SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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Check the appropriate box:
[ ] Preliminary Proxy Statement
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14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Nobility Homes, Inc.
(Name of Registrant as Specified in its Charter)
-------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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4) Date Filed:
NOBILITY HOMES, INC.
Notice and Proxy Statement
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 4, 2005
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the annual meeting of the shareholders of
NOBILITY HOMES, INC. will be held on Friday, the 4th day of March, 2005, at
10:00 A.M. local time, at the Ocala Hilton, 3600 S.W. 36th Avenue, Ocala,
Florida.
The meeting will be held for the following purposes:
1. To elect a board of five directors.
2. To transact such other business as may properly come before the
meeting or any adjournment.
To be sure that your shares will be represented at the meeting, please
date, sign and return your proxy, even if you plan to attend in person. A form
of proxy and a self-addressed, postage prepaid envelope are enclosed. If you do
attend the meeting, you may withdraw your proxy and vote in person.
By Order of the Board of Directors,
Jean Etheredge, Secretary
DATED: February 4, 2005
TABLE OF CONTENTS
Page
PRINCIPAL HOLDERS OF COMPANY'S COMMON SHARES..................................2
NOMINATION AND ELECTION OF DIRECTORS..........................................3
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.......................4
BOARD OF DIRECTORS AND COMMITTEES.............................................5
EXECUTIVE COMPENSATION........................................................6
SUMMARY COMPENSATION TABLE....................................................7
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION.......................7
SHAREHOLDER RETURN PERFORMANCE................................................9
AUDIT COMMITTEE REPORT.......................................................10
CERTAIN TRANSACTIONS.........................................................11
INDEPENDENT PUBLIC ACCOUNTANTS...............................................11
SHAREHOLDER PROPOSALS AND COMMUNICATION WITH THE BOARD OF DIRECTORS..........13
ANNUAL REPORT................................................................13
OTHER MATTERS................................................................14
EXPENSES OF SOLICITATION.....................................................14
APPENDIX A AUDIT COMMITTEE CHARTER...........................................15
i
NOBILITY HOMES, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 4, 2005
This proxy material and the enclosed form of proxy are being sent to
the shareholders of Nobility Homes, Inc. on or about February 4, 2005, in
connection with the solicitation by Nobility's board of directors of proxies to
be used at the annual meeting of the shareholders of Nobility. The meeting will
be held at the Ocala Hilton, 3600 S.W. 36th Avenue, Ocala, Florida, at 10:00
A.M., local time, on Friday, March 4, 2005.
If the enclosed form of proxy is executed and returned, you may revoke
it at any time if it has not yet been exercised, by delivering a later dated
proxy or written notice of revocation to the Secretary of the meeting or by
attending the annual meeting and electing to vote in person. The shares
represented by the proxy will be voted unless the proxy is received in such form
as to render it not votable. The proxy is in ballot form so that you may
specifically grant or withhold authority to vote for the election of each
director. Unless you direct otherwise, the shares represented by the proxy will
be voted "for" the election of each director nominated by the board of
directors. Directors will be elected by a plurality of the votes cast by shares
entitled to vote at the meeting.
Shareholders of record at the close of business on January 28, 2005,
will be entitled to vote. Each share of common stock is entitled to one vote on
any matter to come before the meeting. As of January 28, 2005, Nobility had
4,039,132 shares of common stock outstanding and entitled to vote.
The complete mailing address of Nobility's principal executive office
is P.O. Box 1659, Ocala, Florida 34478.
PRINCIPAL HOLDERS OF COMPANY'S COMMON SHARES
The following table sets forth, as of January 28, 2005, information as
to the $.10 par value common stock of Nobility owned beneficially, directly or
indirectly, (1) by each person who is known by Nobility to own beneficially more
than 5% of Nobility's outstanding voting securities, (2) by each director, (3)
by each executive officer named in the summary compensation table set forth
elsewhere herein and (4) by all directors and executive officers as a group:
Name and Address Number of Common
of Beneficial Owner(1) Shares Beneficially Owned(2) Percent of Class
------------------- ------------------------- ----------------
Terry E. Trexler Irrevocable Trust(3) 2,180,535(5) 53.99%
Kay Charlton, Trustee(4)
P. O. Box 2146
Winter Park, Florida 32790
Terry E. Trexler(6) 2,697(7) *
3741 S.W. 7th Street
Ocala, Florida 34474
Thomas W. Trexler(8) 454,482(9) 10.87%
3741 S.W. 7th Street
Ocala, Florida 34474
Richard C. Barberie(8) 825 *
15300 SE 140 Avenue Road
Weirsdale, Florida 32195
Robert P. Holliday (8) 4,935 *
931 NW 37th Avenue
Ocala, Florida 34475
Robert P. Saltsman (8) 2,537 *
222 South Pennsylvania Avenue,
Suite 200
Winter Park, Florida 32789
Gabelli Group(10) 280,246 6.94%
One Corporate Center
Rye, New York 10580
Directors and 511,326(4)(6) 12.22%
Executive Officers
(8 persons)
_____________________
*Less than 1%
(1) Information contained in this table is based upon information furnished
by the beneficial owners.
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(2) Unless otherwise noted, all shares are owned directly with sole voting
and dispositive power.
(3) Mr. Terry Trexler established this trust for personal estate and tax
planning reasons. Mr. Trexler is the sole beneficiary of the trust and
has no voting or dispositive power with respect to the shares held by
the trust.
(4) Ms. Charlton is the trustee of the Terry E. Trexler Irrevocable Trust
and as such is vested with sole voting and dispositive power with
respect to all shares owned by the trust.
(5) All shares are owned directly by the Terry E. Trexler Irrevocable Trust.
Ms. Charlton has no pecuniary interest in the shares.
(6) Mr. Terry Trexler is President and Chairman of the Board of Nobility.
Additional information is contained under "Nomination and Election of
Directors".
(7) Includes 2,040 shares held in trust for the benefit of Mr. Trexler's
grandchild and 657 shares owned through Nobility's 401(K) plan.
(8) Mr. Thomas Trexler is Executive Vice President and a director of
Nobility. Messrs. Barberie, Holliday and Saltsman are directors of
Nobility. Additional information is contained under "Nomination and
Election of Directors".
(9) Includes 141,600 shares subject to presently exercisable options and 613
shares owned through Nobility's 401(K) plan.
(10) Mario J. Gabelli, Gabelli Group Capital Partners, Inc., Gabelli Asset
Management, Inc., Gabelli Funds, LLC, GAMCO Investors, Inc., Gabelli
Advisers, Inc., Gabelli Securities, Inc., Gabelli & Company, Inc.,
Gabelli & Company, Inc. Profit Sharing Plan, MJG Associates, Inc.,
Gabelli Foundation, Inc., Lynch Corporation and Lynch Interactive
Corporation collectively beneficially own the shares.
NOMINATION AND ELECTION OF DIRECTORS
At the meeting, a board of five directors will be elected to serve for
one year and until the election and qualification of their successors. Your
proxy will be voted, unless you withhold authority to do so, for the election as
directors of the persons named below, who have been nominated by Nobility's
current board of directors.
The bylaws of Nobility provide that Nobility's board shall be made up
of no fewer than one nor more than ten directors. The current board of directors
has determined that five directors are appropriate for the present time. Proxies
cannot be voted for more than five nominees.
Each nominee has consented to being named as such in this proxy
statement and is at present available for election. Each nominee presently is a
member of the board, having been elected as such at the last annual meeting of
the shareholders.
If any nominee should become unavailable, the persons voting the
accompanying proxy may, in their discretion, vote for a substitute. Additional
information concerning the nominees, based on data furnished by them, is set
forth below. Terry E. Trexler is the father of Thomas W. Trexler.
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The board of directors of Nobility recommends a vote "for" the election
of each of the following nominees. Proxies solicited by the board of directors
will be so voted unless shareholders specify in their proxies a contrary choice.
Year
First
Name Became
(Age) Principal Occupation or Employment; Certain Other Directorships Director
- ------------------------------------------------------------------------------------------------------------------------------
Terry E. Trexler Chairman of the Board and President of Nobility for more than five years; Mr. 1967
(65) Trexler is also President of TLT, Inc.
Thomas W. Trexler Executive Vice President and Chief Financial Officer of Nobility since December 1993
(41) 1994; President of Prestige Home Centers, Inc. since June 1995; Director of
Prestige since 1993 and Vice President from 1991 to June 1995; President of Mountain
Financial, Inc. since August 1992; Vice President of TLT, Inc. since September 1991
Richard C. Barberie Vice President of Purchasing of Nobility from December 1994 until his retirement in 1975
(66) June 1995; Executive Vice President of Nobility for more than five years prior to
December 1994
Robert P. Holliday President of Chariot Eagle, Inc. (which is engaged in the park model and 1996
(66) manufactured home business) since 1984 and President of Chariot Eagle-West, Inc.
since 1995
Robert P. Saltsman Attorney and CPA in private practice since 1983; prior to 1983 Mr. Saltsman was 1988
(52) employed as a CPA by Arthur Andersen & Co. in Orlando, Florida
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act, a Form 4 reporting
the acquisition or disposition of Company securities by an officer, director or
10% shareholder must be filed with the Securities and Exchange Commission no
later than the second business day after the date on which the transaction
occurred unless certain exceptions apply. Most transactions not reported on Form
4 must be reported on Form 5 within 45 days after the end of Nobility's fiscal
year. Based on information provided by Nobility's directors and executive
officers, during the fiscal year ended November 6, 2004, all required reports
were filed when due except as follows:
On each of March 17, 2004, June 11, 2004 and September 15, 2004, 100
shares of restricted stock were granted to both Jean Etheredge and John Cramer.
Through inadvertence, the restricted stock grants were not reported on Form 4
within two business days. The original grants were reported in Form 4 filings on
January 31, 2005.
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BOARD OF DIRECTORS AND COMMITTEES
The board of directors of Nobility is comprised of a majority of
independent directors. The board of directors has determined that Messrs.
Richard Barberie, Robert Holliday and Robert Saltsman are all independent
according to current Nasdaq rules. During the fiscal year ended November 6,
2004, the board of directors of Nobility held four regular meetings and one
special meeting. All directors of Nobility attended 100% of the meetings of the
board of directors and committees of the board on which they served. During the
year ended November 6, 2004, directors who were not employees of Nobility were
paid quarterly fees of $1,500.
We have adopted a code of ethics that applies to the principal
executive officer, principal financial officer, executive vice presidents and
controller. The code has been designed in accordance with provisions of the
Sarbanes-Oxley Act of 2002, to promote honest and ethical conduct. Our code of
ethics is available on our website at www.nobilityhomes.com.
Nobility presently has three standing committees of its board of
directors, an audit committee, a salary review committee and a nominating
committee.
Salary Review Committee. The salary review committee is presently
comprised of Messrs. Richard Barberie, Robert Holliday and Robert Saltsman. The
salary review committee meets each quarter and recommends to the board of
directors the salaries and bonuses, if any, to be paid to the officers of
Nobility. The salary review committee met four times during fiscal year 2004.
Audit Committee. Nobility's audit committee has been established in
accordance with Section 3(a)(58)(A) of the Securities Exchange Act. During
fiscal 2004, Nobility's audit committee was comprised of Messrs. Robert
Saltsman, Robert Holliday and Richard Barberie, all of whom are considered
independent under current Nasdaq rules. The audit committee has a written
charter which establishes the scope of the committee's responsibilities and how
it is to carry out those responsibilities. A copy of the audit committee's
charter is attached as Appendix A to this proxy statement. The audit committee
charter charges the committee with overseeing management's conduct of Nobility's
financial reporting process, including (1) the integrity of the financial
statements of Nobility, (2) the compliance by Nobility with legal and regulatory
requirements, and (3) the independence and performance of Nobility's internal
and external auditors. The audit committee met four times during fiscal 2004.
Our board of directors has determined that Mr. Robert Saltsman is the
audit committee financial expert, and is independent as defined by Rule
4200(a)(15) of the National Association of Securities Dealers, Inc.
Nominating Committee. The board of directors has established a
nominating committee comprised of Messrs. Robert Saltsman, Robert Holliday and
Richard Barberie, all of whom are considered independent under current Nasdaq
rules. The nominating committee's charter is available on our website at
www.nobilityhomes.com. Our bylaws include provisions that address the process by
which shareholders may nominate an individual to stand for election to the board
5
at our annual meeting of shareholders. For additional information, see
"Shareholder Proposals and Communication with the Board of Directors" elsewhere
in this proxy statement.
In evaluating director nominees, including candidates submitted by
shareholders, the nominating committee will consider the candidate's experience,
integrity, ability to make independent analytical inquiries, understanding of
our business environment and willingness to devote adequate time to board
duties. The nominating committee will also consider whether a candidate meets
the definition of "independent director" under Nasdaq rules. There are no stated
minimum criteria for director nominees, and the nominating committee may also
consider such other factors as it deems to be in the best interest of Nobility
and its shareholders.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by
Nobility for services rendered during the years indicated by Nobility's Chief
Executive Officer and its Executive Vice President, the only other executive
officer who had total salary and bonus exceeding $100,000 during the fiscal year
ended November 6, 2004. Nobility did not grant any restricted stock awards or
stock appreciation rights or make any long-term incentive plan payouts to the
named executive officers during the years indicated.
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SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
Awards
Securities
Name & Principal Year Underlying All Other
Position Ended Salary Bonus Options/SAR's Compensation
-------- ----- ------ ----- ------------- ------------
Terry E. Trexler 11/06/04 $ 93,500 $ 100,000 ---- $ 39,395(1)
President and 11/02/03 $ 93,500 $ 100,000 ---- $ 39,395(1)
Chairman of 11/03/02 $ 93,500 $ 100,000 ---- $ 39,395(1)
the Board
Thomas W. Trexler 11/06/04 $ 75,036 $ 100,000 ---- $ 16,220(2)
Executive Vice 11/01/03 $ 75,036 $ 100,000 ---- $ 16,220(2)
President 11/02/02 $ 75,036 $ 100,000 ---- $ 16,220(2)
- ----------------
(1) All other compensation represents insurance premiums paid or accrued by
Nobility on two life insurance policies on the life of Mr. Terry E.
Trexler. The proceeds of the two policies will be paid to Mr. Trexler's
designated beneficiaries in the event of his death.
(2) Represents the total annual premiums paid or accrued by Nobility on a
insurance policy on the life of Mr. Thomas W. Trexler. In the event of Mr.
Trexler's death, the proceeds will be paid to Mr. Trexler's designated
beneficiaries.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Nobility's salary review committee (the "salary review committee")
consists of Messrs. Richard Barberie, Robert Holliday and Robert Saltsman.
Nobility's executive compensation policy seeks to fairly compensate executives
for their performance and contributions to Nobility and to provide incentives
that will attract and retain key employees. Compensation of executive officers
for fiscal 2004 performance generally consisted of a base salary and profit
bonuses tied to the performance of Nobility.
Base salaries and profit bonuses historically have been reviewed and
adjusted from time to time based primarily on a non-quantitative assessment of
factors such as an individual's performance, contributions, changes in job
responsibilities and Nobility's performance and economic conditions. The salary
7
review committee reviewed and approved the base salary and the profit bonuses
provided to executive officers in fiscal 2004. In doing so the salary review
committee considered (i) Nobility's financial results for fiscal 2004 and the
continued improvement in the financial condition of Nobility and (ii) certain
non-quantitative factors, with emphasis on the qualitative performance of
Nobility's executives. It is an objective of the salary review committee to
maintain base salaries that are reflective of the individual executive's
experience and responsibilities level, and that are competitive with the salary
levels of executives at other companies engaged in the same or similar line of
business with revenues in a range comparable to those of Nobility.
The base salary of the Chairman, President and Chief Executive Officer
has remained unchanged at his request. His bonuses are tied directly to the net
profit before income taxes of the overall Company and are approved on a
quarterly basis by the salary review committee. It is the committee's belief
that the CEO is undercompensated compared to the compensation paid to chief
executive officers by other companies in the industry of similar size and
performance. However, it is the CEO's desire to maintain his compensation in its
present range, with a major incentive for his performance taking the form of
increases in the value of his substantial stock ownership in Nobility.
Section 162(m) of the Internal Revenue Code, enacted in 1993, precludes
a public corporation from deducting compensation of more than $1 million each
for its chief executive officer or for any of its four other highest paid
officers. Certain performance-based compensation is exempt from this limitation.
Because non-exempt options and other forms of compensation to Nobility's
officers are not expected to be anywhere near $1 million, the salary review
committee does not presently have a policy regarding whether it would authorize
compensation that would not be deductible for Nobility for federal income tax
purposes by reason of Section 162(m).
Robert Holliday, Chairman
Richard Barberie
Robert Saltsman
8
SHAREHOLDER RETURN PERFORMANCE
The following graph compares Nobility's cumulative total shareholder
return on its common stock from November 6, 1999, to November 6, 2004, with the
cumulative total return of a peer issuer group selected by Nobility and the
Nasdaq Market Index.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG NOBILITY HOMES, INC.,
NASDAQ MARKET INDEX AND PEER GROUP INDEX
------------------------ FISCAL YEAR ENDING -----------------------
COMPANY/INDEX/MARKET 11/05/1999 11/03/2000 11/02/2001 11/01/2002 10/31/2003 11/05/2004
Nobility Homes Inc 100.00 108.89 151.06 162.68 186.49 372.26
Customer Selected Stock List 100.00 59.77 81.23 48.42 76.12 93.80
NASDAQ Market Index 100.00 117.61 58.98 47.46 68.93 70.45
ASSUMES $100 INVESTED ON NOVEMBER 6, 1999
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED NOVEMBER 6, 2004
(1) Nobility has selected the following peer issuer group for comparison
purposes:
Cavalier Homes, Inc. Liberty Homes, Inc. CL A
Champion Enterprises, Inc. Palm Harbor Homes, Inc.
Fleetwood Enterprises Skyline Corp.
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AUDIT COMMITTEE REPORT
The purpose of the audit committee is to assist the board of directors
in its oversight of management's conduct of Nobility's financial reporting
process. During the fiscal year ended November 6, 2004 the audit committee was
comprised of Messrs. Robert Saltsman, Robert Holliday and Richard Barberie, each
of whom is "independent" under current Nasdaq rules. For the fiscal year ended
November 6, 2004 the audit committee:
* Reviewed and discussed Nobility's fiscal 2004 financial
statements with management and representatives of Tedder, James,
Worden & Associates, P.A., Nobility's independent public
accountants;
* Discussed with Tedder, James, Worden & Associates, P.A. the
matters required to be discussed by Statement on Auditing
Standards Nos. 61, 89 and 90;
* Received the written disclosures and the letter from Tedder,
James, Worden & Associates, P.A. required by Independence
Standards Board Standard No. 1, and discussed with Tedder,
James, Worden & Associates, P.A. its independence; and
* Based on the foregoing review, discussions and disclosures,
recommended to the board of directors that Nobility's audited
financial statements for the fiscal year ended November 6,
2004 be included in Nobility's annual report on Form 10-K for
the fiscal year.
Robert Saltsman, Chairman
Robert Holliday
Richard Barberie
10
CERTAIN TRANSACTIONS
Nobility is the owner and beneficiary of three life insurance policies
on the life of Terry E. Trexler, having an aggregate death benefit of
approximately $2 million. In September 2001 Nobility entered into an agreement
with Mr. Trexler the proceeds of these life insurance policies will be used to
purchase shares of Company common stock from his estate. The number of shares to
be purchased will be determined by dividing the amount of the insurance proceeds
by the average closing price of Nobility's common stock for the five days prior
to Mr. Trexler's death.
During prior years Nobility paid premiums in the aggregate amount of
approximately $597,000 on two split dollar life insurance policies insuring Mr.
Trexler and naming his family as beneficiaries. The net cash surrender value of
these policies was pledged to Nobility as collateral for these advances.
Subsequent to November 1, 2003, all premiums previously paid by Nobility were
repaid.
Terry E. Trexler and Thomas W. Trexler each own 50% of the stock of
TLT, Inc., which develops, owns and manages manufactured home communities in
Florida that cater to the retirement market. During fiscal 2004, the Company had
sales to TLT manufactured home communities of $83,260. Management of Nobility
anticipates that TLT and related manufactured homes communities will continue to
purchase homes from Nobility during fiscal 2005 and beyond until TLT's
manufactured home communities are built out.
INDEPENDENT PUBLIC ACCOUNTANTS
On July 15, 2003, we dismissed our auditors, PricewaterhouseCoopers LLP
("PWC") and appointed Tedder, James, Worden & Associates, P.A. ("Tedder, James")
as our new independent auditors, effective July 15, 2003. This change was
approved by the audit committee.
During the two fiscal years ended November 2, 2002, and November 3,
2001, and the subsequent interim period through July 15, 2003, there were no
disagreements between us and PWC on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to PWC's satisfaction, would have caused PWC to
make reference to the subject matter of the disagreement in connection with its
reports on our financial statements for such years.
None of the reportable events described under Item 304(a)(1)(v) of
Regulation S-K occurred within the two fiscal years of Nobility ended November
2, 2002 and November 3, 2001 or within the subsequent interim period through
July 15, 2003.
The audit reports of PWC on our financial statements as of November 2,
2002 and for the fiscal years ended November 2, 2002 and November 3, 2001 did
not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting principles.
11
During the two fiscal years of Nobility ended November 2, 2002 and
November 3, 2001 or within the subsequent interim period through July 15, 2003,
Nobility did not consult with Tedder, James on (i) the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that may be rendered on Nobility's financial statements, and
neither a written report nor oral advice was provided to Nobility that Tedder,
James concluded was an important factor considered by Nobility in reaching a
decision as to any accounting, auditing or financial reporting issues; or (ii)
the subject of any disagreement, as defined in Item 304(a)(1)(iv) of Regulation
S-K and the related instructions, or reportable event.
A letter from PWC is attached as an exhibit to our current report on
Form 8-K filed with the Securities and Exchange Commission on July 22, 2003.
The board of directors has selected Tedder, James, Worden & Associates,
P.A. to serve as our independent certified public accountants for the current
fiscal year ending November 5, 2005. That firm has served as our auditors
beginning on June 15, 2003 for the fiscal years ended November 1, 2003 and
November 6, 2004. A representative of Tedder, James, Worden & Associates, P.A.
is expected to be present at the annual meeting of shareholders and will be
accorded the opportunity to make a statement, if he so desires, and to respond
to appropriate questions from shareholders.
The following table provides information relating to the fees PWC and
Tedder James billed or will bill to Nobility for the fiscal years ended November
6, 2004 and November 1, 2003.
Audit Audit-Related Tax All Other Total
Fees(1) Fees(2) Fees(3) Fees Fees
---- ---- ---- ---- ----
Fiscal Year 2004
-- Tedder, James only $ 47,500 $ 10,500 $ 10,000 $ 1,400 $ 69,400
Fiscal Year 2003
-- PWC $ 0 $ 10,000 $ 0 $ 765 $ 10,765
-- Tedder, James $ 45,000 $ 3,500 $ 9,500 $ 587 $ 58,587
(1) Audit fees include all fees for services in connection with the annual audit
for Nobility.
(2) Audit-related fees include all fees for services in connection with the
review of quarterly financial statements of Nobility.
(3) Tax fees are for preparation of federal and state income tax returns. The
audit committee discussed these services with Tedder, James and determined that
their provision would not impair Tedder, James' independence.
12
All decisions regarding selection of independent accounting firms and
approval of accounting services and fees are made by our audit committee in
accordance with the provisions of the Sarbanes-Oxley Act of 2002. There are no
exceptions to the policy of securing pre-approval of our audit committee for any
service provided by our independent accounting firm.
SHAREHOLDER PROPOSALS AND
COMMUNICATION WITH THE BOARD OF DIRECTORS
Any shareholder desiring to present a proposal to be included in
Nobility's proxy statement pursuant to Rule 14a-8 for the next annual meeting of
the shareholders scheduled to be held in early March 2006, should submit a
written copy of such proposal to the principal offices of Nobility no later than
October 7, 2005. Notice to Nobility of a shareholder proposal submitted
otherwise than pursuant to Rule 14a-8 will be considered untimely if received by
Nobility after December 6, 2005, and the persons named in proxies solicited by
Nobility's board for its annual meeting of shareholders to be held in 2006 may
exercise discretionary voting power with respect to any such proposal as to
which Nobility does not receive timely notice. Proposals should be submitted by
certified mail, return receipt requested.
Shareholders who wish to communicate with the board of directors or
with a particular director may send a letter to the Secretary of Nobility at
P.O. Box 1659, Ocala, Florida 34478. The mailing envelope should contain a clear
notation indicating that the enclosed letter is a "Shareholder-Board
Communication" or "Shareholder-Director Communication." All such letters should
identify the author as a shareholder and clearly state whether the intended
recipients are all members of the board or just certain specified individual
directors. The Secretary will make copies of all such letters and circulate them
to the appropriate director or directors.
Nobility does not have a formal policy requiring directors to attend
annual meetings. However, because the annual meeting generally is held on the
same day as a regular board meeting, Nobility anticipates that directors would
attend the annual meeting unless, for some reason, they are unable to attend the
board meeting on the same date. All directors attended the 2004 annual meeting.
ANNUAL REPORT
A copy of Nobility's annual report for the fiscal year ended November
6, 2004, accompanies this proxy statement. Any shareholder who would like an
additional copy of the annual report may obtain one by writing the Treasurer of
Nobility at Post Office Box 1659, Ocala, Florida 34478.
13
OTHER MATTERS
Management does not know of any other matters to come before the
meeting. However, if any other matters properly come before the meeting, it is
the intention of the persons designated as proxies to vote in accordance with
their best judgment on such matters.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by Nobility. Nobility does
not expect to pay any compensation for the solicitation of proxies but may
reimburse brokers and other persons holding stock in their names, or in the
names of nominees, for their expenses of sending proxy material to principals
and obtaining their proxies.
Please specify your choices, date, sign and return the enclosed proxy
in the enclosed envelope, postage for which has been provided. Prompt response
is helpful. Your cooperation will be appreciated.
Date: February 4, 2005
14
APPENDIX A
AUDIT COMMITTEE CHARTER
NOBILITY HOMES, INC.
Purpose
-------
The Audit Committee is appointed by the Board of Directors with the
primary purpose of assisting the Board in fulfilling its responsibility to
oversee management's conduct of the Company's financial reporting process,
including (1) the integrity of the financial statements of the Company, (2) the
compliance by the Company with legal and regulatory requirements, and (3) the
independence and performance of the Company's internal and external auditors.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities and personnel of the Company and the power to retain outside
counsel, auditors or other experts for this purpose. The Board and the Committee
are in place to represent the Company's shareholders; accordingly, the outside
auditor is ultimately accountable to the Board and the Committee. The Audit
Committee may request any officer or employee of the Company or the Company's
outside counsel or independent auditor to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee.
Membership
----------
The Committee shall be comprised of not less than three member of the
Board, and the Committee's composition will meet the requirement of the Audit
Committee Policy of the NASD.
According, all of the members will be directors:
1. Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company; and
2. Who are financially literate or who become financially literate
within a reasonable period of time after appointment to the Committee. In
addition, at least one member of the Committee shall have accounting or related
financial management expertise.
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Key Responsibilities
--------------------
The Committee's job is one of oversight and it recognizes that the
Company's management is responsible for preparing the Company's financial
statements and that the outside auditors are responsible for auditing those
financial statements. Additionally, the Committee recognizes that financial
management, as well as the outside auditors, have more time, knowledge and more
detailed information on the Company than do Committee members; consequently, in
carrying out its oversight responsibilities, the Committee is not providing any
expert or special assurance as to the Company's financial statements or any
professional certification as to the outside auditor's work.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this guide
as appropriate given the circumstances.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.
2. Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles as well as
the adequacy of internal controls that could significantly affect the Company's
financial statements.
3. Review an analysis prepared by management and the independent
auditor of significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial statements.
4. Review with management and the independent auditor the Company's
quarterly financial statements prior to the release of quarterly earnings.
5. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor and
control such exposures.
6. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent auditor, internal
auditors or management.
7. Recommend to the Board the appointment of the independent auditor,
which firm is ultimately accountable to the Audit Committee and the Board.
8. Approve the fees to be paid to the independent auditor.
9. Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, and if so
16
determined by the Audit Committee, recommend that the Board take appropriate
action to satisfy itself of the independence of the auditor.
10. Evaluate together with the Board the performance of the independent
auditor and, if so determined by the Audit Committee, recommend that the Board
replace the independent auditor.
11. Review the appointment and replacement of the senior internal
auditing executive.
12. Review the significant reports to management prepared by the
internal auditing department and management's responses.
13. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit.
14. Obtain from the independent auditor assurance that Section 10A of
the Private Securities Litigation reform Act of 1995 has not been implicated.
15. Obtain reports from management, the Company's senior internal
auditing executive and the independent auditor that the Company's
subsidiary/foreign affiliated entities are in conformity with applicable legal
requirements and the Company's Code of Conduct.
16. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the conduct of
the audit.
17. Review with the independent auditor any problems or difficulties
the auditor may have encountered and any management letter provided by the
auditor and the Company's response to that letter. Such review should include:
a) Any difficulties encountered during the course of the audit
work, including any restrictions on the scope of activities or
access to required information.
b) Any changes required in the planned scope of the internal
audit.
c) The internal audit department responsibilities, budget and
staffing.
18. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy statement.
19. Advise the Board with respect to the Company's policies and
procedures regarding compliance with applicable laws and regulations and with
the company's Code of Conduct.
20. Review with the Company's general counsel legal matters that may
have a material impact on the financial statements, the Company's compliance
policies and any material reports or inquiries received from regulators or
governmental agencies.
21. Meet at least annually with the chief financial officer, the senior
internal audit executive and the independent auditor in separate executive
sessions.
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22. The Audit Committee shall make regular report to the Board.
While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor. Nor is it
the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations and the Company's Code of Conduct.
18
|X| PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE NOBILITY HOMES, INC.
With- For all
For hold Except
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL Proposal 1. Election of Directors |_| |_| |_|
MEETING OF SHAREHOLDERS MARCH 4, 2005 nominated by the
Board of Directors
(except as marked to the
contrary below):
The undersigned, having received the Notice of Annual Meeting of
Shareholders and Proxy Statement appoints Terry E. Trexler and Jean
Etheredge, and each or either of them, as proxies, with full power of
substitution and resubstitution, to represent the undersigned and to
vote all shares of common stock of Nobility Homes, Inc., which the
undersigned is entitled to vote at the Annual Meeting of Shareholders
of the Company to be held on March 4, 2005 and at any and all
adjournments thereof, in the manner specified.
Terry E. Trexler, Richard C. Barberie, Robert P.
Holliday, Robert P. Saltsman and Thomas W.
Trexler
INSTRUCTION: To withhold authority to vote for any
individual nominee, mark "For All Except" and write
that nominee's name in the space provided below.
-------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO
DIRECTION IS INDICATED, WILL BE VOTED "FOR" ELECTION
OF THE DIRECTORS.
Should any other matters requiring a vote of the
shareholders arise, the above named proxies are
authorized to vote the same in accordance with their
best judgment in the interest of the Company. The
Board of Directors is not aware of any matter which
is to be presented for action at the meeting other
than the matters set forth herein.
Please be sure to sign and date Date
This Proxy in the box below.
------------------------------------ Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such.
Shareholder sign above Co-holder (if any) sign above
- -------------------------------------------------------------------------
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Detach above card, sign, date and mail in postage paid envelope provided.
NOBILITY HOMES, INC.
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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