CHAMPION ENTERPRISES INC, DEF 14A, 1995-03-20

CHAMPION ENTERPRISES INC
DEF 14A, 1995-03-20
MOBILE HOMES

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant /X/

Filed by a party other than the registrant / /

Check the appropriate box:

/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

/X/ Definitive proxy statement

/ / Definitive additional materials

/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CHAMPION ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(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 (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:

- --------------------------------------------------------------------------------

/X/ 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:

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<PAGE> 2

[LOGO] CORPORATE HEADQUARTERS
AUBURN HILLS, MICHIGAN 48326
(810) 340-9090

March 20, 1995

Dear Shareholder:

Your Company cordially invites you to attend the 1995 Annual Meeting of
Shareholders which will be held at the Grand Hyatt New York, Park Avenue at
Grand Central, New York, New York, 10017, on Monday, May 1, 1995 at 10:00 a.m.,
local time.

It is important that your shares be represented at the meeting, regardless
of how many you hold. Whether you plan to attend the meeting or not, we urge
that you take time to familiarize yourself with the enclosed proxy materials and
that you then promptly sign, date and return the enclosed proxy card in the
postage-paid envelope provided, so that as many shares as possible may be
represented at the meeting. This will not prevent you from voting your shares in
person if you do attend the meeting.

All shareholders will benefit from your cooperation, since the meeting will
have to be adjourned without conducting any business (and the Company will have
to incur additional proxy soliciting expenses) if less than a majority of the
outstanding shares are represented.

Sincerely,

[SIG]

Walter R. Young, Jr.
Chairman of the Board
of Directors, President and
Chief Executive Officer
<PAGE> 3

CHAMPION ENTERPRISES, INC.

------------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 1, 1995

The Annual Meeting of Shareholders of Champion Enterprises, Inc. will be
held at the Grand Hyatt New York, Park Avenue at Grand Central, New York, New
York, 10017, on Monday, May 1, 1995 at 10:00 a.m., local time, for the following
purposes:

1. To elect a Board of Directors;

2. To consider a proposal to amend the Restated Articles of Incorporation
to increase the number of authorized shares of Common Stock from
15,000,000 shares to 30,000,000 shares;

3. To consider a proposal to approve the 1995 Stock Option and Incentive
Plan;

4. To consider a proposal to approve the 1995 Stock Retainer Plan for
Non-employee Directors; and

5. To transact such other business as may properly come before the meeting
or any adjournment thereof.

The Board of Directors has designated March 9, 1995 as the record date for
the determination of shareholders entitled to notice of and to vote at the
meeting.

You are invited to attend the meeting. However, if you do not expect to
attend in person, you are urged to execute and return immediately the enclosed
proxy, which is solicited by the Board of Directors. The proxy is revocable and
will not affect your right to vote in person if you attend the meeting.

If a shareholder is a participant in the Champion Enterprises, Inc. Savings
Plan, the enclosed proxy card will represent the number of shares registered in
the participant's name and/or the number of shares allocated to the
participant's account under the Plan. For those shares held in the Plan, the
enclosed proxy card will serve as a direction to the trustee under the Plan as
to how the shares are to be voted.

By Order of the Board of Directors,

LOUIS M. BALIUS, SECRETARY

Auburn Hills, Michigan
March 20, 1995
<PAGE> 4

CHAMPION ENTERPRISES, INC.
2701 UNIVERSITY DRIVE, SUITE 320
AUBURN HILLS, MICHIGAN 48326

------------------------

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, MAY 1, 1995

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Champion Enterprises, Inc., a Michigan
corporation (the "Company"), to be used at the Annual Meeting of Shareholders of
the Company to be held on Monday, May 1, 1995, or at any adjournment thereof,
for the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders and in this Proxy Statement. Proxies may be revoked by (i) filing
with the Secretary of the Company, at or before the Annual Meeting, a written
notice of revocation bearing a later date than the proxy, (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the Secretary
of the Company at or before the Annual Meeting, or (iii) attending the Annual
Meeting and voting in person by ballot.

Only shareholders of record of the Company's common stock, $1 par value
("Common Stock"), at the close of business on March 9, 1995 are entitled to
notice of and to vote at the meeting or any adjournment thereof. On that date,
the Company had 7,570,124 shares of Common Stock issued and outstanding. Each
share of Common Stock outstanding on the record date is entitled to one vote on
all matters presented at the Annual Meeting. A majority of the outstanding
shares will constitute a quorum. Shares cannot be voted at the meeting unless
the holder is present in person or represented by proxy. Shares may not be voted
cumulatively for the election of directors.

The nominees for election to the Board receiving a plurality of votes cast
at the Annual Meeting will be elected as Directors. A majority of the shares
present, or represented, and entitled to vote at the Annual Meeting is required
for approval of the 1995 Stock Option and Incentive Plan and the 1995 Stock
Retainer Plan for Non-employee Directors, and a majority of the outstanding
shares entitled to vote at the Annual Meeting is required for approval of the
amendment to the Restated Articles of Incorporation. Abstentions are counted for
purposes of determining whether a quorum is present at the meeting although
broker non-votes are not counted for this purpose. Abstentions and broker
non-votes will have the effect of a vote against the proposals to approve the
1995 Stock Option and Incentive Plan, the 1995 Stock Retainer Plan for
Non-employee Directors and the amendment to the Restated Articles of
Incorporation.

The entire cost of soliciting proxies will be borne by the Company. The
Company will make arrangements with brokerage houses, nominees, fiduciaries and
other custodians to send proxies and proxy materials to beneficial owners of the
Company's stock and will reimburse them for their expenses in so doing. In
addition to solicitation by mail, officers and regular employees of the Company
may solicit proxies personally, by telephone or by facsimile transmission.
Further, the Company may use the services of Morrow & Co., Inc. to solicit
proxies.

The approximate date on which this Proxy Statement and the form of proxy
relating hereto will first be sent or given to shareholders is March 20, 1995.
The Annual Report to Shareholders for the fiscal year ended December 31, 1994 is
enclosed herewith.

<PAGE> 5

SUMMARY OF PROXY STATEMENT

The following summary is intended only to highlight certain information
contained in this Proxy Statement. This summary is not intended to be a complete
statement of all material features of the proposals and is qualified in its
entirety by reference to the more detailed information contained elsewhere in
this Proxy Statement. Shareholders are urged to read this Proxy Statement in its
entirety.

TIME, DATE AND PLACE OF ANNUAL MEETING

The Annual Meeting of Shareholders (the "Annual Meeting") of Champion
Enterprises, Inc., a Michigan corporation (the "Company"), will be held on
Monday, May 1, 1995, at 10:00 a.m., local time, at the Grand Hyatt New York,
Park Avenue at Grand Central, New York, New York 10017.

PURPOSE OF THE ANNUAL MEETING

At the Annual Meeting, holders of shares of the Company's common stock, $1
par value ("Common Stock"), will be asked to consider and vote upon (i) the
election of six directors (the "Directors") to serve until the 1996 Annual
Meeting of Shareholders of the Company, (ii) a proposal to approve an amendment
to the Restated Articles of Incorporation to increase the number of authorized
shares of Common Stock from 15,000,000 shares to 30,000,000 shares, (iii) a
proposal to approve the 1995 Stock Option and Incentive Plan, and (iv) a
proposal to approve the 1995 Stock Retainer Plan for Non-employee Directors. The
aggregate number of shares of Common Stock subject to issuance under the
proposed 1995 Stock Option and Incentive Plan and the proposed 1995 Stock
Retainer Plan for Non-employee Directors does not exceed 5% of the total
outstanding shares of Common Stock.

RECORD DATE; SHARES ENTITLED TO VOTE; QUORUM

Only shareholders of record of the Company's Common Stock at the close of
business on March 9, 1995, will be entitled to notice of and to vote at the
Annual Meeting or any adjournment or adjournments or postponement or
postponements thereof. As of such date, there were 7,570,124 shares of the
Company's Common Stock outstanding and entitled to vote. Shareholders of record
on March 9, 1995, are entitled to one vote per share of Company Common Stock on
any matter that may properly come before the Annual Meeting. The presence,
either in person or by properly executed proxy, of the holders of a majority of
the outstanding shares of the Company's Common Stock is necessary to constitute
a quorum at the Annual Meeting.

VOTE REQUIRED TO ADOPT PROPOSALS

The nominees for election to the Board receiving a plurality of votes cast
at the Meeting will be elected as Directors. A majority of the shares present,
or represented, and entitled to vote at the Meeting is required for approval of
the 1995 Stock Option and Incentive Plan and the 1995 Stock Retainer Plan for
Non-employee Directors, and a majority of the outstanding shares entitled to
vote at the Annual Meeting is required for approval of the amendment to the
Restated Articles of Incorporation.

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1. ELECTION OF DIRECTORS

Six Directors will be elected at the Annual Meeting, each to hold office
until the next Annual Meeting of Shareholders or until a successor is elected
and qualified. The following table sets forth certain information regarding
management's nominees for election as Directors:

<TABLE>
<CAPTION>
Year
First
Became
a
Name Age Principal Occupation Director
- ---------------------------- --- ------------------------------------------- ----
<S> <C> <C> <C>
Walter R. Young, Jr......... 50 Chairman of the Board of Directors,
President and Chief Executive Officer of
the Company................................ 1990
Robert W. Anestis(1)........ 49 President, Anestis & Company, an investment
banking and financial advisory firm
(Westport, Connecticut).................... 1991
Selwyn Isakow(1)............ 43 President, The Oxford Investment Group,
Inc., a merchant banking and corporate
development firm (Bloomfield Hills,
Michigan).................................. 1991
George R. Mrkonic(2)........ 42 Vice Chairman and President, Borders Group,
Inc., a subsidiary of Kmart Corporation, a
consumer retailer (Ann Arbor, Michigan).... 1994
Johnson S. Savary(2)........ 66 Of Counsel, Abel, Band, Russell, Collier,
Pitchford & Gordon, attorneys (Sarasota,
Florida)................................... 1979
Carl L. Valdiserri(2)....... 58 Chairman and Chief Executive Officer, Rouge
Steel Company, an integrated steel
manufacturer (Dearborn, Michigan).......... 1995
</TABLE>

- -------------------------
(1) Member of the Audit Committee

(2) Member of the Compensation Committee

2. PROPOSAL TO AMEND THE RESTATED ARTICLES OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

The Company's Restated Articles of Incorporation presently authorize
15,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock. As of
March 9, 1995, 7,570,124 shares of Common Stock were issued and outstanding, and
1,081,519 shares of Common Stock were reserved for issuance pursuant to the
Company's stock option and other plans. There were no shares of Preferred Stock
issued or reserved for issuance. The Board of Directors is seeking approval of
an amendment to the Restated Articles of Incorporation to increase the number of
authorized shares of Common Stock to 30,000,000 shares. The increase in the
number of authorized shares of Common Stock will provide additional shares which
the Board of Directors believes is important to have available for financing,
acquisitions, stock splits and other general corporate purposes.

2
<PAGE> 7

3. PROPOSAL TO APPROVE THE 1995 STOCK OPTION AND INCENTIVE PLAN

The Board of Directors has approved, subject to shareholder approval, the
1995 Stock Option and Incentive Plan (the "1995 Plan"). The 1995 Plan is
intended to attract, motivate and retain highly qualified individuals to serve
as employees of the Company and to encourage employees of the Company to acquire
an ownership interest in the Company and make a greater effort on behalf of the
Company.

The 1995 Plan is an incentive compensation plan which provides for the
granting of stock options, stock appreciation rights ("SARs"), restricted stock,
performance share awards and annual incentive awards to key employees of the
Company. The annual incentive awards are based on pre-established objective
performance goals. Nonqualified stock options, SARs and annual incentive awards
granted under the 1995 Plan are intended to comply with the requirements of
Section 162(m) of the Internal Revenue Code (the "Code") to ensure that such
incentive compensation is fully tax deductible. The 1995 Plan is to be
administered by the Compensation Committee of the Board of Directors.

Stock Options, SARs, Restricted Stock and Performance Shares. Stock options
granted under the 1995 Plan may be either incentive stock options under Section
422 of the Code or nonqualified options. The exercise price for incentive stock
options must be at least the fair market value of the shares on the grant date.
The exercise price for nonqualified options may be less than fair market value.
The 1995 Plan also provides for the discretionary grant of SARs in tandem with
stock options. The Compensation Committee is also authorized to grant
performance share awards and shares of restricted Common Stock. The terms and
conditions of the performance share awards and the restricted stock are to be
determined by the Compensation Committee.

Annual Performance Incentive Awards. Each year, the Compensation Committee
will (i) identify the executive officers who will be eligible to receive annual
incentive awards ("Eligible Employees"), (ii) determine a performance period and
(iii) determine target levels of Company performance that must be achieved by
the Company for annual incentive awards ("Annual Incentive Awards") to be paid
under the 1995 Plan. The performance period will be from one to three fiscal
years; the performance targets will consist of any or all of the following:
earnings, sales growth or market capitalization; and the target levels will
consist of a threshold level and, in certain instances, first, second and third
target levels. In addition, the Compensation Committee will determine the amount
of the Annual Incentive Award to be paid to each Eligible Employee upon the
achievement of the threshold and target performance levels. The Compensation
Committee will make the foregoing determinations prior to the commencement of
services to which awards relate and while the outcome of the performance goals
is uncertain. At the end of each year, the Compensation Committee will certify,
in writing, the degree of achievement by the Company of the performance targets
and the amount of Annual Incentive Award which may be paid to each Eligible
Employee. If the Company fails to achieve a threshold performance target
applicable to an Eligible Employee, no Annual Incentive Award will be paid to
such Eligible Employee under the 1995 Plan for such year.

Annual Incentive Awards will be paid in cash or shares of Common Stock of
the Company, as determined by the Compensation Committee. Payments will be made
as soon as practicable following the Compensation Committee's certification of
Annual Incentive Awards, if any.

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<PAGE> 8

4. PROPOSAL TO APPROVE THE 1995 STOCK RETAINER PLAN FOR NON-EMPLOYEE DIRECTORS

The Board of Directors has approved, subject to shareholder approval, the
1995 Stock Retainer Plan for Non-employee Directors (the "Retainer Plan"). The
Retainer Plan provides that, beginning on the date of the 1995 Annual Meeting of
Shareholders, and on each subsequent Annual Meeting date through the year 2000,
each person elected as a non-employee Director will receive in lieu of all cash
compensation an annual retainer award of 1,200 shares of Common Stock of the
Company or 1,300 shares if such non-employee Director also serves as a
chairperson of a Board Committee. The award to non-employee Directors of shares
of Common Stock as an annual retainer is expected to further unite the interests
of the Board of Directors with those of the Company's shareholders and to be of
substantial value in attracting, motivating and retaining the most highly
qualified non-employee Directors.

4
<PAGE> 9

1. ELECTION OF DIRECTORS

Six Directors will be elected at the Annual Meeting, each to hold office
until the next Annual Meeting of Shareholders or until a successor is elected
and qualified. In March 1995 and in accordance with the Company's Bylaws, the
Board of Directors increased its size to eight Directors and appointed Carl L.
Valdiserri to fill the vacancy created thereby. Effective May 1, 1995, the size
of the Board will be decreased to six Directors upon the retirement of Stanley
R. Day and James W. Whims from the Board.

The following table sets forth certain information regarding management's
nominees for election as Directors. All of the nominees are presently Directors
of the Company and, except for Mr. Valdiserri, were elected by the shareholders
at the 1994 Annual Meeting. Proxies will be voted for the election of such
nominees unless the proxy card is marked (in accordance with the instructions
thereon) to indicate that authority to do so is withheld. If, as a result of
unknown or unforeseen circumstances, any of such nominees shall be unavailable
to serve as a Director, proxies will be voted for the election of such other
person or persons as the Board of Directors may select.

- -------------------------
(1) Member of the Audit Committee

(2) Member of the Compensation Committee

CERTAIN INFORMATION REGARDING NOMINEES

Each of the foregoing persons has been engaged in the principal occupation
shown above, or in a similar one with the same employer, for more than five
years, except for Messrs. Young, Mrkonic and Savary. Mr. Young has held the
position of President and Chief Executive Officer since 1990

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<PAGE> 10

and Chairman of the Board since April 1992. From 1987 to 1990, Mr. Young held
various senior management positions with The Henley Group, responsible for five
wholly-owned companies and ten international joint ventures, including President
of The Wheelabrator Corporation, a division of Wheelabrator Technologies, Inc.,
Atlanta, Georgia, a provider of industrial surface treatment equipment, parts
and services and President of Johnson Filtration Systems, St. Paul, Minnesota, a
provider and servicer of well and water treatment products. Prior to joining
Kmart in November, 1990, Mr. Mrkonic was President of Eyelab, Inc., an optical
superstore company, from 1987 to 1989. Mr. Mrkonic also serves as a director of
OfficeMax, Inc. and The Sports Authority, Inc., both publicly-traded
corporations. For more than five years prior to joining the law firm of Abel,
Band, Russell, Collier, Pitchford & Gordon in November 1992, Mr. Savary was a
partner of the law firm Dykema Gossett which has provided legal services to the
Company during the past fiscal year. Mr. Valdiserri also serves as a director of
Rouge Steel Company, a publicly-traded corporation.

COMPENSATION OF DIRECTORS

Current Compensation. At the present time, each Director who is not an
employee of the Company ("non-employee Director") receives an annual cash
retainer of $13,000 plus a fee of $1,500 per day for each Board of Directors
meeting (or committee meeting held on a different day) attended. Each such
Director who is also chairperson of a committee receives an additional annual
cash retainer of $2,500. Directors who are employees of the Company receive no
compensation (beyond their compensation for services as an employee) for serving
as Directors.

New Compensation Program. If shareholders approve the proposed 1995 Stock
Retainer Plan for Non-employee Directors, the Company will implement a new
compensation program for non-employee Directors, to be effective May 1, 1995.
Under this new program, each non-employee Director will receive in lieu of all
other cash compensation an annual retainer of 1,200 shares of Common Stock of
the Company or 1,300 shares if such non-employee Director also serves as a
chairperson of a Board Committee. See "Proposal to Approve the 1995 Stock
Retainer Plan for Non-employee Directors". Non-employee Directors will continue
to be reimbursed for expenses they incur in attending Board and Committee
meetings, and the Company will continue to maintain business travel accident
insurance coverage for them. The 1991 Stock Plan for Directors (the "Directors'
Plan") also will continue to be available to any new Director upon his or her
first election to the Board. However, the annual stock retainer will be in lieu
of all other cash retainers, meeting fees and additional stock option grants.

Under the Directors' Plan, the first time a non-employee Director is
elected at an Annual Meeting, he or she will be entitled to a grant immediately
following such Annual Meeting. Stock grants under the Directors' Plan consist of
a right to purchase 2,000 shares and a nonqualified stock option to purchase up
to 6,000 shares. The right must be exercised within 60 days following the date
of grant. Shares purchased pursuant to the right are restricted and
nontransferable for a two-year period following the date of purchase. The option
becomes exercisable when a non-employee Director has exercised the right in full
during the applicable 60-day period. Thereafter, 1,500 shares will become
exercisable on each successive Annual Meeting date that such person remains a
Director until the option becomes fully exercisable. Once the option becomes
exercisable, it will remain exercisable for a period not to exceed 10 years from
the date of grant, whether or not the non-employee Director remains on the Board
for such period. The exercise price for the right is the

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<PAGE> 11

greater of $2.00 per share or 40% of the fair market value per share on the date
of grant and the exercise price for the option is the closing price of the
Company's Common Stock on the American Stock Exchange on the date of the grant.
During fiscal 1994, stock option grants were awarded to Mr. Mrkonic upon his
first election as a Director of the Company.

MEETINGS AND COMMITTEES OF THE BOARD

The Board of Directors of the Company meets regularly, at least once each
quarter. During fiscal 1994 the Board of Directors held seven meetings. Standing
committees established by the Board of Directors to assist it in the discharge
of its responsibilities are described below. The Board of Directors does not
have a nominating committee.

Audit Committee. The Audit Committee, which met three times during fiscal
1994, is responsible for recommending to the Board of Directors the selection of
independent public accountants; approving the nature and scope of services
performed by the independent public accountants and reviewing the range of fees
for such services; conferring with the independent public accountants and
reviewing the results of their audit; providing assistance to the Board of
Directors with respect to the corporate and reporting practices of the Company;
and, in general, assuring that management fulfills its responsibilities in the
preparation of the Company's financial statements and reports.

Compensation Committee. The Compensation Committee, which met four times
during fiscal 1994, recommends, for approval by the full Board of Directors, the
nature and amount of all compensation for executive officers of the Company. The
Compensation Committee also administers the 1987 Stock Option Plan, the 1990
Nonqualified Stock Option Program and, if approved by shareholders, the 1995
Stock Option and Incentive Plan.

2. PROPOSAL TO APPROVE AN AMENDMENT TO THE RESTATED
ARTICLES OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK

The Restated Articles of Incorporation presently authorize 15,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock. As of March 9,
1995, 7,570,124 shares of Common Stock were issued and outstanding, and
1,081,519 shares of Common Stock were reserved for issuance pursuant to the
Company's stock option and other plans. There were no shares of Preferred Stock
issued or reserved for issuance.

Proposed Amendment. The Board of Directors is seeking approval of an
amendment to the Restated Articles of Incorporation to increase the number of
authorized shares of Common Stock to 30,000,000 shares. If the proposal is
approved by the shareholders, the first paragraph of Article III of the Restated
Articles of Incorporation, which sets forth the total authorized capital stock
of the Company, will be amended to read as follows:

The total number of shares of stock which the corporation shall have
authority to issue is 35,000,000 shares, of which 30,000,000 shares
shall be Common Stock of the par value of $1.00 each ("Common Stock"),
and 5,000,000 shares shall be Preferred Stock of no par value
("Preferred Stock").

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<PAGE> 12

Reason for Proposed Amendment. The increase in the number of authorized
shares of Common Stock will provide additional shares which the Board of
Directors believes is important to have available for financing, acquisitions,
stock splits and other general corporate purposes. The additional shares may be
issued by the Board of Directors without further shareholder approval unless
required by applicable law, regulation or rule. Although the Company does
consider from time to time proposals or transactions involving the issuance of
additional shares of Common Stock, there is currently no specific transaction
contemplated which would result in the issuance of the additional shares of
Common Stock being considered for authorization under this proposal.

THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSAL TO AMEND THE
RESTATED ARTICLES OF INCORPORATION.

3. PROPOSAL TO APPROVE THE 1995 STOCK OPTION
AND INCENTIVE PLAN

On November 29, 1994, the Board approved the Company's 1995 Stock Option
and Incentive Plan (the "1995 Plan"), subject to approval by the Company's
shareholders at the Annual Meeting. The 1995 Plan is intended to attract,
motivate and retain highly qualified individuals to serve as employees of the
Company and to encourage employees of the Company to acquire an ownership
interest in the Company and make a greater effort on behalf of the Company.

The 1995 Plan is an incentive compensation plan which provides for the
granting of stock options, stock appreciation rights ("SARs"), restricted stock,
performance share awards and annual incentive awards to such eligible key
employees of the Company and its subsidiaries (including Directors who are key
employees) as the Compensation Committee of the Board of Directors may select.
The annual incentive awards are based on pre-established objective performance
goals. Nonqualified stock options, SARs and annual incentive awards granted
under the 1995 Plan are intended to comply with the requirements of Section
162(m) of the Internal Revenue Code (the "Code") to ensure that such incentive
compensation is fully tax deductible.

The 1995 Plan is to be administered by the Compensation Committee of the
Board of Directors. The Compensation Committee is authorized to administer and
interpret the 1995 Plan and to adopt such rules and regulations as it determines
are appropriate. Approximately 60 employees of the Company (including employees
who are Directors of the Company) currently are eligible to participate in the
1995 Plan. It is anticipated that annual incentive awards under the 1995 Plan
will be limited to those executive officers of the Company who are selected to
participate by the Compensation Committee.

STOCK OPTIONS, SARS, RESTRICTED STOCK AND PERFORMANCE SHARES.

Stock Options. Options granted under the 1995 Plan may be either incentive
stock options under Section 422 of the Code or nonqualified stock options. The
exercise price for incentive stock options must be at least the fair market
value of the shares on the grant date. At the discretion of the Compensation
Committee, the exercise price for nonqualified options may be less than fair
market value. Options granted under the 1995 Plan become exercisable at such
times as the Compensation Committee may determine and generally will expire ten
years after the grant date, unless a shorter period has been set by the
Compensation Committee. Payment for shares to be acquired upon the

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<PAGE> 13

exercise of options granted under the 1995 Plan or payment of related
withholding tax obligations may be made in cash, by check or, at the discretion
of the Compensation Committee, by tendering previously-held shares of Company
Common Stock or through a cashless exercise procedure. In any one fiscal year,
no optionee may be granted options to purchase more than 100,000 shares of the
Company's Common Stock under the 1995 Plan.

Stock Appreciation Rights. The 1995 Plan provides for the discretionary
grant of SARs in tandem with stock options. An SAR represents the right to
receive a cash or stock payment from the Company equal to the excess of the fair
market value of the share of Common Stock subject to the related option on the
date of exercise over the per share exercise price of the related option. An
option to purchase shares will terminate with respect to the number of shares
for which an SAR is exercised.

Restricted Stock and Performance Share Awards. The 1995 Plan also
authorizes the Compensation Committee to grant restricted stock and performance
share awards to key employees. Participants who receive restricted stock are
entitled to dividend and voting rights on the restricted shares prior to the
lapse of restrictions on such grants. Performance share awards are payable at
the discretion of the Compensation Committee in cash or shares of the Company's
Common Stock. The terms and conditions of the restricted stock and performance
share awards, including the acceleration or lapse of any restrictions and
conditions of such awards, are to be determined by the Compensation Committee.

ANNUAL PERFORMANCE INCENTIVE AWARDS

Under the 1995 Plan, certain executive officers ("Eligible Employees")
designated by the Compensation Committee may receive annual incentive awards
determined by pre-established objective performance goals ("Annual Incentive
Awards").

General. Each year, the Compensation Committee will (i) identify the
Eligible Employees, (ii) determine a performance period, and (iii) determine
target levels of Company performance that must be achieved by the Company in
order for awards to be paid under the 1995 Plan. The performance period will be
from one to three fiscal years; the performance targets will consist of any or
all of the following: earnings, sales growth or market capitalization; and the
target levels will consist of a threshold level and, in certain instances,
first, second and third target levels. In addition, the Compensation Committee
will determine the amount of the Annual Incentive Award to be paid to each
Eligible Employee upon the achievement of the threshold and target performance
levels. The Compensation Committee will make the foregoing determinations prior
to the commencement of services to which awards relate (or during the period
established under Code Section 162(m)) and while the outcome of the performance
goals is uncertain. At the end of each year, the Compensation Committee will
certify, in writing, the degree of achievement by the Company of the performance
targets and the amount of Annual Incentive Award which may be paid to each
Eligible Employee.

Annual Incentive Awards. If the Company fails to achieve a threshold
performance target applicable to an Eligible Employee, no Annual Incentive Award
will be paid to such Eligible Employee for that year under the 1995 Plan. Annual
Incentive Awards will be paid in cash or in shares of Common Stock of the
Company, as determined by the Committee. Awards will be made in an amount equal
to a designated percentage of each Eligible Employee's base salary or a
designated percentage of Company earnings. The maximum Annual Incentive Award
that may be

9
<PAGE> 14

earned by any Eligible Employee is five times such Employee's base salary but in
no event more than $2,000,000. The Compensation Committee retains the discretion
to reduce by any amount the Annual Incentive Award otherwise payable to an
Eligible Employee under the 1995 Plan.

New Plan Benefits Table. Annual Incentive Awards to be issued in the future
under the 1995 Plan cannot be determined at this time. The following table sets
forth the Annual Incentive Award that individuals and groups referred to below
would have received in 1994 if the 1995 Plan had been in effect since the
beginning of 1994 and earnings during 1994 were on a fully taxed basis:

<TABLE>
<CAPTION>
NEW PLAN BENEFITS
---------------------------------------------------------------------------------
ANNUAL INCENTIVE AWARDS UNDER THE 1995 STOCK OPTION AND INCENTIVE PLAN
---------------------------------------------------------------------------------
Name and Position Dollar Value ($)
---------------------------------------------------------------------------------
<S> <C>

Walter R. Young, Jr. ........................................ $302,500
Chairman of the Board, President and Chief Executive
Officer
James M. Gurch............................................... 512,827
Vice President
Thomas J. Ensch.............................................. 131,533
Group Vice President -- Transportation
A. Jacqueline Dout........................................... 110,000
Executive Vice President -- Treasurer and Chief Financial
Officer
Louis M. Balius.............................................. 31,236
Vice President -- Secretary and General Counsel
Executive Group.............................................. 1,088,096
Non-Executive Director Group(1).............................. -0-
Non-Executive Officer Employee Group(1)...................... -0-
---------------------------------------------------------------------------------
</TABLE>

(1) Currently, only the named executive officers appearing in the
Summary Compensation Table are eligible to receive Annual Incentive
Awards. Non-employee Directors are not eligible to participate in
the 1995 Plan.

FEDERAL INCOME TAX CONSEQUENCES

Incentive Stock Options. At the time an incentive stock option is granted
or exercised, the optionee will not be deemed to have received any income, and
the Company will not be entitled to a deduction. The optionee generally will
receive long-term capital gain or loss treatment on the disposition of stock
acquired upon exercise of the option, provided the disposition occurs more than
two years from the date the option is granted and the stock acquired is held by
the optionee for more than one year. An optionee who disposes of shares acquired
by exercise prior to the expiration of the foregoing holding periods realizes
ordinary income upon the disposition equal to the difference between the option
price and the lesser of the fair market value of the shares on the date of
exercise or the disposition price. Any appreciation between the fair market
value of the shares on the date of exercise and the disposition price is taxed
to the optionee as long or short-term capital gain, depending on the length of
the holding period. To the extent ordinary income is recognized by the optionee,
the Company receives a corresponding tax compensation deduction.

10
<PAGE> 15

Nonqualified Stock Options. Upon the exercise of a nonqualified stock
option, an optionee not subject to the short swing profit restrictions under
Section 16(b) of the Securities Exchange Act of 1934, and an insider subject to
such restrictions who has held the option until the restrictions have lapsed
(usually six months), will realize ordinary income equal to the difference
between the option price and the fair market value of the Common Stock on the
date of exercise. Upon withholding for income and employment tax, the Company is
entitled to a tax compensation deduction equal to the ordinary income realized
by the employee. When the optionee disposes of the shares acquired by the
exercise of the option, any amount received in excess of the fair market value
of the shares on the date of exercise will be treated as long or short-term
capital gain, depending on the holding period of the shares.

If option shares are paid for with the Company's Common Stock, the optionee
will realize ordinary income equal to the fair market value of the number of
shares received upon exercise of the nonqualified option which exceeds the
number of shares surrendered for payment of such option, reduced by the amount
of any cash paid upon the exercise of the option. Upon withholding for income
and employment taxes, the Company will be entitled to a compensation tax
deduction equal to the ordinary income realized by the optionee.

Stock Appreciation Rights. Upon the exercise of a stock appreciation right,
a participant realizes ordinary income equal to the cash or fair market value of
Common Stock received from the exercise. Upon withholding for income and
employment taxes, the Company receives a compensation tax deduction equal to the
ordinary income realized by the participant.

Restricted Stock Awards. A participant who receives a restricted stock
award realizes ordinary income equal to the fair market value of the Company's
Common Stock on the date on which the restrictions lapse. Upon withholding for
income and employment taxes, the Company receives a compensation tax deduction
equal to the ordinary income realized by the participant.

Annual Incentive Awards. A participant who receives an Annual Incentive
Award in cash or shares of unrestricted Common Stock, realizes ordinary income
equal to the cash or fair market value of the Company's Common Stock on the
later of the payment date or the date on which any restrictions lapse. Upon
withholding for income and employment taxes the Company receives a compensation
tax deduction equal to the ordinary income realized by the participant.

Performance Share Awards. A participant who receives a performance share
award recognizes ordinary income equal to the cash or fair market value of the
Company's Common Stock received from the award upon actual payment when the
terms and conditions of the award have been satisfied. Upon withholding for
income and employment taxes, the Company receives a compensation tax deduction
equal to the ordinary income realized by the participant.

Code Section 162(m). Section 162(m) of the Code denies a federal income tax
deduction for certain compensation in excess of $1,000,000 per year paid to the
Chief Executive Officer and the four other most highly-paid executive officers
of a publicly traded corporation. Certain types of compensation, including
compensation based on performance goals, are excluded from this deduction limit.
It is intended that nonqualified stock options, SARs and Annual Incentive Awards
paid to a named executive officer will be deductible by the Company
notwithstanding the limitations of Code section 162(m) by reason of the
exception for performance based compensation, assuming shareholders approve the
1995 Plan.

11
<PAGE> 16

OTHER INFORMATION

Shares. The Board has reserved 325,000 shares of the Company's Common Stock
for issuance under the 1995 Plan. The number of shares of Common Stock
authorized for the Plan and the number of shares subject to individual awards
and grants under the Plan will be adjusted pro rata by the Compensation
Committee in the event of any increase or decrease in the number of outstanding
shares of Common Stock of the Company resulting from a dividend of Common Stock,
subdivision or combination of shares or a reclassification of Common Stock.
Shares subject to the portion of a cancelled, terminated or expired stock
option, stock appreciation right, restricted stock grant or performance share
award may again be used for grants and awards under the Plan. Upon the exercise
of a stock appreciation right, any shares subject to a tandem option are
forfeited and are unavailable for future grants and awards under the Plan.

Change in Control. Upon a change in control of the Company (as defined in
the 1995 Plan), outstanding stock options and SARs immediately become
exercisable, all restrictions lapse on restricted stock grants, and all
performance goals and conditions shall be deemed to have been satisfied on
outstanding performance share awards. For purposes of granting annual incentive
awards, the determination of whether performance targets have been achieved
shall be made as of the date of the change in control. Any payments due shall
become immediately payable.

Employment Termination. An optionee who terminates employment with the
Company for reasons other than permanent disability or death, must exercise all
exercisable options and SARs within 90 days after such optionee's termination.
Upon the death of an optionee, exercisable options and SARs must be exercised by
the optionee's heirs before the expiration of the options. If an optionee's
employment terminates due to total and permanent disability, his or her
exercisable incentive stock options and related SARs must be exercised within
one year from his or her date of termination due to disability. A disabled
optionee's exercisable nonqualified stock options and related SARs must be
exercised before the expiration of the terms of the options. A participant who
terminates employment for any reason forfeits any restricted stock awards and
performance share awards still subject to restrictions or conditions; provided,
however, that the Compensation Committee is authorized to accelerate or waive
any restrictions or conditions on restricted stock and performance share awards.

An Eligible Employee who terminates employment for any reason other than
retirement, disability or death before receiving payment of an Annual Incentive
Award, forfeits the opportunity to receive any such compensation. An Eligible
Employee who retires, becomes disabled or dies before receiving payment of an
Annual Incentive Award will be paid the full amount for the relevant year if
employed during the entire year or a prorated amount according to the number of
full months of employment during the year.

Plan Amendment and Termination. The 1995 Plan may be terminated or amended
at any time by the Board of Directors, but no amendment may, without the
approval of shareholders, (i) materially increase the benefits accruing to
optionees, (ii) increase the number of securities issuable under the 1995 Plan,
or (iii) modify the requirements for eligibility. No amendment, modification or
termination of the 1995 Plan may adversely affect any option, appreciation
right, restricted stock grant, performance share award or Annual Incentive Award
previously granted under the 1995 Plan, without the consent of the participant.
Unless the 1995 Plan is terminated sooner by the Board of Directors, no new
awards or grants may be authorized under the 1995 Plan after November 28, 2004.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE THE
1995 STOCK OPTION AND INCENTIVE PLAN.

12
<PAGE> 17

4. PROPOSAL TO APPROVE THE 1995 STOCK RETAINER PLAN
FOR NON-EMPLOYEE DIRECTORS

The Board of Directors has approved and is recommending that the
shareholders approve the 1995 Stock Retainer Plan for Non-employee Directors
("Retainer Plan"). The Retainer Plan contemplates that each non-employee
Director will receive an annual retainer of Common Stock of the Company in lieu
of all cash compensation. The payment of an annual retainer to non-employee
Directors in shares of Common Stock is expected to further unite the interests
of the Board of Directors with those of the Company's shareholders and to be of
substantial value in attracting, motivating and retaining the most highly
qualified non-employee Directors.

The Retainer Plan provides that, beginning on the date of the 1995 Annual
Meeting of Shareholders, and on each subsequent Annual Meeting date through the
year 2000, each person elected as a non-employee Director will receive in lieu
of all cash compensation an annual retainer consisting of 1,200 shares of Common
Stock or 1,300 shares if such non-employee Director also serves as chairperson
of a Board Committee. The annual stock retainer will be in lieu of all cash
retainers, meeting fees and annual stock option grants. Non-employee Directors
will continue to be reimbursed for expenses they incur in attending Board and
Committee meetings, and the 1991 Stock Plan for Directors will continue to be
available to any new Director upon his or her first election to the Board. See
"Election of Directors -- Compensation of Directors".

Any new Director who is appointed by the Board prior to an annual meeting
to fill a vacancy on the Board, would receive a pro-rated number of shares of
Common Stock as a stock retainer for services during such interim term. Once
shares are issued to a non-employee Director, they are not forfeited upon the
Director's termination of service, regardless of the reason for such
termination.

Limitations. The Board has reserved 50,000 shares of the Company's Common
Stock (subject to adjustment for stock splits, stock dividends and the like) for
issuance under the Retainer Plan. This number of shares is expected to be
sufficient to pay retainers to non-employee Directors through the Annual Meeting
date in 2000. The Retainer Plan does not provide for the payment of retainers
with respect to any period after the Annual Meeting date in 2000.

Tax Treatment of Retainers. A non-employee Director will realize ordinary
income equal to the fair market value of the shares of Company Common Stock
valued on the date six months after the date of grant. In the alternative, a
Director may file a Code Section 83(b) election within 30 days after the grant
date and be taxed on the fair market value of the shares on the grant date.

General. The Retainer Plan may be amended or terminated by the Board of
Directors upon the recommendation of the Compensation Committee without
shareholder approval, except as specified in Section 9 of the Retainer Plan
(which effectively prohibits the amendment of the Retainer Plan more than once
every six months in a manner that would affect the number of shares of Common
Stock issuable to non-employee Directors thereunder).

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE THE
1995 STOCK RETAINER PLAN FOR NON-EMPLOYEE DIRECTORS.

13
<PAGE> 18

EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT

Compensation recommendations for the Company's executive officers are made
by the Compensation Committee of the Board of Directors and approved by the full
Board. The Compensation Committee generally meets three times a year and during
1994 was comprised of the three non-employee Directors listed below this report.
The primary responsibility of the Committee is to establish and monitor the
Company's executive compensation policies. Set forth below is the report of the
Compensation Committee describing its executive officer compensation policies
and the basis for the 1994 compensation of Walter R. Young, Jr., the Company's
Chief Executive Officer ("CEO").

COMPENSATION POLICIES FOR EXECUTIVE OFFICERS. The Company's executive
compensation policies are designed to attract, retain and motivate executive
officers to enhance shareholder value. Executive compensation has three
components: (i) annual base salary, (ii) annual performance incentives through
cash bonus and stock option awards and, if approved by shareholders, awards
under the 1995 Stock Option and Incentive Plan, and (iii) long-term performance
incentives through participation in the 1987 Stock Option Plan, the 1990
Nonqualified Stock Option Program and, if approved by shareholders, the 1995
Stock Option and Incentive Plan.

Over the past three years, the Committee has engaged an independent
compensation consultant to assist in its analysis and to make recommendations.
Each year, the consultant has provided the Committee and the Board with the
results from a nationwide compensation study covering senior executive officers
from general manufacturing companies with annual sales in a range comparable to
those of the Company ("Comparable Company Survey"). The Comparable Company
Survey includes several hundred companies throughout the United States. The
Committee also considered the comparative executive compensation levels for six
of the eight companies included in the peer group index component of the Five
Year Cumulative Return graph ("Industry Survey"). See "Executive Compensation --
Performance Graph". The Committee also solicited and received input from the
Company's CEO concerning the compensation packages for other Company executive
officers.

Annual Base Salaries for executive officers are reviewed annually and
targeted to be competitive with other companies of comparable size. Executive
officer salaries are based on the position responsibilities, the individual's
performance and compensation data for comparable companies obtained from the
Comparable Company Survey and the Industry Survey.

Annual Performance Incentives are provided primarily through cash bonuses.
Bonus determinations for Mr. Gurch are solely based upon achieving
pre-determined levels of pretax income for his subsidiary. Bonus determinations
for Mr. Ensch are based upon achieving pre-determined levels of pretax income
for his subsidiary (80% of award) and upon certain other objective and
subjective factors (20% of award), such as improvements in growth, return on
equity, quality and share value ("Other Incentive Factors"). Bonus
determinations for Mr. Young, Ms. Dout and Mr. Balius are based upon achieving
pre-determined levels of Company net income (60% of award for Mr. Young and Mr.
Balius and 70% of award for Ms. Dout) and upon the Other Incentive Factors (40%
of award for Mr. Young and Mr. Balius and 30% of award for Ms. Dout). The
pre-determined income levels are reviewed each year and adjusted as appropriate.
In each of the last three years the income

14
<PAGE> 19

targets have been increased. If the 1995 Plan is approved by shareholders, 1995
performance incentives for each of the five executive officers of the Company
will be determined based entirely on reaching pre-determined target levels of
performance for 1995 that were established in November 1994. See "Proposal to
Approve the 1995 Stock Option and Incentive Plan".

Long-Term Performance Incentives are made primarily through the Company's
1987 Stock Option Plan, the 1990 Nonqualified Stock Option Program and, if
approved by shareholders, the 1995 Stock Option and Incentive Plan. Over the
last two years, all stock options granted to executive officers as long-term
performance incentives have been granted at exercise prices that are one-fifth
to one-third above fair market value on the date of the grant. Accordingly, the
value of such premium-priced options is dependent upon significant increases in
the Company's share value. Such stock options only reward executive officers to
the extent that shareholders also have benefited. The amount of these awards
(number of shares) is determined by the Compensation Committee primarily based
upon formulas provided by the independent consultant. The formulas are derived
from a nationwide data base and present executive officer stock option award
levels that are consistent with general industry practices. The formulas are
based upon the expected future value of the option stock over a seven-year
period at several assumed rates of stock price appreciation.

CHIEF EXECUTIVE OFFICER COMPENSATION. The Compensation Committee believes
that the CEO's compensation should be heavily influenced by Company performance.
Therefore, although there is necessarily some subjectivity in setting the CEO's
compensation, major elements of the compensation package are tied to Company
performance.

Annual Base Salary. The Committee targets the CEO's base salary to be
competitive with the salaries of CEO's of comparable companies included in the
Comparable Company Survey and the Industry Survey. For 1994, the Committee
recommended to the Board of Directors to hold the CEO's base compensation
constant at $275,000 which is the same salary he has received for the past four
years. Effective January 1, 1995, the Committee has recommended that the CEO's
annual base salary be increased to $350,000.

Annual Performance Incentive. During 1994, significant improvements were
made in growth, return on equity, quality and share value. Based on the
achievement of pre-determined 1994 net income targets and, to a lesser extent,
on improvements in growth, return on equity, quality and share value, Mr. Young
was granted a cash bonus of $679,100 in March 1995, for the 1994 year
performance.

Long-Term Performance Incentive. Based on Mr. Young's performance in 1994,
his contribution to the future success of the Company and the formulas
recommended by the independent consultant, the Committee recommended to the
Board a premium-priced stock option for 28,000 shares to Mr. Young. The options
were priced at $47.75 per share which was one-fifth over the market price on the
date of the grant (October 24, 1994).

George R. Mrkonic

Johnson S. Savary

James W. Whims

15
<PAGE> 20

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth information with respect to the cash
compensation paid by the Company and its subsidiaries, as well as certain other
compensation paid or accrued, during the Company's last three fiscal years to
the Chief Executive Officer and each of the four most highly compensated
executive officers of the Company in all capacities in which they served:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation Compensation
-----------------------------------------
Securities All Other
Fiscal Underlying Compensation
Name and Principal Position Year(1) Salary Bonus Options(#) (10)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Walter R. Young, Jr.......... 1994 $ 275,000 $ 679,100(5) 28,000 $3,217
Chairman, President and 1993 275,000 412,500(6) 33,500 2,266
Chief Executive Officer 1992-B 229,167 257,000 50,000 2,285
James M. Gurch............... 1994 200,000 512,827(5) 12,000 2,280
Vice President 1993 200,000 354,903(6) 12,000 933
1992-B 100,000(2) 140,000 182,500(7) --
Thomas J. Ensch.............. 1994 165,000 165,000(5) 8,000 2,319
Group Vice President -- 1993 160,000 50,000(6) 9,000 1,349
Transportation 1992-B 112,500(3) 35,000 55,000(8) --
A. Jacqueline Dout........... 1994 141,028(4) 200,000(5) 110,000(9) --
Executive Vice President -- 1993 -- -- -- --
Treasurer and 1992-B -- -- -- --
Chief Financial Officer
Louis M. Balius.............. 1994 105,753 87,000(5) 2,000 1,972
Vice President -- Secretary 1993 105,000 52,500(6) 6,000 1,284
and General Counsel 1992-B 82,663 20,000 7,000 912
- --------------------------------------------------------------------------------------------------
</TABLE>

(1) As a result of the change in the fiscal year end of the Company, fiscal
1992-B was a ten-month period ending January 1, 1993. Fiscal 1993 and 1994
were twelve-month periods ending January 1, 1994 and December 31, 1994,
respectively.

(2) Mr. Gurch joined the Company on July 6, 1992.

(3) Mr. Ensch joined the Company on April 1, 1992.

(4) Ms. Dout joined the Company on April 18, 1994.

(5) Bonus amount paid in March 1995 with respect to performance in fiscal 1994.

(6) Bonus amount paid in March 1994 with respect to performance in fiscal 1993.

(7) Includes an option grant for 175,000 shares awarded to Mr. Gurch as an
inducement to join the Company in July 1992.

(8) Includes an option grant for 50,000 shares awarded to Mr. Ensch as an
inducement to join the Company in April 1992.

(9) Includes an option grant for 105,000 shares awarded to Ms. Dout as an
inducement to join the Company in April 1994.

(10) Reflects the contributions of the Company to the accounts of the named
executive officers under the Company's Savings Plan. The Company has no
pension program nor does the Company provide vehicles for its executives.

16
<PAGE> 21

STOCK OPTIONS

The following table sets forth information with respect to stock options
granted by the Company to the Chief Executive Officer and each of the four most
highly compensated executive officers of the Company during the Company's last
fiscal year. In addition, in accordance with SEC rules, there are shown certain
hypothetical gains that would exist for the respective options over the full
option term, based on assumed rates of annual compound stock price appreciation
of 0%, 5% and 10% from the date the options were granted.

OPTION GRANTS IN LAST FISCAL PERIOD

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at
Assumed Annual Rates
of Stock Price
Appreciation for
Individual Grants Option Term
- --------------------------------------------------------------------------------------------------------------------------------
% of Total
Options
Number of Granted
Securities To
Underlying Employees Exercise Market
Options in Fiscal Price Price on Expiration
Name Granted(#)(1) Year ($/Share) Grant Date Date 0% 5% 10%
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Walter R. Young...... 28,000(2) 7% $47.75 $39.75 10/24/04 -- $ 475,960 $1,549,835
James M. Gurch....... 12,000(2) 3 47.75 39.75 10/24/04 -- 203,983 664,215
Thomas J. Ensch...... 8,000(2) 2 47.75 39.75 10/24/04 -- 135,988 442,810
A. Jacqueline Dout... 5,000(3) 1 47.75 39.75 10/24/04 -- 84,993 276,756
15,000(4) 4 10.10 29.00 6/17/94 283,500 287,075 290,651
15,000(5) 4 10.10 29.00 4/18/04 283,500 557,069 976,778
75,000(6) 18 25.25 29.00 4/18/04 281,250 1,649,096 3,747,640
Louis M. Balius...... 2,000(2) -- 47.75 39.75 10/24/04 -- 33,997 110,703
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- -------------------------
(1) To the extent not already exercisable, the options generally become
exercisable upon the acquisition of 51% or more of the outstanding common
stock of the Company within a one-year period, the sale of all or
substantially all of the Company's assets, or a merger, consolidation or
similar transaction in which the Company is not the surviving corporation.

(2) Options granted pursuant to the 1987 Stock Option Plan at an exercise price
equal to 120% of the market price on the date of the grant and became
exercisable on October 24, 1994.

(3) Options granted pursuant to the 1990 Nonqualified Stock Option Program at an
exercise price equal to 120% of the market price on the date of the grant
and became exercisable on October 24, 1994.

(4) Options granted pursuant to a Nonqualified Stock Option Agreement dated
April 18, 1994 between the Company and Ms. Dout as an inducement to join the
Company. Options became exercisable on April 18, 1994.

(5) Options granted pursuant to a Nonqualified Stock Option Agreement dated
April 18, 1994 between the Company and Ms. Dout as an inducement to join the
Company. Options become fully exercisable on April 18, 1995.

(6) Options granted pursuant to a Nonqualified Stock Option Agreement dated
April 18, 1994 between the Company and Ms. Dout as an inducement to join the
Company. Twenty percent of the options granted become exercisable on each
succeeding one year anniversary of the date of the grant and shall remain
exercisable until the tenth anniversary of the date of the grant.

17
<PAGE> 22

OPTION EXERCISES AND HOLDINGS

The following table sets forth information, with respect to the named
executives in the Summary Compensation Table, concerning the exercise of options
during the last fiscal year and unexercised options held as of the end of the
last fiscal year.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Options In-the-Money Options
at Fiscal Year-End (#) at Fiscal Year-End($)(1)
---------------------------- ---------------------------
Shares Acquired
On Exercise Value
Name (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Walter R. Young.... 110,000 $1,808,750 61,500 30,000 $288,938 $ 855,000
James M. Gurch..... 37,000 682,125 12,000 75,000 -- 1,987,500
Thomas J. Ensch.... 20,000 626,250 22,000 10,000 177,625 261,250
A. Jacqueline
Dout............. 15,000 322,875 5,000 90,000 -- 699,750
Louis M. Balius.... -- -- 15,000 -- 191,750 --
- --------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Assumes a market price of $30.50 per share, which was the last sale price on
the last trading day prior to the fiscal year-end.

PERFORMANCE GRAPH

The SEC requires that the Company include in this proxy statement a
line-graph presentation comparing cumulative, five-year shareholder returns on
an indexed basis with the S&P 500 Stock Index and either a nationally recognized
industry index or an index of peer companies selected by the Company. The Board
of Directors has approved a peer group of seven publicly-held manufactured home
companies and one publicly-held bus company which have been used for purposes of
this performance comparison. These companies were selected based upon their
similarity of products and competitive position in the industry. The companies
included in the peer group index are Clayton Homes, Inc., Fleetwood Enterprises,
Inc., Oakwood Home Corporation, Skyline Corporation, Cavalier Homes, Inc.,
Schult Homes Corporation, Liberty Homes, Inc. and Supreme Industries, Inc.
(formerly "ESI Industries, Inc.").

18
<PAGE> 23

COMPARISON OF FIVE YEAR CUMULATIVE RETURN*
AMONG CHAMPION ENTERPRISES, INC., S&P 500 INDEX AND PEER GROUP INDEX

<TABLE>
<CAPTION>
MEASUREMENT PERIOD CHAMPION EN- S&P 500
(FISCAL YEAR COVERED) TERPRISES INDEX PEER GROUP
<S> <C> <C> <C>
3/2/90 100.00 100.00 100.00
3/1/91 246.67 114.48 137.82
2/28/92 233.33 131.60 215.32
1/1/93 560.00 143.12 287.99
1/1/94 940.01 157.54 320.66
12/31/94 1626.68 159.62 270.32
</TABLE>

- -------------------------
* Assumes that the value of the investment in Champion Common Stock and each
index was $100 on March 2, 1990 and that all dividends were reinvested.

TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL AGREEMENT

The Company maintains a Change in Control Severance Agreement with Mr.
Balius (a "Change in Control Agreement"). The Change in Control Agreement
provides that Mr. Balius will be entitled to severance payments in the event
there has been a change in control of the Company and he has incurred a
termination of employment. In the event Mr. Balius is deemed entitled to any
severance pay under his Change in Control Agreement, he will be entitled to a
cash severance benefit equal to not less than one times his annual base salary
at termination, to be determined at the discretion of the Board of Directors. In
addition to the cash payment, Mr. Balius is entitled to continue participation
in the Company's hospitalization, medical, life insurance and disability
insurance programs for a limited period of time after termination of employment.

A "Change in Control" is defined as the occurrence of any of the following
events: (a) the acquisition of ownership by a person, entity or group acting in
concert, of 51% or more of the outstanding Common Stock within a one-year
period; (b) a sale of all or substantially all of the assets of the Company; or
(c) a merger, consolidation or similar transaction between the Company and
another entity if the shareholders of the corporation do not own a majority of
the voting stock of the corporation surviving the transaction and a majority of
the value of the total outstanding stock of such surviving corporation after the
transaction. Mr. Balius shall be deemed to have suffered a

19
<PAGE> 24

termination of employment in the event that (i) he is involuntarily terminated
by the Company for any reason other than death, disability, retirement or cause,
as defined in the Change in Control Agreement; (ii) he is terminated for good
reason as defined in the Change in Control Agreement, or, (iii) he is terminated
within 180 days prior to the first public announcement of a Change in Control
for reasons other than his death, disability, retirement or cause (unless the
Company can establish otherwise).

EMPLOYMENT CONTRACTS

The Company has an Employment Agreement dated April 27, 1990 with Mr. Young
which terminates April 30, 1998 (the "Employment Agreement"). The Employment
Agreement provided Mr. Young with an initial annual salary of $196,000 (which
may be increased by the Board of Directors) and entitles him to participate in
all benefit and incentive plans maintained by the Company for salaried employees
as well as an executive bonus program established from time to time by the Board
of Directors.

In the event Mr. Young becomes physically or mentally unable to perform his
duties under the Employment Agreement for a period of six consecutive months,
the Company may suspend Mr. Young's salary until the physical or mental
incapacity no longer exists and Mr. Young is able to resume performance of his
duties. In the event Mr. Young is terminated without cause (as defined), he is
entitled to receive his salary under the Employment Agreement for its unexpired
term. In the event Mr. Young terminates his employment upon a sale or merger, he
is entitled to receive an amount equal to his annual salary. Upon termination,
Mr. Young may elect to have the Company purchase his outstanding stock options
upon the terms contained in the Employment Agreement.

The Company also has letter agreements, dated July 6, 1992, April 1, 1992,
and March 15, 1994, respectively, relating to the employment of Messrs. Gurch
and Ensch and Ms. Dout. The letter agreements provide for an initial annual
salary of $200,000 for Mr. Gurch and Ms. Dout and $150,000 for Mr. Ensch. Each
of the executives is entitled to participate in the Company's incentive bonus
program as well as the Company's medical, life insurance and long-term
disability benefits. The letter agreements provide severance payments to Messrs.
Gurch and Ensch equal to one year of salary and to Ms. Dout equal to 18 months
of salary in the event the Company terminates their respective employment during
the first two years of employment. In addition, the letter agreements provided
that the Company would pay moving expenses for each of the executives, which
include the cost of physically moving household goods, temporary housing and
transportation and normal real estate fees for the sale of a home and closing
costs for the purchase of a home.

20
<PAGE> 25

ADDITIONAL INFORMATION

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information with respect to those
persons who are known by management of the Company to have been the beneficial
owner of more than five percent of the Company's outstanding Common Stock as of
December 31, 1994.

<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Class
- --------------------------------------------------------- -------------------- ----------
<S> <C> <C>
FMR Corp. ............................................... 917,900(1) 12.16%
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>

- -------------------------
(1) As reported in the Schedule 13G, dated February 13, 1995, received by the
Company from such beneficial owner.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information with respect to the beneficial
ownership of shares of the Company's Common Stock by the present Directors and
executive officers of the Company.

<TABLE>
<CAPTION>
Shares Beneficially
Owned
as of December 31,
1994(1)
----------------------
Number Percent
of of
Name Shares Class
- ------------------------------------------------------------ ------- -----
<S> <C> <C>
Walter R. Young, Jr......................................... 334,950(2) 4.40%
Robert W. Anestis........................................... 17,000(3) *
Stanley R. Day.............................................. 84,979(4) 1.13%
Selwyn Isakow............................................... 37,000(5) *
George R. Mrkonic........................................... 2,000 *
Johnson S. Savary........................................... 22,000(6) *
Carl L. Valdiserri.......................................... -- *
James W. Whims.............................................. 21,000(7) *
James M. Gurch.............................................. 69,500(8) *
Thomas J. Ensch............................................. 50,000(9) *
A. Jacqueline Dout.......................................... 20,000(10) *
Louis M. Balius............................................. 27,915(11) *
All Directors and officers as a group (13 persons).......... 691,215(12) 8.97%
</TABLE>

- -------------------------
* Less than 1%

(1) To the best of the Company's knowledge based on information reported by
certain of such Directors and officers or contained in the Company's
shareholder records. Except as otherwise indicated by additional
information included in the footnotes to the table, each of the named
persons is presumed to have sole voting and sole investment power with
respect to all shares shown.

(2) Includes 61,500 shares which Mr. Young has the right to acquire within 60
days after the end of the fiscal year pursuant to the exercise of stock
options. Does not include 35,800 shares held by The Young Foundation (a
charitable foundation), the voting power of which is shared by Mr. Young as
its President. Mr. Young disclaims beneficial ownership of the shares held
by The Young Foundation.

21
<PAGE> 26

(3) Includes 9,000 shares which Mr. Anestis has the right to acquire within 60
days after the end of the fiscal year pursuant to the exercise of stock
options.

(4) Includes 18,600 shares owned by Mr. Day's wife of which Mr. Day disclaims
beneficial ownership.

(5) Includes 9,000 shares which Mr. Isakow has the right to acquire within 60
days after the end of the fiscal year pursuant to the exercise of stock
options.

(6) Includes 9,000 shares which Mr. Savary has the right to acquire within 60
days after the end of the fiscal year pursuant to the exercise of stock
options. Does not include 125,000 shares held by the Walter W. Clark
Revocable Trust, the voting power of which is shared by Mr. Savary as
co-trustee. Mr. Savary disclaims beneficial ownership of the shares held by
such trust.

(7) Includes 9,000 shares which Mr. Whims has the right to acquire within 60
days after the end of the fiscal year pursuant to the exercise of stock
options.

(8) Includes 12,000 shares which Mr. Gurch has the right to acquire within 60
days after the end of the fiscal year pursuant to the exercise of stock
options.

(9) Includes 22,000 shares which Mr. Ensch has the right to acquire within 60
days after the end of the fiscal year pursuant to the exercise of stock
options.

(10) Includes 5,000 shares which Ms. Dout has the right to acquire within 60
days after the end of the fiscal year pursuant to the exercise of stock
options.

(11) Includes 15,000 shares which Mr. Balius has the right to acquire within 60
days after the end of the fiscal year pursuant to the exercise of stock
options.

(12) Includes 151,500 shares which all present directors and officers of the
Company as a group have the right to acquire within 60 days after the end
of the fiscal year pursuant to the exercise of stock options.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the American Stock Exchange. Officers, directors and greater than
ten-percent shareholders are required by Securities and Exchange Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, from January 2, 1994
through December 31, 1994 (the fiscal year), all filing requirements applicable
to its officers, directors, and greater than ten percent beneficial owners were
met.

22
<PAGE> 27

INDEPENDENT ACCOUNTANTS

Price Waterhouse has served as independent accountants for the Company
since 1961, and was selected by the Company's Board of Directors to serve as
such during the Company's last fiscal year (ended December 31, 1994). The
Company has selected Price Waterhouse to serve as independent accountants for
the current fiscal year (ending December 30, 1995). It is anticipated that a
representative of Price Waterhouse will be present at the meeting, will have an
opportunity to make a statement, and will respond to appropriate questions.

SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING

Shareholder proposals to be presented at the 1996 Annual Meeting must be
received by the Company not later than November 22, 1995 if they are to be
included in the Company's Proxy Statement relating to that meeting. Such
proposals should be addressed to the Secretary at the Company's executive
offices.

Shareholder proposals to be presented at the 1996 Annual Meeting or any
Special Meeting which are not to be included in the Company's Proxy Statement
relating to that meeting must be received by the Company not less than 60 nor
more than 90 days prior to the date of the meeting or no later than 10 days
after the day of the public announcement of the date of such meeting in
accordance with the procedures set forth in the Company's Bylaws in order to be
properly brought before the Annual or Special Meeting.

OTHER MATTERS

At the date of this Proxy Statement, management is not aware of any matters
to be presented for action at the meeting other than those described above.
However, if any other matters should come before the meeting, it is the
intention of the persons named in the accompanying proxy to vote such proxy in
accordance with their judgment on such matters.

By Order of the Board of Directors,

LOUIS M. BALIUS, Secretary

March 20, 1995

23
<PAGE> 28

[LOGO]

NOTICE OF 1995
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
<PAGE> 29

APPENDIX 1

CHAMPION ENTERPRISES, INC.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF CHAMPION ENTERPRISES, INC.

The undersigned hereby constitutes and appoints Walter R. Young, Jr., and
Stanley R. Day, or either of them, attorneys and proxies with power of
substitution, to vote all of the Common Stock of the undersigned in Champion
Enterprises, Inc. at the Annual Meeting of Shareholders of Champion
Enterprises, Inc., to be held at the GRAND HYATT NEW YORK, PARK AVENUE AT GRAND
CENTRAL, NEW YORK, NEW YORK 10017, on Monday, May 1, 1995 at 10:00 A.M., local
time, and at any adjournments thereof, upon the following matters:

IF THE UNDERSIGNED SPECIFIES HOW HIS OR HER VOTE SHALL BE CAST AS TO PROPOSALS
(1), (2), (3) AND (4), THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH SUCH SPECIFICATION. IF THE UNDERSIGNED DOES NOT SPECIFY HOW HIS
OR HER VOTE SHALL BE CAST, THE UNDERSIGNED HEREBY CONFERS UPON THE PROXIES
SPECIFIC AUTHORITY TO VOTE SUCH SHARES FOR THE ELECTION OF DIRECTORS AND FOR
APPROVAL OF PROPOSALS (2), (3) AND (4).

The undersigned acknowledges receipt of the Proxy Statement dated March 20,
1995 and the Annual Report for the fiscal year ended December 31, 1994 and
ratifies all that the proxies or either of them or their substitutes may
lawfully do or cause to be done by virtue hereof, and revokes all former
proxies.

If a shareholder is a participant in the Champion Enterprises, Inc. Savings
Plan, this proxy card represents the number of shares registered in the
participant's name and/or the number of shares allocated to the participant's
account under the plan. For those shares held in the plan, this proxy card will
serve as a direction to the trustee under the plan as to how the shares are to
be voted.

PLEASE DO NOT FOLD, STAPLE OR MUTILATE
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
<PAGE> 30

CHAMPION ENTERPRISES
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]

<TABLE>
<S><C>
VOTE
FOR WITHHELD FOR AGAINST ABSTAIN
1. The election as directors of all nominees [ ] [ ] 4. Proposal to approve the 1995 Stock [ ] [ ] [ ]
listed (except as marked to the contrary Retainer Plan for Non-employee
below) Directors.
Walter R. Young, Jr., Robert W. Anestis,
Selwyn Isakow, George R. Mrkonic, 5. In their discretion upon the
Johnson S. Savary and Carl L. Valdiserri transaction of such other business
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO as may properly come before the
VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE meeting.
THAT NOMINEE'S NAME ON THE LINE PROVIDED
BELOW.)
________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH
OF THE LISTED PROPOSALS.

FOR AGAINST ABSTAIN
2. Proposal to amend the Restated Articles [ ] [ ] [ ] Please sign this Proxy exactly as your name appears hereon,
of Incorporation to increase the number date it, and return it in the enclosed envelope. Joint owners
of authorized shares of Common Stock should each sign. If you are signing as guardian, trustee,
from 15,000,000 to 30,000,000. executor, administrator or attorney-in-fact, please so
FOR AGAINST ABSTAIN indicate. Please also note any address correction above.
3. Proposal to approve the 1995 Stock Option [ ] [ ] [ ] ____________________________________________________________
and Incentive Plan. (Signature)
Dated: _______________________________________________, 1995

</TABLE>