit
Fees
The aggregate fees billed for professional services rendered for
the audit of Skylines annual financial statements and
internal control over financial reporting for the last two
fiscal years ending May 31, 2006 and May 31, 2007 and
the reviews of the financial statements included in
Skylines
Forms 10-Q
and all services that are normally provided by the accountants,
Crowe Chizek and Company LLC, in connection with statutory and
regulatory filings or engagements for those fiscal years were
$300,000 for the year ended May 31, 2006 and were $281,000
for the year ended May 31, 2007.
Audit-Related
Fees
The aggregate fees billed by Crowe Chizek and Company LLC for
professional services during the last two fiscal years for
assurance and related services that are reasonably related to
the performance of the audit or review of Skylines
financial statements, other than those reported as Audit Fees,
were $31,000 for the fiscal year ended May 31, 2006 and
were $29,000 for the fiscal year ended May 31, 2007.
Tax
Fees
The aggregate fees billed by Crowe Chizek and Company LLC in
each of the last two fiscal years for professional services
rendered for tax compliance, tax advice, and tax planning were
$11,000 for the fiscal year ended May 31, 2006 and were
$14,000 for the fiscal year ended May 31, 2007. The
services were the review, assistance and preparation and signing
of Skylines consolidated Federal tax return.
All Other
Fees
The aggregate fees billed Skyline for services by Crowe Chizek
and Company LLC, other than for services addressed under the
captions Audit Fees, Audit-Related Fees
and Tax Fees for each of the last two fiscal years
were $0 for the fiscal years ended May 31, 2006 and 2007.
Pursuant to the Audit Committees preapproval policies and
procedures under 17 CFR 210.2-01(c)(7)(i)(C), all audit
engagements received explicit approval by the Audit Committee
after the Audit Committee received an adequate description of
the proposed engagement.
6
The percentage of the services addressed under the captions
Audit-Related Fees, Tax Fees and
All Other Fees that were preapproved by the Audit
Committee pursuant to 17 CFR 210.2-01(c)(7)(i) is 100%.
Code of
Ethics
Skyline has Codes of Ethics which apply to all employees,
officers and directors. The ethics policy is posted on our
website at www.skylinecorp.com and is available in paper form
upon request to the Skyline assistant secretary.
New York Stock
Exchange Corporate Governance Listing Standards
On September 22, 2006, the certificate by Skylines
Chief Executive Officer provided for in Section 303A.12 of
the New York Stock Exchange Listing Company Manual was filed
with the New York Stock Exchange. The foregoing certification
was unqualified.
CERTAIN OTHER
BENEFICIAL OWNERS
The following persons, entities or group as
indicated are known to Skyline to own beneficially at least five
percent (5%) of Skylines common stock or are members of
management identified in the summary compensation table but who
are not on Skylines 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.
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Shares of Skyline
Common
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Name
and Address
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Stock
Beneficially Owned
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Percent
of
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of
Beneficial Owner
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at July 1,
2007
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Class(1)
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Third Avenue Management LLC
622 Third Avenue, 32nd Floor
New York, New York 10017
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960,384
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11.4
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%
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GAMCO Investors, Inc.
One Corporate Center
Rye, New York 10580-1435
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869,550
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10.4
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%
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T. Rowe Price Associates Inc.(2)
100 East Pratt Street
Baltimore, Maryland 21202
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836,500
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10.0
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%
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7
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Shares of Skyline
Common
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Name
and Address
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Stock
Beneficially Owned
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Percent
of
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of
Beneficial Owner
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at July 1,
2007
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Class(1)
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Dimensional Fund Advisors
LP
1299 Ocean Avenue
Santa Monica, California 90401
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637,970
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7.6
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%
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Barclays Global Investors
45 Fremont Street
San Francisco, California 94105
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567,185
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6.8
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%
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Private Capital Management.
8889 Pelican Bay Blvd., Suite 500
Naples, Florida 34108
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432,741
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5.2
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%
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Terrence M. Decio
Vice President, Marketing and Sales
2520 By-Pass Road
Elkhart, Indiana 46514
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30,080
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Charles W. Chambliss
Vice President, Product
Design & Engineering
2520 By-Pass Road
Elkhart, Indiana 46514
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1,218
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Christopher R. Leader
Vice President, Operations
2520 By-Pass Road
Elkhart, Indiana 46514
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1,000
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James R. Weigand
Chief Financial Officer
and Secretary
2520 By-Pass Road
Elkhart, Indiana 46514
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800
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(1)
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Less than one percent (1%) if not
specified.
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(2)
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T. Rowe Price Associates, Inc.
(Price Associates) has informed Skyline that these securities
are owned by various individual and institutional investors
which Price Associates serves as investment adviser with power
to direct investment and/or sole power to vote the securities
and that for purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to
be a beneficial owner of such securities; however, Price
Associates expressly disclaims that it is, in fact, the
beneficial owner of such securities.
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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
8
required by Section 16(a) of the Exchange Act by any
director, officer or beneficial owner of more than ten percent
of Skylines common stock.
COMPENSATION,
DISCUSSION AND ANALYSIS
Overview
The Compensation Committee of our Board of Directors
established, subject to the approval of the full Board of
Directors, the compensation for our Chief Executive Officer, our
Chief Financial Officer, and our three most highly compensated
executive officers whose total compensation for the fiscal year
ended May 31, 2007 exceeded $100,000. We refer to these
five individuals as the Named Executive Officers.
In determining compensation, the Compensation Committee takes
into account several factors, including compensation paid by our
competitors and compensation data for other industries. The
Compensation Committee also considers qualitative factors
bearing on an individuals experience, responsibilities,
management and job performance, to evaluate whether the demands
of a particular position are being fulfilled effectively by the
relevant individual. The Compensation Committee evaluates the
contributions to our overall profitability performance during
the last fiscal year, leadership, effectiveness and commitment
of each of our Named Executive Officers, including our Chief
Executive Officer.
Objectives and
Elements of Compensation Program
Our compensation program is intended to enable us to attract,
motivate, reward and retain the executive management talent
required to achieve corporate objectives. It is our policy to
reward exceptional performance and contributions to the
development of our business.
To attain these objectives, our compensation programs include a
competitive base salary coupled with the opportunity to
participate in a bonus pool, which is created based on the
performance of our business. Our Compensation Committee is
responsible for making recommendations to our Board of Directors
with respect to incentive based compensation plans and equity
based plans. For the fiscal year ended May 31, 2007, we did
not pay any long-term compensation or any non-cash compensation
to our Named Executive Officers. We have not utilized long-term
compensation or non-cash compensation programs from a desire to
keep our compensation system simple and straightforward.
Base Salary. The Compensation Committee sets salary
levels for Named Executive Officers so as to reflect the duties
and level of responsibilities inherent in the
9
position and current economic conditions relating to our
business. In establishing the salary level for a given position,
the Compensation Committee considers comparative salaries paid
by other companies in the industries in which we do business.
The Compensation Committee does not, however, target a specific
percentile range within the comparative group in setting
salaries of our Named Executive Officers. The Compensation
Committee also considers the particular qualifications and level
of experience of the individual holding the position in
establishing a salary level when the individual is first
appointed to a given position.
Annual Incentive Bonuses. We provide certain employees,
including the Named Executive Officers, the opportunity to earn
an annual incentive bonus based on an evaluation of the
employees individual performance and our performance,
which is based on earnings before interest and taxes. These
bonuses are discretionary, and no Named Executive Officer is
automatically entitled to a bonus or a bonus in any particular
amount. In considering bonuses for Named Executive Officers
other than the Chief Executive Officer, the Compensation
Committee consults with our Chairman of the Board and Chief
Executive Officer regarding instances of exceptional effort
demonstrated by an employee.
Potential Payments upon Termination or Change in Control.
We provide benefits on death, disability or retirement for
substantially all employees, including our Named Executive
Officers, pursuant to the Skyline Corporation and Affiliates
Employees Profit Sharing Plan. We also provide fixed
payment amounts to the Named Executive Officers over a ten-year
period upon retirement after age 60 or later or to the
Named Executive Officers estate upon death during active
employment with us. For more information, see the discussions
below under Defined Contribution Profit Sharing Plan
and Retirement Benefits.
10
EXECUTIVE
COMPENSATION
Summary Compensation Table
for fiscal year ended May 31, 2007
The following table provides information about all compensation
awarded to, earned by or paid to our Named Executive Officers
during the fiscal year ended May 31, 2007.
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All Other
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Name and
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Compensation
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Principal
Position
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Year
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Salary ($)
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Bonus ($)
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($)*
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Total ($)
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Thomas G. Deranek
Vice Chairman and
Chief Executive Officer
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2007
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300,000
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4,500
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304,500
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Terrence M. Decio**
Vice-President, Marketing
and Sales
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2007
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290,000
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4,500
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294,500
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James R. Weigand
Vice President, Finance,
Treasurer, Chief
Financial Officer and Secretary
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2007
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240,000
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4,500
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244,500
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Christopher R. Leader
Vice-President, Operations
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2007
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235,000
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4,500
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239,500
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Charles W. Chambliss
Vice-President, Product Design and Engineering
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2007
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220,000
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4,500
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224,500
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*
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Other compensation represents a vested contribution to the
Skyline Profit Sharing defined contribution plan described below.
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**
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Terrence M. Decio is the son of Arthur J. Decio.
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Defined
Contribution Profit Sharing Plan
We have defined contribution profit sharing plans for hourly and
salaried workers, including the Named Executive Officers, that
provide benefits on death, disability or retirement for
substantially all employees. Employees become eligible as of the
June 1 or December 1 immediately following completion of six
months of employment. The amount we contribute under the plans
each year is at our discretion. The maximum contribution for any
participant, including any Named Executive Officer, may not
exceed 12% of the participants basic compensation, subject
to the maximum amount allowed by the Internal Revenue Code.
11
Upon retirement, death or permanent total disability, a
participant, including a Named Executive Officer, is entitled to
all of the funds credited to his or her account. In case of
termination of employment by resignation or discharge, the
participant is entitled to a percentage of the amount credited
to his or her account, ranging from 0% after one year of
employment to 100% after six years. We will use forfeitures
resulting from any employees termination of employment
prior to full vesting 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 participants account balance bears to the total
account balances of all participants. We reserve the right to
modify, amend or terminate the plans. In the event of
termination of the plans, we must pay the entire amount
previously contributed under the plans to participants or their
beneficiaries and under no circumstances may those amounts
revert to Skyline.
Retirement
Benefits
for fiscal year ended May 31, 2007
We have entered into arrangements with certain employees,
including our Named Executive Officers, which provide for us to
pay benefits to the employees estates in the event of
death during active employment or to pay retirement benefits
over 10 years beginning at the date of retirement. To fund
all such arrangements, we have purchased life insurance or
annuity contracts on the covered employees. The cash surrender
value of the insurance contracts are recorded as a long-term
other asset and the net present value of the maximum potential
benefit is recorded as a liability on our financial statements.
12
The following table provides information on each plan that
provides for payments or other benefits in connection with a
Named Executive Officers retirement, excluding
tax-qualified and non-qualified defined contribution plans.
Executive
Retirement Benefit Table
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Maximum
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Present
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Annual
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Annual
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Potential
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Value of
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Named
Executive
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Vesting
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Retirement
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Beneficiary
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Remaining
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Accumulated
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Officer
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Plan
Name
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Age
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Amount($)
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Amount($)
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Balance($)
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Benefit($)
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Thomas G. Deranek
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Supplemental
Retirement
Benefits
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60
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75,000
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75,000
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750,000
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564,000
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James R. Weigand
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Supplemental
Retirement
Benefits
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62
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60,000
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40,000
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600,000
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253,000
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Terrence M. Decio
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Supplemental
Retirement
Benefits
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60
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75,000
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75,000
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750,000
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427,000
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Christopher R. Leader
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Supplemental
Retirement
Benefits
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62
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60,000
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40,000
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600,000
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202,000
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Charles W. Chambliss
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Supplemental
Retirement
Benefits
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62
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60,000
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40,000
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600,000
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346,000
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Compensation of
Directors
Directors who are not employees of Skyline receive an annual fee
of $20,000 payable in quarterly installments and receive $1,000
for each Board or Committee meeting attended, except the lead
director receives a fee of $30,000. The Chairman of the Audit
Committee receives $4,000 annually and the remaining members of
the Audit Committee receive $3,000 annually, payable in
quarterly installments. Chairmen of the other Board Committees
who are not employees of Skyline receive an additional $3,000
annually, and Committee members of the other Board Committees
who are not employees of Skyline receive an additional $2,000
annually, payable in quarterly installments.
13
Independent
Director Compensation
for the fiscal year ended May 31, 2007
The following table summarizes payments made to independent
directors for the fiscal year ended May 31, 2007.
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Name
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Total
Fees Earned or Paid in Cash($)
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John C. Firth
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28,250
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Jerry Hammes
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38,625
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William H. Lawson
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38,125
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David T. Link
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37,250
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Andrew J. McKenna
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39,000
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Compensation of
Former Executive Officer Directors
for the fiscal year ended May 31, 2007
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Executive
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Retirement
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Benefit
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All Other
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Payments*
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Compensation**
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Name
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($)
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($)
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Total
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Arthur J. Decio
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100,000
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50,000
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150,000
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Ronald F. Kloska
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100,000
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50,000
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150,000
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*
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Amounts represent fiscal year
payouts of executive retirement benefits as described below for
Directors who previously served as executives for the
corporation.
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**
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Amounts represent consulting fees
for Directors who previously served as executive officers for
the corporation.
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Directors who previously served as executive officers for the
corporation are eligible to receive supplemental retirement
benefits as indicated below.
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Maximum
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Present
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Annual
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Annual
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Potential
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Value of
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Vesting
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Retirement
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Beneficiary
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Remaining
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Accumulated
|
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Named
Director
|
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Plan
Name
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Age
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|
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Amount($)
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|
Amount($)
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|
Balance($)
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|
Benefit($)
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Arthur J. Decio*
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Supplemental
Retirement
Benefits
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60
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100,000
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100,000
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900,000
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695,000
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Ronald F. Kloska
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Supplemental
Retirement
Benefits
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60
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100,000
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100,000
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900,000
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695,000
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14
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*
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In addition to the payments noted above, in the event of the
death of Arthur J. Decio, we have agreed to pay his survivor(s)
the sum of $2,700,000, which at present income tax rates would
result in after tax cost to the Corporation of approximately
$1,600,000. We are the owner and beneficiary of policies
insuring Arthur J. Decios life in the amount of $1,600,000.
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Transactions with
Management
We did not participate in any transactions during the fiscal
year ended May 31, 2007 in which the amount involved
exceeded $120,000 and in which any related person had a direct
or indirect material interest.
Compensation
Committee Interlocks and Insider Participation
The following persons served as members of the Compensation
Committee of our Board of Directors during the fiscal year ended
May 31, 2007: William H. Lawson, John C. Firth, Jerry
Hammes, David T. Link and Andrew J. McKenna. Arthur J. Decio is
our Chairman of the Board, and is a member of the Board of
Directors of Schwarz. Andrew J. McKenna is Chairman of Schwarz.
Report of the
Compensation Committee
on Executive Compensation
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis included
above. Based on that review and discussion, the Compensation
Committee has recommended to our Board of Directors that the
Compensation Discussion and Analysis be included in this proxy
statement and incorporated by reference into our Annual Report
on
Form 10-K
for the fiscal year ended May 31, 2007. Each member of the
Compensation Committee is a director who is not an employee of
Skyline or any of our affiliates.
William H. Lawson, Chairman
John C. Firth
Jerry Hammes
David T. Link
Andrew J. McKenna
Being all the members of Skylines
Compensation Committee
15
DIRECTOR
INDEPENDENCE AND EXECUTIVE SESSIONS
The Board of Directors has affirmatively determined that each of
the five non-management Directors, Andrew J. McKenna, Jerry
Hammes, William H. Lawson, David T. Link, and John C. Firth is
an independent Director and therefore, that a majority of
Skylines eight-person Board of Directors is currently
independent as so defined. For this purpose, Skylines
Board adopted the following categorical standards based in part
on the New York Stock Exchange Corporate Governance Listing
Standards approved by the SEC on November 4, 2003, and
additional categories considered appropriate by the Board:
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1.
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No Director qualifies as independent unless the
Board affirmatively determines that the Director has no material
relationship with Skyline or any of its subsidiaries (either
directly or as a partner, shareholder or officer of an
organization that has a relationship with Skyline or its
subsidiaries);
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2.
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A Director who is an employee, or whose immediate family member
is an executive officer of Skyline or any of its subsidiaries,
is not independent until three (3) years after the end of
such employment relationship;
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3.
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A Director who receives, or whose immediate family member
receives, more than $100,000 per year in direct compensation
from Skyline or any of its subsidiaries, other than Director and
committee fees and pension or other forms of deferred
compensation for prior service (provided such compensation is
not contingent in any way on continued service), is not
independent until three (3) years after he or she ceases to
receive more than $100,000 per year in such compensation;
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4.
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A Director who is affiliated with or employed by, or whose
immediate family member is affiliated with or employed in a
professional capacity by a present or former internal or
external auditor of our company or any of its subsidiaries, is
not independent until three (3) years after the
end of the affiliation or the employment or auditing
relationship;
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5.
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A Director who is employed, or whose immediate family member is
employed, as an executive officer of another company when any of
Skyline or any of its subsidiaries present executives
serve on that other companys compensation committee is not
independent until three (3) years after the end
of such service or the employment relationship;
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6.
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A Director who is an executive officer or an employee, or whose
immediate family member is an executive officer, of a company
that makes payments to, or receives payment from, Skyline or any
of its subsidiaries for property or
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16
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services in an amount which, in any single fiscal year, exceeds
the greater of $1,000,000 or 2% of such other companys
consolidated gross revenues, is not independent
until three (3) years after falling below such
threshold; and
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7.
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The Board has determined that there are no relationships between
Skyline and the Directors classified as independent other than
service on Skylines Board of Directors and compensation
paid to such Directors.
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The foregoing independence determination of the Board of
Directors also included the conclusions of the Board that:
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1.
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Each of the members of the Audit Committee, Nominating and
Governance Committee, and Compensation Committee listed above is
respectively independent under the standards listed above for
purposes of membership on each of these committees; and
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2.
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Each of the members of the Audit Committee also meets the
additional independence requirements under Sec. Rule 10A-3(b).
|
Mr. McKenna is currently serving as the lead
independent Director for purposes of scheduling and setting the
agenda for executive sessions of the independent Directors. It
is presently contemplated that there will be regular executive
sessions during the fiscal year ending May 31, 2008 in
conjunction with regularly scheduled Board meetings, in addition
to the separate meetings of the key standing committees of the
Board of Directors. There were two executive sessions in fiscal
year ending May 31, 2007.
Our Board of Directors has adopted a statement of governance
principles that is available on our Companys website at
www.skylinecorp.com and is available in paper form upon request
to the Skyline assistant secretary.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Skylines independent registered public accounting firm is
Crowe Chizek and Company LLC. It is expected that
representatives of Crowe Chizek and Company LLC 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.
COMMUNICATIONS
WITH DIRECTORS
Skyline provides for a procedure for shareholders and other
interested parties to communicate with the Board. Communications
may be sent to the attention of the Board Members or Committees
in care of board@skylinecorp.com.
17
SHAREHOLDER
PROPOSALS
To be considered for inclusion in next years proxy
statement, shareholder proposals must be received at
Skylines principal executive offices not later than the
close of business on April 18, 2008. For any proposal that
is not submitted for inclusion in next years proxy
statement (as described in the preceding sentence) but instead
is sought to be presented directly at next years annual
meeting, Securities and Exchange Commission Rules permit
management to vote proxies in its discretion if (a) Skyline
received notice of the proposal before the close of business on
July 3, 2008 and advises shareholders in next years
proxy statement about the nature of the matter and how
management intends to vote on such matters, or (b) does not
receive notice of the proposal prior to the close of business on
July 3, 2008.
Notice of intention to present proposals at the 2008 Annual
Meeting should be addressed to:
James R. Weigand
Vice President, Finance, Treasurer
Chief Financial Officer and Secretary
Skyline Corporation
2520 By-Pass Road
Elkhart, Indiana 46514
The Corporation reserves the right to reject, rule out of order,
or take other appropriate action with respect to any proposal
that does not comply with these and other applicable
requirements.
18
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 Shareholder Communications,
Inc. 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,
fax 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
James R. Weigand
Vice President, Finance, Treasurer
Chief Financial Officer
and Secretary
19
IMPORTANT: Please
mark, sign, date and promptly return this proxy using the
enclosed envelope.
PROXY
SKYLINE CORPORATION
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby
appoints James R. Weigand and Linda R. Philippsen as proxies,
each with the power to appoint a substitute, and hereby
authorizes them, or either of them, to appear and to vote as
designated below, all the shares of common stock held of record
by the undersigned on July 20, 2007, at the Annual Meeting
of Shareholders of Skyline Corporation, to be held at the
Emerald Room, in the Ramada Inn, 3011 Belvedere Road, Elkhart,
Indiana, on Thursday, September 20, 2007, at
9:00 a.m., Eastern Daylight Time, and at any adjournments
thereof.
1. ELECTION OF DIRECTORS
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NOMINEES: Arthur J. Decio, Thomas
G. Deranek, John C. Firth, Jerry Hammes, Ronald F. Kloska,
William H. Lawson, David T. Link, and Andrew J. McKenna
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Mark Only One Box:
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o FOR
all nominees listed above; except vote
withheld with respect to nominee/s listed below (if any).
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o WITHHOLD
AUTHORITY to vote for ALL nominees listed above.
|
2. At their discretion, the
proxies are authorized to vote upon such other business as may
properly come before the meeting.
(Continued and to be signed on
other side)
(Continued from other
side)
THIS PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED FOR THE ABOVE PROPOSALS.
The undersigned hereby
acknowledges receipt of the Notice of Annual Meeting of
Shareholders and the Proxy Statement furnished therewith, both
of which are dated August 16, 2007.
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Dated: August 16, 2007
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Please Print:
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Signature
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Name
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Name
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Signature
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Address
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Date:
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Address
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City, State, Zip Code
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Please sign exactly as name appears
hereon. Where shares are held by joint tenants, both should
sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership
name by authorized person.