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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2007 |
or
¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ________ to ________. |
COMMISSION FILE NUMBER: 1-12164
A. | Full title of the plan and address of the plan, if different from that of the issuer named below: |
WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
(the “Plan”)
B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
WOLVERINE TUBE, INC.
200 Clinton Avenue West, Suite 1000
Huntsville, Alabama 35801
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WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Financial Statements and Supplemental Schedules
(Modified Cash Basis)
December 31, 2007 and 2006
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Report of Independent Registered Public Accounting Firm
The Plan Administrator
Wolverine Tube Savings Plan for the
Carrollton and Jackson Locations:
We have audited the accompanying statements of net assets available for benefits (modified cash basis) of Wolverine Tube Savings Plan for the Carrollton and Jackson Locations (the Plan) as of December 31, 2007 and 2006, and the related statements of changes in net assets available for benefits (modified cash basis) for the year ended December 31, 2007 and the period from March 1, 2006 (inception) to December 31, 2006. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As described in note 2, the financial statements and supplemental schedules were prepared on the modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits (modified cash basis) of the Plan at December 31, 2007 and 2006, and the changes in its net assets available for benefits (modified cash basis) for the year ended December 31, 2007 and the period from March 1, 2006 (inception) to December 31, 2006, on the basis of accounting described in note 2.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental schedule of assets (held at end of year) (modified cash basis) and the supplemental schedule of delinquent participant contributions (modified cash basis) as of and for the year ended December 31, 2007 are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements for the year ended December 31, 2007 and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ KPMG LLP
January 26, 2009
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WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Statements of Net Assets Available for Benefits
(Modified Cash Basis)
December 31, 2007 and 2006
2007 | 2006 | ||||
Assets: | |||||
Employer contributions receivable | $ | 4,065 | — | ||
Investments at fair value: | |||||
Guaranteed income fund | 1,533,976 | 1,499,224 | |||
Pooled separate accounts | 883,769 | 803,735 | |||
Participant loans | 163,069 | 183,249 | |||
Common stock | 10,631 | 17,687 | |||
Net assets available for benefits | $ | 2,595,510 | 2,503,895 | ||
See accompanying notes to financial statements.
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WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Statements of Changes in Net Assets Available for Benefits
(Modified Cash Basis)
Year ended December 31, 2007
and period from March 1, 2006 (inception) to December 31, 2006
2007 | 2006 | ||||
Additions: | |||||
Investment income: | |||||
Dividends and interest | $ | 53,051 | 43,212 | ||
Loan interest | 15,132 | 9,994 | |||
Net appreciation in fair value of investments | 60,556 | 33,282 | |||
Total investment income | 128,739 | 86,488 | |||
Contributions: | |||||
Participant | 279,853 | 297,637 | |||
Employer | 219,347 | 80,574 | |||
Total contributions | 499,200 | 378,211 | |||
Transfer from another plan | — | 2,371,688 | |||
Total additions | 627,939 | 2,836,387 | |||
Deductions: | |||||
Benefits paid to participants or beneficiaries | 534,419 | 329,540 | |||
Administrative expenses | 1,573 | 2,952 | |||
Other | 332 | — | |||
Total deductions | 536,324 | 332,492 | |||
Net increase | 91,615 | 2,503,895 | |||
Net assets available for benefits, beginning of year | 2,503,895 | — | |||
Net assets available for benefits, end of year | $ | 2,595,510 | 2,503,895 | ||
See accompanying notes to financial statements.
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WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
(Modified Cash Basis)
December 31, 2007 and 2006
(1) Description of the Plan
The following description of Wolverine Tube Savings Plan for the Carrollton and Jackson Locations (the Plan) provides only general information. Participants should refer to the plan agreement and summary plan description for a more complete description of the Plan’s provisions.
(a) General
Established March 1, 2006, the Plan is a defined contribution plan covering substantially all employees of the Carrollton, Texas and Jackson, Tennessee locations of Wolverine Tube, Inc. (the Company). On March 1, 2006, the Wolverine Tube, Inc. Savings Plan transferred to the Plan all assets and liabilities associated with Carrollton, Texas and Jackson, Tennessee participants. Eligibility is based on hire date and participation in the Plan is available 45 days from hire date. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.
Effective April 30, 2006, no new contributions are invested in Wolverine Tube, Inc. common stock and no transfers are permitted to Wolverine Tube, Inc. common stock.
(b) Plan Administration
Prudential Bank and Trust, F.S.B., is the Trustee of the Plan. The Plan is administered by the Company. See also note 6.
(c) Contributions
Subject to regulatory limitations, participants may contribute up to 50% of annual pre-tax and after-tax compensation, as defined in the Plan. Participants who have attained age 50 before the end of the plan year are eligible to make catchup contributions. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. The Company makes discretionary matching contributions and contributes 38% of the first 3% plus 20% of the next 2% of a participant’s contribution.
In addition, the Company at its discretion may make Success Share contributions. These contributions are based on the Company’s earnings before interest, taxes, depreciation, and amortization (EBIDTA) performance against predetermined targets set annually. Success Share contributions are distributed based on the ratio of a participant’s eligible compensation as defined by the Plan to the aggregate of such compensation for all eligible participants. During 2007, Success Share contributions totaled $129,845. There were no Success Share contributions made in 2006.
Upon enrollment, participants may direct participant and Company contributions to any of the Plan’s fund options, except for Wolverine Tube, Inc. common stock (see note l(a)). Participants may change their investment options at any time with the exception of investments in the Company’s stock, where such change is limited to once every 30 days. The plan currently offers 14 pooled separate accounts as investment options for participants.
4 | (Continued) |
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WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2007 and 2006
(d) Participant Accounts
Each participant’s account is credited with the participant’s contributions and allocations of (a) the Company’s contributions and (b) Plan earnings or losses. Allocations of earnings or losses are based on account balances as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
(e) Vesting
Participants are immediately vested in their contributions, allocated earnings or losses thereon and amounts transferred from other plans. A participant forfeits the balance of his or her employer contributions account if he or she terminates employment for reasons other than disability or death with less than one year of employment. After attaining one year of credited service, the participant’s employer profit sharing and regular matching contributions becomes vested as follows:
Years of credited service | Percentage of employer account vested | ||
Less than 1 | 0 | % | |
1, but less than 2 | 25 | ||
2, but less than 3 | 50 | ||
3, but less than 4 | 75 | ||
4 or more | 100 |
A participant is 0% vested in his or her Success Share contribution until the completion of five years of service at which time a participant is 100% vested.
(f) Participant Loans
Participants may borrow from their accounts a minimum of $1,000, up to the lesser of $50,000 or 50% of their vested account balances. Loan terms range from 1-5 years or up to 10 years for the purchase of a primary residence. Participant loans are secured by the balances in their accounts. Interest is charged on participant loans at the prime rate plus 1.5%. Principal and interest on participant loans are paid ratably through payroll deductions.
(g) Payment of Benefits
Distributions to participants or their beneficiaries take place upon separation of service, retirement, permanent and total disability, or death. Distributions may be in lump sum amounts or in a series of equal installment payments over a period not to exceed the life expectancy of the participant or the designated beneficiary.
5 | (Continued) |
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WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2007 and 2006
(h) Forfeited Accounts
At December 31, 2007 and 2006, forfeited nonvested accounts totaled $5,145 and $5,825, respectively. These accounts will first be used to pay Plan expenses and then used to reduce future employer contributions. In 2007 and 2006, Plan expenses and employer contributions were reduced by $160 and $696, respectively.
(i) Administrative Expenses
Most administrative expenses of the Plan (including legal, accounting, and trustee fees) are paid by the Company. All administrative expenses not paid by the Company are the responsibility of the Plan.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements have been prepared on the modified cash basis of accounting, which is an acceptable alternative method of reporting under regulations issued by the Department of Labor. Investments are reported at fair value as prescribed by the Department of Labor. Dividend and interest income and routine contributions are recorded when received rather than when earned and delinquent contributions are accrued when not received timely by the Plan. Unrealized appreciation or depreciation in the fair value of investments is recognized currently.
(b) Use of Estimates
The preparation of financial statements on the modified cash basis requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
(c) Investment Valuation
The Plan’s investments are stated at fair value. The fair values of units owned by the Plan in pooled separate accounts are based on quoted redemption values on the last trade date of the Plan year. Common stock is valued at the close price on the last trade date of the Plan year. Participant loans are valued at their outstanding balances, which approximate fair value.
Investment contracts held in the Guaranteed Income Fund of Prudential Retirement Insurance Company are recorded at their contract value. As described in Financial Accounting Standards Board Staff Position, FSP AAG INV-I and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP) investment contracts held by a defined-contribution plan are required to be reported at fair value. The Plan adopted FSP AAG INV-1 in 2006. The adoption did not have a material effect on the Plan’s financial statements as interest rates are adjusted to market semi-annually. Accordingly, contract value, which represents net contributions plus interest at the contract rate, approximates fair value. The contracts are fully benefit responsive.
6 | (Continued) |
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WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2007 and 2006
Investment contracts held in the Guaranteed Income Fund of Prudential Retirement Insurance Company are credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The guaranteed investment contract issuer is contractually obligated to repay the principal and a specified interest rate that is guaranteed to the Plan. The fair value of the investment contracts held by the Guaranteed Income Fund approximates contract value.
Because the guaranteed investment contract is fully benefit-responsive, contract value is the relevant measurement attribute for that portion of the net assets available for benefits attributable to the guaranteed investment contract. Contract value, as reported to the Plan by Prudential, represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investments at contract value.
There are no reserves against contract value for credit risk of the contract issuer or otherwise. The crediting interest rate is based on a formula agreed upon with the issuer, but it may not be less than 1.5%. Such interest rates are reviewed on a semi-annual basis for resetting.
Certain events limit the ability of the Plan to transact at contract value with the issuer. Such events include the following: (1) amendments to the Plan agreement, (2) changes to Plan’s prohibition on competing investment options or deletion of equity wash provisions, (3) bankruptcy of the Plan sponsor or other plan sponsor events that cause a significant withdrawal from the Plan, or (4) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under Employee Retirement Income Security Act of 1974. The Plan administrator does not believe that the occurrence of any such value event, which would limit the Plan’s ability to transact at contract value with participants, is probable.
The guaranteed investment contract does not permit the insurance company to terminate the agreement prior to the scheduled maturity date.
2007 | 2006 | |||||
Average yields: | ||||||
Based on actual earnings | 3.50 | % | 3.50 | % | ||
Based on interest rate credited to participants | 3.50 | 3.50 |
The Plan presents in the statement of changes in net assets available for benefits the net appreciation in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation on those investments. Purchases and sales of securities are recorded on a trade date basis.
(d) Benefit Payments
Benefits are recorded when paid.
7 | (Continued) |
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WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2007 and 2006
(e) Recent Accounting Pronouncements
In July 2006, Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes—An Interpretation of FASB Statement No. 109 (FIN 48) was issued. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with Statement of Accounting Standards (SFAS) No. 109, Accounting for income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The new standard also provides guidance on various income tax accounting issues, including derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 was effective for fiscal years beginning January 1, 2007. The Plan’s adoption of FIN 48 on January 1, 2007 did not have a material impact on the statement of net assets available for plan benefits or statement of changes in net assets available for plan benefits.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. SFAS 157 applies to other accounting pronouncements that require or permit fair value measurements but does not require any new fair value measurements. SFAS 157 is effective for the fiscal year beginning January 1, 2008. In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, Effective Date of FASB Statement No. 157 (FSP FAS 157-2), that delays the effective date of SFAS 157’s fair value measurement requirements for nonfinancial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis. Fair value measurements identified in FSP FAS 157-2 will be effective for the fiscal year beginning January 1, 2009. The adoption of SFAS 157 will primarily impact the valuation of the financial instruments, as discussed above, which we do not expect to materially impact the statement of net assets available for plan benefits or statement of changes in net assets available for plan benefits.
(3) Investments
At December 31, 2007 and 2006, the Plan’s investments were held by Prudential Retirement Services, Inc.
During 2007 and 2006, the Plan’s investments (including investments bought, sold, as well as held during the year ended December 31, 2007 and for the period from March 1, 2006 (inception) to December 31, 2006) appreciated (depreciated) in fair value as determined by quoted market prices as follows:
2007 | 2006 | ||||||
Common stock | $ | (2,474 | ) | (34,903 | ) | ||
Pooled separate accounts | 63,030 | 68,185 | |||||
$ | 60,556 | 33,282 | |||||
8 | (Continued) |
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WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2007 and 2006
At December 31, 2007 and 2006, the fair value of individual investments that represent 5% or more of the Plan’s net assets are as follows:
Fair value | |||||
2007 | 2006 | ||||
Guaranteed Income Fund | $ | 1,533,976 | 1,499,224 | ||
Large Cap Growth/Goldman Sachs Fund | 178,815 | 148,169 | |||
Dryden S&P 500 Index Fund | 141,396 | 159,286 |
(4) Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.
(5) Income Tax Status
The Internal Revenue Service has determined and informed the Company by a letter dated November 25, 2005, that the Plan and related trust are designed in accordance with the applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the, Plan administrator and the Plan’s tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable provisions of the IRC.
(6) Related-Party Transactions
Plan investments are managed or sub-advised by Prudential Investment Management, LLC, an affiliate of Prudential Financial. The Plan’s purchase of investment products and services from Prudential qualify as party-in-interest transactions.
At December 31, 2007 and 2006, the Plan owned $10,631 and $17,687, respectively, (11,431 shares and 14,497 shares, respectively) in Wolverine Tube, Inc. common stock.
(7) Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.
(8) Closure of Jackson, Tennessee Location
Effective September 13, 2006, and as a result of the closure of the Jackson, Tennessee location, a partial plan termination occurred. In connection therewith, employees of the Jackson, Tennessee location, who were active participants in the Plan on September 13, 2006, became fully vested in their employer contributions upon the partial plan termination.
9 | (Continued) |
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WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2007 and 2006
(9) Nonexempt Transactions
For the years ended December 31, 2007 and 2006, the Company failed to remit participation contributions to the Plan within the time limit required by the Department of Labor, representing a nonexempt loan of funds to the Company from the Plan, due to errors with automatic enrollment and errors with contribution amounts and matches. The Company determined that $1,628 in interest on such contributions was owed to the Plan.
10 |
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SCHEDULE I
WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Schedule H, Line 4i—Schedule of Assets (Held at End of Year)
(Modified Cash Basis)
December 31, 2007
(a) | (b) Identify of issue, borrower, lessor, or similar party | (c) Description of investment, including maturity date, rate of interest, collateral, par or maturity value | (e) Current value | ||||
Common stock: | |||||||
* | Wolverine Tube, Inc. | Common stock (11,431 shares held) | $ | 10,631 | |||
Guaranteed income account: | |||||||
* | Prudential Retirement Insurance and Annuity Company | Guaranteed Income Fund | 1,533,976 | ||||
Pooled separate accounts: | |||||||
* | Prudential Retirement Insurance and Annuity Company | Dryden S&P 500 Index Fund | 141,396 | ||||
Large Cap Growth/Goldman Sachs Fund | 178,815 | ||||||
Small Cap Growth/Times Square Fund | 44,965 | ||||||
Mid Cap Growth/Artisan Fund | 98,470 | ||||||
Large Cap Value/AJO Fund | 82,545 | ||||||
Mid Cap Value/Wellington Management Fund | 49,316 | ||||||
Small Cap Value Fund/Integrity | 16,252 | ||||||
Intern Equity Fund/Julius Baer | 65,576 | ||||||
High Grade Bond Fund/BSAM | 41,854 | ||||||
Oppenheimer Global Fund | 42,521 | ||||||
Core Plus Bond Fund/PIMCO | 42,859 | ||||||
Prudential Lifetime Growth Fund | 31,423 | ||||||
Prudential Lifetime Conservative Fund | 273 | ||||||
Prudential Lifetime Balanced Fund | 47,504 | ||||||
* | Participant loans | Participant loans: | |||||
Various maturities through 2014, balance collateralized by participant account, interest rates ranging from 5.50% to 10% | 163,069 | ||||||
$ | 2,591,445 | ||||||
* | Parties-in-interest | ||||||
Column (d) has not been presented as all investments are participant directed. |
See accompanying report of independent registered public accounting firm.
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SCHEDULE II
WOLVERINE TUBE SAVINGS PLAN FOR THE
CARROLLTON AND JACKSON LOCATIONS
Schedule H, Line 4a—Schedule of Delinquent Participant Contributions
December 31, 2007
(a) Identify of party involved | (b) Relationship to Plan, employer, or other party-in-interest | (c) Description of transaction, including rate of interest | (d) Amount on line 4(a) | (e) Lost earnings | |||||
Wolverine Tube, Inc. | Plan sponsor | 2007 employee deferrals not deposited to Plan in a timely manner due to errors with automatic enrollment | $ | 12,643 | 1,356 | ||||
Wolverine Tube, Inc. | Plan sponsor | 2007 employee deferrals not deposited to Plan in a timely manner due to errors with contribution amounts and matches | 3,339 | 251 | |||||
Wolverine Tube, Inc. | Plan sponsor | 2006 employee deferrals not deposited to Plan in a timely manner due to errors with contribution amounts and matches | 454 | 21 |
See accompanying report of independent registered public accounting firm.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this Annual Report to be signed on their behalf by the undersigned hereto duly authorized.
Dated: February 2, 2009
WOLVERINE TUBE SAVINGS PLAN FOR THE CARROLLTON AND JACKSON LOCATIONS | ||
By: | WOLVERINE TUBE, INC. | |
By: | /s/ Dave A. Owen | |
Dave A. Owen | ||
Senior Vice President and | ||
Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. | Description | |
23.1 | Consent of Independent Registered Public Accounting Firm |