<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
COACHMEN INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(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):
[X] No fee required.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] 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.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
COACHMEN LOGO
COACHMEN INDUSTRIES, INC.
P. O. BOX 3300
ELKHART, INDIANA 46515
219-262-0123
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 2000
------------------
To the Shareholders of
COACHMEN INDUSTRIES, INC.
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of COACHMEN
INDUSTRIES, INC., an Indiana corporation, will be held at Christiana Creek
Country Club, 116 West Bristol Street, Elkhart, Indiana, on May 4, 2000 at 10:00
A.M., for the following purposes:
1. To elect ten directors of the Company to hold office for the ensuing
year.
2. To approve the Company's 2000 Omnibus Stock Incentive Program.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on March 21, 2000, are
entitled to notice of and to vote at the meeting. Each such 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, please sign, date and
return the enclosed proxy in the enclosed envelope.
By Order of the Board of Directors,
CLAIRE C. SKINNER
Chairman
March 27, 2000
PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD 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.
<PAGE> 3
COACHMEN INDUSTRIES, INC.
P. O. BOX 3300
ELKHART, INDIANA 46515
219-262-0123
------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 2000
------------------
This Proxy Statement is being mailed to shareholders of COACHMEN
INDUSTRIES, INC. (the "Company") on or about March 27, 2000, and is furnished in
connection with the Board of Directors' solicitation of proxies to be used at
the Annual Meeting of Shareholders to be held on May 4, 2000, at the time and
place and for the purposes set forth in the Notice of Annual Meeting of
Shareholders accompanying this Proxy Statement. The shareholder executing the
proxy has the power to revoke it at any time prior to the voting thereof. The
Annual Report to Shareholders for the year 1999 accompanies this Proxy
Statement. Additional copies of the Report may be obtained by writing to the
Secretary of the Company.
The expenses in connection with the solicitation of the enclosed form of
proxy, 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. It is also expected that
solicitation in person or by telephone will be made of some shareholders by
certain directors, officers and employees of the Company without extra
compensation. Also, the Company has retained Innisfree M&A Incorporated to aid
in soliciting proxies, for a fee of $7,500, plus reasonable out-of-pocket
expenses.
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 Annual Meeting, a
quorum means a majority of the outstanding shares entitled to vote. As of the
close of business on March 21, 2000, the record date for shareholders entitled
to vote at the Annual Meeting there were outstanding 15,560,391 shares of Common
Stock, entitled to one vote each. In determining whether a quorum exists at the
Annual 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. A
shareholder may, with respect to the proposal to approve the 2000 Omnibus Stock
Incentive Program (the "2000 Program"), vote for, abstain or vote against the
proposal. Proxies properly executed and received by the Company prior to the
Annual 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 and for approval of the 2000 Program.
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. For
any other matter which may properly come before the meeting, including the
approval of the 2000 Program, approval is obtained if the votes cast in favor
exceed the votes cast in opposition. Accordingly, withholding authority to vote
in the election of Directors, abstaining from voting with respect to the
approval of the 2000 Program and broker non-votes will have no effect on any
matter at the Annual Meeting.
<PAGE> 4
The Board of Directors knows of no other matter which may come up for
action at the Annual Meeting. However, if any other matter properly comes before
the meeting, the persons named in the proxy form enclosed will vote on the
matter in accordance with their judgment.
Shareholders wishing to include proposals in the Company's Proxy Statement
and form of proxy for the next Annual Meeting of Shareholders must submit such
proposals so that they are received by the Secretary of the Company at the
address indicated on page 1 by no later than November 27, 2000.
The Company's Bylaws provide that notice of proposed shareholder
nominations for election of directors must be made in writing and delivered or
mailed by first-class United States mail, postage prepaid, to the Secretary of
the Company not less than 60 days prior to the month and day of the last meeting
of the shareholders called for the election of directors. The notice must
contain information about each proposed nominee, including age, business and
residence addresses and principal occupation, the number of shares of Common
Stock beneficially owned and such other information as would be required to be
included in a proxy statement soliciting proxies for the election of such
proposed nominee. If the Chairman of the meeting of shareholders determines that
a nomination was not made in accordance with the foregoing procedures, such
nomination is void. The advance notice requirement affords the Board of
Directors the opportunity to consider the qualifications of all proposed
nominees and, to the extent deemed necessary or desirable by the Board, inform
shareholders about such qualifications.
For a shareholder to bring other business before the Annual Meeting, but
not have it included in the proxy statement, timely notice must be submitted in
writing, delivered or mailed by first-class United States mail, postage prepaid,
to the Secretary of the Company not less than 60 days prior to the month and day
of mailing of the prior year's proxy statement. The notice must identify the
proposing shareholder and his/her address, and contain a description of the
proposed business and such other information as would be required to determine
the appropriateness of including the proposal in a proxy statement.
2
<PAGE> 5
STOCK OWNERSHIP INFORMATION
The following table sets forth, as of the record date, information
concerning the only parties known to Coachmen 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.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT
OF BENEFICIAL OWNER OWNED OF CLASS
------------------- ------------ --------
<S> <C> <C>
First Pacific Advisors, Inc. 2,650,500 17.0%
11400 West Olympic Blvd., Suite 1200
Los Angeles, California 90064
Brinson Partners, Inc. 1,296,499 8.3%
209 South LaSalle
Chicago, Illinois 60604
J. L. Kaplan Associates, LLC 1,107,150 7.1%
222 Berkeley Street, Suite 2010
Boston, Massachusetts 02116
Dimensional Fund Advisors, Inc. 886,400 5.7%
1299 Ocean Avenue
Santa Monica, California 90401
Thomas H. Corson 576,150 3.7%
Retired Chairman of the Board
P.O. Box 504
Middlebury, Indiana 46540
Dorthy S. Corson 507,540 3.3%
(Wife of Thomas H. Corson)
P.O. Box 504
Middlebury, Indiana 46540
Directors and Executive Officers as a group (18 persons) 1,649,421 10.6%(1)
</TABLE>
- ---------------
(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 Gene E. Stout, Executive Vice President, who owns 26,019 shares
of which 14,000 are held under options exercisable within 60 days of the
record date for the Annual Meeting, James P. Skinner, Senior Vice President,
who owns 52,492 shares of which 12,750 are held under options exercisable
within 60 days of the record date for the Annual Meeting and John T. Trant,
Senior Vice President, who owns 13,550 shares of which 12,750 are held under
options exercisable within 60 days of the record date for the Annual
Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that certain
of the Company's directors, officers and stockholders file with the Securities
and Exchange Commission and the New York Stock Exchange 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, with the requirements during the
fiscal year ended December 31, 1999 by its officers, directors or stockholders.
3
<PAGE> 6
ELECTION OF DIRECTORS
At the Annual Meeting, ten directors constituting the entire Board of
Directors of the Company, are to be elected to hold office until the next Annual
Meeting of Shareholders or until their successors are elected and qualified.
Unless otherwise indicated on the proxy form, the authority conferred by the
proxy will be used for the purpose of voting in favor of the ten nominees listed
below. If any such nominee shall 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 Board of Directors has no reason to
believe that any such nominee will be unable to serve. The following information
concerning the nominees and the number of shares of Common Stock of the Company
owned of record and beneficially as of March 21, 2000 has been furnished by the
nominees:
<TABLE>
<CAPTION>
TOTAL NUMBER
OF SHARES
YEAR FIRST BENEFICIALLY OWNED
ELECTED AS OF
NAME AND AGE PRINCIPAL OCCUPATION(1) DIRECTOR MARCH 21, 2000
------------ ----------------------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Claire C. Skinner (45) Chairman of the Board and Chief 1993 268,252 (1.7%) (2)(3)
Executive Officer (Daughter of
Thomas H. Corson and Niece of
Keith D. Corson)
Keith D. Corson (64) President and Chief Operating 1991 93,900 (2)(3)(4)
Officer (Brother of Thomas H.
Corson)
Thomas H. Corson (72) Retired Chairman of the Board of 1965 1,083,690 (7.0%) (3)
the Company
Geoffrey B. Bloom (58) Chairman & CEO, Wolverine World 1999 1,000 (4)
Wide
Robert J. Deputy (61) President, Godfrey Marine, Inc. 1998 13,000 (4)
Donald W. Hudler (65) Chairman & CEO, Saturn Retail 1999 1,000 (4)
Enterprises, Inc.
William P. Johnson (58) Chairman of the Board of Goshen 1978 16,315 (4)
Rubber Co., Inc.
Philip G. Lux (71) Retired President of the Company 1979 96,136 (4)
Edwin W. Miller (54) Chairman & CEO, Millenium 1998 1,900 (4)
Capital Group
Fredrick M. Miller (44) Partner, Dykema Gossett PLLC 1999 -- --
</TABLE>
- ---------------
(1) All of the nominees have held the positions set opposite their names for
more than the past five years except for C.C. Skinner, G.B. Bloom, D.W.
Hudler and E.W. Miller. Ms. Skinner was an Executive Vice President of the
Company prior to being elected Vice Chairman on May 4, 1995, and Chairman
and CEO on August 1, 1997. Prior to 1996 Mr. Bloom was President and Chief
Executive Officer of Wolverine World Wide, Inc. since 1993. Mr. Hudler was
Chairman, President and CEO of Saturn Corp. GM from April 1, 1997 to
December 31, 1998. Prior to that he was President and CEO of Saturn GM.
Prior to Mr. Miller's current position he was a retired Financial Vice
President and Treasurer, Eli Lilly and Company.
(2) Includes 30,000 shares held under options exercisable within 60 days of the
record date for the Annual Meeting by C.C. Skinner, and 25,000 shares by
K.D. Corson.
(3) Includes shares, as to which beneficial ownership is disclaimed, held by or
for the benefit of family members as follows: C.C. Skinner, 52,492 shares,
K.D. Corson, 36,400 shares and T.H. Corson, 507,540 shares.
(4) Less than 1.0%.
4
<PAGE> 7
PROPOSAL TO APPROVE THE
2000 OMNIBUS STOCK INCENTIVE PROGRAM
BACKGROUND
The Board of Directors is proposing for shareholder approval the 2000
Omnibus Stock Incentive Program (the "Plan"). The purpose of the Plan is to
enable the Company to offer non-employee directors, officers and other key
employees of the Company and its subsidiaries performance-based incentives and
other equity interests in the Company, thereby attracting, retaining and
rewarding such persons and strengthening the mutuality of interests between such
persons and the Company's shareholders. Reference is made to Exhibit A for a
complete statement of the provisions of the Plan which are summarized below.
In structuring the Plan, the Board of Directors sought to provide for a
variety of awards that could be flexibly administered to carry out the purposes
of the Plan. This authority will permit the Company to keep pace with changing
developments in management compensation and make the Company competitive with
those companies that offer creative incentives to attract and keep key
management employees. The flexibility of the Plan will allow the Company to
respond to changes in tax laws, accounting rules, securities regulations and
other rules regarding benefit plans as well as any other changed circumstances.
The Plan grants the administrator's discretion in establishing the terms and
restrictions deemed appropriate for particular awards as circumstances warrant.
Shareholder approval of the Plan will also permit the performance-based
awards discussed below to qualify for deductibility under Section 162(m) of the
Internal Revenue Code.
SHARES AVAILABLE
The Plan makes available for awards 1,000,000 shares of Common Stock, plus
all shares remaining under the Company's now terminated 1994 Omnibus Stock
Incentive Plan (approximately 108,000 shares). All of these shares may, but need
not, be issued pursuant to the exercise of incentive stock options. The maximum
number of shares which may be awarded to any participant in any year during the
term of the Plan is 500,000 shares. If there is a lapse, expiration, termination
or cancellation of any option or right prior to the issuance of shares or the
payment of the equivalent thereunder, or if shares are issued and thereafter are
reacquired by the Company pursuant to rights reserved upon issuance thereof,
those shares may again be used for new awards under the Plan.
ADMINISTRATION
The Plan provides for administration by a committee to be comprised of
either the Compensation Committee of the Board or another committee designated
by the Board (the "Committee"). Among the Committee's powers are the authority
to interpret the Plan, establish rules and regulations for its operation, select
officers and other key employees of the Company and its subsidiaries to receive
awards, and determine the form, amount and other terms and conditions of awards.
The Committee also has the power to modify or waive restrictions on awards, to
amend awards and to grant extensions and accelerations of awards.
ELIGIBILITY FOR PARTICIPATION
Officers and other key employees of the Company or any of its subsidiaries,
as well as non-employee directors, are eligible to participate in the Plan. The
selection of participants from eligible employees is within the discretion of
the Committee. The estimated number of employees who are eligible to participate
in the Plan is 400.
TYPES OF AWARDS
The Plan provides for the grant of any or all of the following types of
awards: (1) stock options, including incentive stock options and nonqualified
stock options; (2) stock appreciation rights; (3) stock awards,
5
<PAGE> 8
including restricted stock; and (4) performance awards. Awards may be granted
singly, in combination, or in tandem as determined by the Committee.
STOCK OPTIONS
Under the Plan, the Committee may grant awards in the form of options to
purchase shares of the Common Stock. The Committee will, with regard to each
stock option, determine the number of shares subject to the option, the manner
and time of the option's exercise and vesting, and the exercise price per share
of stock subject to the option. The exercise price of a stock option will not be
less than 100 percent of the fair market value of the Coachmen Stock on the date
the option is granted. The option price may, at the discretion of the Committee,
be paid by a participant in cash, shares of Common Stock owned by a participant
for at least six months, or a combination thereof or such other consideration as
the Committee may deem appropriate.
STOCK APPRECIATION RIGHT (SARS)
The Plan authorizes the Committee to grant an SAR either in tandem with a
stock option or independent of a stock option. An SAR is a right to receive a
payment equal to the appreciation in market value of a stated number of shares
of Common Stock from the exercise price to the market value on the date of its
exercise.
A tandem SAR may be granted either at the time of the grant of the related
stock option or at any time thereafter during the term of the stock option. Upon
the exercise of a stock option as to some or all of the shares covered by the
award, the related tandem SAR will be cancelled automatically to the extent of
the number of shares acquired through the stock option exercise.
STOCK AWARDS
The Plan authorizes the Committee to grant awards in the form of restricted
or unrestricted shares of Common Stock. Stock awards will be subject to such
terms, conditions, restrictions, and/or limitations, if any, as the Committee
deems appropriate including, but not by way of limitation, restrictions on
transferability, continued employment and performance goals established by the
Committee over a designated period of time.
PERFORMANCE AWARDS
The Plan allows for the grant of performance awards which may take the form
of cash, performance units, performance shares, or any combination thereof.
Performance awards will be contingent upon the attainment over a period to be
determined by the Committee of certain performance goals. The length of the
performance period, the performance goals to be achieved and the measure of
whether and to what degree the goals have been achieved will be determined by
the Committee. Amounts earned under the performance awards may be paid in cash
or shares of Common Stock. The maximum dollar value payable with respect to
Performance Awards to any participant in any fiscal year of the Company shall
not exceed $500,000.
PERFORMANCE GOALS
Performance goals shall be based on one or more business criteria,
including, but not limited to, earnings per share, return on assets or equity,
economic value added, market share, cash flow, operating costs and stock price,
as determined by the Committee from time to time.
OTHER TERMS OF AWARDS
The plan provides that awards shall not be transferable otherwise than by
will or the laws of descent and distribution. The Committee shall determine the
treatment to be afforded to a participant in the event of termination of
employment for any reason including death, disability or retirement.
Notwithstanding the foregoing, the Committee may permit the transferability of
an award by a participant to members of the participant's immediate family or
trusts or family partnerships for the benefit of the participant.
6
<PAGE> 9
Upon the grant of any award, the Committee may, by way of an award notice
or otherwise, establish the other terms, conditions, restrictions and/or
limitations covering the grant of the award not inconsistent with the Plan. No
award shall be made more than ten years after the date of approval of the Plan
by the Company shareholders. The Board of Directors reserves the right to amend,
suspend or discontinue the Plan at any time, subject to the rights of
participants with respect to any outstanding awards.
The Plan contains provisions for equitable adjustment of awards in the
event of a merger, consolidation, or reorganization, or issuance of shares
without new consideration to the Company.
FEDERAL TAX TREATMENT
Under current law, the following are the U.S. federal income tax
consequences generally arising with respect to awards under the Plan.
A participant who is granted an incentive stock option does not recognize
any taxable income at the time of the grant or at the time of exercise.
Similarly, the Company is not entitled to any deduction at the time of the grant
or at the time of exercise. If the participant makes no disposition of the
shares acquired pursuant to an Incentive Stock Option before the later of two
years from the date of grant and one year from the date of exercise, any gain or
loss realized on a subsequent disposition of the shares will be treated as a
long-term capital gain or loss. Under such circumstances, the Company will not
be entitled to any deduction for federal income tax purposes.
If a participant sells incentive stock option shares before having held
them for the requisite one-year and two-year holding periods, the participant
will recognize ordinary income to the extent of the lessor of (i) the gain
realized upon the sale, or (ii) the excess of the fair market value of the
shares on the date of exercise over the exercise price. Any additional gain will
be treated as long-term or short-term capital gain, depending on how long the
option shares were held. The Company will be entitled to a tax deduction in an
amount equal to the ordinary income recognized by the participant.
A participant who is granted a non-qualified stock option will not have
taxable income at the time of grant, but will have taxable income at the time of
exercise equal to the difference between the exercise price of the shares and
the market value of the shares on the date of exercise. The Company is entitled
to a tax deduction for the same amount.
The grant of an SAR will produce no U.S. federal tax consequences for the
participant or the Company. The exercise of an SAR results in taxable income to
the participant, equal to the difference between the exercise price of the
shares and the market price of the shares on the date of exercise, and a
corresponding tax deduction to the Company.
A participant who has been granted an award of restricted shares of Common
Stock will not realize taxable income at the time of the grant, and the Company
will not be entitled to a tax deduction at the time of the grant, unless the
participant makes an election to be taxed at the time of the award. When the
restrictions lapse, the participant will recognize taxable income in an amount
equal to the excess of the fair market value of the shares at such time over the
amount, if any, paid for such shares. The Company will be entitled to a
corresponding tax deduction.
The grant of an unrestricted stock award will produce immediate tax
consequences for both the participant and the Company. The participant will be
treated as having received taxable compensation in an amount equal to the then
fair market value of the Common Stock awarded. The Company will receive a
corresponding tax deduction.
A participant who has been granted performance awards will not realize
taxable income at the time of the grant, and the Company will not be entitled to
a tax deduction at such time. A participant will realize ordinary income at the
time the award is paid equal to the amount of cash paid or the value of the
shares delivered and the Company will have a corresponding tax deduction.
7
<PAGE> 10
OTHER INFORMATION
A new benefits table is not provided because no grants have been made under
the Plan and all benefits are discretionary. The closing price of the Common
Stock as reported on the New York Stock Exchange Composite Transactions Tape for
March 21, 2000 was $14.1875 per share.
Approval of the Plan requires that the votes cast in favor exceed the votes
cast in opposition. Abstentions will not count as a vote against the proposal,
and broker non-votes will have no effect on the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 2000 OMNIBUS STOCK
INCENTIVE PROGRAM.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------
ANNUAL COMPENSATION SECURITIES RESTRICTED
NAME AND ------------------- UNDERLYING STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(#)(2) AWARDS(3) COMPENSATION(4)
------------------ ---- -------- -------- ------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Claire C. Skinner 1999 $270,000 $270,000 10,000 $ $8,454
Chairman of the 1998 252,000 252,000 8,231
Board and Chief 1997 217,000 223,920 30,000 7,552
Executive Officer
Keith D. Corson 1999 235,000 235,000 10,000 9,339
President and Chief 1998 220,000 220,000 9,145
Operating Officer 1997 210,000 210,000 20,000 7,691
Gene E. Stout 1999 151,000 90,600 5,000 7,069
Executive Vice 1998 144,000 86,400 6,000 26,850 6,307
President, Corporate 1997 138,000 87,800 5,000 5,202
Development
James P. Skinner 1999 130,000 48,750 5,000 5,182
Senior Vice President, 1998 125,000 56,013 5,000 26,850 5,165
Operations Development 1997 105,000 36,120 4,000 3,853
And Parts & Supply
(Husband of Claire C.
Skinner)
John T. Trant 1999 130,000 63,778 5,000 610
Senior Vice President, 1998 125,000 51,180 5,000 26,850 617
Executive Vice 1997 105,000 35,343 4,000 1,963
President, Housing
Group
</TABLE>
- ---------------
(1) The Company has incentive bonus plans for both designated officers and key
management personnel. Under these plans and subject to certain limitations
and exceptions, bonus payments are made from an amount equal to a maximum of
20% of the result reached by subtracting 6% of the previous year-end net
worth from annual earnings, before the bonuses described herein and income
taxes.
(2) The options are for a term of five years and become exercisable at the rate
of 25% per year at the end of the first year. The option plan permits the
optionee to pay for exercise with common stock and to pay withholding tax
with shares acquired on exercise.
(3) The stock awards vest over a four-year period at the rate of 25% per year at
the end of the first year. No dividends are paid on the unvested portion of
the awards. On December 31, 1999, the remaining value of Gene E. Stout's,
James P. Skinner's and John T. Trant's awards were $13,613 each.
8
<PAGE> 11
(4) The Compensation Committee has approved executive deferred compensation
agreements for certain corporate and subsidiary officers. These agreements
provide monthly payments to executives upon retirement and provide for
monthly payments to the executive's beneficiaries should the executive die
prematurely. The benefits are funded by the Company's purchase of insurance
on the lives of the executive officers. These agreements provide for
twenty-year payments upon retirement and are fully funded by the life
insurance purchased. The amounts in this column represent the Company's
contributions under the deferred compensation plan and interest earned above
120% of the applicable federal rate.
STOCK OPTION GRANTS TABLE
The following table shows information with respect to options for the
Company's Common Stock (without par value) granted under the Company's 1994
Omnibus Stock Incentive Program.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
% OF TOTAL VALUE
OPTIONS OPTIONS GRANTED EXERCISE EXPIRATION --------------------
GRANTED(#) TO EMPLOYEES PRICE DATE 5% 10%
---------- --------------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Claire C. Skinner.......... 10,000 2.5 $24.875 1/28/04 $68,725 $151,864
Keith D. Corson............ 10,000 2.5 24.875 1/28/04 68,725 151,864
Gene E. Stout.............. 5,000 1.3 24.875 1/28/04 34,363 75,932
James P. Skinner........... 5,000 1.3 24.875 1/28/04 34,363 75,932
John T. Trant.............. 5,000 1.3 24.875 1/28/04 34,363 75,932
</TABLE>
STOCK OPTION EXERCISES AND VALUES TABLE
The following table shows information with respect to options for the
Company's Common Stock either exercised or having value outstanding under the
Company's 1994 Omnibus Stock Incentive Program.
AGGREGATED OPTION EXERCISES IN FISCAL 1999
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
OPTIONS EXERCISED UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
IN 1999 OPTIONS AT DECEMBER 31, IN-THE-MONEY OPTIONS AT
--------------------------- 1999 DECEMBER 31, 1999*
SHARES ACQUIRED VALUE --------------------------- ---------------------------
ON EXERCISE REALIZED* EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Claire C. Skinner.... 10,000 $145,625 32,500 27,500 $107,813 $12,813
Keith D. Corson...... 20,000 208,750 17,500 22,500 38,438 12,813
Gene E. Stout........ 4,000 60,950 13,500 13,500 57,750 7,688
James P. Skinner..... 4,000 58,250 11,750 12,250 50,813 7,688
John T. Trant........ 500 6,844 8,750 12,250 30,000 7,688
</TABLE>
- ---------------
* Market value of the underlying securities at exercise date or year-end as the
case may be, minus the exercise price of the options.
CHANGE IN CONTROL AGREEMENTS
The Company has entered into Change in Control Agreements with certain key
employees, including the named executive officers. Each Change in Control
Agreement provides for the payment of benefits in the event that, within a
three-year period following the date of a "change in control", (i) the
executive's employment is terminated by the Company without "cause", or (ii) the
executive terminates employment for "good reason". The terms "change in
control", "cause" and "good reason" are defined in the Agreements. The amount of
the benefits payable to an executive entitled thereto would be an amount equal
to accrued salary through the termination date and target annual bonus, plus
either two or three times the sum of (i) the
9
<PAGE> 12
executive's annual base salary at the rate in effect at the time of the change
in control or upon termination, whichever is greater, plus (ii) the executive's
target annual bonus. The Agreements also provide for the full vesting of an
executive's 401(k) account and a matching contribution for a two or three-year
period, as well as the acceleration of vesting of any outstanding options or
shares of restricted stock and the continuation of certain fringe benefits for a
two or three-year period. Certain Change in Control Agreements provide a gross-
up of the amount of benefits provided to hold the executives harmless from the
impact of any excise tax imposed under the "parachute payment" provisions of the
Internal Revenue Code. The term of the Agreements shall extend through the
executive's term of employment, or the third anniversary of the date of a change
in control of the Company, if sooner.
BOARD OF DIRECTORS
The Company's Board of Directors has an Audit Committee consisting of
William P. Johnson, Philip G. Lux, and Edwin W. Miller. The functions of the
Audit Committee are to review and approve in advance the scope of the annual
audit by the Company's independent public accountants, to review internal audit
procedures, to review all matters having a material effect upon the Company's
financial operations and to discuss fees paid to the Company's independent
public accountants. The committee met three times in 1999.
The Board of Directors has a Compensation Committee consisting of Philip G.
Lux, William P. Johnson and Robert J. Deputy. This committee reviews and
approves compensation plans for all senior corporate officers, stock option
grants and profit sharing awards. The committee met one time in 1999.
The Board of Directors has a Nominating Committee consisting of Thomas H.
Corson, Robert J. Deputy, and William P. Johnson. This committee selects and
nominates candidates for Board membership. The committee met three times in
1999. The Nominating Committee will consider director nominees recommended by
shareholders if the recommendations are submitted in writing to the committee in
accordance with the Company's Bylaws.
The Board of Directors had four meetings in 1999. All directors attended at
least three meetings. Non-employee directors are paid a fee of $8,000 annually,
plus $500 per meeting attended. They also receive $1,000 per year per committee
served on, plus $500 per meeting held on days other than regular board meetings.
Employee directors receive no compensation as such.
In addition, each Non-employee Director of the Company, with at least one
full year of service as a director, automatically receives under the Plan a
one-time restricted stock award for 4,000 shares of Common Stock which will vest
at the rate of 400 shares per year over a ten-year period upon the attainment of
an after-tax return on average shareholder equity of fifteen percent or greater.
If in any year, the fifteen percent return on equity is not attained, the
restricted share award for that year is forfeited. All of the incumbent
directors have received the restricted share award, except for Geoffrey B.
Bloom, Donald W. Hudler and Fredrick M. Miller, who will be eligible to receive
their awards in 2000.
10
<PAGE> 13
COMPENSATION COMMITTEE REPORT
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.
COMPENSATION PHILOSOPHY
In designing its compensation programs, the Company follows its belief that
compensation should reflect the value created for shareholders while supporting
the Company's strategic goals. In doing so, the compensation programs reflect
the following themes:
- Compensation should be meaningfully related to the value created for
shareholders.
- Compensation programs should support the short- and long-term strategic
goals and objectives of the Company.
- Compensation programs should reflect and promote the Company's values,
and reward individuals for outstanding contributions to the Company's
success.
- Short- and long-term compensation play a critical role in attracting and
retaining well qualified executives.
- Federal tax law imposes a $1 million limit on the tax deduction for
certain executive compensation payments. Because the total compensation
for executive officers is significantly below the $1 million threshold,
the Compensation Committee has not had to address the issues relative
thereto.
PAY MIX AND MEASUREMENT
Coachmen's executive compensation is based on three components, each of
which is intended to serve the overall compensation philosophy.
BASE SALARY levels for the Company's executive officers are competitively
set relative to companies in the recreational vehicle and manufactured housing
industries and other comparable companies. In determining salaries, the
Committee also takes into account individual experience and performance. The
base salary of the current Chairman and Chief Executive Officer was $217,000 in
1997, $252,000 in 1998 and $270,000 in 1999.
ANNUAL INCENTIVES for executives are intended to reflect the Company's
belief that management's contribution to shareholder returns comes from
maximizing earnings and the quality of those earnings. Accordingly, the annual
incentive compensation plan is funded from a pre-set portion of the Company's
net income which exceeds a threshold return on equity. See footnote 1 to Summary
Compensation Table. The Compensation Committee believes that this program
provides an excellent link between the value created for shareholders and the
incentives paid to executives. The current Chairman and CEO received an annual
incentive of $223,920 in 1997, $252,000 in 1998 and $270,000 in 1999.
In addition to the incentive compensation described above, certain
employees engaged in running specific lines of business receive incentive pay
which is tied to the business results of such lines of business. Accordingly,
Ms. Skinner, prior to becoming Chairman, was entitled to participate in an
incentive pool funded by the profits of the business line she managed, after
allowing the company to achieve what the Committee deemed to be an acceptable
rate of return from the business. In addition, she received an incentive bonus
based on the return on assets earned by each of the business units she oversaw.
LONG-TERM INCENTIVES provided through grants of stock options and stock
awards to the named executives and others, are intended to retain and motivate
executives to improve long-term stock market performance. Stock options are
granted at the prevailing market price and will only have value if the Company's
stock price increases. Generally, grants vest in equal amounts annually over
four years. Executives must be employed by the Company at the time of vesting in
order to exercise the options.
11
<PAGE> 14
Stock options are granted to the current Chairman and CEO, and to other
executives, primarily based on the executive's ability to influence the
Company's long-term growth and profitability. In 1997 the CEO was granted an
option for 10,000 shares at an option price of $20.875 and an option for 20,000
shares at $16.625 and, in 1999, 10,000 shares at $24.875.
Since all options are granted at the current market price, the value of the
option bears a direct relationship to the Company's stock price and is an
effective incentive for executives to create value for shareholders. The
Committee therefore views stock options as an important component of its
long-term performance-based compensation philosophy.
<TABLE>
<S> <C>
Philip G. Lux, Chairman, William P. Johnson, Member
Compensation Committee Robert J. Deputy, Member
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Philip G. Lux was President and Chief Operating Officer of the Company
prior to his retirement on December 31, 1991.
12
<PAGE> 15
PERFORMANCE GRAPH
The stock price performance shown on the graph below is not necessarily
indicative of future price performance. The companies comprising the Peer Group
are Fleetwood Enterprises, Inc., Skyline Corporation, Thor Industries, Inc. and
Winnebago Industries, Inc. The total return of each company in the Peer Group
has been weighted according to Coachmen's stock market capitalization.
COMPARATIVE FIVE-YEAR TOTAL RETURNS*
COACHMEN, S&P 500, PEER GROUP
(PERFORMANCE RESULTS THROUGH 12/31/99)
[PERFORMANCE CHART]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COACHMEN INDUSTRIES, INC 100.00 143.86 379.11 291.08 357.47 208.33
S&P 500 INDEX 100.00 137.58 169.17 225.60 290.08 351.12
PEER GROUP 100.00 122.47 137.08 198.60 196.96 162.60
</TABLE>
Assumes $100 invested at the close of trading on the last trading day preceding
the first day of the fifth preceding fiscal year in Coachmen common stock, S&P
500, and Peer Group. *Cumulative total return assumes reinvestment of dividends.
13
<PAGE> 16
ACCOUNTING INFORMATION
The Company's certified public accountants for the year 1999 were
PricewaterhouseCoopers LLP and that firm has been selected as the Company's
accountants for fiscal 2000. Such accounting firm is expected to have a
representative at the Annual Meeting of Shareholders and will be available to
respond to appropriate questions at that time and have an opportunity to make a
statement if they desire to do so.
By Order of the Board of Directors,
CLAIRE C. SKINNER
Chairman
Dated: March 27, 2000
14
<PAGE> 17
EXHIBIT A
COACHMEN INDUSTRIES, INC.
2000 OMNIBUS STOCK INCENTIVE PROGRAM
1. Purpose. The Coachmen Industries, Inc. 2000 Omnibus Stock Incentive
Program (the "Plan") is intended to provide incentives which will attract and
retain highly competent persons as directors, officers and key employees of
Coachmen Industries, Inc. and its subsidiaries (the "Company"), by providing
them opportunities to acquire shares of Common Stock of the Company ("Common
Stock") or to receive monetary payments based on the value of such shares
pursuant to the Benefits described herein.
2. Administration. The Plan will be administered by the Compensation
Committee of the Board of Directors or another committee (the "Committee")
appointed by the Board of Directors of the Company from among its members which
shall be comprised of not less than two members of the Board provided, however,
that as long as the Common Stock of the Company is registered under the
Securities Exchange Act of 1934, each member of the Committee must qualify as a
"Non-employee Director" within the meaning of Securities and Exchange Commission
Regulation sec. 240.16b-3. The Committee is authorized, subject to the
provisions of the Plan, to establish such rules and regulations as it deems
necessary for the proper administration of the Plan and to make such
determinations and interpretations and to take such action in connection with
the Plan and any Benefits (as defined below) granted hereunder as it deems
necessary or advisable. All determinations and interpretations made by the
Committee shall be binding and conclusive on all participants and their legal
representatives. No member of the Board, no member of the Committee and no
employee of the Company shall be liable for any act or failure to act hereunder,
by any other member or employee or by any agent to whom duties in connection
with the administration of this Plan have been delegated or, except in
circumstances involving his or her bad faith, gross negligence or fraud, for any
act or failure to act by the member or employee.
3. Participants. Participants will consist of all Non-employee Directors of
the Company and such officers and key employees of the Company as the Committee
in its sole discretion determines to be significantly responsible for the
success and future growth and profitability of the Company and whom the
Committee may designate from time to time to receive Benefits under the Plan.
Designation of the participant in any year shall not require the Committee to
designate such person to receive a Benefit in any other year or, once
designated, to receive the same type or amount of Benefit as granted to the
participant in any year. The Committee shall consider such factors as it deems
pertinent in selecting participants and in determining the type and amount of
their respective Benefits.
4. Type of Benefits. Benefits under the Plan may be granted in any one or a
combination of (a) Stock Options, (b) Stock Appreciation Rights, (c) Stock
Awards, and (d) Performance Awards, all as described below (collectively
"Benefits").
5. Common Stock Reserved under the Plan. There is hereby reserved for
issuance under the Plan an aggregate of 1,000,000 shares of Common Stock, which
may be authorized and unissued or treasury, plus any shares of Common Stock
which as of the effective date of this Plan are authorized for award under the
Company's Key Employees Incentive Stock Option Plan and the 1994 Omnibus Stock
Incentive Program (the "Prior Plans") and which have not been awarded, plus any
shares of Common Stock from the Prior Plans if there is a lapse, forfeiture,
expiration or termination of any such award. All of the reserved shares may, but
need not be issued pursuant to the exercise of Incentive Stock Options. The
maximum number of shares of Common Stock which may be available for the award of
Benefits to any participant in any fiscal year of the Company shall not exceed
500,000 shares, subject to the adjustment provisions in Section 12. Any shares
subject to Stock Options or Stock Appreciation Rights or issued under such
options or rights or as Stock Awards may thereafter be subject to new options,
rights or awards under this Plan if there is a lapse, forfeiture, expiration or
termination of any such options or rights prior to issuance of the shares or the
payment of the equivalent or if shares are issued under such options or rights
or as such awards, and thereafter are reacquired by the Company pursuant to
rights reserved by the Company upon issuance thereof.
A-1
<PAGE> 18
6. Stock Options. Stock Options will consist of awards from the Company, in
the form of agreements, which will enable the holder to purchase a specific
number of shares of Common Stock, at set terms and at a fixed purchase price.
Stock Options may be "incentive stock options" within the meaning of Section 422
of the Internal Revenue Code ("Incentive Stock Options") or Stock Options which
do not constitute Incentive Stock Options ("Nonqualified Stock Options"). The
Committee will have the authority to grant to any participant one or more
Incentive Stock Options, Nonqualified Stock Options, or both types of Stock
Options, (in each case with or without Stock Appreciation Rights). Each Stock
Option shall be subject to such terms and conditions consistent with the Plan as
the Committee may impose from time to time, subject to the following
limitations:
(a) Exercise Price. Each Stock Option granted hereunder shall have
such per-share exercise price as the Committee may determine at the date of
grant, provided, however, that the per-share exercise price for Incentive
Stock Options shall not be less than 100% of the Fair Market Value of the
Common Stock on the date the option is granted and provided further that
the per-share exercise price for Nonqualified Stock Options shall not be
less than 90% of the Fair Market Value of the Common Stock on the date the
option is granted.
(b) Payment of Exercise Price. The option exercise price may be paid
by check or, in the discretion of the Committee, by the delivery of shares
of Common Stock of the Company then owned by the participant or
certification of such ownership; provided, however, that option agreements
may provide that payment of the exercise price by delivery of shares of
Common Stock of the Company then owned by the participant or certification
may be made only if such payment does not result in a charge to earnings
for financial accounting purposes as determined by the Committee. In the
discretion of the Committee, payment may also be made by delivering a
properly executed exercise notice to the Company together with a copy of
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds to pay the exercise price. To facilitate
the foregoing, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms.
(c) Exercise Period. Stock Options granted under the Plan shall be
exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee.
(d) Limitations on Incentive Stock Options. Incentive Stock Options
may be granted only to participants who are employees of the Company or one
of its subsidiaries (within the meaning of Section 424(f) of the Internal
Revenue Code) at the date of grant. The aggregate Fair Market Value
(determined as of the time the option is granted) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time
by a participant during any calendar year (under all option plans of the
Company) shall not exceed $100,000. Incentive Stock Options may not be
granted to any participant who, at the time of grant, owns stock possessing
(after the application of the attribution rules of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of
stock of the Company, unless the option price is fixed at not less than
110% of the Fair Market Value of the Common Stock on the date of grant and
the exercise of such option is prohibited by its terms after the expiration
of five years from the date of grant of such option.
7. Stock Appreciation Rights. The Committee may, in its discretion, grant
Stock Appreciation Rights to the holders of any Stock Options granted hereunder.
In addition, Stock Appreciation Rights may be granted independently of and
without relation to options. Each Stock Appreciation Right shall be subject to
such terms and conditions consistent with the Plan as the Committee shall impose
from time to time, including the following:
(a) A Stock Appreciation Right relating to a Nonqualified Stock Option
may be made part of such option at the time of its grant or at any time
thereafter up to twelve months prior to its expiration, and a Stock
Appreciation Right relating to an Incentive Stock Option may be made part
of such option only at the time of its grant.
(b) Each Stock Appreciation Right will entitle the holder to elect to
receive the appreciation in the Fair Market Value of the shares subject
thereto up to the date the right is exercised. In the case of a right
A-2
<PAGE> 19
issued in relation to a Stock Option, such appreciation shall be measured
from not less than the option price and in the case of a right issued
independently of any Stock Option, such appreciation shall be measured from
not less than 90% of the Fair Market Value of the Common Stock on the date
the right is granted. Payment of such appreciation shall be made in cash or
in Common Stock, or a combination thereof, as set forth in the award, but
no Stock Appreciation Right shall entitle the holder to receive, upon
exercise thereof, more than the number of shares of Common Stock (or cash
of equal value) with respect to which the right is granted.
(c) Each Stock Appreciation Right will be exercisable at the time and
to the extent set forth therein, but no Stock Appreciation Right may be
exercisable earlier than twelve months after the date it was granted or
later than the earlier of (i) the term of the related option, if any, or
(ii) ten years after it was granted. Exercise of a Stock Appreciation Right
shall reduce the number of shares issuable under the Plan (and the related
option, if any) by the number of shares with respect to which the right is
exercised.
8. Stock Awards. Stock Awards will consist of Common Stock transferred to
participants without other payments therefor as additional compensation for
services to the Company. Stock Awards shall be subject to such terms and
conditions as the Committee determines appropriate, including, without
limitation, restrictions on the sale or other disposition of such shares, the
right of the Company to reacquire such shares for no consideration upon
termination of the participant's employment within specified periods, and
conditions requiring that the shares be earned in whole or in part upon the
achievement of performance goals established by the Committee over a designated
period of time. The Committee may require the participant to deliver a duly
signed stock power, endorsed in blank, relating to the Common Stock covered by
such an Award. The Committee may also require that the stock certificates
evidencing such shares be held in custody until the restrictions thereon shall
have lapsed. The Stock Award shall specify whether the participant shall have,
with respect to the shares of Common Stock subject to a Stock Award, all of the
rights of a holder of shares of Common Stock of the Company, including the right
to receive dividends and to vote the shares.
9. Performance Awards.
(a) Performance Awards may be granted to participants at any time and
from time to time, as shall be determined by the Committee. The Committee
shall have complete discretion in determining the number, amount and timing
of awards granted to each participant. Such Performance Awards may take the
form of, as determined by the Committee, including without limitation,
cash, shares of Common Stock, performance units and performance shares, or
any combination thereof. Performance Awards may be awarded as short-term or
long-term incentives. The Committee shall set performance goals at its
discretion which, depending on the extent to which they are met, will
determine the number and/or value of Performance Awards that will be paid
out to the participants, and may attach to such Performance Awards one or
more restrictions. Performance goals may be based upon, without limitation,
Company-wide, divisional, project team, and/or individual performance.
(b) The Committee shall have the authority at any time to make
adjustments to performance goals for any outstanding Performance Awards
which the Committee deems necessary or desirable unless at the time of
establishment of goals the Committee shall have precluded its authority to
make such adjustments. However, the Committee may not make any adjustment
to a performance goal if such adjustment would result in increased
compensation to a "covered employee" within the meaning of Section 162(m)
of the Code.
(c) Payment of earned Performance Awards shall be made in accordance
with terms and conditions prescribed or authorized by the Committee. The
participant may elect to defer, or the Committee may require the deferral
of, the receipt of Performance Awards upon such terms as the Committee
deems appropriate.
A-3
<PAGE> 20
10. Change in Control. In the event of a change in control of the Company,
all outstanding stock options and stock appreciation rights shall become
immediately exercisable, all stock awards shall immediately vest and all
performance goals shall be deemed fully achieved. For these purposes, change in
control shall mean the occurrence of any of the following events, as a result of
one transaction or a series of transactions:
(a) any "person" (as that term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, but excluding the Company, its
affiliates and any qualified or nonqualified plan maintained by the Company
or its affiliates) becomes the "beneficial owner" (as defined in Rule 13d-3
promulgated under such Act), directly or indirectly, of securities of the
Company representing more than 20% of the combined voting power of the
Company's then outstanding securities;
(b) during a period of 24 months, a majority of the Board of Directors
of the Company ceases to consist of the existing membership or successors
nominated by the existing membership or their similar successors;
(c) shareholder approval of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than sixty percent (60%) of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(d) shareholder approval of either (A) a complete liquidation or
dissolution of the Company or (B) a sale or other disposition of all or
substantially all of the assets of the Company, or a transaction having a
similar effect.
11. Performance Goals. Stock Awards and Performance Awards may be made
subject to the attainment of performance goals relating to one or more business
criteria within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended, including, but not limited to, earnings per share, return on
assets or equity, economic value added, market share, cash flow, operating
costs, and stock price, as determined by the Committee from time to time.
However, the Committee may not in any event increase the amount of compensation
payable to a "covered employee" within the meaning of Section 162(m) of the Code
upon the attainment of a performance goal.
12. Adjustment Provisions.
(a) If the Company shall at any time change the number of issued
shares of Common Stock without new consideration to the Company (such as by
stock dividend, stock split, recapitalization, reorganization, exchange of
shares, liquidation, combination or other change in corporate structure
affecting the Common Stock) the total number of shares available for
Benefits under this Plan shall be appropriately adjusted and the number of
shares covered by each outstanding Benefit and the reference price or Fair
Market Value for each outstanding Benefit shall be adjusted so that the net
value of such Benefit shall not be changed.
(b) In the case of any sale of assets, merger, consolidation,
combination or other corporate reorganization or restructuring of the
Company with or into another corporation which results in the outstanding
Common Stock being converted into or exchanged for different securities,
cash or other property, or any combination thereof (an "Acquisition"),
subject to the provisions of this Plan and any limitation applicable to the
Benefit:
(i) any participant to whom a Stock Option has been granted shall
have the right thereafter and during the term of the Stock Option, to
receive upon exercise thereof the Acquisition Consideration (as defined
below) receivable upon the Acquisition by a holder of the number of
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<PAGE> 21
shares of Common Stock which might have been obtained upon exercise of
the Stock Option or portion thereof, as the case may be, immediately
prior to the Acquisition; or
(ii) any participant to whom a Stock Appreciation Right has been
granted shall have the right thereafter and during the term of such
right to receive upon exercise thereof the difference on the exercise
date between the aggregate Fair Market Value of the Acquisition
Consideration receivable upon such acquisition by a holder of the number
of shares of Common Stock which are covered by such right and the
aggregate reference price of such right.
The term "Acquisition Consideration" shall mean the kind and amount of
securities, cash or other property or any combination thereof receivable in
respect of one share of Common Stock upon consummation of an Acquisition.
(c) Notwithstanding any other provision of this Plan, the Committee
may authorize the issuance, continuation or assumption of Benefits or
provide for other equitable adjustments after changes in the Common Stock
resulting from any other merger, consolidation, sale of assets, acquisition
of property or stock, recapitalization, reorganization or similar
occurrence upon such terms and conditions as it may deem equitable and
appropriate.
(d) In the event that another corporation or business entity is being
acquired by the Company, and the Company assumes outstanding employee stock
options and/or stock appreciation rights and/or the obligations to make
future grants of options or rights to employees of the acquired entity, the
aggregate number of shares of Common Stock available for Benefits under
this Plan shall be increased accordingly.
13. Nontransferability. Each Benefit granted under the Plan to a
participant shall not be transferable otherwise than by will or the laws of
descent and distribution, and shall be exercisable, during the participant's
lifetime, only by the participant. In the event of the death of a participant
while the participant is rendering services to the Company, each Stock Option or
Stock Appreciation Right theretofore granted to him shall be exercisable during
such period after his death as the Committee shall in its discretion set forth
in such option or right at the date of grant (but not beyond the stated duration
of the option or right) and then only:
(a) By the executor or administrator of the estate of the deceased
participant or the person or persons to whom the deceased participant's
rights under the Stock Option or Stock Appreciation Right shall pass by
will or the laws of descent and distribution; and
(b) To the extent that the deceased participant was entitled to do so
at the date of his or her death.
Notwithstanding the foregoing, at the discretion of the Committee, an award of a
Benefit may permit the transferability of a Benefit by a participant solely to
members of the participant's immediate family or trusts or family partnerships
for the benefit of such persons, subject to any restriction included in the
award of the Benefit.
14. Other Provisions. The award of any Benefit under the Plan may also be
subject to such other provisions (whether or not applicable to the Benefit
awarded to any other participant) as the Committee determines appropriate,
including without limitation, provisions for the installment purchase of Common
Stock under Stock Options, provisions for the installment exercise of Stock
Appreciation Rights, provisions to assist the participant in financing the
acquisition of Common Stock, provisions for the forfeiture of, or restrictions
on resale or other disposition of, Common Stock acquired under any form of
Benefit, provisions for the acceleration of exercisability or vesting of
Benefits in the event of a change of control of the Company, provisions for the
payment of the value of Benefits to participants in the event of a change of
control of the Company, provisions to comply with federal and state securities
laws, or understandings or conditions as to the participant's employment in
addition to those specifically provided for under the Plan.
15. Fair Market Value. For purposes of this Plan and any Benefits awarded
hereunder, Fair Market Value shall be the closing price for the Company's Common
Stock on the date of calculation (or on the last preceding trading date if
Common Stock was not traded on the date of calculation) if the Company's
A-5
<PAGE> 22
Common Stock is readily tradeable on a national securities exchange or other
market system, and if the Company's Common Stock is not readily tradeable, Fair
Market Value shall mean the amount determined in good faith by the Committee as
the fair market value of the Common Stock of the Company.
16. Withholding. All payments or distributions made pursuant to the Plan
shall be net of any amounts required to be withheld pursuant to applicable
federal, state and local tax withholding requirements. If the Company proposes
or is required to distribute Common Stock pursuant to the Plan, it may require
the recipient to remit to it an amount sufficient to satisfy such tax
withholding requirements prior to the delivery of any certificates for such
Common Stock. The Committee may, in its discretion and subject to such rules as
it may adopt, permit an optionee or award or right holder to pay all or a
portion of the minimum federal, state and local withholding taxes arising in
connection with (a) the exercise of a Nonqualified Stock Option or a Stock
Appreciation Right or (b) the receipt or vesting of Stock Awards, by electing to
have the Company withhold shares of Common Stock having a Fair Market Value
equal to the amount to be withheld.
17. Tenure. A participant's right, if any, to continue to serve the Company
as an officer, employee, or otherwise, shall not be enlarged or otherwise
affected by his or her designation as a participant under the Plan.
18. Duration, Amendment and Termination. No Benefit shall be granted more
than ten years after the date of the approval of this Plan by the stockholders
of the Company; provided, however, that the terms and conditions applicable to
any Benefit granted prior to such date may thereafter be amended or modified by
mutual agreement between the Company and the participant or such other persons
as may then have an interest therein. Also, by mutual agreement between the
Company and a participant hereunder, under this Plan or under any other present
or future plan of the Company, benefits may be granted to such participant in
substitution and exchange for, and in cancellation of, any Benefits previously
granted such participant under this Plan, or any other present or future plan of
the Company. The Board of Directors may amend the Plan from time to time or
terminate the Plan at any time. However, no action authorized by this paragraph
shall reduce the amount of any existing Benefit or change the terms and
conditions thereof without the participant's consent. No amendment of the Plan
shall be made without approval of the stockholders of the Company, if such
approval is required by law, regulation or stock exchange rule.
19. Governing Law. This Plan, Benefits granted hereunder and actions taken
in connection herewith shall be governed and construed in accordance with the
laws of the State of Indiana (regardless of the law that might otherwise govern
under applicable Indiana principles of conflict of laws).
20. Shareholder Approval. The Plan was adopted by the Board of Directors of
the Company on February 3, 2000. The Plan and any Benefits granted thereunder
shall be null and void if shareholder approval is not obtained within twelve
(12) months of the adoption of the Plan by the Board of Directors.
A-6
<PAGE> 23
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COACHMEN INDUSTRIES, INC. PROXY
P. O. BOX 3300
ELKHART, INDIANA 46515
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Claire C. Skinner and Keith D.
Corson, and each of them, as his proxies, each with full power
of substitution, to REPRESENT AND TO VOTE, AS DESIGNATED
BELOW, ALL OF THE UNDERSIGNED'S Common Stock of Coachmen
Industries, Inc. at the Annual Meeting of shareholders of
Coachmen Industries, Inc. to be held on May 4, 2000 and at any
adjournment thereof, with the same authority as if the
undersigned were personally present.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below (except WITHHOLD AUTHORITY to vote for
as all
marked to the contrary below) [ ] nominees listed below [
]
</TABLE>
Claire C. Skinner, Keith D. Corson, Thomas H. Corson, Geoffrey
B. Bloom, Robert J. Deputy,
Donald W. Hudler, William P. Johnson, Philip G. Lux, Edwin W.
Miller, Frederick M. Miller
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below:
--------------------------------------------------------------
2. PROPOSAL TO APPROVE THE 2000 OMNIBUS STOCK INCENTIVE PROGRAM
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In 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 the reverse side.)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
THE UNDERSIGNED HEREBY REVOKES ANY PROXY HERETOFORE GIVEN AND
ACKNOWLEDGES RECEIPT OF THE NOTICE AND PROXY STATEMENT FOR THE
ANNUAL MEETING.
<TABLE>
<S> <C>
Dated: , 2000 ---------------------------------------------
(Signature)
---------------------------------------------
(Signature)
(If the stock is registered in the name of
more than one person, the proxy should be
signed by all named holders. If signing as
attorney, executor, administrator, trustee,
guardian, corporate official, etc., please
give full title as such.)
</TABLE>
