SKYLINE CORPORATION
2520 By-Pass Road
P.O. Box 743
Elkhart, Indiana 46515
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
September 19,1994
NOTICE IS HEREBY GIVEN that the Annual Meeting of the
Shareholders of Skyline Corporation ("Skyline") will be held at the
Shenandoah Room, in the Ramada Inn, 3011 Belvedere Road, Elkhart,
Indiana, on Monday, September 19, 1994, at 10:00 a.m., Eastern Standard
Time, for the following purposes:
1.To elect a Board of Directors for the ensuing year, or until their
successors are elected and qualify.
2.To transact such other business as may properly come before the
meeting, or any adjournment thereof.
The Board of Directors has fixed the close of business on July 20, 1994, as
the record date for the determination of shareholders entitled to notice of,
and to vote at, said meeting.
By Order of the Board of Directors
RONALD F. KLOSKA
Vice-Chairman and Chief
Administration Officer
August 2, 1994
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON,
PLEASE SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED
PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
SKYLINE CORPORATION
2520 By-Pass Road
P.O. Box 743
Elkhart, Indiana 46515
August 2, 1994
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Skyline
Corporation ("Skyline") for use at the Annual Meeting of Shareholders to
be held September 19, 1994. The shares represented by properly executed
proxies received prior to the meeting will be voted. If the shareholder
directs in the proxy how the shares are to be voted, they will be voted
accordingly. When no direction has been given by the shareholder, it is the
intention of the proxies named in the proxy to vote the same in accordance
with their best judgment. Any proxy given may be revoked by the
shareholder at any time prior to the voting of the proxy.
VOTING SECURITIES
Only shareholders of record as of the close of business on July 20, 1994, or
their proxies are entitled to vote at the meeting. As of that date, Skyline has
outstanding 11,157,244 shares of Common Stock having one vote per
share.
ELECTION OF DIRECTORS
Each share of Common Stock is entitled to one vote, which means that the
holders of more than 50% of the shares voting for the election of Directors
can elect all of the Directors and approve any other matter as may properly
come before the meeting if they choose to do so.
It is proposed that nine Directors be elected at the meeting, each to serve
until the next Annual Meeting of Shareholders and until his successor is
elected and qualifies.
It is intended that the votes authorized by the enclosed proxy will be cast
for the election of the nine nominees for Directors whose names are set
forth below. In the event that one or more of the nominees shall
unexpectedly become unavailable for election, the votes will be cast,
pursuant to authority granted by the enclosed proxy, for such person as
may be designated by the present Board of Directors or the Board may be
reduced accordingly. All of the nominees for whom the proxies intend to
vote have agreed to serve as Directors if elected.
Information about the nominees for election as Directors and the beneficial
ownership of Skyline Common Stock by directors as a group is as follows:<PAGE>
Shares of Skyline
Common Stock bene-
Skyline ficially Owned at Percent
Name, Title, Address Director July 1, 1994 of
and Principal Occupation Age Since Directly or Indirectly Class (3)
ARTHUR J. DECIO 63 1959 1,477,784(1) 13.2%
Chairman, Skyline Corporation, 2520 By-Pass Road, Elkhart,
IN 46514. Chairman of the Board and Chief Executive Officer.
Mr. Decio is also a Director of NIPSCO Industries, Inc.,
Hammond, Indiana, and Quality Dining, Mishawaka, Indiana.
TERRENCE M. DECIO 42 1989 30,080(2)
Senior Executive Vice President and Assistant Chief Operations
Officer, Skyline Corporation, 2520 By-Pass Road, Elkhart,
Indiana 46514. Mr. Decio is also a Director of Society National
Bank Indiana, South Bend, Indiana.
JERRY HAMMES 62 1986 13,000
2015 West Western Avenue, South Bend, Indiana 46629.
President of Romy Hammes, Inc., a one bank holding
company and real estate investment company, South Bend,
Indiana, and Chairman of Peoples Bank of Kankakee County,
a bank, Kankakee, Illinois. Mr. Hammes is also a Director
of Society National Bank Indiana, South Bend, Indiana.
RONALD F. KLOSKA 60 1965 28,600
Vice-Chairman and Chief Administration Officer, Skyline
Corporation, 2520 By-Pass Road, Elkhart, Indiana 46514.
WILLIAM H. LAWSON 57 1975 3,000
President and Chief Executive Officer, Franklin Electric Co.,
Inc., 400 East Spring Street, Bluffton, Indiana 46714. Chairman
of the Board, Chief Executive Officer and a Director of
Franklin Electric Company, Inc., a manufacturer of electric
motors, Bluffton, Indiana. Mr. Lawson is also a Director of
JSJ Corporation and Sentry Insurance, a Mutual Company.
DAVID T. LINK 57 0
Dean and Professor of Law, Notre Dame Law School,
University of Notre Dame, Notre Dame, Indiana 46556.
<PAGE>
Shares of Skyline
Common Stock bene-
Skyline ficially Owned at Percent
Name, Title, Address Director July 1, 1994 of
and Principal Occupation Age Since Directly or Indirectly Class (3)
ANDREW J. McKENNA 64 1971 12,300
Chairman, President and CEO, Schwarz Paper Company,
8338 North Austin Avenue, Morton Grove, Illinois 60053.
President of Schwarz Paper Company, a national
distributor of paper, printing and packaging, Morton Grove,
Illinois. Mr. McKenna is also a director of First Chicago
Corporation, First National Bank of Chicago, Tribune
Company, Aon Corporation, McDonalds Corporation
and Dean Foods Company.
WILLIAM H. MURSCHEL 49 1992 1,110
President and Chief Operations Officer, Skyline Corporation,
2520 By-Pass Road, Elkhart, Indiana 46514. Mr. Murschel
was Vice President of Skyline from June 1986 through
September 16, 1991.
DALE SWIKERT 64 1963 8,791
15801 North 29th Street, #1, Phoenix, Arizona 85032.
Private Investor and former President of Vanamera
Industries, Ltd., Kelowna, British Columbia, a Canadian
manufacturer of van conversions.
ALL NOMINEES AND
OFFICERS AS A GROUP 1,583,715 14.12%
(1)Includes 83,500 shares in The Arthur J. Decio Foundation, a charitable
foundation, of which Mr. Decio is a trustee. Mr. Decio disclaims any
beneficial interest with respect to these shares.
(2)Terrence M. Decio is the son of Arthur J. Decio.
(3)Less than one percent unless otherwise indicated.
<PAGE>
Information about Board and Committee meetings is a follows:
The Audit Committee consisted of Messrs. Hammes, McKenna and Dr.
Thomas P. Bergin. It met four times during the fiscal year ended May 31,
1994. The Committee meets with the accounting firm which conducts the
annual audit of Skyline's books, reviews auditor's recommendations,
reviews the independence of Skyline's auditors and considers the range of
audit and non-audit fees. It also meets with the internal audit staff and
Chief Financial Officer, reviews the scope and adequacy of Skyline's
internal auditing program and reports its findings to the Board with any
recommendations it considers appropriate.
The Governance and Compensation Committee consisted of Messrs.
McKenna, Hammes and Lawson. It met two times during the last fiscal
year. The Committee establishes compensation for the Chief Executive
Officer and consults with the Chief Executive Officer concerning
compensation for other elected officers of the Company. The Committee
also recommends to the Board the selection of nominees for election as
directors, and considers the performance of incumbent directors in
determining whether to nominate them for re-election. Nominees
recommended by shareholders will be considered upon their submission in
writing by the shareholders to Skyline prior to the end of the fiscal year
immediately preceding the next regular annual shareholders meeting.
The Executive Committee of the Board of Directors consists of Messrs.
Arthur J. Decio, Hammes and McKenna, and met ten times during the last
fiscal year. This Committee exercises the powers of the Board of Directors
in the management of the business and affairs of Skyline, subject to the
approval of the full Board of Directors at the next regular or special
meeting.
The Board of Directors met or took action six times during the last fiscal
year. Every Board member was present at all Board meetings and meetings
of all committees of which he was a member, except that one Director did
not attend one Board meeting and one Director did not attend two Board
meetings.
<PAGE>
Certain Other Beneficial Owners
The following person, entities or "group" as indicated are known to Skyline
to own beneficially at least five percent (5%) of Skyline's common stock or
are members of management identified in the summary compensation table
but who are not on Skyline's Board. The beneficial ownership of Skyline
common stock by the members of its Board and its nominees for directors
is shown in the table under "Election of Directors" above.
Shares of Skyline Common
Name and Address Stock Beneficially Owned Percent of
of Beneficial Owner at July 1, 1994 Class (1)
Donald A. Barrow 1,350
Vice President, Skyline
2520 By-Pass Road
Elkhart, Indiana 46514
Orbis Investment Management 1,065,000 9.5%
Limited (2)
Harold Hayes Frith Building
55 Par-Ia-Ville Road
Hamilton, HM 11
Bermuda
PosAlpha Management Limited(2) 45,000 .4%
Harold Hayes Frith Building
55 Par-Ia-Ville Road
Hamilton, HM 11
Bermuda
(1)Less than one percent (1%) if not specified.
(2)Orbis Investment Management Limited and PosAlpha Management
Limited may constitute a "group" owning 1,110,000 shares, which is 9.9%
of the outstanding Skyline common stock.
<PAGE>
Executive Compensation
All cash compensation paid during the fiscal year ended May 31, 1994 for
each of the five highest paid executive officers of Skyline, including the
Chief Executive Officer. The table also shows for each such officer, the
amounts set aside during the last fiscal year under Skyline's Profit Sharing
Plan.
All
Other
Compen-
sation
Annual Compensation (Vested)
Name and Principal Profit
Position Year Salary ($) Bonus ($) Sharing)
Arthur J. Decio 1994 395,000 248,000 6,000
Chairman of the Board 1993 395,000 90,000 6,000
and Chief Executive Officer 1992 395,000 0 6,000
William H. Murschel 1994 295,000 170,500 6,000
President and Chief Operations 1993 275,000 102,500 6,000
Officer (Vice-President prior to 1992 225,000 22,500 6,000
September 16, 1991)
Terrence M. Decio 1994 225,000 139,500 6,000
Senior Executive Vice-President and 1993 200,000 67,500 6,000
Assistant Chief Operations Officer 1992 140,000 14,000 6,000
(Senior Vice-President from
September 16, 1991 to
September 21, 1992 and Vice-President
before September 16, 1991)
Ronald F. Kloska 1994 245,000 139,500 6,000
Vice-Chairman of the Board and 1993 225,000 67,500 6,000
Chief Administration Officer 1992 225,000 22,500 6,000
(President prior to September 16, 1991)
Donald A. Barrow 1994 150,000 45,000 6,000
Vice-President 1993 140,000 22,500 6,000
1992 140,000 14,000 6,000
<PAGE>
Compensation of Directors
Directors who are not full-time employees receive an annual fee of $16,000
payable in quarterly installments. Chairmen of the Board Committees
receive an additional $2,000 annually. If a Committee meeting is held on a
day when there is not Board meeting, the sum of $500 is payable to each
Director attending the Committee meeting.
Termination of Employment Arrangements
The Skyline Corporation and Affiliates Employees' Profit Sharing Plan
provides benefits on death, disability or retirement for officers and
executives, sales, administrative and supervisory employees. Employees
hired on or after June 1, 1987 become eligible as of the June 1 or
December 1 immediately following completion of six months of
employment. Under the Plan, as amended effective June 1, 1987, the
amount of contribution under the Plan is in the discretion of Skyline each
year. However, the maximum contribution for any participant shall not
exceed 12% of a participant's basic compensation. Upon retirement, death
or permanent total disability, a participant is entitled to all of the funds
credited to his account. In case of termination of employment by
resignation or discharge, the participant is entitled to a percentage of the
amount credited to his account, ranging from 0% (10% for employees
hired on or before May 31, 1987) after one year of employment to 100%
after seven years. For plan years beginning on or after June 1, 1987,
forfeitures resulting from any employee's termination of employment prior
to full vesting will be used to reduce employer contributions. Net
investment earnings or net losses for each fiscal year are allocated to the
account of each participant in the same ratio as the participant's account
balance bears to the total account balances of all participants. Skyline
reserves the right to modify, amend or terminate the Plan. In the event of
termination of the Plan, the entire amount theretofore contributed under
the Plan must be paid to participants or their beneficiaries and under no
circumstances reverts to Skyline.
Under an insurance plan, payments would be made to the below named
executive officers, and executive officers as a group, for a period of 10
years upon retirement from Skyline at age 60 or later, in the following
amounts: Ronald F. Kloska, $75,000; William H. Murschel, Donald A.
Barrow and Terrence M. Decio, $60,000 each; and all executive officers as
a group, consisting of 5 individuals, $295,000. Under the same insurance
plan, in the event of the death of any of such executive officers while
employed by Skyline, payments would be made for a period of 10 years in
the annual amounts hereinafter specified to the beneficiaries of the
following individuals and group: Ronald F. Kloska, $75,000; William H.
Murschel and Terrence M. Decio, $60,000 each, and Donald A. Barrow,
$30,000; and all executive officers as a group, consisting of 5 individuals,
$255,000. Skyline is the owner and beneficiary of policies insuring the lives
of all such executive officers in the total amount of $1,875,984. In
addition, in the event of the death of Arthur J. Decio, Skyline has agreed to
pay his survivor(s) the sum of $1,920,000, which at the present income tax
rates, would result in after tax cost to Skyline of approximately
$1,153,000. Skyline is the owner and beneficiary of policies insuring Arthur
J. Decio's life in the amount of $1,000,000.
The appreciation in cash surrender value of all of the above-described
insurance policies is such that there is no current cost to Skyline for their
maintenance.
Compensation Committee Interlocks and Insider Participation
The following persons served as members of the Governance and
Compensation Committee (the "Compensation Committee") of Skyline's
Board of Directors during the fiscal year ended May 31, 1994: Andrew J.
McKenna, Jerry Hammes and William H. Lawson. Arthur J. Decio is the
Chairman of the Board and Chief Executive Officer of Skyline, and is a
member of the Board of Directors of Schwarz Paper Company. Andrew J.
McKenna is an executive officer of Schwarz Paper Company.
Report of the Governance and Compensation
Committee (the "Compensation Committee")
on Executive Compensation
The compensation of Skyline's executive officers is determined by the
Compensation Committee of the Board of Directors. Each member of the
Compensation Committee is a director who is not an employee of Skyline
or any of its affiliates. The following report with respect to compensation
paid to Skyline's executive officers for the fiscal year ended May 31, 1994
is furnished by the Compensation Committee.
General Policies. Skyline's compensation programs are intended to enable
Skyline to attract, motivate, reward and retain the executive management
talent required to achieve corporate objectives. It is Skyline's policy to
reward exceptional performance and contributions to the development of
Skyline's business. To attain these objectives, Skyline's executive
compensation program includes a competitive base salary coupled with the
opportunity to participate in a bonus pool which is created based on the
performance of Skyline's business. The Compensation Committee
establishes the base salaries and discretionary bonuses which will be paid to
Skyline's executive officers for each fiscal year. In setting salaries and
bonuses, the Compensation Committee takes into account several factors,
including compensation paid by competitors and other industries'
compensation data as well as qualitative factors bearing on an individual's
experience, responsibilities, management and job performance. The
Compensation Committee evaluates the contributions to Skyline's overall
performance during the last fiscal year, leadership, effectiveness and
commitment of all executive officers, including the Chief Executive Officer.
For the fiscal year ended May 31, 1994, each of the executive officers
received a bonus, in the amounts set forth above in the summary
compensation table.
Salaries. Salary levels for executive officer positions are set so as to reflect
the duties and level of responsibilities inherent in the position and current
economic conditions relating to Skyline's business. Comparative salaries
paid by other companies in the industries which Skyline does business are
considered in establishing the salary level for a given position. The
Compensation Committee does not, however, target a specific percentile
range within the comparative group in setting salaries of Skyline's
executive officers. The particular qualifications and level of experience of
the individual holding the position are also considered in establishing a
salary level when the individual is first appointed to a given position.
Bonus. Skyline provides executive officers the opportunity to earn an
annual incentive bonus based on an evaluation of the executive's individual
performance and Skyline's performance. No executive officer is
automatically entitled to a bonus or a bonus in any particular amount. In
considering bonuses for executives other than Arthur J. Decio, the
Compensation Committee consults with the Chief Executive Officer.
Other. In addition, the executive officers participate in a profit sharing
program and insurance and other plans described above providing
payments on death or retirement.
Compensation of Chief Executive Officer ("CEO"). In setting the base
salary and bonus for Skyline's CEO, for the fiscal year ended May 31,
1994, the Compensation Committee considered the same factors as with
other executive officers of Skyline. The Compensation Committee believes
the CEO's compensation was fully supported by those standards.
Andrew J. McKenna, Chairman
Jerry Hammes
William H. Lawson
Being all the members of Skyline's Governance and Compensation
Committee (the "Compensation Committee")
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG SKYLINE CORPORATION, S & P 500 INDEX AND PEER
GROUP**
Skyline S&P Peer
Corporation 500 Group
Starting Basis - 1989 $100.00 $100.00 $100.00
1990 77.72 116.61 98.60
1991 96.54 130.36 114.11
1992 92.19 143.21 128.06
1993 107.54 159.84 163.50
1994 109.64 165.99 208.29
* Notes:
Assumes initial investment of $100 on May 31,1989 and compares the
return on that investment through May 31, 1994.
For comparison purposes, Total Return assumes reinvestment of dividends,
although Skyline has no dividend reinvestment plan.
Total Return is based on market capitalization.
** This self constructed peer group consists of the following companies:
Champion Enterprises, Inc.
Coachman Industries, Inc.
Fleetwood Enterprises, Inc.
Liberty Homes, Inc.
Schult Homes, Inc.
Thor Industries, Inc.
The returns of each member of this peer group have been weighted
according to that company's respective stock market capitalization.
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Skyline's independent public accounting firm is Price Waterhouse. It is
expected that representatives of Price Waterhouse will be present at the
meeting of the shareholders, will have the opportunity to make a statement
if they so desire and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Any proposal submitted for inclusion in Skyline's Proxy Statement and
form of proxy for the 1995 Annual Meeting of Shareholders must be
received at the address shown above on or before April 5, 1995.
MISCELLANEOUS
As of the date of this Proxy Statement, the Board of Directors knows of no
other business which will be presented for consideration at the annual
meeting. However, if other proper matters are presented at the meeting, it
is the intention of the proxies named in the enclosed proxy to take such
action as shall be in accordance with their best judgment.
The expense of this solicitation, including cost of preparing and mailing this
Proxy Statement and accompanying material, will be paid by Skyline.
Skyline expects to pay approximately $6,000 to Georgeson & Company as
compensation for the solicitation of proxies, and may reimburse brokers
and others for their expense for sending proxy material to principals for the
purpose of obtaining signed proxies. In addition, solicitation may be by
mail, telephone, telegraph and personal interview by regularly engaged
officers of Skyline who will not be additionally compensated therefor.
Shareholders are respectfully requested to date, sign and return promptly
the enclosed proxy in the enclosed envelope. No postage is required if
mailed in the United States.
By Order of the
Board of Directors
RONALD F. KLOSKA
Vice-Chairman and Chief
Administration Officer
<PAGE>
IMPORTANT: Please mark, sign, date and promptly return this proxy
using the enclosed envelope.
Proxy
SKYLINE CORPORATION
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
The undersigned hereby appoints Ronald F. Kloska and Richard M.
Treckelo as proxies, each with the power to appoint his substitute, and
hereby authorizes them, or either of them, to appear and to vote as
designated below, all the shares of common stock held of record by the
undersigned on July 20, 1994 at the Annual Meeting of Shareholders of
Skyline Corporation, to be held at the Shenandoah Room, in the Ramada
Inn, 3011 Belvedere Road, Elkhart, Indiana, on Monday, September 19,
1994, at 10:00 a.m., Eastern Standard Time, and at any adjournments
thereof.
1. ELECTION OF DIRECTORS
NOMINEES: Arthur J. Decio, Terrence M. Decio, Jerry Hammes,
Ronald F. Kloska, William H. Lawson, David T. Link, Andrew J.
McKenna, William H. Murschel and Dale Swikert.
Mark Only One Box:
_____ FOR all nominees listed above; except vote withheld with
respect to nominee/s listed below (if any)
________________________________________________
________________________________________________
_____ WITHHOLD AUTHORITY to vote for ALL nominees listed
above
(Continued and to be signed on other side)<PAGE>
(continued from other side)
2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and the Proxy Statement furnished therewith,
both of which are dated August 2, 1994.
Dated _________________ , 1994 _____________________________
Signature
Please print:
_________________________ _____________________________
Name Signature
_________________________
Name
_________________________
Address
_________________________
City, State, Zip Code
Please sign exactly as name appears hereon. Where shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.