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Indiana | 2452 | 35-1101097 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (IRS Employer Identification No.) |
Delaware | 3711 | |||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (IRS Employer Identification No.) |
Elkhart, Indiana 46514
Chief Executive Officer
All American Group, Inc.
2831 Dexter Drive
Elkhart, Indiana 46514
James A. Strain, Esq. Taft Stettinius & Hollister LLP One Indiana Square Suite 3500 Indianapolis, Indiana 46204 Tel:(317) 713-3500 | Jorge L. Freeland, Esq. White & Case LLP 200 South Biscayne Boulevard Suite 4900 Miami, Florida 33131-2352 Tel: (305) 371-2700 |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting company þ |
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The information in this proxy/statement/prospectus is not complete and may be changed. All American Group, Inc., may not sell these securities until the registration statement filed with the Securities and Exchange Commission, of which this proxy statement/prospectus is a part, is effective. This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities described in this proxy/prospectus, or the solicitation of a proxy, in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer, solicitation of an offer or proxy solicitation in such jurisdiction. |
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• | the material terms of a sale are agreed upon in an executed letter of intent within nine months after the effective time of the Merger and the sale is completed within 90 days thereafter; | |
• | the surviving corporation must receive “net proceeds” of at least $12 million; | |
• | the sale is not prohibited by law; and | |
• | the surviving corporation is not required to indemnify the purchaser. However, the trust may elect to indemnify the purchaser out of the proceeds of a sale. |
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EX-23.1 | ||||||||
EX-23.2 |
A | Agreement and Plan of Merger | |
B | Liquidating Trust Agreement | |
C | Chapter 44 of the Indiana Business Corporation Law | |
D | Opinion of Houlihan Lokey Financial Advisors, Inc. |
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• | All American Group, Inc. |
• | All American Group Holdings, LLC |
• | All American Acquisition Corporation |
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• | the net proceeds, as defined in the merger agreement, from the sale of the Specialty Vehicles business would be at least $12 million; | |
• | the sale occurs within nine months after the effective time of the Merger or, if AAG has entered into a letter of intent with respect to a sale, the sale closes within twelve months of the effective time of the Merger; and | |
• | the sale is not prohibited by law. |
• | the absence of any applicable law prohibiting completion of the Merger; |
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• | the effectiveness of the registration statement onForm S-4 and the absence of a stop order or any proceeding initiated or threatened by the SEC for that purpose; and | |
• | execution and delivery of the trust agreement. |
• | AAG and its subsidiaries’ senior executives will have entered employment related agreements that are satisfactory to Acquiror and that replace and supersede their current agreements; | |
• | delivery of all consents, approvals, orders, permits, and other authorizations required by law, contract, or agreement; | |
• | delivery of the proxy statement to each holder of Common Shares as required by the merger agreement and applicable securities laws and twenty (20) days have elapsed since delivery of such proxy statement; | |
• | accuracy of AAG’s representations and warranties in the merger agreement, subject to certain materiality thresholds, as of the date of merger agreement and as of the effective time of the Merger; | |
• | AAG’s performance of its covenants and agreements in the merger agreement in all material respects; and | |
• | AAG’s delivery to Acquiror and Acquisition Sub of a closing certificate certifying that the other conditions to Acquiror’s and Acquisition Sub’s obligations to consummate the Merger have been satisfied. |
• | AAG’s shareholders have approved the merger agreement pursuant to the Indiana Business Corporation Law; | |
• | accuracy of Acquiror’s and Acquisition Sub’s representations and warranties in the merger agreement, subject to certain materiality thresholds, as of the date of merger agreement and as of the effective time of the Merger; | |
• | Acquiror’s and Acquisition Sub’s performance of their covenants and agreements in the merger agreement in all material respects; and | |
• | Acquiror’s and Acquisition Sub’s delivery to AAG of a closing certificate certifying that the other conditions to Acquiror’s and Acquisition Sub’s obligations to consummate the Merger have been satisfied. |
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Q. | When and where is the Special Meeting? |
A. | The Special Meeting to vote on the Merger will be held at Christiana Creek Country Club, 1160 West Bristol Street, Elkhart, Indiana, on Tuesday, March 22, 2011 at 11:00 a.m. local time. |
Q. | What matters will be considered and voted on at the Special Meeting? |
A. | At the Special Meeting, you will be asked to consider and vote upon a proposal to adopt the merger agreement and approve the Merger. |
Q. | What will I receive in the Merger? |
A. | For each Common Share owned, the Minority Shareholders will receive $0.20 in cash and one unit of beneficial interest in the Specialty Vehicles Liquidating Trust. H.I.G. All American will also receive one trust unit for each Common Share it owns. |
Q. | How does the Board of Directors recommend that I vote on the merger proposal? |
A. | After careful consideration, the Board recommends that you vote FOR the adoption of the merger agreement and approval of the Merger. See the sections entitled “SPECIAL FACTORS — Recommendation of the Special Committee and the Board” and “— Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board.” |
Q. | How many Common Shares must be present to hold the Special Meeting? |
A. | The presence, either in person or by proxy, of a majority of the outstanding Common Shares entitled to vote at the Special Meeting is necessary to constitute a quorum for the transaction of business at the Special Meeting. |
Q. | What vote is required to approve the Merger? |
A. | The adoption of the merger agreement and approval of the Merger requires the affirmative vote of the holders of a majority of the outstanding Common Shares entitled to vote at the Special Meeting for the adoption of the merger agreement and the approval of the Merger. As of December 31, 2010, there were 36,757,069 Common Shares outstanding. H.I.G. All American beneficially owns approximately 55.7% of the outstanding Common Shares entitled to vote at the Special Meeting. Pursuant to the merger agreement, Acquiror has agreed to cause H.I.G. All American to vote all the Common Shares it beneficially owns in favor of adopting the merger agreement and approving the Merger. Accordingly, shareholder approval of the merger agreement and the Merger is assured. |
Q. | What do I need to do now? |
A. | Please vote electronically via the Internet or telephonically by following the instructions on the enclosed proxy card or complete, sign, date and promptly return the enclosed proxy card to ensure that your Common Shares will be voted at the Special Meeting. |
Q. | What rights do I have if I oppose the Merger? |
A. | Shareholders that oppose the Merger may dissent and seek a determination of the fair value of their Common Shares and receive that fair value in lieu of the Merger Consideration, but only if they comply with the procedures explained in the section entitled “RIGHTS OF DISSENTING SHAREHOLDERS” and Appendix C to this proxy statement/prospectus. |
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Q. | Who can vote on the Merger? |
A. | All shareholders of record as of the close of business on February 9, 2011 will be entitled to notice of, and to vote at, the Special Meeting. |
Q. | How do the directors and executive officers of AAG intend to vote? |
A. | Six of the nine members of our Board of Directors, Mr. Lavers, Mr. Johnson, Mr. Donald W. Hudler, Mr. Geoffrey Bloom, Mr. Edwin Miller and Mr. John Goebel, have informed us that they intend to vote their Common Shares in favor of the approval of the merger agreement and the Merger. Mr. Sanford and Mr. de Armas do not directly own any Common Shares, but each of them is an employee of an affiliate of H.I.G. All American. Acquiror has agreed to cause H.I.G. All American to vote its Common Shares in favor of the approval of the merger agreement and the Merger. One of our directors, Mr. Robert J. Deputy, has informed us that he intends to vote against approval of the merger agreement and the Merger. Each of our executive officers has informed us that they intend to vote in favor of the approval of the merger agreement and the Merger. |
Q. | If I am in favor of the Merger, should I send my share certificates now? |
A. | No. If the Merger is consummated, AAG will send you a transmittal form and written instructions for exchanging your share certificates. |
Q. | If my Common Shares are held in “street name” by my bank or broker, will my bank or broker vote my Common Shares for me? |
A. | Your bank or broker will vote your Common SharesONLY if you instruct your bank or broker on how to vote. You should follow the voting instructions provided by your bank or broker regarding how to vote your Common Shares. |
Q. | May I change my vote after I have submitted a proxy? |
Yes, you may change your vote after you have submitted a proxy by (i) delivering a properly executed proxy card bearing a later date, (ii) delivering a written revocation of your proxy to AAG’s Secretary at our corporate offices before the start of the Special Meeting, (iii) submitting a later-dated vote electronically via the Internet or telephonically, or (iv) attending the Special Meeting and voting in person. Attending the Special Meeting will not, in itself, revoke a previously submitted proxy. To revoke a proxy in person at the Special Meeting, you must obtain a ballot and vote in person at the Special Meeting. |
Q. | When is the Merger expected to be completed? |
A. | AAG is working toward completing the Merger as quickly as possible and currently expects that the Merger will be completed in the first quarter of 2011. If the merger agreement is adopted and the Merger is approved, AAG expects the closing will occur within two business days following the satisfaction or waiver of all of the conditions to the Merger contained in the merger agreement. |
Q. | What are the U.S. federal income tax consequences of the Merger to me? |
A. | The receipt of the Merger Consideration by a U.S. holder in exchange for cash and a trust unit should be a taxable transaction for United Stated federal income tax purposes. The amount of gain or loss a U.S. holder recognizes, and the timing of such gain or loss, depends in part on the United States federal income tax treatment of the trust units, with respect to which there is substantial uncertainty. An AAG shareholder’s gain or loss will also be determined by the shareholder’s tax basis in his, her or its Common Shares. For a more complete description of the tax consequence of the Merger, see the section entitled “SPECIAL FACTORS-Material United Stated Federal Income Tax Consequences of the Merger” beginning on page 45 of this proxy statement/prospectus. |
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Tax matters are very complicated, and the tax consequence of the Merger to a particular shareholder will depend in part on such shareholder’s circumstances. Accordingly, you are urged to consult your own tax advisor for a full understanding of the tax consequence of the Merger to you, including the applicability and effect of federal, state, local and foreign income and other tax laws. |
Q. | Who can answer my questions? |
A. | If you have questions about the Merger or would like additional copies of this proxy statement/prospectus you should contact All American Group, Inc., 2831 Dexter Drive, Elkhart, Indiana 46514, Attn: Martin Miranda, Secretary, or by phone at(574) 266-2500. |
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• | liquidity; | |
• | consumer confidence and the availability of consumer credit; | |
• | the ability of AAG to obtain adequate bid and performance bonds with reasonable collateral requirements; | |
• | financing for, and the availability of, chassis utilized for bus production; | |
• | the availability of financing to AAG’s customers; | |
• | AAG’s ability to introduce new homes and features that achieve consumer acceptance; | |
• | adverse weather conditions affecting home deliveries; | |
• | tax law changes could make home ownership more expensive or less attractive; | |
• | the availability and cost of real estate for residential housing; | |
• | the increased size and scope of work of major projects, as compared to AAG’s traditional single-family homes business, with increased reliance on third parties for performance which could impact AAG; and | |
• | the over supply of existing homes and the inventory of foreclosed properties within AAG’s markets; |
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• | the operating performance of the Specialty Vehicles business; | |
• | general economic trends in mergers and acquisitions, as well as the market for selling businesses in the specialty vehicle or bus industries in particular; | |
• | the ability of the sale committee to locate a suitable buyer and enter into a letter of intent prior to December 22, 2011, and to consummate a sale transaction within three months thereafter; | |
• | the availability of financing to a potential buyer to pay a cash purchase price; | |
• | the absence of contingent liabilities and other issues at the Specialty Vehicles business that would induce potential buyers to acquire the Specialty Vehicles business without indemnification from the surviving corporation; and | |
• | our successful resolution of a dispute with ARBOC Mobility, LLC, the licensor of certain intellectual property used by the Specialty Vehicles business. |
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• | National Traffic and Motor Vehicle Safety Act (“NTMVSA”), and the Federal Motor Vehicle Safety Standards included therein, and the regulations promulgated under the NTMVSA, including Federal Motor Carrier Safety Regulations; | |
• | Safety standards for buses and bus components which have been promulgated thereunder by the U.S. Department of Transportation; | |
• | laws regulating the operation of vehicles on highways; | |
• | state and federal product warranty statutes; and | |
• | state and local zoning laws and building codes. |
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1st Qtr. | 2nd Qtr. | 3rd Qtr. | 4th Qtr. | |||||||||||||||||||||
All American Group, Inc. | Total | 2011 | 2011 | 2011 | 2011 | Total | ||||||||||||||||||
Profit & Loss Forecasts | 2010 | Forecast | Forecast | Forecast | Forecast | 2011 | ||||||||||||||||||
NET SALES | 82,189,596 | 15,091,789 | 14,443,798 | 16,013,691 | 13,657,485 | 59,206,763 | ||||||||||||||||||
COST OF SALES | 78,850,225 | 13,540,218 | 12,732,217 | 13,948,500 | 12,127,153 | 52,348,088 | ||||||||||||||||||
GROSS PROFIT | 3,339,371 | 1,551,571 | 1,711,581 | 2,065,191 | 1,530,332 | 6,858,675 | ||||||||||||||||||
As Pct. Of Net Sales | 4.1 | % | 10.3 | % | 11.8 | % | 12.9 | % | 11.2 | % | 11.6 | % | ||||||||||||
Sales Expense | 3,417,228 | 772,186 | 788,656 | 804,355 | 780,793 | 3,145,990 | ||||||||||||||||||
Sales Promotion | 1,328,242 | 291,640 | 305,398 | 320,487 | 294,569 | 1,212,094 | ||||||||||||||||||
Total Selling Expenses | 4,745,470 | 1,063,826 | 1,094,054 | 1,124,842 | 1,075,362 | 4,358,084 | ||||||||||||||||||
As Pct. Of Net Sales | 5.8 | % | 7.4 | % | ||||||||||||||||||||
General & Administrative Expenses | 9,653,140 | 1,854,401 | 1,785,879 | 1,792,879 | 1,791,879 | 7,225,038 | ||||||||||||||||||
(Gain)/Loss on Sale of Assets | (90,140 | ) | — | — | — | — | — | |||||||||||||||||
Total Operating Expenses | 14,308,470 | 2,918,227 | 2,879,933 | 2,917,721 | 2,867,241 | 11,583,122 | ||||||||||||||||||
As Pct. Of Net Sales | 17.4 | % | 19.3 | % | 19.9 | % | 18.2 | % | 21.0 | % | 19.6 | % | ||||||||||||
NET PROFIT FROM OPERATIONS | (10,969,099 | ) | (1,366,656 | ) | (1,168,352 | ) | (852,530 | ) | (1,336,909 | ) | (4,724,447 | ) | ||||||||||||
As Pct. Of Net Sales | (13.3 | )% | (9.1 | )% | (8.1 | )% | (5.3 | )% | (9.8 | )% | (8.0 | )% | ||||||||||||
Interest Expense | 15,242,833 | 1,031,866 | 1,052,752 | 1,052,749 | 1,052,752 | 4,190,119 | ||||||||||||||||||
Interest (Income) | (674,378 | ) | (23,700 | ) | (8,700 | ) | (8,700 | ) | (8,700 | ) | (49,800 | ) | ||||||||||||
Investment (Income) | (144,984 | ) | (29,500 | ) | (4,500 | ) | (4,500 | ) | (4,500 | ) | (43,000 | ) | ||||||||||||
Other (Income)/Expense | (471,424 | ) | (37,500 | ) | (37,500 | ) | (37,500 | ) | (90,000 | ) | (202,500 | ) | ||||||||||||
PROFIT BEFORE TAXES | (24,921,147 | ) | (2,307,822 | ) | (2,170,404 | ) | (1,854,579 | ) | (2,286,461 | ) | (8,619,266 | ) | ||||||||||||
As Pct. Of Net Sales | (30.3 | )% | (15.3 | )% | (15.0 | )% | (11.6 | )% | (16.7 | )% | (14.6 | )% | ||||||||||||
Total Income Taxes | (214,318 | ) | — | — | — | — | — | |||||||||||||||||
NET PROFIT OR (LOSS) | (24,706,829 | ) | (2,307,822 | ) | (2,170,404 | ) | (1,854,579 | ) | (2,286,461 | ) | (8,619,266 | ) | ||||||||||||
Return On Sales | (30.1 | )% | (15.3 | )% | (15.0 | )% | (11.6 | )% | (16.7 | )% | (14.6 | )% | ||||||||||||
Income/(Loss) Discontinued Ops | (1,032,845 | ) | (1,300,000 | ) | — | — | — | (1,300,000 | ) | |||||||||||||||
NET PROFIT OR (LOSS) AFTER DISC. OPS | (25,739,674 | ) | (3,607,822 | ) | (2,170,404 | ) | (1,854,579 | ) | (2,286,461 | ) | (9,919,266 | ) | ||||||||||||
Interest | 15,242,833 | 1,031,866 | 1,052,752 | 1,052,749 | 1,052,752 | 4,190,119 | ||||||||||||||||||
Depreciation | 2,237,831 | 455,745 | 455,745 | 450,864 | 450,864 | 1,813,218 | ||||||||||||||||||
Amortization/Impairment of Goodwill | — | — | — | — | — | — | ||||||||||||||||||
Other Non-Cash/HIG related costs(1) | 1,199,178 | 1,360,500 | 160,500 | 160,500 | 53,500 | 1,735,000 | ||||||||||||||||||
EBITDA AFTER DISC OPS | (7,059,831 | ) | (759,711 | ) | (501,407 | ) | (190,466 | ) | (729,345 | ) | (2,180,929 | ) | ||||||||||||
(1) | Assumes no costs post HIG loan maturity October 2011 | |
• | Assumes Company remains public through 2011 |
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• | the value of the Merger Consideration to be paid to the unaffiliated shareholders upon consummation of the Merger, of which the Cash Consideration represents a 122% premium over the trading price of the Common Shares immediately prior to the first public announcement of the Merger; | |
• | the fact that the receipt of trust units by the unaffiliated shareholders as part of the Merger Consideration will afford them an opportunity to realize additional consideration if the Specialty Vehicles business is sold within the specified period and the net proceeds of the sale exceed $12 million; | |
• | the Special Committee’s belief that the Merger is more favorable to the unaffiliated shareholders than any other alternative reasonably available to AAG and its shareholders, including the alternative of an orderly liquidation of AAG, in light of a number of factors, including the risks and uncertainty associated with these alternatives; | |
• | the structure of the Merger will provide certainty of a minimum value to the unaffiliated shareholders and a potential opportunity to benefit from the net proceeds of a sale of the Specialty Vehicles business; | |
• | the fact that AAG would incur significant expenses ranging from $700,000 to $1 million per year by remaining a public company. Such fees include legal fees of $100,000 to $150,000, accounting fees of $50,000 to $75,000, director fees and board meeting expenses of $40,000 to $75,000, transfer agent fees of $30,000, printing and filing fees of $15,00 to $20,000, annual shareholder meeting expenses of $20,000 to $25,000, directors’ and officers’ insurance of $300,000 to $400,000, personnel costs related to compliance of $125,000 to $200,000, and miscellaneous other expenses. Such expenses could adversely affect AAG’s financial performance and the value of the Common Shares; | |
• | the fact that AAG had no liquidity and that, absent H.I.G. All American providing liquidity, which H.I.G. All American indicated, in light of AAG’s failure to meet the financial covenants in the loan agreement, it was not then willing to do, AAG was facing bankruptcy or liquidation that, as reflected in AAG management’s liquidation analysis, would likely result in the unaffiliated shareholders receiving nothing; | |
• | the fact that AAG had suffered losses in recent periods and was unable to mitigate those losses absent adequate liquidity; | |
• | the attempts by the Special Committee to find alternatives to the Merger, each of which was rejected by H.I.G. All American; | |
• | the terms of the merger agreement, including (1) the conditions to the Merger, (2) the parties’ representations, warranties and covenants, (3) the shareholder approval requirements applicable to the merger agreement and the Merger and (4) the ability of the unaffiliated shareholders to assert dissenters’ rights of appraisal; and | |
• | the receipt by the Special Committee of an opinion, dated November 8, 2010, from Houlihan Lokey as to the fairness, from a financial point of view and as of the date of the opinion, of the Merger |
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Consideration to be received by holders of Common Shares (other than excluded holders), which opinion was based on and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion, as more fully described below under the caption “Opinion of Houlihan Lokey Financial Advisors, Inc.” The Special Committee and the Board also noted that AAG’s directors (other than Mr. Sanford and Mr. de Armas) and AAG’s executive officers (other than executive officers that retain or obtain, directly or indirectly, an equity interest in AAG or Acquiror following the consummation of the Merger) are not “excluded holders” for purposes of Houlihan Lokey’s opinion, but also are not unaffiliated shareholders of AAG. However, the Special Committee and the Board considered that AAG’s independent directors and such executive officers have no interest in the Merger, through an equity investment or otherwise, materially different from that of the unaffiliated shareholders. The Special Committee and the Board also considered the relatively small shareholdings of AAG’s executive officers and the fact that it is not expected that the compensation of AAG’s executive officers will be materially different after the Merger. |
• | the fact that the unaffiliated shareholders will have no ongoing equity participation in AAG as the surviving corporation following the Merger, other than an interest in the Specialty Vehicles Liquidating Trust, and will not share in any cost savings resulting from the Merger, any future earnings of the business,and/or the proceeds of any future sale of AAG’s assets or lines of business, other than the sale of the Specialty Vehicles business upon the terms in the merger agreement; | |
• | the conditions to completion of the proposed Merger including: (i) the condition that certain senior executives of AAG enter into new employment agreements, which had not been negotiated and the terms of which were unknown, (ii) that all necessary third party consents are obtained, and (iii) that no injunction restraining the completion of the Merger is in effect. The Special Committee and the Board considered that satisfaction of these conditions is not entirely within AAG’s control, so no assurance can be given that these conditions will be satisfied or waived; | |
• | the fact that the receipt of the Merger Consideration will be taxable to AAG’s shareholders for U.S. federal income tax purposes; and | |
• | the potential risks and costs to AAG if the Merger does not close, including the potential effects on our relationships with our business partners. |
• | the Special Committee consisted entirely of independent directors appointed by the Board that are not employees of AAG, H.I.G. All American or any of their respective subsidiaries and have no financial interest in the Merger that is different from that of the unaffiliated shareholders; | |
• | the Special Committee retained and was advised by its own legal counsel, and engaged its own financial advisor to assist the Special Committee in its evaluation of the Merger Consideration from a financial point of view; | |
• | the Special Committee engaged in extensive negotiations and deliberations in evaluating the Merger and the Merger Consideration; |
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• | the Special Committee had the authority under AAG’s loan agreement with H.I.G. All American to reject the Merger or any similar transaction with H.I.G. All American or its affiliates; | |
• | the Merger Consideration and the other terms and conditions of the merger agreement resulted from active negotiating between the Special Committee and Acquiror; | |
• | holders of the Common Shares that do not vote in favor of the adoption of the merger agreement and approval of the Merger or otherwise waive their dissenters’ rights will have the right under Indiana law to dissent and seek a determination of the fair value of their Common Shares and receive that fair value in lieu of the Merger Consideration; | |
• | the appointment of the Shareholders Representative to act on behalf of AAG’s former shareholders after the completion of the Merger in connection with any disputes arising under the merger agreement after the completion of the Merger and settling the amounts to be paid to holders of trust units will allow the former shareholders to act collectively to assert their interests. Mr. Johnson, the Shareholders Representative, has no interest in the Merger other than as a shareholder, and after the Merger will not be an officer or director of AAG or have any interest in AAG other than as holder of trust units and as a member of the sale committee authorized to negotiate the sale of the Specialty Vehicles business. | |
• | the Special Committee approved the merger agreement and the Merger; and | |
• | the Board approved the merger agreement and the Merger, with a majority of the disinterested directors voting in favor of approval. |
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• | as Merger Consideration, Acquiror will pay $.20 in cash and one trust unit for each of the outstanding Common Shares held by the unaffiliated shareholders, and with respect to which dissenters’ rights have |
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not been properly exercised and perfected under Indiana law. The Purchaser Group believes that this is relevant to the following factors supporting their view as to the fairness of the Merger: |
• | the aggregate value of the cash portion of Merger Consideration of $.20 per share, as described above, represents a premium of: |
• | 122% to the closing price of Common Shares on November 5, 2010, the last trading day prior to the date of the announcement of the Merger; | |
• | 66.7% to the closing price of Common Shares on November 1, 2010, the last trading day one week prior to the date of the announcement of the Merger; | |
• | 23.2% to the30-day average closing prices of Common Shares for the30-day period prior to the date of the announcement of the Merger; |
• | in addition to the Cash Consideration, the unaffiliated shareholders will participate in their pro rata portion of the net proceeds from the sale of the Specialty Vehicles business in excess of $5 million if the sale meets the other requirements of the merger agreement. These proceeds, if obtained, could exceed the cash portion of the Merger Consideration; | |
• | in light of AAG’s losses of $23.7 million for the nine months ended September 30, 2010 and $4.7 million and $69 million for 2009 and 2008, respectively, as well as AAG’s liquidity issues and questions as to AAG’s ability to continue as a going concern, the Purchaser Group considered the liquidation value of AAG and determined that it was unlikely the unaffiliated shareholders would receive any value in a liquidation of AAG; | |
• | the cash portion of the Merger Consideration exceeded the offer that the Purchaser Group believed the strategic buyer was offering to H.I.G. All American and the trust units offer a greater value attributable to the Specialty Vehicles business than the private equity firm offered H.I.G. All American, but most notably the private equity firm’s proposal did not include consideration to the unaffiliated shareholders; and | |
• | the Merger is not subject to a financing condition, which limits the execution risk attached to the completion of the Merger, subject to the satisfaction of the conditions to the completion of the Merger as described in this proxy statement/prospectus. |
• | the vote for approval of the proposal relating to the Merger required the approval of the Special Committee in its sole discretion under the loan agreement with H.I.G. All American, which it could have elected not to provide; | |
• | the AAG Board, by actions taken without the participation of the two directors affiliated with H.I.G. All American and after considering the majority recommendation of the Special Committee (which is comprised entirely of independent directors and had engaged legal and financial advisors to assist the Special Committee) has approved and declared advisable the merger agreement, has determined that it and the Merger are fair to and in the best interests of AAG and the unaffiliated shareholders, and has recommended that AAG shareholders vote for approval of the proposal to adopt the merger agreement and the Merger; and | |
• | the AAG Special Committee requested and received from Houlihan Lokey an opinion, dated November 8, 2010, as to the fairness, from a financial point of view and as of the date of the opinion, of the Merger Consideration to be received by holders of Common Shares (other than excluded holders). |
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• | any AAG shareholders that receive Merger Consideration in the form of cash and trust units in exchange for all of their AAG Common Shares will cease to participate in the future earnings or growth of AAG and its subsidiaries or benefit from increases, if any, in the value of AAG and its subsidiaries, following completion of the Merger, other than a contingent right to receive a pro rata share of the net proceeds of a sale of the Specialty Vehicles business, if the Specialty Vehicles business is sold in accordance with the terms and conditions of the merger agreement; | |
• | as to the Merger Consideration, the Purchaser Group’s interests are adverse to the financial interests of AAG’s unaffiliated shareholders. In addition, as described under “Interests of Certain Persons in the Merger,” certain executive officers of AAG may have actual or potential conflicts of interest in connection with the Merger; and | |
• | the value of the trust units may be indeterminate or ultimately result in no value if the Specialty Vehicles business is not sold in a manner to satisfy the requirements of the merger agreement. |
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• | reviewed a draft, dated November 7, 2010, of the merger agreement and a draft, dated November 6, 2010, of the liquidating trust agreement; | |
• | reviewed certain publicly available business and financial information relating to AAG that Houlihan Lokey deemed to be relevant; |
• | reviewed certain information relating to the historical, current and future operations, financial condition and prospects of AAG made available to Houlihan Lokey by AAG, including (a) financial projections prepared by AAG’s management for the fiscal years ending December 31, 2010 and 2011 reflecting the future financial results and condition of AAG after giving effect to AAG’s current inability to obtain adequate bonding for certain commercial construction projects of its housing business and to purchase bus chassis for its Specialty Vehicles business, which are referred to in this section as the AAG management 2010/2011 financial projections, and (b) a liquidation analysis prepared by AAG’s management, which is referred to in this section as the AAG management liquidation analysis (for a description of this analysis, see “SPECIAL FACTORS — AAG Management Liquidation Analysis”); |
• | spoke with certain members of AAG’s management and certain of its representatives and advisors regarding (a) the business, operations, financial condition and prospects of AAG, including the liquidity needs of and capital resources available to AAG, and (b) the Merger and related matters; | |
• | reviewed the current and historical market prices and trading volume for Common Shares, and the current and historical market prices of the publicly traded securities of certain other companies that Houlihan Lokey deemed to be relevant; | |
• | reviewed a certificate addressed to Houlihan Lokey from AAG’s senior management which contains, among other things, representations regarding certain matters relating to AAG’s financial condition and prospects and the accuracy of the information, data and other materials (financial or otherwise) provided to, or discussed with, Houlihan Lokey by or on behalf of AAG; and | |
• | conducted such other financial studies and inquiries and considered such other information and factors as Houlihan Lokey deemed appropriate. |
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Estimated | ||||||||||||||||
As of | Liquidation | Liquidation | Liquidation Value | |||||||||||||
Assets | 9/30/2010 | Value Adjustment | Value Adjustment | 9/30/2010 | ||||||||||||
(figures in millions) | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash & Cash Equivalents | $ | 10.537 | 52.2 | % | $ | 5.500 | 1 | $ | 5.037 | |||||||
Accounts Receivable | 4.403 | 49.1 | % | 2.161 | 2.242 | |||||||||||
Inventories | 17.096 | 47.2 | % | 8.070 | 9.026 | |||||||||||
Prepaid Expenses | 3.955 | 98.1 | % | 3.880 | 0.075 | |||||||||||
Refundable Income Taxes | 0.182 | 0.0 | % | 0.000 | 0.182 | |||||||||||
Assets Held for Sale | 4.658 | 22.7 | % | 1.058 | 3.600 | |||||||||||
Total Current Assets | $ | 40.832 | $ | 20.163 | ||||||||||||
Net Fixed Assets | 27.333 | 70.0 | % | 19.133 | 8.200 | |||||||||||
Intangible Assets | 0.000 | 0.0 | % | 0.000 | 0.000 | |||||||||||
Rental Properties | 0.225 | 60.0 | % | 0.135 | 0.090 | |||||||||||
Investments | 5.927 | 77.1 | % | 4.570 | 1.356 | |||||||||||
CSV of Life Insurance | 0.072 | 0.0 | % | 0.000 | 0.072 | |||||||||||
Total Assets | $ | 74.389 | $ | 29.882 | ||||||||||||
Liabilities & Stockholders’ Equity | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts Payables | $ | 9.314 | 0.0 | % | $ | 0.000 | $ | 9.314 | ||||||||
Customer Deposits | 1.859 | 0.0 | % | 0.000 | 1.859 | |||||||||||
Current Maturities of Long-Term Debt | 0.389 | 0.0 | % | 0.000 | 0.389 | |||||||||||
Payroll and Withholding | 0.416 | 0.0 | % | 0.000 | 0.416 | |||||||||||
Accrued Expenses | 6.461 | 13.9 | % | 0.901 | 5.561 | |||||||||||
Income Taxes Payable | 0.441 | 0.0 | % | 0.000 | 0.441 | |||||||||||
Total Current Liabilities | $ | 18.880 | $ | 17.979 | ||||||||||||
Long-Term Debt | 13.052 | -14.7 | % | (1.913 | )2 | 14.965 | ||||||||||
Mortgage Payable | 0.001 | 0.0 | % | 0.000 | 0.001 | |||||||||||
Other Long-Term Payables | 9.023 | 73.0 | % | 6.589 | 2.434 | |||||||||||
Total Liabilities | $ | 40.955 | $ | 35.379 | ||||||||||||
Net Stockholders’ Equity | $ | 33.433 | ||||||||||||||
Residual | ($ | 5.497 | ) | |||||||||||||
Total Additional Potential Contingencies Not Yet Booked | 1.929 | |||||||||||||||
Residual After Additional Potential Contingencies Not Yet Booked | ($ | 7.426 | ) |
(1) | Reflects estimated overhead costs associated with an orderly liquidation of the Company. |
(2) | Per Company management, assumes liquidation on November 1, 2010. Represents face value of debt above GAAP accrued value and includes interest through October 31, 2010. |
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• | A going private transaction. | |
• | Conversion of debt to equity. | |
• | A sale of the vehicle business to fund the housing segment. |
• | Chapter 7 or Chapter 11 liquidation — without additional funding, this could be the most likely in-court option for AAG. A detailed wind down analysis would need to be developed for Chapter 7 or Chapter 11 liquidations. | |
• | A sale of AAG’s assets under Chapter 11, Section 363 of the Bankruptcy Code. | |
• | A Chapter 11 restructuring. |
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• | gather and analyze data, interview appropriate management and evaluate AAG’s existing financial forecasts and budgets to determine the extent of AAG’s financial challenges; | |
• | review AAG’s current liquidity forecast and assist management in modifying and updating such forecasts based upon current information, CDG’s observations and other information as it becomes available, review and agree with management’s recommendations for payment priorities and check releases; | |
• | review AAG’s business plan and its implementation, to the extent implemented thru August 31, 2010, including the proposed performance improvement plan submitted to AAG’s Board of Directors and H.I.G. All American on August 16, 2010 (including detailed financial projections); | |
• | analysis of AAG’s near-term capital obligations; and | |
• | provide preliminary ideas with respect to the various alternative business strategies available to AAG. |
• | AAG was managing the business with limited liquidity, evidenced by the fact that AAG was holding checks and limiting check runs due to the backlog of held checks. | |
• | AAG was managing its payables appropriately considering its limited liquidity. AAG was careful to reserve available cash to cover payroll, insurance and taxes before considering vendor priorities. AAG had a good knowledge of its vendor base allowing AAG to know where it could manage payables. | |
• | AAG was to focus efforts on limiting purchase orders and working down its inventory levels as there may have been an opportunity to reduce working capital usage. | |
• | The cash availability outlook was challenging for the next few months. Additional analysis needed to be performed, but AAG was hopeful that it could manage through the projected deficits. The situation was fluid due to uncertainty of the timing of cash flows and the risks and opportunities surrounding major cash events. The signing of the Casper College project and the associated deposit had improved the liquidity picture. | |
• | Management and CDG had attempted to quantify potential risks and opportunities to the cash forecast discussed further in the Liquidity Assessment section of the Budget and Liquidity Assessment. |
• | The primary focus of the10-day analysis had been on the historical and forecasted performance of the housing segment. Housing had been running a negative net profit from operations since November 2008 due to significant issues in the housing market (rapidly declining volume, compounded by credit constraints, i.e. bonding collateral and customers inability to secure credit). | |
• | The specialty vehicles segment had been reviewed, but not to the extent of the housing segment. In 2009, specialty vehicles generated a slight net profit from operations of approximately $290,000 and was on track to generate $2.6 million in net profit from operations in 2010. | |
• | For purposes of CDG’s analysis, corporate expenses were not reviewed to the extent of the two operating groups. Similar to actions taken at the housing segment, corporate spending had been drastically reduced since 2008 when spending levels were $25.2 million. Full year 2010 was projected to be $6.1 million, and the fourth quarter 2010 run rate was projected to be an annualized $5.6 million per year. This represented a 77.6% reduction in corporate spending over 2008. |
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• | Based on the assumptions in the August 2010 projections, AAG’s fourth quarter 2010 EBITDA was expected to be positive (approximately $798,000). |
• | AAG shipped 2,880 boxes during 2008 through its housing segment. In 2009, due to deteriorating market conditions, shipments totaled 1,184, nearly a 60% reduction. AAG’s 2010 volume projections were 13% higher than 2009 performance, but remained 46% below 2008 levels. In that time, the Company had cut fixed costs in its housing segment to 52% of 2008’s spending level. Variable expenses per box, during the same period, had increased, mainly in the direct labor category. Managing four facilities on a drastically reduced volume had contributed to the rise in variable costs. Management was evaluating opportunities to improve the utilization of direct labor. | |
• | In 2008, breakeven boxes totaled 2,302 compared to actual shipments of 2,880, generating EBITDA of $6.5 million. EBITDA fell to a negative $6.9 million in 2009. Theyear-over-year volume decline impacted EBITDA by approximately $19.1 million. Additionally, variable expenses increased on a per box basis as proportionate reductions were not able to be achieved on variable cost components, totaling another $5.4 million of additional expense. These were partially offset by the fixed cost reductions totaling $11.1 million, 43% over 2008. | |
• | The fourth quarter of 2010 projected breakeven point was 234 boxes with 303 boxes expected to ship. The most significant item in the fourth quarter of 2010 was the Casper College order. Net revenue per box would increase $11,891 per box to $48,176. Casper College net revenue was approximately $50,000 per box. | |
• | The dramatic reduction in the breakeven point in the fourth quarter of 2010 illustrated the impact of a major project, such as Casper College. On an annualized basis, this represented a breakeven point of 936 boxes per year, which was 58% lower than 2009’s breakeven point. | |
• | Using the second quarter of 2010 as a benchmark (the most recent quarter with actual results), variable margin improved $8,579 per box, due mainly to the Casper College price at $50,000 per box compared to a range of $25,000 to $35,000 for the traditional housing business. In addition to the improved variable margin, AAG had reduced an additional $465,693 of fixed costs in the fourth quarter of 2010, an additional 12% reduction over the second quarter of 2010. |
• | Specialty vehicles 2010 EBITDA was projected to be $3.1 million with $1.6 million coming in the second half of 2010. The breakeven volume for specialty vehicles was approximately 34 per quarter. Specialty vehicles expected to sell 86 vehicles per quarter during the second half of 2010, which was 47% above its breakeven level. As of August 27, 2010, there were 38 vehicles in production, 65 scheduled to begin production, 47 at the contractual stage and 46 awarded. These totals represented a backlog of 246 vehicles. | |
• | Variable margin per vehicle was 18.4%, or $15,605 per vehicle. Throughout 2010, this had fluctuated from a high in the first quarter of 21.9% ($18,998 per vehicle) to a low in the third quarter of 17.9% ($15,299 per vehicle). Fixed costs (less depreciation) had declined since the high of $684,517 in the first quarter of 2010, and were expected to run approximately $539,000 per quarter for the remainder of the year. | |
• | Based on the backlog and the consistency of its cost structure, specialty vehicles should have been able to achieve its forecast. Very little overhead was allocated from corporate to specialty vehicles. | |
• | The specialty vehicles business’ cash cycle was approximately 6 weeks. Using a variable cost of material of $69,873 per vehicle, working capital could be $3.0 million at any one time to service 90 |
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vehicles per quarter. AAG estimated $4.1 million was invested in working capital, thus presenting an opportunity for reductions. |
• | The hypothetical Liquidation Analysis is a high-level wind down analysis performed for discussion purposes and does not represent a valuation opinion. | |
• | The analysis is subject to detailed wind down projections for AAG’s open projects and plants. | |
• | The hypothetical valuations contained therein are preliminary and subject to change and refinement. No formal appraisals were provided for the various assets. | |
• | Assets held and hypothetical values could change materially over time. The balance sheet assets were based on projected balances as of September 30, 2010. | |
• | A present value factor was used for some of the assets that will likely take more than a year to be converted to cash. | |
• | Unsecured creditor claims were estimates. Additional work would be required to refine the estimates. Further, additional claims may surface through a bankruptcy notice process. | |
• | Liquidation values are as of projected September 30, 2010 balances (with certain exceptions). | |
• | The vehicle segment continues as a going concern to maximize value and is self funding. | |
• | To the extent possible, assets relating specifically to AAG’s vehicle segment were removed from the wind down analysis. Any amounts attributable to the sale of the vehicle segment net of liabilities would be additive to the amounts contained herein. The liabilities exclude the Lake City bank loan. | |
• | Unrestricted cash will be $0 at the time of the wind-down. | |
• | The analysis assumes that any working capital loans needed to fund operations are repaid through the conversion of $2.0 million of raw materials and $3.8 million of work in process inventory into accounts receivable. |
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• | each outstanding Common Share held by the Minority Shareholders (other than Minority Shareholders that perfect their dissenters’ rights under Indiana law) will be canceled and cease to exist and will be automatically converted into the right to receive the Merger Consideration; | |
• | each outstanding Common Share held by Acquiror or its affiliates will be canceled and cease to exist and will be automatically converted into a right to receive one unit of the beneficial interest of the Specialty Vehicles Liquidating Trust; | |
• | each Common Share held by AAG or any of its subsidiaries, including any Common Shares held as treasury stock, will be canceled and cease to exist, and no payment will be made with respect to those Common Shares; | |
• | each Minority Shareholder that perfects its dissenter’s rights under Indiana law will receive the fair value of its Common Shares; and | |
• | each common share of Acquisition Sub will be converted into and become one fully paid and non-assessable common share, no par value, of AAG, as the surviving corporation of the Merger, and those shares will constitute the only outstanding shares of capital stock of AAG. |
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• | the surviving corporation will maintain and honor all indemnification arrangements in place for all our past and present directors and officers for acts or omissions occurring at or before the effective time of the Merger; | |
• | the surviving corporation will maintain and honor all indemnification provisions and exculpation provisions in favor of each of our present or former directors and officers that is set forth in our certificate of incorporation or bylaws in effect as of the date of the merger agreement; and | |
• | the surviving corporation will purchase a directors’ and officers’ liability insurance policy which will cover those persons who are covered by our directors’ and officers’ liability insurance policy for events occurring before the effective time of the Merger on substantially the same terms as those applicable to our current directors and officers, subject to certain limitations. |
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AAG: | ||||
Financial Advisor Fees | $ | 300,000 | ||
Legal Fees and Expenses | 150,000 | |||
Special Committee Fees and Expenses | 15,000 | |||
SEC Filing Fees | 79 | |||
Accounting Fees | 40,000 | |||
Printing and Mailing Expenses | 40,000 | |||
Transfer Agent Fees and Expenses | 35,500 | |||
Miscellaneous | 25 | |||
Trustee Fees | 20,000 | |||
Shareholder Meeting Fees and Expenses | 5,000 | |||
Total | $ | 605,604 | ||
Acquiror and, Acquisition Sub: | ||||
Legal Fees and Expenses | $ | 400,000 | ||
Total | 1,005,604 | |||
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2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
Housing | $ | 47.1 | 77.7 | $ | 117.2 | 98.0 | ||||||||||
Specialty Vehicles | 13.5 | 22.3 | 2.4 | 2.0 | ||||||||||||
Total | $ | 60.6 | 100.0 | $ | 119.6 | 100.0 | ||||||||||
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Location | Acreage | No. of Buildings | Building Area (Sq. Ft.) | |||||||||
Properties Owned and Used by Registrant: | ||||||||||||
Housing Business | ||||||||||||
Milliken, Colorado | 23.0 | 1 | 151,675 | |||||||||
Decatur, Indiana | 40.0 | 2 | 215,995 | |||||||||
Dyersville, Iowa | 20.0 | 1 | 168,277 | |||||||||
Rutherfordton, North Carolina | 36.8 | 1 | 169,177 | |||||||||
Rocky Mount, Virginia | 44.1 | 6 | 137,693 | |||||||||
Subtotal | 163.9 | 11 | 842,817 | |||||||||
Specialty Vehicles | ||||||||||||
Middlebury, Indiana | 13.5 | 1 | 111,962 | |||||||||
Subtotal | 13.5 | 1 | 111,962 | |||||||||
Other | ||||||||||||
Elkhart, Indiana | 6.2 | 2 | 19,317 | |||||||||
Middlebury, Indiana | 1.3 | 2 | 4,800 | |||||||||
Subtotal | 7.5 | 4 | 24,117 | |||||||||
Total owned and used | 184.9 | 16 | 978,896 | |||||||||
Properties Leased by Registrant: | ||||||||||||
Other | ||||||||||||
Chino, California | 4.7 | 3 | 84,296 | |||||||||
Columbia City, Indiana | 0.8 | 1 | 576 | |||||||||
Indianola, Iowa | 1.2 | 1 | 1,679 | |||||||||
Newport, Tennessee | 3.1 | 0 | 0 | |||||||||
Longmont, Colorado | 7.0 | 0 | 0 | |||||||||
Total leased | 16.8 | 5 | 86,551 | |||||||||
Properties Owned by Registrant and Available for Sale or Lease: | ||||||||||||
Housing Business | ||||||||||||
Decatur, Indiana | 3.3 | 2 | 86,310 | |||||||||
Zanesville, Ohio | 23.0 | 2 | 129,753 | |||||||||
Subtotal | 26.3 | 4 | 216,063 | |||||||||
Other | ||||||||||||
Crooksville, Ohio | 10.0 | 2 | 39,310 | |||||||||
Elkhart, Indiana | 16.2 | 3 | 114,729 | |||||||||
Pigeon Forge, Tennessee | 2.1 | 0 | 0 | |||||||||
Fitzgerald, Georgia | 12.6 | 2 | 103,600 | |||||||||
Middlebury, Indiana | 132.8 | 0 | 0 | |||||||||
Subtotal | 173.7 | 7 | 257,639 | |||||||||
Total owned and available for sale or lease | 200.0 | 11 | 473,702 | |||||||||
Total Company | 401.7 | 32 | 1,539,149 | |||||||||
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All Other | ||||||||||||||||
Name and Principal | Salary | Compensation | Total | |||||||||||||
Position | Year | ($) | ($) | ($) | ||||||||||||
(a) | (b) | (c) | (i) | (j) | ||||||||||||
Richard M. Lavers | 2010 | $ | 236,330 | $ | 5,771 | $ | 242,101 | |||||||||
Chief Executive Officer | 2009 | $ | 275,285 | $ | 12,419 | $ | 287,704 | |||||||||
Colleen A. Zuhl | 2010 | $ | 152,060 | $ | 1,628 | $ | 153,688 | |||||||||
Chief Financial Officer | 2009 | $ | 160,163 | $ | 6,371 | $ | 166,534 | |||||||||
Rick J. Bedell | 2010 | $ | 174,185 | $ | 6,211 | $ | 180,396 | |||||||||
President, All | 2009 | $ | 204,253 | $ | 11,456 | $ | 215,709 | |||||||||
American Homes, LLC |
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Split Dollar Life | Travel | Total All | ||||||||||||||||||
Insurance | Allowance | Perquisites | Other | |||||||||||||||||
(A) | (B) | (C) | Physicals | Compensation | ||||||||||||||||
2010 Compensation | ||||||||||||||||||||
Richard M. Lavers | $ | 0 | $ | 0 | $ | 5,316 | $ | 455 | $ | 5,771 | ||||||||||
Colleen A. Zuhl | $ | 0 | $ | 0 | $ | 1,446 | $ | 182 | $ | 1,628 | ||||||||||
Rick J. Bedell | $ | 0 | $ | 0 | $ | 5,689 | $ | 522 | $ | 6,211 | ||||||||||
2009 Compensation | ||||||||||||||||||||
Richard M. Lavers | $ | 1,675 | $ | 3,600 | $ | 7,144 | $ | 0 | $ | 12,419 | ||||||||||
Colleen A. Zuhl | $ | 1,075 | $ | 3,600 | $ | 1,446 | $ | 250 | $ | 6,371 | ||||||||||
Rick J. Bedell | $ | 2,167 | $ | 3,600 | $ | 5,689 | $ | 0 | $ | 11,456 |
(A) | The economic benefit of the Split Dollar Life Insurance to each executive represents the value of life insurance based on age and coverage amounts. The program was eliminated October 31, 2009. | |
(B) | Travel allowance was eliminated July 1, 2009. | |
(C) | Perquisites include Country Club Dues and Disability Insurance Premiums. |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Equity | Equity | Incentive | ||||||||||||||||||||||||||||||||||
Incentive | Incentive | Plan Awards: | ||||||||||||||||||||||||||||||||||
Plan | Market | Plan Awards: | Market or | |||||||||||||||||||||||||||||||||
Awards: | Number of | Value of | Number of | Payout | ||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Shares or | Shares or | Unearned | Value of | ||||||||||||||||||||||||||||||
Securities | Securities | Securities | Units of | Units of | Shares, | Unearned Shares, | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Stock That | Stock That | Units or | Units or | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Have Not | Have Not | Other Rights | Other Rights | |||||||||||||||||||||||||||||
Options- | Options- | Unearned | Exercise | Option | Been | Been | That Have | That Have | ||||||||||||||||||||||||||||
Exercisable | Unexercisable | Options | Price | Expiration | Vested | Vested | Not Vested | Not Vested | ||||||||||||||||||||||||||||
Name | # | # | # | # | Date | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||||
(a) | (b) | (c ) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
Richard M. Lavers | 5,500 | 0 | $ | 16.50 | 2/19/2012 | |||||||||||||||||||||||||||||||
1,600 | 0 | $ | 11.18 | 3/28/2013 |
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• | the distribution of all the excess sale proceeds according to the terms of the merger agreement and the trust agreement; or | |
• | the sale committee’s failure to consummate a sale of our Specialty Vehicles business within the time period and pursuant to the other terms set forth in the merger agreement. |
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• | Each of our Common Shares that is issued and outstanding immediately prior to the effective time will cease to exist and each such share: |
• | (other than dissenting shares, treasury shares and shares owned by Acquiror and its affiliates) will be converted into the right to receive $0.20 per share; | |
• | (other than dissenting shares, but including shares owned by Acquiror and its affiliates) will be converted into the right to receive one unit of the trust; and | |
• | for which the holder has properly perfected appraisal rights underChapter 23-1-44 of the Indiana Business Corporation Law (the “IBCL”), will receive the fair value of such share. |
• | Each share of Acquisition Sub that is issued and outstanding immediately prior to the effective time will cease to exist and be converted into the right to receive one Common Share of the surviving corporation. |
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• | amend its governance documents; | |
• | issue or sell, or authorize to issue or sell, any shares of its capital stock or securities convertible or exchangeable into shares of capital stock (except pursuant to the exercise of vested options or the conversion of all or a portion of the convertible note issued to Acquiror’s affiliate); | |
• | sell or agree to sell, pledge or dispose of any capital stock or other equity interest of any other person that is owned by it; | |
• | declare, pay or set aside any dividend or other distribution or payment with respect to, or split, combine, reclassify, purchase or otherwise redeem or acquire, any shares of its capital stock or its other securities (other than the convertible notes issued to Acquiror’s affiliate), except by exercise of any currently outstanding vested options; | |
• | enter into any contract or commitment with respect to capital expenditures for amounts that exceed the amounts budgeted in the financial projections delivered to Acquiror by $50,000 or more in the aggregate; | |
• | acquire an equity interest in or a portion of the assets of any business of any person, or otherwise acquire any assets of any person (other than the purchase of assets in the ordinary course of business and consistent with past practice); | |
• | increase the compensation or fringe benefits of any of its directors, officers or key employees, or grant any severance or termination pay not currently required to be paid under existing agreements or plans (except to the extent required under existing employee and director benefit plans and written agreements in effect on November 8, 2010); | |
• | enter into any new agreements, or modify or terminate certain existing agreements, with any present or former director, officer or other employee of AAG or any of its subsidiaries; | |
• | transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, subject to any lien any material assets; or incur or modify any indebtedness; or issue any debt securities; or assume, guarantee or become responsible for the obligations of any person; or make any loan or other extension of credit, other than in the ordinary course of business consistent with past practice; |
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• | agree to settle or waive and material claim; | |
• | file any amended returns or claims tax refunds; | |
• | issue any press release or make any public announcements without the review and consent of Acquiror, other than in the ordinary course of business consistent with past practice; | |
• | except as required by applicable law or generally accepted accounting principles, make any material change in its accounting practices, policies or procedures or any of its methods of reporting income, deductions or other items for income tax purposes; | |
• | adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of AAG or any of its subsidiaries, except as expressly permitted in the merger agreement; | |
• | incur, assume, guarantee or prepay any indebtedness or make any loans, extensions of credit or advances to any other person, other than to AAG or any of its wholly-owned subsidiaries, except extensions of credit or advances constituting trade payables in the ordinary course of business; | |
• | accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, option, insurance or other compensation or benefits; | |
• | pay, discharge or satisfy any claims, liabilities or obligations, other than the payment, discharge or satisfaction claims, liabilities or obligations in the ordinary course of business and consistent with past practice; | |
• | enter into any material contract other than in the ordinary course of business consistent with past practice; | |
• | plan, announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of AAG or its subsidiaries, other than routine employee terminations for cause; | |
• | take any action that would cause any of the representations or warranties in the merger agreement to be untrue; | |
• | take any action that would, directly or indirectly, restrict the ability of Acquiror to vote or otherwise exercise the rights and receive the benefits of a shareholder of AAG, or which would permit any shareholder to acquire securities of AAG from us on a basis not available to Acquiror or Acquisition Sub; | |
• | materially modify, amend or terminate any material contract or waive any of its material rights or claims; | |
• | prepare any returns, statements, forms, or reports for taxes required to be filed in a manner that is inconsistent with our and our subsidiaries’ past practices; incur any material liability for taxes other than in the ordinary course of business; or enter into any settlement or closing agreement with a taxing authority that does or may adversely affect our or our subsidiaries’ tax liability for any period; | |
• | fail to maintain insurance on its tangible assets and its businesses consistent with past practice; or | |
• | authorize, agree or announce an intention, in writing or otherwise, to take any of the foregoing actions. |
• | upon reasonable notice allow Acquiror, Acquisition Sub, their potential financing sources, and each of their respective affiliates, employees, counsel, accountants, consultants and other authorized |
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representatives reasonable access to our and our subsidiaries’ officers, directors, employees, accountants, properties, books and records; |
• | furnish copies of filings made to the SEC and all information concerning business, properties, personnel, financial data, operating data, and any other information as requested; | |
• | file and prepare with the SEC a proxy statement relating to the Special Meeting of our shareholders and will use reasonable efforts to respond to SEC comments with respect to the proxy statement; | |
• | within two days after the registration statement becomes effective, mail the proxy statement to our shareholders; | |
• | use reasonable efforts to provide information to Acquiror in connection with the filing of the registration statement and cause the registration statement filed with the SEC to become effective; | |
• | not supplement or amend the proxy statement or registration statement without Acquiror’s approval; | |
• | inform Acquiror if any event or circumstance arises that would require an amendment or supplement to the registration statement or proxy statement; | |
• | set a record date for, call and establish a date for, and give notice of, the Special Meeting of our shareholders, and hold that meeting as soon as possible after the registration statement becomes effective; | |
• | obtain, file, and maintain until the effective time any material authorizations, approvals, consents or filings with any government authority; | |
• | appoint two of our board members to serve on a three member special committee to conduct and negotiate the sale of AAG’s Specialty Vehicles business; | |
• | use our commercially reasonable efforts to assist the special committee in selling the Specialty Vehicles business; and | |
• | deliver to the liquidating trust any net proceed from the sale of the Specialty Vehicles business in excess of $5 million if (a) such sale occurs within nine months after the effective time of the Merger, or if AAG has entered into a letter of intent with respect to the sale within such nine-month period and the sale closes within twelve months after the effective time of the Merger, (b) the net proceeds of such sale to the surviving corporation exceed $12 million, and (c) the other conditions to such sale described in the merger agreement are satisfied. |
• | prepare and file with the SEC a registration statement onForm S-4 for registration of the trust units to be issued to shareholders in accordance with the merger agreement and the Merger; | |
• | use reasonable efforts to provide information to us in connection with the filing of the registration statement and cause the registration statement filed with the SEC to become effective; | |
• | use reasonable efforts to respond to comments made by the SEC with respect to the registration statement; | |
• | not supplement or amend the proxy statement or registration statement without our approval; | |
• | inform us if any event or circumstance arises that would require an amendment or supplement to the registration statement or proxy statement; | |
• | cause all shares of Common Shares owned by it or its affiliates to be voted in favor of adopting the merger agreement and the Merger; and |
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• | not take any action that would reasonably be expected to prevent holders of our Common Shares from exercising dissenter’s rights to demand appraisal of their shares in connection with the Merger. |
• | hold in strict confidence all data and information obtained in connection with the Merger, except for any information that was, is now, or becomes generally available to the public, was known to a party on a non-confidential basis prior to its disclosure; is disclosed by a third party not subject to the duty of confidentiality, or may be required to be disclosed by law; | |
• | cooperate with each other party in connection with preparation, filing, and clearance of this proxy statement and registration statement and allow each other party, to the extent possible, to participate in all communications with the SEC and its staff; and | |
• | use best efforts to satisfy the conditions precedent to the consummation of the Merger. |
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• | no temporary, preliminary or permanent order or injunction is pending that prohibits the consummation of the Merger, and no law, statute, code, ordinance, regulation, code, order, judgment, writ, injunction, decision, ruling or decree that prevents or prohibits consummation of the Merger shall have been enacted since the date of the merger agreement; | |
• | the registration statement onForm S-4 shall have been declared effective by the SEC, and shall not be subject to a stop order or any proceeding initiated or threatened by the SEC for that purpose; and | |
• | We and Acquiror have executed and delivered the trust agreement. |
• | we and our subsidiaries senior executives shall have entered employment related agreements, satisfactory to Acquiror, that replace and supersede their present agreements; | |
• | we shall have delivered to Acquiror all consents, approvals, orders, permits, and other authorizations required by law, contract, or agreement; | |
• | we shall have delivered the proxy statement to each holder of our Common Shares as required by the merger agreement and applicable securities law and twenty (20) days have elapsed since delivery of the proxy statement; | |
• | each of our representations and warranties set forth in the merger agreement that (a) are not qualified by materiality or material adverse effect shall be true and correct in all material respects, (b) are qualified by materiality or material adverse effect shall be true and correct, in each case, on the date of the merger agreement and the effective time of the Merger, except to the extent the representations and warranties address matters only as of a particular earlier date, then those representations and warranties will speak as to that earlier date; | |
• | there shall not have been any breach of our covenants and agreements that either is not reasonably capable of being cured, or if reasonably capable of being cured, has not been cured within ten days after written notice to us of such breach; and | |
• | we have delivered a closing certificate to Acquiror and Acquisition Sub certifying that the other conditions to Acquiror’s and Acquisition Sub’s obligation to consummate the Merger have been satisfied. |
• | our shareholders have approved the merger agreement pursuant toSection 23-1-40-3 of the IBCL; |
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• | each of the representations and warranties of Acquiror and Acquisition Sub set forth in the merger agreement that (a) are not qualified by materiality or material adverse effect shall be true and correct in all material respects, (b) are qualified by materiality or material adverse effect shall be true and correct, in each case, on the date of the merger agreement and the effective time of the Merger, except to the extent the representations and warranties address matters only as of a particular earlier date, then those representations and warranties will speak as to that earlier date; | |
• | there shall not have been any breach of the covenants and agreements of Acquiror or Acquisition Sub that either are not reasonably capable of being cured, or if reasonably capable of being cured, have not been cured within ten days after written notice to Acquiror and Acquisition Sub of such breach; and | |
• | Acquiror will have delivered a closing certificate to us certifying that the other conditions to our obligations to consummate the Merger have been satisfied. |
• | any court of competent jurisdiction or any governmental authority has issued a final and nonappealable order, decree, or ruling or taken any action permanently restricting, enjoining or restraining the acceptance of payment for the Common Shares pursuant to the merger agreement; | |
• | any action taken, law entered, enacted, issued or deemed applicable that prohibits or makes illegal the consummation of the Merger; or | |
• | the conditions precedent to the consummation of the Merger described in the two clauses above have not be satisfied on or before March 31, 2011. |
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• | the surviving corporation will maintain and honor all indemnification arrangements in place for all our past and present directors and officers for acts or omissions occurring at or before the effective time of the Merger; | |
• | the surviving corporation will maintain and honor all indemnification provisions and exculpation provisions in favor of each of our present or former directors and officers that is set forth in our certificate of incorporation or bylaws in effect as of the date of the merger agreement; and | |
• | the surviving corporation will purchase a directors’ and officers’ liability insurance policy which will cover those persons who are covered by our directors’ and officers’ liability insurance policy for events occurring before the effective time of the Merger on substantially the same terms as those applicable to our current directors and officers, subject to certain limitations. |
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• | the distribution of all the excess sale proceeds according to the terms of the merger agreement and the trust agreement; or | |
• | the special committee’s failure to consummate a sale of AAG’s Specialty Vehicles business within the time period and pursuant to the other terms set forth in the merger agreement. |
• | collect and convert into cash the trust assets; |
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• | retain and set aside funds and to use those funds to pay and satisfy claims, expenses, charges, liabilities and obligations existing with respect to the trust or trust assets; | |
• | appoint or engage agents or representatives, for example, accountants or attorneys, to assist the trustee in executing its duties; | |
• | take actions necessary to protect and conserve trust assets, including instituting or defending actions or judgments for relief in the name of the trust; and | |
• | cancel, terminate or amend existing contracts, agreements, or causes of action relating to or forming a part of the trust assets and to execute new contracts, agreements, or causes of action relating to the trust. |
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LIQUIDATING TRUST UNIT HOLDERS
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Years Ended | Nine Months Ended | |||||||||||||||
December 31, | September 30, | |||||||||||||||
2009 | 2008 | 2010 | 2009 | |||||||||||||
Total Revenues | 60,623 | 119,596 | 57,814 | 45,088 | ||||||||||||
Gross Profit (Loss) | (1,036 | ) | 17,379 | 1,335 | (2,168 | ) | ||||||||||
Loss from Continuing Operations Before | (20,583 | ) | (20,218 | ) | (23,153 | ) | (14,166 | ) | ||||||||
Federal Income Taxes | ||||||||||||||||
Federal Income Tax Expense (Benefit) | (346 | ) | (1,539 | ) | (214 | ) | (19 | ) | ||||||||
Net Income or ( Loss) | (20,237 | ) | (18,679 | ) | (22,939 | ) | (14,147 | ) | ||||||||
Income (Loss) from Discontinued Operations | 15,507 | (50,323 | ) | (814 | ) | 15,317 | ||||||||||
Net Loss | (4,730 | ) | (69,002 | ) | (23,753 | ) | 1,170 | |||||||||
Per Common Share Data: | ||||||||||||||||
Net Income — Basic and Diluted | (0.29 | ) | (4.37 | ) | (1.16 | ) | 0.07 | |||||||||
Ratio of Earnings (Loss) to Fixed Charges | (1.84 | ) | (11.37 | ) | (0.60 | ) | (4.94 | ) |
December 31, | December 31, | September 30, | ||||||||||
2009 | 2008 | 2010 | ||||||||||
Current Assets | 53,621 | 52,620 | 40,832 | |||||||||
Noncurrent Assets | 36,428 | 54,784 | 33,557 | |||||||||
Total Assets | 90,049 | 107,404 | 74,389 | |||||||||
Current Liabilities | 22,125 | 47,926 | 36,274 | |||||||||
Noncurrent Liabilities | 19,567 | 6,789 | 4,681 | |||||||||
Total Liabilities | 41,692 | 54,715 | 40,955 | |||||||||
Shareholders’ Equity | 48,357 | 52,689 | 33,434 | |||||||||
Total Liabilities and Shareholders’ Equity | 90,049 | 107,404 | 74,389 | |||||||||
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Years Ended | Nine Months Ended | |||||||||||||||
December 31, | September 30, | |||||||||||||||
2009 | 2008 | 2010 | 2009 | |||||||||||||
Total Revenues | 13,493 | 2,405 | 19,147 | 7,887 | ||||||||||||
Gross Profit (Loss) | 310 | (635 | ) | 1,881 | (330 | ) | ||||||||||
Operating Income (Loss) | (837 | ) | (636 | ) | 691 | (1,190 | ) | |||||||||
(Loss) on intercompany real estate transaction | — | — | (1,485 | ) | — | |||||||||||
Net Income (Loss) Attributable to Specialty Vehicles(1) | (856 | ) | (636 | ) | (826 | ) | (1,190 | ) |
(1) | September 30, 2010 Net Loss includes a charge of $1.5 million attributable to an intercompany real estate transaction. This loss is eliminated in consolidation. |
December 31, | December 31, | September 30, | ||||||||||
2009 | 2008 | 2010 | ||||||||||
Current Assets | 6,321 | 2,153 | 4,487 | |||||||||
Noncurrent Assets | 320 | — | 2,422 | |||||||||
Total Assets | 6,641 | 2,153 | 6,909 | |||||||||
Current Liabilities | 3,764 | 474 | 2,901 | |||||||||
Noncurrent Liabilities | — | — | — | |||||||||
Total Liabilities | 3,764 | 474 | 2,901 | |||||||||
(2) | The balance sheet data reflects the effect of the Company’s discontinued operations. |
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Price Range | ||||||||
Fiscal 2010 | High | Low | ||||||
First Quarter | $ | 1.51 | $ | 1.09 | ||||
Second Quarter | 1.45 | 0.47 | ||||||
Third Quarter | 0.59 | 0.12 | ||||||
Fourth Quarter | 0.27 | 0.09 |
Fiscal 2009 | High | Low | ||||||
First Quarter | $ | 2.03 | $ | 0.52 | ||||
Second Quarter | 1.45 | 0.25 | ||||||
Third Quarter | 1.55 | 1.02 | ||||||
Fourth Quarter | 1.55 | 1.00 |
Fiscal 2008 | High | Low | ||||||
First Quarter | $ | 6.01 | $ | 2.75 | ||||
Second Quarter | 3.78 | 2.11 | ||||||
Third Quarter | 2.64 | 1.65 | ||||||
Fourth Quarter | 2.53 | 0.48 |
Number of Shares | Percent of | |||||||
Name and Address of Beneficial Owner | Beneficially Owned | Class | ||||||
H.I.G. All American, LLC | 41,640,523 | (1) | 71.9 | % | ||||
c/o H.I.G. Capital, LLC 1450 Brickell Avenue, 31st Floor Miami, Florida 33131 | ||||||||
GAMCO Investors, Inc. | 2,840,900 | (2) | 7.7 | % | ||||
One Corporate Center Irvine, California 92614 |
(1) | Includes 21,156,658 shares that H.I.G. All American could acquire on conversion of convertible debt or other rights as of December 31, 2010. Certain other persons may be deemed to the be the beneficial |
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owners of all of such shares as follows: All American Homes Holdings, LLC, as the owner of a majority of the equity interests of H.I.G. All American; H.I.G. Capital Partners IV, L.P., in its capacity as the owner of a majority of the equity interests of All American Homes Holdings, LLC; H.I.G. Advisors IV, L.L.C., as the general partner of H.I.G. Capital Partners IV, L.P.; H.I.G. GP-II, Inc., as the manager of H.I.G. Advisors IV, L.L.C.; and Messrs. Tamer and Mnaymneh as co-presidents, directors and the only shareholders of H.I.G. GP-II, Inc. The address of each such person is the same as the address of H.I.G. All American. | ||
(2) | In a Schedule 13D filed with the SEC, GAMCO Investors states that Mr. Mario Gabelli may be deemed to beneficially own the Common Shares owned by GAMCO Investors. Mr. Gabelli’s address is the same as that of GAMCO Investors. |
Director | Shares | |||||||||||||||||||||||
Compensation | Held in | |||||||||||||||||||||||
Grant | 401(k) | Total | ||||||||||||||||||||||
Shares | Exercisable | Vesting | Plan as of | Shares | % of | |||||||||||||||||||
Beneficially | Within | Within | Dec. 31, | Beneficially | Shares | |||||||||||||||||||
Name | Owned | 60 Days | 60 Days | 2010 | Owned | Outstanding | ||||||||||||||||||
R.J. Deputy | 173,989 | 3,000 | — | — | 176,989 | * | ||||||||||||||||||
W.P. Johnson | 142,815 | 3,000 | — | — | 145,815 | * | ||||||||||||||||||
R.M. Lavers | 75,932 | 7,100 | — | 292 | 83,324 | * | ||||||||||||||||||
E.W. Miller | 76,308 | 3,000 | — | — | 79,308 | * | ||||||||||||||||||
D.W. Hudler | 75,070 | 3,000 | — | — | 78,070 | * | ||||||||||||||||||
G.B. Bloom | 73,927 | 3,000 | — | — | 76,927 | * | ||||||||||||||||||
J.A. Goebel | 67,138 | — | — | — | 67,138 | * | ||||||||||||||||||
R.J. Bedell | 19,671 | — | — | 25,318 | 46,939 | * | ||||||||||||||||||
C.A. Zuhl | 29,297 | — | — | — | 29,297 | * | ||||||||||||||||||
F. deArmas | — | — | — | — | — | * | ||||||||||||||||||
M. Sanford | — | — | — | — | — | * | ||||||||||||||||||
All Current Directors and Executive Officers as a group (11 persons) | 736,097 | 22,100 | — | 25,610 | 783,807 | 2.1 | % | |||||||||||||||||
* | Less than 1% |
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Secretary
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Consolidated Balance Sheets
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 2,485 | $ | 6,352 | ||||
Restricted cash | 8,052 | 10,191 | ||||||
Trade receivables, less allowance for doubtful receivables 2010 — $414 and 2009 — $1,234 | 2,712 | 3,163 | ||||||
Other receivables | 1,691 | 1,426 | ||||||
Refundable income taxes | 182 | 1,939 | ||||||
Inventories | 17,096 | 21,566 | ||||||
Prepaid expenses and other | 3,955 | 4,325 | ||||||
Assets held for sale | 4,659 | 4,659 | ||||||
Total current assets | 40,832 | 53,621 | ||||||
Property, plant and equipment, net | 27,333 | 28,787 | ||||||
Cash value of life insurance, net of loans | 72 | 515 | ||||||
Restricted cash | 4,598 | 4,607 | ||||||
Other | 1,554 | 2,519 | ||||||
TOTAL ASSETS | $ | 74,389 | $ | 90,049 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable, trade | $ | 9,314 | $ | 9,132 | ||||
Accrued income taxes | 441 | 691 | ||||||
Accrued expenses and other liabilities | 8,736 | 11,933 | ||||||
Fair value of derivative instruments | 6,589 | — | ||||||
Current maturities of long-term debt | 11,194 | 369 | ||||||
Total current liabilities | 36,274 | 22,125 | ||||||
Long-term debt | 2,248 | 2,828 | ||||||
Fair value of derivative instruments | — | 13,030 | ||||||
Deferred income taxes | — | 508 | ||||||
Postretirement deferred compensation benefits | 2,369 | 2,753 | ||||||
Other | 64 | 448 | ||||||
Total liabilities | 40,955 | 41,692 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 9) | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common shares, without par value: authorized 100,000 shares; issued 2010 — 41,751 shares and 2009 — 21,257 shares | 101,320 | 92,710 | ||||||
Additional paid-in capital | 6,365 | 6,547 | ||||||
Retained earnings (deficit) | (17,558 | ) | 6,195 | |||||
Treasury shares, at cost, 2010 — 5,000 shares and 2009 — 5,074 shares | (56,693 | ) | (57,095 | ) | ||||
Total shareholders’ equity | 33,434 | 48,357 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 74,389 | $ | 90,049 | ||||
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Consolidated Statements of Operations
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Net sales | ||||||||||||||||
Products | $ | 15,993 | $ | 15,064 | $ | 54,845 | $ | 41,857 | ||||||||
Delivery and set | 703 | 1,010 | 2,969 | 3,231 | ||||||||||||
16,696 | 16,074 | 57,814 | 45,088 | |||||||||||||
Cost of sales | ||||||||||||||||
Products | 16,304 | 15,810 | 53,232 | 43,318 | ||||||||||||
Delivery and set | 981 | 1,208 | 3,247 | 3,938 | ||||||||||||
17,285 | 17,018 | 56,479 | 47,256 | |||||||||||||
Gross profit (loss) | (589 | ) | (944 | ) | 1,335 | (2,168 | ) | |||||||||
Operating expenses: | ||||||||||||||||
Selling | 1,278 | 1,083 | 3,685 | 2,717 | ||||||||||||
General and administrative | 2,749 | 2,856 | 7,502 | 8,978 | ||||||||||||
Gain on sale of assets, net | (79 | ) | (8 | ) | (90 | ) | (22 | ) | ||||||||
3,948 | 3,931 | 11,097 | 11,673 | |||||||||||||
Operating loss | (4,537 | ) | (4,875 | ) | (9,762 | ) | (13,841 | ) | ||||||||
Nonoperating (income) expense: | ||||||||||||||||
Interest expense | 4,140 | 924 | 7,186 | 2,385 | ||||||||||||
Debt extinguishment loss | — | — | 7,289 | — | ||||||||||||
Investment income | (194 | ) | (598 | ) | (727 | ) | (1,168 | ) | ||||||||
Other income, net | (112 | ) | (42 | ) | (357 | ) | (892 | ) | ||||||||
3,834 | 284 | 13,391 | 325 | |||||||||||||
Loss from continuing operations before income taxes | (8,371 | ) | (5,159 | ) | (23,153 | ) | (14,166 | ) | ||||||||
Income taxes, (credit) | (214 | ) | 34 | (214 | ) | (19 | ) | |||||||||
Net loss from continuing operations | (8,157 | ) | (5,193 | ) | (22,939 | ) | (14,147 | ) | ||||||||
Discontinued operations: | ||||||||||||||||
Income (loss) from operations of discontinued entities (net of taxes of $0) | (294 | ) | 1,298 | (814 | ) | 382 | ||||||||||
Gain on sale of assets of discontinued entities (net of taxes of $0) | — | — | — | 25 | ||||||||||||
Income from legal settlement (net of taxes of $0) | — | — | — | 14,910 | ||||||||||||
Income (loss) from discontinued operations | (294 | ) | 1,298 | (814 | ) | 15,317 | ||||||||||
Net income (loss) | $ | (8,451 | ) | $ | (3,895 | ) | $ | (23,753 | ) | $ | 1,170 | |||||
Earnings (loss) per share — Basic and Diluted | ||||||||||||||||
Continuing operations | $ | (0.40 | ) | $ | (0.32 | ) | $ | (1.12 | ) | $ | (0.89 | ) | ||||
Discontinued operations | (0.01 | ) | 0.08 | (0.04 | ) | 0.96 | ||||||||||
Net income (loss) per share | $ | (0.41 | ) | $ | (0.24 | ) | $ | (1.16 | ) | $ | 0.07 | |||||
Number of common shares used in the computation of earnings (loss) per share: | ||||||||||||||||
Basic | 20,564 | 16,024 | 20,559 | 15,946 | ||||||||||||
Diluted | 20,564 | 16,024 | 20,559 | 15,965 |
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Consolidated Statements of Cash Flows
Nine Months Ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income (loss) | $ | (23,753 | ) | $ | 1,170 | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Depreciation and amortization | 2,473 | 1,910 | ||||||
Amortization of discount on convertible debt | 2,036 | — | ||||||
Fair value change in derivative instruments | 2,161 | — | ||||||
PIK interest and penalties | 2,510 | — | ||||||
Debt extinguishment loss | 7,289 | — | ||||||
Net realized and unrealized losses on derivatives | — | 22 | ||||||
Provision for doubtful receivables, net of recoveries | (213 | ) | (374 | ) | ||||
Gain on sale of properties and other assets, net | (90 | ) | (47 | ) | ||||
Increase in cash surrender value of life insurance policies | (2 | ) | (931 | ) | ||||
Deferred income tax | (508 | ) | — | |||||
Other | (547 | ) | (187 | ) | ||||
Changes in certain assets and liabilities: | ||||||||
Accounts receivable | 399 | 1,870 | ||||||
Inventories | 4,470 | 3,166 | ||||||
Prepaid expenses and other | (2,263 | ) | 651 | |||||
Accounts payable, trade | 182 | (5,586 | ) | |||||
Income taxes — accrued and refundable | 1,507 | (620 | ) | |||||
Accrued expenses and other liabilities | (3,197 | ) | (15,301 | ) | ||||
Net cash used in operating activities | (7,546 | ) | (14,257 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Proceeds from sale of properties and other assets | 402 | 713 | ||||||
Investments in life insurance policies | 445 | 771 | ||||||
Purchases of property and equipment | (561 | ) | (712 | ) | ||||
Release of restricted cash and other | 3,112 | 2,301 | ||||||
Net cash provided by investing activities | 3,398 | 3,073 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from short-term borrowings | — | 2,345 | ||||||
Payments of short-term borrowings | — | (5,441 | ) | |||||
Proceeds from long-term debt | 550 | 2,375 | ||||||
Payments of long-term debt | (276 | ) | (435 | ) | ||||
Proceeds from borrowings on cash value of life insurance policies | — | 1,452 | ||||||
Issuance of common shares under stock incentive plans | 7 | 19 | ||||||
Purchases of common shares for treasury | — | (47 | ) | |||||
Net cash provided by financing activities | 281 | 268 | ||||||
Decrease in cash and cash equivalents | (3,867 | ) | (10,916 | ) | ||||
CASH AND CASH EQUIVALENTS: | ||||||||
Beginning of period | 6,352 | 15,745 | ||||||
End of period | $ | 2,485 | $ | 4,829 | ||||
F-4
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1. | BASIS OF PRESENTATION. |
2. | SEGMENT INFORMATION. |
F-5
Table of Contents
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales | ||||||||||||||||
Specialty vehicles | $ | 6,471 | $ | 3,948 | $ | 19,147 | $ | 7,887 | ||||||||
Housing | 10,225 | 12,126 | 38,667 | 37,201 | ||||||||||||
Consolidated total | $ | 16,696 | $ | 16,074 | $ | 57,814 | $ | 45,088 | ||||||||
Gross profit | ||||||||||||||||
Specialty vehicles | $ | 391 | $ | 265 | $ | 1,881 | $ | (330 | ) | |||||||
Housing | (980 | ) | (1,202 | ) | (546 | ) | (1,814 | ) | ||||||||
Other reconciling items | — | (7 | ) | — | (24 | ) | ||||||||||
Consolidated total | $ | (589 | ) | $ | (944 | ) | $ | 1,335 | $ | (2,168 | ) | |||||
Operating expenses | ||||||||||||||||
Specialty vehicles | $ | 397 | $ | 287 | $ | 1,189 | $ | 860 | ||||||||
Housing | 3,106 | 3,437 | 9,146 | 9,481 | ||||||||||||
Other reconciling items | 445 | 207 | 762 | 1,332 | ||||||||||||
Consolidated total | $ | 3,948 | $ | 3,931 | $ | 11,097 | $ | 11,673 | ||||||||
Operating income (loss) | ||||||||||||||||
Specialty vehicles | $ | (6 | ) | $ | (22 | ) | $ | 691 | $ | (1,190 | ) | |||||
Housing | (4,086 | ) | (4,639 | ) | (9,691 | ) | (11,296 | ) | ||||||||
Other reconciling items | (445 | ) | (214 | ) | (762 | ) | (1,355 | ) | ||||||||
Consolidated total | $ | (4,537 | ) | $ | (4,875 | ) | $ | (9,762 | ) | $ | (13,841 | ) | ||||
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Total assets | ||||||||
Specialty vehicles | $ | 6,898 | $ | 6,715 | ||||
Housing | 38,610 | 42,461 | ||||||
Corporate and other reconciling items | 28,881 | 40,873 | ||||||
Consolidated total | $ | 74,389 | $ | 90,049 | ||||
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3. | INVENTORIES. |
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Raw materials | ||||||||
Specialty vehicles | $ | 1,686 | $ | 3,493 | ||||
Housing | 2,589 | 3,691 | ||||||
Other | — | 14 | ||||||
Consolidated total | 4,275 | 7,198 | ||||||
Work in process | ||||||||
Specialty vehicles | 1,545 | 1,780 | ||||||
Housing | 1,245 | 1,554 | ||||||
Consolidated total | 2,790 | 3,334 | ||||||
Improved lots | ||||||||
Housing | 391 | 391 | ||||||
Consolidated total | 391 | 391 | ||||||
Finished goods | ||||||||
Specialty vehicles | 85 | 483 | ||||||
Housing | 9,555 | 10,160 | ||||||
Consolidated total | 9,640 | 10,643 | ||||||
Consolidated total | $ | 17,096 | $ | 21,566 | ||||
4. | LONG-TERM ASSETS. |
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Land and improvements | $ | 7,310 | $ | 7,549 | ||||
Buildings and improvements | 31,860 | 31,777 | ||||||
Machinery and equipment | 10,969 | 10,789 | ||||||
Transportation equipment | 9,993 | 10,398 | ||||||
Office furniture and fixtures | 14,335 | 14,138 | ||||||
Total | 74,467 | 74,651 | ||||||
Less, accumulated depreciation | 47,134 | 45,864 | ||||||
Property, plant and equipment, net | $ | 27,333 | $ | 28,787 | ||||
F-7
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5. | ACCRUED EXPENSES AND OTHER LIABILITIES. |
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Wages, salaries, bonuses and commissions and other compensation | $ | 622 | $ | 226 | ||||
Warranty | 2,081 | 4,162 | ||||||
Insurance-products and general liability, workers compensation, group health and other | 1,573 | 3,105 | ||||||
Customer deposits and unearned revenues | 1,858 | 1,391 | ||||||
Interest | 304 | 400 | ||||||
Sales and property taxes | 862 | 778 | ||||||
Other current liabilities | 1,436 | 1,871 | ||||||
Total | $ | 8,736 | $ | 11,933 | ||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Balance of accrued warranty at beginning of period | $ | 2,619 | $ | 6,565 | $ | 4,162 | $ | 9,688 | ||||||||
Warranties issued during the period and changes in liability for pre- existing warranties | 415 | 544 | 1,988 | 1,399 | ||||||||||||
Settlements made during the period | (953 | ) | (1,678 | ) | (4,069 | ) | (5,656 | ) | ||||||||
Balance of accrued warranty at September 30 | $ | 2,081 | $ | 5,431 | $ | 2,081 | $ | 5,431 | ||||||||
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6. | COMPREHENSIVE INCOME (LOSS). |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income (loss) | $ | (8,451 | ) | $ | (3,895 | ) | $ | (23,753 | ) | $ | 1,170 | |||||
Unrealized loss on securities | — | (59 | ) | — | — | |||||||||||
Unrealized gains on cash flow hedges, net of taxes | — | 9 | — | 22 | ||||||||||||
Comprehensive income (loss) | $ | (8,451 | ) | $ | (3,945 | ) | $ | (23,753 | ) | $ | 1,192 | |||||
7. | EARNINGS PER SHARE AND COMMON STOCK MATTERS. |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Numerator: | ||||||||||||||||
Net income (loss) available to common stockholders | $ | (8,451 | ) | $ | (3,895 | ) | $ | (23,753 | ) | $ | 1,170 | |||||
Denominator: | ||||||||||||||||
Number of shares outstanding, end of period: | ||||||||||||||||
Weighted average number of common shares used in basic EPS | 20,564 | 16,024 | 20,559 | 15,946 | ||||||||||||
Effect of dilutive securities | — | — | — | 19 | ||||||||||||
Weighted average number of common shares used in dilutive EPS | 20,564 | 16,024 | 20,559 | 15,965 | ||||||||||||
F-9
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8. | INCOME TAXES. |
9. | COMMITMENTS AND CONTINGENCIES. |
F-10
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F-11
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10. | STOCK-BASED COMPENSATION. |
11. | RESTRICTED CASH. |
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Cash collateral for letters of credit(1) | $ | 8,553 | $ | 8,550 | ||||
Indemnity escrow account(2) | 2,817 | 5,147 | ||||||
Cash collateral for workers compensation trust accounts | 1,098 | 1,101 | ||||||
Other | 182 | — | ||||||
Total restricted cash | $ | 12,650 | $ | 14,798 | ||||
(1) | The amount classified as current assets is $5.1 million and $5.0 million as of September 30, 2010 and December 31, 2009. |
F-12
Table of Contents
(2) | The indemnity escrow account is related to the agreement for the asset sale of the recreational vehicle business. |
12. | DEBT. |
F-13
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F-14
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F-15
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Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Interest on H.I.G. Tranche B Note | $ | 536 | $ | — | $ | 1,585 | $ | — | ||||||||
Additional warrants, conversion feature, penalty and anti-dilution provisions from 1st and 2nd Amendments | 9,965 | — | 36,727 | — | ||||||||||||
Fair value adjustments of derivative instruments | (6,879 | ) | — | (33,746 | ) | — | ||||||||||
Debt accretion | 393 | — | 2,036 | — | ||||||||||||
Amortization of loan fees | 13 | — | 317 | — | ||||||||||||
Interest on Lake City Bank notes | 35 | 31 | 97 | 60 | ||||||||||||
Interest on life insurance borrowings | — | 784 | 2 | 2,231 | ||||||||||||
Interest on retirement plans | 30 | 54 | 90 | 18 | ||||||||||||
Other interest expense | 47 | 55 | 78 | 76 | ||||||||||||
Total interest expense | $ | 4,140 | $ | 924 | $ | 7,186 | $ | 2,385 | ||||||||
13. | SUBSEQUENT EVENTS. |
F-16
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F-17
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F-18
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2009 | 2008 | |||||||
(In thousands) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 6,352 | $ | 15,745 | ||||
Restricted cash | 10,191 | 1,600 | ||||||
Trade receivables, less allowance for doubtful receivables 2009 — $1,234 and 2008 — $1,676 | 3,163 | 1,837 | ||||||
Other receivables | 1,426 | 4,666 | ||||||
Refundable income taxes | 1,939 | 1,559 | ||||||
Inventories | 21,566 | 19,910 | ||||||
Prepaid expenses and other | 4,325 | 4,390 | ||||||
Assets held for sale | 4,659 | 2,913 | ||||||
Total current assets | 53,621 | 52,620 | ||||||
Property, plant and equipment, net | 28,787 | 30,922 | ||||||
Cash value of life insurance, net of loans | 515 | 4,710 | ||||||
Restricted cash | 4,607 | 17,321 | ||||||
Other | 2,519 | 1,831 | ||||||
TOTAL ASSETS | $ | 90,049 | $ | 107,404 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable, trade | $ | 9,132 | $ | 11,414 | ||||
Accrued income taxes | 691 | 1,470 | ||||||
Accrued expenses and other liabilities | 11,933 | 31,127 | ||||||
Floorplan notes payable | — | 3,096 | ||||||
Current maturities of long-term debt | 369 | 819 | ||||||
Total current liabilities | 22,125 | 47,926 | ||||||
Long-term debt | 2,828 | 2,190 | ||||||
Fair value of derivative instruments | 13,030 | — | ||||||
Deferred income taxes | 508 | 457 | ||||||
Postretirement deferred compensation benefits | 2,753 | 3,104 | ||||||
Other | 448 | 1,038 | ||||||
Total liabilities | 41,692 | 54,715 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 13) | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common shares, without par value: authorized 60,000 shares; issued 2009 — 21,257 shares and 2008 — 21,236 shares | 92,710 | 92,688 | ||||||
Additional paid-in capital | 6,547 | 7,213 | ||||||
Accumulated other comprehensive loss | — | (75 | ) | |||||
Retained earnings | 6,195 | 10,925 | ||||||
Treasury shares, at cost, 2009 — 5,074 shares and 2008 — 5,236 shares | (57,095 | ) | (58,062 | ) | ||||
Total shareholders’ equity | 48,357 | 52,689 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 90,049 | $ | 107,404 | ||||
F-19
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2009 | 2008 | |||||||
(In thousands, except per share amounts) | ||||||||
Net sales | ||||||||
Products | $ | 56,521 | $ | 107,609 | ||||
Delivery and set | 4,102 | 11,987 | ||||||
60,623 | 119,596 | |||||||
Cost of sales | ||||||||
Products | 56,703 | 89,593 | ||||||
Delivery and set | 4,956 | 12,624 | ||||||
61,659 | 102,217 | |||||||
Gross profit (loss) | (1,036 | ) | 17,379 | |||||
Operating expenses: | ||||||||
Selling | 3,633 | 7,077 | ||||||
General and administrative | 11,155 | 13,018 | ||||||
Impairments | — | 18,605 | ||||||
Gain on sale of assets, net | (67 | ) | (44 | ) | ||||
14,721 | 38,656 | |||||||
Operating loss | (15,757 | ) | (21,277 | ) | ||||
Nonoperating (income) expense: | ||||||||
Interest expense | 7,256 | 1,635 | ||||||
Investment income | (1,422 | ) | (1,094 | ) | ||||
Other income, net | (1,008 | ) | (1,600 | ) | ||||
4,826 | (1,059 | ) | ||||||
Loss from continuing operations before income taxes | (20,583 | ) | (20,218 | ) | ||||
Income taxes (credits) | (346 | ) | (1,539 | ) | ||||
Net loss from continuing operations | (20,237 | ) | (18,679 | ) | ||||
Discontinued operations | ||||||||
Income (loss) from operations of discontinued entities (net of taxes (credits) of $0 and $947, respectively) | 597 | (40,884 | ) | |||||
Loss on sale of assets of discontinued entities (net of taxes of $0) | — | (9,439 | ) | |||||
Income from legal settlement (net of taxes of $0) | 14,910 | — | ||||||
Income (loss) from discontinued operations | 15,507 | (50,323 | ) | |||||
Net loss | $ | (4,730 | ) | $ | (69,002 | ) | ||
Earnings (loss) per share — Basic | ||||||||
Continuing operations | $ | (1.26 | ) | $ | (1.18 | ) | ||
Discontinued operations | 0.97 | (3.19 | ) | |||||
Net loss per share | (0.29 | ) | (4.37 | ) | ||||
Earnings (loss) per share — Diluted | ||||||||
Continuing operations | (1.26 | ) | (1.18 | ) | ||||
Discontinued operations | 0.97 | (3.19 | ) | |||||
Net loss per share | $ | (0.29 | ) | $ | (4.37 | ) | ||
Number of common shares used in the computation of loss per share: | ||||||||
Basic | 16,073 | 15,799 | ||||||
Diluted | 16,073 | 15,799 |
F-20
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Accumulated | ||||||||||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||||||||
Comprehensive | Common | Shares | Paid-In | Comprehensive | Retained | Treasury | Shares | Shareholders’ | ||||||||||||||||||||||||||||
Income (Loss) | Number | Amount | Capital | Income (Loss) | Earnings | Number | Amount | Equity | ||||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||
Balance at January 1, 2008 | 21,180 | $ | 92,552 | $ | 7,856 | $ | (48 | ) | $ | 79,927 | (5,402 | ) | $ | (59,154 | ) | $ | 121,133 | |||||||||||||||||||
Comprehensive Loss — 2008 | ||||||||||||||||||||||||||||||||||||
Net loss | $ | (69,002 | ) | — | — | — | — | (69,002 | ) | — | — | (69,002 | ) | |||||||||||||||||||||||
Net unrealized (loss) on cash flow hedges | (27 | ) | — | — | — | (27 | ) | — | — | — | (27 | ) | ||||||||||||||||||||||||
Total comprehensive loss | $ | (69,029 | ) | |||||||||||||||||||||||||||||||||
Shares repurchased for the treasury | — | — | — | — | — | (31 | ) | (55 | ) | (55 | ) | |||||||||||||||||||||||||
Issuance of common shares under employee stock purchase plan | 56 | 136 | — | — | — | — | — | 136 | ||||||||||||||||||||||||||||
Issuance (cancellations) of common shares from treasury | — | — | (643 | ) | — | — | 197 | 1,147 | 504 | |||||||||||||||||||||||||||
Balance at December 31, 2008 | 21,236 | $ | 92,688 | $ | 7,213 | $ | (75 | ) | $ | 10,925 | (5,236 | ) | $ | (58,062 | ) | $ | 52,689 | |||||||||||||||||||
Comprehensive Loss — 2009 | ||||||||||||||||||||||||||||||||||||
Net loss | $ | (4,730 | ) | — | — | — | — | (4,730 | ) | — | — | (4,730 | ) | |||||||||||||||||||||||
Net realized gain on cash flow hedges | 75 | — | — | — | 75 | — | — | — | 75 | |||||||||||||||||||||||||||
Total comprehensive loss | $ | (4,655 | ) | |||||||||||||||||||||||||||||||||
Shares repurchased for the treasury | — | — | — | — | — | (25 | ) | (47 | ) | (47 | ) | |||||||||||||||||||||||||
Issuance of common shares under employee stock purchase plan | 21 | 22 | — | — | — | — | — | 22 | ||||||||||||||||||||||||||||
Issuance (cancellations) of common shares from treasury | — | — | (666 | ) | — | — | 187 | 1,014 | 348 | |||||||||||||||||||||||||||
Balance at December 31, 2009 | 21,257 | $ | 92,710 | $ | 6,547 | $ | — | $ | 6,195 | (5,074 | ) | $ | (57,095 | ) | $ | 48,357 | ||||||||||||||||||||
F-21
Table of Contents
2009 | 2008 | |||||||
(In thousands) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (4,730 | ) | $ | (69,002 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 2,681 | 4,225 | ||||||
Amortization of discount on convertible debt | 833 | — | ||||||
Fair value adjustment to derivative instruments | 3,030 | — | ||||||
Provision for doubtful receivables | (407 | ) | 1,140 | |||||
Provision for write-down of assets to net realizable value | — | 1,505 | ||||||
Net realized/unrealized gain (loss) on cash flow hedges | 75 | (27 | ) | |||||
Goodwill impairment charge | — | 12,993 | ||||||
Impairment charges | — | 6,264 | ||||||
Loss on sale of businesses | — | 9,439 | ||||||
Gain on sale of properties and other assets, net | (104 | ) | (44 | ) | ||||
Increase in cash surrender value of life insurance policies | (766 | ) | (90 | ) | ||||
Deferred income tax provision (benefit) | 51 | (1,533 | ) | |||||
Other | (592 | ) | (3,993 | ) | ||||
Changes in certain assets and liabilities, net of effects of acquisitions and dispositions: | ||||||||
Trade receivables | 534 | (116 | ) | |||||
Inventories | (1,656 | ) | 35,819 | |||||
Prepaid expenses and other | 1,218 | (777 | ) | |||||
Accounts payable, trade | (2,282 | ) | (3,628 | ) | ||||
Income taxes — accrued and refundable | (1,159 | ) | 1,003 | |||||
Accrued expenses and other liabilities | (19,194 | ) | (2,786 | ) | ||||
Net cash used in operating activities | (22,469 | ) | (9,608 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Proceeds from sale of businesses | — | 25,238 | ||||||
Proceeds from sale of properties and other assets | 840 | 357 | ||||||
Proceeds from (investments in) marketable securities and cash surrender value | 3,509 | (667 | ) | |||||
Purchases of property and equipment | (991 | ) | (2,088 | ) | ||||
Other | 4,338 | (7,154 | ) | |||||
Net cash provided by investing activities | 7,696 | 15,686 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from short-term borrowings | 2,345 | 16,813 | ||||||
Payments of short-term borrowings | (5,441 | ) | (37,906 | ) | ||||
Proceeds from long-term debt | 2,584 | — | ||||||
Payments of long-term debt | (3,229 | ) | (853 | ) | ||||
Proceeds from borrowings on cash value of life insurance policies | 1,452 | 48,983 | ||||||
Repayment of borrowings on cash value of life insurance policies | — | (19,000 | ) | |||||
Proceeds from issuance of convertible debt, net of financing costs | 7,694 | — | ||||||
Issuance of common shares under stock incentive plans | 22 | 136 | ||||||
Purchases of common shares for treasury | (47 | ) | (55 | ) | ||||
Net cash provided by financing activities | 5,380 | 8,118 | ||||||
Increase (decrease) in cash and cash equivalents | (9,393 | ) | 14,196 | |||||
CASH AND CASH EQUIVALENTS | ||||||||
Beginning of year | 15,745 | 1,549 | ||||||
End of year | $ | 6,352 | $ | 15,745 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid during the year for interest | $ | 383 | $ | 599 | ||||
Cash paid (refunded) during the year for income taxes | 816 | (35 | ) | |||||
Operating cash received related to insurance settlement | (139 | ) | (988 | ) | ||||
Gain on sale of assets — Continuing operations | (104 | ) | (44 | ) | ||||
(Gain) loss on sale of assets — Discontinued operations | — | 9,439 | ||||||
Cash received from legal settlement | $ | (14,910 | ) | $ | — |
F-22
Table of Contents
1. | NATURE OF OPERATIONS AND ACCOUNTING POLICIES. |
2009 | 2008 | |||||||
Issuance (cancellations) of common shares, at market value, in lieu of cash compensation | $ | 101 | $ | 234 |
F-23
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December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Cash collateral for letters of credit(1) | $ | 8,550 | $ | 7,492 | ||||
Indemnity escrow account(2) | 5,147 | 10,000 | ||||||
Cash collateral for workers compensation trust accounts | 1,101 | 1,429 | ||||||
Total restricted cash | $ | 14,798 | $ | 18,921 | ||||
(1) | The amount classified as current assets is $5.0 million and $1.6 million as of December 31, 2009 and 2008, respectively. | |
(2) | The indemnity escrow account is related to the agreement for the asset sale of the recreational vehicle business (seeNote 12, Discontinued Operations). |
2009 | 2008 | |||||||
Interest income | $ | 345 | $ | 288 | ||||
Increase in cash value of life insurance policies | 999 | 1,255 | ||||||
Dividend income on preferred stocks | 3 | 7 | ||||||
Net gain (loss) on investment in joint ventures | 75 | (456 | ) | |||||
Total | $ | 1,422 | $ | 1,094 | ||||
F-24
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Land improvements | 3-15 years | |
Buildings and improvements | 10-30 years | |
Machinery and equipment | 3-10 years | |
Transportation equipment | 2-7 years | |
Office furniture and fixtures, including capitalized computer software | 2-10 years |
F-25
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F-26
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2009 | 2008 | |||||||
Balance of accrued warranty at January 1 | $ | 9,688 | $ | 8,123 | ||||
Warranties issued during the period and changes in liability for pre-existing warranties | 1,782 | 14,873 | ||||||
Settlements made during the period | (7,308 | ) | (13,308 | ) | ||||
Balance of accrued warranty at December 31 | $ | 4,162 | $ | 9,688 | ||||
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F-28
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2. | BASIS OF PRESENTATION. |
F-29
Table of Contents
3. | SEGMENT INFORMATION. |
F-30
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2009 | 2008 | |||||||
Net sales | ||||||||
Housing | $ | 47,130 | $ | 117,191 | ||||
Specialty Vehicles | 13,493 | 2,405 | ||||||
Total | $ | 60,623 | $ | 119,596 | ||||
Gross profit (loss) | ||||||||
Housing | $ | (1,275 | ) | $ | 18,014 | |||
Specialty Vehicles | 310 | (635 | ) | |||||
Other reconciling items | (71 | ) | — | |||||
Total | $ | (1,036 | ) | $ | 17,379 | |||
2009 | 2008 | |||||||
Operating expenses | ||||||||
Housing | $ | 12,484 | $ | 16,551 | ||||
Specialty Vehicles | 1,147 | 1 | ||||||
Other reconciling items | 1,090 | 22,104 | ||||||
Total | $ | 14,721 | $ | 38,656 | ||||
Operating income (loss) | ||||||||
Housing | $ | (13,759 | ) | $ | 1,463 | |||
Specialty Vehicles | (837 | ) | (636 | ) | ||||
Other reconciling items | (1,161 | ) | (22,104 | ) | ||||
Total | $ | (15,757 | ) | $ | (21,277 | ) | ||
Pre-tax income (loss) from continuing operations | ||||||||
Housing | $ | (13,914 | ) | $ | 1,324 | |||
Specialty Vehicles | (856 | ) | (636 | ) | ||||
Other reconciling items | (5,813 | ) | (20,906 | ) | ||||
Total | $ | (20,583 | ) | $ | (20,218 | ) | ||
Total assets | ||||||||
Housing | $ | 42,461 | $ | 43,456 | ||||
Specialty Vehicles | 6,715 | 1,031 | ||||||
Corporate and other reconciling items | 40,873 | 62,917 | ||||||
Total | $ | 90,049 | $ | 107,404 | ||||
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2009 | 2008 | |||||||
Interest expense | ||||||||
Housing | $ | 171 | $ | 159 | ||||
Specialty Vehicles | 19 | — | ||||||
Corporate and other reconciling items | 7,066 | 1,476 | ||||||
Total | $ | 7,256 | $ | 1,635 | ||||
Depreciation | ||||||||
Housing | $ | 1,749 | $ | 2,000 | ||||
Specialty Vehicles | 166 | 9 | ||||||
Corporate and other reconciling items | 488 | 312 | ||||||
Total | $ | 2,403 | $ | 2,321 | ||||
4. | INVENTORIES. |
December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Raw materials | ||||||||
Housing | $ | 3,691 | $ | 4,157 | ||||
Specialty Vehicles | 3,493 | 902 | ||||||
Other | 14 | — | ||||||
Total | 7,198 | 5,059 | ||||||
Work in process | ||||||||
Housing | 1,554 | 2,392 | ||||||
Specialty Vehicles | 1,780 | 385 | ||||||
Total | 3,334 | 2,777 | ||||||
Improved lots | ||||||||
Housing | 391 | 434 | ||||||
Total | 391 | 434 | ||||||
Finished goods | ||||||||
Housing | 10,160 | 10,816 | ||||||
Specialty Vehicles | 483 | 824 | ||||||
Total | 10,643 | 11,640 | ||||||
Total | $ | 21,566 | $ | 19,910 | ||||
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5. | PROPERTY, PLANT AND EQUIPMENT. |
2009 | 2008 | |||||||
Land and improvements | $ | 7,549 | $ | 7,700 | ||||
Buildings and improvements | 31,777 | 32,849 | ||||||
Machinery and equipment | 10,789 | 10,637 | ||||||
Transportation equipment | 10,398 | 11,035 | ||||||
Office furniture and fixtures | 14,138 | 13,992 | ||||||
Total | 74,651 | 76,213 | ||||||
Less, accumulated depreciation | 45,864 | 45,291 | ||||||
Property, plant and equipment, net | $ | 28,787 | $ | 30,922 | ||||
6. | SHORT-TERM BORROWINGS. |
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7. | LONG-TERM DEBT. |
2009 | 2008 | |||||||
H.I.G. Convertible Debt (Tranche B Notes), net of discount of $9,167 | $ | 833 | $ | — | ||||
Note payable to Lake City Bank, interest at 6.25%, monthly principal and interest payment of $23,000, matures April 2012 | 1,899 | — | ||||||
Obligations under industrial development revenue bonds, variable rates (effective weighted-average interest rates of 1.3% at December 31, 2008), paid in full in November 2009 | — | 2,850 | ||||||
Other | 465 | 159 | ||||||
Subtotal | 3,197 | 3,009 | ||||||
Less, current maturities of long-term debt | 369 | 819 | ||||||
Long-term debt | $ | 2,828 | $ | 2,190 | ||||
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8. | ACCRUED EXPENSES AND OTHER LIABILITIES. |
2009 | 2008 | |||||||
Wages, salaries, bonuses, commissions and other compensation | $ | 226 | $ | 5,022 | ||||
Dealer incentives, including volume bonuses, dealer trips, interest reimbursement, co-op advertising and other rebates | 173 | 989 | ||||||
Warranty | 4,162 | 9,688 | ||||||
Insurance-products and general liability, workers compensation, group health and other | 3,105 | 6,320 | ||||||
Customer deposits and unearned revenues | 1,391 | 2,545 | ||||||
Interest | 400 | 395 | ||||||
Sales and property taxes | 778 | 920 | ||||||
Deferred gain on sale of real estate | — | 814 | ||||||
Repurchase liability | 339 | 2,671 | ||||||
Other current liabilities | 1,359 | 1,763 | ||||||
Total | $ | 11,933 | $ | 31,127 | ||||
9. | COMMON STOCK MATTERS AND EARNINGS PER SHARE. |
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Number | Weighted-Average | |||||||
of Shares | Exercise Price | |||||||
Outstanding, January 1, 2008 | 134 | $ | 12.20 | |||||
Granted | — | — | ||||||
Canceled | (1 | ) | 15.78 | |||||
Exercised | — | — | ||||||
Outstanding, December 31, 2008 | 133 | 12.18 | ||||||
Granted | — | — | ||||||
Canceled | (54 | ) | 12.10 | |||||
Exercised | — | — | ||||||
Outstanding, December 31, 2009 | 79 | $ | 12.24 | |||||
Weighted-Average | ||||||||||||
Number Outstanding at | Remaining | Weighted-Average | ||||||||||
Range of Exercise Price | December 31, 2009 | Contractual Life | Exercise Price | |||||||||
$10.00 - $12.00 | 52 | 1.1 | $ | 10.19 | ||||||||
$12.01 - $17.00 | 22 | 2.4 | $ | 15.62 | ||||||||
$17.01 - $18.68 | 5 | 2.3 | $ | 18.68 | ||||||||
79 | ||||||||||||
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Number | ||||
of Shares | ||||
Nonvested at January 1, 2008 | — | |||
Granted | 351,375 | |||
Forfeited | (205,187 | ) | ||
Nonvested at December 31, 2008 | 146,188 | |||
Granted | 196,250 | |||
Earned | (114,729 | ) | ||
Forfeited | (209,791 | ) | ||
Nonvested at December 31, 2009 | 17,918 | |||
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Plan Year | ||||||||
2009 | 2008 | |||||||
Contingent shares awarded | 196,250 | 351,375 | ||||||
Shares earned | — | 114,729 | ||||||
Shares forfeited | 196,250 | 218,728 | ||||||
Contingent shares outstanding as of December 31, 2009 | — | 17,918 | ||||||
2009 | 2008 | |||||||
Numerator: | ||||||||
Net loss available to common stockholders | $ | (4,730 | ) | $ | (69,002 | ) | ||
Denominator: | ||||||||
Number of shares outstanding, end of period: | ||||||||
Weighted-average number of common shares used in Basic EPS | 16,073 | 15,799 | ||||||
Stock options and awards | — | — | ||||||
Weighted-average number of common shares used in Diluted EPS | 16,073 | 15,799 | ||||||
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10. | COMPENSATION AND BENEFIT PLANS. |
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11. | INCOME TAXES. |
2009 | 2008 | |||||||
Federal: | ||||||||
Current | $ | (459 | ) | $ | (36 | ) | ||
Deferred | 51 | (1,533 | ) | |||||
(408 | ) | (1,569 | ) | |||||
State: | ||||||||
Current | 62 | 30 | ||||||
Deferred | — | — | ||||||
62 | 30 | |||||||
Total | $ | (346 | ) | $ | (1,539 | ) | ||
2009 | 2008 | |||||||
Computed federal income tax at federal statutory rate | $ | (7,083 | ) | $ | (7,076 | ) | ||
Changes resulting from: | ||||||||
Decrease (increase) in cash surrender value of life insurance contracts | (498 | ) | 985 | |||||
Redemption of life insurance contracts | 5,159 | — | ||||||
Amortization of HIG Beneficial Ownership | 168 | — | ||||||
Current year state income taxes, net of federal income tax benefit | 40 | 19 | ||||||
Valuation allowance for NOL, AMT, deferred tax assets and general business credits | 1,830 | 5,403 | ||||||
Recognition of deferred tax liability related to goodwill impairment | — | (898 | ) | |||||
Other, net | 38 | 28 | ||||||
Total | $ | (346 | ) | $ | (1,539 | ) | ||
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2009 | 2008 | |||||||
Current deferred tax asset (liability): | ||||||||
Accrued warranty expense | $ | 1,582 | $ | 3,098 | ||||
Accrued self-insurance | 1,180 | 1,769 | ||||||
Inventories | 445 | 445 | ||||||
Receivables | 469 | 511 | ||||||
Prepaid insurance | (289 | ) | (372 | ) | ||||
Litigation reserve | 21 | 103 | ||||||
Other | 250 | 1,241 | ||||||
Valuation allowance | (3,658 | ) | (6,795 | ) | ||||
Net current deferred tax asset | $ | — | $ | — | ||||
Noncurrent deferred tax asset (liability): | ||||||||
Deferred compensation | $ | 1,179 | $ | 2,786 | ||||
Property and equipment and other real estate | (436 | ) | (414 | ) | ||||
Notes receivable | 402 | 402 | ||||||
Federal net operating loss carryforwards | 38,301 | 37,087 | ||||||
Impairments | 7,697 | 7,890 | ||||||
Alternative minimum tax credit carryover | 127 | 586 | ||||||
Federal and state research and development credit carryover | 1,738 | 1,738 | ||||||
State net operating loss carryforwards | 3,856 | 3,780 | ||||||
Other | 1,079 | 662 | ||||||
Valuation allowance | (54,451 | ) | (54,974 | ) | ||||
Net noncurrent deferred tax liability | $ | (508 | ) | $ | (457 | ) | ||
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(In thousands) | ||||
Balance at January 1, 2008 | $ | 2,416 | ||
Additions based on tax positions related to the current year | — | |||
Additions for tax positions of prior years | 1,090 | |||
Reductions for tax positions of prior years | — | |||
Settlements | — | |||
Balance at December 31, 2008 | $ | 3,506 | ||
Additions based on tax positions related to the current year | — | |||
Additions for tax positions of prior years | ||||
Reductions for tax positions of prior years | — | |||
Settlements | (1,470 | ) | ||
Balance at December 31, 2009 | $ | 2,036 | ||
12. | RESTRUCTURING CHARGES AND DISCONTINUED OPERATIONS. |
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2009 | 2008 | |||||||
Current assets | $ | 74 | $ | 827 | ||||
Properties and equipment | — | 2,102 | ||||||
Total assets of discontinued operations | $ | 74 | $ | 2,929 | ||||
Current liabilities | $ | 3,878 | $ | 18,791 | ||||
Long-term liabilities | 671 | 986 | ||||||
Total liabilities of discontinued operations | $ | 4,549 | $ | 19,777 | ||||
13. | COMMITMENTS AND CONTINGENCIES. |
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F-47
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14. | SUBSEQUENT EVENTS. |
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Dated as of November 8, 2010
Table of Contents
Page | ||||
ARTICLE I DEFINITIONS | A-1 | |||
Section 1.1 | Definitions | A-1 | ||
ARTICLE II THE MERGER | A-9 | |||
Section 2.1 | The Merger | A-9 | ||
Section 2.2 | Conversion of Stock | A-9 | ||
Section 2.3 | Dissenting Shares | A-10 | ||
Section 2.4 | Surrender of Certificates | A-10 | ||
Section 2.5 | Payment | A-11 | ||
Section 2.6 | No Further Rights of Transfers | A-11 | ||
Section 2.7 | Options, Incentive Plans and Other Plans | A-11 | ||
Section 2.8 | Articles of Incorporation of the Surviving Corporation | A-12 | ||
Section 2.9 | Bylaws of the Surviving Corporation | A-12 | ||
Section 2.10 | Directors and Officers of the Surviving Corporation | A-12 | ||
Section 2.11 | Closing | A-12 | ||
Section 2.12 | Withholding Rights | A-12 | ||
Section 2.13 | Further Assurances | A-13 | ||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE CORPORATION | A-13 | |||
Section 3.1 | Corporate Existence; Power and Authority. | A-13 | ||
Section 3.2 | Financial Statements; No Material Adverse Change | A-13 | ||
Section 3.3 | Title to Properties | A-14 | ||
Section 3.4 | Authorized Capital | A-15 | ||
Section 3.5 | Tax Returns and Payments | A-15 | ||
Section 3.6 | Litigation | A-15 | ||
Section 3.7 | Compliance with Other Agreements and Applicable Laws | A-15 | ||
Section 3.8 | Environmental Compliance | A-16 | ||
Section 3.9 | Employee Benefits | A-16 | ||
Section 3.10 | Intellectual Property | A-17 | ||
Section 3.11 | Subsidiaries; Affiliates; Capitalization | A-18 | ||
Section 3.12 | Labor Disputes. | A-18 | ||
Section 3.13 | Restrictions on Subsidiaries | A-18 | ||
Section 3.14 | Material Contracts | A-19 | ||
Section 3.15 | Real Property | A-19 | ||
Section 3.16 | Certain Fees | A-19 | ||
Section 3.17 | Commission Filings | A-19 | ||
Section 3.18 | Proxy Statement | A-19 | ||
Section 3.19 | State Business Combination Statutes; Rights Agreement | A-20 | ||
Section 3.20 | Voting Requirements | A-20 | ||
Section 3.21 | Opinion of Financial Advisor | A-20 | ||
Section 3.22 | Board Approval and Recommendation | A-20 | ||
Section 3.23 | Survival of Warranties; Cumulative | A-20 | ||
Section 3.24 | Accuracy and Completeness of Information | A-21 |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION | A-21 | |||
Section 4.1 | Due Organization, Good Standing and Corporate Power | A-21 | ||
Section 4.2 | Authorization and Validity of Agreement | A-21 | ||
Section 4.3 | Consents and Approvals; No Violations | A-21 | ||
Section 4.4 | Broker’s or Finder’s Fee | A-22 | ||
Section 4.5 | Registration Statement | A-22 | ||
Section 4.6 | Acquisition’s Operations | A-22 | ||
ARTICLE V COVENANTS | A-22 | |||
Section 5.1 | Access to Information Concerning Properties and Records | A-22 | ||
Section 5.2 | Confidentiality | A-22 | ||
Section 5.3 | Conduct of the Business of the Corporation Pending the Closing Date | A-23 | ||
Section 5.4 | Registration Statement; Proxy Statement; Special Meeting | A-25 | ||
Section 5.5 | Best Efforts to Satisfy Conditions Precedent | A-26 | ||
Section 5.6 | Notification of Certain Matters | A-27 | ||
Section 5.7 | Directors’ and Officers’ Insurance | A-27 | ||
Section 5.8 | Public Announcements | A-28 | ||
Section 5.9 | Subsequent Filings | A-28 | ||
Section 5.10 | Material Consents and Waivers | A-28 | ||
Section 5.11 | Financing Cooperation | A-29 | ||
Section 5.12 | Shareholders Representative. | A-29 | ||
Section 5.13 | Sale of Specialty Vehicle Business. | A-30 | ||
Section 5.14 | Dissenter’s Rights | A-31 | ||
ARTICLE VI CONDITIONS PRECEDENT | A-31 | |||
Section 6.1 | Conditions Precedent to Each Party’s Obligation to Effect the Merger | A-31 | ||
Section 6.2 | Condition Precedent to the Corporation’s Obligation to Effect the Merger | A-31 | ||
Section 6.3 | Conditions Precedent to the Parent’s and Acquisition’s Obligations to Effect the Merger | A-32 | ||
ARTICLE VII TERMINATION AND ABANDONMENT | A-33 | |||
Section 7.1 | Termination | A-33 | ||
Section 7.2 | Effect of Termination | A-33 | ||
ARTICLE VIII MISCELLANEOUS | A-33 | |||
Section 8.1 | Fees and Expenses | A-33 | ||
Section 8.2 | Representations and Warranties | A-33 | ||
Section 8.3 | Extension; Waiver | A-34 | ||
Section 8.4 | Notices | A-34 | ||
Section 8.5 | Entire Agreement | A-34 | ||
Section 8.6 | Binding Effect; Benefit; Assignment | A-34 | ||
Section 8.7 | Amendment and Modification | A-35 | ||
Section 8.8 | Time Is of the Essence | A-35 | ||
Section 8.9 | Headings | A-35 | ||
Section 8.10 | Counterparts | A-35 | ||
Section 8.11 | Applicable Law | A-35 | ||
Section 8.12 | Severability | A-35 |
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Page | ||||
Section 8.13 | Interpretation | A-35 | ||
Section 8.14 | Specific Enforcement | A-35 | ||
Section 8.15 | Waiver of Jury Trial | A-36 | ||
Exhibit A | Liquidating Trust Agreement | |||
Exhibit 6.2 | Parent and Acquisition Closing Certificate | |||
Exhibit 6.3 | Corporation Closing Certificate |
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A-1
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A-2
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A-3
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A-4
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A-5
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A-6
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A-7
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A-8
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A-9
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A-10
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A-13
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A-14
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A-16
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A-19
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A-27
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A-33
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2831 Dexter Drive
Elkhart, IN 46515
Attention: Chief Executive Officer, General Counsel
Facsimile:(574) 266-2559
c/o H.I.G. Capital, LLC
1001 Brickell Bay Drive, 27th Floor
Miami, Florida, 33131
Attention: Matthew Sanford
Facsimile:(305) 379-3655
200 S. Biscayne Boulevard, Suite 4900
Miami, Florida 33131
Attention: Jorge L. Freeland, Esq.
Facsimile:(305) 358-5744
A-34
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A-35
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By | /s/ Fabian de Armas |
Title: Manager |
By | /s/ Fabian de Armas |
Title: Vice President |
By | /s/ Richard Lavers |
Title: President and CEO |
A-36
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B-1
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B-2
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B-3
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B-4
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B-5
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B-6
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B-7
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B-8
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B-9
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B-10
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B-11
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B-12
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B-13
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(a) | If to the Trustee: |
(b) | If to the Corporation: |
All American Group, Inc.
2831 Dexter Drive
B-14
Table of Contents
Attention: Chief Executive Officer, General Counsel
Facsimile:(574) 266-2559
c/o H.I.G. Capital, LLC
1001 Brickell Bay Drive, 27th Floor
Miami, Florida, 33131
Attention: Matthew Sanford
Facsimile:(305) 379-3655
200 S. Biscayne Boulevard, Suite 4900
Miami, Florida 33131
Attention: Jorge L. Freeland, Esq.
Facsimile:(305) 358-5744
B-15
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By: |
Title: |
By: |
Title: |
B-16
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“Corporation” defined
“Dissenter” defined
“Fair value” defined
“Interest” defined
“Preferred shares” defined
“Record shareholder” defined
“Beneficial shareholder” defined
“Shareholder” defined
C-1
Table of Contents
Right to dissent and obtain payment for shares
C-2
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Dissenters’ rights of beneficial shareholder
Proposed action creating dissenters’ rights; notice
Proposed action creating dissenters’ rights; assertion of dissenters’ rights
C-3
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Dissenters’ notice; contents
Demand for payment and deposit of shares by shareholder
Uncertificated shares; restriction on transfer; dissenters’ rights
C-4
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Payment to dissenter
Failure to take action; return of certificates; new action by corporation
Withholding payment by corporation; corporation’s estimate of fair value; after-acquired shares
Dissenters’ estimate of fair value; demand for payment; waiver
C-5
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Court proceeding to determine fair value; judicial appraisal
C-6
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Costs; fees; attorney’s fees
C-7
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D-1
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D-2
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D-3
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D-4
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D-5
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Item 20. | Indemnification of Directors and Officers |
Item 21. | Exhibits and Financial Statement Schedules |
Item 22. | Undertakings |
II-1
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II-2
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By: | /s/ Richard M. Lavers |
By: | /s/ Richard M. Lavers |
Signature | Title | Date | ||||
/s/ Richard M. Lavers Richard M. Lavers | Chief Executive Officer and Director (Principal Executive Officer) | February 11, 2011 | ||||
/s/ Colleen A. Zuhl* Colleen A. Zuhl | Chief Financial Officer (Principal Financial Officer) | February 11, 2011 | ||||
/s/ Stephen L. Patterson* Stephen L. Patterson | Corporate Controller (Principal Accounting Officer) | February 11, 2011 | ||||
/s/ William P. Johnson* William P. Johnson | Director | February 11, 2011 | ||||
Geoffrey B. Bloom | Director | |||||
/s/ Fabian de Armas* Fabian de Armas | Director | February 11, 2011 | ||||
Robert J. Deputy | Director |
II-3
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Signature | Title | Date | ||||
/s/ John A. Goebel* John A. Goebel | Director | February 11, 2011 | ||||
/s/ Donald W. Hudler* Donald W. Hudler | Director | February 11, 2011 | ||||
/s/ Edwin W. Miller* Edwin W. Miller | Director | February 11, 2011 | ||||
/s/ Matthew S. Sanford* Matthew S. Sanford | Director | February 11, 2011 | ||||
*By: | /s/ Richard M. Lavers Richard M. Lavers, Attorney-in-Fact | February 11, 2011 |
II-4
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Exhibit | ||||
Number | Description | |||
2 | .1 | Agreement and Plan of Merger by and among All American Group Holdings, LLC, All American Acquisition Corporation, All American Group, Inc., and Richard M. Lavers as Shareholders Representative, dated November 8, 2010 (included as Appendix A in this Registration Statement onForm S-4) | ||
3 | .1 | Articles of Incorporation of the Company as amended on May 30, 1995 (incorporated by reference to Exhibit 3(i) to the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 1995). | ||
3 | .2 | Articles of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 4.2 to the Company’sForm S-3 Registration Statement, FileNo. 333-14579). | ||
3 | .3 | Articles of Amendment to Articles of Incorporation (incorporated by reference to the Company’s Current Report onForm 8-K filed May 5, 2010). | ||
3 | .4 | Articles of Amendment to Articles of Incorporation (incorporated by reference to the Company’s Current Report onForm 8-K filed October 12, 2010). | ||
3 | .5 | By-Laws as modified through October 27, 2009 (incorporated by reference to Exhibit 3(ii) to the Company’s Current Report onForm 8-K/A filed October 29, 2009). | ||
4 | .1 | Form of Liquidating Trust Agreement (included as Appendix B in this Registration Statement onForm S-4) | ||
4 | .2 | Demand Promissory Note, dated March 23, 2009, in the original principal amount of $2,344,801.71 by Coachmen Industries, Inc. as maker and endorser, payable to Robert J. Deputy (incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K filed March 24, 2009). | ||
4 | .3 | Promissory Note dated April 9, 2009 in the original principal amount of $2,000,000 by Coachmen Industries, Inc. as maker and endorser, payable to Lake City Bank on or before April 9, 2012 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K filed April 9, 2009). | ||
4 | .4 | Promissory Note dated April 9, 2009 in the maximum principal amount of $500,000 by Coachmen Industries, Inc. as maker and endorser, payable to Lake City Bank on or before March 31, 2012 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report onForm 8-K filed April 9, 2009). | ||
4 | .5 | Loan Agreement dated as of October 27, 2009 among Coachmen Industries, Inc., and H.I.G. All American, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report onForm 8-K/A filed October 29, 2009). | ||
4 | .6 | First Amendment to Loan Agreement dated April 5, 2010 among Coachmen Industries, Inc. and H.I.G. All American, LLC, (incorporated by reference to Exhibit 2.1 to the Company’s Current Report onForm 8-K filed April 9, 2010). | ||
4 | .7 | Limited Waiver of Specified Defaults dated as of August 24, 2010 among H.I.G. All American, LLC, All American Group, Inc. (f/k/a Coachmen Industries, Inc.), All American Homes, LLC, All American Homes of Colorado, LLC, All American Homes of Georgia, LLC, All American Homes of Indiana, LLC, All American Homes of Iowa, LLC, All American Homes of North Carolina, LLC, All American Homes of Ohio, LLC, All American Building Systems, LLC, All American Specialty Vehicles, LLC, Coachmen Motor Works, LLC, Coachmen Motor Works of Georgia, LLC, Consolidated Building Industries, LLC, Consolidated Leisure Industries, LLC, Coachmen Operations, Inc., Coachmen Properties, Inc., Mod-U-Kraf Homes, LLC, and Sustainable Designs, LLC (incorporated by reference to Exhibit 10 to the Company’s Current Report onForm 8-K filed August 25, 2010). | ||
4 | .8 | Senior Secured Revolving Note dated as of October 27, 2009 among Coachmen Industries, Inc., and H.I.G. All American, LLC (incorporated by reference to Exhibit 4.2 to the Company’s Current Report onForm 8-K/A filed October 29, 2009). | ||
4 | .9 | Second Amended and Restated 20% Secured Subordinated Convertible Tranche B Note, dated August 24, 2010, by and among All American Group, Inc. and H.I.G. All American, LLC, (incorporated by reference to Exhibit 4 to the Company’s Current Report onForm 8-K filed August 25, 2010). |
Table of Contents
Exhibit | ||||
Number | Description | |||
4 | .10 | Amended and Restated Warrant dated April 5, 2010, among Coachmen Industries, Inc. and H.I.G. All American, LLC, (incorporated by reference to Exhibit 4.4 to the Company’s Current Report onForm 8-K filed April 9, 2010). | ||
4 | .11 | Common Stock Purchase Warrant dated April 5, 2010, among Coachmen Industries, Inc. and H.I.G. All American, LLC, (incorporated by reference to Exhibit 4.6 to the Company’s Current Report onForm 8-K filed April 9, 2010). | ||
4 | .12 | Common Stock Purchase Warrant dated August 5, 2010, among All American Group, Inc. (f/k/a Coachmen Industries, Inc.) and H.I.G. All American, LLC, (incorporated by reference to Exhibit 4 to the Company’s Current Report onForm 8-K filed August 11, 2010). | ||
4 | .13 | Registration Rights Agreement dated as of October 27, 2009 among Coachmen Industries, Inc., and H.I.G. All American, LLC (incorporated by reference to Exhibit 4.5 to the Company’s Current Report onForm 8-K/A filed October 29, 2009). | ||
4 | .14 | First Amendment to Registration Rights Agreement, dated April 5, 2010, among Coachmen Industries, Inc. and H.I.G. All American, LLC, (incorporated by reference to Exhibit 4.5 to the Company’s Current Report onForm 8-K filed April 9, 2010). | ||
10 | .1 | Agreement dated as of September 7, 2010 among All American Building Systems, LLC and Casper/Pope Joint Venture (incorporated by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2010). | ||
*10 | .2 | Executive Benefit and Estate Accumulation Plan, as amended and restated effective as of September 30, 2000 (incorporated by reference to Exhibit 10(a) to the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2001). | ||
*10 | .3 | 2000 Omnibus Stock Incentive Program (incorporated by reference to Exhibit A to the Company’s Proxy Statement dated March 27, 2000 for its Annual Meeting in 2000). | ||
*10 | .4 | Resolution regarding Amendment of 2000 Omnibus Stock Incentive Program adopted by the Company’s Board of Directors on July 27, 2000 (incorporated by reference to Exhibit 10(b)(i) to the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2001). | ||
*10 | .5 | Form of Change in Control Agreements for certain executive officers (Tier 1) (incorporated by reference to Exhibit 10(c) to the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2000). | ||
*10 | .6 | Form of Change in Control Agreements for certain executive officers (Tier 2) (incorporated by reference to Exhibit 10(d) to the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2000). | ||
*10 | .7 | Coachmen Industries, Inc. Supplemental Deferred Compensation Plan (Amended and Restated as of January 1, 2003) (incorporated by reference to Exhibit 10(e) to the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2004). | ||
*10 | .8 | Executive Annual Performance Incentive Plan effective January 1, 2002 (incorporated by reference to Exhibit 10(f) to the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2002). | ||
*10 | .9 | Form of the 2006 Restricted Stock Award Agreement and listing of the maximum number of shares each Executive Officer may earn under the Agreements (incorporated by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2006). | ||
10 | .10 | Program Agreement and related Repurchase Agreement dated as of May 10, 2004 between Textron Financial Corporation and certain subsidiaries of Coachmen Industries, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2004). | ||
*10 | .11 | Summary of Life Insurance and Long Term Disability Benefits for Executives (incorporated by reference to Exhibit 10(q) to the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2004). | ||
*10 | .12 | Description of Non-management Director Compensation (incorporated by reference to Exhibit 10(r) to the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2004). | ||
10 | .13 | Mentor Protégé Agreement between Coachmen Industries, Inc. and The Warrior Group, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K filed August 19, 2005). |
Table of Contents
Exhibit | ||||
Number | Description | |||
*10 | .14 | Severance and Early Retirement Agreement and General Release of All Claims dated October 23, 2006 among Coachmen Industries, Inc. and Claire C. Skinner (incorporated by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2006). | ||
*10 | .15 | Form of the 2006 Restricted Stock Award Agreement and listing of the maximum number of shares each Executive Officer may earn under the Agreements (incorporated by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2006). | ||
*10 | .16 | 2007 Restricted Stock Award Agreement under the 2007 Long-Term Incentive Plan (incorporated by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2007). | ||
10 | .17 | Standard Purchase Agreement dated October 26, 2006, between All American Building Systems and the Warrior Group, Inc. (incorporated by reference to Exhibit 10(b) to the Company’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2007). | ||
10 | .18 | Standard Purchase Agreement dated December 20, 2007 between All American Building Systems and the Warrior Group, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K filed January 25, 2008). | ||
10 | .19 | Standard Purchase Agreement dated December 20, 2007 between All American Building Systems and the Warrior Group, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report onForm 8-K filed January 25, 2008). | ||
10 | .21 | Agreement with ARBOC Mobility, LLC (incorporated by reference to Exhibit 10(c) to the Company’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2008). | ||
10 | .22 | Purchase Agreement dated March 1, 2010 between All American Building Systems and Radford Place Apartments, LLC (incorporated by reference to the Company’s Current Report onForm 8-K filed March 2, 2010). | ||
21 | .1 | Subsidiaries of All American Group, Inc.** | ||
23 | .1 | Consent of Ernst & Young LLP | ||
23 | .2 | Consent of McGladrey & Pullen LLP | ||
24 | .1 | Power of Attorney (included on signature page) | ||
99 | .1 | Consent of Houlihan Lokey Financial Advisors, Inc.** | ||
99 | .2 | Form of Proxy Card** | ||
99 | .3 | Consent of Conway, Del Genio, Gries & Co., LLC** |
* | Management Contract or Compensatory Plan. | |
** | Previously filed |