UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
[ ] Preliminary Proxy Statement
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(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-12
NATIONAL R.V. HOLDINGS, INC.
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(Name of Registrant as Specified In Its Charter)
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NATIONAL R.V. HOLDINGS, INC.
100 West Sinclair Street
Perris, California 92571
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on January 31, 2007
The Board of Directors of National R.V. Holdings, Inc., a Delaware
corporation (the "Company"), hereby gives notice that the 2007 Annual Meeting of
Stockholders of the Company will be held on Wednesday, January 31, 2007, at 9:00
a.m., Pacific Daylight Time, at the Company's headquarters, 100 West Sinclair
Street, Perris, California 92571, for the following purposes:
1. To elect two persons to serve on the Company's Board of Directors as
Class III Directors until the 2009 Annual Meeting of Stockholders or
until their successors are duly elected and qualified as provided in
the Company's By-laws.
2. To ratify the selection by the Board of Directors of Swenson Advisors
LLP, as the Company's independent registered public accountants for
the fiscal year ending December 31, 2006.
3. To transact such other and further business as may properly come
before the meeting or any adjournment(s) thereof.
Stockholders of record at the close of business on December 26, 2006 are
entitled to notice of and to vote at the meeting. If you attend the meeting you
may vote in person if you wish, even though you have previously returned your
proxy. A copy of the Company's Proxy Statement is enclosed herewith.
By Order of The Board of Directors
/s/ Stephen M. Davis
Stephen M. Davis
Secretary
December 28, 2006
IMPORTANT: WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED
ENVELOPE. THIS WILL ENSURE REPRESENTATION OF YOUR SHARES AT THE MEETING.
NATIONAL R.V. HOLDINGS, INC.
100 WEST SINCLAIR STREET
PERRIS, CALIFORNIA 92571
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON JANUARY 31, 2007
This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders are being furnished in connection with the solicitation by the
Board of Directors of National R.V. Holdings, Inc., a Delaware corporation (the
"Company"), of proxies for use at the 2007 Annual Meeting of Stockholders (the
"Annual Meeting") of the Company to be held on Wednesday, January 31, 2007, at
9:00 a.m., Pacific Daylight Time, at the Company's headquarters, 100 West
Sinclair Street, Perris, California 92571, and at any adjournments thereof. This
Proxy Statement and the enclosed proxy are first being sent to stockholders on
or about December 28, 2006.
The close of business on December 26, 2006 has been selected as the record
date (the "Record Date") for determining the holders of outstanding shares of
the Company's common stock, par value $.01 per share (the "Common Stock"),
entitled to receive notice of and vote at the Annual Meeting. On the Record
Date, there were approximately 10,339,484 shares of Common Stock outstanding and
approximately 56 holders of record. Holders of Common Stock are entitled to one
vote per share.
The presence in person or by properly executed proxy of the record holders
of a majority of the outstanding shares of Common Stock will constitute a quorum
at the Annual Meeting. Elections of directors will be determined by a plurality
of vote of all shares present in person or by properly executed proxy and voting
at the Annual Meeting. The affirmative vote of the record holders of a majority
of the Common Stock present in person or by proxy at the Annual Meeting and
voting is required to ratify the selection of the independent registered public
accountants.
Unless proxies have been previously revoked, all shares represented by
properly executed proxies will be voted at the Annual Meeting in accordance with
the directions given on such proxies. Any person giving a proxy has the power to
revoke it, in writing delivered to the Secretary of the Company at the address
given above, at any time prior to its exercise. If no direction is given, a
properly executed proxy will be voted FOR the election of the nominees named
under "Election of Directors," and FOR the ratification of the selection of
Swenson Advisors, LLP, as the Company's independent registered public
accountants. The Board of Directors does not anticipate that any other matters
will be brought before the Annual Meeting. If, however, other matters are
properly presented, the persons named in the proxy will have discretion, to the
extent allowed by Delaware law, to vote in accordance with their own judgment on
such matters.
ELECTION OF DIRECTORS
ITEM 1 -- ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of five members and is
divided into three classes of directors serving three-year terms. One class of
directors is elected by stockholders at each annual meeting to serve until the
third annual meeting following such annual meeting or until their successors are
elected and qualified. At the Annual Meeting, stockholders will elect two Class
III Directors to serve until the Annual Meeting of Stockholders to be held in
2009 and until their successors are elected and qualified.
NOMINEES FOR CLASS III DIRECTORS
Doy B. Henley and James B. Roszak, incumbent Class III Directors, have been
nominated by management for election to the Board of Directors as Class III
Directors at the Annual Meeting and have consented to serve as such, if elected.
Certain biographical information regarding Mr. Henley and Mr. Roszak is set
forth below in the section entitled "Management of the Company -- Executive
Officers and Directors."
VOTE REQUIRED
The affirmative vote of the record holders of a plurality of the Common
Stock present in person or by proxy at the Annual Meeting and voting is required
to elect Directors. The enclosed proxy provides a means for stockholders to vote
for the election of the nominees or to withhold authority to vote for such
nominees. Abstentions with respect to the election of the nominees for Class III
Directors will have the same effect as a withheld vote and broker non-votes will
have no effect on the election of Directors.
It is the intention of the persons in the enclosed proxy to vote FOR the
election of Doy B. Henley and James B. Roszak to serve as Class III Directors of
the Company. Messrs. Henley and Roszak have consented to be named in this Proxy
Statement and to continue to serve if elected. Management does not contemplate
or foresee that the nominees will be unable or unwilling to serve or be
otherwise unavailable for election.
BOARD RECOMMENDATION
The Board of Directors recommends that stockholders vote FOR the election
of the nominees for Class III Directors set forth above.
2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
ITEM 2 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has selected the firm of
Swenson Advisors, LLP ("Swenson Advisors"), as the Company's independent
registered public accountants for the fiscal year ending December 31, 2006.
Although the selection of auditors does not require ratification, the Audit
Committee of the Board has directed that the appointment of Swenson Advisors be
submitted to stockholders for ratification because management believes this
matter is of such significance as to warrant stockholder participation. The
Company expects representatives of Swenson Advisors LLP to be present at the
Annual Meeting in person or by telephone conference to respond to appropriate
stockholder questions, and they will be given the opportunity to address the
stockholders, if they so desire.
VOTE REQUIRED
The affirmative vote of the record holders of a majority of the Common
Stock present in person or by proxy at the Annual Meeting and voting is required
to ratify the selection of the independent registered public accountants.
Abstentions and broker non-votes will have no effect on the vote for the
ratification of the selection of the independent registered public accountants.
BOARD RECOMMENDATION
The Board of Directors recommends that stockholders vote FOR ratification
of the selection of Swenson Advisors, LLP, as the Company's independent
registered public accountants for the fiscal year ending December 31, 2006.
3
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Swenson Advisors, LLP served as the Company's independent public accountant
for the fiscal year ending December 31, 2005 and PricewaterhouseCoopers LLP
served as the Company's independent public accountant for the fiscal year ending
December 31, 2004 and provided services to the Company in 2005 through the
effective date of its dismissal on October 26, 2005. The following table sets
forth the fees incurred by the Company for the services of its independent
public accountants in 2005 and 2004.
SERVICES RENDERED FEES
---------------------------------------- -------------------------------
2005 2004
Audit Fees (1) $1,619,706 $1,880,411
Audit Related Fees $0 $0
Tax Fees (2) $7,800 $11,397
Other Fees $0 $0
________________
(1) For professional services rendered for the audit of the Company's annual
financial statements, and the reviews of the financial statements included
in the Company's Forms 10-Q for fiscal years 2005 and 2004.
(2) For 2005 and 2004, tax services for tax compliance and planning.
The Audit Committee of the Company's Board of Directors has concluded that
the provision of non-audit services listed above is compatible with maintaining
the independence of its independent public accountants. The Audit Committee has
delegated to the Chair of the Audit Committee the authority to pre-approve
future audit-related and non-audit services not prohibited by law to be
performed by the Company's independent auditors and associated fees, provided
that the Chair shall report any decision to pre-approve such audit-related or
non-audit services and fees to the full Audit Committee at its next regular
meeting.
4
MANAGEMENT OF THE COMPANY
The executive officers and directors of the Company are as follows:
NAME AGE POSITION
---- --- --------
Doy B. Henley 77 Chairman of the Board (1)(2)
Bradley C. Albrechtsen 44 President, Chief Executive Officer and
Director
David J. Humphreys 70 Director (2)
Gregory McCaffery 53 Director (1)(2)
James B. Roszak 65 Director (1)(2)
Thomas J. Martini 58 Chief Financial Officer
Jonathan C. Corn 42 Vice President - General Counsel
_____________________
(1) Member of the Audit Committee and Compensation Committee
(2) Member of the Nominating/Corporate Governance Committee.
EXECUTIVE OFFICERS AND DIRECTORS
DOY B. HENLEY. Mr. Henley has served as Chairman of the Board since
September 2001 and has been a director of the Company since February 1998. Mr.
Henley is a Class III director whose term expires at the Annual Meeting. See
"Election of Directors - Nominees For Class III Directors." Mr. Henley is chief
executive officer of Henley Properties, a private real estate management
company. Mr. Henley was a founder and, from 1966 to 1997, had been the Chairman
and Chief Executive Officer of Aeromil Engineering Company, a computer-automated
manufacturing firm engaged in the production of complex machined titanium track
systems and structural components for the aerospace industry. Mr. Henley also
serves on the Board of Chapman University and The Salvation Army Advisory Board.
BRADLEY C. ALBRECHTSEN. Mr. Albrechtsen has been President, Chief Executive
Officer and a director since September 2001, Chief Financial Officer and
Treasurer of the Company from April 1999 to September 2001 and Assistant
Secretary from January 1999 to September 2001. Mr. Albrechtsen served as the
Company's Controller from 1993 through April 1999 and as Assistant Controller
prior to 1993. Mr. Albrechtsen is a Class I director whose term expires in 2008.
Mr. Albrechtsen is a certified public accountant with six years of public
accounting experience, including three years at Arthur Young & Co. (the
predecessor of Ernst & Young).
DAVID J. HUMPHREYS. Mr. Humphreys has been a Director of the Company since
February 2006. Mr. Humphreys is a Class I Director whose term expires in 2008.
Mr. Humphreys was President of the Recreation Vehicle Industry Association
(RVIA) from 1979 until his retirement in January 2006. Prior to 1979 he served
for nearly ten years as RVIA's outside legal counsel. Mr. Humphreys has been a
member of the Board of Directors of the Travel Industry Association of America
(TIA), the umbrella organization for all segments of the travel and tourism
industry, since 1985 and was its National Chairman from 1990 to 1991. Mr.
Humphreys has also been a member of the board of directors of the American
Highway Users Alliance (formerly Highway Users Federation), whose membership
includes representatives of the oil, trucking, automobile and tire industries.
5
GREGORY McCAFFERY. Mr. McCaffery has been a director of the Company since
February 1998. Mr. McCaffery is a Class II director whose term expires in 2007.
Mr. McCaffery is a founder and president of, and since 1984 has operated,
McCaffery Homebuilders, a builder of custom homes located in Orange Country,
California.
JAMES B. ROSZAK. Mr. Roszak has been a director of the Company since June
2003 and is a Class III director whose term expires at the Annual Meeting. See
"Election of Directors - Nominees For Class III Directors." Mr. Roszak was
employed by the Life Insurance Division of Transamerica Corporation, a financial
services organization engaged in life insurance, commercial lending, leasing and
real estate services, from June 1962 through his retirement as President of such
division in June 1997. Mr. Roszak also served as interim Chief Executive Officer
and a director of buy.com, an Internet retailer, from February 2001 through
August 2001.
THOMAS J. MARTINI. Mr. Martini was named Chief Financial Officer in May
2005 and has served as Treasurer since joining the Company in March 2004. Prior
to joining the Company, Mr. Martini was Vice President and Treasurer for
Coachmen Industries, Inc., a publicly traded recreational vehicle manufacturer,
from March 2001 to December 2003. From February 1991 to March 2001, Mr. Martini
served as Chief Financial Officer of Miller Building Systems, Inc., a
manufacturer of commercial and institutional buildings, that was publicly traded
prior to its acquisition in 2000 by Coachmen Industries, Inc. From 1978 to 1991,
Mr. Martini held a number of senior financial management positions for several
manufacturing organizations. Mr. Martini is a certified public accountant.
JONATHAN C. CORN. Mr. Corn has been Vice President - General Counsel since
April 2002, and General Counsel since December 2001. Mr. Corn is an attorney who
received his law degree from Georgetown University Law Center in 1991. Prior to
joining the Company, Mr. Corn practiced law in San Diego. His firm, Corn &
Associates, P.C., was a specialty firm focused on the representation of RV
manufacturers and dealers.
6
BOARD OF DIRECTORS AND COMMITTEES
Pursuant to the Company's Bylaws, the Company's Board of Directors is
divided into three classes of Directors serving three-year terms. One class of
directors is elected by stockholders at each annual meeting to serve until the
third annual meeting following such annual meeting or until their successors are
elected and qualified. In the case of a vacancy, a director will be appointed by
a majority of the remaining directors then in office to serve the remainder of
the term left vacant. During the year ended December 31, 2005, the Board of
Directors held 15 meetings. All directors attended at least 75% of those
meetings and of its committees of which they were members that were held while
they were serving on the Board or such committee.
The Board has determined that the following directors are "independent"
under current NYSE Arca, Inc. ("NYSE Arca") rules: Doy Henley, David J.
Humphreys, Gregory McCaffery and James Roszak. Mr. Henley, as Chairman of the
Board, is the presiding Director at meetings of the Board and at executive
sessions of the non-management Directors. The Board of Directors has standing
Audit, Compensation and Nominating/Corporate Governance Committees.
For additional information on the Company's corporate governance, including
the charters approved by the Board for the Audit Committee, the Compensation
Committee and the Nominating/Corporate Governance Committee, the Code of
Business Conduct and Ethics and the Corporate Governance Guidelines, please
visit the Company's investor relations website at www.nrvh.com.
AUDIT COMMITTEE. The Audit Committee currently consists of Messrs. Henley,
McCaffery and Roszak (chairman). The Audit Committee met eleven times during
2005. The Board has determined that all members of the Audit Committee are
independent directors under the rules of NYSE Arca and each of them meets the
financial literacy and sophistication requirements under the rules of NYSE Arca.
The Board has determined that Mr. Roszak qualifies as an "audit committee
financial expert" as defined by the rules of the Securities and Exchange
Commission ("SEC"). The purpose of the Audit Committee is to oversee the
accounting and financial reporting processes of the Company and audits of its
financial statements. The responsibilities of the Audit Committee include
appointing and providing the compensation of the independent accountants to
conduct the annual audit of our accounts, reviewing the scope and results of the
independent audits, reviewing and evaluating internal accounting policies, and
approving all professional services to be provided to the Company by its
independent accountants.
COMPENSATION COMMITTEE. The Compensation Committee currently consists of
Messrs. Henley, McCaffery and Roszak. The Compensation Committee held one
meeting during 2005. The Board has determined that all members of the
Compensation Committee are independent directors under the rules of NYSE Arca.
The Compensation Committee administers the Company's benefit plans, reviews and
administers all compensation arrangements for executive officers, and
establishes and reviews general policies relating to the compensation and
benefits of our officers and employees.
7
NOMINATING/CORPORATE GOVERNANCE COMMITTEE. The Nominating/Corporate
Governance Committee currently consists of Messrs. Humphreys (chairman), Henley,
McCaffery and Roszak, each of whom the Board has determined is an independent
director under the rules of NYSE Arca. The Nominating/Corporate Governance
Committee, which consisted in 2005 of Messrs. Henley, McCaffery and Roszak, met
one time in 2005. The Nominating/Corporate Governance Committee's
responsibilities include recommending to the Board of Directors nominees for
possible election to the Board of Directors and providing oversight with respect
to corporate governance.
COMMUNICATION WITH DIRECTORS
Stockholders who wish to communicate with the entire Board, the
non-management Directors as a group or the Chairs of any of the Board committees
may do so telephonically by calling 800-864-5307 or by mail c/o Corporate
Secretary, National R.V. Holdings, Inc., 100 West Sinclair Street, Perris, CA
92571. Communications are distributed to the Board, or to any individual
Director or Directors as appropriate, depending on the facts and circumstances
outlined in the communication. In that regard, the Board of Directors has
requested that certain items that are unrelated to the duties and
responsibilities of the Board should be excluded, such as spam, job inquiries,
business solicitations or product inquiries. In addition, material that is
unduly hostile, threatening, illegal or similarly unsuitable will be excluded,
with the provision that any communication that is filtered out must be made
available to any Director upon request.
DIRECTOR COMPENSATION
Effective January 1, 2003, non-employee Directors receive an annual
Director retainer of $30,000, an in-person per meeting fee of $1,000 and a
telephone meeting fee of $500. In addition, the Chairman of the Board of
Directors is entitled to an additional annual fee of $30,000, members of a Board
committee are entitled to an annual fee of $3,000 and the Audit Committee and
Nominating/Corporate Governance Committee Chairmen are entitled to an additional
annual fee of $10,000. Mr. Albrechtsen does not receive any additional
compensation for acting as a Director. Directors are also entitled to receive
reimbursement for traveling costs and other out-of-pocket expenses incurred in
attending Board and committee meetings.
DIRECTOR NOMINATION
CRITERIA FOR BOARD MEMBERSHIP. In selecting candidates for appointment or
re-election to the Board, the Nominating/Corporate Governance Committee
considers the appropriate balance of experience, skills and characteristics
required of the Board of Directors, and seeks to insure that at least a majority
of the Directors are independent under the rules of NYSE Arca, that members of
the Company's Audit Committee meet the financial literacy and sophistication
requirements under the rules of NYSE Arca and at least one of them qualifies as
an "audit committee financial expert" under the rules of the SEC. Nominees for
Director are selected on the basis of their depth and breadth of experience,
integrity, ability to make independent analytical inquiries, understanding of
the Company's business environment, and willingness to devote adequate time to
Board duties.
8
STOCKHOLDER NOMINEES. The Nominating/Corporate Governance Committee will
consider written proposals from stockholders for nominees for Director. Any such
nominations should be submitted to the Nominating/Corporate Governance Committee
c/o the Secretary of the Company and should include the following information:
(a) all information relating to such nominee that is required to be disclosed
pursuant to Regulation 14A under the Securities Exchange Act of 1934 (including
such person's written consent to being named in the proxy statement as a nominee
and to serving as a Director if elected); (b) the names and addresses of the
stockholders making the nomination and the number of shares of the Company's
common stock which are owned beneficially and of record by such stockholders;
and (c) appropriate biographical information and a statement as to the
qualification of the nominee, and should be submitted in the time frame
described in the Bylaws of the Company and under the caption, "Stockholder
Proposals for Annual Meeting for the Year Ended December 31, 2006" below.
Process for Identifying and Evaluating Nominees. The Nominating/Corporate
Governance Committee believes the Company is well-served by its current
Directors. In the ordinary course, absent special circumstances or a material
change in the criteria for Board membership, the Nominating/Corporate Governance
Committee will renominate incumbent Directors who continue to be qualified for
Board service and are willing to continue as Directors. If an incumbent Director
is not standing for re-election, or if a vacancy on the Board occurs between
annual stockholder meetings, the Nominating/Corporate Governance Committee will
seek out potential candidates for Board appointment who meet the criteria for
selection as a nominee and have the specific qualities or skills being sought.
Director candidates will be selected based on input from members of the Board,
senior management of the company and, if the Nominating/Corporate Governance
Committee deems appropriate, a third-party search firm. The Nominating/Corporate
Governance Committee will evaluate each candidate's qualifications and check
relevant references; in addition, such candidates will be interviewed by at
least one member of the Nominating/Corporate Governance Committee. Candidates
meriting serious consideration will meet with all members of the Board. Based on
this input, the Nominating/Corporate Governance Committee will evaluate which of
the prospective candidates is qualified to serve as a Director and whether the
committee should recommend to the Board that this candidate be appointed to fill
a current vacancy on the Board, or presented for the approval of the
stockholders, as appropriate.
The Company has never received a proposal from a stockholder to nominate a
Director. Although the Nominating/Corporate Governance Committee has not adopted
a formal policy with respect to stockholder nominees, the committee expects that
the evaluation process for a stockholder nominee would be similar to the process
outlined above.
BOARD NOMINEES FOR THE 2007 ANNUAL MEETING. Messrs. Henley and Roszak, the
nominees listed in this Proxy Statement, are current Directors standing for
re-election.
9
CODE OF BUSINESS CONDUCT AND ETHICS
The Company has adopted a written code of conduct and ethics (the "Code")
which is applicable to all of the Company's officers, directors and employees,
including the Company's Chief Executive Officer and Chief Financial Officer
(collectively, the "Senior Officers"). In accordance with the rules and
regulations of the SEC and the rules of NYSE Arca, a copy of the Code has been
posted on the Company's website at www.nrvh.com. The Company intends to disclose
any changes in or waivers from the Code applicable to any Senior Officers on its
website or by filing a Form 8-K.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of the copies of the forms furnished to the
Company, or written representations from certain reporting persons, the Company
believes that during the year ended December 31, 2005, all filing requirements
applicable to its officers and directors were complied with by such individuals
except for the following: (1) Mr. Bradley Albrechtsen did not timely file two
Forms 4 in connection with the purchase of shares of Common Stock; (2) Mr. Doy
Henley did not timely file a Form 4 in connection with the purchase of shares of
Common Stock; and (3) Mr. James Roszak did not timely file a Form 4 in
connection with the purchase of shares of Common Stock.
10
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth all compensation awarded to, earned by or
paid to each of the Company's current or former executive officers named below
(the "Named Individuals") for the Company's fiscal periods as specified below:
Long Term All Other
Annual Compensation Compensation Compensation
Name and Year Ended Other Annual
Principal Position December 31, Salary Bonus Compensation (1) Options/SARs
Bradley C. Albrechtsen 2005 $265,000 $40,000 --- 20,000 $4,943 (2)
President and Chief 2004 $265,000 --- --- 50,000 ---
Executive Officer 2003 $220,000 --- --- --- ---
Thomas J. Martini 2005 $172,346 $25,000 --- 16,000 ---
Chief Financial Officer
(3)
Jonathan C. Corn 2005 $215,804 $35,080 --- 3,000 $3,299 (2)
Vice President/General 2004 $212,000 --- --- 10,000 ---
Counsel 2003 $212,000 --- --- --- ---
(1) Except as may be indicated below, the aggregate amount of all perquisites
and other personal benefits paid to each Named Individual is not greater
than either $50,000 or 10% of the total of the annual salary and bonus
reported for either such executive.
(2) Represents the amounts of the Company's matching contributions under the
Company's 401(k) plan.
(3) Mr. Martini was appointed Chief Financial Officer in May 2005.
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION
Compensation decisions during the fiscal year ended December 31, 2005 were
made by the Company's Compensation Committee and by the Board of Directors,
which included Bradley C. Albrechtsen, President and Chief Executive Officer of
the Company. Mr. Albrechtsen did not participate in Board deliberations or
voting concerning his compensation. No executive officer of the Company serves
on the board of directors or compensation committee of any entity that has one
or more executive officers serving on the Company's Board of Directors. No
member of the Compensation Committee is, or ever has been, an employee or
officer of the Company.
EMPLOYMENT AGREEMENTS
Thomas J. Martini, the Company's Chief Financial Officer, is a party to an
employment agreement with the Company dated March 16, 2004 entered into at the
time Mr. Martini was hired as the Company's Treasurer. Mr. Martini was appointed
Chief Financial Officer in May 2005 following the resignation of the Company's
then Chief Financial Officer. This agreement provides for an employment at-will
arrangement and can be terminated by the Company or Mr. Martini at any time.
Effective with his appointment as Chief Financial Officer, Mr. Martini's salary
was adjusted to $200,000 per year. Under the agreement, Mr. Martini is entitled
to certain standard employee benefits pursuant to such agreement.
11
Other than the agreement described above, the Company is not presently a
party to an employment or consulting agreement with any of its executive
officers nor were any such agreements in effect during the fiscal year ended
December 31, 2005.
STOCK OPTION PLANS
1996 Stock Option Plan
----------------------
In October 1996, the Company's Board of Directors adopted and approved the
1996 Stock Option Plan (the "1996 Option Plan"). The 1996 Option Plan is
designed to serve as an incentive for retaining qualified and competent
directors, employees and consultants. The 1996 Option Plan provides for the
award of options to purchase up to 675,000 shares of Common Stock, of which
172,500 shares were subject to outstanding options as of December 31, 2005. The
1996 Option Plan is administered by the Compensation Committee of the Board of
Directors. The Compensation Committee has, subject to the provisions of the 1996
Option Plan, full authority to select Company individuals eligible to
participate in such plan, including officers, directors (whether or not
employees) and consultants. The 1996 Option Plan provides for the awarding of
incentive stock options (as defined in Section 422 of the Internal Revenue Code
(the "Code")) and non-incentive stock options. Options granted pursuant to the
1996 Option Plan will have such vesting schedules and expiration dates as the
Compensation Committee shall establish in connection with each participant in
the 1996 Option Plan, which terms shall be reflected in an option agreement
executed in connection with the granting of the option. During the year ended
December 31, 2005, no options were granted under the 1996 Option Plan.
1997 Stock Option Plan
----------------------
In June 1997, the Company's Board of Directors adopted and approved the
1997 Stock Option Plan (the "1997 Option Plan"). The 1997 Option Plan is
designed to serve as an incentive for retaining qualified and competent
directors, employees and consultants. The 1997 Option Plan provides for the
award of options to purchase up to 900,000 shares of Common Stock, of which
318,750 shares were subject to outstanding options as of December 31, 2005. The
1997 Option Plan is administered by the Board of Directors or, at its option, a
committee of the Board of Directors. The Board (or a designated committee) has,
subject to the provisions of the 1997 Option Plan, full authority to select
Company individuals eligible to participate in such plan, including officers,
directors (whether or not employees) and consultants. The 1997 Option Plan
provides for the awarding of incentive stock options (as defined in Section 422
of the Code) and non-incentive stock options. Options granted pursuant to the
1997 Option Plan will have such vesting schedules and expiration dates as the
Board (or a designated committee) shall establish in connection with each
participant in the 1997 Option Plan, which terms shall be reflected in an option
agreement executed in connection with the granting of the option. During the
year ended December 31, 2005, no options were granted under the 1997 Option
Plan.
12
1999 Stock Option Plan
----------------------
The Company's Board of Directors adopted and approved the 1999 Stock Option
Plan in April 1999 and the amended and restated 1999 Stock Option Plan in April
2000 and again in April 2001 (together, the "1999 Option Plan"). The 1999 Option
Plan is designed to serve as an incentive for retaining qualified and competent
directors, employees and consultants. The 1999 Option Plan provides for the
award of options to purchase up to 1,150,000 shares of Common Stock, of which
581,746 shares were subject to outstanding options as of December 31, 2005. The
1999 Option Plan is administered by the Compensation Committee. The Compensation
Committee has, subject to the provisions of the 1999 Option Plan, full authority
to select Company individuals eligible to participate in such plan, including
officers, directors (whether or not employees) and consultants. The 1999 Option
Plan provides for the awarding of incentive stock options (as defined in Section
422 of the Code) and non-incentive stock options. Options granted pursuant to
the 1999 Option Plan will have such vesting schedules and expiration dates as
the Compensation Committee shall establish in connection with each participant
in the 1999 Option Plan, which terms shall be reflected in an option agreement
executed in connection with the granting of the option. During the year ended
December 31, 2005, 162,000 options were granted under the 1999 Option Plan.
13
OPTIONS GRANTED DURING FISCAL YEAR ENDED DECEMBER 31, 2005
The following table sets forth certain information concerning options
granted during the fiscal year ended December 31, 2005 to the Named Individuals.
Potential realizable
value at assumed annual
rates of stock price
Individual Grants appreciation for
option term (1)
Percent of total Exercise
Name Options options/SARs granted or base
Granted to employees in price
fiscal year (2) ($/Sh) Expiration date 5% ($) 10% ($)
Bradley C. Albrechtsen 20,000 12.3% 6.31 12/9/15 79,367 201,130
Thomas J. Martini 16,000 9.9% 6.31 12/9/15 63,493 160,904
Jonathan C. Corn 3,000 1.9% 6.31 12/9/15 11,905 30,170
(1) The 5% and 10% assumed annual rates of appreciation are mandated by rules of the SEC and do not reflect
estimates or projections of future Common Stock prices. There can be no assurance that the amounts reflected
in this table will be achieved.
(2) This percentage is based on the total number of options granted to the Company's employees during the year
ended December 31, 2005 All options granted to the Named Executive Officers vest in three equal annual
installments on the first, second and third anniversaries of the date of grant.
OPTION VALUES
The following table sets forth, as of December 31, 2005, the number of
options and the value of exercised and unexercised options held by the Named
Individuals.
Value of Unexercised
Number of Unexercised Options in-the-money Options at
at December 31, December 31, 2005 ($)
2005 (1)
------------------------------- --------------------------------
Shares
Name Acquired in Value Realized
Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
-------------------------- --------------- --------------- -------------- ---------------- -------------- -----------------
Bradley C. Albrechtsen 0 0 31,668 53,332 0 7,600
Thomas J. Martini 0 0 1,667 19,333 0 6,080
Jonathan C. Corn 0 0 3,333 9,667 0 1,140
(1) On December 30, 2005, the last trading day of the year 2005, the last reported sales price for the Common Stock
on the New York Stock Exchange was $6.69.
14
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes the Company's equity compensation plan
information as of December 31, 2005. Information is included for both equity
compensation plans approved by the Company's stockholders and equity
compensation plans not approved by the Company's Stockholders.
(c) Common
shares
available for
future
(a) Common (b) issuance under
Plan Category shares to be Weighted-average equity
issued upon exercise compensation
exercise of price of plans
outstanding outstanding (excluding
options, options, securities
warrants, warrants, reflected in
and rights and rights column (a))
--------------- --------------- ----------------
Equity compensation plans approved by
Company stockholders (1) 1,072,996 $ 9.95 844,276
Equity compensation plans not approved by
Company stockholders (2) 7,500 $ 9.33 --
--------------- ----------------
Totals: 1,080,496 $ 9.94 844,276
=============== ================
(1) Please see "Item 11. Executive Compensation - Stock Option Plans" for a description of these plans.
(2) The only outstanding options not previously approved by the Company's stockholders were granted
in October 1996 pursuant to a separate stock option agreement with a former director of the Company
at an exercise price of $9.33. Such option had a term of 10 years.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee continued in 2005 its function of reviewing and
making recommendations to the Board regarding salaries, compensation and
benefits of executive officers and key employees of the Company, including the
granting of stock options. The Committee consists solely of directors who are
not employees of the Company and are independent directors under the rules of
NYSE Arca.
Compensation of the Company's executive officers and key employees consists
of three components: base salary, annual bonuses and long-term incentive awards
in the form of stock options. For each of the three years ended 2001, the
Compensation Committee retained the nationally recognized executive compensation
consulting firm of William M. Mercer, Incorporated ("Mercer") to advise it with
respect to executive and employee compensation and other related matters for
those years. As part of its annual engagement, Mercer presented a report to the
Compensation Committee in which Mercer provided benchmark information on the
senior executive positions with respect to both an industry peer group and
published compensation and proprietary survey information. Mercer also compared
the Company's financial performance to the same peer group and assessed the pay
and performance relationship thereof. The Compensation Committee relied on,
among other factors, Mercer's prior reports in setting compensation levels in
2005 as well as the compensation philosophy contained therein.
15
Base compensation levels have been developed in order to attract and retain
executives and key employees based on their level of responsibility within the
Company. Individual salaries may be higher or lower, based on the qualifications
and experience of the individual as well as Company performance. Base salaries
have been subject to periodic review and adjustment and annual salary
adjustments have been made based on those factors. Bonuses and stock option
grants closely link executive pay with performance in areas key to the Company's
operating success. These areas include sales growth, earnings per share growth,
return on average equity and total shareholder return performance. In the past,
the Company has granted bonuses and stock options to executives and employees
based upon subjective and objective performance criteria relating to both the
Company and the individual, including the level of Company revenues and earnings
and a comparison with the operating results of the Company's peer group, a
person's responsibility level and other performance targets.
Historically, during periods of strong operating performance by the Company
compared to its peer group, based upon the recommendation of the Compensation
Committee, the Company has positioned salaries, together with target bonuses and
stock options, at median compensation levels for comparable positions and
responsibilities in the peer group. During the past three fiscal years, periods
of weak relative operating performance, as a result of the Compensation
Committee's compensation philosophy, the Company positioned total compensation
at or near the bottom of its peer group.
The Compensation Committee uses the same factors and criteria described
above for compensation decisions regarding the Chief Executive Officer, Bradley
C. Albrechtsen. During 2005, Mr. Albrechtsen received a base salary of $265,000.
For 2005, Mr. Albrechtsen was also awarded a bonus of $40,000 and options to
purchase 20,000 shares of the Company's Common Stock.
The Company established the 1996 Stock Option Plan and 1999 Stock Option
Plan, which are administered by the Compensation Committee, and the 1997 Stock
Option Plan, which is administered by the Board. See "Management of the Company
-- Stock Option Plans." The Company adopted these stock option plans in order to
create incentives for retaining qualified and competent employees and maximizing
long-term stockholder values.
The Compensation Committee intends to examine and evaluate the performance
of the Company's officers and employees, through discussions with senior
management and otherwise, and make recommendations to the Board of Directors
with respect to base salary, bonuses and any other elements of compensation in
light of an overriding Company philosophy linking pay and performance.
COMPENSATION COMMITTEE
Doy B. Henley
Gregory McCaffery
James B. Roszak
16
REPORT OF THE AUDIT COMMITTEE
The Audit Committee members are Doy B. Henley, Gregory McCaffery and James
B. Roszak. The Audit Committee assists the Board of Directors in monitoring the
integrity of the Company's financial statements, the Company's compliance with
legal requirements and the Company's internal and external auditors.
The Audit Committee has reviewed and discussed the Company's audited
consolidated balance sheets as of December 31, 2005 and 2004 and consolidated
statements of income, cash flows and stockholders' equity for the three years
ended December 31, 2005 with the Company's management. The Audit Committee has
discussed with Swenson Advisors LLP, the Company's independent auditors for the
year ended December 31, 2005, the matters required to be discussed by Statement
Auditing Standards No. 61 (concerning the accounting methods used in the
financial statements).
The Audit Committee has also received and reviewed written disclosures and
the letter from Swenson Advisors LLP required by Independent Standards Board No.
1 (concerning matters that may affect an auditor's independence) and has
discussed with Swenson Advisors LLP their independence. Based on the foregoing
review and discussions, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2005 for filing with
the SEC.
AUDIT COMMITTEE
Doy B. Henley
Gregory McCaffery
James B. Roszak
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Mr. Robert B. Lee, a director of the Company from 1996 through 2006 and
formerly also an executive officer of the Company, is a partner in a joint
venture which is a party to a lease agreement with Country Coach. Pursuant to
the agreement, Country Coach leases from the joint venture a parcel of property
constituting a majority of Country Coach's manufacturing facilities. During the
year ended December 31, 2005, the Company paid $1.37 million under the lease
agreement. In November 2005, the Company exercised its second and final 5-year
renewal option with the lease set to expire in November 2010. The lease
agreement calls for future payments totaling approximately $6.8 million through
the term of the lease. Lease payments are adjusted in accordance with the
Consumer Price Index.
Heller Ehrman LLP, a law firm in which Mr. Stephen M. Davis, the Secretary
of the Company and a former director, is a shareholder, performed legal services
for the Company for which it collected fees of approximately $0.6 million in the
year ended December 31, 2005.
17
PERFORMANCE GRAPH
Set forth below is a graph comparing cumulative total stockholder returns
(assuming reinvestment of dividends) of the Company; the CRSP Total Return Index
for the NYSE/AMEX/Nasdaq Stock Market (US Companies), comprising all domestic
shares traded in the New York Stock Exchange, American Stock Exchange and Nasdaq
Stock Market; and a self-determined peer group of six companies. The graph
assumes $100 invested on December 29, 2000 in the Company and in each of the
indices. The performance shown in the graph is not necessarily indicative of
future performance.
Graph Omitted
LEGEND
Symbol CRSP Total Returns Index for: 12/2000 12/2001 12/2002 12/2003 12/2004 12/2005
National R.V. Holdings, Inc. 100.00 84.8 51.7 86.1 83.3 57.9
NYSE/AMEX/Nasdaq Stock Market
(US Companies) 100.00 89.3 70.9 93.4 104.9 111.3
Self-Determined Peer Group 100.00 167.3 183.2 279.3 326.2 304.0
Companies in the Self-Determined Peer Group
COACHMEN INDUSTRIES INC FLEETWOOD ENTERPRISES INC
MONACO COACH CORP SKYLINE CORP
THOR INDUSTRIES INC WINNEBAGO INDUSTRIES INC
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/29/2000.
18
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The following table set forth as of December 10, 2006 the number and
percentage of shares of Common Stock held by (i) each of the executive officers,
directors and nominees of the Company, (ii) all persons who are known by the
Company to be the beneficial owners of, or who otherwise exercise voting or
dispositive control over, five percent or more of the Company's outstanding
Common Stock and (iii) all of the Company's present executive officers and
directors as a group:
Common Stock Percentage of
Beneficial Owned(1) Outstanding
Owner
Bradley C. Albrechtsen (2) 59,657 *
Thomas J. Martini (3) 18,558 *
Jonathan C. Corn (4) 7,666 *
Doy B. Henley (5) 129,000 1.2%
David J. Humphreys (6) 7,000 *
Gregory McCaffery (7) 34,162 *
James B. Roszak (8) 61,000 *
Bryant R. Riley (9) 1,199,383 11.6%
Gary N. Siegler (10) 967,858 9.0%
Dimensional Fund Advisors Inc. (11) 800,500 7.7%
Brandes Investment Partners, LP (12) 769,662 7.4%
Robert B. Lee (13) 577,906 5.6%
FMR Group (14) 562,681 5.4%
All executive officers and directors as a group 317,043 3.0%
(7 in number) (15)
__________________
* Less than one percent.
(1) Except as otherwise indicated, the persons named in the table have sole
voting and investment power with respect to the shares of Common Stock
shown as beneficially owned by them. Excludes shares underlying stock
options.
(2) Includes 40,000 shares underlying outstanding options exercisable
immediately or within 60 days.
19
(3) Includes 8,666 shares underlying outstanding options exercisable
immediately or within 60 days.
(4) Includes 7,666 shares underlying outstanding options exercisable
immediately or within 60 days.
(5) Includes 58,000 shares underlying outstanding options exercisable
immediately or within 60 days.
(6) Includes 5,000 shares underlying outstanding options exercisable
immediately or within 60 days.
(7) Includes 33,000 shares underlying outstanding options exercisable
immediately or within 60 days.
(8) Includes 50,000 shares underlying outstanding options exercisable
immediately or within 60 days.
(9) As reported in an Amendment No. 3 to Schedule 13D filed with the SEC by
Bryant R. Riley and certain affiliated parties on December 6, 2006.
(10) As reported in an Amendment No. 19 to Schedule 13D filed with the SEC by
Gary Siegler and certain related parties on April 10, 2006. Includes
420,000 shares underlying outstanding options.
(11) As reported in an Amendment No. 5 to Schedule 13G filed with the SEC by
Dimensional Fund Advisors Inc. on February 6, 2006.
(12) As reported in Amendment No. 3 to Schedule 13G filed with the SEC by
Brandes Investment Partners, LP and certain affiliated parties on February
14, 2006.
(13) As reported in an Amendment No. 2 to Schedule 13D filed with the SEC on
March 28, 2006. Includes 136,870 shares of Common Stock owned by Mr. Lee's
wife and 30,000 shares held by Mr. Lee's daughters.
(14) As reported in an Amendment No. 6 to Schedule 13G filed with the SEC on
behalf of FMR Group and certain affiliated parties on September 11, 2006.
(15) Includes the shares underlying stock options reported in notes 2 through 8
above.
20
OTHER MATTERS
The Board of Directors is not currently aware of any other matters to be
transacted at the Annual Meeting. However, if any other matter should properly
come before the Annual Meeting or any adjournment thereof, the persons named in
the accompanying proxy intend to vote on such matters as they, in their
discretion, may determine, subject, in any event, to the requirements of
Delaware Law.
The Company will bear all costs of soliciting proxies in the accompanying
form. Solicitation will be made by mail, and officers of the Company may also
solicit proxies by telephone or personal interview. In addition, the Company
expects to request persons who hold shares in their names for others to forward
copies of this proxy soliciting material to them and to request authority to
execute proxies in the accompanying form, and the Company will reimburse such
persons for their out-of-pocket and reasonable clerical expenses in doing this.
REGULATORY CERTIFICATIONS
The Company submitted a CEO Certification to NYSE Arca in 2006 and,
separately, filed Section 302 CEO and CFO certifications with the SEC as
exhibits to its Annual Report on Form 10-K for the year ended December 31, 2005.
ANNUAL REPORT
The Company's audited financial statements for the year ended December 31,
2005 and certain other related financial and business information of the Company
are contained in the Company's Annual Report on Form 10-K, as amended on Form
10-K/A, previously mailed to all Stockholders in April 2006. The Form 10-K and
other reports that the Company files with or furnishes to the SEC are available
on the Company's website, www.nrvh.com. The Company makes this information
available on its website free of charge as soon as reasonably practicable after
it has electronically filed the information with, or furnished it to, the SEC.
In addition, a Stockholder may request a free copy of the Form 10-K by
contacting the Company's Investor Relations Department by mail at 100 West
Sinclair Street, Perris, CA 92571 or by calling 951-436-3000.
21
STOCKHOLDER PROPOSALS FOR ANNUAL MEETING
FOR YEAR ENDED DECEMBER 31, 2006
The Company expects to hold another annual meeting later in 2007 with
respect to its fiscal year ended December 31, 2006. Any proposal which an
eligible stockholder wishes to include in the proxy or information statement for
such Annual Meeting of Stockholders must be received by the Company at its
principal executive offices at 100 West Sinclair Street, Perris, California
92571, a reasonable time before the Company begins to print and mail its proxy
materials for such Annual Meeting, and otherwise in accordance with the
procedures set forth in the Company's By-Laws.
By Order of the Board of Directors
/s/ Stephen M. Davis
Stephen M. Davis
Secretary
Dated: December 28, 2006
22
NATIONAL R.V. HOLDINGS, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 31, 2007
The undersigned hereby appoints Bradley C. Albrechtsen and Thomas J.
Martini proxies of the undersigned, with full power of substitution, to vote all
shares of Common Stock, par value $.01 per share, of National R.V. Holdings,
Inc., a Delaware Corporation (the "Company"), the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Company to be held on
Wednesday, January 31, 2007 at 9:00 a.m., Pacific Daylight Time, at the
Company's headquarters, 100 West Sinclair Street, Perris, California 92571, or
any adjournments or postponements thereof, with all the powers the undersigned
would have if personally present on the following matters:
1. Election of the following WITHHOLD
nominees to serve as AUTHORITY
Class III Directors until FOR to vote
the 2009 Annual Meeting of the for the
Stockholders. nominees nominees
[ ] [ ]
NOMINEES: Doy B. Henley and James B. Roszak
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.
------------------------------------------------------------
2. Proposal to ratify and
approve the selection by the
Board of Directors of
Swenson Advisors, LLP FOR AGAINST ABSTAIN
as the Company's independent [ ] [ ] [ ]
public accountants for the fiscal
year to end December 31, 2006.
3. In their discretion, the above-named
proxies are authorized to vote in
accordance with their own judgment
upon such other matters as may properly
come before the Annual Meeting or any
adjournments or postponements thereof.
This proxy when properly executed, will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is indicated, this
proxy will be voted "FOR" the election of the nominees for Director in Item 1
and "FOR" Item 2 and the proxies will use their discretion with respect to any
matters referred to in Item 3.
The undersigned stockholder(s) acknowledges receipt of an accompanying
Notice of Annual Meeting of Stockholders and accompanying Proxy Statement dated
December 28, 2006.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
Dated: , 2007
Signature(s):
------------------------------------------------
(Note: Please complete, date and sign exactly as your name appears hereon. When
signing as attorney, administrator, executor, guardian, trustee or corporate
official, please add your title. If shares are held jointly, each holder should
sign.)
RETURN THIS PROXY IN THE ENCLOSED ENVELOPE