<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:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
CLAYTON HOMES, 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:
(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
[Clayton Homes Logo]
BOX 15169
KNOXVILLE, TENNESSEE 37901
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 12, 1998
---------------------
The 1998 Annual Meeting of the Shareholders (the "Annual Meeting") of
Clayton Homes, Inc., a Delaware corporation (the "Company"), will be held at
10:30 a.m. EST, on Thursday, November 12, 1998, at the Clayton Homes
Headquarters, 5000 Clayton Road, Maryville, Tennessee 37804 for the following
purposes:
1. To elect eight directors, each to hold office for a term of one
year and until a successor has been elected and qualified.
2. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Holders of Common Stock of record as of the close of business on September
14, 1998, are entitled to notice of and to vote at the Annual Meeting. Transfer
books will not be closed.
Your vote is important. To ensure that your shares are represented at the
Annual Meeting, please complete, sign, date and mail the enclosed proxy card
promptly in the enclosed postage-paid envelope. Shareholders attending the
Annual Meeting may revoke their proxies and vote in person if they so desire.
By order of the Board of Directors
/s/ AMBER W. KRUPACS
Amber W. Krupacs
Secretary
Knoxville, Tennessee
September 23, 1998
<PAGE> 3
PROXY STATEMENT
CLAYTON HOMES, INC.
BOX 15169
KNOXVILLE, TN 37901
(mailing)
5000 CLAYTON ROAD
MARYVILLE, TN 37804
(street)
This Proxy Statement and related proxy are furnished to the holders of
Common Stock, par value $.10 per share (the "Common Stock"), of Clayton Homes,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by and on behalf of the Board of Directors of the
Company for use at the 1998 Annual Meeting of Shareholders to be held at 10:30
a.m. EST, on November 12, 1998, and any adjournments thereof (the "Annual
Meeting"). This Proxy Statement and the enclosed proxy card are being first
mailed to shareholders of the Company on or about September 23, 1998. The
Company's Annual Report to Shareholders for the year ended June 30, 1998,
accompanies this Proxy Statement.
The matters to be considered at the Annual Meeting are: (i) the election of
eight members of the Board of Directors of the Company and (ii) the transaction
of such other business as may properly come before the Annual Meeting or any
adjournments thereof.
VOTING RIGHTS AND PROXY SOLICITATION
Holders of Common Stock of record as of the close of business on September
14, 1998, are entitled to notice of and to vote at the Annual Meeting. As of
such date, the Company had issued and outstanding 117,853,276 shares of Common
Stock. The affirmative vote of a majority of the outstanding shares present in
person or by proxy at the Annual Meeting is required for the approval of any
proposal submitted to the shareholders at the Annual Meeting, except that
directors shall be elected by a plurality of the votes of the shares cast in the
election. Each shareholder is entitled to one vote per share on all matters to
be considered at the Annual Meeting, except that for the election of directors,
each shareholder has the right to vote the number of shares held for as many
persons as there are directors to be elected at the Annual Meeting. The
certificate of incorporation of the Company does not provide for cumulative
voting for director nominees.
No specific provisions of the General Corporation Law of Delaware, the
Company's Charter or the Company's Bylaws address the issue of abstentions or
broker non-votes. Abstentions will be treated as shares that are present and
entitled to vote for purposes of determining whether a quorum is present, but
will not be counted as votes either in favor of or against a particular
proposal. If a broker or nominee holding shares in "street" name indicates on
the proxy that it does not have discretionary authority to vote on a particular
matter, those shares will not be voted with respect to that matter and will be
disregarded for the purpose of determining the total number of votes cast with
respect to a proposal.
A shareholder executing and returning a proxy may revoke such proxy by
notice in writing delivered to the Secretary of the Company prior to or at the
Annual Meeting, submitting a later dated proxy to the Secretary of the Company
prior to or at the Annual Meeting or appearing in person and voting in a
contrary manner at the Annual Meeting. However, a shareholder's attendance at
the Annual Meeting does not of itself serve to revoke a proxy executed by such
shareholder.
Proxies in the form enclosed, executed by shareholders of the Company and
returned to the proxyholder designated by the Board of Directors, will be voted
at the Annual Meeting in accordance with the instructions that appear thereon.
If no instructions are given, such proxies will be voted in favor of the
election of the nominees of the Board of Directors named in the Proxy Statement
and the approval of each matter proposed in the Proxy Statement. As of the date
of this Proxy Statement, the Board of Directors of the Company does not know of
any business which will be presented for consideration at the Annual Meeting
other than as
<PAGE> 4
specified herein and in the notice of the Annual Meeting, but if other matters
are presented, it is the intention of the person designated as proxyholder to
vote in accordance with her judgment on such matters.
The cost of soliciting proxies, including the preparation, printing and
mailing of the Proxy Statement, will be borne by the Company. Proxies may be
solicited by mail, telephone, facsimile, or personal contact by directors,
officers, or employees of the Company who will receive no additional
compensation therefor. The Company also will request brokers, custodians, and
other nominees to forward proxy solicitation material to the beneficial owners
of Common Stock and will reimburse them for their reasonable out-of-pocket
expenses.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP served as independent accountants for the
Company during the fiscal year ended June 30, 1998. Representatives of
PricewaterhouseCoopers LLP will be present at the Annual Meeting and will be
given the opportunity to respond to questions.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors of the Company has nominated the eight persons named
below for election as directors at the Annual Meeting, to hold office until the
next annual meeting of shareholders and until their successors have been duly
elected and qualified. The Company's Bylaws allow for a maximum of eight
directors. In the event that any nominee is unable to serve (which is not
anticipated), the person designated as proxyholder for the Company will vote for
the remaining nominees and for such other person(s) as the Board of Directors
may nominate. Each of the nominees is currently a director except for John J.
Kalec. James D. Cockman, presently a director, is not standing for re-election.
The following table sets forth certain information with respect to the
nominees for election as directors at the Annual Meeting:
<TABLE>
<CAPTION>
YEAR FIRST
NAME, AGE, PRINCIPAL OCCUPATION AND ELECTED
MATERIAL POSITIONS DURING PAST FIVE YEARS DIRECTOR
----------------------------------------- ----------
<S> <C>
James L. Clayton, 64, Chairman and Chief Executive Officer, 1967
since prior to 1993; Chairman, BankFirst; Director, Dollar
General Corporation, and Chateau Communities, Inc.
B. Joe Clayton, 62, Chief Executive Officer, Clayton 1967
Automotive Group, since prior to 1993; Regional Director,
First Tennessee Bank.
Kevin T. Clayton, 35, President and Chief Operating Officer 1998
since 1997, President, Financial Services since 1995,
various management positions from 1995 to prior to 1993.
Dan W. Evins, 62, co-founder and Chairman and Chief 1991
Executive Officer, Cracker Barrel Old Country Store, Inc.,
since prior to 1993.
Wilma H. Jordan, 50, Chief Executive Officer, The Jordan, 1994
Edmiston Group, Inc., since prior to 1993; Director, LIN
Television Corp.
John J. Kalec, 48, Vice President and Chief Financial 1998
Officer, Interactive Pictures Corporation since 1998;
Senior Vice President, Chief Financial Officer and
Secretary, Clayton Homes, Inc. from 1996 to 1998, Managing
Director, Finance and Accounting, Philips Components
International B.V. from 1992 to 1995.
Thomas N. McAdams, 45, Partner, Bernstein, Stair & McAdams 1997
since prior to 1993; Director, Rafferty's, Inc.
C. Warren Neel, 61, Dean of the College of Business 1993
Administration of The University of Tennessee, since prior
to 1993; Director, O'Charley's, Inc., Proffitt's, Inc.,
American Health Corp., Inc., and Promus Hotel Corporation.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
LISTED ABOVE.
2
<PAGE> 5
BOARD ATTENDANCE, FEES AND COMMITTEES
The Board of Directors held four meetings during the last fiscal year. Each
of the directors attended at least 75% of the meetings of the Board and
committees of which each was a member. Each director not employed by the Company
receives an annual retainer of $12,000, and $1,500 for each Board and $500 for
each committee meeting attended; $250 for each telephonic meeting; and
reimbursement for travel expenses to meetings. Committee chairpersons receive an
additional $250 for each such committee meeting attended. The Board of Directors
does not have separate nominating or executive committees.
AUDIT COMMITTEE
The Audit Committee consists of Dr. Neel (Chairperson), Mr. Cockman, and
Mr. Evins. The Audit Committee held three meetings during fiscal year 1998. The
Audit Committee's responsibility is to: (i) review annually and recommend to the
Board of Directors the firm to be engaged as independent accountants of the
Company for the next fiscal year; (ii) review with the Company's independent
accountants the plan and results of the auditing engagement; (iii) review the
scope and results of the Company's procedures for internal auditing; (iv)
inquire as to the adequacy of the Company's internal controls; and (v) consider
each professional service provided by the independent accountants and whether
the providing of such service affects the independence of the accountants.
COMPENSATION COMMITTEE
The Compensation Committee consists of Ms. Jordan (Chairperson), Mr.
McAdams and Dr. Neel. It held two meetings during the last fiscal year. The
Compensation Committee is authorized to establish and fix the amount and form of
compensation payable from time to time to all officers and other key employees
of the Company. It also administers the Company's stock option plans.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The goal of the Compensation Committee is to structure and administer the
Company's executive compensation programs in such a way that individual
compensation is largely dependent upon the Company's performance, as measured by
the percentage increase in fully diluted earnings per share (EPS) of the Common
Stock over the prior year. The variable components of its compensation programs
are designed to attract and motivate results-oriented people to achieve higher
levels of performance while focusing on the goals of the Company and its
shareholders.
Company executives, including the Chief Executive Officer, receive base
salaries which are intended to support minimal managerial lifestyles. The
balance of the annual cash compensation for these executives is based upon the
percentage increase in EPS over the prior year. Increases in EPS within annually
established ranges result in corresponding increases in the percentage of base
salary paid in the form of bonuses. Conversely, declines in EPS would result in
the reduction or elimination of bonuses. Adjustments are made on an annual basis
to base salary and bonus programs to reflect individual performances.
Stock options are also granted to executive officers and other employees at
the fair market value of the Common Stock on the date of grant and become vested
over a specified period of employment. The number of shares granted is similarly
based upon the achievement of EPS growth targets and individual performance in
the previous year.
The fact that a significant portion of the compensation paid to the
Company's executive officers is based upon increases in earnings per share helps
to ensure that the Chief Executive Officer and other members of management are
sensitized to the needs and desires of the shareholders.
Wilma H. Jordan (Chairperson)
Thomas N. McAdams
Dr. C. Warren Neel
3
<PAGE> 6
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION
During fiscal year 1998, the Compensation Committee consisted of Ms. Jordan
(Chairperson), Mr. McAdams and Dr. Neel, none of whom has been an officer or
employee of the Company. In addition, there are no relationships among the
Company's executive officers, members of the Compensation Committee or entities
whose executives serve on the Board of Directors or the Compensation Committee
that require disclosure under applicable Security and Exchange Commission
regulations.
COMPENSATION OF MANAGEMENT TABLE
The following table sets forth certain information with respect to the
compensation paid by the Company during the 1998, 1997 and 1996 fiscal years to
the executive officers of the Company, including the Chief Executive Officer
(the "named executive officers"):
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
ANNUAL COMPENSATION -----------------------------------
FISCAL ---------------------- OPTIONS OTHER ANNUAL
NAME AND POSITION YEAR SALARY BONUS (# OF SHARES)(1) COMPENSATION(2)
----------------- ------ -------- -------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
James L. Clayton 1998 $275,000 $825,000 40,000 $ 9,507
Chairman and 1997 $275,000 $274,400 31,250 $ 7,367
Chief Executive Officer 1996 $250,000 $410,000 39,062 $10,481
Joseph H. Stegmayer (3) 1998 $132,000 $ 0 0 $ 5,726
Vice Chairman and Chairman of the 1997 $245,000 $274,400 25,000 $ 7,767
Executive Committee 1996 $225,000 $385,000 54,687 $10,624
Kevin T. Clayton (4) 1998 $250,000 $750,000 130,000 $ 8,621
President 1997 $175,000 $198,000 25,000 $ 6,494
President, Financial Services 1996 $125,000 $255,000 31,250 $ 8,126
David M. Booth 1998 $250,000 $750,000 130,000 $ 6,934
Executive Vice President 1997 $175,000 $198,000 25,000 $ 6,862
President, Retail 1996 $150,000 $265,000 31,250 $10,095
Richard D. Strachan 1998 $225,000 $675,000 130,000 $ 5,572
Vice President 1997 $150,000 $186,000 18,750 $ 5,887
President, Manufacturing 1996 $115,000 $186,000 15,625 $ 9,977
John J. Kalec (5) 1998 $175,000 $325,000 105,000 $ 2,036
Senior Vice President 1997 $125,000 $ 54,800 25,000 $ 1,232
Chief Financial Officer and 1996 -- -- -- --
Secretary
</TABLE>
- ---------------
(1) Adjusted for applicable stock splits.
(2) Represents Company contributions and reallocated forfeitures in the
Company's 401(k) Plan, health and life and disability insurance premiums.
(3) Resigned January 9, 1998.
(4) Son of James L. Clayton and nephew of B. Joe Clayton.
(5) Resigned August 21, 1998.
4
<PAGE> 7
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to stock
options granted to the named executive officers during the fiscal year ended
June 30, 1998:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------
PERCENT OF
TOTAL POTENTIAL REALIZABLE
OPTIONS VALUE AT ASSUMED
NUMBER OF GRANTED ANNUAL RATES OF STOCK
SECURITIES TO PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE OF FOR OPTION TERM(1)
OPTIONS IN FISCAL DATE BASE PRICE EXPIRATION ----------------------
NAME GRANTED YEAR 1998 GRANTED ($/SHARE) DATE 5% 10%
- ---- ---------- ---------- -------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
James L. Clayton........ 40,000 3.3% 11/12/97 $15.75 11/12/07 $607,960 $1,341,244
Kevin T. Clayton........ 130,000 10.6% 11/12/97 $15.75 11/12/07 $645,957 $1,844,211
David M. Booth.......... 130,000 10.6% 11/12/97 $15.75 11/12/07 $645,957 $1,844,211
Richard D. Strachan..... 130,000 10.6% 11/12/97 $15.75 11/12/07 $645,957 $1,844,211
John J. Kalec........... 105,000 8.6% 11/12/97 $15.75 11/12/07 $531,965 $1,508,900
</TABLE>
- ---------------
(1) Dollar gains reflected in these columns result from calculations assuming 5%
and 10% rates of annual growth as set by Securities and Exchange Commission
Regulations for the full ten-year option term and are not intended to
forecast future price appreciation of the Company's Common Stock. This
approach does not give effect to the impact of future world, domestic or
industry market or economic conditions, or the termination of the optionee's
employment during the option period (which results in a loss of the options
not then vested) and other factors that may not reasonably be foreseen. The
gains reflect a future value based upon growth at these prescribed rates. It
is important to note that options have value to listed executives and to all
option recipients only if the stock price advances beyond the base price on
the date of grant shown in the table during the effective option period.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth certain information with respect to the
exercise of options during the fiscal year ended June 30, 1998, and the value of
unexercised options held as of June 30, 1998, by the named executive officers:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF IN-THE-MONEY
UNEXERCISED OPTIONS UNEXERCISED OPTIONS
SHARES AT FISCAL YEAR-END(#) AT FISCAL YEAR-END(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James L. Clayton...................... -- -- 64,108 96,251 $ 481,714 $404,506
Joseph H. Stegmayer................... 469,694 $3,830,713 -- -- -- --
Kevin T. Clayton...................... -- -- 52,468 185,352 $ 414,710 $745,372
David M. Booth........................ 33,377 $ 422,939 110,140 190,235 $ 967,512 $794,084
Richard D. Strachan................... 12,343 $ 97,949 -- 155,938 -- $547,217
John J. Kalec......................... -- -- 5,000 125,000 $ 30,500 $463,250
</TABLE>
- ---------------
(1) Market value of underlying securities at June 30, 1998 minus exercise price.
5
<PAGE> 8
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth certain information with respect to Common
Stock beneficially owned by each director, each named executive officer, and by
all directors and executive officers of the Company as a group, as of August 31,
1998:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME BENEFICIALLY OWNED CLASS
---- ------------------ ----------
<S> <C> <C>
James L. Clayton............................................ 30,814,116(1) 26.0%
B. Joe Clayton.............................................. 111,845(2) *
Kevin T. Clayton............................................ 596,583(3) *
Joseph H. Stegmayer......................................... 339,289(4) *
Dan W. Evins................................................ 101,809(5) *
Wilma H. Jordan............................................. 18,999(6) *
John J. Kalec............................................... 5,000(7) *
Thomas N. McAdams........................................... 1,085 *
C. Warren Neel.............................................. 25,145(8) *
David M. Booth.............................................. 113,959(9) *
Richard D. Strachan......................................... 759(10) *
All Directors and Executive Officers as a Group (14
persons).................................................. 32,133,481(11) 27.1%
</TABLE>
- ---------------
* Less than 1%
(1) Includes options for 64,108 shares presently exercisable; includes 8,559
shares held for the benefit of James L. Clayton in the Company's 401(k)
Plan; includes 1,092,430 shares held by The Clayton Family Foundation, a
non-profit corporation of which James L. Clayton is director and president.
(2) Includes options for 8,147 shares presently exercisable.
(3) Includes options for 52,468 shares presently exercisable; includes 3,817
shares held for the benefit of Kevin T. Clayton in the Company's 401(K)
Plan; includes 351,692 shares held in trust in which Kevin T. Clayton (son
of James L. Clayton) is a trustee, but not beneficiary; includes 4,880
shares held in trust of which Kevin T. Clayton is a trustee and
beneficiary; does not include 1,092,430 shares held by The Clayton Family
Foundation, a non-profit corporation of which Kevin T. Clayton is a
director.
(4) Includes 1,100 shares held for the benefit of Joseph H. Stegmayer in the
Company's 401(k) Plan.
(5) Includes options for 46,292 shares presently exercisable.
(6) Includes options for 12,592 shares presently exercisable.
(7) Includes options for 5,000 shares presently exercisable.
(8) Includes options for 21,575 shares presently exercisable.
(9) Includes options for 110,140 shares presently exercisable; includes 3,819
shares held for the benefit of David M. Booth in the Company's 401(k) Plan.
(10) Includes 708 shares held for the benefit of Richard D. Strachan in the
Company's 401(k) Plan.
(11) Includes options to purchase 324,577 shares presently exercisable; includes
18,641 shares held for the benefit of the executive officers in the
Company's 401(k) Plan; includes 4,880 shares held in trusts of which an
executive officer is trustee and beneficiary; includes 351,692 held in
trusts of which directors or executive officers are trustees, but not
beneficiaries; includes 1,092,430 shares held by The Clayton Family
Foundation, a non-profit corporation, of which certain executive officers
are directors.
6
<PAGE> 9
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following table sets forth certain information with respect to the
Company's cumulative total shareholder return during the previous five years as
compared with the Standard & Poor's Corporation S & P Midcap 400 composite stock
price index and a "peer group" comprised of the following manufactured housing
companies: Cavalier Homes, Inc., Champion Enterprises, Inc., Fleetwood
Enterprises, Inc., Liberty Homes, Inc., Oakwood Homes Corporation, and Skyline
Corporation.
<TABLE>
<CAPTION>
Measurement Period Clayton S&P Midcap Peer
(Fiscal Year Covered) Homes 400 Group(1)
<S> <C> <C> <C>
1993 100 100 100
1994 95.79 99.94 109.75
1995 111.65 122.27 116.39
1996 171.13 148.66 205.63
1997 154.56 183.34 196.50
1998 205.15 233.12 284.95
</TABLE>
- ---------------
(1) The stock performance graph in last year's proxy statement did not include
Champion Enterprises, Inc. due to non-representative results in prior year.
7
<PAGE> 10
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information with respect to holders
of more than five percent of the Common Stock, as of August 31, 1998, except as
noted below:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL
BENEFICIAL OWNERS OWNERSHIP
------------------- -------------
<S> <C>
James L. Clayton
P.O. Box 15169
Knoxville, TN 37901....................................... 30,814,116(1)
Pioneering Management Corporation
60 State Street
Boston, MA 02109.......................................... 7,364,000(2)
</TABLE>
- ---------------
(1) See footnote (1) under "Security Ownership of Directors and Officers."
(2) As reported in Schedule 13G filed as of April 23, 1998.
CERTAIN TRANSACTIONS
The Company's primary counsel is Bernstein, Stair & McAdams, of which
Thomas N. McAdams is a partner. During fiscal 1998, payments received by
Bernstein, Stair & McAdams from the Company were approximately $196,000.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors ("reporting persons") to file initial reports
of ownership of common stock and reports of changes in ownership with the
Securities and Exchange Commission (SEC). Executive officers and directors are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. Based solely on a review of the copies of such forms
furnished to the Company and written representations from such reporting persons
with respect to the period from July 1, 1997 through June 30, 1998, all filing
requirements applicable to reporting persons have been met.
ANNUAL REPORT ON FORM 10-K
The Company will provide without charge, at the written request of any
beneficial shareholder of record on September 14, 1998, a copy of the Company's
Annual Report on Form 10-K, including the financial statements and financial
statement schedules, as filed with the SEC, except exhibits thereto. The Company
will provide copies of the exhibits, should they be requested by eligible
shareholders, and the Company may impose a reasonable fee for providing such
exhibits. Requests for copies of the Company's Annual Report on Form 10-K should
be mailed to:
CLAYTON HOMES, INC.
Box 15169
Knoxville, Tennessee 37901
Attention: Investor Relations
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the Company's 1999
Annual Meeting of Shareholders must be received by the Company at its corporate
offices no later than May 31, 1999 in order to be considered by the Board of
Directors for inclusion in the proxy statement and form of proxy relating to
such meeting.
8
<PAGE> 11
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Annual Meeting. However, if any other matter properly comes before the Annual
Meeting or any adjournment thereof, it is intended that the person named in the
enclosed Proxy will vote such Proxy on such matter in accordance with her best
judgment.
Amber W. Krupacs
Secretary
September 23, 1998
9
<PAGE> 12
Appendix A
CLAYTON HOMES, INC.
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders on November 12, 1998, and related Proxy Statement, and appoints
Rebecca J. Hoag the true and lawful agent and proxy of the undersigned (the
"Proxy"), having full power of substitution, to represent the undersigned and
to vote all shares of Clayton Homes, Inc., owned and held by the undersigned, or
which the undersigned would be entitled to vote if personally present at the
Annual Meeting of Shareholders of Clayton Homes, Inc., to be held at the Clayton
Homes Headquarters, 5000 Clayton Road, Maryville, TN 37804 at 10:30 a.m. EST,
November 12, 1998, or any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
[SEE REVERSE SIDE]
[X] Please mark your
votes as in this
example
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
WITHHOLD
FOR AUTHORITY FOR AGAINST ABSTAIN
(1) ELECTION OF [ ] [ ] NOMINEES: James L. Clayton (2) IN THEIR DISCRETION, THE [ ] [ ] [ ]
DIRECTORS B. Joe Clayton PROXY IS AUTHORIZED TO
Kevin T. Clayton VOTE UPON SUCH BUSINESS
FOR, except vote withheld from the Dan W. Evins AS MAY COME BEFORE THE
following nominees Wilma H. Jordan MEETING.
John J. Kalec
Thomas N. McAdams
------------------------------------------ C. Warren Neal
</TABLE>
PLEASE CHECK BOX IF YOU PLAN [ ]
TO ATTEND THE ANNUAL MEETING
IN PERSON.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER HEREIN DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO PROPOSAL IS MADE,
THE SHARE(S) REPRESENTED BY THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Signature(s) ___________________________________ Dated: _____________, 1998
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give your full title as such.
