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
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COACHMEN INDUSTRIES, INC
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
THOR INDUSTRIES, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT,
IF OTHER THAN REGISTRANT)
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{ x } No Fee required.
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0-11:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying 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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THOR INDUSTRIES, INC.
419 West Pike Street o P.O. Box 629 o Jackson Center, Ohio 45334-0629
Phone: 937-596-6849 o Fax: 937-596-6539
P R E S S R E L E A S E
Date: April 20, 2000
Contact: Wade F. B. Thompson or Peter B. Orthwein
Thor Industries, Inc. (NYSE:THO) announced today that it has released the
following letter to the shareholders of Coachmen Industries, Inc. (NYSE:COA)
FELLOW SHAREHOLDERS OF COACHMEN INDUSTRIES, INC.:
PLEASE USE COACHMEN'S PROXY CARD FOR ITS SHAREHOLDER MEETING TO SEND A MESSAGE
THAT COACHMEN SHOULD AGREE TO A MERGER WITH THOR
Coachmen shareholders need to send a strong message to the Coachmen Board that
Coachmen should agree to a merger with Thor. The proxy card you have received
from Coachmen and their annual meeting, currently scheduled for May 4, 2000,
present a timely opportunity for shareholders to send such a message to the
Coachmen Board. Yesterday, we asked Coachmen to promptly enter into a binding
agreement with Thor and to postpone the annual meeting of shareholders while we
negotiate a transaction. We also asked them to waive the defensive provisions of
Coachmen's by-laws.
WE STRONGLY URGE YOU TO:
* WITHHOLD AUTHORITY TO VOTE FOR ALL NAMED DIRECTOR NOMINEES, and
* vote AGAINST approval of Coachmen's 2000 Omnibus Stock Incentive Program.
On April 17, 2000, Thor, which owns 466,300 or 3% of Coachmen's outstanding
shares, made a proposal to Coachmen to acquire all of the outstanding Coachmen
common stock for $18 per share. The proposed consideration consists of 60% cash
and 40% Thor stock based upon Thor's closing price of $24 7/16 on April 14, 2000
(resulting in an exchange ratio of 0.7366 Thor shares for each Coachmen share
exchanged entirely for Thor stock). Our offer is not subject to financing
contingencies. The $18 offering price represents a 41.9% premium over Coachmen's
closing stock price of $12 11/16 on April 14, 2000.
The offer not only gives Coachmen shareholders a substantial premium, but also
permits them to continue as shareholders in the combined enterprise, providing
further opportunities for long term value enhancement.
We reluctantly made our proposal public because of Coachmen's unwillingness to
enter into discussions with us about a mutually beneficial merger. On February
21, 2000, we privately proposed a merger with Coachmen at $17 per share, only to
be told that Coachmen was not interested in discussing our proposal.
ADVANTAGES OF A MERGER WITH THOR
_________________________________
The advantages of a merger of Coachmen and Thor are significant. We believe the
transaction would be immediately accretive to pro-forma earnings per share and
create additional opportunities to increase shareholder value as a result of:
* cost savings from increased purchasing leverage in the RV industry, and
* synergies due to the fit in products and geography between the two companies.
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COMPARE THOR'S STRONG PERFORMANCE TO COACHMEN'S PERFORMANCE
Since our founding 20 years ago, Thor has achieved an excellent record:
* We have never had a year in which we lost money.
* We have substantial cash and no debt. Despite our strong cash position,
we achieved a return on beginning stockholders equity of 22.3% in
fiscal 1999 versus Coachmen's 14.4% in fiscal 1999.
* While our diluted earnings per share have grown from $1.12 in fiscal
1996 to $2.52 in fiscal 1999 (a compound annual growth rate of 31.0%),
Coachmen's diluted earnings per share have declined from $1.84 in
fiscal 1996 to $1.80 in fiscal 1999. These earnings results were
achieved while both companies had similar revenue growth rates during
the same periods.
* During 1999, a year in which RV industry shipments were up nearly 10%
to the highest unit sales in 20 years following a 15% increase in 1998,
Coachmen's RV income before taxes for the year was down 22.1%. In the
second half of 1999, its RV income dropped 32.8% versus 1998 and
declined 62.1% in the last quarter alone. Coachmen was the only major
public manufacturer to show an RV earnings decline in 1999.
* In contrast, Thor's latest six months' results show RV sales up 18.3%
and RV income up 37.0%.
* We believe our stock should be very attractive to Coachmen
shareholders, since the ratio of Coachmen to Thor closing stock prices
has declined during the last two years. On February 4, 1998, this ratio
was 1.26x--its highest level in the past two years. However, by April
14, 2000, the ratio declined to .52x. Thor's closing stock price
increased 8.0% from $22 5/8 on March 31, 1999 to $24 7/16 on April 14,
2000. In contrast, Coachmen's closing stock price dropped 38.1% from
$20 1/2 on March 31, 1999 to $12 11/16 on April 14, 2000. Between March
31, 1999 and April 14, 2000, Coachmen shareholders lost approximately
$120 million in market value.
* Coachmen possesses a number of un-utilized and under-utilized assets,
including real estate and, we understand, a corporate jet. Coachmen
recently acquired a new corporate headquarters.
* Coachmen has spent $13.3 million over the past 3 years on an Enterprise
Resource Planning system. These costs incurred represented
approximately 10% of the company's net income before taxes during this
time. Coachmen's 1999 Annual Report to Shareholders discloses that the
system has resulted in "major operational disruptions..., significant
material shortages..., high rework costs and missed sales that resulted
in dramatically reduced profits." Plus, its 1999 Annual Report states
that "higher costs associated with...the underlying system will
continue to impact profits in 2000."
WHAT HAS THE COACHMEN BOARD BEEN DOING ABOUT IT?
POISON PILLS, GOLDEN PARACHUTES, EXECUTIVE-FRIENDLY STOCK OPTION PLANS
While the Coachmen Board has (i) rebuffed our attempts to discuss a mutually
beneficial transaction that will increase shareholder value and (ii) watched the
decline of its earnings and share price, it:
* has extended a "poison pill" that further entrenches the existing executives.
* has approved Change in Control Agreements offering rich rewards to family
members and others - golden parachutes.
* now seeks your approval to adopt a stock incentive plan that will reward the
same family members and others and dilute current stockholders' interests.
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POISON PILL. In October 1999, the Coachmen Board replaced an expiring
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shareholder rights plan with one which became effective in January of this year
(the "poison pill"). If triggered, the rights plan would cause any person deemed
an "acquiring person" to suffer substantial dilution. It is troubling to us that
an under-performing Board has so much discretion over who can and cannot
participate in the process to increase shareholder value. We believe the Board
should redeem the poison pill immediately, in the best interests of all
shareholders.
CHANGE IN CONTROL AGREEMENTS. As described on page 9 in Coachmen's March 27,
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2000 Proxy Statement delivered to you, Coachmen has entered into "Change in
Control Agreements" with certain executive officers and other employees. If
there is a change in control of Coachmen and these employees leave for certain
specified reasons, these individuals can receive a huge, and we think
unjustified, financial payment. Based upon information in Coachmen's Proxy
Statement, we believe that many millions of dollars could be paid out under
these golden parachutes - and that approximately $3.0 million could be paid to
members of the Corson family.
EXECUTIVE-FRIENDLY STOCK INCENTIVE PLAN. On top of these golden parachutes, the
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Coachmen Board is now asking you to authorize an additional 1.0 million shares
in its 2000 Omnibus Stock Incentive Plan. We believe that this is another
attempt by executive officers to increase their personal compensation without
making a reciprocal increase in their accountability for the financial
performance (or under-performance) of Coachmen. Some of the individuals who are
eligible for benefits under this plan include the very same executives who have
continually refused to negotiate with us.
AGAIN, PLEASE USE COACHMEN'S PROXY CARD FOR ITS SHAREHOLDER MEETING
TO SEND A MESSAGE THAT COACHMEN SHOULD AGREE TO A MERGER WITH THOR
Coachmen shareholders need to send a strong message to Coachmen executives that
Coachmen should agree to a merger with Thor. The upcoming annual meeting of
Coachmen, currently scheduled for May 4, 2000, presents a timely opportunity for
shareholders to send a strong message to the Coachmen Board.
WE STRONGLY URGE YOU TO:
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* WITHHOLD AUTHORITY TO VOTE FOR ALL NAMED DIRECTOR NOMINEES, and
* vote AGAINST approval of Coachmen's 2000 Omnibus Stock Incentive Program.
By voting on the proxy card provided by Coachmen to WITHHOLD ALL NOMINEES for
directors and voting AGAINST the approval of the 2000 Omnibus Stock Incentive
Program, you can encourage the Coachmen Board to do what is right and maximize
your investment value. THIS IS YOUR LAST CHANCE THIS YEAR TO SEND THAT MESSAGE.
If you have already voted in any other way and now wish to change your vote,
please call D.F. King & Co. at (212) 493-6920 for instructions on how to easily
change your vote. Likewise, if you have any questions on these procedures,
please also call D.F. King.
Thank you for your support.
Sincerely,
THOR INDUSTRIES, INC.
Wade F.B. Thompson, Chairman
IT IS IMPORTANT THAT YOUR VOICE BE HEARD BY COACHMEN'S BOARD
____________________________________________________________
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* * *
This press release includes "forward looking statements" that involve
uncertainties and risks. There can be no assurance that actual results will not
differ from Thor's expectations. Factors which could cause materially different
results include, among others, the success of new product introductions, the
pace of acquisitions and cost structure improvements, competitive and general
economic conditions, and the other risks set forth in Thor's filings with the
Securities and Exchange Commission. In some cases, such forward-looking
statements may be identified by terminology such as "may," "will," "could,"
"should," "expects," "intends" or "believes" or the negative of such terms or
other comparable terminology.
This press release and certain other communications made by or on
behalf of Thor may constitute a solicitation. Thor intends to make a preliminary
filing with the Securities and Exchange Commission of proxy materials. Thor has
not yet filed such materials. Shareholders are advised to read the proxy
statement and other documents related to any proxy solicitation by Thor when
they become available because they will contain important information. When
completed, a definitive proxy statement and related proxy materials will be
mailed to shareholders of Coachmen and will be available at no charge on the
Securities and Exchange Commission's website at http://www.sec.gov.
Thor and certain other persons named below may be deemed to be
"participants" (as such term is defined in Schedule 14A promulgated under the
Securities Exchange Act of 1934, as amended ("Schedule 14A")) in any
solicitation. The participants in this solicitation may include the following
executive officers of Thor: Wade Thompson and Peter Orthwein. As of the date of
this communication, Thor and Peter Orthwein may be deemed the beneficial owner
of 466,300 and 300 shares of common stock of Coachmen, respectively, and Mr.
Thompson and Mr. Orthwein may be deemed to beneficially own approximately
4,535,930 and 639,100 shares of Thor common stock, respectively.
In addition to any solicitations that may be made by any of the
above-referenced persons, Thor has retained D.F. King & Co., Inc. ("D.F. King &
Co."), BMO Nesbitt Burns Corp. ("BMO Nesbitt Burns") and Barry Vogel to act as
advisors.
D.F. King & Co. is a proxy solicitor that may provide solicitation
services with respect to banks, brokers, institutional investors and individual
shareholders for which it will receive customary compensation. Employees of D.F.
King & Co. may communicate in person, by telephone or otherwise with persons who
are shareholders of Coachmen.
BMO Nesbitt Burns is an investment banking firm that provides a range
of financial services for institutional and individual clients. In connection
with the engagement of BMO Nesbitt Burns as a financial advisor to Thor, Thor
anticipates that with respect to any solicitation the following employee of BMO
Nesbitt Burns may communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who are shareholders of
Coachmen for the purpose of assisting in such proposed solicitation: Steven
Knoop. BMO Nesbitt Burns does not believe that it or any of its directors,
officers, employees or affiliates is a "participant" as defined in Schedule 14A
or that Schedule 14A requires the disclosure of participant information
regarding BMO Nesbitt Burns. BMO Nesbitt Burns will not receive any fee for, or
in connection with, such solicitation activities, apart from the fees to which
they are otherwise entitled under the terms of their engagement. Thor has agreed
to pay BMO Nesbitt Burns customary compensation for acting as financial advisor
to Thor in this transaction and has agreed to provide BMO Nesbitt Burns and
certain persons related to BMO Nesbitt Burns with customary indemnification
against certain liabilities, including certain liabilities under the federal
securities laws, arising out of this engagement. An affiliate of BMO Nesbitt
Burns provides commercial lending services to Thor. In the ordinary course of
its business, BMO Nesbitt Burns may trade securities of Coachmen or Thor for its
own account and the accounts of its customers, and accordingly, may at any time
hold a long or short position in such securities. BMO Nesbitt Burns has informed
Thor that, as of the date hereof, it does not hold any shares of common stock of
Coachmen for its own account. BMO Nesbitt Burns and/or certain of its affiliates
may have voting and dispositive power with respect to certain shares of common
stock of Coachmen held in asset management, brokerage and other accounts. BMO
Nesbitt Burns and each of its affiliates disclaim beneficial ownership of such
shares.
In addition to any solicitations that may be made by any of the
above-referenced persons, Thor has retained Mr. Vogel as an advisor. In
connection with his engagement, Thor anticipates that Mr. Vogel may communicate
in person, by telephone or otherwise with a limited number of institutions,
brokers or other persons who are shareholders of Coachmen for the purpose of
assisting in the proposed solicitation. Mr. Vogel will not receive any fee for,
or in connection with, such solicitation activities, apart from the fees to
which he is otherwise entitled under the terms of his engagement. Thor has
agreed to pay Mr. Vogel a fee as compensation for acting as an advisor to Thor
in this transaction. Mr. Vogel and members of his immediate family beneficially
own 14,400 shares of common stock of Coachmen.
