<PAGE>
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 Section240.14a-11(c) or
Section240.14a-12
FLEETWOOD ENTERPRISES, 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.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(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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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
FLEETWOOD ENTERPRISES, INC.
3125 MYERS STREET
RIVERSIDE, CALIFORNIA 92503
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF FLEETWOOD ENTERPRISES, INC.
The Annual Meeting of Shareholders of Fleetwood Enterprises, Inc.
("Fleetwood") will be held in the Conference Center at Fleetwood's corporate
offices, 3050 Myers Street, Riverside, California, on September 15, 1998 at
10:00 a.m., Pacific Daylight Time, for the following purposes:
1. To elect two directors to serve three-year terms ending in the year
2001, and until their successors are elected and qualified. Management
has nominated for director the two persons specified in the accompanying
Proxy Statement.
2. To consider and act upon a proposal to approve amendments to Fleetwood's
1992 Non-Employee Director Stock Option Plan.
3. To transact such other business as may properly come before the meeting.
The close of business on July 17, 1998 has been fixed as the record date for
determination of shareholders entitled to receive notice of and to vote at the
Annual Meeting and any adjournment thereof.
Your attention is directed to the accompanying Proxy Statement. To
constitute a quorum for the conduct of business at the Annual Meeting, it is
necessary that holders of a majority of all outstanding shares of common stock
be present in person or be represented by proxy. To assure representation at the
Annual Meeting, you are urged to date and sign the enclosed proxy and return it
promptly in the enclosed envelope.
By Order of the Board of Directors,
[LOGO]
William H. Lear
Secretary
Riverside, California
Dated: July 21, 1998
<PAGE>
FLEETWOOD ENTERPRISES, INC.
3125 MYERS STREET
RIVERSIDE, CALIFORNIA 92503
PROXY STATEMENT
Your proxy is solicited by the Board of Directors of Fleetwood Enterprises,
Inc. ("Fleetwood") for use at the Annual Meeting of Shareholders on Tuesday,
September 15, 1998, or at any adjournment thereof, for purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. A shareholder giving a
proxy may revoke it at any time before the proxy is exercised by giving written
notice of revocation to Fleetwood's Secretary. Only shareholders of record at
the close of business on July 17, 1998 are entitled to notice of, and to vote
at, the meeting. Fleetwood has arranged to deliver these proxy materials to such
shareholders of record on approximately July 21, 1998.
Fleetwood will bear the cost of solicitation of proxies. In addition,
Fleetwood will request brokers or other persons holding stock in their names or
in the names of their nominees to forward proxies and proxy materials to the
beneficial owners of such stock and will reimburse them for expenses incurred in
so doing.
As of the record date, 32,034,409 shares of Fleetwood's common stock, its
only outstanding securities, were issued and outstanding. Each shareholder has
one vote per share on all business presented at the Annual Meeting. A majority
of the outstanding shares will constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. Abstentions are
counted in tabulations of the votes cast on proposals presented to shareholders,
whereas broker non-votes are not counted for purposes of determining whether a
proposal has been approved.
ELECTION OF DIRECTORS
(PROXY ITEM NO. 1)
Under Fleetwood's Bylaws, which provide for a "classified Board", two
directors (out of a total of eight) are to be elected at the Annual Meeting to
serve three-year terms expiring at the Annual Meeting in the year 2001 and until
their successors have been elected and qualified. Proxies will be voted for the
election of Nelson W. Potter and of Thomas B. Pitcher as Fleetwood directors,
unless the shareholder directs otherwise or withholds the vote. If either of the
nominees should become unavailable to serve, the proxies will be voted for the
election of a substitute nominee or nominees selected by the Board of Directors.
It is not expected, however, that either of the nominees will be unavailable.
Each shareholder is entitled to one vote for each share of common stock held
on the record date. In voting for directors, each shareholder has the right to
cumulate votes and give one candidate a number of votes equal to the number of
directors to be elected, multiplied by the number of votes to which his or her
shares are entitled, or to distribute total votes on the same principle among as
many candidates as desired. The two candidates receiving the highest number of
votes will be elected. In order for one or all shareholders to be entitled to
cumulate votes, one shareholder must give notice prior to the voting that
cumulation of votes is intended. In the event that any person other than the
nominees named herein should be nominated for election as a director, the proxy
holders may, in the exercise of their best judgment, vote the proxies they
receive cumulatively to elect as directors as many of the above nominees as the
votes represented by the proxies held by them are entitled to elect.
<PAGE>
The following information is furnished as of July 17, 1998 with respect to
the two nominees, both of whom are currently Fleetwood directors, as well as for
the other six Fleetwood directors whose terms of office will continue after the
1998 Annual Meeting.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR TERM
NAME OR EMPLOYMENT AGE SINCE EXPIRES
- ------------------------------- ----------------------------------------- --- ----------- -----------
<S> <C> <C> <C> <C>
Glenn F. Kummer Chairman of the Board and Chief 64 1983 2000
Executive Officer of the Company
Nelson W. Potter President of the Company 55 1998 1998
Walter F. Beran(1) Chairman of Financial Services Firm 72 1993 1999
Andrew Crean(2) Private Investor; Restaurateur 47 1981 1999
Dr. James L. Doti(3) University President 51 1995 2000
Thomas A. Fuentes(4) Engineering Firm Executive 49 1993 2000
Dr. Douglas M. Lawson(5) Fund-Raising Consultant 62 1981 1999
Thomas B. Pitcher(6) Advisory Counsel 59 1998 1998
</TABLE>
- ---------
(1) Since 1986, Mr. Beran has served as Chairman of Pacific Alliance Group, a
financial services firm. Previously, he served as Vice Chairman of the
accounting firm of Ernst & Whinney (now Ernst & Young) from 1971 until 1986.
Mr. Beran also serves as a director of ARCO Chemical Company, Ventas, Inc.
and Eureka Funds.
(2) Mr. Crean is the proprietor of the Villa Nova Restaurant, located in Newport
Beach, California, which he acquired in 1993.
(3) Since 1991, Dr. Doti has served as President of Chapman University, located
in Orange, California, where he also founded the University's Center for
Economic Research. Dr. Doti is a director of First American Financial
Corporation, Remedy Temp, Inc. and Standard Pacific Corp.
(4) Mr. Fuentes has been Senior Vice President of Tait & Associates, Inc., an
engineering firm located in Orange, California, since 1995. He served as
Senior Vice President of Robert Bein, William Frost & Associates, another
engineering firm, from 1975 until 1995.
(5) Dr. Lawson is President of Douglas M. Lawson Associates, a New York-based
firm he founded in 1969 that specializes in management and consulting
activities with respect to charitable fund raising.
(6) Mr. Pitcher is Advisory Counsel to the law firm of Gibson, Dunn & Crutcher
LLP, from which he retired at the end of 1993. At the time of his
retirement, Mr. Pitcher was a member of the firm's Executive Committee and
the managing partner of its Orange County office. Gibson, Dunn & Crutcher
has performed legal services for Fleetwood in the past and it is anticipated
that the services of such firm will continue to be requested in the future.
BOARD COMMITTEES
Fleetwood's Board of Directors has standing Compensation and Audit
Committees. None of the Directors who serve on these committees are executive
officers of Fleetwood. The Board of Directors has no standing nominating
committee.
The Board of Directors met six times during the fiscal year ended on April
26, 1998 and the aggregate of Board and Committee meetings totaled sixteen
during such period. All of Fleetwood's directors attended at least 75% of the
meetings of the Board of Directors and, if applicable, the Committee(s) on which
they served during such fiscal year.
2
<PAGE>
The Compensation Committee met six times during the past fiscal year. The
Committee is responsible for reviewing and overseeing the establishment and
implementation of Fleetwood's basic and special management compensation
policies. It is also responsible for interpreting and administering certain
benefit plans and making awards under such plans. The Compensation Committee
consists of Mr. Beran, Chairman, Mr. Fuentes and Dr. Lawson.
The Audit Committee, consisting of Dr. Lawson, Chairman, Mr. Beran and Dr.
Doti, met four times during the past fiscal year. The Audit Committee reviews
with management and Fleetwood's independent public accountants such matters as
Fleetwood's internal accounting controls and procedures, the plan and results of
the audit engagement and suggestions by the accountants for improvements in
accounting procedures. It considers the type and scope of services, both of an
audit and a non-audit character, to be performed by the independent public
accountants and reviews the respective fees related to the performance of such
services. During each Committee meeting, members of the Committee and
representatives of the accountants have an opportunity for discussions outside
the presence of management.
OUTSIDE DIRECTORS' COMPENSATION
All members of the Board of Directors who are not Fleetwood employees
receive compensation on account of their service as Fleetwood directors in the
amount of $20,000 per year, payable quarterly, plus a fee of $200 per Board or
Committee meeting in lieu of reimbursed expenses. In addition, members of the
Audit Committee and Compensation Committee each receive additional compensation
in the amount of $4,000 per year per Committee, payable quarterly.
Under Fleetwood's 1992 Non-Employee Director Stock Option Plan, non-employee
directors of Fleetwood serving after each Annual Meeting of Shareholders
automatically receive options to purchase 2,000 shares of Fleetwood common stock
at exercise prices equal to the market value of the underlying shares of common
stock on the date of grant; the options expire ten years after the date of grant
or three years after service as a director is terminated, whichever occurs
earlier, and become fully exercisable within one year after the date of grant.
(See Proxy Item No. Two on page 12.) Mr. Crean, Dr. Lawson, Dr. Doti, Mr. Beran
and Mr. Fuentes all received options under this Plan during fiscal 1998 and Mr.
Pitcher received options when he was appointed to the Board of Directors.
DIRECTOR AND OFFICER STOCK OWNERSHIP
The following table sets forth ownership of Fleetwood common stock as of
July 17, 1998 by each Fleetwood Director, the Chief Executive Officer and the
four other most highly compensated executive
3
<PAGE>
officers and all Directors and executive officers as a group. Such ownership
includes shares held by certain family members, trusts and private foundations.
<TABLE>
<CAPTION>
NAME TOTAL OWNERSHIP(1)
- ------------------------------------------------------ ------------------ PERCENT OF CLASS
---------------------
(* = LESS THAN 1%)
<S> <C> <C>
Walter F. Beran....................................... 14,510 *
Paul M. Bingham....................................... 45,000 *
Andrew Crean.......................................... 414,148 1.2%
John C. Crean......................................... 1,255,800(2) 3.7%
Dr. James L. Doti..................................... 6,658 *
Thomas A. Fuentes..................................... 10,256 *
Glenn F. Kummer....................................... 516,000 1.5%
Dr. Douglas M. Lawson................................. 9,000 *
Thomas B. Pitcher..................................... 1,037 *
Nelson W. Potter...................................... 70,000 *
Mallory S. Smith...................................... 51,000 *
William W. Weide...................................... 29,000 *
21 Directors and Executive Officers as a Group........ 2,621,909 7.7%
</TABLE>
- ---------
(1) Includes shares of Fleetwood common stock which may be obtained if vested
options issued under Fleetwood's 1982 Key Employee Stock Option Plan, 1992
Stock-Based Incentive Compensation Plan or 1992 Non-Employee Director Stock
Option Plan are exercised. The persons who have such options and the number
of shares which may be so obtained are as follows: Mr. Beran, 9,510, Mr.
Bingham, 44,500, Mr. Andrew Crean, 11,000, Mr. John Crean, 851,800, Dr.
Doti, 5,658, Mr. Fuentes, 10,256, Mr. Kummer, 499,000, Dr. Lawson, 7,000,
Mr. Pitcher 537, Mr. Potter, 69,000, Mr. Smith, 46,000, Mr. Weide, 24,000,
and 21 Directors and Executive Officers as a Group, 1,775,424.
(2) Includes 404,000 shares owned by a limited partnership, of which a
corporation owned by Mr. Crean is the general partner, which limited
partnership is a trust for the benefit of one of Mr. Crean's adult children.
DIRECTOR AND OFFICER SECURITIES REPORTS
The Federal securities laws require Fleetwood's directors and executive
officers to file with the Securities and Exchange Commission and the New York
Stock Exchange initial reports of ownership and reports of changes in ownership
of Fleetwood common stock. To the best of Fleetwood's knowledge, all persons
subject to these reporting requirements with respect to Fleetwood common stock
filed the required reports on a timely basis during the fiscal year ended on
April 26, 1998.
4
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of July 17, 1998, information concerning
the only shareholders known to Fleetwood to have beneficial ownership, by virtue
of actual or attributed voting rights or investment powers, of more than 5% of
Fleetwood's outstanding common stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
OWNERSHIP CLASS
------------------ -------------
<C> <S> <C> <C>
1. FMR Corp 2,927,374(1) 9.1%
82 Devonshire Street
Boston, MA 02109-3614
2. Primecap Management Company 2,178,700(2) 6.8%
225 S. Lake Avenue
Pasadena, CA 91101
3. Barclay's Bank PLC 1,753,660(3) 5.5%
388 Market Street
San Francisco, CA 94111-5317
</TABLE>
- ---------
(1) According to its May 1998 Schedule 13G Report, the shares reported on by FMR
Corp at that time were beneficially owned by affiliates, which had sole
investment authority with respect to all the shares and sole voting
authority with respect to 32,137 of the shares.
(2) Primecap Management Company has informed the Company that it has sole
investment and voting authority with respect to 950,200 of the shares and
shared investment authority and no voting authority with respect to
1,225,000 of the shares.
(3) According to its December 1997 Year End Schedule 13G Report, the shares
reported on by Barclays Bank PLC at that time were beneficially owned by
affiliates, which had sole investment authority with respect to all of the
shares and sole voting authority with respect to 1,724,369 of the shares.
TRANSACTION WITH AFFILIATES
On July 31, 1997, the Compensation Committee of the Board of Directors
authorized Fleetwood to enter into an agreement with the Trustee of a trust
created by Glenn F. Kummer for the benefit of members of his family (the "Kummer
Trust"), providing for the purchase by Fleetwood for the Kummer Trust of a
split-dollar life insurance policy on the life of Mr. Kummer, payable to the
Kummer Trust. Fleetwood intends to pay the premium on the policy for up to five
(5) years. The Trustee of the Kummer Trust will contribute a portion of each
annual premium which will reduce Fleetwood's premium each year, and will assign
certain rights under the policies, including the right to receive the cash
surrender value thereof, to Fleetwood to secure repayment of all the premium
payments made by Fleetwood. Fleetwood will recover all of its insurance premium
payments from the death benefit under the policy or earlier from the Kummer
Trust. Since the increases in the cash surrender value of the policy assigned to
secure premium repayments are applied for accounting purposes to offset the
premium expense incurred by Fleetwood, the cost of such payments will not have
any material effect on Fleetwood's consolidated financial statements. In light
of this increase in Mr. Kummer's benefits, his participation in future incentive
compensation shall be adjusted accordingly.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years ended April 26, 1998,
April 27, 1997 and April 28, 1996, the cash compensation paid by Fleetwood, as
well as certain other compensation awarded or accrued for those years, to each
of the five highest paid Fleetwood executive officers, including the Chief
Executive Officer.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION --------- -----------
--------------------------- OPTIONS/ LONG-TERM ALL OTHER
NAME AND POSITION(1) FISCAL YEAR SALARY BONUS SHARES INCENTIVE(3) COMPENSATION(4)
- ---------------------------------- ----------- ---------- --------------- --------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
John C. Crean 1998 $ 108,000 $ 923,070 82,000 $ 614,277 $ 973,991
Former Chairman of the 1997 $ 111,000 $ 1,241,188 95,000 $ 624,199 $ 860,418
Board of Directors 1996 $ 111,000 $ 1,251,148 77,000 $ 514,254 $ 756,954
and Chief Executive Officer
Glenn F. Kummer
Chairman of the Board of 1998 $ 99,000 $ 810,663(2) 71,000 $ 631,828 $ 666,561
Directors and Chief 1997 $ 111,000 $ 1,086,040 84,000 $ 561,779 $ 620,421
Executive Officer 1996 $ 111,000 $ 1,251,148 61,000 $ 462,828 $ 516,083
Nelson W. Potter 1998 $ 88,500 $ 704,717 32,000 $ 280,812 $ 155,705
President and Chief 1997 $ 64,500 $ 288,839 8,000 $ 124,840 $ 83,674
Operating Officer 1996 $ 60,000 $ 194,046 6,000 $ 104,862 $ 65,454
Mallory S. Smith 1998 $ 84,750 $ 571,019 25,000 $ 263,262 $ 168,535
Senior Vice President 1997 $ 60,000 $ 295,334 9,000 $ 249,680 $ 91,556
Housing Group 1996 $ 60,000 $ 360,519 12,000 $ 209,725 $ 138,973
Paul M. Bingham 1998 $ 87,000 $ 433,690 25,000 $ 280,812 $ 146,756
Senior Vice President-- 1997 $ 87,000 $ 348,296 20,000 $ 249,680 $ 145,116
Finance 1996 $ 87,000 $ 299,890 15,000 $ 209,725 $ 148,063
</TABLE>
- ---------
(1) On January 12, 1998, Mr. Crean retired from his positions as Chairman of
Fleetwood's Board of Directors, Chief Executive Officer and Director. At
that time, Mr. Kummer, who previously served as Fleetwood's President and
Chief Operating Officer, was appointed to replace Mr. Crean as Chairman and
Chief Executive Officer and Mr. Potter, who was the Company's Executive Vice
President - Operations, became President and Chief Operating Officer and
replaced Mr. Crean on the Board of Directors. Mr. Smith was named Senior
Vice President -Housing Group on July 28, 1997. Previously, he was the Vice
President of the Eastern region of the Company's Housing Group.
(2) Excludes $416,667 of earned incentive compensation which was paid to Mr.
Kummer's irrevocable trust for the benefit of members of his family in
connection with a split-dollar life insurance program. See TRANSACTION WITH
AFFILIATES on page 5 of this Proxy Statement.
(3) Payments made after fiscal year-end, but accrued for the two-year award
period ended April 26, 1998 under Fleetwood's Long-Term Incentive Plan.
(4) Includes payments made or accrued under Fleetwood's retirement plans,
payments of dividend equivalents on outstanding stock options granted under
the Company's stock-based incentive plans, and in the cases of Mr. Crean and
Mr. Kummer, the estimated value of the premiums paid by Fleetwood on
split-dollar insurance on the lives of Mr. Crean and his wife and Mr.
Kummer, owned by irrevocable trusts for the benefit of the respective
families of Mr. Crean and Mr. Kummer. (Fleetwood
6
<PAGE>
will receive the premiums it has paid, plus interest, from the proceeds of
such insurance.) The following table shows the respective amounts of each of
the above items for the past three fiscal years.
<TABLE>
<CAPTION>
NON-FUNDED RETIREMENT DIVIDEND SPLIT-DOLLAR
PLAN CONTRIBUTION EQUIVALENTS INSURANCE
---------------------- ----------- ------------
<S> <C> <C> <C>
Mr. Crean
1998..................................... $ 376,666 $ 557,586 $ 39,739
1997..................................... $ 365,228 $ 455,524 $ 39,666
1996..................................... $ 326,368 $ 364,252 $ 58,334
Mr. Kummer
1998..................................... $ 259,450 $ 376,970 $ 30,141(1)
1997..................................... $ 308,781 $ 311,640 --
1996..................................... $ 276,243 $ 239,840 --
Mr. Potter
1998..................................... $ 113,925 $ 41,780 --
1997..................................... $ 62,214 $ 21,460 --
1996..................................... $ 50,394 $ 15,060 --
Mr. Smith
1998..................................... $ 117,495 $ 51,040 --
1997..................................... $ 44,626 $ 46,930
1996..................................... $ 100,003 $ 38,970
Mr. Bingham
1998..................................... $ 113,106 $ 33,650 --
1997..................................... $ 103,226 $ 41,890
1996..................................... $ 96,253 $ 51,810
</TABLE>
- ---------
(1) See TRANSACTION WITH AFFILIATES on p. 5 of the Proxy Statement.
OPTION GRANTS
The following table lists certain information concerning stock options
granted to Fleetwood's five highest paid executive officers during the fiscal
year ended on April 26, 1998 under Fleetwood's 1992 Stock-Based Incentive
Compensation Plan.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS(1)(2) ANNUAL RATES OF
----------------------------------------------------------------- STOCK
% OF TOTAL PRICE APPRECIATION
OPTIONS FOR
GRANTED EXERCISE 10-YEAR OPTION TERM
OPTIONS IN FISCAL DATE OF OR BASE EXPIRATION --------------------
GRANTED YEAR GRANT PRICE DATE 5% 10%
----------- ------------- ----------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
John C. Crean....................... 82,000 16.9% 6/10/97 $ 28.00 6/10/07 $1,446,480 $3,673,600
Glenn F. Kummer..................... 71,000 14.7% 6/10/97 $ 28.00 6/10/07 $1,252,440 $3,180,800
Nelson W. Potter.................... 32,000 6.6% 6/10/97 $ 28.00 6/10/07 $ 564,480 $1,433,600
Mallory S. Smith.................... 25,000 5.2% 6/10/97 $ 28.00 6/10/07 $ 441,000 $1,120,000
Paul M. Bingham..................... 25,000 5.2% 6/10/97 $ 28.00 6/10/07 $ 441,000 $1,120,000
</TABLE>
- ------------
(1) All awards were made pursuant to Fleetwood's 1992 Stock-Based Incentive
Compensation Plan at not less than 100% of the fair market value of the
Company's common stock on the date the options were granted. Stock options
may not be exercised during the first six months after the date the options
were granted. Stock options may not be exercised during the first six months
after the date of grant.
7
<PAGE>
OPTION EXERCISES, OPTIONS HELD AND YEAR-END VALUES
The following table contains information on stock options exercised by the
five executive officers named in the Summary Compensation Table during the
fiscal year ended on April 26, 1998 and stock options held by such executive
officers as of such date.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED IN-
SHARES UNEXERCISED THE-MONEY
ACQUIRED ON VALUE OPTIONS HELD AT OPTIONS AT
NAME EXERCISE REALIZED APRIL 26, 1998(1) APRIL 26, 1998
- ------------------------------------------------- ----------- ------------ ------------------ ---------------
<S> <C> <C> <C> <C>
John C. Crean.................................... -- -- 851,800 $ 23,052,075
Glenn F. Kummer.................................. 108,000 $ 2,637,181 499,000 $ 11,851,000
Nelson W. Potter................................. -- -- 70,000 $ 1,500,375
Mallory S. Smith................................. 43,000 $ 987,075 46,000 $ 857,000
Paul M. Bingham.................................. 15,000 $ 195,000 45,000 $ 810,625
</TABLE>
- ---------
(1) All options were exercisable on April 26, 1998.
LONG-TERM INCENTIVE PLAN AWARDS
The following table sets forth information concerning awards made to
Fleetwood's five highest-paid executive officers during the fiscal year ended on
April 26, 1998 under Fleetwood's Long-Term Incentive Plan. (1)
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK
PERFORMANCE OR OTHER PRICE BASED PLANS(2)
PERIOD UNTIL --------------------------------------------
NAME AND POSITION MATURATION OR PAYOUT THRESHOLD TARGET MAXIMUM
- ------------------------------------------------------- ---------------------- -------------- ----------- ---------------
<S> <C> <C> <C> <C>
Glenn F. Kummer........................................ 4/27/98 to 4/30/00 20% 35% 50%
Nelson W. Potter....................................... 4/27/98 to 4/30/00 18% 31.50% 40%
Mallory S. Smith....................................... 4/27/98 to 4/30/00 10% 17.50% 25%
Paul M. Bingham........................................ 4/27/98 to 4/30/00 10% 17.50% 25%
</TABLE>
- ---------
(1) As a result of his retirement, John C. Crean did not receive an award.
(2) Represents the percentage of the average annual compensation of the named
individuals for the award period payable at the three performance levels.
Award payouts are tied to the achievement of targets with respect to cash
flow returns on Fleetwood's gross cash investment for the award period. For
the two-year period ending in April, 2000, the minimum performance level
("Threshold") is 12.33%, the performance objective ("Target") is 14.33% and
the maximum performance objective ("Maximum") is 16.33%. No incentive is
paid unless the Threshold rate of return is achieved. The aggregate of
long-term incentive compensation payments, excluding payments to deceased,
disabled or retired participants, may not exceed three percent of
Fleetwood's aggregate cash flow return for the award period.
8
<PAGE>
PERFORMANCE GRAPH
The performance graph set forth below compares the cumulative total
stockholder return on Fleetwood's common stock against the cumulative total
return of the Standard & Poor's Corporation S & P 500 Composite Stock Price
Index (S&P 500) for the most recently ended calendar year and two "peer groups"
of companies selected by Fleetwood whose primary business is either manufactured
housing or recreational vehicles for the five-year period ended on April 26,
1998. Dividend reinvestment has been assumed and, with respect to all companies
in both peer groups, the returns of each such company have been weighted to
reflect relative stock market capitalization at the beginning of the period.
There is no currently available published index of companies involved in the
same businesses as Fleetwood. The "new" peer group, which will be utilized in
the future, consists of the following companies: Champion Enterprises, Inc.,
Clayton Homes, Inc., Coachmen Industries, Inc., Monaco Coach Corp., National
R.V. Inc., Oakwood Homes Corporation, Palm Harbor Homes, Inc., Skyline Corp.,
Thor Industries, Inc. and Winnebago Industries, Inc. The "old" peer group, which
has been utilized in past proxy statements, also included Schult Homes Corp. and
Kit Manufacturing Co., but excluded Monaco Coach Corp., National RV Inc. and
Palm Harbor Homes, Inc. The new peer group contains the largest companies in
Fleetwood's industries, the performance of which is generally compared to
Fleetwood's performance by investment analysts. None of these companies are
truly comparable to Fleetwood. All are smaller; some are involved only in
manufactured housing and others only in recreational vehicles; some are
vertically integrated to a greater extent than Fleetwood is at this time.
FIVE-YEAR CUMULATIVE TOTAL RETURN
VALUE OF $100 INVESTED ON APRIL 26, 1993
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FLEETWOOD NEW PEER OLD PEER S & P 500
<S> <C> <C> <C> <C>
Enterprises,
Inc. Group Group
4/25/93 $100.00 $100.00 $100.00 $100.00
4/24/94 $110.88 $121.91 $121.58 $105.32
4/30/95 $134.25 $124.29 $123.44 $123.72
4/28/96 $158.15 $184.51 $183.89 $161.10
4/27/97 $154.09 $170.64 $167.14 $201.59
4/26/98 $288.15 $289.03 $268.17 $284.37
</TABLE>
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Fleetwood's Compensation Committee reviews the administration of Fleetwood's
management compensation programs as they affect the compensation of the
Company's senior managers. In addition, the Committee is responsible for
administering several Fleetwood benefit plans--the Long-Term Incentive Plan, the
1982 Key Employee Stock Option Plan, the 1992 Stock-Based Incentive Compensation
Plan and the Senior Executive Incentive Compensation Plan.
FLEETWOOD'S CORPORATE COMPENSATION PHILOSOPHY. Since Fleetwood's founding,
it has consistently followed a management compensation philosophy which
encourages growth and profitability. The system provides for moderate base
salaries at virtually all levels, but offers opportunities for each manager to
earn incentive compensation based on results. This performance-based approach
carefully follows the philosophy of Fleetwood's founder, John C. Crean--that
managers should have an opportunity to earn more than individuals performing
similar functions at other companies, but their compensation should grow only if
Fleetwood's profitability grows as well. This philosophy has always aligned
Fleetwood managers with the interests of its shareholders. In addition, it has
permitted Fleetwood to have lower fixed costs when negative economic conditions
have a marked impact on results.
Fleetwood has always avoided many of the perquisites typically provided to
corporate managers, especially members of top management. Fleetwood's senior
managers have no expense accounts, company cars or airplanes, executive dining
room, paid country club memberships, matching charitable or educational
contributions, paid financial counseling or the like. Instead, it has always
been Fleetwood's philosophy that its managers should be given the opportunity to
earn good cash rewards for their efforts and they can each decide on their own
whether particular expenditures are necessary or desirable.
MAJOR MANAGEMENT CHANGES. 1998 was a watershed year in Fleetwood's history.
After 48 years as the Company's Chief Executive Officer, Mr. Crean decided to
retire from that position and from the Board. Fortunately, the Company's
substantial management depth allowed it to deal with this significant change, as
Glenn F. Kummer, Fleetwood's long-time President and Chief Operating Officer was
elevated to be Mr. Crean's replacement. At the same time, Nelson W. Potter, a
veteran Fleetwood senior manager who had served as the Company's Executive Vice
President--Operations, was promoted to be Mr. Kummer's replacement. Earlier in
the fiscal year, replacements were installed for the heads of both of
Fleetwood's principal operating groups. The Committee believes that all of these
senior managers of the Company are committed to the Company's basic philosophy
and that the continuity of Fleetwood's traditional management approach is
assured.
SALARIES AND INCENTIVE COMPENSATION. Aside from routine adjustments and
changes resulting from promotions such as those discussed above, no changes were
made during the past fiscal year with respect to corporate base salaries or
Fleetwood's basic incentive compensation system. Periodic compensation reviews
have indicated that Fleetwood's salary and incentive compensation programs are
competitive and appropriate for Fleetwood.
LONG-TERM INCENTIVE COMPENSATION. The basis for earning long-term incentive
compensation awards was changed several years ago. The Long-Term Incentive Plan
requires returns in excess of Fleetwood's cost of capital in order for any
long-term incentive compensation to be payable. It utilizes cash flow returns on
the Company's gross cash investment as the measurement device for determining
whether or not compensation has been earned, and how much. The Committee
believes that this approach focuses Fleetwood's senior management on the
importance of proper utilization of corporate capital, which assists in
enhancing shareholder value for Fleetwood's investors.
Some changes were required in administering the Plan this year. In the first
place, Mr. Kummer was designated by the Committee as the Plan's new Benchmark
Participant to replace Mr. Crean. Second, reflecting the reduction in
Fleetwood's cost of capital resulting primarily from the repurchase of stock
from Mr. Crean and the related convertible trust preferred financing, the
performance levels for the award
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period which began in April, 1998 are lower than those of the previous year. As
compared to the previous award period, the threshold return was reduced from
13.54% to 12.33% for the new award period, the target performance level from
15.54% to 14.33% and the maximum from 17.54% to 16.33%. The award percentages
for the new award period, reflecting awards which participants may earn if the
targets are met, remain at the same level as for the prior award period.
STOCK OPTIONS. In its role of administering Fleetwood's 1992 Stock-Based
Incentive Compensation Plan, the Committee grants non-qualified stock option
awards from time to time, usually once per year, to key officers and managers
with the greatest degree of potential influence on Fleetwood's strategic
direction. In addition, smaller awards have also been made to a broader group of
operational managers who also have a meaningful impact on Fleetwood's returns.
Awards in both categories were made by the Committee during the past fiscal
year.
COMPENSATION OF FLEETWOOD'S CHIEF EXECUTIVE OFFICER AND PRESIDENT. In 1994,
the shareholders approved the Company's Long-Term Incentive Plan and also the
Senior Executive Incentive Compensation Plan which provides incentive
compensation to Fleetwood's Chief Executive Officer and President on a
substantially equivalent basis to Fleetwood's basic incentive compensation
program. As a result, payments made under these two performance-based plans
continue to be deductible under Internal Revenue code Section 162(m). The
Committee continues to have as one of its objectives the policy that, wherever
reasonably possible, compensation paid by Fleetwood to its managers, including
its senior officers, should be deductible for income tax purposes. All
compensation payments made to Fleetwood officers in fiscal 1999 should be fully
deductible.
Mr. Kummer's base salary remained the same as in the previous year, although
his incentive compensation level was increased for fiscal 1999. Both the base
salary and incentive compensation level of Mr. Potter were increased for the new
fiscal year, reflecting his promotion. The stock option awards to Mr. Kummer and
Mr. Potter made in the current fiscal year, were similar to those granted to Mr.
Crean and Mr. Kummer in past years. All such awards again involved only
non-qualified stock options granted at fair market value on the date of grant.
In light of the significant changes and challenges in the marketplaces in
which Fleetwood competes and the Company's continuing strong performance in
difficult economic times, the Committee believes that the compensation of Mr.
Kummer and Mr. Potter is appropriate.
Walter F. Beran, Chairman June 9, 1998
Dr. Douglas M. Lawson
Thomas A. Fuentes
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APPROVAL OF AMENDMENTS TO
1992 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(PROXY ITEM NO. 2)
On June 9, 1992, the Board of Directors of Fleetwood adopted the Fleetwood
Enterprises, Inc. 1992 Non-Employee Director Stock Option Plan (the "Director
Plan") authorizing the grant of Awards (as defined therein) aggregating a total
of 100,000 shares of Fleetwood common stock. The Director Plan was approved by
Fleetwood's shareholders at the 1992 Annual Meeting. Non-employee directors are
not eligible to participate in the Fleetwood Enterprises, Inc. 1992 Stock-Based
Incentive Compensation Plan.
On June 9, 1998, the Board of Directors approved amendments to the Director
Plan to (i) increase the number of authorized shares to 200,000 and (ii) provide
that the annual automatic Award to each non-employee director be increased from
2,000 to 4,000 shares of common stock. Fleetwood believes that increasing the
size of the annual grant is appropriate to attract and retain qualified
non-employee directors for Fleetwood's Board of Directors. At June 30, 1998,
46,039 shares remained available for grant under the Director Plan. Absent
authorization of additional shares, the currently available number of shares
under the Director Plan would only be sufficient for automatic grants to the
current non-employee directors at the new rate for the current year. No other
changes were made to the Director Plan by the Board of Directors. Approval of
the amendments to the Director Plan requires the affirmative vote of a majority
of the shares present in person or by proxy and entitled to vote at the Annual
Meeting.
The following is a summary of the material provisions of the Director Plan,
giving effect to the amendments.
GENERAL
The Director Plan provides for the grant ("Award") of stock options
("Options") which are not qualified as incentive stock options under Section 422
of the Code. The maximum number of shares of common stock which may be purchased
pursuant to the exercise of Options granted under the Plan may not exceed
200,000 shares in the aggregate, subject to adjustments for stock splits or
other adjustments as discussed below under "Capital Changes." The shares
available under the Director Plan may either be authorized and unissued shares
or shares reacquired by Fleetwood through open market purchases or otherwise.
Distribution of shares under the Director Plan will be made only after full
compliance with all Federal and state securities laws. If any options granted
under the Director Plan expires, terminates or is forfeited before the exercise
thereof or the payment in full thereof, the shares covered by the unexercised or
unpaid portion will become available for new grants under the Director Plan.
AWARD OF OPTIONS
Since the Director Plan was approved by the shareholders in 1992, each
non-employee director has automatically been awarded Options covering 2,000
shares of Fleetwood common stock on the date of each annual meeting of
shareholders. Directors who were appointed in between annual meetings were
automatically awarded Options covering the number of shares (exclusive of
fractional shares) equal to the product of 2,000 and a fraction, the numerator
of which is the number of days from the date of grant to the date of the next
scheduled annual meeting and the denominator of which is 365.
Fleetwood currently has six non-employee directors, Walter F. Beran, Andrew
Crean, Dr. James L. Doti, Thomas A. Fuentes, Dr. Douglas M. Lawson, and Thomas
B. Pitcher. If the amendments are approved, each of these individuals and their
successors will automatically receive Options covering 4,000 shares of common
stock on the date of the annual meeting of shareholders each calendar year they
serve as a Fleetwood director.
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TERMS AND CONDITIONS OF OPTIONS
Options granted under the Director Plan will be evidenced by stock option
agreements. All Options will be granted at an exercise price equal to the fair
market value, as of the date of grant of the Option, of the common stock subject
to such Option. Unless earlier exercised or terminated, each Option shall expire
and no longer be exercisable ten (10) years after the date of grant.
EXERCISE OF OPTIONS. Options covering fifty percent (50%) of the shares of
common stock subject to an Award will become exercisable six (6) months
following the date of grant. Options covering the remaining fifty (50%) percent
of such shares shall become exercisable one (1) year following the date of
grant. Once exercisable, Options will thereafter remain exercisable until they
are exercised or expire. At the time of the exercise of an Option, the purchase
price shall be paid in full in cash, or in shares of common stock valued at
their fair market value as of the exercise date. No fractional shares will be
issued pursuant to the exercise of an Option, nor will any cash payment be made
in lieu of fractional shares.
TERMINATION OF DIRECTOR STATUS. In the event that the holder of Options
ceases to be a director of Fleetwood for any reason, all Options not exercisable
on or within ninety (90) days after the date of such termination shall expire
and not thereafter be exercisable. All Options exercisable on or within ninety
(90) days after such termination shall thereafter be exercisable until the
earlier to occur of three (3) years from the date of termination or ten (10)
years from the date of the grant of such Option.
DIVIDEND EQUIVALENTS. Fleetwood will pay to holders of Options granted
under the Director Plan an amount for each share of common stock issuable upon
exercise of such Options, whether or not exercisable, a "dividend equivalent"
equal to the cash or other consideration paid by Fleetwood as a dividend or
distribution (other than a dividend or distribution payable in common stock)
with respect to its outstanding shares of common stock. Dividend equivalents
shall be paid, with respect to any record date for such dividend or distribution
occurring on or after the date of grant of any Option to and including the date
of exercise or termination of such Option, in the same manner as provided for
holders of common stock.
RIGHTS WITH RESPECT TO COMMON STOCK. No non-employee director who receives
an Award under the Director Plan and no beneficiary or other person claiming
under or through such individual will have any right, title or interest in or to
any shares of common stock subject to any Option unless and until such Option is
duly exercised pursuant to the terms of the Director Plan.
NONTRANSFERABILITY OF OPTIONS. Options or any interest therein may not be
assigned, transferred, pledged or hypothecated by a participant in the Plan,
except by will or by the laws of descent and distribution. The transfer by a
participant to a trust created by the participant for the benefit of the
participant or the participant's family which is revocable at any and all times
during the participant's lifetime by the participant and as to which the
participant is the sole trustee during his or her lifetime, will not be deemed
to be a transfer for purposes of the Director Plan.
AMENDMENT AND TERMINATION OF THE PLAN
The Director Plan may be amended, suspended or terminated by the Board of
Directors at any time, except that the Board of Directors may not: (i) alter,
terminate or impair in any manner which is materially adverse to a participant
any Award previously granted; (ii) change the nondiscretionary manner in which
Awards are made; (iii) change more than once, in any six-month period,
provisions of the Director Plan dealing with the amount of any Award, the
purchase price of the common stock which is the subject of any Award, the timing
of the grant of any Award, or the exercisability features of Awards; or (iv)
unless approved by the shareholders of Fleetwood, increase the maximum number of
shares issuable pursuant to Awards under the Director Plan. Questions or
interpretation of any provision of the Director Plan shall be resolved by
competent legal counsel selected by the Chief Executive Officer of Fleetwood.
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CAPITAL CHANGES
In the event any change, such as a stock split or payment of a stock
dividend, is made in Fleetwood's capitalization which results in an exchange of
common stock for a greater or lesser number of shares without receipt of
consideration by Fleetwood, appropriate and proportionate adjustment may be made
in the number and kind of shares or other securities subject to then outstanding
Options, and the purchase or exercise price or each share of common stock
subject to an outstanding Option. In addition, upon the occurrence of a change
in control of Fleetwood (as defined in the Director Plan), any outstanding
Options not theretofore exercisable will immediately become exercisable in their
entirety, notwithstanding any of the other provisions of the Director Plan. Any
adjustments under the Director Plan will be made by the Board of Directors,
whose determination as to what adjustments will be made and the extent thereof
will be final, binding and conclusive.
FEDERAL INCOME TAX ASPECTS
The grant of an Option under the Director Plan generally will not result in
Federal taxable income to the Participant. When an Option is exercised, the
participant generally will recognize ordinary compensation income for Federal
income tax purposes in an amount equal to the excess of the fair market value of
the shares on the date of exercise over the exercise price. The participant
generally will recognize ordinary income for Federal income tax purposes equal
to the amount of dividend equivalents paid to the participant for the
participant's taxable year in which such amounts are paid. Fleetwood generally
will be entitled to a Federal income tax deduction equal to the amount of
ordinary income recognized by the participant with respect to the exercise of an
Option or the payment of dividend equivalents for Fleetwood's taxable year
during or within which ends the taxable year of the participant in which such
ordinary income is recognized.
REQUIRED VOTE FOR APPROVAL OF THE AMENDMENTS
The affirmative vote of a majority of the shares present in person or by
proxy and entitled to vote at the Annual Meeting is required to approve the
amendments to the Director Plan. Your Board of Directors recommends a vote FOR
approval of the amendments to the Director Plan. All proxies will be voted to
approve the amendments unless a contrary vote is indicated on the enclosed proxy
card.
AUDITORS
The firm of Arthur Andersen LLP has served as Fleetwood's independent public
accountants since 1955. Such firm has again been selected to act in such
capacity for the current fiscal year. A representative of Arthur Andersen LLP
will be present at the Annual Meeting, at which time he or she will be given an
opportunity to make a statement, if desired, and to respond to appropriate
shareholder questions.
ANNUAL REPORTS
Fleetwood's Annual Report for the fiscal year ended April 26, 1998,
including audited financial statements, is being mailed to shareholders along
with the proxy materials. In addition, Fleetwood files an Annual Report on Form
10-K with the Securities and Exchange Commission. SHAREHOLDERS MAY OBTAIN A COPY
OF THE FORM 10-K ANNUAL REPORT, INCLUDING FINANCIAL STATEMENTS, WITHOUT CHARGE,
BY WRITING THE SECRETARY AT THE ADDRESS LISTED ABOVE.
OTHER BUSINESS AND DIRECTOR NOMINATIONS
At the time of the preparation of this Proxy Statement, Fleetwood's Board of
Directors had not been informed of any other matters which would be presented
for action at the Annual Meeting. If any other
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matters are properly presented, the persons named in the accompanying form of
proxy will vote or refrain from voting in accordance with their best judgment.
Fleetwood's Bylaws require that, for other business to be properly brought
before an annual meeting by a shareholder, the Secretary must have received
written notice thereof not less than 60 nor more than 90 days prior to the
annual meeting (or not later than 10 days after public disclosure of the annual
meeting if such disclosure occurs less than 70 days prior to the date of such
annual meeting). The Notice must set forth (a) a brief description of the
business proposed to be brought before the annual meeting and the reasons for
conducting such business, (b) the shareholder's name and address, and the number
of shares of common stock represented, and (c) any material interest of the
shareholder in such business.
Fleetwood's Bylaws also require that the Secretary receive written notice of
all persons to be nominated as a director at an annual meeting, other than
nominations made at the direction of the Board of Directors, not less than 60
nor more than 90 days prior to the annual meeting at which the election will
take place (or not later than 10 days after public disclosure of such meeting if
such disclosure occurs less than 70 days prior to the date of such meeting). The
notice must set forth (a) the shareholder's name and address, and the number of
shares of common stock represented, (b) such information with respect to the
nominee as would have to be included in the Proxy Statement if such person were
a nominee included in that Statement, and (c) a consent to serve as director
signed by such nominee.
1999 SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1999 Annual Meeting
must be received by Fleetwood on or before March 23, 1999 if they are to be
considered for inclusion in the Proxy Statement. Such proposals should be
addressed to the Secretary.
By Order of the Board of Directors,
[LOGO]
William H. Lear
Secretary
Dated: July 21, 1998
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