SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant
Check the appropriate box:
[X] Preliminary proxy statement
[_] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to Rule 14a-11(c) or 14a-12
- ------------------------------------------------------------------------------
CAVALIER HOMES, INC.
(Name of Registrant as Specified in Its Charter)
- ------------------------------------------------------------------------------
Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
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:
Notes:
<PAGE>
----------------------------------------------
----------------------------------------------
------- -------
------- PRELIMINARY COPY -------
------- -------
----------------------------------------------
----------------------------------------------
CAVALIER HOMES, INC.
POST OFFICE BOX 300
HIGHWAY 41 NORTH AND CAVALIER ROAD
ADDISON, ALABAMA 35540
March 25, 1997
Dear Stockholder:
You are cordially invited to join us at our 1997 Annual Meeting of Stockholders
to be held on Wednesday, May 14, 1997, beginning at 10:00 A.M., C.D.T., at The
Summit Club, Suite 3100, AmSouth-Harbert Plaza, 1901 6th Avenue North,
Birmingham, Alabama. At the meeting, we will consider the election of directors,
the selection by the Board of Directors of Deloitte & Touche LLP as independent
public accountants for the Company, the approval of a proposed amendment to the
Amended and Restated Certificate of Incorporation of the Company to increase the
number of authorized shares of Common Stock and any other business as may
properly come before the Annual Meeting.
Stockholders of the Company who are unable to be present personally at the
Annual Meeting may vote by proxy. The enclosed Notice and Proxy Statement
contain important information concerning the matters to be considered, and we
urge you to review them carefully. You will also find enclosed a copy of the
Company's Annual Report to Stockholders for the fiscal year ended December 31,
1996, which we encourage you to read.
It is important that your shares be voted whether or not you plan to be present
at the meeting. Whether you plan to attend or not, please complete, sign, date
and return the enclosed form of proxy promptly so that the Company may be
assured of the presence of a quorum at the Annual Meeting. If you attend the
meeting and wish to vote your shares personally, you may revoke your proxy.
We look forward to seeing you on May 14th.
Sincerely yours,
CAVALIER HOMES, INC.
Barry B. Donnell
Chairman of the Board
David A. Roberson
President and Chief Executive Officer
<PAGE>
CAVALIER HOMES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1997
TO THE STOCKHOLDERS OF CAVALIER HOMES, INC.:
The Annual Meeting of Stockholders of Cavalier Homes, Inc., a Delaware
corporation (the "Company"), will be held at The Summit Club, Suite 3100,
AmSouth-Harbert Plaza, 1901 6th Avenue North, Birmingham, Alabama, on Wednesday,
May 14, 1997, at 10:00 A.M., C.D.T. for the following purposes:
(1) To elect seven directors;
(2) To consider the ratification and approval of the appointment
by the Board of Directors of Deloitte & Touche LLP as
independent public accountants for the Company;
(3) To consider a proposed amendment to the Amended and Restated
Certificate of Incorporation of the Company to increase the
number of authorized shares of Common Stock of the Company from
15,000,000 to 50,000,000; and
(4) To transact such other business as may properly come before the
meeting.
Details respecting these matters are set forth in the accompanying Proxy
Statement.
Holders of record of the Common Stock of the Company at the close of business on
March 20, 1997, are entitled to notice of and to vote at the Annual Meeting. A
list of the stockholders of the Company who are entitled to vote at the Annual
Meeting will be available for inspection for a period of ten days prior to the
Annual Meeting at 2000 B Southbridge Parkway, Birmingham, Alabama, and at the
Annual Meeting, for any purpose germane to the meeting. The meeting may be
adjourned from time to time without notice other than such notice as may be
given at the meeting or any adjournment thereof, and any business for which
notice is hereby given may be transacted at any such adjourned meeting.
You are cordially invited to attend the Annual Meeting of the Stockholders of
your Company, and we hope you will be present at the meeting.
WHETHER YOU PLAN TO ATTEND OR NOT, PLEASE SIGN AND RETURN THE ENCLOSED FORM OF
PROXY SO THAT THE COMPANY MAY BE ASSURED OF THE PRESENCE OF A QUORUM AT THE
MEETING. A postage-paid envelope is enclosed for your convenience in returning
your proxy to the Company.
BY ORDER OF THE BOARD OF DIRECTORS
Michael R. Murphy
Secretary
Post Office Box 300
Highway 41 North and Cavalier Road
Addison, Alabama 35540
March 25, 1997
<PAGE>
CAVALIER HOMES, INC.
POST OFFICE BOX 300
HIGHWAY 41 NORTH AND CAVALIER ROAD
ADDISON, ALABAMA 35540
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1997
The accompanying proxy is solicited on behalf of the Board of Directors of
Cavalier Homes, Inc., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders and any adjournments thereof (the "Annual
Meeting") to be held at The Summit Club, Suite 3100, AmSouth-Harbert Plaza, 1901
6th Avenue North, Birmingham, Alabama, on Wednesday, May 14, 1997, at 10:00
A.M., C.D.T. This Proxy Statement and the enclosed form of proxy are first being
mailed or given to stockholders on or about March 25, 1997.
GENERAL INFORMATION
Outstanding Voting Shares; Voting Procedures
Holders of record of the Common Stock of the Company outstanding at the close of
business on March 20, 1997, are entitled to notice of, and to vote at, the
Annual Meeting. A total of ___________ shares of Common Stock were outstanding
on such date and will be entitled to vote at the Annual Meeting. Each holder of
shares of Common Stock entitled to vote has the right to one vote for each share
held of record on the record date for each matter to be voted upon.
The presence, in person or by proxy, of a majority of the outstanding shares of
Common Stock of the Company entitled to vote, consisting of at least ___________
shares, is necessary to constitute a quorum at the Annual Meeting. Shares of
Common Stock represented by a properly executed proxy will be treated as present
at the Annual Meeting for purposes of determining the presence or absence of a
quorum without regard to whether the proxy is marked as casting a vote for or
against or abstaining with respect to a particular matter. In addition, shares
of Common Stock represented by "broker non-votes" will be treated as present for
purposes of determining a quorum. In accordance with the Bylaws of the Company,
the seven nominees receiving the highest vote totals will be elected as
directors of the Company. Accordingly, assuming the presence of a quorum,
abstentions and broker non-votes will not affect the outcome of the election of
directors at the Annual Meeting. The affirmative vote of the holders of a
majority of the outstanding shares of Common Stock of the Company entitled to
vote thereon is required for approval of the proposed amendment to the Amended
and Restated Certificate of Incorporation (the "Certificate of Incorporation").
The affirmative vote of the holders of a majority of the outstanding shares of
Common Stock of the Company present in person or represented by proxy at the
Annual Meeting and entitled to vote thereon is required , (i) for the approval
and ratification of the selection of the Company's independent auditors, and
(ii) for approval of all other matters. Abstentions and broker non-votes will be
included for purposes of determining whether the requisite number of affirmative
votes have been cast with respect to approval of the proposed amendment to the
Certificate of Incorporation, the ratification of the selection of the Company's
independent auditors, and approval of any other matters coming before the
stockholders meeting; and, accordingly, will have the same effect as a negative
vote.
Voting Your Proxy
Proxies, in the form enclosed, properly executed by a stockholder and returned
to the Board of Directors of the Company, with instructions specified thereon,
will be voted at the Annual Meeting in accordance with such instructions. If no
specification is made, a properly executed proxy will be voted in favor of:
(i) The election to the Board of Directors of the seven nominees
named in this Proxy Statement;
(ii) The ratification of action taken by the Board of Directors
in selecting Deloitte & Touche LLP as independent public
accountants for the Company; and
(iii) The approval of a proposed amendment to the Certificate of
Incorporation of the Company to increase the number of
authorized shares of Common Stock of the Company from
15,000,000 to 50,000,000.
1
<PAGE>
As of the date of this Proxy Statement, the Board of Directors knows of no
business to be presented for consideration or action at the Annual Meeting other
than the matters stated above. If any other matters properly come before the
meeting, however, it is the intention of the persons named in the enclosed form
of proxy to vote in accordance with their best judgment on such matters.
A stockholder may revoke a proxy by notice in writing delivered to the Secretary
of the Company, Michael R. Murphy, at any time before it is exercised. A proxy
may also be revoked by attending the Annual Meeting and voting in person. The
presence of a stockholder at the Annual Meeting will not automatically revoke a
proxy previously given to the Company.
Costs of Solicitation
The cost of soliciting proxies, including the preparation, printing and mailing
of this Proxy Statement, will be borne by the Company. The Company may reimburse
investment bankers, brokers and other nominees for their expenses incurred in
obtaining voting instructions from beneficial owners of Common Stock held of
record by such investment bankers, brokers and other nominees; however, the
Company has not entered into any written contract or arrangement for such
repayment of expenses. In addition to the use of mails, proxies may be solicited
by personal interview, telephone or facsimile machine by the directors, officers
and employees of the Company, without additional compensation.
ELECTION OF DIRECTORS
The Bylaws of the Company provide for a Board of Directors of not fewer than one
nor more than ten members, the exact number to be determined by resolution of
the Board of Directors or the stockholders. The present Board of Directors has
fixed the number of directors at seven members and proposes the election of the
seven persons listed below, each of whom has consented to being named and to
serving in such capacity as directors until the next Annual Meeting of
Stockholders and until their successors are duly elected and shall have
qualified. Unless otherwise directed, it is intended that shares of Common Stock
represented by all proxies received by the Board of Directors will be voted in
favor of the nominees listed below. Should any such nominee become unable or
decline to accept election, which is not anticipated, it is intended that such
shares of Common Stock will be voted for the election of such person or persons
as the Board of Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE NOMINEES
SET FORTH BELOW.
The following table sets forth certain information concerning each nominee, each
of whom is currently serving as a director:
Name Age Principal Occupation Director Since
Thomas A. Broughton, III 41 President of First Commercial 1986
Bank (a state banking corporation)
Barry B. Donnell 57 Chairman of the Board 1986
of the Company
Lee Roy Jordan 55 President of Lee Roy Jordan 1993
Redwood Lumber Company
(lumber supply business) and
Southern Valve Services, Inc.
(remanufacturer and installer
of industrial valves)
John W Lowe 55 Partner, Lowe, Mobley 1984
& Lowe (law firm)
Gerald R. Moore 63 Independent tax consultant 1996
Michael R. Murphy 51 Chief Financial Officer and 1997
Secretary-Treasurer of the
Company
2
<PAGE>
David A. Roberson 40 President and Chief Executive 1996
Officer of the Company
Each nominee has occupied the position indicated for at least the last five
years with the exception of Mr. David A. Roberson who served as the Company's
Chief Financial Officer and Secretary-Treasurer for the five years prior to
being appointed President and Chief Executive Officer in October of 1996, and
Mr. Michael R. Murphy who, prior to being appointed Chief Financial Officer and
Secretary-Treasurer, served as the Company's Corporate Controller since June of
1995. For the five years prior to Mr. Murphy's employment with the Company, he
was Controller of Peerless Coatings, Inc.
Information Regarding Board of Directors and Committees
During 1996, the Board of Directors of the Company held five meetings and four
meetings in which the directors participated by conference telephone. Each
director attended at least 75% of the aggregate of the number of meetings of the
Board of Directors and the number of meetings of all committees on which he
served held in 1996.
The Company currently pays each nonemployee director $2,500 and each director
who is employed by the Company $1,250 for each regular Board meeting at which he
is in attendance. Each director who participates in a telephone conference Board
meeting receives $250 per meeting. Directors who are members of committees also
receive $750 for attendance for each committee meeting held on a date when no
Board meeting is held and $250 for each committee meeting held by conference
telephone. Directors are also reimbursed for travel and out-of-pocket expenses
incurred in connection with attending Board and committee meetings.
Pursuant to the Company's 1993 Amended and Restated Nonemployee Directors Stock
Option Plan (the "Nonemployee Directors Plan"), options to purchase 20,000
shares of Common Stock are granted to each nonemployee director upon first being
elected to the Board of Directors . In addition to such initial grants, annually
on January 15, each nonemployee director receives an option to purchase 5,000
shares of Common Stock; provided, however, that no director of the Company shall
be granted options to purchase more than 125,000 shares of stock under the
Nonemployee Directors Plan. In accordance with the Nonemployee Directors Plan,
nonemployee directors who were serving on the Board at February 27, 1996 and
remained directors at January 15, 1997, were granted options to purchase 14,647
shares of Common Stock at such date, while directors elected after February 27,
1996 were granted options to purchase 5,000 shares. All such options are granted
at an exercise price equal to the fair market value of the Common Stock on the
date of grant. Options granted under the Nonemployee Directors Plan generally
have a term of ten years, and are exercisable at any time beginning six months
after the date of grant; provided, however, that no option is exercisable
unless, at all times during the period from the date of grant and ending twelve
months before the date of exercise, the optionee was a director of the Company.
The Board of Directors has two standing committees: the Compensation Committee
and the Audit Committee.
The Compensation Committee, which held two meetings during 1996, is currently
composed of Thomas A. Broughton, III, Lee Roy Jordan, John W Lowe and Gerald R.
Moore. The Compensation Committee administers the Company's stock option plans
(other than the Nonemployee Directors Plan) and sets the compensation of the
executive officers of the Company.
The Audit Committee held one meeting during 1996. The Audit Committee is
currently composed of Thomas A. Broughton, III, Lee Roy Jordan, John W Lowe and
Gerald R. Moore. The Audit Committee, among other things, recommends the
selection each year of the Company's independent public accountants, reviews and
evaluates the Company's financial statements for reliability and
informativeness, reviews the external and internal audit procedures, scope and
controls practiced by the Company's independent public accountants and its
internal accounting personnel, and evaluates the services performed and fees
charged by the Company's independent public accountants to determine, among
other things, that the non-audit services performed by such auditors do not
compromise their independence.
RATIFICATION AND APPROVAL OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has unanimously selected, subject to
ratification by the stockholders, the accounting firm of Deloitte & Touche LLP
as the independent public accountants for the Company for fiscal year 1997.
Deloitte & Touche LLP has served as the Company's auditors for many years.
Ratification of the selection of auditors is being submitted to the stockholders
of the Company because the Board of Directors believes it is an important
corporate decision in which stockholders should participate. If the stockholders
do not ratify the selection of Deloitte & Touche LLP or if Deloitte & Touche LLP
shall decline to act, resign or otherwise become incapable of acting, or if its
engagement is otherwise discontinued, the Board of Directors will select other
auditors for the period remaining until the 1998 Annual Meeting of Stockholders
when engagement of auditors is expected to again be subject to ratification by
the stockholders at such meeting. Representatives of Deloitte & Touche LLP will
be in attendance at the Annual Meeting and will be provided an opportunity to
address the meeting and to respond to appropriate questions from stockholders.
3
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR RATIFICATION
AND APPROVAL OF DELOITTE & TOUCHE LLP.
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
The Board of Directors has proposed an amendment to the Company's Certificate of
Incorporation by which the authorized number of shares of Common Stock will be
increased from 15,000,000 shares to 50,000,000 shares. The amendment would
affect only the first paragraph of Article 4 of the Certificate of
Incorporation, which, as so amended, will read as follows:
"4. The total number of shares of stock which the corporation shall
have authority to issue is 50,500,000; 50,000,000 of the
authorized shares shall be Common Stock, $.10 par value each; and
500,000 of the authorized shares shall be Preferred Stock, $.01
par value each."
The Board of Directors believes that the increase in the number of authorized
shares of Common Stock is advisable because of the limited number of unissued
shares of Common Stock presently available, and because such increase will give
the Company greater flexibility in considering and planning future operations.
The shares of Common Stock will be available for issuance by the Board of
Directors for proper corporate purposes, including, but not limited to, stock
dividends, stock splits, stock options, acquisitions and the raising of capital
through the sale of stock. The Company in the normal course of its operations
considers various alternatives for raising additional capital and various
acquisition opportunities as they arise, though none are contemplated at this
time. The authorization of the additional shares will enable the Company to
continue to consider such alternatives and opportunities and to act promptly if
appropriate circumstances arise which require the issuance of such shares.
The authorization of additional shares of Common Stock of the Company will not,
by itself, have any effect on the rights of holders of existing Common Stock.
Depending on the circumstances, any issuance of additional shares of Common
Stock could affect the existing holders of shares of Common Stock by diluting
the per share earnings and voting power of the Common Stock. The issuance of
additional authorized shares by a company is sometimes utilized by such company
as a device to prevent attempts to acquire the company, since one of the affects
of such issuance could be to dilute the voting power of the entity attempting
the acquisition. The Board of Directors does not anticipate that the approval of
stockholders of the Company will be solicited for any future issuance of any of
the additional authorized shares, unless such solicitation is otherwise required
by law, or unless such solicitation is required by the rules of an exchange on
which shares of the Common Stock of the Company are listed. Stockholders do not
have preemptive rights to subscribe for, purchase or receive any shares of the
authorized capital stock of the Company.
The affirmative vote of a majority of the outstanding shares of Common Stock of
the Company is required for approval of the foregoing amendment of Article 4 of
the Certificate of Incorporation of the Company. In the event the amendment is
approved, the Board of Directors may decide to file a restated Certificate of
Incorporation consolidating the amendment and all prior amendments into one
document, but this will not require the approval of the stockholders of the
Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO ARTICLE 4
OF THE CERTIFICATE OF INCORPORATION OF THE COMPANY TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
4
<PAGE>
EXECUTIVE OFFICERS AND PRINCIPAL STOCKHOLDERS
Executive Officers
The following table sets forth certain information concerning the executive
officers of the Company, who are elected annually by the Board of Directors:
Name Age Position with the Company
David A. Roberson 40 President and Chief Executive Officer
Barry B. Donnell 57 Chairman of the Board
Michael R. Murphy 51 Chief Financial Officer and Secretary -Treasurer
Messrs. Roberson, Donnell and Murphy's business experience is set forth above.
See "Election of Directors". Mr. Roberson, who previously served as Chief
Financial Officer and Secretary-Treasurer, was elected as President and Chief
Executive Officer upon the death of Mr. Jerry F. Wilson, the previous President
and Chief Executive Officer of the Company. Mr. Murphy, who previously served as
the Company's Corporate Controller, was elected as Chief Financial Officer and
Secretary-Treasurer upon the promotion of Mr. Roberson, who previously held
these positions, to President and Chief Executive Officer of the Company.
Ownership of Equity Securities
Set forth below is information as of March 20, 1997, with respect to the
beneficial ownership of the Common Stock of the Company by (a) each of the
directors of the Company (which directors also constitute the nominees for
election as directors at the Annual Meeting), (b) the Company's President and
Chief Executive Officer and the two other executive officers of the Company
during the fiscal year ended December 31, 1996 and (c) all directors and
executive officers of the Company as a group.
Name and Address of Number of Shares
Beneficial Owner of Common Stock Percent of Class 1
- ---------------- --------------- -------------------
Thomas A. Broughton, III 128,577 2 ____%
Barry B. Donnell 703,515 3 ____%
719 Scott Avenue, Suite 600
Wichita Falls, Tx 76301
Lee Roy Jordan 38,867 4 ____%
John W Lowe 164,354 5 ____%
Gerald R. Moore 1,250 6 ____%
Michael R. Murphy 87 7 ____%
David A. Roberson 45,651 8 ____%
Directors and Executive Officers
as a Group (seven persons) 1,082,301 9 ____%
In addition to the above, the following entities have reported ownership in the
Company at a level of greater than 5% according to statements on Form 13G as
filed by the entities with the Securities and Exchange Commission:
Name and Address of Number of Shares
Beneficial Owner of Common Stock Percent of Class 1
- ---------------- --------------- -------------------
George D. Bjurman & Associates 801,826 ____%
10100 Santa Monica Blvd, Suite 1200
Los Angeles, CA 900067
Thomson Horstmann & Bryant, Inc. 757,158 ____%
Park 80 West, Plaza Two
Saddle Brook, NJ 07663
5
<PAGE>
* Represents beneficial ownership of less than 1% of the outstanding shares of
the Company's Common Stock.
(1) Beneficial ownership in the foregoing table is based upon information
furnished by the persons listed. For purposes of this table, a person
or group of persons is deemed to have "beneficial ownership" of any
shares as of March 20, 1997, that such person or group has the right to
acquire within sixty days after such date, or with respect to which
such person otherwise has or shares voting or investment power. For
purposes of computing beneficial ownership and the percentages of
outstanding shares held by each person or group of persons on a given
date, shares which such person or group has the right to acquire within
sixty days after such date are shares for which such person has
beneficial ownership and are deemed to be outstanding for purposes of
computing the percentage for such person, but are not deemed to be
outstanding for the purpose of computing the percentage of any other
person. Except as otherwise indicated in these notes to the foregoing
table, the beneficial owners named in the table have sole voting and
investment power with respect to the shares of Common Stock reflected.
(2) Includes 16,477 shares beneficially owned in an Individual Retirement
Account and 66,210 shares issuable pursuant to stock options presently
exercisable as of March 20, 1997, or within 60 days thereafter.
(3) Includes 125,000 shares issuable pursuant to stock options presently
exercisable as of March 20, 1997, or within 60 days thereafter, and
15,000 shares held by the Donnell Foundation, of which Mr. Donnell is
co-trustee.
(4) Constitutes shares issuable pursuant to stock options presently
exercisable as of March 20, 1997, or within 60 days thereafter.
(5) Includes 31,837 shares issuable pursuant to stock options presently
exercisable as of March 20, 1997, or within 60 days thereafter.
(6) Does not include options to purchase 17,250 shares which are not
exercisable as of March 20, 1997, or within 60 days thereafter, which
option resulted from an amendment to the Nonemployee Directors Plan to
effect a cancellation and reissuance of Mr. Moore's option to purchase
25,000 shares (as adjusted from 20,000 for the November 1996 stock
split) originally granted in 1996 upon his election as a director.
(7) Does not include 12,500 shares issuable pursuant to stock options
originally granted in 1996 and repriced in 1997, which are not
exercisable as of March 20, 1997, or within 60 days thereafter.
(8) Includes 4,218 shares beneficially owned in an Individual Retirement
Account and 7,804 shares owned by the minor children of Mr. Roberson.
Does not include 62,500 shares issuable pursuant to stock options
originally granted in 1996 and repriced in 1997, which are not
exercisable as of March 20, 1997, or within 60 days thereafter.
(9) See notes 1-8 above.
EXECUTIVE COMPENSATION
The following tables, graphs and other information provide details concerning
executive compensation.
Performance Graph
The following indexed graph compares the yearly percentage change in the
Company's cumulative total stockholder return on its Common Stock with the
cumulative total return of (i) the Standard and Poor's 500 Stock Index and (ii)
a group of public companies, each of which is engaged in the business of
designing, producing and selling manufactured homes. The industry group
companies included in the index are: Cavco Industries, Inc.; Champion
Enterprises, Inc.; Clayton Homes, Inc.; Fleetwood Enterprises, Inc.; Kit
Manufacturing Company; Liberty Homes, Inc.; Nobility Homes, Inc.; Oakwood Homes
Corporation; Schult Homes Corporation; and Skyline Corporation.
6
<PAGE>
Comparison of Cumulative Total Return
Assumes an Initial Investment of $100 and Reinvestment of Dividends
+-----------------------------------------------------------------------+
1400 | # |
| # |
1200 | # |
| # # |
1000 | # # |
| # # |
800 | # # |
| # # |
600 | # # # |
| # # # # |
400 | # # # # # |
| # # # # # |
200 | # # #+^ #+^ #+^ |
| #+^ #+ #+^ #+^ #+^ |
0 | #+^ #+^ #+ #+^ #+^ #+^ |
+-----------------------------------------------------------------------+
| 1991 1992 1993 1994 1995 1996 |
+-----------------------------------------------------------------------+
# - CAVALIER HOMES + - S & P 500 ^ - PEER GROUP
+-----------------------------------------------------------------------------+
| 1991 1992 1993 1994 1995 1996 |
+-----------------------------------------------------------------------------+
|CAVALIER HOMES 100 555.06 747.28 536.14 1291.19 1350.91 |
| |
|S & P 500 100 107.62 118.46 120.03 165.13 203.05 |
| |
|PEER GROUP 100 168.42 189.91 166.99 262.20 267.84 |
+-----------------------------------------------------------------------------+
Report of the Compensation Committee
General. The Compensation Committee of the Board of Directors currently consists
of four directors, Thomas A. Broughton, III, Lee Roy Jordan, John W Lowe and
Gerald R. Moore. The Compensation Committee is responsible for establishing the
base salary and annual bonus of the Company's executive officers. The
Compensation Committee also administers the terms, conditions and policies of,
and the benefits granted under, the Company's 1988 Nonqualified Stock Option
Plan, the Long Term Incentive Compensation Plan, the 1993 Amended and Restated
Nonqualified Stock Option Plan, the Employee Stock Purchase Plan and the 1996
Key Employee Incentive Stock Option Plan (the "1996 Plan").
Compensation Policies. The Compensation Committee believes that the most
effective executive compensation program is one which provides incentives to
achieve both increased current profitability and longer term stockholder value.
In this regard, the Compensation Committee believes executive compensation
should be comprised of a reasonable annual base salary and an annual cash bonus
program that rewards the executive officers in a manner directly related to the
annual profitability of the Company. The Compensation Committee further believes
that annual base salary and bonus arrangements should be supplemented with
equity-based programs, pursuant to which the Company affords the ownership and
retention of the Company's Common Stock by its executive officers and other key
employees. The Compensation Committee endorses the proposition that equity
ownership by management is beneficial because it aligns management's and
stockholders' interest in the enhancement of stockholder value. In general,
considering the cyclical nature of the manufactured housing industry and the
Company's business, the philosophy of the Compensation Committee has been to
design a compensation system comprised of a cash component that is conservative
when the Company's operations are marginal and rewarding when its operations are
good, and an equity component that provides the executive officers with a strong
incentive to manage the Company's operations with a view towards maintaining and
increasing stockholder value. The Compensation Committee feels that the
combination of these programs helps to assure that the Company's executive
officers and other key employees have a meaningful stake in the Company, its
value, and its long-term and short-term performance.
The Compensation Committee determines base salary, bonus and other components of
executive compensation upon the basis of corporate performance, judged by
revenues, earnings, stock trading prices, and strategies, and on the basis of
the Compensation Committee's subjective perception of a particular executive's
performance and worth to the Company, the Company's past compensation practices
and a comparison of the Company's executive compensation with the compensation
paid by other companies in the same industry (which generally are the companies
included in the industry group included in the index for the performance graph
set forth above) and, to a lesser extent, a random selection of other companies.
In making executive compensation decisions, the Compensation Committee
considered the views of Mr. Wilson, Mr. Roberson and Mr. Donnell and information
provided by them. The Compensation Committee has established target levels to be
used in judging corporate performance for purposes of its annual bonus
arrangements.
7
<PAGE>
Generally, base salaries for executive officers are fixed at levels which are
comparable to the base salaries for persons in similar positions in other
companies in the manufactured housing industry. Bonuses are payable under the
Company's Executive Incentive Compensation Plan based on performance in
comparison to targets previously set by the Compensation Committee. Stock
options are the component of executive compensation that is designed to motivate
executives to improve the long-term performance of the Company and the Common
Stock in the market, to encourage the Company's executives to achieve superior
results over the longer term and to align executive officers' with stockholders'
interests. The Compensation Committee's decisions respecting stock option grants
generally are made using the same criteria discussed above, and take into
consideration the number of unexercised options held by the executive officers,
exercise prices and market prices of the Company's Common Stock.
Chief Executive Officer Compensation. The late Mr. Wilson's compensation for
1996 was established according to the policies, bases and relationships to
corporate performance that are discussed above as being applicable to the
Company's executive officers generally. Mr. Wilson's base salary of $240,000 per
annum was fixed in 1996. In addition, Mr. Wilson earned an annual incentive
bonus in accordance with the provisions of the Company's Executive Incentive
Compensation Plan that was adopted by the Company's stockholders in 1996. Mr.
Wilson's base salary and annual incentive bonus were paid on a prorated basis
through the date of his death. Mr. Roberson's base salary of $180,000 was fixed
in 1996 based upon his previous position as Chief Financial Officer. His annual
incentive bonus earned for 1996, in accordance with the provisions of the
Company's Executive Incentive Compensation Plan, was not changed upon his
promotion to Chief Executive Officer in October of 1996.
Stock Option Repricings. In July 1996, the Compensation Committee effected a
repricing of certain options granted to Mr. Wilson and Mr. Murphy under the
Company's 1996 Plan. The Compensation Committee repriced the options because it
believed that, despite the Company's strong financial performance, the price
decline in the Common Stock of the Company had degraded the incentive value of
the options. The Compensation Committee believed that granting replacement
options at an exercise price approximating the then current market price of the
Company's Common Stock would restore the incentive value of the options and
satisfy the Company's incentive and compensation purposes. In January 1997, the
Compensation Committee effected a repricing of certain options granted in 1996
to Mr. Roberson and Mr. Murphy under the Company's 1996 Plan. During the latter
part of 1996, many of the stocks of publicly traded companies in the Company's
industry had experienced significant declines in market value, which declines
also affected the Company's stock, notwithstanding record financial performance
by the Company. The Company's stock price may also have been adversely affected
by the death of the Company's President and Chief Executive Officer, Mr. Jerry
F. Wilson. The committee believed, in light of the death of Mr. Wilson, that
management of the Company is facing new challenges during the transition period,
that Mr. Roberson and Mr. Murphy in particular would be taking on substantial
new duties, and that it was in the best interest of the Company and its
stockholders that the key employees of the Company, including Mr. Roberson and
Mr. Murphy, be properly compensated and highly incentivized during this period.
The Compensation Committee was concerned that the decline in the Company's stock
price was substantial and that the outstanding stock options held by key
employees of the Company did not further these goals, particularly in light of
the Company's recent performance and the performance of management. The
Compensation Committee also took into account that the aggregate cash
compensation to the Company's executive officers is expected to be less in l997
as compared to 1996, primarily because of a change in certain factors used in
calculating the available pool for bonuses payable under the Executive Incentive
Compensation Plan following the death of Mr. Wilson. In light of all these
factors, the committee believed that cancelling these outstanding options and
granting replacement options at the current fair market value would help restore
the compensation and incentive purposes of the options. See "Information
Concerning Stock Options - Summary of Stock Options Granted During the Last
Fiscal Year" and "- Summary of Options Granted and Repriced During the Last
Fiscal Year" below.
Members of the Compensation Committee:
Thomas A. Broughton, III, Chairman
Lee Roy Jordan
John W Lowe
Gerald R. Moore
Summary Compensation Table
The following summary compensation table sets forth information concerning
compensation for services in all capacities, including cash and non-cash
compensation, awarded to, earned by or paid to the Company's Chief Executive
Officer and the two other executive officers of the Company in each of the last
three fiscal years, unless otherwise noted.
8
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUMMARY ANNUAL COMPENSATION TABLE
- ---------------------------------------------------------------------------------------------------------------
Long-Term
Compensation
Annual Compensation Awards
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus($)1 Compensation($)2 Options(#)3 Compensation($)4
- ---------------------------------------------------------------------------------------------------------------
David A. Roberson 1996 180,000 623,060 - 62,500 3,438
President and Chief Executive 1995 67,500 336,404 - None 1,688
Officer 1994 60,000 233,676 - None 1,706
Jerry F. Wilson 1996 200,000 1,145,299 - 125,000 8,354
President and Chief Executive 1995 96,000 1,121,273 - None 7,744
Officer (Deceased) 1994 96,000 664,265 - None 8,413
Barry B. Donnell 1996 200,000 855,417 - 125,000 9,084
Chairman of the Board 1995 84,000 672,806 - None 8,571
1994 84,000 398,559 - None 8,042
Michael R. Murphy 1996 60,000 19,750 - 12,500 787
Chief Financial Officer 1995 - - - None -
and Secretary-Treasurer 1994 - - - None -
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Certain amounts that were included as Bonus for the year 1994 in prior
Proxy Statements have been reclassified as Other Annual Compensation to
conform to the classification for the year 1996.
(2) For the years ended December 31, 1996, 1995 and 1994, none of the named
executive officers received perquisites or other personal benefits in
excess of the amounts required to be disclosed under the revised rules
on executive compensation disclosure adopted by the Securities and
Exchange Commission; accordingly, the amounts of such benefits are
omitted. Certain amounts that were included as Other Annual
Compensation for the year 1994 in prior Proxy Statements have been
reclassified as All Other Compensation to conform to the classification
for the year 1996.
(3) Options granted to executive officers during 1996 were granted pursuant
to the 1996 Plan, and have been adjusted for subsequent stock splits
through December 31, 1996.
(4) Includes the following for 1996: (i) matching contributions made by the
Company to its 401(k) plan during 1996 on behalf of each executive
officer as follows: Messrs. Roberson, Wilson and Donnell in the amount
of $1,688 and Mr. Murphy in the amount of $787; (ii) directors' fees
paid by the Company in 1996 to Mr. Roberson in the amount of $1,750,
Mr. Wilson in the amount of $6,000 and Mr. Donnell in the amount of
$7,250, and (iii) in connection with certain split dollar agreements
between Mr. Wilson and Mr. Donnell, certain associates of each, and the
Company, which provides for the Company being reimbursed for premiums
paid for life insurance, less the amounts attributable to term
insurance, upon the earlier of the cancellation of the policy or when
the death benefits are paid. The amount reflected in the column
includes the portion of the premium payment that is attributable to
term insurance coverage for Mr. Wilson and Mr. Donnell, $666 and $146
respectively, as determined by tables supplied by the Internal Revenue
Service.
Information Concerning Stock Options
The Company granted stock options to purchase 325,000 shares to its executive
officers and repriced 137,500 stock options during 1996 as summarized in the
following tables. For a discussion of these repricings and the repricings
effected in January 1997, see "Report of the Compensation Committee - Stock
Option Repricings." Options granted to executive officers were granted during
1996 pursuant to the 1996 Plan and have been adjusted for subsequent stock
splits effected prior to March 20, 1997.
9
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPTIONS GRANTED
DURING THE LAST FISCAL YEAR
- -----------------------------------------------------------------------------------------------------------------------------------
Number of Percentage of Potential Realizable Value at Assumed
Securities Total Options Granted Annual Rates of Stock Price Increase
Name and Underlying to Employees Exercise Price Expiration Date Grant Value at Grant Value at
Principal Position Options Granted During Fiscal Year Per Share of Options 5% Assumed Rate 10% Assumed Rate
- -----------------------------------------------------------------------------------------------------------------------------------
David A. Roberson
President and Chief 62,500 1 9% 16.600 1 May 14, 2006 652,478 1 1,653,508 1
Executive Officer
Jerry F. Wilson
President and Chief 125,000 2 17% 13.600 2 July 24, 2006 1,069,121 2,709,362
Executive Officer
(Deceased)
Barry B. Donnell
Chairman of the Board 125,000 17% 16.600 May 14, 2006 1,304,956 3,307,016
Michael R. Murphy
Chief Financial Officer 12,500 2,3 2% 13.600 2,3 July 24, 2006 106,912 3 270,936 3
and Secretary-Treasurer
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This option was subject to a repricing effected in January 1997,
pursuant to which the option was regranted at an exercise price of
$10.625. The potential realizable value of the repriced option at
a five percent (5%) assumed annual rate of stock price increase
would be $382,495 and at a ten percent (10%) annual rate would be
$950,760.
(2) Reflects shares of Common Stock underlying an option granted on
July 25, 1996, which option replaced an option to purchase an
equal number of shares originally granted on May 15, 1996.
(3) This option was subject to a repricing effected in January 1997,
pursuant to which the option was regranted at an exercise price of
$10.625. The potential realizable value of the repriced option at
a five percent (5%) assumed annual rate of stock price increase
would be $78,495 and at a ten percent (10%) annual rate would be
$196,196.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPTIONS GRANTED AND REPRICED
DURING THE LAST FISCAL YEAR
- -------------------------------------------------------------------------------------------------------------------------------
Length of Original
Number of Market Price of Exercise Price Option Term
Name and Date of Options Stock at Time of at the Time New Exercise Remaining at date of
Principal Position Adjustment Repriced of Repricing($) of Repricing($) Price($) Repricing
- -------------------------------------------------------------------------------------------------------------------------------
Jerry F. Wilson 9 Years and
President and Chief July 25,1996 125,000 13.600 16.600 13.600 Ten Months
Executive Officer
(Deceased)
Michael R. Murphy 9 Years and
Chief Financial Officer July 25,1996 12,500 13.600 16.600 13.600 Ten Months
and Secretary-Treasurer
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In addition to the above, the Company has repriced options to the named
executive officers during the last ten years as summarized by the following
table:
10
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPTION REPRICINGS
FOR THE PAST TEN YEARS 1
- -------------------------------------------------------------------------------------------------------------------------------
Length of Original
Number of Market Price of Exercise Price Option Term
Name and Date of Options Stock at Time of at the Time New Exercise Remaining at date of
Principal Position Adjustment Repriced of Repricing($) of Repricing($) Price($) Repricing
- -------------------------------------------------------------------------------------------------------------------------------
David A. Roberson 7 Years and
President and Chief November 26,1990 73,242 0.682 1.246 0.682 Five Months
Executive Officer
Jerry F. Wilson 7 Years and
President and Chief November 26,1990 73,242 0.682 1.331 0.682 Five Months
Executive Officer
(Deceased)
Barry B. Donnell 7 Years and
Chairman of the Board November 26,1990 54,932 0.682 1.331 0.682 Five Months
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The share and exercise price numbers have been retroactively
adjusted to reflect all stock splits of the Company's Common Stock
that have been effected since 1990.
During 1996, stock options to purchase 342,186 shares of Common Stock were
exercised by the named executive officers. Stock options to purchase 325,000
shares were granted to these persons during 1996 and were unexercised at the end
of the year. The following table summarizes the foregoing:
<TABLE>
<S> <C> <C> <C> <C>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
- -------------------------------------------------------------------------------------------------------
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Shares Acquired Value at Fiscal Year-End at Fiscal Year-End
on Exercise(#) Realized ($) (Exercisable)(#) (Exercisable)($)
- -------------------------------------------------------------------------------------------------------
David A. Roberson 93,750 1,343,806 62,500 1 - 1
Jerry F. Wilson 117,187 1,095,558 125,000 2,3 -
Barry B. Donnell 117,187 2,030,499 125,000 -
Michael R. Murphy 14,062 146,368 12,500 1,3 - 1
- -------------------------------------------------------------------------------------------------------
</TABLE>
(1) These options were subject to a repricing effected in January 1997,
pursuant to which the options were regranted at an exercise price of
$10.625. The closing price per share of the Company's Common Stock on
December 31, 1996 was $11.50 per share.
(2) Mr. Wilson passed away on October 29, 1996. The options are currently
held by his estate.
(3) The options held by Messrs. Wilson and Murphy were repriced on July 25,
1996 and became exercisable on January 25, 1997, except that Mr.
Murphy's option was repriced in January 1997 as provided in footnote
(1) above and as such is not exercisable.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The following directors of the Company serve as members of the Compensation
Committee: Thomas A. Broughton, III, Lee Roy Jordan, John W Lowe and Gerald R.
Moore.
11
<PAGE>
Mr. Lowe is a partner in the law firm of Lowe, Mobley & Lowe, which rendered
legal services to the Company and its subsidiaries during 1996 and which the
Company expects to continue to render legal services during 1997, and has an
ownership interest in certain entities that lease certain facilities to the
Company, as described below. During 1996, the Company and its subsidiaries paid
Lowe, Mobley & Lowe legal fees in the aggregate amount of $119,785.
Cavalier Homes of Alabama ("Cavalier - Alabama"), a division of one of the
Company's subsidiaries, leases a manufacturing facility, office premises and
certain equipment from a partnership, the partners of which include the estate
of the former President and Chief Executive Officer of the Company, Jerry F.
Wilson, and John W Lowe, each of whom owns a one-third interest in such
partnership and together own ____% of the Common Stock of the Company. The lease
was entered into in September 1984, and, after renewals, had an expiration date
in August 1996. In 1996, Cavalier renegotiated the lease for a two-year term
which expires in 1998 and may be renewed for an additional three years at the
option of Cavalier - Alabama. During 1996, Cavalier - Alabama made rental
payments to such partnership in the aggregate amount of $260,000 and expects to
make rental payments during 1997 in the aggregate amount of $180,000. Cavalier -
Alabama has the option to purchase the leased property at any time during the
term of the lease for $2,100,000. Cavalier - Alabama is currently negotiating
with this partnership to purchase ten acres of the land currently under lease.
The Company believes that the payments made under the previous lease terms and
future payments to be made under the renegotiated lease terms are reasonable
compared to amounts that would be paid to an unaffiliated entity for similar
properties.
Cavalier - Alabama leases another manufacturing facility from a partnership, the
partners of which include Jonathan B. Lowe and Michael P. Lowe, each of whom
owns a 5% interest in such partnership and each of whom is a son of John W Lowe;
David A. Roberson, who owns a 10% interest in such partnership; and Jerry F.
Wilson, Jr. and Jonathan D. Wilson, each of whom owns a 10% interest in such
partnership and each of whom is a son of the Company's previous President and
Chief Executive Officer, Jerry F. Wilson. The above-referenced partners of such
partnership beneficially own, in the aggregate, approximately ____% of the
outstanding Common Stock of the Company, not including the shares of Common
Stock beneficially owned by John W Lowe and the estate of Jerry F. Wilson. The
lease, which was entered into in May 1993, expires in May 1997 and may be
renewed for an additional four years at the option of Cavalier - Alabama,
provides for rental payments to be made by Cavalier - Alabama in the amount of
$240,000 per year. Rent during the optional extension period is to be $264,000
per year. During 1996, Cavalier - Alabama made rental payments to such
partnership in the aggregate amount of $240,000 and expects to make rental
payments in 1997 in the aggregate amount of $256,000. Cavalier - Alabama has the
option to purchase the leased property at any time during the term of the lease
for $1,500,000. The Company believes that the payments made under the lease are
reasonable compared to amounts that would be paid to an unaffiliated entity for
similar property.
In March 1996, the Company entered into a $23 million revolving, warehouse and
term loan agreement (the "Credit Facility") with First Commercial Bank which
amended the previous Credit Facility entered into in February 1994. The Credit
Facility contains a revolving line of credit which provides for borrowings
(including letters of credit) of up to 80% and 50% of the Company's eligible (as
defined) accounts receivable and inventories, respectively, up to a maximum of
$5 million. Interest is payable under the revolving line of credit at the bank's
prime rate. The warehouse and term loan agreements contained in the Credit
Facility provide for borrowings of up to 80% of the Company's eligible (as
defined) installment sales contracts, up to a maximum of $18 million. Interest
on term notes is fixed for a period of five years from issuance at a rate based
on the weekly average yield on five year treasury securities averaged over the
preceding 13 weeks, plus 2%, and floats for the remaining two years at a rate
(subject to certain limits) equal to the bank's prime rate plus .75%. The
warehouse component of the Credit Facility provides for borrowings of up to $2
million with interest payable at the bank's prime rate. However, in no event may
the aggregate borrowings under the warehouse and term loan agreement exceed $18
million. The Credit Facility will expire in April 1998. Amounts outstanding
under the Credit Facility are secured by accounts receivable and inventory,
loans purchased and originated by Cavalier Acceptance Corporation, a subsidiary
of the Company, and the capital stock of certain Company subsidiaries. During
1996, the maximum principal balance outstanding under the term loan component of
the Credit Facility was $4,980,786 and the Company made interest payments to
First Commercial Bank in the aggregate amount of $446,048. The Company had no
borrowings under the revolving credit line component of the Credit Facility. Mr.
Broughton is the President of First Commercial Bank.
12
<PAGE>
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
Buccaneer Homes of Alabama ("Buccaneer"), a division of one of the Company's
subsidiaries, leases a manufacturing facility from a corporation, the
shareholders of which include Jerry F. Wilson, Jr. and Jonathan D. Wilson, sons
of the previous President and Chief Executive Officer, each of whom owns a 12.5%
interest in such corporation. The two shareholders also beneficially own, in the
aggregate, approximately ____% of the outstanding Common Stock of the Company,
not including the shares of Common Stock beneficially owned by the estate of
Jerry F. Wilson. The current lease is for an initial term of five years with an
option to renew by Buccaneer for an additional five years. The annual rent for
the initial term is $111,000. The rent for the renewal period beginning May 1999
will be increased by a CPI adjustment at the renewal date. Buccaneer has the
option to purchase the property at any time during the initial period for
$875,000, or subject to a CPI adjustment if purchased during the renewal period.
Buccaneer also has the right of first refusal to purchase the property in the
event the lessor has a bona fide offer to sell the property to a third party.
During January 1996, the Company purchased a manufacturing facility from a
corporation, the shareholders of which include David A. Roberson, who owns a 10%
interest in such corporation, and Jerry F. Wilson, Jr. and Jonathan D. Wilson,
each of whom owns a 12.5% interest in such corporation and each of whom is the
son of the previous President and Chief Executive Officer of the Company. The
foregoing shareholders of such corporation beneficially own, in the aggregate,
approximately _____% of the outstanding Common Stock of the Company, not
including the shares of Common Stock beneficially owned by the estate of Jerry
F. Wilson. The facility was purchased in connection with the Company's
acquisition of Riverchase Homes, Inc. in January 1996 and is utilized by such
Company subsidiary. The facility was purchased for $1,650,000. The Company
believes that the purchase terms were reasonable compared to amounts that would
have been paid to an unaffiliated entity for a similar facility.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The Company's executive officers, directors and beneficial owners of more than
10% of the Company's Common Stock are required under the Exchange Act to file
reports of ownership and changes in ownership with the SEC and the New York
Stock Exchange. Copies of these reports must also be furnished to the Company.
Based on a review of copies of such reports furnished to the Company, the
Company believes that during 1996 all applicable filing requirements were
complied with in a timely manner with the exception of a Form 3 that was filed
late by Gerald R. Moore, a Form 4 that was filed late by John W Lowe and a Form
4 that was filed late by the Company's former President and Chief Executive
Officer, Jerry F. Wilson.
OTHER MATTERS
The Board of Directors does not know of any other business to be presented for
consideration at the Annual Meeting. If other matters properly come before the
Annual Meeting, the persons named in the accompanying form of proxy will vote
thereon in their best judgment.
STOCKHOLDER PROPOSALS
Stockholder proposals submitted for consideration at the 1998 Annual Meeting of
Stockholders must be received by the Company no later than November 26, 1997, to
be included in the 1998 proxy material.
CAVALIER HOMES, INC.
Michael R. Murphy
Secretary
Addison, Alabama
March 25, 1997
13
<PAGE>
----------------------------------------------
----------------------------------------------
------- -------
------- PRELIMINARY COPY -------
------- -------
----------------------------------------------
----------------------------------------------
CAVALIER HOMES, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints David A.
Roberson and Michael R. Murphy, or either of them, proxies of the undersigned,
with full power of substitution, to represent and to vote all shares of Common
Stock of Cavalier Homes, Inc. which the undersigned would be entitled to vote at
the Annual Meeting of Stockholders of Cavalier Homes, Inc., to be held on
Wednesday, May 14, 1997, beginning at 10:00 A.M., C.D.T., at The Summit Club,
Suite 3100, AmSouth-Harbert Plaza, 1901 6th Avenue North, Birmingham, Alabama,
and at any adjournment or postponement thereof, in the following manner:
1. ELECTION OF DIRECTORS.
[ ] FOR all nominees listed [ ] AUTHORITY WITHHELD to
below (except as otherwise vote for all nominees
instructed below) listed below
------------------------------------------------------------------
------------------------------------------------------------------
Thomas A. Broughton, III, Barry B. Donnell, Lee Roy Jordan, John W Lowe,
Gerald R. Moore, Michael R. Murphy and David A. Roberson.
To withhold authority to vote for any nominee, write that nominee's name
in the space provided below.
2. PROPOSAL TO RATIFY AND APPROVE THE APPOINTMENT OF DELOITTE & TOUCHE LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO AMEND THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
THE COMPANY TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK OF
THE COMPANY FROM 15,000,000 TO 50,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on other side)
<PAGE>
(Continued from other side)
4. OTHER MATTERS
[ ] In their discretion, upon such [ ] AUTHORITY WITHHELD to vote
other matters as may properly upon such matters
come before the meeting
The Board of Directors recommends a vote FOR Items 1 through 4. If this proxy is
properly signed and returned, the shares represented will be voted FOR Items 1
through 4 unless you otherwise specify herein.
Dated:_________________________________ 1997
_______________________________________
Signature
_______________________________________
Signature
Please sign this proxy exactly as your name appears hereon. When signing as
executor, administrator, trustee, corporate officer, etc., please give full
title. In case of joint owners, each joint owner should sign.
Please Date, Sign and Return TODAY in the Enclosed Envelope.
No Postage Required if Mailed in the United States.
