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 ss. 240.14a-11(c) or ss. 240.14a-12
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STARCRAFT CORPORATION
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0- 11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
[STARCRAFT LOGO]
P.O. Box 1903
2703 College Avenue
Goshen, Indiana 46526
(219) 533-1105
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------------------
To Be Held On February 17, 1998
Notice is hereby given that the Annual Meeting of Shareholders of Starcraft
Corporation (the "Company") will be held at the Goshen Inn and Conference
Center, 1375 Lincoln Way East (U.S. 33 East), Goshen, Indiana, on Tuesday,
February 17, 1998 at 9:00 A.M., Goshen time.
The Annual Meeting will be held for the following purposes:
1. Election of Director. Election of one director of the Company in Class
III for a term to expire in the year 2001.
2. Ratification of Auditors. Ratification of the appointment of Ernst &
Young LLP as auditors for the Company for the fiscal year ending
September 27, 1998.
3. Other Business. Such other matters as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on December 19, 1997, are
entitled to vote at the meeting or any adjournment thereof.
We urge you to read the enclosed Proxy Statement carefully so that you may
be informed about the business to come before the meeting, or any adjournment
thereof. At your earliest convenience, please sign and return the accompanying
proxy in the postage-paid envelope furnished for that purpose.
A copy of our Annual Report for the fiscal year ended September 28, 1997,
is enclosed. The Annual Report is not a part of the proxy soliciting material
enclosed with this letter.
By Order of the Board of Directors
/s/ Kelly L. Rose
Kelly L. Rose, Chairman of the Board
and Chief Executive Officer
Goshen, Indiana
January 16, 1998
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER
OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE
AND COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
[STARCRAFT LOGO]
P.O. Box 1903
2703 College Avenue
Goshen, Indiana 46526
(219) 533-1105
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PROXY STATEMENT
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FOR
ANNUAL MEETING OF SHAREHOLDERS
February 17, 1998
This Proxy Statement is being furnished to the holders of common stock,
without par value (the "Common Stock"), of Starcraft Corporation (the
"Company"), an Indiana corporation, in connection with the solicitation of
proxies by the Board of Directors of the Company to be voted at the Annual
Meeting of Shareholders to be held at 9:00 A.M., Goshen time, on February 17,
1998, at the Goshen Inn and Conference Center, 1375 Lincoln Way East (U.S. 33
East), Goshen, Indiana, and at any adjournment of such meeting. This Proxy
Statement is expected to be mailed to shareholders on or about January 16, 1998.
The proxy solicited hereby, if properly signed and returned to the Company
and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted for each of the matters described below and, upon
the transaction of such other business as may properly come before the meeting,
in accordance with the best judgment of the persons appointed as proxies.
Any shareholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Company written
notice thereof (Michael H. Schoeffler, P.O. Box 1903, 2703 College Avenue,
Goshen, Indiana 46526), (ii) submitting a duly executed proxy bearing a later
date, or (iii) by appearing at the Annual Meeting and giving the Secretary
notice of his or her intention to vote in person. Proxies solicited hereby may
be exercised only at the Annual Meeting and any adjournment thereof and will not
be used for any other meeting.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only voting shareholders of record at the close of business on December 19,
1997 ("Voting Record Date"), will be entitled to vote at the Annual Meeting. On
the Voting Record Date, there were 4,133,600 shares of the Common Stock issued
and outstanding, and the Company had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the Annual Meeting. Such table
provides certain information regarding the beneficial ownership of the Common
Stock as of December 19, 1997, by each person who is known by the Company to own
beneficially 5% or more of the Common Stock. Unless otherwise indicated, the
named beneficial owner has sole voting and dispositive power with respect to the
shares reported.
<TABLE>
<CAPTION>
Number of Shares
Name and Address of of Common Stock Percent of
Beneficial Owner Beneficially Owned(1) Class (1)
- ---------------- --------------------- ---------
<S> <C> <C>
Kelly L. Rose 1,301,888 (2) 31.02%
2703 College Avenue
Goshen, Indiana 46526
Heartland Advisors, Inc. 1,263,800 (3) 30.57%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Investment Counselors of Maryland, Inc. 210,000 (4) 5.08%
803 Cathedral Street
Baltimore, Maryland 21201
</TABLE>
- -----------------
(1) Based upon 4,133,600 shares of Common Stock outstanding (and in the case of
Mr. Rose, 63,709 exercisable stock options held by Mr. Rose). The number of
shares deemed outstanding does not include exercisable stock options held
by other employees, management and directors for 332,349 shares of Common
Stock including options which currently are or will become exercisable
within the next 60 days.
(2) Includes 100,000 shares owned by Karen K. Rose, Mr. Rose's spouse, 63,709
stock options which are or will become exercisable within the next 60 days,
and 10,450 shares held in a charitable foundation as to which Mr. Rose
disclaims beneficial ownership.
(3) Heartland Advisors, Inc. has dispositive power with respect to all such
shares and exclusive voting power with respect to 603,700 shares.
(4) Investment Counselors of Maryland, Inc. has dispositive power with respect
to all such shares and voting power with respect to 180,000 shares.
PROPOSAL I -- ELECTION OF DIRECTORS
The Board of Directors has five members. The Company's Articles of
Incorporation provide that the Board of Directors is comprised of three classes
as nearly equal in number as possible. The members of each class are to be
elected for a term of three years and until their successors are elected and
qualified. One class of directors is to be elected annually. The sole nominee
for director from Class III is L. Craig Fulmer. Mr. Fulmer is a current director
of the Company. If elected by the shareholders at the Annual Meeting, the term
of Mr. Fulmer will expire in 2001.
Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted for the election of Mr. Fulmer. If Mr. Fulmer should
be unable or unwilling to stand for election at the time of the Annual Meeting,
the proxy holders will nominate and vote for a replacement nominee recommended
by the Board of Directors. At this time, the Board of Directors knows of no
reason why the nominee may not be able to serve as director if elected.
<PAGE>
The following table sets forth certain information regarding the nominee
for election as director and the other incumbent directors, including the number
and percent of shares of Common Stock beneficially owned by such persons as of
the Voting Record Date. No director or nominee for director is related to any
other director or nominee for director or executive officer of the Company by
blood, marriage, or adoption, and there are no arrangements or understandings
between any nominee and any other person pursuant to which such nominee was
selected. The table also sets forth the number of shares of Common Stock
beneficially owned by each executive officer of the Company and by all directors
and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Common Stock
Director of Beneficially
Expiration of Company Owned as of Percentage
Name Term as Director Since December 19, 1997(1) of Class
- ---- ---------------- ----- -------------------- --------
Directors and Nominees
Class I:
<S> <C> <C> <C> <C>
Kelly L. Rose 2000 1991 1,301,888 (2)(3) 31.02%
David J. Matteson 2000 1993 3,000 (3) *
Class II:
Allen H. Neuharth 1999 1993 12,600 (3)(5) *
Frank K. Martin 1999 1994 41,500 (3) 1.00%
Class III:
L. Craig Fulmer (Nominee) 1998 1991 7,500 (3) *
Other Executive Officers
Michael H. Schoeffler 72,500 (3) 1.73%
President, Chief Operating Officer,
Chief Financial Officer, Treasurer
and Secretary
All directors and executive officers
as a group (6 persons) 1,438,988 (4) 33.79% _____________
</TABLE>
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* Indicates less than 1%.
(1) Based upon information furnished by the respective director nominees. Under
applicable regulations, shares are deemed to be beneficially owned by a
person if he directly or indirectly has or shares the power to vote or
dispose of the shares, whether or not he has any economic power with
respect to the shares. Includes shares beneficially owned by members of the
immediate families of the directors or director nominees residing in their
homes and also includes options held by the individual or group that
currently are or will become exercisable within the next 60 days.
(2) Includes 100,000 shares owned by Mr. Rose's spouse, and 10,450 shares held
in a charitable foundation as to which Mr. Rose disclaims beneficial
ownership.
(3) Includes the following shares subject to currently exercisable options
granted under the Starcraft Corporation 1993 Stock Incentive Plan (the
"1993 Incentive Plan") and/or the Starcraft Corporation 1997 Stock
Incentive Plan ("1997 Incentive Plan" and together with the 1993 Incentive
Plan, the "Incentive Plans"): 63,709 shares subject to currently
exercisable options held by Mr. Rose; 55,000 shares subject to currently
exercisable options held by Mr. Schoeffler; 1,500 shares subject to
curently exercisable options held by Mr. Fulmer; 1,500 shares subject to
curently exercisable options held by Mr. Martin; 1,500 shares subject to
currently exercisable options held by Mr. Matteson; and 1,500 shares
subject to currently exercisable options held by Mr.Neuharth.
(4) This total includes 124,709 shares subject to stock options granted under
the Incentive Plans which are exercisable or will be exercisable within the
next 60 days.
(5) Includes 100 shares currently held by trust under which Mr. Neuharth serves
as Trustee.
The business experience of each director, director nominee and executive officer
is set forth below.
<PAGE>
Class I
Mr. Rose (age 45) founded the Company in 1990. He has served as Chairman of
the Board since January 18, 1991, and as Chief Executive Officer since April 16,
1993. He also serves as Chairman of the Board and Chief Executive Officer of
Starcraft Automotive Group, Inc., Imperial Automotive Group, Inc. and National
Mobility Corporation. Mr. Rose was co-founder and 50% owner of ASA Corporation
from January 1977 to July 1990. ASA Corporation is an importer and international
distributor of electronic components to manufacturers in the van conversion and
recreational vehicle industries. Mr. Rose is currently a board member and
chairman of the Recreational Vehicle Industry Association Conversion Vehicle
Committee and serves on the boards of numerous charitable organizations.
Mr. Matteson (age 61) was elected Director of the Company in April 1993.
Presently retired, he served as the Associate Pastor of Granger Missionary
Church in Granger, Indiana, from September 1985 to May 1994. Prior to that
appointment, he was associated with Bethel College, Mishawaka, Indiana, where he
served as Vice President for Business and Finance, Registrar, Director of
Admissions, and Director of Financial Aid over a period of twenty years.
Class II
Mr. Neuharth (age 73) was elected Director of the Company in September
1993. The founder of the nationally distributed daily newspaper, USA TODAY, Mr.
Neuharth retired as Chairman and CEO of Gannet Co., Inc. in March 1989.
Presently, he serves as Chairman of the Freedom Forum and is self-employed as an
author, columnist, consultant and public speaker.
Mr. Martin (age 55) was elected as a Director of the Company in November
1994. He is the founder of Martin Capital Management where he has been Managing
Partner since 1991. Prior to that time he was the President of McDonald Capital
Management. Mr. Martin is also a board member of McDonald Trust Company.
Class III - Director Nominee
Mr. Fulmer (age 55), a Certified Public Accountant, was elected Director of
the Company in January 1991. In 1980, he founded and currently is Chairman of
the Board of Heritage Financial Group, Inc., a real estate management, financial
service, and manufacturing corporation operating in the manufactured housing
industry. Mr. Fulmer is also a board member of Lake City Bank, Inc.
THE DIRECTOR SHALL BE ELECTED UPON RECEIPT OF A PLURALITY OF VOTES CAST IN
PERSON OR BY PROXY AT THE ANNUAL SHAREHOLDERS' MEETING OR AT ANY ADJOURNMENT
THEREOF.
Other Executive Officer
Mr. Schoeffler (age 37) a Certified Public Accountant, joined the Company
in 1995 as Senior Vice President, Treasurer, and Chief Financial Officer and was
appointed Secretary in 1995. Effective December 12, 1996, Mr. Schoeffler was
appointed President and Chief Operating Officer. Prior to joining the Company he
was Executive Vice President/Chief Financial Officer of General Products
Corporation, an automotive parts supplier from 1989 to 1995; Assistant
Controller for Sudbury, Inc., a diversified manufacturer, from 1986 to 1989; and
a Certified Public Accountant with Ernst & Whinney from 1982 to 1986.
Meetings and Committees of the Board of Directors
During the fiscal year ended September 28, 1997, the Board of Directors of
the Company met five times, including teleconferences, in addition to taking a
number of actions by unanimous written consent. During fiscal 1997, no incumbent
director of the Company attended fewer than 75% of the aggregate of the total
number of Board meetings and the total number of meetings held by the committees
of the Board of Directors on which he served.
The Company's Audit Committee is responsible for recommending the
appointment of the Company's independent accountants; meeting with the
independent accountants to outline the scope and review the results of the
annual audit; and reviewing with the internal auditor the systems of internal
control and audit reports. The current members of this committee are directors
Fulmer, Matteson, Martin, Neuharth and Rose. The Audit Committee held two
meetings during the year ended September 28, 1997.
<PAGE>
The Compensation Committee of the Board of Directors is comprised of
Messrs. Matteson, Fulmer, Neuharth, and Martin. The Compensation Committee
recommends employee compensation, benefits and personnel policies to the Board
of Directors and establishes for Board approval salary and cash bonuses for
senior officers. The Compensation Committee also administers the Incentive Plans
and has certain interpretive responsibilities for the Directors' Share Plan. The
Compensation Committee held one meeting in the fiscal year ending September 28,
1997.
Management Remuneration and Related Transactions
Report of the Compensation Committee
The objectives of the Compensation Committee with respect to executive
compensation are the following:
(1) provide compensation opportunities generally comparable to those
offered by other similarly situated companies to ensure the Company's
ability to attract and retain talented executives who are essential to
the Company's long-term success;
(2) reward executive officers based upon their ability to achieve
short-term and long-term strategic goals and objectives and to enhance
shareholder value; and
(3) align the interests of the executive officers with the long-term
interests of shareholders by granting stock options which will become
more valuable to the executives as the value of the Company's shares
increases.
At present, the Company's executive compensation program is comprised of
base salary, annual incentive bonuses and long-term incentive opportunities
provided in the form of stock options. The Company has employment contracts with
the named executives which help the Company retain its executive officers and
currently provide for the executives' base salaries. Annual incentive bonuses
are tied to the Company's financial performance during the fiscal year and the
executive's individual performance, and stock options have a direct relation to
long-term enhancement of shareholder value. In years in which the Company's
performance goals are met or exceeded, executive compensation should tend to be
higher than in years in which performance is below expectations.
Base Salary. The base salary levels of the Company's executive officers are
intended to be generally comparable to those offered to executives with similar
talent and experience by other similarly situated public companies. In
determining base salaries, the Compensation Committee also takes into account
individual performance and experience. While desiring to maintain executive
salaries at competitive levels, the Compensation Committee does not give
particular weight to compensation paid by any specific comparable public
company.
For fiscal year 1997, under the terms of Mr. Rose's employment agreement,
his base salary was $300,000. Such base salary was determined by the
Compensation Committee after considering the individual performance and
experience of Mr. Rose and the base salary levels of executives with similar
talent and experience who are employed with similarly situated public companies.
Effective April 14, 1997, Mr. Rose agreed to a 20% reduction in base salary.
Under Mr. Schoeffler's employment agreement his base salary for fiscal 1997
was increased from $150,000 to $200,000. Such base salaries for Mr. Schoeffler
were determined by the Compensation Committee after considering the individual
performance and experience of Mr. Schoeffler and the base salaries of executives
with similar talent and experience employed by similarly situated public
companies. The Compensation Committee determined the significant increase in Mr.
Schoeffler's salary for 1997 in part as compensation for his assumption of
substantial additional management responsibilities as President and Chief
Operating Officer of the Company. Effective April 14, 1997, Mr. Schoeffler
agreed to a 20% reduction in base salary.
<PAGE>
Annual Incentive Bonuses. In December 1996 the Compensation Committee
approved a new bonus arrangement based on the Company's return on assets. The
Committee believes the new arrangement will better serve the objectives of the
Committee to link the compensation of management with the enhancement of value
for shareholders. Since the Company's performance did not exceed expectations,
no bonuses were paid in fiscal years 1996 or 1997.
Stock Options and Restricted Stock. The 1997 Incentive Plan and the 1993
Incentive Plan are the Company's long-term incentive plans for directors,
executive officers and other key employees. The objective of the Incentive Plans
is to align executive and shareholder long-term interests by creating a strong
and direct link between executive compensation and shareholder return, and to
enable executive officers and other key employees to develop and maintain a
significant long-term ownership position in the Company's Common Stock. The
Incentive Plans authorize the Compensation Committee to award executive officers
and other key employees stock options, shares of restricted stock or certain
cash awards.
Options were granted to Mr. Schoeffler under the Incentive Plans in fiscal
year 1997 as follows. In October 1996, Mr. Schoeffler was granted options to
purchase 5,000 shares of Common Stock with an exercise price of $4.75 per share
and, in July 1997, Mr. Schoeffler was granted options to purchase 10,000 shares
for $2.875 per share. These grants of options were made in recognition of the
additional duties Mr. Schoeffler has undertaken in connection with his
assumption of the position of President and to provide additional incentive for
him to work to build share value.
To date the Compensation Committee has not taken steps to cause the
Company's executive compensation arrangements to accommodate the provisions of
ss.162(m) of the Internal Revenue Code of 1986, which limit the deductibility of
an executive's compensation to $1 million annually, because it does not
presently anticipate that any executive officer's remuneration will exceed $1
million per year.
The Compensation Committee believes that linking executive compensation
generally to corporate performance results in better alignment of compensation
with corporate goals and the interests of the Company's shareholders. As
performance goals are met or exceeded, most probably resulting in increased
value to shareholders, executives are appropriately rewarded. The Committee
believes that compensation levels during fiscal 1997 for Mr. Rose and Mr.
Schoeffler adequately reflect the Company's compensation goals and policies.
Compensation
Committee Members
David J. Matteson, Chairman
L. Craig Fulmer
Allen H. Neuharth
Frank K. Martin
<PAGE>
Remuneration of Named Executive Officers
The following table sets forth for each of the Company's last three fiscal
years information with respect to Mr. Rose and Mr. Schoeffler who are the
executive officers of the Company.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards All
Other Annual Securities Other
Fiscal Compen- Underlying Compen-
Name and Principal Position Year Salary Bonus sation (1) Options/SARs (#) sation (2)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kelly L. Rose 1997 $271,500 $ --- $24,204 --- $ 3,750
Chairman and 1996 257,700 --- 13,169 25,000 3,750
Chief Executive Officer 1995 300,000 95,000 19,084 50,000 8,000
Michael H. Schoeffler (3) 1997 180,400 --- 6,709 15,000 33,750
President, Chief Operating 1996 143,900 --- 2,456 15,000 3,159
Officer, Chief Financial 1995 86,538 50,000 40,510 25,000 ---
Officer, Treasurer and Secretary
</TABLE>
- -----------------------
footnotes on following page
(1) Other annual compensation for 1995 was for taxes paid for Mr. Rose and, in
the case of Mr. Schoeffler, consisted of $18,556 of housing and relocation
expenses, $12,135 for taxes paid and $9,819 of other various benefits.
Other annual compensation for 1996 and 1997 consisted of taxes paid for
Messrs. Rose and Schoeffler. The value of perquisites or other personal
benefits received by the named executives in 1995, 1996 and 1997 did not
exceed the lesser of $50,000 or 10% of the executive's salary and bonus.
(2) These amounts represent Company contributions, on behalf of each of the
named executives, to the 401(k) Plan. In January, 1997, Mr. Schoeffler
received a $30,000 special commitment fee in connection with his execution
of his employment agreement.
(3) Mr. Schoeffler was hired on January 16, 1995 at an annual base salary of
$125,000 which was increased to $150,000 during 1996 and $200,000 for 1997.
Stock Incentive Plans
The executive officers named above have received options to purchase
130,000 shares of Common Stock under the Incentive Plans. The purpose of the
Incentive Plans is to provide to certain directors, officers (including officers
who are members of the Board of Directors) and other key employees of the
Company who are materially responsible for the management or operations of the
Company and have provided valuable services to the Company a favorable
opportunity to acquire Common Stock of the Company, thereby providing them with
an increased incentive to work for the success of the Company and better
enabling the Company to attract and retain capable directors and executive
personnel.
<PAGE>
The following sets forth information related to options granted during
fiscal 1997 to the following executive officer.
<TABLE>
<CAPTION>
Options Granted -- Last Fiscal Year
Individual Grants
Potential Realized
Value at Assumed
Annual Rates of
% of Total Stock Price Appreciation
Options Granted Exercise of for Option Term (1)
-------------------
Options to Employees in Base Price Expiration
Name Granted Fiscal Year ($/share) Date 5% 10%
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Michael H. Schoeffler 10,000 8.81% 2.875 07/26/02 $ - 0 - $7,450
Michael H. Schoeffler 5,000 4.41% 4.750 10/05/01 - 0 - - 0 -
Total 15,000 13.22% $ - 0 - $7,450
</TABLE>
(1) Based upon a market value of the Common Stock of $2.25 per share at
December 19, 1997.
The following table includes the number of shares covered by both
exercisable and unexercisable stock options held by the executive officers as of
December 19, 1997.
<TABLE>
<CAPTION>
Outstanding Stock Option Grants and Value Realized as of December 19, 1997
Number of Unexercised Options Value of the Unexercised
at Fiscal Year End In-the-Money Options
Name Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Kelly L. Rose 63,709 11,291 $ --- (1) -0-
Michael H. Schoeffler 55,000 -0- $ --- (1) -0-
</TABLE>
(1) Since the market value of the Company's Common Stock was $2.25 per share at
December 19, 1997, none of the options granted during the last fiscal year
are "in-the-money."
Employment Agreements
The Company has entered into a five-year employment contract with Kelly
L. Rose ("Rose"). The contract, effective as of December 12, 1996, extends
annually to maintain its five-year term unless notice not to extend is properly
given by either party to the contract. Rose is entitled to receive a base salary
under the contract for 1998 of $300,000. Mr. Rose's base salary is subject to
increases as approved by the Company. The contract also provides, among other
things, for participation in other fringe benefits and benefit plans available
to the Company's employees. Rose may terminate his employment upon sixty days'
written notice to the Company. The Company may discharge Rose for "cause" (as
defined in the contract) at any time. If Rose terminates his own employment for
"cause" (as defined in the contract), or if the Company, in arbitration or
judicial proceedings, is found to have breached any of the material terms or
conditions of the agreement, Rose shall be entitled to receive his base
compensation under the contract for an additional five years from the
termination date. In addition, during such period, Rose shall be entitled to
continue to participate in the Company's group insurance plans or receive
comparable benefits. Alternatively, Rose may elect to receive his base
compensation under the contract for such five year period, payable in one lump
sum payment within thirty days of the date of termination; but shall not be
entitled to continue to participate in the Company's group insurance plans or
receive comparable benefits. Moreover, within the three month period after
Rose's employment is terminated for any reason including Rose's termination of
<PAGE>
his employment with the Company without cause, Rose will have the right to cause
the Company to purchase any stock options he holds for a price equal to the fair
market value (as defined in the contract) of the shares subject to such options
minus their option price. In the event of Rose's disability, Rose will be
entitled to receive his base compensation for five additional years during the
continuance of such disability. In addition, during such period, Rose shall be
entitled to continue to participate in the Company's group insurance plans or
receive comparable benefits. In the event of Rose's death, Rose's spouse will be
entitled to receive Rose's base compensation for an additional five years.
During such period, Rose's spouse will also continue to receive the benefit of
the Company's insurance plans. The contract provides for certain additional
insurance coverage and other perquisites to be paid for by the Company. The
contract also requires Rose to protect the confidential business information of
the Company.
On December 12, 1996, the Company entered into a one-year employment
contract with Michael H. Schoeffler ("Schoeffler"). The contract was extended
for an additional one year term on December 12, 1997. Schoeffler is entitled to
receive a base salary under the contract for 1998 of $200,000. Mr. Schoeffler's
base salary is subject to increases approved by the Company. Additionally, prior
to a "change of control" (as defined in the contract), the Company may decrease
the salary it pays to Schoeffler if the operating results of the Company are
significantly less favorable than those for the fiscal year then ending, and the
Company decreases the salaries it pays to all other senior executive officers.
The contract also provides, among other things, for participation in other
fringe benefits and benefit plans available to the Company's employees.
Schoeffler may terminate his employment upon sixty days' written notice to the
Company. The Company may discharge Schoeffler for "cause" (as defined in the
contract) at any time. If the Company terminates Schoeffler's employment for
other than cause or if Schoeffler terminates his own employment for "cause" (as
defined in the contract), Schoeffler shall be entitled to receive his base
compensation under the contract for an additional one year from the termination
date, provided, that in the event such termination follows a change of control,
Schoeffler shall be entitled to receive his base compensation under the contract
for an additional three years from the termination date. In addition, during
such period Schoeffler shall be entitled to continue to participate in the
Company's group insurance plans or receive comparable benefits, unless
substantially equivalent and no less favorable benefits are provided by a
subsequent employer. In the event that Schoeffler is entitled to receive his
base salary for an additional three years, he may elect to receive such
compensation in one lump sum payment within thirty days of the date of
termination. If Schoeffler makes such an election he shall not be entitled to
continue to participate in the Company's group insurance plans or receive
comparable benefits. Moreover, within a period of three months after the Company
terminates Schoeffler's employment for other than cause or if Schoeffler
terminates his own employment for cause, Schoeffler shall have the right to
cause the Company to purchase any stock options he holds for a price equal to
the fair market value (as defined in the contract) of the shares subject to such
options minus their option price. The employment contract provides the Company
protection for two years from competition by Schoeffler should he voluntarily
terminate his employment without cause or be terminated by the Company for
cause. The employment contract also requires protection of confidential business
information.
Defined Benefit Plans
401(k) Savings Plan. The employees of the Company with more than six months
of service and who have attained age 18 are entitled to participate in the
401(k) Savings Plan of the Company (the "401(k) Plan"). The Company has
discretion to make a matching contribution to each participating employee based
on the employee's contribution up to a maximum of 6% of the employee's
compensation. The Company also has discretion to make additional profit-sharing
contributions. Benefits under the 401(k) Plan are payable upon the employee's
retirement, death, disability or other termination of employment.
<PAGE>
Compensation of Directors
Director Compensation. Directors of the Company who are salaried employees
of the Company do not receive additional compensation for serving as director.
Non-employee directors of the Company receive a retainer of $5,000 per year for
serving on the Board of Directors and $1,250 for each meeting of the Board of
Directors of the Company, $625 for each committee meeting of the Board of
Directors and $625 for a meeting of the Board of Directors of one of the
Company's subsidiaries. Pursuant to the Directors' Share Plan and a related
compensation deferral plan, non-employee directors may elect to receive their
cash director fees in the form of Company Common Stock or to have the payment of
their fees deferred. In the event of deferral, the director may elect to have
the deferred amount deemed invested in Company shares (with dividend-equivalent
value deemed reinvested in shares) or as a general interest bearing obligation
of the Company.
Non-employee directors are eligible to receive supplemental life,
accidental death and disability and health insurance. Premiums paid for Messrs.
Fulmer, Martin, Neuharth and Matteson during 1997 totalled $797 each.
Non-employee directors are also eligible to receive personal use of a
demonstrator Starcraft conversion vehicle. The estimated values of vehicles
provided to Messrs. Fulmer, Martin, Neuharth and Matteson were approximately
$4,567, $2,283, $6,850, and $6,850, respectively, during fiscal 1997.
The Company entered into a consulting agreement with Allen H. Neuharth as
of September 15, 1993 for a period of one year, subject to automatic extension
unless cancelled by either party upon thirty days' written notice. The agreement
is intended to help the Company take optimal advantage of Mr. Neuharth's
experience and expertise in entrepreneurship, public relations, management
motivation and the investment community. Mr. Neuharth will be available to the
Company to provide consultation, assistance and advice, generally as management
requests. He will also make at least two speaking appearances on the Company's
behalf each year. Under the agreement, Mr. Neuharth receives $6,500 per month
for his consulting services, reimbursement for reasonable out-of-pocket
expenses, including first-class travel and lodging accommodations, and certain
other perquisites appropriate to the performance of his services. As a Director
of the Company, Mr. Neuharth is also entitled to receive such retainers, fees,
stock options and other benefits that accrue to non-employee members of the
Board of Directors.
<PAGE>
Performance Graph
The graph below shows the monthly performance of the Company's Common Stock
since July 30, 1993, in comparison to the NASDAQ Composite Index and certain
peer groups described below.
[GRAPH HAS BEEN OMITTED]
STARCRAFT PEER NASDAQ
AUTOMOTIVE GROUP (1) MARKET
BASE 100.00 100.00 100.00
9/30/1993 92.50 106.58 105.02
12/31/1993 112.50 105.91 105.26
3/31/1994 95.00 104.65 106.96
6/30/1994 87.50 90.22 106.05
9/30/1994 63.75 92.23 111.70
12/30/1994 75.00 76.29 109.46
3/31/1995 78.75 76.50 112.69
6/30/1995 57.50 82.97 123.28
9/29/1995 63.75 81.34 137.36
12/29/1995 45.00 76.57 136.26
3/29/1996 48.75 77.04 142.55
6/28/1996 50.00 79.09 153.12
9/30/1996 47.50 88.70 157.34
12/31/1996 37.50 90.03 164.74
3/31/1997 36.25 93.41 156.36
6/30/1997 26.25 98.67 184.98
9/30/1997 20.63 105.52 215.68
(1) Excel Industries Inc., Simpson Industries Inc., and Walbro Corp.
Peer group comparisons. Management believes the vehicle conversion business
has similarities to, and can be affected by factors in the general automotive
industry. The Company is the only publicly-traded company whose principal line
of business is vehicle conversions, so a directly comparable peer group is not
available. The peer group presented consists of companies in the automotive
business, primarily suppliers to original equipment manufacturers.
Compensation Committee Interlocks and Insider Participation
During fiscal 1997 the members of the Company's Compensation Committee have
been outside directors Matteson, Fulmer, Martin and Neuharth. See
"--Compensation of Directors" above.
Certain Transactions
The Company from time to time utilizes an airplane for business
transportion purposes which is owned by a partnership in which Mr. Rose holds a
one-third interest. During 1997, payments by the Company for use of the plane
were $100,816.
<PAGE>
PROPOSAL II-- RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors proposes the ratification by the shareholders at the
Annual Meeting the appointment of the accounting firm of Ernst & Young LLP as
independent auditors for the fiscal year ended September 27, 1998. The Board of
Directors of the Company approved the engagement of Ernst & Young LLP as the
Company's independent auditors at its meeting held on November 4, 1997 upon the
recommendaton of the Audit Committee. Ernst & Young LLP served as auditors for
the Company during the past two fiscal years. A representative of Ernst & Young
LLP is expected to be present at the Annual Meeting with the opportunity to make
a statement if he so desires. He will also be available to respond to any
appropriate questions shareholders may have.
RATIFICATION OF THE APPOINTMENT OF AUDITORS REQUIRES THAT THE VOTES CAST IN
PERSON OR BY PROXY AT THE ANNUAL MEETING OR AT ANY ADJOURNMENT THEREOF IN FAVOR
OF RATIFICATION EXCEED THOSE CAST AGAINST.
SHAREHOLDER PROPOSALS
Any proposal that a shareholder wishes to have presented at the next Annual
Meeting of the Company to be held in 1999 must be received at the main office of
the Company for the inclusion in the proxy statement no later than 120 days in
advance of January 16, 1999. Any such proposal should be sent to the attention
of Michael H. Schoeffler, Secretary of the Company, at P.O. Box 1903, 2703
College Avenue, Goshen, Indiana 46526.
FILINGS UNDER SECTION 16(a) OF THE 1934 ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that the Company's officers and directors and persons who own more than 10% of
the Company's Common Stock file reports of ownership and changes in ownership
with the Securities and Exchange Commission (the "SEC"). Officers, directors and
greater than 10% shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it,
and/or written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that during the fiscal
year ended September 28, 1997, all filing requirements applicable to its
officers, directors and greater than 10% beneficial owners with respect to
Section 16(a) of the 1934 Act were complied with.
OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than those matters described in the Proxy Statement. However, if any other
matters should properly come before the Annual Meeting, it is intended that the
proxies solicited hereby will be voted with respect to those other matters in
accordance with the judgment of the persons voting the proxies.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy material
to the beneficial owners of the Common Stock. In addition to solicitation by
mail, directors, officers, and employees of the Company may solicit proxies
personally or by telephone without additional compensation.
Each Shareholder is urged to complete, date and sign the proxy and return
it promptly in the enclosed return envelope.
Insofar as any of the information in this Proxy Statement may rest
peculiarly within the knowledge of persons other than the Company, the Company
relies upon information furnished by others for the accuracy and completeness
thereof.
By Order of the Board of Directors
/s/ Kelly L. Rose
Kelly L. Rose, Chairman of the Board
and Chief Executive Officer
January 16, 1998
<PAGE>
REVOCABLE REVOCABLE
PROXY PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
STARCRAFT CORPORATION
Annual Meeting of Shareholders -- February 17, 1998
The undersigned hereby appoints Kelly L. Rose and Michael H.
Schoeffler, with full powers of substitution, to act as attorneys and proxies
for the undersigned to vote all shares of capital stock of Starcraft Corporation
(the "Company") which the undersigned is entitled to vote at the Annual Meeting
of Shareholders to be held at the Goshen Inn and Conference Center, 1375 Lincoln
Way East (U.S. 33 East), Goshen, Indiana, on Tuesday, January 17, 1998, at 9:00
A.M. Goshen time, and at any and all adjournments thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY
OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE
NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
(Continued and to be signed on reverse side.)
<PAGE>
STARCRAFT CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
The Board of Directors recommends a vote "FOR" each of the listed propositions.
For Withhold
1. Election of Directors:
L. Craig Fulmer [_] [_]
2. Ratification of the appointment
of Ernst & Young, LLP as auditors
for the year ending September For Against Abstain
27, 1998. [_] [_] [_]
3. Please check this box if you
intend to attend the Annual
Meeting of Shareholders [_]
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment thereof. This Proxy
may be revoked at any time prior to the voting thereof. The undersigned
acknowledges receipt from the Company, prior to the execution of this proxy, of
notice of the meeting, a proxy statement and an Annual Report to Shareholders.
Dated: ___________________________, 1998
Signature:______________________________
----------------------------------------
Please sign as your name appears on the
envelope in which this card was mailed.
When signing as attorney, executor,
administrator, trustee or guardian,
please give your full title. If shares
are held jointly, each holder should
sign.
^ FOLD AND DETACH HERE ^
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS ABOVE PROXY CARD AND PROMPTLY
RETURN IT IN THE ENCLOSED ENVELOPE
