<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
PALM HARBOR HOMES, 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):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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:
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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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
PALM HARBOR HOMES, INC.
15303 DALLAS PARKWAY, SUITE 800
DALLAS, TEXAS 75248
-----------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 24, 1997
-----------------------
To the Shareholders of Palm Harbor Homes, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of Palm
Harbor Homes, Inc. (the "Company") will be held at 9:30 a.m., Dallas time, on
June 24, 1997, at The Grand Kempinski Hotel, 15201 Dallas Parkway, Dallas,
Texas, to consider and act upon the following matters:
1. To elect eight members of the Company's Board of Directors to
hold office until the next Annual Meeting of Shareholders and
until their respective successors shall have been elected and
qualified.
2. To ratify the appointment of Ernst & Young LLP as independent
auditors for the Company for the year ending March 27, 1998.
3. Such other matters as may properly be brought before the Annual
Meeting or any adjournment thereof.
Only shareholders of record of the Company at the close of business on
May 5, 1997 will be entitled to notice of and to vote at the Annual Meeting or
any adjournment thereof.
Your vote is important. To ensure that your shares will be
represented at the Annual Meeting, whether or not you plan to attend the Annual
Meeting, please complete, date, sign and mail the enclosed proxy promptly in
the enclosed postage-paid envelope. Shareholders who attend the Annual Meeting
in person may revoke their proxies and vote in person prior to the commencement
of the meeting if they so desire.
By Order of the Board of Directors
Kelly Tacke
Secretary
May 23, 1997
<PAGE> 3
PALM HARBOR HOMES, INC.
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 24, 1997
--------------------
This Proxy Statement and the accompanying proxy are being furnished to
shareholders in connection with the solicitation of proxies by the Board of
Directors of Palm Harbor Homes, Inc., a Florida corporation (the "Company"),
for use at the Annual Meeting of Shareholders to be held at The Grand Kempinski
Hotel, Dallas, Texas, at 9:30 a.m., Dallas time, on June 24, 1997, and at any
adjournment or postponement thereof. This Proxy Statement and the related form
of proxy are first being sent to shareholders on or about May 23, 1997.
The close of business on May 5, 1997 (the "Record Date") has been
fixed as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting or any adjournments or
postponements thereof. As of the Record Date, the Company had 15,096,308
outstanding shares of Common Stock, $.01 par value per share ("Common Stock"),
the only outstanding voting security of the Company. Each shareholder of
record on the Record Date is entitled to one vote for each share of Common
Stock. As of the Record Date, the Company had 1,163 shareholders of record. A
majority of the outstanding shares of Common Stock, represented in person or by
proxy, will constitute a quorum at the Annual Meeting; however, if a quorum is
not present or represented at the Annual Meeting, the shareholders entitled to
vote at such meeting, present in person or represented by proxy, have the power
to adjourn the Annual Meeting from time to time, without notice, other than by
announcement at the Annual Meeting, until a quorum is present or represented.
At any such adjourned Annual Meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the original Annual Meeting.
All proxies which are properly completed, signed and returned to the
Company prior to the Annual Meeting, and which have not been revoked, will be
voted FOR the proposals described in this Proxy Statement unless otherwise
directed. A shareholder may revoke his or her proxy at any time before it is
voted either by filing with the Secretary of the Company at its principal
executive office a written notice of revocation or a duly executed proxy
bearing a later date, or by attending the Annual Meeting and expressing a
desire to vote his or her shares in person prior to commencement of the
meeting. A notice of revocation need not be on any specific form.
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no business that will be presented for consideration at the
Annual Meeting other than the matters described in this Proxy Statement. If
any other matters are properly brought before the Annual Meeting, the persons
named in the accompanying form of proxy will vote the proxies in accordance
with their judgment.
Abstentions and broker non-votes (where a nominee holding Common Stock
has not received voting instructions from the beneficial owner with respect to
a particular matter and such nominee does not possess or choose to exercise
discretionary authority with respect thereto) will be included in the
determination of the number of shares of Common Stock present at the Annual
Meeting for quorum purposes. Abstentions and broker non-votes will not be
deemed to be outstanding and, therefore, will not be counted in the tabulations
of votes cast on proposals presented to shareholders.
<PAGE> 4
PROPOSAL ONE: ELECTION OF DIRECTORS
The number of directors to be elected at the Annual Meeting is eight.
The election of directors requires the affirmative vote of a majority of
outstanding Common Stock represented in person or by proxy at the Annual
Meeting. Although it is not contemplated that any nominee will decline or be
unable to serve, the proxies will be voted by the proxy holders in their
discretion for another person, or for a lesser number of persons, if such a
contingency should arise. The term of each person elected as a director will
continue until the next annual meeting and until his successor is duly elected
and qualified. Unless such authority is withheld, it is the intention of the
persons named in the enclosed proxy to vote such proxy FOR the election of such
eight nominees. All of the nominees currently serve as directors of the
Company. The following table sets forth the name, age and year of election to
the Board of each person who is a nominee for director of the Company.
<TABLE>
<CAPTION>
NAME AGE YEAR FIRST ELECTED DIRECTOR
---- --- ---------------------------
<S> <C> <C>
Lee Posey 63 1977
Larry H. Keener 47 1980
William R. Thomas 68 1982
Walter D. Rosenberg, Jr. 70 1977
Frederick R. Meyer 69 1994
John H. Wilson 54 1994
A. Gary Shilling 60 1995
Scott W. Chaney 39 1996
</TABLE>
Set forth below is a description of the backgrounds of the directors
of the Company.
LEE POSEY, founder of the Company, has served as Chairman of the Board
and Chief Executive Officer since December 1977 and as President from December
1977 through December 1993. From 1967 through 1977, Mr. Posey served as
President of Redman Industries, Inc., a manufactured housing company. Mr.
Posey has 41 years of experience in the manufactured housing industry.
LARRY H. KEENER, who joined the Company in 1979, has served as
President and Chief Operating Officer since June 1994, as a director from 1980
to May 1994 and as Division President of Florida and other Southeastern
operations from June 1989 through May 1994. He was appointed as a director of
the Company on May 15, 1995. Mr. Keener has 25 years of experience in the
manufactured housing industry.
WILLIAM R. THOMAS has served as a director since 1982. Mr. Thomas
joined Capital Southwest Corporation ("Capital Southwest"), a publicly-owned
venture capital investment company, in 1962 and has served as its President
since 1980 and Chairman of the Board since 1982. He has also served as
President of Capital Southwest Venture Corporation ("CSVC") since 1980. Mr.
Thomas currently serves on the Board of Directors of Alamo Group, Inc. and
Encore Wire Corporation. Mr. Thomas serves as a director of the Company
pursuant to an affirmative covenant under an agreement among the Company,
Capital Southwest and CSVC.
WALTER D. ROSENBERG, JR. has served as a director since 1977. Since
June 1991, Mr. Rosenberg has managed his personal investments. From December
1957 to June 1991, he was Chairman of the Board and Chief Executive Officer of
Duro Metal Manufacturing Company, Inc., a manufacturer of steel furniture and
components, acquired in 1991 by Leggett & Platt.
FREDERICK R. MEYER has served as a director since May 1994. Since
July 1985, Mr. Meyer has served as Chairman of the Board of Aladdin Industries,
Inc., a diversified company engaged in the manufacture of children's lunch
kits, thermosware, insulated food delivery systems and related products. Since
October 1995, he has served as President
2
<PAGE> 5
and Chief Executive Officer of Aladdin Industries. He previously served as its
President from May 1987 to September 1994. From July 1983 through December
1986, he served as President of Tyler Corporation. He currently serves on the
Board of Directors of Tyler Corporation, Arvin Industries, Inc. and Southwest
Securities Group, Inc.
JOHN H. WILSON has served as a director since May 1994. Mr. Wilson
has served as President of U.S. Equity Corporation, a venture capital firm,
since 1983. He currently serves on the Board of Directors of Capital
Southwest, Whitehall Corporation, Norwood Promotional Products, Inc. and Encore
Wire Corporation.
A. GARY SHILLING has served as a director since September 1995. Since
1978, Dr. Shilling has served as President of A. Gary Shilling & Co., Inc.,
economic consultants to a number of financial institutions and industrial
corporations as well as investment advisors, managing individual and
institutional accounts. Before establishing his own firm, he was Senior Vice
President and Chief Economist of White, Weld & Co., Inc. He currently serves
on the Board of Directors of National Life of Vermont, the Heartland Group, and
is an advisory Director of Austin Trust Company.
SCOTT W. CHANEY has served as a director since August 1, 1996. Mr.
Chaney became President of the Company's retail operations effective July 1,
1996 and an Executive Vice President of the Company on March 28, 1997. Prior
to joining the Company, Mr. Chaney was President of Newco Homes, Inc., from
March 1986 through June 30, 1996. The Company owned 41.6% of Newco Homes prior
to its merger into the Company which was effective as of July 1, 1996.
BOARD OF DIRECTOR COMMITTEES
The Company has two standing committees: an Audit Committee and a
Compensation Committee. The Audit Committee recommends to the Board of
Directors the appointment of independent auditors, reviews the plan and scope
of audits, reviews the Company's significant accounting policies and internal
controls and performs such other related duties and functions as are deemed
appropriate by the Audit Committee or the Board of Directors. Messrs. Thomas
and Wilson serve on the Audit Committee. The Compensation Committee reviews
and approves salaries and bonuses for the officers of the Company and
management bonus plans and compensation arrangements. Messrs. Thomas and Meyer
serve on the Compensation Committee. The Company does not have a Nominating
Committee.
MEETINGS OF THE BOARD AND COMMITTEES
During the fiscal year ended March 28, 1997, there were four meetings
of the Board of Directors, two meetings of the Audit Committee and two
meetings of the Compensation Committee. Each Director attended 100% of all
meetings of the Board of Directors and 100% of the Committees on which such
Director served during such period.
DIRECTOR COMPENSATION
During the fiscal year ended March 28, 1997, the Company paid each
director who is not an employee of the Company (an "Independent Director")
$6,000 for services as a director plus $1,000 for each meeting (other than
telephonic meetings) of the Board of Directors attended by each Independent
Director. The total annual compensation paid to any person for his services as
an Independent Director in fiscal 1997 did not exceed $10,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are William R. Thomas and
Frederick R. Meyer. No executive officer of the Company served as a member of
the Compensation Committee or as a director of any other entity, one of whose
executive officers served on the Compensation Committee or as a director of the
Company.
3
<PAGE> 6
EXECUTIVE OFFICERS
The executive officers of the Company serve at the discretion of the
Board of Directors and are chosen annually by the Board of Directors. Set
forth below are the names, ages and positions of the executive officers of the
Company.
<TABLE>
<CAPTION>
NAME AGE Position
---- --- --------
<S> <C> <C>
Lee Posey 63 Chairman of the Board, Chief Executive Officer and Director
Larry H. Keener 47 President, Chief Operating Officer and Director
Scott Chaney 39 Executive Vice President and Director
Kelly Tacke 39 Chief Financial Officer, Vice President-Finance and Secretary
</TABLE>
Information concerning the business experience of Messrs. Posey, Keener
and Chaney is provided in "Proposal One: Election of Directors." Set forth
below is a description of the background of Ms. Tacke. There is no family
relationship between any directors or executive officers of the Company.
KELLY TACKE has served as Vice President-Finance and Chief Financial
Officer since October 1993, and as Secretary of the Company since March 1997.
From August 1979 through September 1993, Ms. Tacke was employed by Price
Waterhouse LLP where she most recently served as a Senior Audit Manager.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth all compensation paid or accrued during
the Company's fiscal years ended March 28, 1997, March 29, 1996 and March 31,
1995, respectively, to the Chief Executive Officer and the three other
executive officers of the Company in all capacities in which they served.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1)
NAME AND FISCAL ------------------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
------------------ ---- ----------- --------------- --------------
<S> <C> <C> <C> <C>
Lee Posey . . . . . . . . . . . . 1997 $150,000 $463,465 $5,689(2)
Chairman of the Board and Chief 1996 250,000 512,036 5,344(2)
Executive Officer 1995 200,000 475,416 7,100(2)
Larry H. Keener . . . . . . . . . 1997 200,000 623,591 14,249(3)
President and Chief Operating 1996 150,000 363,493 10,069(3)
Officer 1995 128,750 224,828 11,791(3)
Scott Chaney . . . . . . . . . . 1997 120,833(4) 537,573 3,617(4)
Executive Vice President
Kelly Tacke . . . . . . . . . . . 1997 100,000 180,473 5,015(5)
Chief Financial Officer, Vice 1996 100,000 100,000 3,168(5)
President-Finance and Secretary 1995 100,000 79,237 4,915(5)
</TABLE>
- -------------------
(1) The named executive officers did not receive any annual
compensation not properly categorized as salary or bonus,
except for certain perquisites and other personal benefits
which are not shown because the aggregate incremental costs of
these benefits to the Company for each officer did not exceed
the lesser of either $50,000 or 10% of the total of annual
salary and bonus reported for each such officer.
(2) Includes $2,590, $3,175 and $4,620 contributed in fiscal 1997,
1996 and 1995, respectively, by the Company pursuant to the
Employee Savings Plan and $3,099, $2,169 and $2,480 paid in
fiscal year 1997, 1996 and 1995, respectively, by the Company
as a car allowance.
(3) Includes $8,249, $4,069 and $5,791 contributed in fiscal 1997,
1996 and 1995, respectively, by the Company pursuant to the
Employee Savings Plan and $6,000 paid in fiscal 1997, 1996
and 1995 by the Company as a car allowance. Mr. Keener
became President and Chief Operating Officer in June 1994. In
that position, his annualized salary was $150,000. From June
1989 through May 1994, Mr. Keener served as Division President
of Florida and other Southeastern Operations.
(4) Mr. Chaney became Executive Vice President effective July 1,
1996. In that position, his annualized salary was $175,000.
Includes $3,617 paid in fiscal year 1997 by the Company
pursuant to the Employee Savings Plan.
(5) Represents contributions by the Company pursuant to the
Employee Savings Plan.
4
<PAGE> 7
COMPENSATION ARRANGEMENTS
Effective April 1, 1995, the Company entered into a compensation
agreement with Mr. Posey. The agreement was amended effective October 1, 1995
to provide that Mr. Posey's annual base salary be $150,000 (subject to increase
by the Company's Compensation Committee) for the next two fiscal years
following the date of the agreement. Effective April 1, 1996, Mr. Posey agreed
that for a period of eight years from the date he ceases to be an employee of
the Company, he will serve as a consultant to the Company for a specified
number of days per year at an annual fee of $200,000. If the compensation
agreement is terminated for any reason, Mr. Posey or his beneficiary shall be
entitled to receive the lesser of (i) $1,500,000 or (ii) $16,667 multiplied by
the remainder of 132 minus the number of months Mr. Posey provided services as
an employee or as a consultant under the agreement. Any amounts payable upon
termination shall be paid in cash at Mr. Posey's or his estate's, as
applicable, option, (i) in equal monthly installments over a number of months
selected by the recipient of the payments, or (ii) in one lump sum payment
within 30 days of termination.
The Company's Corporate Bonus Plan (the "Plan"), which was amended as
of July 1, 1996 and extends through the fiscal year ending March 27, 1998,
defines the basis for determining a potential bonus pool in each fiscal quarter
equal to 20% of the excess of Actual Earnings (as defined in the Plan) over
Base Earnings (as defined in the Plan). The Plan defines Actual Earnings in
each fiscal period to be the Company's consolidated earnings before deducting
bonuses determined pursuant to the Plan and before state and federal income
taxes. Bonuses under the Plan are paid promptly following each quarter.
Mr. Posey is entitled to receive as much as 21% of the bonus pool under
the Plan, but elected to receive approximately 10.4% for the year ended March
28, 1997. For the year ending March 27, 1998, Mr. Keener is entitled to
receive 14% of the bonus pool under the Plan, Mr. Chaney is entitled to receive
12.5% of the bonus pool and Ms. Tacke is entitled to receive 3.8% of the bonus
pool. There are no dollar limits on bonus amounts awarded.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), enacted in 1993, precludes a public corporation from taking a
deduction in 1994 or subsequent years for compensation in excess of $1 million
paid to its chief executive officer or any of its four other highest-paid
officers.
INDEMNIFICATION AGREEMENTS
The Company has entered into indemnification agreements with certain of
its officers and each of its directors, requiring the Company to indemnify such
persons against judgments, claims, damages, losses and expenses incurred as a
result of the fact that such officer or director, in his or her capacity as
such, is made or threatened to be made a party to any suit or proceeding, to
the maximum extent permitted by Florida law. The indemnification agreements
provide for the advancement of expenses to such officers and directors in
connection with any such suit or proceeding.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE OFFICER COMPENSATION
Decisions on compensation of the Company's executive officers are made
by the two member Compensation Committee of the Board of Directors (the
"Committee"). Each member of the Committee is an outside director. None of
the members of the Committee has ever been an officer or employee of the
Company or any of its subsidiaries. The Committee, in consultation with the
Company's Chief Executive Officer, is responsible for establishing the policies
that govern compensation of the executive officers and key employees at the
corporate level of the Company.
The goals of the Company's compensation program are to attract, retain
and motivate competent executive officers and key employees who have the
experience and ability to contribute materially to the long-term success of the
Company. The Company's compensation philosophy for its executive officers and
key employees is predicated on base salaries which are in most instances below
salaries for comparable industry positions and potential bonuses which,
depending on the Company's earnings performance in relation to pre-established
base levels, may be relatively high or relatively low in comparison with bonus
payments by companies of comparable size and type. The significant influence
of earnings growth on compensation levels effectively aligns the interests of
the executive officers and key employees with the interests of the Company's
shareholders.
5
<PAGE> 8
Base salaries are determined by the Committee for each of the executive
officers on an individual basis, taking into consideration level of
responsibility, individual contributions to the Company's performance, length
of tenure with the Company, compensation levels of comparable positions and
internal equities among positions. In most instances, base salaries are set at
subjectively-determined levels below base salaries paid to executives in
similar positions in companies of comparable size in the same industry or
similar industries. Despite the Committee's recommendation of a higher base
salary level, Lee Posey, the Company's Chairman and Chief Executive Officer,
requested that his base salary be set at a level below the previous year's base
salary. On the other hand, the base salary of the Company's President, Larry
H. Keener, was increased to $200,000 from $150,000 in the preceding year.
Bonuses were determined largely on the basis of a plan which was in
effect for the last three quarters of the fiscal year ended March 28, 1997 and
will also govern bonuses for the next fiscal year. The bonus plan provides for
a corporate level bonus pool to be distributed on a predetermined basis among
those executives and key employees specified by the Committee. The amount of
the bonus pool in each year is based on the extent to which the Company's
annual earnings exceed a base level equivalent to a 20% pre-tax return on the
Company's shareholders' equity at the beginning of the period. Individual
participation in the bonus pool is based on a percentage amount specified for
each participant. Despite the Committee's approval of a higher amount, Lee
Posey, the Company's Chairman and Chief Executive Officer, requested that his
share of the bonus pool be set significantly below the amount approved by the
Committee.
The combined effect of low base salaries and a profit-sharing plan
which generates bonuses only after earnings exceed an annual hurdle level,
results in relatively low executive compensation if the Company's performance
is unfavorable and a significantly higher level if performance is favorable,
thereby increasing the importance of performance-based bonuses as a material
determinant of total compensation.
During the fiscal year ended March 28, 1997, the Company's net income
and earnings per share increased by 65.2% and 42.4%, respectively, over the
previous year. During the same period, the combined base salary and bonus of
the Chairman and Chief Executive Officer, Lee Posey, decreased by 19% and the
combined base salary and bonus of the President and Chief Operating Officer,
Larry H. Keener, increased by 60%. The base salaries paid to Mr. Posey and Mr.
Keener represented 25% and 24%, respectively, of each officer's combined base
salary and bonus.
The Company's executives and key employees, especially Mr. Posey, own a
significant amount of the Company's stock. The Company has not adopted an
incentive stock option plan and does not at this time intend to adopt any type
of stock option plan. Instead, the management of the Company believes that a
bonus plan similar to the present plan is a more equitable and effective
compensation device.
Compensation Committee
William R. Thomas, Chairman
Frederick R. Meyer
6
<PAGE> 9
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns for
the Company, the Standard & Poor's MidCap 400 Composite Stock Index and the
Company's peer group (the "PHH Peer Group"), assuming the investment of $100 on
July 31, 1995 (the date the Common Stock began trading) and the reinvestment of
dividends. The companies in the PHH Peer Group are as follows: Cavalier
Homes, Inc., Champion Enterprises, Inc., Clayton Homes, Inc., Fleetwood
Enterprises, Inc., Liberty Homes, Inc., Oakwood Homes Corporation, Schult Homes
Corporation and Skyline Corporation.
[GRAPH]
<TABLE>
- -----------------------------------------------------------
7/95 3/96 3/97
- -----------------------------------------------------------
<S> <C> <C> <C>
Palm Harbor Homes, Inc. $100 $215 $229
- -----------------------------------------------------------
S&P MidCap 400 $100 $112 $124
- -----------------------------------------------------------
Peer Group $100 $139 $120
- -----------------------------------------------------------
</TABLE>
CERTAIN TRANSACTIONS
Effective July 1, 1996, Newco was merged with and into the Company.
Mr. Chaney owned 21.66% of Newco and received $6,430,962 cash and 535,914
shares of Common Stock in connection with the merger. Also in connection with
the merger, the Company purchased five lots located in Tyler, Cleveland and San
Antonio, Texas and Albuquerque, New Mexico from Mr. Chaney or entities
partially owned by Mr. Chaney. In connection with these purchases, Mr. Chaney
received an aggregate of $514,390.
Mr. Posey received $276,667 in connection with the purchase by the
Company of two lots located in San Antonio and Mesquite, Texas from Mr. Posey
or entities partially owned by him.
7
<PAGE> 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of May 5, 1997 by (i) each person who
is the beneficial owner of more than 5% of the Company's outstanding Common
Stock; (ii) each director of the Company; (iii) each executive officer named in
the Summary Compensation Table; and (iv) all directors and executive officers
of the Company as a group. Unless otherwise indicated, each of the
shareholders listed below has sole voting and investment power with respect to
the shares beneficially owned.
<TABLE>
<CAPTION>
Name and Address of NUMBER OF SHARES PERCENT
Beneficial Owner BENEFICIALLY OWNED(1) OF CLASS
- ------------------- --------------------- --------
<S> <C> <C>
Lee Posey . . . . . . . . . . . . . 3,012,928 19.96%
15303 Dallas Parkway
Suite 800
Dallas, Texas 75248
Capital Southwest Corporation and
Capital Southwest Venture
Corporation(3) . . . . . . . . . 5,027,276 33.30
12900 Preston Road
Suite 700
Dallas, Texas 75230
Larry H. Keener(2) . . . . . . . . 282,790 1.87
Kelly Tacke . . . . . . . . . . . . 31,923 *
W.D. Rosenberg, Jr. . . . . . . . . 136,719 *
William R. Thomas(3)(4) . . . . . . 215,248 1.43
Frederick R. Meyer(5) . . . . . . . 76,173 *
John H. Wilson(3) . . . . . . . . . --- *
A. Gary Shilling(6) . . . . . . . . 34,175 *
Scott W. Chaney . . . . . . . . . . 535,914 3.55
All directors and executive
officers as a group (9 persons)
(2)(4)(5)(6) . . . . . . . . . . . 4,325,870 28.66
</TABLE>
- -------------------------
* Represents less than 1%
(1) The information contained in this table with respect to Common Stock
ownership reflects "beneficial ownership" as defined in Rule 13d-3
under the Exchange Act.
(2) Includes an aggregate of 78,128 shares owned by Mr. Keener's spouse
and three daughters, over which he exercises voting and investment
power.
(3) Mr. Thomas is President and Chairman of the Board of Capital Southwest
and CSVC, both of which are principal shareholders of the Company.
Mr. Wilson is a member of the Board of Directors of Capital Southwest
and CSVC. Mr. Thomas and Mr. Wilson may be deemed to share voting and
investment power with respect to the shares of Common Stock
beneficially owned by Capital Southwest and CSVC. Mr. Thomas and Mr.
Wilson each have disclaimed beneficial ownership of such shares.
(4) Mr. Thomas has sole voting and investment power with respect to 72,500
shares personally held by Mr. Thomas. Mr. Thomas also has sole voting
and investment power with respect to 51,632 shares held by a family
partnership. Mr. Thomas is a trustee of certain trusts pursuant to
employee stock ownership plans for employees of Capital Southwest and
its wholly-owned subsidiaries owning 91,116 shares, with the power as
one of three trustees to participate in the voting of such shares.
Under the rules and regulations of the Securities and Exchange
Commission, Mr. Thomas is deemed to be the beneficial owner of such
91,116 shares which are included in the shares owned by Mr. Thomas.
(5) Includes 31,250 shares owned by a family partnership over which Mr.
Meyer exercises voting and investment power.
(6) Dr. Shilling is one of five members of an investment committee to
participate in the voting and investment decision relating to 17,500
shares owned by clients of A. Gary Shilling & Co., Inc. Under the
rules and regulation of the Securities and Exchange Commission, Dr.
Shilling is deemed to be the beneficial owner of such 17,500 shares
which are included in the shares owned by Dr. Shilling.
- -------------
8
<PAGE> 11
PROPOSAL TWO: RATIFICATION OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors
of the Company has appointed the firm of Ernst & Young LLP as the Company's
independent auditors for the year ending March 27, 1998. The affirmative vote
of the majority of the Common Stock present or represented and entitled to vote
at the Annual Meeting is required to ratify the appointment of Ernst & Young
LLP.
Ernst & Young LLP served as the Company's independent auditors for the
fiscal year ended March 28, 1997. A representative of Ernst & Young LLP is
expected to be present at the Annual Meeting. The representative will be
afforded the opportunity to make a statement and to respond to appropriate
questions of shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF ERNST
& YOUNG LLP AS THE COMPANY'S AUDITORS FOR THE YEAR ENDING MARCH 27, 1998.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires that Company directors,
executive officers and persons who own more than 10% of the Common Stock of the
Company file initial reports of ownership and reports of changes in ownership
of Common Stock with the Securities and Exchange Commission (the "SEC").
Officers, directors and shareholders who own more than 10% of the Common Stock
are required by the SEC to furnish the Company with copies of all Section 16(a)
reports they file.
To the Company's knowledge, based solely upon the review of the copies
of such reports furnished to the Company during the fiscal year ended March 28,
1997, the Company's officers, directors and 10% shareholders complied with all
Section 16(a) filing requirements applicable to them.
PROPOSALS OF SHAREHOLDERS
A proper proposal submitted by a shareholder for presentation at the
Company's 1998 Annual Meeting and received at the Company's executive offices
located at 15303 Dallas Parkway, Suite 800, Dallas, Texas 75248, no later than
January 23, 1998, will be included in the Company's Proxy Statement and form of
proxy relating to the 1998 Annual Meeting.
EXPENSES
The entire cost of soliciting proxies will be borne by the Company.
Solicitation may be made by mail, telephone, facsimile and personal contact by
officers and other employees of the Company, who will not receive additional
compensation for such services. The Company will request brokerage houses,
nominees, custodians, fiduciaries and other like parties to forward soliciting
material to the beneficial owners of the Company's Common Stock held of record
by them and will reimburse such persons for their reasonable charges and
expenses in connection therewith.
GENERAL
The Company's Annual Report for the fiscal year ended March 28, 1997
is being mailed to shareholders together with this Proxy Statement. The Annual
Report is not to be considered part of the soliciting materials.
The information set forth in this Proxy Statement under the caption
"Executive Compensation -- Report of the Compensation Committee on Executive
Officer Compensation" and "-- Performance Graph" shall not be deemed to be (i)
incorporated by reference into any filing by the Company under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except to the extent that
in any such filing the Company expressly so incorporates such information by
reference, and (ii) "soliciting material" or to be "filed" with the SEC.
9
<PAGE> 12
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PALM HARBOR HOMES, INC.
The undersigned hereby appoints Kelly Tacke and Colleen Rogers proxies,
each with power to act without the other and with power of substitution, and
hereby authorizes them to represent and vote, as designated on the other side,
all the shares of stock of Palm Harbor Homes, Inc., standing in the name of the
undersigned with all powers which the undersigned would possess if present at
the Annual Meeting of Shareholders of the Company to be held June 24, 1997, at
9:30 a.m. or at any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2.
(Continued, and to be marked, dated and signed, on reverse side)
-----------
SEE REVERSE
SIDE
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<PAGE> 13
<TABLE>
<S> <C> <C>
A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR all nominees listed WITHHOLD AUTHORITY
at the right (except as to vote for all nominees
marked to the contrary) listed at right
1. ELECTION [ ] [ ] NOMINEES: Lee Posey
OF Larry H. Keener
DIRECTORS William R. Thomas
Walter D. Rosenberg, Jr.
(INSTRUCTION: To withhold authority to vote for any Frederick R. Meyer
individual nominee, write that nominee's name in John H. Wilson
space provided below.) A. Gary Shilling
Scott W. Chaney
- ---------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the appointment of Ernst & Young [ ] [ ] [ ]
LLP as the Company's independent auditors for
the fiscal year ending March 27, 1998.
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
SIGNATURE(S) DATED: , 1997
------------------------------------------ --------------
NOTE: Please sign exactly as name appears above. When 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.
</TABLE>
