SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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THOR INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)
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THOR INDUSTRIES, INC.
419 West Pike Street - Jackson Center, Ohio 45334-0629
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 9, 2003
The 2003 Annual Meeting of Stockholders of Thor Industries, Inc. (the "Company")
will be held at 230 Park Avenue, Suite 618, New York, N.Y., on December 9, 2003,
at 1:00 p.m., local time, for the purpose of considering and voting upon the
following:
(1) the election of three directors;
(2) an amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock from
40,000,000 shares to 250,000,000 shares;
(3) the Thor Industries, Inc. Annual Incentive Plan; and
(4) such other business as may properly come before the meeting or
any adjournment of the meeting.
Stockholders of record at the close of business on October 21, 2003 will be
entitled to notice and to vote at the meeting. A list of such stockholders will
be available for examination by any stockholder for any purpose germane to the
meeting, during normal business hours, at the office of the Company for a period
of ten days prior to the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN YOUR PROXY CARD AS SOON AS
POSSIBLE.
By Order of the Board of Directors,
Walter L. Bennett
Secretary
October 31, 2003
THOR INDUSTRIES, INC.
419 West Pike Street - Jackson Center, Ohio 45334-0629
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Thor Industries, Inc. (the "Company") for use at
the 2003 Annual Meeting of Stockholders to be held at 230 Park Avenue, Suite
618, New York City, on December 9, 2003, at 1:00 p.m., local time (the
"Meeting"), and any adjournment thereof. The cost of such solicitation is being
borne by the Company. This proxy statement and the accompanying form of proxy
are being sent to stockholders on October 31, 2003.
The Company does not expect that representatives of Deloitte & Touche LLP, its
principal independent accountants, will be present at the Meeting. However, such
representatives will be available during the Meeting by telephone to respond to
any stockholder questions that may be asked.
VOTING BY STOCKHOLDERS
A proxy in the form accompanying this proxy statement that is properly executed,
duly returned to the Company and not revoked prior to the Meeting will be voted
in accordance with the instructions contained therein. If no instructions are
given with respect to the proposals to be voted upon, proxies will be voted in
favor of such proposals. Each proxy may be revoked by a stockholder at any time
until exercised by giving written notice to the Secretary of the Company, by
voting in person at the Meeting, or by submitting a later-dated proxy.
The Common Stock of the Company constitutes its only outstanding security
entitled to vote on the matters to be voted upon at this meeting. Each share of
Common Stock entitles the holder to one vote. Only stockholders of record at the
close of business on October 21, 2003 are entitled to notice of and to vote at
the Meeting or any adjournment thereof. As of that date, 28,621,296 shares of
Common Stock were outstanding. The presence, in person or by proxy, of the
holders of a majority of all the issued and outstanding Common Stock is
necessary to constitute a quorum at the Meeting. Abstentions and broker
non-votes (i.e., shares held by a broker for its customers that are not voted
because the broker does not receive instructions from the customer or because
the broker does not have discretionary voting power with respect to the item
under consideration) will be counted as present for purposes of determining the
presence or absence of a quorum for the transaction of business.
In accordance with the By-laws of the Company and the Delaware General
Corporation Law, a plurality of the votes duly cast is required for the election
of directors. The approval of the amendment to the Company's Certificate of
Incorporation and the approval of the Thor Industries, Inc. Annual Incentive
Plan will require the affirmative vote of the majority of the outstanding shares
of Common Stock entitled to vote thereon. Under the Delaware General Corporation
Law, although abstentions and broker non-votes are deemed to be present for the
purpose of determining whether a quorum is present at a meeting, abstentions and
broker non-votes are not deemed to be votes duly cast. As a result, abstentions
and broker non-votes will not be included in the tabulation of voting results
with respect to Proposal #1, and therefore will have no impact on the voting on
such proposal. With respect to Proposals #2 and #3, however, abstentions and
broker non-votes have the effect of votes in opposition.
1
A copy of the Company's Annual Report for the fiscal year ended July 31, 2003
("fiscal 2003") is being sent to each stockholder of record herewith. The Annual
Report is not to be considered a part of this proxy soliciting material.
PROPOSAL #1
ELECTION OF DIRECTORS
The Company's By-laws provide that the Board of Directors may set the number of
directors at no less than one (1) and no more than fifteen (15). The Board of
Directors of the Company currently consists of seven directors who are divided
into three classes. Peter B. Orthwein and William C. Tomson currently serve as
Class B directors; their terms expire in 2004. Wade F. B. Thompson and Jan H.
Suwinski currently serve as Class A Directors; their terms expire in 2005. Neil
D. Chrisman, Alan Siegel and Geoffrey A. Thompson currently serve as Class C
directors; their terms expire on the date of this year's annual meeting.
In accordance with the Certificate of Incorporation of the Company, as amended,
Neil D. Chrisman and Alan Siegel have been nominated to stand for election as
Class C directors. Geoffrey A. Thompson was appointed as a director in September
2003 and has also been nominated to stand for election as a Class C director.
The Company's Nominating and Corporate Governance Committee, which was formed in
September 2003, has proposed these nominations. If elected, Messrs. Chrisman,
Siegel and Thompson will serve on the board until the annual meeting in 2006 and
until their successors are duly elected and qualified.
The persons named in the enclosed proxy intend to vote FOR the election of the
nominees listed below. In the event that a nominee becomes unavailable for
election (a situation the Company's management does not now anticipate), the
shares represented by proxies will be voted, unless authority is withheld, for
such other persons as may be designated by management.
The nominees, as set forth below, are now directors of the Company and have
continuously served since their first election or appointment to the Board.
FIRST YEAR
NOMINEE AGE PRINCIPAL OCCUPATION AS DIRECTOR
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Neil D. Chrisman 66 Retired Managing Director of J. P. Morgan & Co. 1999
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Alan Siegel 68 Partner in the law firm of Akin Gump Strauss 1983
Hauer & Feld LLP
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Geoffrey A. Thompson 63 Private investor 2003
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THE COMPANY RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL #1.
BUSINESS EXPERIENCE OF DIRECTORS AND EXECUTIVE OFFICERS
Wade F. B. Thompson, age 63, has been the President and Chief Executive Officer
and a Director of the Company since its founding in 1980. He currently serves as
Chairman, President, Chief Executive Officer and Director of the Company. Mr.
Thompson is not related to Geoffrey A. Thompson.
Peter B. Orthwein, age 58, has served as Treasurer and a Director of the Company
since its founding in 1980. He currently serves as Vice Chairman, Treasurer and
Director of the Company.
2
Walter L. Bennett, age 57, has been with the Company and its predecessor since
July 1977. He became Vice President, Finance, of Airstream, Inc., in September
1980; Vice President, Finance, of the Company in September 1983; Chief
Administrative Officer/Secretary of the Company in November 1985; Senior Vice
President of the Company in February, 1989; and Chief Financial Officer of the
Company in March 1999.
Ted J. Bartus, age 36, has been employed with the Company since May 1999 and was
appointed as Vice President, Purchasing, of the Company in August 2003. From May
1999 to July 2003, Mr. Bartus served as purchasing director of the Company and,
from April 1998 to April 1999, he was employed as a purchasing agent for Valeo,
a tier 1 supplier to the automotive industry.
Neil D. Chrisman, age 66, who was appointed as a Director in July 1999, is a
retired Managing Director of J. P. Morgan & Co. Mr. Chrisman retired from J. P.
Morgan in 1993.
Alan Siegel, age 68, who became a Director in September 1983, has been a partner
in the law firm of Akin Gump Strauss Hauer & Feld LLP since August 1995. Mr.
Siegel is also a Director of The Wet Seal, Inc. and Ermenegildo Zegna
Corporation.
Jan H. Suwinski, age 62, who was appointed as a Director in July 1999, has been
a Professor of Business Operations at the Samuel Curtis Johnson Graduate School
of Management, Cornell University since 1997. From 1990 to 1996, Mr. Suwinski
was Executive Vice President, Opto Electronics Group at Corning, Incorporated
and Chairman of Siecor, a Siemens/Corning joint venture. Mr. Suwinski is a
Director of Tellabs, Inc. and Ohio Casualty Group.
Geoffrey A. Thompson, age 63, who was appointed as a Director in September 2003,
is currently a partner at Palisades Advisors, LLC, a private equity firm. From
1995 to 1998, he served as a principal at Kohlberg & Company. He retired as
Chief Executive Officer of Marine Midland Banks, Inc. in 1992. Mr. Thompson is
not related to Wade F. B. Thompson.
William C. Tomson, age 67, who became a Director in June 1988, is the Vice
Chairman of Board Member, Inc. Mr. Tomson has been with the firm for the past
ten years. Board Member, Inc. publishes Bank Director and Corporate Board Member
magazines.
PROPOSAL #2
INCREASE OF AUTHORIZED SHARES
The Company's Certificate of Incorporation, as currently in effect, authorizes
the Company to issue up to 40,000,000 shares of Common Stock having a par value
of $0.10 per share. On September 26, 2003, the Board of Directors authorized an
amendment to the Certificate of Incorporation, subject to stockholder approval,
to increase the authorized number of shares of Common Stock to 250,000,000
shares. The text of the proposed amendment is attached as Appendix A to this
proxy statement.
As of October 1, 2003, there were 28,615,648 shares of Common Stock issued and
outstanding. In addition, as of October 1, 2003, (i) a total of 1,000,000 shares
of Common Stock were reserved for issuance pursuant to the Thor Industries, Inc.
1999 Stock Option Plan, of which grants to acquire 475,332 shares were
previously issued as of that date, and (ii) a total of 300,000 shares of Common
Stock were reserved for issuance pursuant to the Thor Industries, Inc.
Restricted Stock Plan, of which 96,375 shares of restricted stock were issued as
of that date. As a result of the foregoing, as of October 1, 2003, the Company
has authority to issue up to only 10,344,705 shares of Common Stock without
first seeking stockholder approval.
3
The principal purpose of the proposed amendment to the Company's Certificate of
Incorporation is to authorize additional shares of Common Stock which will be
available in the event that the Board of Directors determines that it is
necessary or appropriate to effect future stock dividends or stock splits, to
raise additional capital through the sale of securities, to acquire another
company or its business or assets through the issuance of securities, to
establish a strategic relationship with a corporate partner through the exchange
of securities or for issuance under the Company's stock incentive plans. The
Board of Directors believes that approval of the proposed amendment to increase
the authorized shares of Common Stock is necessary to provide the Company with
the flexibility to pursue these types of opportunities without added delay and
expense. If the proposed amendment is adopted, 210,000,000 additional shares of
Common Stock will be available for issuance by the Board of Directors without
any further stockholder approval, although certain issuances of shares may
require stockholder approval in accordance with the requirements of the New York
Stock Exchange or Delaware law. The Company has no present plans or proposals to
issue the additional authorized shares.
The flexibility of the Board of Directors to issue additional shares of stock
could enhance the Board's ability to negotiate on behalf of the stockholders in
a takeover situation. Although it is not the purpose of the proposed amendment,
the authorized but unissued shares of Common Stock could also be used by the
Board of Directors to discourage, delay or make more difficult a change in
control of the Company. For example, these shares could be privately placed with
purchasers who might align themselves with the Board in opposing a hostile
takeover bid. The issuance of additional shares might serve to dilute the stock
ownership of a person seeking to obtain control and thereby increase the cost of
acquiring a given percentage of the outstanding stock. The Company has
previously adopted certain measures that may have the effect of helping to
resist an unsolicited takeover attempt, including provisions of the Company's
Certificate of Incorporation authorizing the Board of Directors to issue up to
1,000,000 shares of preferred stock with terms, provisions and rights fixed by
the Board. The Board of Directors is not aware of any pending or proposed effort
to acquire control of the Company.
The additional Common Stock to be authorized by adoption of the amendment would
have rights identical to the currently outstanding Common Stock. Adoption of the
proposed amendment and issuance of additional shares of Common Stock would not
affect the rights of the holders of currently outstanding Common Stock, except
for effects incidental to increasing the number of shares of Common Stock
outstanding, such as dilution of the earnings per share and voting rights of
current holders of Common Stock. If the amendment is adopted, it will become
effective upon filing of a certificate of amendment to the Company's Certificate
of Incorporation with the Secretary of State of the State of Delaware.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK FROM 40,000,000 SHARES TO
250,000,000 SHARES.
PROPOSAL #3
THOR INDUSTRIES, INC. ANNUAL INCENTIVE PLAN
The Board of Directors has approved and recommends that stockholders approve the
adoption of the Thor Industries, Inc. Annual Incentive Plan (the "Annual
Incentive Plan") which is intended to comply with Section 162(m) of the Internal
Revenue Code. The Annual Incentive Plan, if approved by stockholders, will
provide an incentive to executive officers of the Company and its subsidiaries,
and such other key employees of the Company and its subsidiaries, selected by
the Committee ("Eligible Executives") to contribute to the growth, profitability
and increased shareholder value of the Company. Awards will be paid based on the
satisfaction of performance objectives as described below.
4
The Board of Directors approved the Annual Incentive Plan on October 2, 2003.
The Annual Incentive Plan permits the Committee (defined below) to grant
performance awards based upon pre-established performance goals to Eligible
Executives, whether or not such executives, at the time of grant, are subject to
the limit on deductible compensation under Section 162(m) of the Internal
Revenue Code.
In order to qualify for deductibility under Section 162(m) of the Internal
Revenue Code, the Annual Incentive Plan, including the performance goals set
forth in the Annual Incentive Plan for determining performance awards
("Performance Awards"), must be approved by the stockholders. If the Annual
Incentive Plan is not approved by the Company's stockholders, no Performance
Awards granted under the Annual Incentive Plan will be paid whether or not the
Performance Awards would otherwise be earned.
Stockholder approval of the Annual Incentive Plan is recommended by the Board of
Directors in order to continue to provide an incentive to Eligible Executives to
contribute to the growth, profitability and increased stockholder value of the
Company, to retain such executives, and to endeavor to maintain the
tax-deductible status of such incentive payments to the Company's Chief
Executive Officer and the four most highly paid executive officers other than
the Chief Executive Officer who were serving as executive officers at the end of
the fiscal year and who are named in the Company's proxy statement for the
fiscal year in which such amounts are claimed as a deduction by the Company. A
copy of the Annual Incentive Plan is attached to this Proxy Statement as
Appendix B. The description of the plan that follows is qualified in its
entirety by reference to the plan as attached.
The Annual Incentive Plan will be administered by a committee which will be
comprised of at least two members of the Board of Directors who qualify as
"outside directors" within the meaning of Section 162(m) of the Internal Revenue
Code (the "Committee"), which is currently the Compensation Committee. The
Committee will select plan participants from among the Eligible Executives of
the Company. The number of participants in the Annual Incentive Plan is not
determinable from year to year. Under the Annual Incentive Plan, the Committee
shall make all determinations under the Annual Incentive Plan and may establish,
modify or rescind such rules and regulations as it deems necessary for the
proper administration of the Annual Incentive Plan. The Committee also shall
make such determinations and interpretations and take such steps in connection
with the Annual Incentive Plan or the awards granted thereunder as it deems
necessary or advisable. All actions by the Committee under the Annual Incentive
Plan shall be final and binding on all persons.
Under the Annual Incentive Plan, the Committee has the authority to grant
Performance Awards which represent the conditional right of a participant to
receive a cash award following a Performance Period (as defined below) based
upon performance in respect of one of more of the Performance Goals (as defined
below) set by the Committee during a Performance Period. For purposes of the
Annual Incentive Plan, a Performance Period shall mean the fiscal year, or such
other shorter or longer period designated by the Committee, during which
performance will be measured in order to determine a participant's entitlement
to receive payment of a Performance Award. The Annual Incentive Plan
contemplates that the following Performance Goals may be selected by the
Committee and shall mean or may be expressed in terms of any of the following
business criteria: revenue, earnings before taxes, funds from operations, funds
from operations per share, operating income, pre or after tax income, cash
available for distribution, cash available for distribution per share, cash
and/or cash equivalents available for operations, net earnings, earnings per
share, return on equity, return on assets, return on invested capital, share
price performance, improvements in the Company's attainment of expense levels,
implementing or completion of critical projects, including, without limitation,
implementation of strategic plan(s), improvement in investor relations,
marketing and manufacturing of key products, improvement in cash-flow (before or
after tax), development of critical projects or product development, or progress
relating to research and development. A Performance Goal may be measured over a
Performance Period on a periodic, annual, cumulative or average basis and may be
established on a corporate-wide basis or established with respect to one or more
operating units,
5
divisions, subsidiaries, acquired businesses, minority investments, partnerships
or joint ventures. The level or levels of performance specified with respect to
a Performance Goal may be established in absolute terms, as objectives relative
to performance in prior periods, as an objective compared to the performance of
one or more comparable companies or an index covering multiple companies, or
otherwise as the Committee may determine.
The Annual Incentive Plan contemplates that the Committee will establish
performance objectives ("Performance Objectives") for each Performance Award,
consisting of one or more business criteria permitted as Performance Goals under
the Annual Incentive Plan, one or more levels of performance with respect to
each such criteria and the amount or amounts payable to the participant or other
rights to which the participant will be entitled upon achievement of such levels
of performance.
The Performance Objective applicable to a Performance Period must be established
by the Committee prior to, or reasonably promptly following the inception of, a
Performance Period, but no later than the earlier of the date that is 90 days
after the commencement of the Performance Period or the date prior to the date
on which twenty-five percent of the Performance Period has elapsed, as required
by Section 162(m) of the Internal Revenue Code. Performance Awards shall be
subject to such conditions and limitations as specified by the Committee;
provided, however, that the amount of compensation payable upon the attainment
of a Performance Objective shall not be increased at the discretion of the
Committee. The Committee may, however, at its discretion, reduce or eliminate
the amount of compensation payable upon the attainment of a Performance
Objective.
As soon as practicable following certification of the achievement of Performance
Objectives by the Committee which entitle a participant to the payment of a
Performance Award, the award shall be paid in cash. A participant will not be
granted Performance Awards for all of the Performance Periods commencing in a
fiscal year that permit the participant in the aggregate to earn a cash payment
in any fiscal year, in excess of $3,000,000.
The Board of Directors or the Committee may, at any time, terminate or, from
time to time, amend, modify or suspend the Annual Incentive Plan and the terms
and provisions of any Performance Award theretofore awarded to any participant
which has not been paid; provided, however, that without the approval of the
stockholders, no such amendment or modification shall change the Eligible
Executives or the Performance Goals set forth in the Annual Incentive Plan or
increase the amount of compensation payable under the Annual Incentive Plan.
The Annual Incentive Plan became effective on October 2, 2003, subject to the
approval of the stockholders at the Annual Meeting.
The amounts payable under the Annual Incentive Plan for 2003 which may be
received by each of (a) the executive officers of the Company named in the
Summary Compensation Table below and (b) the executive officers of the Company
as a group, is not currently determinable.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
ANNUAL INCENTIVE PLAN.
BOARD OF DIRECTORS, COMMITTEES AND ATTENDANCE AT MEETINGS
The Board of Directors has the responsibility for establishing broad corporate
policies and for the overall management of the business of the Company. Members
of the Board are kept informed of the Company's performance by various reports
sent to them at regular intervals by management, as well as by operating and
financial reports presented by management at Board meetings.
6
The Board has three committees with the principal functions described below. The
Charters of each of these committees are posted on our website at
www.thorindustries.com.
Audit Committee
The principal functions of the Audit Committee are to recommend engagement of
the Company's independent public accountants and to maintain communications
among the Board of Directors, such independent public accountants and the
Company's internal accounting staff with respect to accounting and auditing
procedures, the implementation of recommendations by such independent
accountants, the adequacy of the Company's internal controls and related
matters. During fiscal 2003, the Audit Committee had private meetings with the
Chief Financial Officer, the internal audit manager and the outside audit
partners. The Board of Directors has determined that Geoffrey A. Thompson, a
member of the committee, is an "audit committee financial expert" as defined in
Section 407 of the Sarbanes-Oxley Act of 2002. A copy of the Audit Committee
Charter is set forth in Appendix C to this Proxy Statement.
Compensation Committee
The principal functions of the Compensation Committee are to establish executive
compensation policies and guiding principles; establish the compensation of the
Chief Executive Officer and review and approve the compensation of the other
executive officers; evaluate the design of compensation and benefit programs;
and review all components of compensation for independent directors. The
Compensation Committee also acts as administrator under the Company's 1999 Stock
Option Plan, the Company's Restricted Stock Plan, the Company's Management
Incentive Plan and the Company's Select Executive Incentive Plan. In its
capacity as administrator of the 1999 Stock Option Plan and the Restricted Stock
Plan, the Compensation Committee grants options and restricted stock, determines
which employees and other individuals performing substantial service for the
Company may be granted options and/or restricted stock, and determines the
rights and limitations attendant to options and restricted stock granted under
these plans. In its capacity as administrator under the Select Executive
Incentive Plan, the Compensation Committee awards supplemental deferred
compensation to eligible employees in amounts determined by the Compensation
Committee. A copy of the Compensation Committee Charter is set forth in Appendix
D to this Proxy Statement.
Nominating and Corporate Governance Committee
The principal functions of the Nominating and Corporate Governance Committee are
to address all matters of corporate governance; evaluate qualifications and
candidates for positions on the Board of Directors; evaluate the performance of
the Chief Executive Officer and the Board of Directors; review succession plans
and senior management performance; establish criteria for selecting new
directors, nominees for Board membership and the positions of Chairman and Chief
Executive Officer, and whether a director should be invited to stand for
re-election. A copy of the Charter of the Nominating and Corporate Governance
Committee is set forth in Appendix E to this Proxy Statement.
Membership of Committees
The following table summarizes the current membership of the Board of Directors
and each of its committees.
7
NOMINATING AND
CORPORATE
COMPENSATION GOVERNANCE
BOARD AUDIT COMMITTEE COMMITTEE COMMITTEE
------------- --------------- ------------ --------------
Wade F. B. Thompson Chairman
Peter B. Orthwein Vice Chairman
Neil D. Chrisman X X
Alan Siegel X X X
Jan H. Suwinski X Chair
Geoffrey A. Thompson X X
William C. Tomson X X X
The Board of Directors has affirmatively determined, by resolution of the Board
of Directors as a whole, that the following directors have no direct or indirect
material relationship with the Company and satisfy the requirements to be
considered "independent" under the Company's Director Independence Standards
which were adopted in accordance with the proposed rules of the New York Stock
Exchange: Messrs. Neil D. Chrisman, Alan Siegel, Jan H. Suwinski, Geoffrey A.
Thompson and William C. Tomson. As a result, each of the Audit Committee, the
Compensation Committee and the Nominating and Corporate Governance Committee is
comprised entirely of independent directors, as determined by the Board. A copy
of the Company's Director Independence Standards is set forth in Appendix F to
this Proxy Statement.
Board and Committee Meetings
The Board of Directors as a whole met or took action by unanimous written
consent four times during fiscal 2003. The Audit Committee met in person or by
telephone eight times during fiscal 2003. The Compensation Committee, which was
formed in September 2002, met or took action by unanimous written consent two
times during fiscal 2003. In September 2003, the functions of the former Stock
Option Committee were transferred to the Compensation Committee and the Stock
Option Committee was disbanded. The former Stock Option Committee met or took
action by unanimous written consent two times during fiscal 2003. The Nominating
and Corporate Governance Committee was formed in September 2003 and therefore
took no action during fiscal 2003.
Each of the directors attended all meetings of the Board of Directors and the
respective Board committees on which they served during fiscal 2003, except for
Mr. Chrisman and Mr. Siegel, who each missed one meeting of the Board of
Directors for medical or personal reasons.
OWNERSHIP OF COMMON STOCK
The following table sets forth information as of October 1, 2003 with respect to
the beneficial ownership, as defined in Rule 13(d) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), of the Company's Common Stock by
(i) each person known by the Company to beneficially own, as defined in Rule
13d-3 under the Exchange Act, 5% or more of the outstanding Common Stock; (ii)
each director of the Company; (iii) each executive officer of the Company named
in the Summary Compensation Table below; and (iv) all of such executive officers
and directors of the Company as a group. As of October 1, 2003, there were
28,615,648 shares of Common Stock issued and outstanding.
8
BENEFICIAL OWNERSHIP (1)
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT
------------------------------------ ---------------- -------
Wade F. B. Thompson................................................ 8,719,310 30.5%
419 West Pike Street
Jackson Center, Ohio 45334-0629
Peter B. Orthwein.................................................. 1,355,600 (2)(3) 4.7%
419 West Pike Street
Jackson Center, Ohio 45334-0629
Walter L. Bennett.................................................. 29,792 (4) *
419 West Pike Street
Jackson Center, Ohio 45334-0629
Clare G. Wentworth................................................. 33,917 (5) *
419 West Pike Street
Jackson Center, Ohio 45334-0629
Neil D. Chrisman................................................... 10,334 (6) *
419 West Pike Street
Jackson Center, Ohio 45334-0629
Alan Siegel........................................................ 601,012 (7) 2.1%
419 West Pike Street
Jackson Center, Ohio 45334-0629
Jan H. Suwinski.................................................... 15,667 (8) *
419 West Pike Street
Jackson Center, Ohio 45334-0629
Geoffrey A. Thompson............................................... 0 *
419 West Pike Street
Jackson Center, Ohio 45334-0629
William C. Tomson.................................................. 22,167 (9) *
419 West Pike Street
Jackson Center, Ohio 45334-0629
First Pacific Advisors, Inc........................................ 1,927,100 (10) 6.7%
11400 West Olympia Blvd.
Los Angeles, CA 90064
FMR Corp........................................................... 4,279,714 (11) 15.0%
82 Devonshire Street
Boston, MA 02109
All directors and executive officers as a group (nine persons)..... 10,787,799 (12) 37.6%
---------------------
* less than 1%.
(1) Except as otherwise indicated, the persons in the table have
sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them.
(2) Includes 28,600 shares owned by Mr. Orthwein's wife, 62,000
shares owned of record by a trust for the benefit of Mr.
Orthwein's children, of which Mr. Orthwein is a trustee,
15,000 shares owned of record by a trust for the benefit of
Mr. Orthwein's half brother, of which
9
Mr. Orthwein is a trustee, 72,300 shares of record owned by
Mr. Orthwein's minor children for which Mrs. Orthwein acts as
custodian and 160,000 shares owned of record by the Orthwein
Investment Group D, L.P., in which Mr. Orthwein has a 0.51%
economic interest but a 51% general partnership interest.
(3) Does not include 48,200 shares owned of record by Mr.
Orthwein's adult children, as to which Mr. Orthwein disclaims
beneficial ownership.
(4) Includes 11,250 non-vested restricted shares and options to
acquire 12,667 shares under the 1999 Stock Option Plan.
(5) Includes 6,250 non-vested restricted shares and options to
acquire 10,001 shares under the 1999 Stock Option Plan.
(6) Includes options to acquire 8,334 shares under the 1999 Stock
Option Plan.
(7) Includes (i) 294,312 shares owned of record by a trust for the
benefit of Mr. Thompson's adult children, of which Mr. Siegel
is sole trustee and (ii) 301,700 shares owned of record by a
trust for the benefit of Mr. Orthwein's adult children, of
which Mr. Siegel is co-trustee and as to which Mr. Siegel has
shared voting power with Mr. Orthwein's brother. Mr. Siegel
disclaims beneficial ownership of such shares. Also includes
options to acquire 5,000 shares under the 1999 Stock Option
Plan.
(8) Includes options to acquire 10,667 shares under the 1999 Stock
Option Plan.
(9) Includes options to acquire 11,667 shares under the 1999 Stock
Option Plan.
(10) The number of shares shown for First Pacific Advisors, Inc. is
based on a Schedule 13G filed on February 13, 2003.
(11) The number of shares shown for FMR Corp. is based on a
Schedule 13G filed on February 14, 2003.
(12) Includes 58,336 shares issuable under stock options which are
currently exercisable or will become exercisable within 60
days from October 1, 2003.
10
EXECUTIVE COMPENSATION
Information is furnished below concerning the compensation of the President and
Chief Executive Officer and the three highest paid executive officers of the
Company other than the President and Chief Executive Officer who earned more
than $100,000 in salary and bonuses for the last three fiscal years
(collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------------------------
SECURITIES
ANNUAL ----------
COMPENSATION INCENTIVE ALL OTHER
--------------------------------- STOCK RESTRICTED COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) OPTIONS (#)(3) STOCK ($)(4) (2) (5)
--------------------------- ---- ------ --------- -------------- ------------ ------------
Wade F. B. Thompson 2003 $ 271,584 $ 830,000 - - $ -
Chief Executive Officer 2002 $ 271,584 $ 730,000 - - $ 182,538
Chairman, President 2001 $ 284,878 $ 320,000 - - $ 183,514
----------------------------------------------------------------------------------------------------------------------------
Peter B. Orthwein 2003 $ 101,032 $ 660,000 - - $ -
Vice Chairman, Treasurer 2002 $ 101,032 $ 500,000 - - $ 41,566
2001 $ 100,552 $ 175,000 - - $ 41,118
----------------------------------------------------------------------------------------------------------------------------
Walter L. Bennett 2003 $ 91,032 $ 665,000 - $ 32,630 $ 23,583
Senior Vice President, Chief 2002 $ 91,032 $ 510,000 10,000 $ 119,800 $ (6,693)
Financial Officer, Secretary 2001 $ 90,552 $ 312,000 20,000 $ 15,285 $ 4,172
----------------------------------------------------------------------------------------------------------------------------
Clare G. Wentworth 2003 $ 91,584 $ 335,000 - $ 32,630 $ 30,500
Former Senior Vice 2002 $ 91,584 $ 504,000 10,000 $ 25,875 $ (3,857)
President (6) 2001 $ 91,584 $ 307,000 20,000 $ 15,285 $ 6,661
----------------------------------------------------------------------------------------------------------------------------
(1) Messrs. Thompson's, Orthwein's, Bennett's and Wentworth's
bonuses are discretionary and depend on the Company's profits.
(2) The 2002 and 2001 amounts in this column for Messrs. Thompson
and Orthwein represent payments made by the Company under a
split-dollar life insurance arrangement effective March 18,
1993, under which the Company assisted Messrs. Thompson and
Orthwein in purchasing whole life insurance on their lives and
that of their wives. Under the arrangement Messrs. Thompson
and Orthwein pay a portion of the premiums based upon certain
Internal Revenue standards and the Company advances the
balance of the premiums. The Company is entitled to repayment
of the amounts it advances, without interest, upon the
occurrence of certain events, including the buildup of the
policy's cash surrender value or upon the payment of the death
benefit under the policy. The Company did not make any further
payments under such arrangement during fiscal 2003.
(3) The 2001 option grants have been adjusted to reflect the
Company's 2 for 1 stock split effective July 8, 2002.
(4) The numbers in this column represent the value of restricted
stock grants during fiscal years 2003, 2002 and 2001
calculated by multiplying the number of shares of restricted
stock
11
granted by the share price on the date of grant. As of July
31, 2003, Messrs. Bennett and Wentworth, respectively, held
13,125 and 8,125 shares of restricted stock which were granted
under the Thor Industries, Inc. Restricted Stock Plan which
had a total value of $577,238 and $357,338, respectively, at
July 31, 2003. Each of Messrs. Bennett and Wentworth, as
holders of restricted stock shares, are entitled to receive
dividends and other distributions paid with respect to such
shares while they are so restricted.
(5) Messrs. Bennett and Wentworth were credited with supplemental
deferred compensation earned under the Company's Select
Executive Incentive Plan. The amounts credited to each
executive shall vest and be payable six years after the
effective date of such eligible executive's participation,
provided, however, that the amount shall vest immediately upon
death or age 65. The amounts shown in this column for each
year represent the amount credited to each executive plus or
minus the change in the value of such executive's account in
the Select Executive Incentive Plan during that year.
(6) Mr. Wentworth retired from the Company effective August 1,
2003.
There were no options granted in fiscal 2003 to any of the Named Executive
Officers and therefore the customary table setting forth information regarding
such grants is not shown in this Proxy Statement.
The following table sets forth information regarding the exercise of options by
the named executive officers during fiscal 2003. The table also shows the number
and value of unexercised options held by these officers as of July 31, 2003.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND OPTION VALUES AT JULY 31, 2003
Number of Securities Underlying Value of Unexercised In-the-
Shares Unexercised Options at Money Options at
acquired on Value Fiscal Year End Fiscal Year End
Name exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable (1)
---- -------- -------- ------------------------- -----------------------------
Wade F. B. Thompson -- $ -- -- / -- $ -- / $ --
Peter B. Orthwein -- $ -- -- / -- $ -- / $ --
Walter L. Bennett 4,000 $ 101,000 6,001 / 13,333 $151,520 / $ 348,250
Clare G. Wentworth (2) 6,666 $ 192,581 3,334 / 13,334 $ 60,895 / $ 348,284
(1) Represents the market value of shares underlying
"in-the-money" options on July 31, 2003 less the option
exercise price. Options are "in-the-money" at the fiscal year
end if the fair market value of the underlying securities on
such date exceeds the exercise or base price of the option.
(2) Mr. Wentworth retired from the Company effective August 1,
2003.
DIRECTOR COMPENSATION
Directors who are not employees of the Company are paid an annual retainer of
$30,000, payable quarterly, plus expenses. Audit Committee members are paid an
annual retainer of $10,000, plus expenses, except for the chair of the Audit
Committee, who is paid an annual retainer of $16,000, plus expenses. Members of
the Compensation Committee and the Nominating and Corporate Governance
12
Committee are each paid an annual retainer of $5,000, plus expenses. All such
committee retainers are paid quarterly. In addition, non-employee directors are
awarded non-incentive stock options from time to time under the Company's 1999
Stock Option Plan, including a grant of 5,000 options to each then incumbent
non-employee director in July 2002.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company consists of a corporate parent, Thor Industries, Inc., and several
operating subsidiaries, including, Aero Coach, Inc., Airstream, Inc., Dutchmen
Manufacturing, Inc., Four Winds International, Inc., Keystone RV Company,
Komfort Corp., Thor America, Inc., Citair, Inc., Thor California, Inc., Champion
Bus, Inc., ElDorado National California, Inc., and ElDorado National Kansas,
Inc. The Compensation Committee believes that the Company has been successful in
attracting and retaining management of its operating subsidiaries because of its
policy of compensating management personnel based upon the profitability of such
operating subsidiaries. The management of each operating subsidiary is provided
with incentive based compensation consisting generally of 14% to 20% of their
operating subsidiary's pre-tax profits in excess of targets established by the
Company's Chief Executive Officer. The executive officers of the corporate
parent, Thor Industries, Inc., Messrs. Thompson, Orthwein, Bennett and Bartus,
receive low fixed salaries in addition to bonuses relating to profitability of
the Company as a whole, which are reviewed and approved by the Compensation
Committee. The Compensation Committee has reconsidered these arrangements and
has concluded that it is in the best interest of the Company and its
shareholders that such arrangements continue without any substantial change.
The Compensation Committee
Alan Siegel
William C. Tomson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Siegel and Tomson, neither of
whom is an officer or employee of the Company.
CERTAIN RELATIONS AND TRANSACTIONS WITH MANAGEMENT
Messrs. Thompson and Orthwein own all the stock of Cash Flow Management, Inc.
The Company pays Cash Flow Management a fee of $168,000 per annum, which is used
to defray expenses, including the rent of offices used by Messrs. Thompson and
Orthwein.
Alan Siegel, a director of the Company, is a share partner of Akin Gump Strauss
Hauer & Feld, LLP, one of the law firms regularly employed by the Company.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information as of July 31, 2003 about the Company's
Common Stock that may be issued upon the exercise of options, warrants and
rights granted to employees or members of the Board of Directors under all the
Company's existing equity compensation plans, including the 1999 Stock Option
Plan and the Thor Industries, Inc. Restricted Stock Plan.
13
Number of securities
Number of securities remaining available for
to be issued Weighted-average future issuance under
upon exercise of exercise price of equity compensation plans
outstanding options, outstanding options, (excluding securities
Plan category warrants and rights warrants and rights reflected in column (a))
------------- ------------------- ------------------- ------------------------
(a) (b) (c)
Equity compensation plans
approved by security
holders.................... 329,357 $18.51 524,668
Equity compensation plans
not approved by
security holders........... 0 NA 203,625
------- ------ -------
Total............................... 329,357 $18.51 728,293
------- ------ -------
1999 STOCK OPTION PLAN
The Thor Industries, Inc. 1999 Stock Option Plan (the "1999 Plan") was adopted
by the Company's Board of Directors in July 1999 and by the Company's
shareholders in September 1999. The purpose of the Plan is to enhance the
ability of the Company and its subsidiaries to attract and retain employees and
directors of outstanding ability and to provide employees and directors with an
interest in the Company parallel to that of the Company's shareholders. The 1999
Plan is administered and managed by the Compensation Committee of the Board of
Directors (the "Committee").
The Common Stock subject to the options granted under the 1999 Plan will be
authorized by unissued shares of Common Stock of the Company, $0.10 value, or
shares reacquired by the Company in any manner. The aggregate number of shares
of Common Stock which may be acquired upon the grant of options under the 1999
Plan will not exceed 1,000,000, subject to adjustment in certain circumstances.
If any option granted under the 1999 Plan expires or terminates for any reason
without having been exercised in full or ceases for any reason to be exercisable
in whole or in part, the unpurchased shares subject to such option shall again
be available for grant under the 1999 Plan. Subject to adjustment, no employee
may be granted an option to acquire more that 500,000 shares of Common Stock in
any one year.
Employees and directors of the Company and its subsidiaries are eligible to
receive grants of options under the 1999 Plan. Eligible participants may be
granted both nonqualified stock options ("Nonqualified Stock Options") and
"incentive stock options" ("ISOs" and, together with Nonqualified Stock Options,
"Options"), provided that only employees of the Company and its subsidiaries may
receive ISOs. The exercise price per share of the shares of Common Stock to be
purchased pursuant to any Option shall be fixed by the Committee at the time
such Option is granted. In no event shall the exercise price for ISOs be less
that the fair market value of a share on the day on which the ISO is granted
(110% of the fair market value in the case of an ISO granted to an employee
owning stock with more that 10% of the total combined voting power of all
classes of stock of the Company or its subsidiaries (a "10% Shareholder")).
Subject to termination, the duration of each Option will be determined by the
Committee, but may not exceed 10 years from the date of grant; provided,
however, that in the case of ISOs granted to 10% Shareholders, the term of such
Option shall not exceed 5 years from the date of grant. An Option will be
exercisable by the Option holder at such rate and times as may be determined by
the Committee at or subsequent to the time of grant. Each Option may be
exercised in whole or in part by giving written notice of exercise to the
Company. Payment in full of the Option exercise price will be made upon delivery
of such notice in cash or through additional methods, if any, prescribed by the
Committee. Options are assignable or transferable only in limited circumstances.
14
Upon the occurrence of a Change in Control (as defined in the 1999 Plan), all
Options will automatically become vested and exercisable in full and all
restrictions or conditions, if any, on any Options will automatically lapse.
Under certain circumstances, in the event option holders engage in certain
prohibitive behavior, options can be forfeited at the discretion of the
Committee. In addition, any gains realized by option holders may have to be
repaid under certain circumstances.
RESTRICTED STOCK PLAN
The Company has adopted the Thor Industries, Inc. Restricted Stock Plan (the
"Stock Plan") effective September 29, 1997. The Stock Plan is administered by
the Compensation Committee. The Stock Plan is intended to advance the interests
of the Company, its stockholders, its subsidiaries and its affiliates by
encouraging and enabling inside directors, officers and other employees to
acquire and retain a proprietary interest in the Company by ownership of its
stock.
The total number of shares available for grants under the Stock Plan may not
exceed 300,000 subject to adjustment in certain circumstances and subject to
increase by the Board of Directors. Subject to adjustment, no more than 100,000
shares may be granted in any one calendar year. If a grant, or any portion
thereof, is forfeited, the forfeited shares will be made available again for
grants under the Stock Plan. The Compensation Committee may, at any time and
from time to time, make grants to such participants and in such amounts as it
shall determine. Each grant shall be made pursuant to a written instrument which
must be executed by the grantee in order to be effective. The Board of Directors
may at any time suspend or terminate the Stock Plan or any portion thereof or
may amend it from time to time in such respects as the Board may deem to be in
the best interests of the Company.
No shares granted under the Stock Plan may be transferred by the recipient
thereof until such shares have vested; such shares shall vest on the date
specified by the Compensation Committee in the underlying written agreement
pursuant to which the grant was made. Notwithstanding the foregoing, the shares
of a recipient who has not previously forfeited any nonvested shares granted to
him under the Stock Plan shall automatically vest upon the earliest of (x) the
termination by the Company of the recipient other than for cause and (y) the
recipient's death, disability or retirement. The Stock Plan contains
non-competition and non-solicitation provisions which restrict recipients from
competing with the Company. Non-compliance with such provisions will result in
the forfeiture of non vested benefits.
During the applicable period of restriction, the recipient of shares under the
Stock Plan is the record owner thereof and is entitled to vote such shares and
to receive all dividends and other distributions paid with respect to such
shares. However, if any such dividends or distributions are paid in shares of
Company stock during an applicable period of restriction, the shares received
shall be subject to the same restrictions as the shares with respect to which
they were issued. Moreover, the Compensation Committee may provide in any
written agreement pursuant to which the grant was made such other restrictions,
terms and conditions as it may deem advisable with respect to the treatment and
holding of any stock, cash or property that is received in exchange for the
restricted shares.
SELECT EXECUTIVE INCENTIVE PLAN
The Company has adopted the Thor Industries, Inc. Select Executive Incentive
Plan (the "Incentive Plan") effective September 29, 1997. The Incentive Plan is
administered by an Administrative Committee chosen by the Board of Directors,
which is currently the Compensation Committee. The purpose of the Incentive Plan
is to provide its eligible executives with supplemental deferred compensation in
addition to their current compensation. It is intended that the Incentive Plan
shall constitute an unfunded deferred
15
compensation arrangement for the benefit of a select group of management or
highly compensated employees of the Company and its designated subsidiaries and
affiliates.
The Compensation Committee will designate those employees of the Company (which
may include employees of any subsidiary or affiliate thereof) who will be
eligible executives under the Incentive Plan. For each year of participation,
each eligible executive shall be credited with the amount(s), if any, determined
by the Compensation Committee in its sole discretion. The amount(s) will be
credited to an account maintained for each eligible executive, which will also
be credited with earnings and losses as if the amounts were invested in specific
investment funds selected by the Compensation Committee (or by the eligible
executive if the Compensation Committee establishes a procedure permitting the
eligible executive to credit his or her account with respect to the results of
one or more of the index funds selected by the Compensation Committee). The
Compensation Committee is not obligated to comply with the investment request of
an eligible executive, and retains the sole discretion regarding the decision to
credit earnings with regard to the results of the index funds selected by any
eligible executive. The amount(s) credited to the account of an eligible
executive shall vest and be payable six years after the effective date of such
eligible executive's participation; provided, however, that the amounts vest
immediately upon death or age 65. The Incentive Plan contains non-competition
and non-solicitation provisions which prohibit eligible executives from
competing with the Company within the United States or Canada during the term of
such eligible executive's participation and for a period of eighteen months
after termination of employment with the Company for any reason. Non-compliance
with such provisions will result in a total forfeiture of vested benefits. The
Company may establish a trust for payment of benefits under the Incentive Plan;
such trust shall be a grantor trust for tax purposes. Payment of benefits will
generally be made following termination of employment in one of the following
forms: (a) lump sum; (b) substantially equal annual installments for five years;
(c) substantially equal installments for ten years; or (d) any other actuarially
equivalent form approved by the Compensation Committee.
STOCK PRICE PERFORMANCE GRAPH
The performance graph set forth below compares the cumulative total stockholder
returns on the Company's Common Stock (assumes $100 invested on July 31, 1998
and that all dividends are reinvested) against the cumulative total returns of
the Standard and Poor Corporation's S&P 500 composites stock price index (S&P
500) and a "Peer Group" of companies selected by the Company whose primary
business is recreation vehicles or mid-size buses for the five year period ended
July 31, 2003. The peer group consists of the following companies: Coachmen
Industries, Inc.; Fleetwood Enterprises, Inc.; Winnebago Industries, Inc.;
Monaco Coach, Inc.; and Supreme Industries, Inc. The Company cautions that stock
price performance noted below should not be considered indicative of potential
future stock price performance. The Company changed its peer group in fiscal
2003 to include Monaco Coach, Inc. and remove Collins Industries, Inc.
PERFORMANCE GRAPH
THOR INDUSTRIES, INC. COMMON STOCK
SUMMARY OF TOTAL RETURN
7/31/1998 7/30/1999 7/31/2000 7/31/2001 7/31/2002 7/31/2003
Thor Industries Inc 100.00 118.11 94.64 139.05 244.00 355.76
Peer Group - Current Year 100.00 145.61 82.32 175.83 226.01 211.18
Peer Group - Prior Year 100.00 117.99 66.53 135.98 212.30 214.31
S&P 500 Composite Index 100.00 118.56 127.68 108.08 81.35 88.37
16
REPORT OF THE AUDIT COMMITTEE
Working under the guidance of a written charter approved by the Board of
Directors, the Audit Committee, which is comprised of Messrs. Neil D. Chrisman,
Jan H. Suwinski and Geoffrey A. Thompson, is primarily responsible for assisting
the Board in overseeing the Company's financial reporting process as well as the
internal controls that management and the Board have established. (During the
fiscal year ended July 31, 2003, the audit committee consisted of Messrs. Neil
D. Chrisman, Jan H. Suwinski and William C. Tomson.) The Board of Directors
adopted a revised charter for the Audit Committee in September 2003, a copy of
which may be found in Appendix C to this Proxy Statement.
Management is responsible for the financial reporting process, including the
system of internal control, and for the preparation of consolidated financial
statements in accordance with accounting principles generally accepted in the
United States of America. The Company's independent auditors are responsible for
auditing those financial statements. The Audit Committee's responsibility is to
monitor and review these processes, acting in an oversight capacity. The Audit
Committee relies, without independent verification, on the information provided
to it and on the representations made by management and the independent
auditors.
During the past fiscal year, the Audit Committee met in person or by telephone
eight times and met in separate executive sessions with the Company's Chief
Financial Officer, the Company's senior internal auditing executive and the
independent auditing partner for the Company. The Audit Committee also met
privately on a quarterly basis.
In carrying out its duties, the Audit Committee has reviewed and discussed the
Company's audited consolidated financial statements for the fiscal year ended
July 31, 2003 with the Company's management and Deloitte & Touche LLP ("Deloitte
& Touche"), the Company's independent auditors. The Audit Committee has also
discussed with Deloitte & Touche the matters required to be discussed by
Statement on Auditing Standards No. 61, "Communication with Audit Committees",
as amended. In addition, the Audit Committee has received the written
disclosures and the letter from Deloitte & Touche required by Independence
Standards Board Standard No. 1, "Independence Discussions with Audit Committees"
and has discussed with Deloitte & Touche its independence from the Company and
its management. Based on the foregoing reports and discussions and subject to
the limitations on the role and responsibilities of the Audit Committee referred
to above and in the Charter of the Audit Committee, the Audit Committee
recommended to the Board of Directors, and the Board of Directors has approved,
that the audited consolidated financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended July 31, 2003.
The Board of Directors has affirmatively determined that each of the members of
the Audit Committee is "independent" as defined under the proposed rules of the
New York Stock Exchange.
The Audit Committee (for fiscal 2003)
Neil D. Chrisman
Jan H. Suwinski
William C. Tomson
17
INDEPENDENT AUDITOR FEES
The following table represents aggregate fees billed to the Company for fiscal
2003 by Deloitte & Touche, the Company's principal accounting firm. Certain
amounts from fiscal 2002 have been reclassified to conform to new presentation
requirements.
Fiscal 2003 Fiscal 2002
------------ ------------
Audit Fees...................... $ 535,834 $ 516,450
Audit-Related Fees.............. 86,157 160,100
------------ ------------
Subtotal................... 621,991 676,550
------------ ------------
Tax Fees........................ 946,293 1,507,732
All Other Fees.................. 43,410 286,912
------------ ------------
Total Fees...................... $ 1,611,694 $ 2,471,194
============ ============
Audit Fees. Represents fees for professional services provided for the audit of
the Company's annual financial statements and review of the Company's quarterly
financial statements, and audit services provided in connection with other
statutory or regulatory filings.
Audit-Related Fees. Represents fees for assurance services related to the audit
of the Company's financial statements. The amount shown for 2003 consists of
fees for benefit plan audits and services related to future compliance with the
provisions of the Sarbanes-Oxley Act of 2002. The amount shown for 2002 consists
primarily of fees for benefit plan audits and fees for audit services related to
the Company's acquisition of Keystone RV Company.
Tax Fees. Represents fees for professional services related to taxes including
the preparation of domestic and international returns, tax examinations
assistance and tax planning.
All Other Fees. Represents fees for products and services provided to the
Company not otherwise included in the categories above. The amount shown for
2003 consists of fees for benefit plan tax consultation. The amount shown for
2002 consists of fees of $6,485 for benefit plan tax consultation and fees of
$280,427 for forensic services relating to a lawsuit.
The Audit Committee has considered whether performance of services other than
audit services is compatible with maintaining the independence of Deloitte &
Touche.
In 2003, the Audit Committee adopted a formal policy concerning the approval of
audit and non-audit services to be provided by the independent auditor to the
Company. The policy requires that all services Deloitte & Touche, the Company's
independent auditor, may provide to the Company, including audit services and
permitted audit-related and non-audit services, be pre-approved by the Audit
Committee, except that the Company may, without such pre-approval, spend an
amount on non-audit services of not more than 5% of the total amount of revenues
paid by the Company to its auditor during the fiscal year in which the non-audit
services are performed. The Audit Committee approved all audit and non-audit
services provided by Deloitte & Touche during fiscal 2003.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The federal securities laws require the filing of certain reports by officers,
directors and beneficial owners of more than ten percent (10%) of the Company's
securities with the Securities and Exchange Commission and the New York Stock
Exchange. Specific due dates have been established and the Company is required
to disclose in this Proxy Statement any failure to file by these dates. Based
solely
18
on a review of copies of the filings furnished to the Company, or written
representations that no such filings were required, the Company believes that
all filing requirements were satisfied by each of the Company's officers,
directors and ten percent (10%) stockholders for fiscal 2003.
STOCKHOLDER PROPOSALS
Proposals by stockholders that are intended to be presented at the 2004 annual
meeting must be received by the Company on or before July 3, 2004 to be included
in the proxy statement and form of proxy for the 2004 annual meeting.
Notice of a shareholder proposal submitted outside the processes of Rule 14a-8
of the Securities Exchange Act of 1934, as amended, which is not received on or
before September 16, 2004 will be considered untimely. The Company reserves the
right to reject, rule out of order or take other appropriate action with respect
to any proposal that does not comply with applicable requirements.
OTHER MATTERS
Management knows of no other matters that will be presented for consideration at
the meeting. However, if any other matters are properly brought before the
meeting, it is the intention of the persons named in the proxy to vote the proxy
in accordance with their best judgment.
By Order of the Board of Directors,
WALTER L. BENNETT
[THOR LOGO]
419 West Pike Street o Jackson Center, Ohio 45334-0629 o (937) 596-6849
19
APPENDIX A
TEXT OF PROPOSED AMENDMENT TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
THOR INDUSTRIES, INC.
FOURTH: the total number of shares of stock which the Corporation shall
have authority to issue is two hundred fifty-one million (251,000,000) shares,
consisting of two hundred fifty million (250,000,000) shares of Common Stock,
par value ten cents ($0.10) each, and one million (1,000,000) shares of
Preferred Stock, par value ten cents ($0.10) each, which may be issued from time
to time in one or more series. The Board of Directors is hereby authorized to
fix, by resolution or resolutions providing for the issue of any such series,
the voting powers, if any, and the designation, preferences and rights of the
shares in such series, and the qualification, limitations or restrictions
thereof, including, but not limited to, the following:
(a) the number of shares constituting that series and the
distinctive designation thereof;
(b) the dividend rate on the shares of that series, whether
dividends shall be cumulative and, if so, from which date or
dates, and the relative rights of priority, if any, of payment
of dividends on shares of that series;
(c) the voting rights, if any, of shares of that series in
addition to the voting rights provided by law, and the terms
of such voting rights;
(d) the terms and conditions of the conversion privileges, if any,
of shares of that series, including provision for adjustment
of the conversion rate in such events as the Board of
Directors shall determine;
(e) the terms and conditions of redemption if shares of that
series shall be redeemable, including the date or dates on or
after which they shall be redeemable, and the amount per share
payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;
(f) the terms and amount of any sinking fund for the redemption or
purchase of shares of that series, if any;
(g) the rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, and the relative rights of priority, if
any, of payment of shares of that series; and
(h) any other relative rights, preferences and limitations of that
series.
Dividends on outstanding Preferred Stock shall be declared and paid, or
set apart for payment, before any dividend shall be declared and paid, or set
apart for payment, on the Common Stock with respect to the same dividend period.
APPENDIX B
THOR INDUSTRIES, INC. ANNUAL INCENTIVE PLAN
1. Purposes. The purposes of the Thor Industries, Inc. Annual
Incentive Plan (the "Plan") are to provide an incentive to executive officers
and other key employees of Thor Industries, Inc. (the "Company") and its
subsidiaries to contribute to the growth, profitability and increased
shareholder value of the Company, to retain such executives and endeavor to
qualify the compensation paid under the Plan for tax deductibility under Section
162(m) of the Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder (the "Code"). Each executive officer of the Company and
its subsidiaries, and such other key employees of the Company and its
subsidiaries, selected by the Committee shall be eligible to receive awards
("Performance Awards") under the Plan ("Eligible Executives").
2. Administration of Plan. The Plan shall be administered by a
committee comprised of at least two members of the Board of Directors of the
Company (the "Board") who qualify as "outside directors" within the meaning of
Section 162(m) of the Code (the "Committee"). The Committee shall make all
determinations under the Plan and may establish, modify or rescind such rules
and regulations as it deems necessary for the proper administration of the Plan;
and to make such determinations and interpretations and to take such steps in
connection with the Plan or the awards granted thereunder as it deems necessary
or advisable. All actions by the Committee under the Plan shall be final and
binding on all persons. The Committee shall determine which Eligible Executives,
if any, will become participants in the Plan ("Participants").
3. Performance Awards. The Committee is authorized to grant
Performance Awards pursuant to this Section 3. A Performance Award shall
represent the conditional right of a Participant to receive a cash award
following the completion of a Performance Period (as defined below) based upon
performance in respect of one or more of the Performance Goals (as defined
below) during the Performance Period. For purposes of the Plan, "Performance
Period" shall mean the fiscal year, or such other shorter or longer period
designated by the Committee, during which performance will be measured in order
to determine a Participant's entitlement to receive payment of a Performance
Award. Performance goals ("Performance Goals") shall mean or may be expressed in
terms of any of the following business criteria: revenue, earnings before taxes,
funds from operations, funds from operations per share, operating income, pre or
after tax income, cash available for distribution, cash available for
distribution per share, cash and/or cash equivalents available for operations,
net earnings, earnings per share, return on equity, return on assets, return on
invested capital, share price performance, improvements in the Company's
attainment of expense levels, implementing or completion of critical projects,
including, without limitation, implementation of strategic plan(s), improvement
in investor relations, marketing and manufacturing of key products, improvement
in cash-flow (before or after tax), development of critical projects or product
development, or progress relating to research and development. A Performance
Goal may be measured over a Performance Period on a periodic, annual, cumulative
or average basis and may be established on a corporate-wide basis or established
with respect to one or more operating units, divisions, subsidiaries, acquired
businesses, minority investments, partnerships or joint ventures. The level or
levels of performance specified with respect to a Performance Goal may be
established in absolute terms, as objectives relative to performance in prior
periods, as an objective compared to the performance of one or more comparable
companies or an index covering multiple companies, or otherwise as the Committee
may determine. The Committee shall establish performance objectives
("Performance Objective") for each Performance Award, consisting of one or more
business criteria
permitted as Performance Goals hereunder, one or more levels of performance with
respect to each such criteria, and the amount or amounts payable upon
achievement of such levels of performance. The Performance Objective shall be
established by the Committee prior to, or reasonably promptly following the
inception of, a Performance Period but, to the extent required by Section 162(m)
of the Code, by no later than the earlier of the date that is ninety (90) days
after the commencement of the Performance Period or the day prior to the date on
which twenty-five percent (25%) of the Performance Period has elapsed.
Performance Awards shall be subject to such conditions, including risks of
forfeiture, restrictions on transferability and other terms and conditions as
shall be specified by the Committee; provided, however, that the amount of
compensation payable upon the attainment of a Performance Objective shall not be
increased at the discretion of the Committee. The Committee may, however, at its
discretion, reduce or eliminate the amount of compensation payable upon the
attainment of a Performance Objective.
4. Certification and Timing of Payment. Following the completion
of each Performance Period, the Committee shall certify in writing, in
accordance with the requirements of Section 162(m) of the Code, whether the
Performance Objective and other material terms for paying amounts in respect of
each Performance Award related to that Performance Period have been achieved or
met. Performance Awards shall not be paid until the Committee has made the
certification specified under this Section 4. Any cash amounts payable in
respect of Performance Awards for a Performance Period will generally be paid as
soon as practicable following the determination made pursuant to this Section 4.
5. Maximum Amount Payable per Participant. A Participant shall
not be granted Performance Awards for all of the Performance Periods commencing
in a fiscal year that permit the Participant in the aggregate to earn a cash
payment in any fiscal year in excess of $3,000,000.
6. Changes to the Plan and Performance Awards/Discontinuance of
Plan. Notwithstanding anything herein to the contrary, the Board or the
Committee, may, at any time, terminate or, from time to time, amend, modify or
suspend the Plan and the terms and provisions of any Performance Award
theretofore granted to any Participant which has not been paid; provided,
however, that without the approval of the stockholders, no such amendment or
modification shall change the Eligible Executives or the Performance Goals set
forth in the Plan or increase the amount of compensation payable under the Plan.
The Plan and all Performance Awards issued hereunder, are intended to be exempt
from the application of Section 162(m) of the Code, which restricts under
certain circumstances the Federal income tax deduction for compensation paid by
a public company to named executives in excess of $1 million per year. The
Committee may, without stockholder approval, amend the Plan retroactively or
prospectively to the extent it determines necessary in order to comply with any
subsequent clarification of Section 162(m) of the Code required to preserve the
Company's Federal income tax deduction for compensation paid pursuant to the
Plan.
7. Governing Law. The validity, construction, and effect of the
Plan, any rules and regulations relating to the Plan and any Performance Award
shall be determined in accordance with the laws of the State of Delaware,
without giving effect to principles of conflicts of laws, and applicable Federal
law.
8. Effective Date. The Plan is effective on October 2, 2003 (the
"Effective Date"), subject to subsequent approval thereof by the Company's
stockholders at the first annual meeting of stockholders to occur after the
Effective Date, and shall remain in effect until it has been terminated pursuant
to Section 6 hereof. If the Plan is not approved by the stockholders at such
annual meeting, the Plan and all interests in the Plan awarded to Participants
before the date of such annual meeting shall be void ab initio and of no further
force and effect. Unless the Company determines to submit Section 4 of the Plan
and the definition of "Performance Goal" to the Company's stockholders at the
first stockholder meeting that occurs in the fifth year following the year in
which the Plan was last approved by stockholders (or any
earlier meeting designated by the Board), in accordance with the requirements of
Section 162(m) of the Code, and such stockholder approval is obtained, then no
further Performance Awards shall be made under the Plan after the date of such
annual meeting.
APPENDIX C
AUDIT COMMITTEE CHARTER
I. PURPOSE
The Audit Committee is established by and among the Board of Directors for the
primary purpose of assisting the board in:
- overseeing the quality and integrity of the Company's
financial statements,
- overseeing the Company's compliance with legal and regulatory
requirements,
- overseeing the independent auditor's qualifications and
independence,
- overseeing the performance of the company's internal audit
function and independent auditor, and
- overseeing the Company's system of disclosure controls and
system of internal controls regarding finance, accounting,
legal compliance, and ethics that management and the Board
have established.
Consistent with this function, the Audit Committee should foster adherence to:
Company policies, procedures, and practices at all levels. The Audit Committee
should also provide an open avenue of communication among the independent
auditors, financial and senior management, the internal auditing function, and
the Board of Directors.
The Audit Committee has the authority to obtain advice and assistance from
outside legal, accounting, or other advisors as deemed appropriate to perform
its duties and responsibilities.
The Company shall provide appropriate funding, as determined by the Audit
Committee, for compensation to the independent auditor and to any advisers that
the Audit Committee chooses to engage.
The Audit Committee will primarily fulfill its responsibilities by carrying out
the activities enumerated in Section III of this Charter. The Audit Committee
will report regularly to the Board of Directors regarding the execution of its
duties and responsibilities.
II. COMPOSITION AND MEETINGS
The Audit Committee shall be comprised of three or more directors as determined
by the Board, each of whom shall be independent directors (as defined by all
applicable rules and regulations), and free from any relationship (including
disallowed compensatory arrangements) that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member of
the Committee. All members of the Committee shall have a working familiarity
with basic finance and accounting practices, and at least one member of the
Committee shall be a "financial expert" in compliance with the criteria
established by the SEC and other relevant regulations. The existence of such
member(s) shall be disclosed in periodic filings as required by the SEC.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. Each regularly scheduled meeting shall conclude with an
executive session of the Committee absent members of management and on such
terms and conditions as the Committee may elect. As part of its job to foster
open communication, the Committee should meet periodically with management, the
director of the internal auditing function and the independent auditors in
separate executive sessions to discuss any matters that the Committee or each of
these groups believe should be discussed privately. In addition, the Committee
should meet quarterly with the independent auditors and management to discuss
the annual audited financial statements and quarterly financial statements,
including the Company's disclosure under "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
III. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
Documents/Reports/Accounting Information Review
1. Review this Charter periodically, at least annually, and recommend to the
Board of Directors any necessary amendments as conditions dictate.
2. Review and discuss with management the Company's annual financial statements,
quarterly financial statements, and all internal controls reports (or summaries
thereof). Review other relevant reports or financial information submitted by
the Company to any governmental body, or the public, including management
certifications as required by the Sarbanes-Oxley Act of 2002 (Sections 302, 906,
and 404) and relevant reports rendered by the independent auditors (or summaries
thereof).
3. Recommend to the Board whether the financial statements should be included in
the Annual Report on Form 10-K. Review with financial management and the
independent auditors the 10-Q prior to its filing (or prior to the release of
earnings).
4. Review earnings press releases with management, including review of
"pro-forma" or "adjusted" non-GAAP information.
5. Discuss with management financial information and earnings guidance provided
to analysts and rating agencies. Such discussions may be on general terms (i.e.,
discussion of the types of information to be disclosed and the type of
presentation to be made).
6. Review the regular internal reports (or summaries thereof) to management
prepared by the internal auditing department and management's response.
Independent Auditors
7. Appoint, compensate, and oversee the work performed by the independent
auditor for the purpose of preparing or issuing an audit report or related work.
Review the performance of the independent auditors and remove the independent
auditors if circumstances warrant. The independent auditors shall report
directly to the audit committee and the audit committee shall oversee the
resolution of disagreements between management and the independent auditors in
the event that they arise. Consider whether the auditor's performance of
permissible nonaudit services is compatible with the auditor's independence.
8. Review with the independent auditor any problems or difficulties and
management's response; review the independent auditor's attestation and report
on management's internal control report; and hold timely discussions with the
independent auditors regarding the following:
- all critical accounting policies and practices;
- all alternative treatments of financial information within
generally accepted accounting principles that have been
discussed with management, ramifications of the use of such
alternative disclosures and treatments, and the treatment
preferred by the independent auditor;
- other material written communications between the independent
auditor and management including, but not limited to, the
management letter and schedule of unadjusted differences; and
- an analysis of the auditor's judgment as to the quality of the
Company's accounting principles, setting forth significant
reporting issues and judgments made in connection with the
preparation of the financial statements.
9. At least annually, obtain and review a report by the independent auditor
describing:
- the firm's internal quality control procedures;
- any material issues raised by the most recent internal
quality-control review, peer review, or by any inquiry or
investigation by governmental or professional authorities,
within the preceding five years, respecting one or more
independent audits carried out by the firm, and any steps
taken to deal with any such issues; and
- an assessment of the auditor's independence and all
relationships between the independent auditor and the Company.
10. Review and preapprove both audit and nonaudit services to be provided by the
independent auditor (other than with respect to de minimis exceptions permitted
by the Sarbanes-Oxley Act of 2002). This duty may be delegated to one or more
designated members of the audit committee with any such preapproval reported to
the audit committee at its next regularly scheduled meeting. Approval of
nonaudit services shall be disclosed to investors in periodic reports required
by Section 13(a) of the Securities Exchange Act of 1934.
11. Establish Company hiring policies, compliant with governing laws or
regulations, for employees or former employees of the independent auditor.
Financial Reporting Processes and Accounting Policies
12. In consultation with the independent auditors and the internal auditors,
review the integrity of the organization's financial reporting processes (both
internal and external), and the internal control structure (including disclosure
controls). Meet with management on a periodic basis to discuss any matters of
concern arising from the quarterly process used for Sarbanes-Oxley Act of 2002
Section 302 certifications.
13. Review with management major issues regarding accounting principles and
financial statement presentations, including any significant changes in the
Company's selection or application of accounting principles, and major issues as
to the adequacy of the Company's internal controls and any special audit steps
adopted in light of material, control deficiencies.
14. Review analyses prepared by management (and the independent auditor as noted
in item 8 above) setting forth significant financial reporting issues and
judgments made in connection with the preparation of the financial statements,
including analyses of the effects of alternative GAAP methods on the financial
statements.
15. Review with management the effect of regulatory and accounting initiatives,
as well as off-balance sheet structures, on the financial statements of the
Company.
16. Review and approve all related party transactions.
17. Establish and maintain procedures for the receipt, retention, and treatment
of complaints regarding accounting, internal accounting, or auditing matters.
18. Establish and maintain procedures for the confidential, anonymous submission
by Company employees regarding questionable accounting or auditing matters.
Internal Audit
19. Review and advise on the selection and/or removal of the internal audit
director.
20. Review activities, organizational structure, and qualifications of the
internal audit function.
21. Annually, review and recommend changes (if any) to the internal audit
charter.
22. Periodically review with the internal audit director any significant
difficulties, disagreements with management, or scope restrictions encountered
in the course of the function's work.
Ethical Compliance, Legal Compliance, and Risk Management
23. Establish, review and update periodically a Code of Ethical Conduct and
ensure that management has established a system to enforce this Code. Ensure
that the code is in compliance with all applicable rules and regulations.
24. Review management's monitoring of the Company's compliance with the
organization's Ethical Code, and ensure that management has the proper review
system in place to ensure that Company's financial statements, reports and other
financial information disseminated to governmental organizations, and the public
satisfy legal requirements.
25. Review, with the organization's counsel, legal compliance matters including
corporate securities trading policies.
26. Review, with the organization's counsel, any legal matter that could have a
significant impact on the organization's financial statements.
27. Discuss policies with respect to risk assessment and risk management. Such
discussions should include the Company's major financial and accounting risk
exposures and the steps management has undertaken to control them.
Other Responsibilities
28. Review with the independent auditors, the internal auditing department and
management the extent to which changes or improvements in financial or
accounting practices, as approved by the Audit Committee, have been implemented.
(This review should be conducted at an appropriate time subsequent to
implementation of changes or improvements, as decided by the Committee.)
29. Prepare the report that the SEC requires be included in the Company's annual
proxy statement.
30. Annually, perform a self-assessment relative to the Audit Committee's
purpose, duties and responsibilities outlined herein.
31. Perform any other activities consistent with this Charter, the Company's
by-laws and governing law, as the Committee or the Board deems necessary or
appropriate.
Nothing contained in this Charter is intended to expand applicable standards of
liability under statutory or regulatory requirements for the directors of the
Company or members of the Committee. The purposes and responsibilities outlined
in this Charter are meant to serve as guidelines rather than as inflexible rules
and the Committee is encouraged to adopt such additional procedures and
standards as it deems necessary from time to time to fulfill its
responsibilities. This Charter, and any amendments thereto, shall be displayed
on the Company's web site and a printed copy of such shall be made available to
any shareholder of the Company who requests it.
Adopted by the Audit Committee and approved by
the Board of Directors on September 26, 2003.
APPENDIX D
COMPENSATION COMMITTEE CHARTER
CHARTER OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF THOR
INDUSTRIES, INC.
AS ADOPTED BY THE BOARD OF DIRECTORS ON OCTOBER 2, 2003
I. Purpose and Authority
The Compensation Committee (the "Committee") of the Board of Directors of Thor
Industries, Inc. (the "Company") is appointed by the Board of Directors (the
"Board") to discharge the Board's responsibilities with respect to all forms of
compensation of the Company's executive officers, to administer the Company's
equity incentive plans for employees and to produce an annual report on
executive compensation for use in the Company's proxy statement. This Charter
sets forth the authority and responsibility of the Committee for approving and
evaluating executive officer compensation arrangements, plans, policies and
programs of the Company, and for administering the Company's equity incentive
plans for employees whether adopted prior to or after the date of adoption of
this charter (the "Stock Plans").
II. Membership
The Committee will consist of two or more members, with the exact number being
determined by the Board. Each of the members of the Committee will be (i) an
"independent director" as defined under the rules of the New York Stock
Exchange, as they may be amended from time to time (the "Rules"), except as may
otherwise be permitted by such Rules and (ii) a "Non-Employee Director," as
defined in Rule 16b-3 promulgated under Section 16 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). If any such person does not
qualify as an "outside director" within the meaning of Treasury Regulation
1.162-27(e)(3) at the time that the Committee is granting "qualified
performance-based compensation" within the meaning of Treasury Regulation
1.162-27(e)(2), such person shall recuse himself or herself from considering any
compensation arrangements for which the Company will seek to so qualify. In such
event, the Board shall appoint one or more "outside directors" to the Committee
such that it is comprised solely of two or more "outside directors" in order to
satisfy the requirements of Section 162(m) of the Internal Revenue Code of 1986,
as amended. All members of the Committee will be appointed by, and shall serve
at the discretion of, the Board.
The Board will select members of the Committee who will be approved by a
majority vote of the Board. Committee members will serve during their respective
term as a director, subject to earlier removal by a majority vote of the Board.
Unless a chair is elected by the full Board, the members of the Committee may
designate a chair by majority vote of the Committee membership.
III. Duties and Responsibilities
The principal processes of the Committee in carrying out its oversight
responsibilities are set forth below. These processes are set forth as a guide
with the understanding that the Committee may supplement them as appropriate and
may establish policies and procedures from time to time that it deems necessary
or advisable in fulfilling its responsibilities.
1. The Committee will have the sole authority to determine the form
and amount of compensation to be paid or awarded to the Chief
Executive Officer ("CEO") and other executive officers of the
Company.
2. The Committee will annually review and approve the corporate goals
and objectives relevant to CEO compensation and evaluate the CEO's
performance in light of these goals and objectives. Based on this
evaluation, the Committee will make and annually review decisions
respecting (i) salary paid to the CEO, (ii) the grant of all
cash-based bonuses and equity compensation to the CEO, (iii) the
entering into or amendment or extension of any employment contract
or similar arrangement with the CEO, (iv) any CEO severance or
change in control arrangement, and (v) any other CEO compensation
matters as from time to time directed by the Board. In determining
the long-term incentive component of the CEO's compensation, the
Committee will consider, among other things: the Company's
performance and relative shareholder return, the value of similar
incentive awards to chief executive officers at companies that the
Committee determines comparable based on factors it selects, and
the incentive awards given to the Company's CEO in prior years.
3. The Committee will annually review and approve the corporate goals
and objectives relevant to executive officers' compensation. In
light of these goals and objectives, the Committee will annually
review the proposals of the CEO respecting (i) salary paid to the
executive officers, (ii) the grant of cash-based bonuses and equity
compensation provided to the executive officers, (iii) the entering
into or amendment or extension of any employment contract or
similar arrangement with the executive officers, (iv) executive
officers' severance or change in control arrangement, and (v) any
other executive officer compensation matters as from time to time
directed by the Board. In determining the long-term incentive
component of the executive officer's compensation, the Committee
will consider the same factors pertaining to such compensation that
it considers for that element of the CEO's compensation.
4. The Committee will periodically review with the CEO and make
recommendations to the Board with respect to adoption and approval
of, or amendments to, all equity-based incentive compensation plans
and arrangements for employees, and the shares and amounts reserved
thereunder. The Committee will also periodically review and make
recommendations to the Board with respect to adoption and approval
of, and amendments to, all cash based incentive plans for senior
executives.
5. The Committee will: (i) approve grants of stock, stock options or
stock purchase rights to employees eligible for such grants
(including grants in compliance with Rule 16b-3 promulgated under
the Exchange Act to individuals who are subject to Section 16 of
the Exchange Act); (ii) interpret the Stock Plans and agreements
thereunder; and (iii) determine acceptable forms of consideration
for stock acquired pursuant to the Stock Plans. Pursuant to Section
157 of the Delaware General Corporation Law, the Committee may
delegate to the Company's CEO the authority to grant options to
employees of the Company or of any subsidiary of the Company who
are not directors or executive officers, provided that such grants
are within the limits established by Section 157 and by resolution
of the Board of Directors.
6. The Committee will periodically review the Company's policies and
procedures with respect to employee loans, and will not approve any
arrangement in which the Company, directly or indirectly, extends
or maintains credit, arranges for the extension of credit or renews
an extension of credit, in the form of a personal loan to or for
any director or executive officer
(or equivalent thereof) of the Company. The Committee will assist
the Board and management of the Company in complying with this
prohibition.
7. The Committee will exercise the powers of the Directors and perform
such duties and responsibilities as may be assigned to a
"committee", this Committee or the Board under the terms of any
incentive-compensation, equity-based, deferred compensation, or
other plan in the Company's executive benefit program.
8. The Committee will prepare an annual report on executive
compensation to the Company's stockholders for inclusion in the
proxy statement for the Company's annual meeting in accordance with
the rules and regulations of the Securities and Exchange Commission
(the "SEC").
9. The Committee will make regular reports to the Board.
10. The Committee will review this Charter annually and recommend to
the Board any changes it determines are appropriate.
11. The Committee will at least annually review its performance and
submit a report on its performance to the Board.
12. The Committee will have the sole authority and right, as and when
it shall determine to be necessary or appropriate to the functions
of the Committee, at the expense of the Company, to retain and
terminate compensation consultants, legal counsel and other
advisors of its choosing to assist the Committee in connection with
its functions. The Committee shall have the sole authority to
approve the fees and other retention terms of such advisors. The
Company shall provide for appropriate funding, as determined by the
Committee, for payment of compensation to any such advisors
employed by the Committee pursuant to this charter.
13. The Committee will perform any other activities required by
applicable law, rules or regulations, including the rules of the
SEC and any exchange or market on which the Company's capital stock
is traded, and perform other activities that are consistent with
this charter, the Company's certificate of incorporation and
bylaws, and governing laws, as the Committee or the Board deems
necessary or appropriate.
IV. Meetings
Meetings of the Committee will be held from time to time, in response to the
needs of the Board or as otherwise determined by the Chairman of such Committee,
and the Committee shall provide reports to the Board. In lieu of a meeting, the
Committee may also act by unanimous written consent resolution.
V. Minutes
The Committee will maintain written minutes of its meetings, and will file such
minutes with the books and records of the Company.
APPENDIX E
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER
CHARTER OF THE NOMINATING AND CORPORATE GOVERNANCE COMMITTEE OF THE BOARD OF
DIRECTORS OF THOR INDUSTRIES, INC.
AS ADOPTED BY THE BOARD OF DIRECTORS ON OCTOBER 2, 2003
I. Purpose of the Committee
The purposes of the Nominating and Corporate Governance Committee (the
"Committee") of the Board of Directors (the "Board") of Thor Industries, Inc.
(the "Company") shall be to recommend to the Board individuals qualified to
serve as directors of the Company and on committees of the Board; to advise the
Board with respect to the Board composition, compensation, procedures and
committees; to develop and recommend to the Board a set of corporate governance
principles applicable to the Company; and to oversee the evaluation of the
Board. The Committee shall report to the Board on a regular basis and not less
than once per year.
II. Composition of the Committee
The Committee shall be comprised of two or more directors each of whom has been
determined, in the business judgment of the Board, to qualify as an independent
director ("Independent Directors") under (a) the rules of the New York Stock
Exchange (the "NYSE Rules") and (b) the Company's Corporate Governance
Guidelines.
III. Meetings and Procedures of the Committee
The Committee may fix its own rules of procedure, which shall be consistent with
the Bylaws of the Company and this Charter. The Committee shall meet at least
two times annually or more frequently as circumstances or such rules of
procedure as it may adopt require. The Board may designate one member of the
Committee as its Chairperson.
The Committee may request that any directors, officers or employees of the
Company, or other persons whose advice and counsel are sought by the Committee,
attend any meeting of the Committee to provide such pertinent information as the
Committee requests.
Following each of its meetings, the Committee shall deliver a report on the
meeting to the Board, including a summary description of actions taken by the
Committee at the meeting. The Committee shall keep written minutes of its
meetings, which minutes shall be maintained with the books and records of the
Company.
IV. Committee Responsibilities
A. Board Candidates and Nominees
The Committee shall have the following goals and responsibilities with respect
to Board candidates and nominees:
(a) To recommend to the Board the director nominees for election
by the stockholders or appointment by the Board, as the case
may be, pursuant to the Bylaws of the Company, which
recommendations shall be consistent with the Board's criteria
for selecting new directors. Such criteria shall include the
possession of such knowledge, experience, skills, expertise
and diversity as may enhance the Board's ability to manage and
direct the affairs and business of the Company, including,
when applicable, as may enhance the ability of committees of
the Board to fulfill their duties. The Committee shall also
take into account, as applicable, the satisfaction of any
independence requirements imposed by law, regulation, the NYSE
Rules, and the Company's Corporate Governance Guidelines. Any
new candidate proposed by the Committee for election to the
Board shall be discussed with and receive concurrence from the
whole Board prior to the Chairman of the Board extending a
formal invitation to the candidate to join the Board.
(b) To establish procedures for evaluating the suitability of
potential director nominees proposed by the directors,
management or shareholders.
(c) To review the suitability for continued service as a director
of each Board member when his or her term expires and when he
or she has a significant change in status, including but not
limited to an employment change, and to recommend whether or
not the director should be re-nominated.
B. Board Composition and Compensation
The Committee shall have the following goals and responsibilities with respect
to the composition and procedures of the Board as a whole:
(a) To review annually with the Board the size and composition of
the Board as a whole and to recommend, if necessary, measures
to be taken so that the Board (i) reflects the appropriate
balance of knowledge, experience, skills, expertise and
diversity required for the Board as a whole and (ii) contains
at least the minimum number of Independent Directors required
by the NYSE Rules or such greater number or percentage of
Independent Directors as the Committee may, from time to time,
recommend to the Board.
(b) To make recommendations on the frequency and structure of
Board meetings.
(c) To review, on an annual basis the level and form of
non-employee Director compensation and recommend to the
Chairman of the Board any changes the Committee considers
appropriate.
(d) To make recommendations concerning any other aspect of the
procedures of the Board that the Committee considers
warranted, including but not limited to procedures with
respect to the waiver by the Board of any Company rule,
guideline, procedure or corporate governance principle.
C. Board Committees
The following shall be the goals and responsibilities of the Committee with
respect to the committee structure of the Board:
(a) To make recommendations to the Board, in consultation with the
Chairman of the Board, regarding the size, composition and
chair, if any, of each standing committee of the Board of
Directors, including the identification of individuals
qualified to serve as members of a standing committee,
including the Committee, and to recommend to the Board
individual directors to fill any vacancy that might occur on a
committee, including the Committee.
(b) To monitor the functioning of the standing committees of the
Board and to make recommendations for any changes, including
the creation and elimination of any standing or special
committees.
(c) To review annually standing committee assignments and the
policy with respect to the rotation of standing committee
memberships and/or chairpersonships, and to report any
recommendations to the Board.
D. Corporate Governance
The following shall be the goals and responsibilities of the Committee with
respect to corporate governance:
(a) To develop and recommend to the Board a set of corporate
governance principles for the Company, which shall be
consistent with any applicable laws, regulations and listing
standards. At a minimum, the corporate governance principles
developed and recommended by the Committee shall address the
following:
(i) Director qualification standards. The Committee shall
establish director qualification standards; and such standards
must reflect at a minimum the independence requirements of the
NYSE Rules. The Committee shall also develop policies
regarding director tenure, retirement and succession, and may
consider whether it is in the best interest of the Company to
limit the number of corporate boards on which a director may
serve.
(ii) Director responsibilities.
(iii) Director access to management and, as necessary and
appropriate, independent advisors.
(iv) Director compensation, including principles for
determining the form and amount of director compensation, and
for reviewing those principles at least annually.
(v) Director orientation and continuing education.
(vi) Management succession, including policies and principles
for the selection and performance review of the Chief
Executive Officer, as well as policies regarding succession of
the Chief Executive Officer in the event of his or her death
or retirement.
(b) To review periodically, and at least annually, the corporate
governance principles adopted by the Board to assure that they
are appropriate for the Company, and to recommend any
desirable changes therein to the Board. In formulating its
recommendations pursuant to this Charter, the Committee shall
work closely with the Chairman of the Board of the Company.
E. Evaluation of the Board
The Committee shall be responsible for overseeing the annual evaluation of the
Board as a whole. The Committee shall establish procedures to allow it to
exercise this oversight function.
V. Evaluation of the Committee
The Committee shall on an annual basis evaluate its performance, which
evaluation should among other things: (i) compare its performance with the
requirements of this charter, (ii) evaluate its performance against its goals
and objectives for the previous year, and (iii) set forth its goals and
objectives for the upcoming year. The evaluation should include a review and
assessment of the adequacy of the Committee's charter. The Committee shall
address all matters that it considers relevant to its performance, including at
least the following: the adequacy, appropriateness and quality of the
information and recommendations presented by the Committee to the Board, the
manner in which they were discussed or debated, and whether the number and
length of meetings of the Committee were adequate for it to complete its work in
a thorough and thoughtful manner.
The Committee shall report the results of its evaluation to the Board, including
any recommended amendments to this Charter and any recommended changes to the
Company's or the Board's policies or procedures.
VI. Investigations and Studies; Outside Advisors
The Committee may conduct or authorize investigations into or studies of matters
within the Committee's scope of responsibilities, and may retain, at the
Company's expense, such independent counsel or other advisors as it deems
necessary. The Committee shall have the sole authority to retain or terminate
any search firm to be used to identify director candidates, including sole
authority to approve the search firm's fees and other retention terms, such fees
to be borne by the Company.
APPENDIX F
DIRECTOR INDEPENDENCE STANDARDS
AS ADOPTED BY THE BOARD OF DIRECTORS OF THOR INDUSTRIES, INC.
A director will not be considered independent if, within the preceding three
years:
- The director is an employee, or whose immediate family member
is an executive officer, of the Company.
- The director receives, or whose immediate family member
receives, more than $100,000 per year in direct compensation
from the Company, other than director and committee fees and
pension or other forms of deferred compensation for prior
service (provided such compensation is not contingent in any
way on continued service).
- The director is affiliated with or employed by, or whose
immediate family member is affiliated with or employed in a
professional capacity by, a present or former internal or
external auditor of the Company.
- The director is employed, or whose immediate family member is
employed, as an executive officer of another company where any
of the Company's present executives serve on that company's
compensation committee.
- The director is an executive officer or an employee, or whose
immediate family member is an executive officer, of another
company that makes payments to, or receives payments from, the
Company for property or services in an amount which, in any
single fiscal year, exceeds the greater of $1 million or 2% of
such other company's consolidated gross revenues.
For relationships not covered by the guidelines above, or for relationships that
are covered, but as to which the Board believes a director may nonetheless be
independent, the determination of independence shall be made by the directors
who satisfy the NYSE independence rules and the guidelines set forth above.
However, any determination of independence for a director who does not meet
these standards must be specifically explained in the Company's proxy statement
for a meeting of shareholders at which directors are to be elected.
PROXY PROXY
THOR INDUSTRIES, INC.
ANNUAL MEETING OF STOCKHOLDERS, DECEMBER 9, 2003
The undersigned stockholder of Thor Industries, Inc. hereby appoints
WADE F. B. THOMPSON and PETER B. ORTHWEIN or each of them, with power of
substitution and revocation to each, as proxies to appear and vote all shares of
the Company which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders to be held on December 9, 2003 and
any adjournments thereof, hereby revoking any proxy heretofore given, notice of
which meeting and related proxy statement have been received by the undersigned.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
________________________________________________________________________________
THOR INDUSTRIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND SHALL BE VOTED
AS SPECIFIED HEREIN. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS #1, #2, AND #3.
1. Election of Directors (Class C term expires 2006): For Withhold For All
Nominees: All All Except Nominee(s) Written Below.
01 Neil D. Chrisman 02 Alan Siegel [ ] [ ] [ ] ____________________________________
03 Geoffrey A. Thompson
2. Amendment to the Company's Certificate of Incorporation For Against Abstain
to increase the authorized number of shares of Common [ ] [ ] [ ]
Stock from 40,000,000 to 250,000,000.
3. Approval of Thor Industries, Inc. Annual Incentive For Against Abstain
Plan. [ ] [ ] [ ]
4. In their discretion, upon the transaction of such other
business as may come before the meeting.
___________________________________ Dated _____________________________, 2003
Signature(s) ____________________________
THIS SPACE RESERVED FOR ADDRESSING
(key lines do not print) _________________________________________
(Stockholder(s) should sign here exactly
as name appears hereon.)
___________________________________
________________________________________________________________________________
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.