Company Name: Skyline Corp.
Public Availability Date: July 14, 2004Document Sections:
INQUIRY LETTER
STAFF REPLY LETTER [INQUIRY LETTER]
May 4, 2004 By Certified Mail, Return Receipt Requested Artide Number 7160 3901 9844 4050
0980 Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549 Re: Skyline Corporation Statement of Reasons for Omission of Shareholder
Proposal Pursuant to Rule 14a-8 Dear Ladies and Gentlemen:
We are writing on behalf of Skyline Corporation in accordance with Securities
and Exchange Commission Regulation 240.14a-8 to inform the Securities and
Exchange Commission (the "Commission") of the intent of Skyline Corporation
("Skyline" or the "Company") to exclude a shareholder's proposal by Gary B.
Green (the "Proponent") from its proxy statement and form of proxy for its 2004
annual meeting (the "2004 Proxy Statement"). The Company hereby requests that
the Staff of the Division of Corporation Finance of the Commission (the "Staff")
not recommend to the Commission that any enforcement action be taken if the
Company excludes the Proposal from its 2004 Proxy Statement for the reasons set
forth below. In accordance with Rule 14a-8(j) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), six copies of this letter and its attachments are
enclosed. We are forwarding a copy of this letter to the Proponent as notice of
the Company's intention to omit the Proposal from the 2004 Proxy Statement.
Although the Company has not yet finalized its schedule for the mailing of
definitive proxy statements and other materials to its stockholders and the
filing of such materials with the Commission, the Company will not mail and file
such definitive materials before July 28, 2004. On August 29, 2003 Skyline received the Proponent's proxy card for the 2003
annual meeting which contained the following handwritten message which Skyline
considers to be a shareholder proposal: Shareholder Resolution
Request that no compensation to officer/manager be paid unless required by
contract in excess of 2001 levels until management averages a return of 5% or
more per year for a period of four or more consecutive years. If required by
contract which manager is unwilling to waive, manager should be terminated if
performance is under 5% average for more than 2 years assuming you can do so by
contract. To Board of Directors of Skyline Corporation -
I believe you are failing in your fiduciary duties to shareholders. For years
the company has produced a rate of return far less than for other companies, so
why should the top corporate officers and directors receive such high
compensation. Either it should be limited when earnings are less than 5% or
there should be a major distribution of the cash and temporary cash investments
to each shareholder because they could earn more than the company earns.
If a contract prohibits this then you should have alternative provisions
guaranteeing shareholders a reasonable return on investment. Your cash and
temporary investments alone is able to generate more cash than your total
earnings. There is something wrong and you directors are subject to suit by
shareholders since you have been warned and have never responded.
A copy of the proxy card containing that handwritten message by the Proponent is
attached as Exhibit A (the "Communication"). On September 5, 2003, within 14 calendar days after receiving the Communication
on August 29, 2003, the Company, pursuant to Rule 14a-8(f) under the Exchange
Act, sent to the Proponent via first-class mail, return receipt requested, a
letter (the "Company Letter"), a copy of which is attached as Exhibit B. The
certified mail receipt attached as part of Exhibit B shows that the Proponent
received the Company Letter on September 17, 2003. The Company Letter informed
the Proponent that the August 29, 2003 Proposal did not comply with the relevant
requirements of the Exchange Act and specified the basis for noncompliance. In
particular, the Company Letter informed the Proponent that the Communication did
not adequately establish the Proponent's eligibility under Rule 14a-8(b)(2)(i)
under the Exchange Act. The Company Letter also informed the Proponent that the
Proponent could cure the identified deficiency by means of a response to the
Company that must be postmarked, or transmitted electronically, no later than 14
days from the date the Proponent received the Company Letter.
Under Rule 14a-8(b) of the Exchange Act, in order to be eligible to submit a
proposal, a proponent must have continuously held at least $2,000 in market
value, or 1%, of the Company's securities entitled to vote on the proposal for
at least one year and continue to hold these securities through the date of the
shareholders meeting. If a proponent is not a registered holder of the company
securities entitled to vote on the proposal and has not filed a Schedule 13D,
Schedule 13G, Form 3, Form 4 or Form 5 reflecting ownership of the company's
securities as of or before the date on which the one-year eligibility period
begins, a proponent may prove eligibility by submitting a written statement from
the record holder of the securities verifying that at the time the proponent
submitted the proposal that the proponent had held the securities for at least
one year. The Proponent was the record owner of five shares of Skyline common stock on the
date the Proposal was received. The highest selling price on the New York Stock
Exchange for Skyline's common stock during the 60 calendar days before the
Proponent submitted the Proposal was $32.15 per share, or a total of $160.75 for
the Proponent's five shares. The Proponent's five shares of Skyline common stock
represented less than 1% of the 8,391,244 shares of Skyline Corporation common
stock then outstanding. At no time during the one year period preceding the date
of the Communication or Skyline's receipt of the Proposal did the five shares of
Skyline common stock owned by the Proponent have a market value based on the
highest selling price on the New York Stock Exchange for Skyline's common stock
equal to or in excess of $2,000, or represent 1% or more of the outstanding
shares of Skyline common stock. Skyline Corporation has not received any reply
to the Company Letter from the Proponent or any information from the Proponent
regarding the Proponent's eligibility to submit a shareholder proposal, either
within or after the 14 calendar days required under Securities and Exchange
Commission Regulation 240.14a-8. The Company believes that the Proposal can be omitted pursuant to Rule 14a-8(b),
because the Proponent has failed to provide any documentary support or other
information indicating that the Proponent satisfies the minimum ownership
requirement for the one year period required by Rule 14a-8(b) within the
statutory 14-day time frame set by Rule 14a-8(f). The Company advised the
Proponent on a timely basis of the need for the Proponent to establish that
proof and specifically informed the Proponent of the 14-day time period in which
the Proponent had to respond. As discussed above, the Proponent has not provided evidence of eligibility to
submit a shareholder proposal. Accordingly, we respectfully request that the
Staff not recommend enforcement action if the Proposal is omitted from the 2004
Proxy Statement. Should the Staff disagree with the Company's position, we would appreciate an
opportunity to confer with a member of the Staff before the issuance of its
response. If the Staff requires additional information, please call me at (574)
293-0681. Respectfully submitted, BARNES & THORNBURG LLP
/s/ J. Scott Troeger
JST:Pjc Enclosures
cc: Mr. Gary B. Green (w/encl.)
Ms. Linda R. Philippsen (w/encl.)
Mr. Samuel S. Thompson (w/encl.) ELDS01 JST 164796v1 [STAFF REPLY LETTER]
July 14, 2004 Response of the Office of Chief Counsel Division of Corporation Finance
Re: Skyline Corporation Incoming letter dated May 4, 2004
The proposal relates to "officer/manager" compensation.
We note that it is unclear whether (1) the submission is a proposal made under
rule 14a-8 or is a proposal to be presented directly at the annual meeting and
(2) whether the submission was submitted in connection with the 2003 or the 2004
annual meeting; each of these are matters we do not address. To the extent that
the submission involves a rule 14a-8 issue and the submission was submitted in
connection with the 2004 annual meeting, we note that, to date, the proponent
has not provided a statement from the record holder evidencing documentary
support of continuous beneficial ownership of $ 2,000, or 1%, in market value of
voting securities, for at least one year prior to submission of the proposal. We
note, however, that Skyline failed to notify the proponent of any procedural or
eligibility deficiencies under rule 14a-8(b) in connection with the 2004 annual
meeting. Adcordingly, to the extent that the submission involves a rule 14a-8
issue and the submission was submitted in connection with the 2004 annual
meeting, unless the proponent provides Skyline with appropriate documentary
support of ownership, within seven calendar days after receiving this letter, we
will not recommend enforcement action to the Commission if Skyline omits the
proposal from its proxy materials in reliance on rules 14a-8(b) and 14a-8(f).
Sincerely, /s/
Grace K. Lee
Special Counsel
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