SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by 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 ss. 240.14a-11(c) or ss. 240.14a-12
------------------------
CLAYTON HOMES, INC.
(Name of Registrant as Specified In Its Charter)
------------------------
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:
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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):
-----------------------------------
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:
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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>
CLAYTON HOMES, INC.
BOX 15169
KNOXVILLE, TENNESSEE 37901
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TIME: 10:30 a.m. EST, on Wednesday, November 1, 2000
PLACE: Clayton Homes Headquarters
5000 Clayton Road
Maryville, Tennessee 37804
ITEMS OF BUSINESS: (1) To elect eight directors.
(2) To adopt amendments to the 1996 Outside
Directors Equity Plan.
(3) To transact any other business properly
brought before the meeting.
WHO CAN VOTE: You can vote if you were a stockholder of record on
August 30, 2000.
ANNUAL REPORT: A copy of our 2000 Annual Report is enclosed.
DATE OF MAILING: This notice and the proxy statement are first being
mailed to stockholders on or about September 21, 2000.
By Order of the Board of Directors
Carl Koella, III, Secretary
<PAGE>
ABOUT THE MEETING
WHAT AM I VOTING ON?
You will be voting on the following:
1. To elect eight directors.
2. To adopt amendments to the 1996 Outside Directors Equity Plan.
WHO IS ENTITLED TO VOTE?
You may vote if you owned stock as of the close of business on August 30, 2000.
Each share of common stock is entitled to one vote. As of August 30, 2000, we
had 137,540,170 shares of common stock outstanding.
HOW DO I VOTE BEFORE THE MEETING?
You have two voting options:
1. By mail by completing, signing and returning the enclosed proxy card, or
2. By telephone through the number shown on your proxy card.
If you hold your shares in the name of a bank or broker, whether you can vote by
telephone depends on their voting processes. Please follow the directions on
your proxy card carefully.
CAN I VOTE AT THE MEETING?
You may vote your shares at the meeting if you attend in person. Even if you
plan to attend the meeting, we encourage you to vote your shares by proxy. You
may vote by proxy through the mail or by telephone.
CAN I CHANGE MY MIND AFTER I VOTE?
You may change your vote at any time before the polls close at the meeting.
However, you may only do this by (1) signing another proxy with a later date and
returning it to the address on the proxy card before the meeting, (2) voting
again by telephone before 10:30 a.m. on November 1, 2000, or (3) voting in
person at the meeting.
WHAT IF I RETURN MY PROXY CARD BUT DO NOT PROVIDE VOTING INSTRUCTIONS?
Proxies that are signed and returned but do not contain instructions will be
voted "FOR" the election of the nominee directors.
HOW DO I VOTE IF I PARTICIPATE IN THE CLAYTON HOMES, INC. 401(K) RETIREMENT PLAN
FOR CLAYTON HOMES, INC. TEAM MEMBERS?
Shares credited to your Clayton Homes, Inc. 401(k) Retirement Plan are on your
proxy card. You may vote your shares by mail or by telephone as described on the
enclosed proxy card. If you also own stock in your name or through a broker, you
will receive another card for those shares.
HOW DO I VOTE IF I PARTICIPATE IN THE DIVIDEND REINVESTMENT PLAN?
The proxy card you have received includes your dividend reinvestment plan
shares. You may vote your shares by mail, by telephone as described on the
enclosed proxy card or at the meeting.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
It means that you have multiple accounts with brokers and/or our transfer agent.
Please vote all of these shares. We recommend that you contact your broker
and/or our transfer agent to consolidate as many accounts as possible under the
same name and address. Our transfer agent is American Stock Transfer and Trust
Company and may be reached by phone at 1-800-937-5449.
HOW CAN I ATTEND THE MEETING?
The annual meeting is open to all holders of Clayton Homes, Inc. common stock.
For directions to the meeting, please call our Investor Relations department at
865-380-3000. We look forward to having you at the meeting!
MAY STOCKHOLDERS ASK QUESTIONS AT THE MEETING?
Yes. Representatives of the Company will answer stockholders' questions of
general interest at the end of the meeting.
2
<PAGE>
ABOUT THE MEETING
HOW MANY VOTES MUST BE PRESENT TO HOLD THE MEETING?
Your shares are counted as present at the meeting if you attend the meeting and
vote in person or if you properly return a proxy by mail or telephone. In order
for us to conduct the meeting, a majority of our outstanding shares of common
stock as of August 30, 2000, must be present in person or by proxy at the
meeting. This is referred to as a quorum.
HOW MANY VOTES ARE NEEDED TO ELECT DIRECTORS?
The eight nominees receiving the highest number of "Yes" votes will be elected
as directors. This number is called a plurality. Shares not voted, whether by
marking "Abstain" on your proxy card, by broker non-vote (which is described
above), or otherwise, will have no impact on the election of directors. Unless a
properly executed proxy card is marked "Withhold Authority," the proxy given
will be voted "FOR" the eight nominees for director.
HOW MANY VOTES ARE NEEDED TO ADOPT THE AMENDMENTS TO THE 1996 OUTSIDE DIRECTORS
EQUITY PLAN?
The proposal must receive the "Yes" vote of a majority of our outstanding shares
of common stock as of August 30, 2000. A properly executed proxy card marked
"Abstain" with respect to this proposal will not be voted. Accordingly,
abstentions will have the effect of a vote "Against" this proposal.
WILL MY SHARES BE VOTED IF I DO NOT PROVIDE MY PROXY?
Your shares may be voted under certain circumstances if they are held in the
name of a brokerage firm. Brokerage firms have the authority under the New York
Stock Exchange rules to vote customers' unvoted shares, which are referred to as
"broker non-votes," on certain "routine" matters, including the election of
directors. Shares represented by broker non-votes are counted for purposes of
establishing a quorum. At the meeting, shares represented by broker non-votes
will be counted by the brokerage firm in the election of directors, but will not
be counted on any other matters that are voted on because these other matters
are not considered "routine" under the applicable rules. If you hold your shares
directly in your own name, they will not be voted if you do not provide a proxy
or attend the meeting and vote the shares yourself.
CAN MY SHARES BE VOTED ON MATTERS OTHER THAN THOSE DESCRIBED IN THIS PROXY?
Yes. The Company has not received proper notice of, and is not aware of, any
business to be transacted at the meeting other than as indicated in this proxy
statement. If any other item or proposal properly comes before the meeting, the
proxies received will be voted in accordance with the discretion of the proxy
holders.
ARE DISSENTERS' RIGHTS APPLICABLE TO ANY OF THE PROPOSALS?
No, dissenters' rights do not apply to any of the proposals.
3
<PAGE>
PROPOSAL ONE:
ELECTION OF DIRECTORS AND DIRECTOR BIOGRAPHIES
WHO ARE THIS YEAR'S NOMINEES?
JAMES L. CLAYTON, 66, Director since 1967
- Founder and Chairman of the Board of Clayton Homes, Inc. since its
inception in 1967
- Retired as Chief Executive Officer of Clayton Homes, Inc. in 1999
- Chairman of the Board of BankFirst Corporation
- Member of the Board of:
- Dollar General Corporation
- Chateau Communities, Inc.
B. JOE CLAYTON, 64, Director since 1967
- Chief Executive Officer of Clayton Automotive Group since its inception in
1961
- Member of the Regional Board of First Tennessee Bank
KEVIN T. CLAYTON, 37, Director since 1998
- Chief Executive Officer of Clayton Homes, Inc. since 1999
- President of Clayton Homes, Inc. since 1997
- President of Clayton Homes, Inc., Financial Services from 1995
- Other Clayton Homes, Inc. management positions from 1986 to 1995 (1)
DAN W. EVINS, 64, Director since 1991
- Co-founder, Chairman, Chief Executive Officer, and President of CBRL
Group, Inc. since its inception in 1970
WILMA H. JORDAN, 52, Director since 1994
- Co-founder and Chief Executive Officer, The Jordan, Edmiston Group, Inc.
since its inception in 1988
JOHN J. KALEC, 50, Director since 1998
- Executive Vice President and Chief Financial Officer, Internet Pictures
Corp. since 1998
- Senior Vice President and Chief Financial Officer of Clayton Homes, Inc.
from 1996 through 1998
- Senior Vice President and Managing Director of Finance and Accounting,
Philips Consumer Electronics from 1992 to 1996
THOMAS N. MCADAMS, 47, Director since 1997
- Partner, Bernstein, Stair & McAdams LLP since 1982
- Member of the Board of Rafferty's, Inc.
C. WARREN NEEL, 63, Director since 1993
- Dean of the College of Business Administration of the University of
Tennessee since 1977
- Member of the Board of:
- O'Charley's, Inc.
- Sak's, Inc.
- BankFirst Corporation
- American Health Corp, Inc.
____________________________________________
(1) Son of James L. Clayton and nephew of B. Joe Clayton.
WE RECOMMEND THAT YOU VOTE FOR THE ELECTION OF THE DIRECTORS LISTED ABOVE.
BOARD OF DIRECTORS INFORMATION
HOW LONG WILL THIS YEAR'S NOMINEES SERVE?
Each nominee will hold office until the 2001 annual meeting of stockholders and
until their successors have been duly elected and qualified. All nominees are
currently directors.
HOW ARE THE DIRECTORS COMPENSATED?
Each director not employed by the Company receives an annual retainer of
$15,000; $2,000 for each Board meeting and $1,000 for each committee meeting
attended; $500 for each telephonic meeting; reimbursement for travel expenses to
meetings; and may receive options to purchase common stock.
HOW OFTEN DID THE BOARD MEET IN FISCAL 2000?
The Board of Directors met four times during the last fiscal year. Each of the
directors attended at least 75% of the meetings of the Board.
4
<PAGE>
BOARD OF DIRECTORS INFORMATION, CONTINUED
WHAT IS THE MAKEUP OF THE BOARD OF DIRECTORS?
The Company's bylaws allow for a maximum of eight directors. In the event that a
nominee is unable to serve, the person designated as proxyholder for the Company
will vote for the remaining nominees and for such other person as the Board of
Directors may nominate.
WHAT ARE THE COMMITTEES OF THE BOARD?
Our Board of Directors has the following committees:
AUDIT:
------
Number of Meetings in Fiscal Year 2000:
- The committee held two meetings.
Members:
- Dr. Warren Neel
- John J. Kalec
- Dan W. Evins
Responsibilities:
- Make annual recommendation to the Board of Directors regarding the
selection of independent auditors
- Reviews with the independent auditors the plan and results of the auditing
engagement
- Reviews the scope and results of internal systems of accounting and
management control
- Evaluates the independence of the independent auditors
COMPENSATION:
-------------
Number of Meetings in Fiscal 2000:
- The committee held two meetings.
Members (all members are non-management directors):
- Dr. Warren Neel
- Wilma H. Jordan
- Thomas N. McAdams
Responsibilities:
- Reviews and recommends grants of stock awards pursuant to stock incentive
plans
- Reviews and recommends compensation of Directors and executive officers
- Emphasizes the relationship between pay and performance by placing a
significant portion of executive compensation at risk and subject to
achievement of financial goals and other critical objectives
PROPOSAL TWO:
ADOPT AMENDMENTS TO THE
1996 OUTSIDE DIRECTORS EQUITY PLAN
WHAT AM I VOTING ON?
A proposal to amend the 1996 Outside Directors Equity Plan (the Plan) to enhance
Plan flexibility to attract and retain talented non-employee individuals to
serve as directors. This flexibility will enable the Company to attract new
outside directors and adopt compensation packages that are responsive to market
trends, remain competitive and continue to associate the interests of the
outside directors with the interests of the shareholders. The Plan was approved
by our shareholders at our 1996 Annual Shareholders Meeting; it provides for
grants of stock options to non-employee directors. The maximum number of shares
available for grant, as adjusted for stock splits, is 390,625.
WHAT ARE THE AMENDMENTS ABOUT?
The amendments will delete certain restrictions no longer required by Section 16
of the Exchange Act and will give the Board authority to determine the size,
timing and other terms of awards under the Plan. The amendments delete the
shareholder approval requirement for future Plan changes. See Exhibit A.
WHAT ARE THE TERMS OF THE STOCK OPTION GRANTS UNDER THE PLAN?
The Board will set the terms of stock options granted under the amended Plan.
These include the exercise price, vesting schedule and expiration date. The
option price may be paid in cash or common stock. Earlier, outside directors
received 5,000 share options on election to the Board and, if company
performance goals were met, 1,000 share options on re-election. Those options
vested over five years, had a ten-year term and an exercise price equal to the
fair market value of the common stock on the grant date. As of August 30, 2000,
the total value of shares subject to options outstanding under the Plan was
$1,530.
ARE THERE ANY PENDING AWARDS?
Yes. Three directors will receive options for 1,000 shares each, at an option
price of $12.60, which will fully vest on November 12, 2002. A vote "FOR"
proposal two includes the approval of these awards.
WE RECOMMEND THAT YOU VOTE FOR PROPOSAL TWO.
5
<PAGE>
EXECUTIVE COMPENSATION
The following tables set forth the compensation earned by our Chief Executive
Officer and other executive officers during the fiscal years 2000, 1999, and
1998:
<TABLE>
<CAPTION>
COMPENSATION OF MANAGEMENT
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
-------------------- ------------------------------------
FISCAL OPTIONS OTHER ANNUAL
NAME AND POSITION YEAR SALARY BONUS (# OF SHARES)(1) COMPENSATION (2)
---- -------- -------- ----------------- -----------------
<S> <C> <C> <C> <C>
Kevin T. Clayton 2000 $260,000 $250,000 50,000 $7,531
Chief Executive Officer 1999 $250,000 $758,000 107,500 $7,671
And President 1998 $250,000 $750,000 130,000 $8,621
David M. Booth 2000 $260,000 $250,000 50,000 $7,498
Executive Vice President 1999 $250,000 $758,000 107,500 $9,996
President, Retail 1998 $250,000 $750,000 130,000 $6,934
Richard D. Strachan 2000 $260,000 $225,000 50,000 $5,889
Executive Vice President 1999 $250,000 $683,000 107,500 $7,205
President, Manufacturing 1998 $225,000 $675,000 130,000 $5,572
Allen Morgan 2000 $135,000 $ 15,000 15,000 $5,122
Vice President and General 1999 $100,962 $ 19,615 12,500 $1,074
Manager, Communities 1998 $ --- $ --- --- $ ---
James L. Clayton 2000 $100,000 $150,000 --- $5,064
Chairman of the Board. . . 1999 $275,000 $833,000 120,000 $7,800
Chief Legal Officer. . . . 1998 $275,000 $825,000 40,000 $9,507
</TABLE>
(1) Adjusted for applicable stock split.
(2) Represents Company contributions and reallocated forfeitures in the
Company's 401(k) Plan, health, life and disability insurance premiums.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF STOCK
SECURITIES PERCENT OF TOTAL PRICE APPRECIATION FOR
UNDERLYING OPTIONS GRANTED TO EXERCISE OR OPTION TERM (10 YEARS)*
OPTIONS EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED IN FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kevin T. Clayton 50,000 6.56% $9.38 10/27/09 $182,808 $568,747
David M. Booth 50,000 6.56% $9.38 10/27/09 $182,808 $568,747
Richard D. Strachan 50,000 6.56% $9.38 10/27/09 $182,808 $568,747
Allen Morgan 15,000 1.97% $9.38 10/27/09 $ 54,842 $170,624
James L. Clayton --- --- --- --- --- ---
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
* All such options were granted on October 27, 1999. These amounts
represent assumed rates of appreciation only. Actual gains, if any, on stock
option exercises are dependent on future performance of our stock. There can be
no assurance that the amounts reflected in these columns will be achieved or, if
achieved, will exist at the time of any option exercise. We believe that
placing a current value on outstanding options is highly speculative and may not
represent the true benefit, if any, that may be realized by the grantee.
6
<PAGE>
EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
ON VALUE YEAR END AT FISCAL YEAR END (1)
EXERCISE REALIZED
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kevin T. Clayton --- --- 136,959 317,813 $ 62,197 $---
David M. Booth --- --- 215,154 317,813 $100,721 $---
Richard D. Strachan --- --- 41,639 310,782 $ 1,525 $---
Allen Morgan --- --- 2,500 25,000 $ --- $---
James L. Clayton --- --- 155,056 165,391 $ 41,735 $---
--------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Market value of underlying securities at June 30, 2000 minus exercise price.
COMPENSATION COMMITTEE REPORT
WHAT IS THE PHILOSOPHY OF EXECUTIVE COMPENSATION?
To structure and administer executive compensation in a way that individual
compensation is largely dependent on the Company's performance. The
compensation plan for executives incorporates three elements:
- Annual Base Salary
- Performance based annual bonus
- Long-term stock incentive compensation
The variable components of the 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.
HOW ARE THE BASE SALARY AMOUNTS DECIDED?
Company executives, including the Chief Executive Officer, receive base
salaries, which are intended to support minimal managerial lifestyles.
HOW ARE STOCK OPTIONS GRANTED?
Stock options are 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 based upon the
Company's performance based on the overall industry and economic environment,
the achievement of EPS growth targets and individual performance in the previous
year.
HOW ARE THE BONUS AMOUNTS DECIDED?
The key components in determining bonus amounts include the financial
performance of the Company based on the overall industry and economic
environment, and the percentage increase in EPS over the prior year.
Adjustments to the bonus program to reflect individual performance are made
annually. The fact that a significant portion of the compensation paid to the
Company's executive officers is based upon increases in EPS helps ensure that
the Chief Executive Officer and other members of management are sensitized to
the needs and desires of the stockholders.
7
<PAGE>
STOCK OWNERSHIP
These tables depict how much of the Company's common stock is owned by
directors, executive officers and owners of more than 5% of the Company's
common stock as of August 30, 2000:
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
NAME OF NUMBER OF SHARES RIGHT TO PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED (1) ACQUIRE (2) OF CLASS
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
James L. Clayton (3) 38,236,364 155,056 27.9%
B. Joe Clayton 129,622 13,315 *
Kevin T. Clayton (4) 700,406 136,959 *
Dan W. Evins 69,520 60,996 *
Wilma H. Jordan 13,882 27,661 *
John J. Kalec 1,256 1,250 *
Thomas N. McAdams 3,481 2,750 *
C. Warren Neel 4,587 36,204 *
David M. Booth 16,405 215,154 *
Richard D. Strachan 3,920 41,639 *
Allen Morgan 474 2,500 *
All Directors and Executive
Officers as a Group (13 persons) 39,182,479 706,548 29.0%
---------------------------------------------------------------------------------------
</TABLE>
*Less than 1%
(1) These amounts include shares for which the named person has sole voting
and investment power or shares such powers with his or her spouse. They
also include shares credited to the named person's account under the
401(k) Plan, in the following amounts:
- James L. Clayton - 11,650
- Kevin T. Clayton - 5,936
- David Booth - 6,099
- Richard D. Strachan - 2,506
- Allen Morgan - 349
- All executive officers as a group (7)- 28,742
(2) These amounts reflect shares that could be purchased on exercise of
stock options as of August 30, 2000 under the Company's stock incentive
plans.
(3) Includes 1,300,161 shares held by the Clayton Family Foundation, a non-
profit corporation, of which James L. Clayton is director and president.
(4) Includes 450,923 shares held in trust in which Kevin T. Clayton is a
trustee, but not a beneficiary; includes 6,100 shares held in trust of
which Kevin T. Clayton is a trustee and beneficiary; does not include
1,300,161 shares held by the Clayton Family Foundation of which
Kevin T. Clayton is a director.
<TABLE>
<CAPTION>
PRINCIPAL STOCKHOLDERS
NAME AND ADDRESS OF AMOUNT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
--------------------------------------------------------------------------
<S> <C> <C>
James L. Clayton
P.O. Box 15169
Knoxville, TN 37901 38,391,420 (1) 27.9%
Pioneer Investment Management Corp.
60 State Street
Boston, MA 02109 8,184,000 (2) 5.9%
--------------------------------------------------------------------------
</TABLE>
(1) See table "Security Ownership of Directors and Officers"
(2) As reported in Schedule 13G filed January 3, 2000
8
<PAGE>
STOCK PERFORMANCE GRAPH
This graph compares our total stockholder returns (assuming reinvestment of
dividends) with Standard & Poor's Midcap 400 composite stock price index, and a
"peer group" comprised of the following companies: Cavalier Homes, Inc.,
Champion Enterprises, Inc., Fleetwood Enterprises, Inc., Liberty Homes, Inc.,
Oakwood Homes Corporation, and Skyline Corporation.
[GRAPHIC OMITED]
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Clayton Homes 100.00 153.26 135.43 183.74 138.98 97.90
S&P Midcap 400 100.00 121.58 149.95 190.66 223.40 261.33
Peer Group 100.00 176.67 168.83 244.83 149.10 56.39
</TABLE>
9
<PAGE>
GENERAL
COMPENSATION COMMITTEE INSIDER PARTICIPATION
None of the members of the Compensation Committee were officers or employees of
the Company or had any relationship with the Company requiring disclosure under
applicable SEC regulations during fiscal year 2000.
INSIDER TRANSACTIONS
The Company maintains an agreement to purchase certain installment contract
receivables from a business venture in which the Company had a 25% equity
interest until June 29, 2000, when it acquired a 50% equity interest, and Kevin
T. Clayton is a director. The remaining 50% equity interest is owned by
unrelated parties.
The Company's primary counsel is Bernstein, Stair & McAdams LLP, of which one of
our directors, Thomas N. McAdams, is a partner. During fiscal 2000, payments to
Bernstein, Stair & McAdams LLP from the Company did not exceed 5% of the gross
revenues of Bernstein, Stair & McAdams LLP.
COMPLIANCE WITH SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers ("reporting persons") to file initial reports
of ownership of common stock and reports of changes in ownership with the
Securities and Exchange Commission. The Company assists its executive officers
and directors in completing and filing those reports. The Company believes that
during the last fiscal year all filing requirements applicable to its executive
officers and directors were met, except for one report, disclosing one
transaction for 4,000 shares, that was filed on a delayed basis by the Company
on behalf of Ms. Jordan.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP was our auditor during fiscal 2000. Representatives
from the firm will be present at our annual meeting and will be available to
respond to appropriate questions.
AVAILABILITY OF FORM 10-K AND ANNUAL REPORT TO STOCKHOLDERS
The Company will provide without charge, at the written request of any
stockholder of record on August 30, 2000, 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
STOCKHOLDER PROPOSALS
Any stockholder proposals intended to be presented at the Company's 2001 Annual
Meeting of Stockholders must be received by the Company at its corporate offices
no later than May 31, 2001, in order to be considered by the Board of Directors
for inclusion in the Proxy Statement and form of proxy relating to such meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before our annual
meeting. However, if any other matter properly comes before the 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 his best judgement.
SOLICITATION BY BOARD; EXPENSES OF SOLICITATION
Our Board of Directors has sent you this proxy. Proxies may be solicited by
directors, officers, or employees of the Company who will receive no additional
compensation thereof. The cost of soliciting proxies, including preparation,
printing, and mailing of the Proxy Statement, will be borne by the Company. The
Company will reimburse brokers, custodians, and other nominees to send proxies
and proxy materials to our stockholders so they can vote their shares.
10
<PAGE>
EXHIBIT A
PROPOSED AMENDMENTS TO THE
CLAYTON HOMES, INC. 1996 OUTSIDE DIRECTORS EQUITY PLAN
A. Section 2 of the Clayton Homes, Inc. 1996 Outside Directors Equity
Plan (the "Plan") is amended to read as follows:
2. Administration. The Plan shall be administered by the Board. The
Board shall have authority to grant stock options upon such terms (not
inconsistent with the provisions of this Plan), as the Board may consider
appropriate. Such terms may include conditions (in addition to those contained
in this Plan), on the exercisability of all or any part of an option.
Notwithstanding any such conditions, the Board may, in its discretion,
accelerate the time at which any option may be exercised. In addition, the
Board shall have complete authority to interpret all provisions of this Plan; to
prescribe the form of stock option agreements; to adopt, amend, and rescind
rules and regulations pertaining to the administration of the Plan; and to make
all other determinations necessary or advisable for the administration of this
Plan. The express grant in the Plan of any specific power to the Board shall
not be construed as limiting any power or authority of the Board. Any decision
made, or action taken, by the Board or in connection with the administration of
this Plan shall be final and conclusive. Neither the Board nor any member of
the Board shall be liable for any act done in good faith with respect to this
Plan or any agreement or option. All expenses of administering this Plan shall
be borne by the Company.
B. The fourth sentence Section 3 of the Plan is amended to read as
follows:
Options granted under the Plan shall be evidenced by stock option
agreements.
C. Section 4 of the Plan is amended to read as follows:
4. Eligibility. Participants under the Plan are duly elected members
of the Board who are not otherwise employed by the Company and who are selected
by the Board to receive an option under the Plan.
D. Section 5 of the Plan is amended to read as follows:
5. Award of Options, Option Price. In accordance with the provisions
of Section 4, the Board will designate each individual to whom an option is to
be granted and will specify the number of shares of Common Stock subject to such
awards. The price of a share of Common Stock purchased on exercise of an option
shall be determined by the Board on the date of grant.
E. Section 6 of the Plan is amended to read as follows:
6. Option Period. The maximum period in which an option may be
exercised shall be determined by the Board on the date of grant.
F. The following sentence is added at the beginning of Section 7 of the
Plan:
Each option shall be exercisable ("vested") at the time or times determined
by the Board and set forth in the applicable stock option agreement.
G. Section 9 of the Plan is amended to read as follows:
9. Rights in the Event of Termination. The Board shall determine a
Participant's rights (if any) with respect to an option, in the event a
Participant's membership on the Board terminates.
H. The third sentence of section 12 is deleted, and the second sentence
of Section 12 is amended to read as follows:
The Plan may at any time or from time to time be terminated, modified,
suspended and amended by the Board, without approval of the Shareholders.
11
<PAGE>
CLAYTON HOMES, INC.
BOX 15169, Knoxville, TN 37901
TEL 865.380.3000 FAX 865.380.3750
Internet:www.clayton.net e-mail:[email protected]
Human resources:[email protected]
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 1, 2000, and related Proxy Statement, and appoints
Timothy Rhoades 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 1, 2000, 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>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
WITHHOLD
FOR AUTHORITY FOR AGAINST ABSTAIN
(1) ELECTION OF [ ] [ ] NOMINEES: James L. Clayton (2) ADOPT AMENDMENTS TO THE [ ] [ ] [ ]
DIRECTORS B. Joe Clayton 1996 OUTSIDE DIRECTORS
Kevin T. Clayton EQUITY PLAN
FOR, except vote withheld from the Dan W. Evins (2) IN THEIR DISCRETION, THE [ ] [ ] [ ]
following nominees Wilma H. Jordan PROXY IS AUTHORIZED TO
John J. Kalec VOTE UPON SUCH BUSINESS
Thomas N. McAdams AS MAY COME BEFORE THE
------------------------------------------ C. Warren Neel MEETING.
</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, 2 AND 3.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Signature(s) ___________________________________ Dated: _____________, 2000
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.
