<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 1998
REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
FLEETWOOD ENTERPRISES, INC.
FLEETWOOD CAPITAL TRUST
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 95-1948322
DELAWARE 33-0789924
(State or other jurisdiction (I.R.S. Employer
of Identification
incorporation or organization) No.)
</TABLE>
------------------------
3125 MYERS STREET RIVERSIDE, CALIFORNIA 92503
(909) 351-3500
(Address, including zip code, and telephone number, including
area code, of Registrant's Principal Executive Offices)
WILLIAM H. LEAR, ESQ.
SENIOR VICE PRESIDENT--GENERAL COUNSEL AND SECRETARY
FLEETWOOD ENTERPRISES, INC.
3125 MYERS STREET
RIVERSIDE, CALIFORNIA 92503
(909) 351-3500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
COPY TO:
ROBERT E. DEAN, ESQ.
GIBSON, DUNN & CRUTCHER LLP
4 PARK PLAZA
IRVINE, CALIFORNIA 92614
(949) 451-3800
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time following the effective date of this Registration Statement as
determined in light of market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of this prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
(CONTINUED ON NEXT PAGE)
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH AMOUNT OFFERING AGGREGATE AMOUNT OF
CLASS OF SECURITIES TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) UNIT(1)(2) PRICE(1)(2) FEE(1)
<S> <C> <C> <C> <C>
6% Convertible Trust Preferred Securities of
Fleetwood Capital Trust................... 5,750,000 shares $50 $287,500,000 $84,812.50
6% Convertible Subordinated Debentures due
2028 of Fleetwood Enterprises, Inc........ (3) -- --
Common Stock, par value $1.00 per share, of
Fleetwood Enterprises, Inc................ (4) -- --
Preferred Securities Guarantee.............. (5) -- --
Total....................................... 5,750,000 shares $50 $287,500,000 $84,812.50
</TABLE>
(1) Calculated pursuant to Rule 457(i) under the Securities Act of 1933, as
amended.
(2) Exclusive of accrued interest and distributions, if any.
(3) $287,500,000 in aggregate principal amount of 6% Convertible Subordinated
Debentures due 2028 (the "Convertible Subordinated Debentures") of Fleetwood
Enterprises, Inc. (the "Company") were issued and sold to Fleetwood Capital
Trust (the "Trust") in connection with the issuance by the Trust of
5,750,000 shares of its 6% Convertible Trust Preferred Securities (the
"Preferred Securities"). The Convertible Subordinated Debentures may be
distributed, under certain circumstances, to the holders of Preferred
Securities for no additional consideration.
(4) Each share of Fleetwood Common Stock includes a right to purchase one
one-hundredth of a share of the Company's Series A Junior Participating
Preferred Stock. Also includes such indeterminate number of shares of
Fleetwood Common Stock as may be issuable upon conversion of the Preferred
Securities registered hereunder, subject to adjustment in certain
circumstances. Pursuant to Rule 416 under the Securities Act, such number of
shares of Fleetwood Common Stock registered hereby includes an indeterminate
number of shares of Fleetwood Common Stock that may be issued in connection
with a stock split, stock dividend, recapitalization or similar event. No
additional consideration will be received in connection with the exercise of
the conversion privilege.
(5) Includes the rights of holders of the Preferred Securities under the
Preferred Securities Guarantee. No additional consideration will be received
for the Preferred Securities Guarantee.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 4, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
[LOGO]
5,750,000 CONVERTIBLE TRUST PREFERRED SECURITIES
FLEETWOOD CAPITAL TRUST
6% CONVERTIBLE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $50 PER CONVERTIBLE TRUST PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY, AND CONVERTIBLE INTO COMMON STOCK
OF,
FLEETWOOD ENTERPRISES, INC.
-----------
This Prospectus relates to the offering for resale of the 6% Convertible
Trust Preferred Securities (the "Preferred Securities"), liquidation amount of
$50 per Preferred Security, which represent preferred undivided beneficial
interests in the assets of Fleetwood Capital Trust, a Delaware statutory
business trust (the "Trust"), and the shares of common stock, par value $1.00
per share ("Fleetwood Common Stock"), of the Fleetwood Enterprises, Inc., a
Delaware corporation ("Fleetwood" or the "Company"), issuable upon conversion of
the Preferred Securities.
The Preferred Securities were originally issued and sold to the Initial
Purchaser in connection with a private transaction on February 10, 1998 at a
price of $50 per Preferred Security and were subsequently sold by the Initial
Purchaser in transactions exempt from registration under the Securities Act of
1933, as amended (the "Securities Act"), in the United States to persons
reasonably believed to be "qualified institutional buyers" as defined in Rule
144A under the Securities Act. The Company owns all of the common securities
(the "Common Securities" and, with the Preferred Securities, the "Trust
Securities") representing common undivided beneficial interests in the assets of
the Trust. The Trust was organized for the sole purpose of issuing the Preferred
Securities and the Common Securities and investing the proceeds thereof in an
equivalent amount of 6% Convertible Subordinated Debentures due 2028 (the
"Convertible Subordinated Debentures") having the terms described herein. Upon
an event of default under the Declaration (as defined herein), the holders of
Preferred Securities will have a preference over the holders of the Common
Securities with respect to payments in respect of Distributions (as defined
herein) and payments upon redemptions, liquidation and otherwise. See
"Description of the Securities-- Description of the Preferred Securities."
The Preferred Securities, the Convertible Subordinated Debentures and the
Fleetwood Common Stock issuable upon conversion of the Preferred Securities (the
"Securities") may be offered and sold from time to time by the holders named
herein or by their transferees, pledgees, donees or their successors
(collectively, the "Selling Securityholders") pursuant to this Prospectus. The
Securities may be sold by the Selling Securityholders from time to time directly
to purchasers or through agents, underwriters or dealers. See "Plan of
Distribution" and "Selling Securityholders." If required, the names of any such
agents, underwriters or dealers involved in the sale of the Securities and the
applicable agent's commission, dealer's purchase price or underwriter's
discount, if any, will be set forth in an accompanying supplement to this
Prospectus (the "Prospectus Supplement"). The Selling Securityholders will
receive all of the net proceeds from the sale of the Securities and will pay all
selling commissions, if any, applicable to any sale. The Company is responsible
for payment of all other expenses incident to the offer and sale of the
Securities. The Selling Securityholders and any underwriters, brokers or agents
which participate in the distribution of the Securities may be "Underwriters"
within the meaning of the Securities Act, and any commission received by them
and any profit on the resale of the Securities purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act. See "Plan
of Distribution" for a description of the indemnification arrangements.
Each Preferred Security is convertible in the manner described herein at the
option of the holder, at any time, into shares of Fleetwood Common Stock, at the
initial conversion price of $48.72 per share of Fleetwood Common Stock
(equivalent to an initial conversion rate of 1.02627 shares of Fleetwood Common
Stock for each Preferred Security), subject to adjustment in certain
circumstances. Fleetwood Common Stock is listed on the New York Stock Exchange
(the "NYSE") and the Pacific Stock Exchange and is traded on various regional
exchanges under the symbol "FLE." Options are traded on the American Stock
Exchange. On May 4, 1998, the last reported sale price of Fleetwood Common Stock
on the NYSE was $45.5625 per share. See "Description of the
Securities--Description of the Preferred Securities--Conversion Rights."
Holders of the Preferred Securities are entitled to receive cumulative cash
Distributions at an annual rate of 6% of the liquidation amount of $50 per
Preferred Security, payable quarterly in arrears on February 15, May 15, August
15 and November 15 of each year ("Distributions"). The payment of Distributions
out of monies held by the Trust and payments on liquidation of the Trust or the
redemption of Preferred Securities are guaranteed by the Company (the
"Guarantee") to the extent the Trust has funds available therefor as described
herein. The Guarantee covers payments of Distributions and other payments on the
Preferred Securities only if and to the extent that the Trust has funds
available therefor, which will not be the case unless the Company has made a
payment of interest or principal or other payments on the Convertible
Subordinated Debentures held by the Trust as its sole asset. The Guarantee, when
taken together with the obligations of the Company under the Convertible
Subordinated Debentures, the Indenture (as defined herein) and the Declaration,
including its obligation to pay costs, expenses, debts and obligations of the
Trust (other than with respect to the Trust Securities), provides a full and
unconditional guarantee, on a subordinated basis, of amounts due on the
Preferred Securities. See "Risk Factors--Risks Relating to an Investment in the
Preferred Securities--Rights Under the Guarantee" and "Description of the
Securities-- Description of the Guarantee."
(CONTINUED ON PAGE i)
-------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN RISKS THAT
SHOULD BE CAREFULLY CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SECURITIES.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------
THE DATE OF THIS PROSPECTUS IS , 1998
<PAGE>
The obligations of the Company under the Guarantee are subordinate and
junior in right of payment to all other liabilities of the Company (except any
liabilities that may rank pari passu expressly by their terms), and rank pari
passu with the most senior preferred stock, if any, issued from time to time by
the Company. The obligations of the Company under the Convertible Subordinated
Debentures are unsecured obligations of the Company, and are subordinate and
junior in right of payment to all present and future Senior Indebtedness (as
defined herein) of the Company. At May 4, 1998, Senior Indebtedness of the
Company aggregated $55.0 million.
The Distribution rate and the Distribution payment dates and other payment
dates for the Preferred Securities correspond to the interest rate and interest
payment dates and other payment dates for the Convertible Subordinated
Debentures, which is the sole asset of the Trust. As a result, if principal or
interest is not paid on the Convertible Subordinated Debentures, no amounts will
be paid on the Preferred Securities. If the Company does not make principal or
interest payments on the Convertible Subordinated Debentures, the Trust will not
have sufficient funds to make Distributions on the Preferred Securities, in
which event, the Guarantee will not apply to such Distributions until the Trust
has sufficient funds available therefor.
So long as the Company shall not be in default in the payment of interest on
the Convertible Subordinated Debentures, the Company has the right to defer
payments of interest on the Convertible Subordinated Debentures from time to
time for successive periods (each, an "Extension Period") by extending the
interest payment period on the Convertible Subordinated Debentures at any time
for up to 20 consecutive quarters. If interest payments are so deferred,
Distributions to holders of the Preferred Securities will also be deferred.
During an Extension Period, Distributions will continue to accumulate with
interest thereon (to the extent permitted by applicable law) at the Distribution
rate, compounded quarterly, and holders of Preferred Securities will be required
to include deferred interest payments in their gross income for United States
federal income tax purposes in advance of receipt of the cash Distributions with
respect to such deferred interest payments. There could be multiple Extension
Periods of varying lengths throughout the term of the Convertible Subordinated
Debentures. See "Risk Factors--Risks Relating to an Investment in the Preferred
Securities--Option to Extend Interest Payment Period," "Description of the
Securities--Description of the Preferred Securities--Distributions,"
"Description of the Securities--Description of the Convertible Subordinated
Debentures--Option to Extend Interest Payment Period," and "Certain Federal Tax
Consequences--Interest Income and Original Issue Discount."
The Convertible Subordinated Debentures are redeemable by the Company, in
whole or in part, from time to time, at any time on or after February 15, 2001
at the redemption prices set forth herein, plus accrued and unpaid interest
thereon to but excluding the date fixed for redemption. In addition, in certain
circumstances upon the occurrence of a Tax Event (as defined herein), the
Convertible Subordinated Debentures may be redeemed by the Company, in whole but
not in part, at a redemption price determined as set forth herein, plus accrued
and unpaid interest thereon. If the Company redeems the Convertible Subordinated
Debentures, the Trust shall redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Convertible
Subordinated Debentures so redeemed, at a redemption price corresponding to the
redemption price of the Convertible Subordinated Debentures, plus accrued and
unpaid interest thereon to the date fixed for redemption. The outstanding
Preferred Securities will be redeemed upon maturity of the Convertible
Subordinated Debentures. The Convertible Subordinated Debentures mature on
February 15, 2028. See "Description of the Securities-- Description of the
Preferred Securities--Mandatory Redemption."
Upon the occurrence of a Special Event arising from a change in law or a
change in legal interpretation, unless the Convertible Subordinated Debentures
are redeemed in the limited circumstances described herein, the Trust may be
dissolved (with the consent of the Company), with the result that, after
satisfaction of liabilities to creditors of the Trust, if any, the Convertible
Subordinated Debentures would be distributed to the holders of the Trust
Securities, on a pro rata basis, in lieu of any cash distribution. If the
Convertible Subordinated Debentures are distributed to the holders of the
Preferred Securities, the Company will use its best efforts to have the
Convertible Subordinated Debentures listed on the NYSE or on such other exchange
as the Preferred Securities are then listed. If the Company declines to consent
to such dissolution and distribution, the Company may incur an obligation to pay
Additional Interest (as defined herein). See "Description of the
Securities--Description of the Preferred Securities--Special Event Distribution;
Tax Event Redemption" and "Description of the Securities--Description of the
Convertible Subordinated Debentures--Additional Interest."
In the event of the involuntary or voluntary dissolution of the Trust, after
satisfaction of liabilities to creditors of the Trust, if any, the holders of
the Preferred Securities will be entitled to receive for each Preferred Security
a liquidation amount of $50, plus accumulated and unpaid Distributions thereon
(including, to the extent permitted by applicable law, interest thereon, if
any), to the date of payment unless, in connection with such dissolution in the
case of a Special Event, the Convertible Subordinated Debentures are distributed
to the holders of the Preferred Securities. See "Description of the
Securities--Description of the Preferred Securities--Liquidation Distribution
Upon Dissolution."
Each of the Preferred Securities offered hereby is represented by one or
more global certificates in fully registered form and has been deposited with a
custodian for, and Cede & Co. as nominee for, The Depository Trust Company
("DTC"). Beneficial interests in such Preferred Securities will be shown in, and
transfers thereof wll be effected only through, records maintained by the
participants in DTC. Except under the limited circumstances described herein,
Preferred Securities in certificated form will not be issued in exchange for the
global certificate or certificates. See "Description of the Securities--
Description of the Preferred Securities--Book-Entry Only Issuance--The
Depository Trust Company."
i
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549 and at the Commission's regional offices in New York (Seven World
Trade Center, New York, New York 10048), and Chicago (Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661). Copies of these materials
can be obtained from the Public Reference Section of the Commission, at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such material
may also be accessed electronically through the Commission's website at
http://www.sec.gov. The Company's securities are listed on the New York Stock
Exchange and Pacific Stock Exchange and reports, proxy statements, information
statements and other information concerning the Company can be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005 and the Pacific Stock Exchange, 301 Pine Street, San Francisco, California
94104.
The Company and the Trust have filed with the Commission a Registration
Statement on Form S-3 (including all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto, certain portions of which are
omitted as permitted by the rules and regulations of the Commission. Such
additional information may be obtained from the Commission's principal office in
Washington, D.C. Statements contained in this Prospectus as to the contents of
any contract or other document referred to herein or therein are not necessarily
complete, and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement or such other
document; all such statements are qualified in their entirety by this reference.
A copy of the Registration Statement and the exhibits and schedules thereto may
be examined without charge at the Commission's principal offices at 450 Fifth
Street N.W., Room 1024, Washington, D.C. 20549, and copies of such materials can
be obtained from the Public Reference Section of the Commission at prescribed
rates.
No separate financial statements of the Trust have been included herein. The
Company does not consider that such financial statements would be material to
holders of the Preferred Securities because (i) all of the voting securities of
the Trust will be owned, directly or indirectly, by the Company, a reporting
company under the Exchange Act; (ii) the Trust has no independent operations but
exists for the sole purpose of issuing the Trust Securities; and (iii) the
Company's obligations described herein under the Declaration, the Guarantee, the
Convertible Subordinated Debentures purchased by the Trust and the Indenture,
taken together, constitute a full and unconditional guarantee of payments due on
the Preferred Securities. See "Description of the Securities--Description of the
Guarantee."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company under the Exchange
Act with the Commission are hereby incorporated herein by reference: (i) the
Annual Report on Form 10-K for the fiscal year ended April 27, 1997; (ii)
Quarterly Reports on Form 10-Q for the fiscal quarters ended July 27, 1997,
October 26, 1997, and January 25, 1998; and (iii) Current Reports on Form 8-K
dated October 8, 1997, January 13, 1998, January 21, 1998, and February 10,
1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Preferred Securities shall be deemed to be
incorporated into this Prospectus by reference and to be a part hereof from the
date of filing of such documents. Any statement contained herein, in a
Prospectus Supplement or in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein, in a Prospectus
Supplement or in any other subsequently filed document that also is or is deemed
to be incorporated by
<PAGE>
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of such
person, a copy of any or all of the documents referred to above which have been
or may be incorporated in this Prospectus by reference other than exhibits to
such documents, unless such exhibits are also specifically incorporated by
reference herein. Requests for such copies should be directed to: Fleetwood
Enterprises, Inc., Office of the Corporation Secretary, at 3125 Myers Street,
P.O. Box 7638, Riverside, California 92513-7638, telephone number (909)
351-3500.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars," "U.S.
dollars," or "U.S.$").
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION, FINANCIAL STATEMENTS AND NOTES
THERETO INCLUDED ELSEWHERE IN THIS PROSPECTUS AND IN THE DOCUMENTS INCORPORATED
BY REFERENCE HEREIN. AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE
INDICATES, THE TERMS "FLEETWOOD" AND THE "COMPANY" REFER TO FLEETWOOD
ENTERPRISES, INC. AND ITS SUBSIDIARIES.
THE COMPANY
Fleetwood is one of the nation's largest producers of both manufactured
homes and recreational vehicles ("RVs"). The Company primarily distributes its
manufactured homes through a network of approximately 1,400 independent
retailers in 49 states. The Company has been the leading producer of RVs in the
United States since 1973 and distributes its products through a network of
approximately 1,200 independent retailers in 49 states and Canada. The Company's
goals are to enhance its position as a leading provider of affordable, high
quality manufactured homes and RVs, to sustain long-term profitable growth, and
to enhance shareholder value by generating returns in excess of its cost of
capital.
The Company is incorporated in the State of Delaware. Its principal
executive offices are located at 3125 Myers Street in Riverside, California
92503, and its telephone number is (909) 351-3500.
THE OFFERING
<TABLE>
<S> <C>
Issuer............................ Fleetwood Capital Trust, a Delaware business trust (the
"Trust"). The sole asset of the Trust consists of the 6%
Convertible Subordinated Debentures due February 15,
2028 (the "Convertible Subordinated Debentures") of the
Company.
Securities Offered................
5,750,000 6% Convertible Trust Preferred Securities (the
"Preferred Securities"). See "Description of the
Securities-- Description of the Preferred Securities."
Guarantor.........................
Fleetwood Enterprises, Inc., a Delaware corporation.
Distributions.....................
Distributions on the Preferred Securities
("Distributions") will accumulate from February 10, 1998
and will be payable at an annual rate of 6% of the
liquidation amount of $50 per Preferred Security.
Subject to the Distribution deferral provisions
described below, Distributions will be payable quarterly
in arrears on February 15, May 15, August 15, and
November 15 of each year, commencing May 15, 1998.
Because Distributions on the Preferred Securities
constitute interest for United States federal income tax
purposes, corporate holders thereof will not be entitled
to a dividends-received deduction. See "Description of
the Securities--Description of the Preferred
Securities--Distributions" and "Certain Federal Tax
Consequences."
Distribution Deferral
Provisions......................
The ability of the Trust to pay Distributions on the
Preferred Securities is solely dependent on the receipt
of interest payments from the Company on the Convertible
Subordinated Debentures. So long as the Company shall
not be in default in the payment of interest on the
Convertible Subordinated Debentures, the Company has the
right to defer payments of interest on the Convertible
Subordinated Debentures from time to time for successive
extension periods not exceeding 20
</TABLE>
1
<PAGE>
<TABLE>
<S> <C>
consecutive quarters (each an "Extension Period") for
each such period. Quarterly Distributions on the
Preferred Securities would be deferred by the Trust (but
would continue to accumulate quarterly and, to the
extent permitted by applicable law, accrue interest)
until the end of any such Extension Period. Upon the
termination of an Extension Period, payment is due on
all accrued and unpaid amounts on the Convertible
Subordinated Debentures and, upon such payment, the
Trust will be required to pay all accumulated and unpaid
Distributions. If the deferral of an interest payment
occurs, the holders of the Preferred Securities will
accrue interest income for United States federal income
tax purposes in advance of any corresponding cash
Distribution. See "Risk Factors--Risks Relating to an
Investment in the Preferred Securities--Option to Extend
Interest Payment Period," "Description of the
Securities--Description of the Preferred Securities--
Distributions," "--Description of the Convertible
Subordinated Debentures--Option to Extend Interest
Payment Period," and "Certain Federal Tax
Consequences--Interest Income and Original Issue
Discount."
Rights Upon Deferral of
Distributions...................
During any Extension Period, interest will accrue on the
Convertible Subordinated Debentures (compounded
quarterly to the extent permitted by applicable law) and
quarterly Distributions will continue to accumulate with
interest thereon (to the extent permitted by applicable
law) at the Distribution rate, compounded quarterly. The
Company has agreed, among other things, not to declare
or pay any dividend on or purchase any shares of the
Company's capital stock during an Extension Period,
except for dividends or distribution in shares of its
capital stock of the same class on which such dividend
or distribution is being made and conversions or
exchanges of common stock of one class into common stock
of another class and subject to certain other
exceptions. See "Risk Factors-- Risks Relating to an
Investment in the Preferred Securities-- Option to
Extend Interest Payment Period," "Description of the
Securities--Description of the Preferred Securities--
Distributions" and "--Description of the Convertible
Subordinated Debentures--Option to Extend Interest
Payment Period."
Conversion Rights.................
Each Preferred Security is convertible at any time prior
to the close of business on February 15, 2028 (or, in
the case of Preferred Securities called for redemption,
prior to the close of business on the Business Day (as
defined herein) prior to the applicable redemption date)
at the option of the holder into shares of Fleetwood's
common stock, par value $1.00 per share ("Fleetwood
Common Stock"), at an initial conversion price of $48.72
per share of Fleetwood Common Stock (equivalent to an
initial conversion rate of 1.02627 shares of Fleetwood
Common Stock for each Preferred Security), subject to
adjustment in certain circumstances. The last reported
sale price of Fleetwood
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
Common Stock on the NYSE on May 4, 1998 was $45.5625 per
share. In connection with any conversion of a Preferred
Security, the Conversion Agent (as defined herein) will
exchange such Preferred Security for the appropriate
principal amount of the Convertible Subordinated
Debentures held for the Trust, and immediately convert
such Convertible Subordinated Debentures into Fleetwood
Common Stock. No fractional shares of Fleetwood Common
Stock will be issued as a result of conversion, but in
lieu thereof such fractional interest will be paid by
the Company in cash. See "Description of the
Securities--Description of the Preferred
Securities--Conversion Rights."
Liquidation Amount................
In the event of any liquidation or winding-up of the
Trust, after satisfaction of liabilities to creditors of
the Trust, if any, holders will be entitled to receive
$50 per Preferred Security, plus an amount equal to any
accumulated and unpaid Distributions thereon to the date
of payment, unless Convertible Subordinated Debentures
are distributed to such holders. See "Description of the
Securities--Description of the Preferred
Securities--Liquidation Distribution Upon Dissolution."
Redemption........................
The Company shall have the right to redeem the
Convertible Subordinated Debentures (i) in whole or in
part, from time to time, on or after February 15, 2001,
upon not less than 30 nor more than 60 days' notice, at
an initial redemption price of 103.75% of principal
amount of Convertible Subordinated Debentures, declining
ratably annually to 100% of par if redeemed on or after
February 15, 2006; or (ii) in whole but not in part for
cash at 100% of par at any time under certain
circumstances upon the occurrence of a Tax Event (as
described herein), in each case plus accrued and unpaid
Distributions and any amounts payable with respect
thereto in any such event. If the Company redeems the
Convertible Subordinated Debentures, the Trust must
redeem an equal amount in aggregate liquidation amount
of Preferred Securities. See "Description of the
Securities--Description of the Preferred
Securities--Mandatory Redemption" and "--Special Event
Distribution; Tax Event Redemption" and "Description of
the Securities--Description of the Convertible
Subordinated Debentures--Redemption at the Option of the
Company."
Guarantee.........................
The Company has irrevocably guaranteed, on a
subordinated basis and to the extent set forth herein,
the payment in full of (i) Distributions on the
Preferred Securities to the extent the Trust has funds
available therefor, (ii) the amount payable upon
redemption of the Preferred Securities to the extent the
Trust has funds available therefor and (iii) generally,
the liquidation amount of the Preferred Securities to
the extent the Trust has assets available for
distribution to holders of Preferred Securities. The
Guarantee is unsecured and is subordinate and junior in
right of payment to all other liabilities of the Company
(except any liabilities that may rank pari passu
expressly by their
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terms), and ranks pari passu in right of payment with
the most senior preferred stock, if any, issued from
time to time by the Company. See "Description of the
Securities--Description of the Guarantee."
Voting Rights.....................
Generally, holders of the Preferred Securities will not
have any voting rights. However, if an Indenture Event
of Default (as defined herein) occurs and is continuing,
the holders of 25% of the aggregate liquidation amount
of the outstanding Preferred Securities may direct the
Property Trustee (as defined herein) to declare the
principal and interest on the Convertible Subordinated
Debentures immediately due and payable. If (i) the
Property Trustee fails to enforce its rights under the
Convertible Subordinated Debentures or (ii) the
Guarantee Trustee (as defined herein) fails to enforce
its rights under the Guarantee, a record holder of
Preferred Securities may institute a legal proceeding
directly against the Company to enforce such rights
without first instituting any legal proceeding against
any other person or entity. See "Description of the
Securities-- Description of the Preferred
Securities--Voting Rights" and "--Declaration Events of
Default" and "Description of the Securities--Effect of
Obligations Under the Convertible Subordinated
Debentures and the Guarantee."
Special Event Distribution........
Upon the occurrence of a Special Event (I.E., a Tax
Event or an Investment Company Event, in each case as
defined herein), except in certain limited
circumstances, the Company may cause the Trust to be
dissolved and, after satisfaction of liabilities to
creditors of the Trust, if any, cause the Convertible
Subordinated Debentures to be distributed to the holders
of the Preferred Securities. In the case of a Tax Event,
the Company may also elect to cause the Preferred
Securities to remain outstanding and pay Additional
Interest (as defined herein), if any, on the Convertible
Subordinated Debentures. See "Description of the
Securities--Description of the Preferred
Securities--Special Event Distribution; Tax Event
Redemption."
The Convertible Subordinated
Debentures......................
The Convertible Subordinated Debentures mature on
February 15, 2028, and bear interest at the rate of 6%
per annum, payable quarterly in arrears. So long as the
Company shall not be in default in the payment of
interest on the Convertible Subordinated Debentures, the
Company has the right to defer payments of interest on
the Convertible Subordinated Debentures from time to
time for successive Extension Periods not exceeding 20
consecutive quarters for each such Extension Period;
PROVIDED, that no such Extension Period shall extend
beyond the maturity date of the Convertible Subordinated
Debentures. Prior to the termination of any Extension
Period of less than 20 consecutive quarters, the Company
may further defer interest payments, provided the
Extension Period, as previously and further extended,
does not exceed 20 consecutive quarters and does not
extend beyond the
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maturity date of the Convertible Subordinated
Debentures. During any Extension Period, no interest
shall be due, but such interest shall continue to accrue
and, to the extent permitted by applicable law, compound
quarterly. Upon the termination of an Extension Period,
payment shall be due on all accrued and unpaid amounts.
After the payment of all amounts then due, the Company
may commence a new Extension Period, subject to the
conditions of this paragraph. During any Extension
Period, the Company will be prohibited from, among other
things, paying dividends on and purchasing shares of the
Company's capital stock (except for dividends or
distribution in shares of its capital stock of the same
class on which such dividend or distribution is being
made and conversions or exchanges of common stock of one
class into common stock of another class and subject to
certain other exceptions) until quarterly interest
payments are resumed and all amounts due on the
Convertible Subordinated Debentures are made current.
See "Description of the Convertible Subordinated
Debentures--Option to Extend Interest Payment Period."
The payment of principal and interest on the Convertible
Subordinated Debentures are subordinated in right of
payment to all present and future Senior Indebtedness
(as defined herein) of the Company. At May 4, 1998, the
Company had $55.0 million of Senior Indebtedness
outstanding. Because the Company is a holding company
and its assets consist primarily of its investments in
subsidiaries, the Convertible Subordinated Debentures
(and the Company's obligations under the Guarantee) are
also effectively subordinated to all existing and future
liabilities, including trade payables, of the Company's
subsidiaries, except to the extent that the Company is a
creditor of the subsidiaries. The Indenture (as defined
herein) under which the Convertible Subordinated
Debentures have been issued does not limit the aggregate
amount of Senior Indebtedness or other liabilities that
may be incurred by the Company.
The Convertible Subordinated Debentures have provisions
with respect to interest, optional redemption and
conversion into Fleetwood Common Stock and certain other
terms substantially similar or analogous to those of the
Preferred Securities. See "Description of the
Securities--Description of the Convertible Subordinated
Debentures" and "Risk Factors--Risks Relating to an
Investment in the Preferred Securities--Ranking of
Subordinate Obligations Under the Guarantee and
Convertible Subordinated Debentures."
Form of Preferred Securities......
The Preferred Securities initially sold to qualified
institutional buyers in reliance on Rule 144A under the
Securities Act of 1933, as amended (the "Securities
Act"), are represented by a global certificate or
certificates registered in the name of Cede & Co., as
nominee for the Depository Trust Company ("DTC").
Beneficial interest in the Preferred Securities will be
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evidenced by, and transfers thereof will be effected
only through, records maintained by the participants in
DTC. Except under limited circumstances described
herein, Preferred Securities in certificated form will
not be issued in exchange for the global certificate or
certificates. See "Description of the
Securities--Description of the Preferred
Securities--Book-Entry Only Issuance; The Depository
Trust Company."
Registration Rights...............
The Company has filed with the Commission a shelf
registration statement (the "Registration Statement"),
of which this Prospectus forms a part, covering resales
of the Securities. The Trust and the Company have agreed
to keep the Registration Statement effective until
February 10, 2000 or such earlier date as all the
securities registered thereunder shall have been
disposed of or on which all securities registered
thereunder held by persons that are not affiliates of
the Company or the Trust may be resold without
registration pursuant to Rule 144(k) under the
Securities Act. Under the terms of the Registration
Rights Agreement (as defined herein), the Registration
Statement will not be available to holders of the
Registrable Securities (as defined herein) during
certain periods. See "Description of the
Securities--Description of the Preferred
Securities--Registration Rights."
Use of Proceeds...................
The Company will not receive any of the proceeds from
the sale by the Selling Securityholders of the
Securities.
Risk Factors......................
Investment in the Securities offered hereby involves
certain risks. Each prospective purchaser of Securities
should carefully consider all of the matters described
herein under "Risk Factors."
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RISK FACTORS
IN EVALUATING AN INVESTMENT IN THE SECURITIES, PROSPECTIVE PURCHASERS SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS, TOGETHER WITH THE OTHER
INFORMATION SET FORTH ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
CERTAIN STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT, AND ARE SUBJECT TO A NUMBER
OF RISKS AND UNCERTAINTIES. ANY SUCH FORWARD-LOOKING STATEMENTS CONTAINED OR
INCORPORATED BY REFERENCE HEREIN SHOULD NOT BE RELIED UPON AS PREDICTIONS OF
FUTURE EVENTS. CERTAIN SUCH FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE
USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "BELIEVES," "EXPECTS," "MAY," "WILL,"
"SHOULD," "SEEKS," "APPROXIMATELY," "INTENDS," "PLANS," "ESTIMATES" OR
"ANTICIPATES" OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREOF OR COMPARABLE
TERMINOLOGY, OR BY DISCUSSIONS OF STRATEGY, PLANS OR INTENTIONS. SUCH
FORWARD-LOOKING STATEMENTS ARE NECESSARILY DEPENDENT ON ASSUMPTIONS, DATA OR
METHODS THAT MAY BE INCORRECT OR IMPRECISE AND MAY NOT BE REALIZED. IN THAT
REGARD, THE MATTERS DISCUSSED BELOW AND ELSEWHERE IN THIS PROSPECTUS, AND THE
DOCUMENTS INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE HEREIN, COULD
CAUSE ACTUAL RESULTS AND OTHER MATTERS TO DIFFER MATERIALLY FROM THOSE IN SUCH
FORWARD-LOOKING STATEMENTS. AS A RESULT OF THE FOREGOING, NO ASSURANCE CAN BE
GIVEN AS TO FUTURE RESULTS OF OPERATIONS OR FINANCIAL CONDITION.
RISKS RELATED TO THE COMPANY'S BUSINESSES
CYCLICALITY OF THE COMPANY'S BUSINESSES; FLUCTUATIONS IN OPERATING RESULTS
The industries in which the Company operates are highly cyclical. Companies
within both the manufactured housing and RV industries are subject to volatility
in operating results due to external factors such as economic, demographic and
political changes. Factors affecting the manufactured housing industry include
availability of financing, interest rates, availability of manufactured home
sites, employment trends, consumer confidence and general economic conditions.
Factors affecting the RV industry include general economic conditions, overall
consumer confidence, the level of discretionary consumer spending, interest
rates, employment trends, fuel availability and fuel prices. Because of these
and other factors, there can be substantial fluctuations in the Company's
operating results and the results for any prior period may not be indicative of
results for any future period.
COMPETITION IN THE COMPANY'S BUSINESSES
The manufactured housing industry is highly competitive. As of December 31,
1997, there were approximately 100 manufacturers and over 6,000 retail sales
centers. The ten largest manufacturers accounted for approximately 71% of the
wholesale manufactured housing market in 1996, including the Company's sales,
which represented 18.5% of the market. The manufactured home retail market is
much more fragmented, with the four largest companies accounting for only 10% of
the retail market in 1997. Manufactured homes compete with new and existing
site-built homes, apartments, townhouses and condominiums. The supply of such
housing has increased in recent years with the increased availability of
construction financing. Competition exists on both the manufacturing and retail
levels and is based primarily on price, product features, reputation for service
and quality, retail inventory, sales promotions, merchandising, and terms and
availability of wholesale and retail customer financing. Recent growth in
manufacturing capacity in the southern United States has increased competition
at both the manufacturing and retail levels and has resulted in both regional
and national competitors increasing their presence in the region. Overproduction
of manufactured housing in this region could lead to greater competition and
result in decreased margins, which could have a material adverse effect on the
Company's results of operations.
The market for RVs is also highly competitive, and the Company has numerous
competitors and potential competitors in this industry. The five largest
manufacturers represented approximately 68% of the market in 1997, including the
Company's sales, which represented 26.6% of the market. There can be
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no assurance that either existing or new competitors will not develop products
that are superior to the Company's RVs or achieve better consumer acceptance.
DECLINE IN THE COMPANY'S MANUFACTURED HOUSING MARKET SHARE
The Company's market share in the manufactured housing market, based on unit
shipments, declined from 21.6% in 1994 to 18.1% in 1997, in part because the
Company reduced its retail distribution points from approximately 1,800 to 1,400
during the period from January 1994 through December 1997, in order to
concentrate on larger dealers that share the Company's approach to merchandising
and customer satisfaction. However, the Company has also, from time to time in
the past, lost certain significant retailers to competitors. In addition, recent
acquisitions of manufactured housing retailers by the Company's competitors may
reduce the Company's retail distribution network and market share, as these
retail outlets may choose not to sell the Company's products. During the first
quarter of calendar year 1998, several competitors announced the acquisitions of
some of the Company's largest retailers, which collectively purchased an
aggregate of approximately $217 million in manufactured housing from the Company
in 1997. There can be no assurance that the Company will be able to adequately
replace retailers purchased by competitors if they cease selling the Company's
manufactured homes or that the Company will be able to maintain its sales volume
or market share in these competitive markets.
RISKS RELATED TO ENTRY INTO RETAIL DISTRIBUTION
The Company has responded to the consolidation in the manufactured housing
sector by agreeing to a merger with HomeUSA, Inc. ("HomeUSA") in order to
bolster its retail distribution network. In addition, the Company has purchased
a 100% interest in Expression Homes, Inc. ("Expression Homes") and commenced
building a number of new retail outlets directly. However, the Company has no
prior direct experience running retail operations and will rely significantly on
HomeUSA and Expression Homes personnel to evaluate retail acquisitions and
administer its retail operations. There can be no assurance that the merger with
HomeUSA will be completed or that the Company will be able to successfully
integrate HomeUSA's retail distribution network. Even if the Company is able to
successfully integrate HomeUSA's retail distribution network, there can be no
assurance that such successful integration combined with the Company's other
retail initiatives will enable the combined company to capture an adequate
portion of the retail distribution market.
MANUFACTURED HOUSING GEOGRAPHIC MARKET CONCENTRATION
The market for the Company's manufactured homes is geographically
concentrated, with the top 15 states accounting for approximately 70% of the
industry's total shipments in 1997. The southern United States accounts for a
significant portion of the Company's manufactured housing sales. A downturn in
this region's economic conditions could have a material adverse effect on the
Company's results of operations. There can be no assurance that the demand for
manufactured homes will not decline in the southern United States or other areas
in which the Company experiences high product sales and any such decline could
have a material adverse effect on the Company's results of operations.
SEASONALITY OF THE COMPANY'S BUSINESSES
The Company has experienced and expects to continue to experience
significant variability in sales, production and net income as a result of
seasonality in the Company's businesses. Demand in both the manufactured housing
and RV industries generally declines during the winter season, while sales and
profits are generally highest during the spring and summer months. In addition,
unusually severe weather conditions in certain markets may delay the timing of
purchases and shipments from one quarter to another.
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POTENTIAL CHANGES IN CONSUMER PREFERENCES; NEW PRODUCT INTRODUCTIONS
There can be no assurance that historical consumer preferences for the
Company's products in general, and RVs in particular, will remain unchanged. The
Company believes that, with respect to its RV operations, the introduction of
new features and new models will be critical to its future success. Delays in
the introduction of new models or product features, or a lack of market
acceptance of new models or features, could have a material adverse effect on
the Company's business. There also can be no assurance that new product
introductions will not reduce revenues from existing models and adversely affect
results of operations.
WARRANTY CLAIMS AND PRODUCTS LIABILITY
The Company is subject to warranty claims in the ordinary course of its
business. Although the Company maintains reserves for such claims, which to date
have been adequate, there can be no assurance that warranty expense levels will
remain at current levels or that such reserves will continue to be adequate. A
large number of warranty claims exceeding the Company's current warranty expense
levels could have a material adverse effect on the Company's results of
operations.
The Company partially self-insures its products liability claims and
purchases excess products liability insurance in the commercial insurance
market. Although the Company believes that its products liability insurance
coverage is adequate, there can be no assurance that such coverage will be
sufficient to cover all future products liability claims. Successful assertion
against the Company of one or a series of claims exceeding the Company's
insurance could have a material adverse effect on the Company's results of
operations.
CONTINGENT REPURCHASE OBLIGATIONS
In accordance with customary practice in the manufactured housing and RV
industries, the Company enters into repurchase agreements with various financial
institutions pursuant to which the Company agrees, under certain circumstances,
to repurchase manufactured homes and RVs sold to independent retailers in the
event of a default by an independent retailer in its obligation to such credit
sources. Under the terms of such repurchase agreements, the Company agrees to
repurchase manufactured homes and RVs at declining prices over the period of the
agreements (which generally range from 12 to 15 months). Although losses with
respect to these contingent repurchase obligations have not been significant, if
the Company were obligated to repurchase a substantial number of manufactured
homes or RVs in the future, this could have a material adverse effect on the
Company's results of operations.
AVAILABILITY OF WHOLESALE AND RETAIL FINANCING
The Company's retailers, as well as retail buyers of the Company's products,
generally secure financing from third party lenders. Reduced availability of
such financing, or increased interest rates and other costs, could have an
adverse impact on the Company's sales. These factors are dependent on the
lending practices of financial institutions, governmental policies and economic
conditions, all of which are beyond the control of the Company. With respect to
the Company's housing business, most states classify manufactured homes as
personal property rather than real property for purposes of taxation, lien
perfection and length of loan terms. Interest rates for manufactured homes are
generally higher and the terms of the loans shorter than for site-built homes.
At times, financing for the purchase of manufactured homes is more difficult to
obtain than conventional home mortgages. There can be no assurance that
affordable wholesale or retail financing for either manufactured homes or RVs
will continue to be available on a widespread basis. If such financing were to
become unavailable, such unavailability could have a material adverse effect on
the Company's results of operations.
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AVAILABILITY AND PRICING OF MANUFACTURING COMPONENTS AND LABOR
The Company's results of operations may be significantly affected by the
availability and pricing of manufacturing components and labor. Although the
Company attempts to offset the effect of any escalation in components and labor
costs by increasing the sales prices of its products, there can be no assurance
that the Company will be able to do so without adversely impacting demand for
its products. Even if the Company were able to offset higher manufacturing costs
by increasing the sales prices of its products, the realization of any such
increases often lags the rise in manufacturing costs--especially in its
manufactured housing operations--due in part to the Company's commitment to
price-protect its retailers with respect to previously placed customer orders.
The inability of the Company to successfully offset increases in manufacturing
costs could have a material adverse effect on the Company's results of
operations.
IMPORTANCE OF CERTAIN SUPPLIERS
The chassis for the Company's motor homes are purchased from a limited
number of manufacturers. Limited chassis availability as a result of various
causes has in the past and could in the future constrain the Company's ability
to produce motor homes. There can be no assurance that the Company would be able
to sustain its present levels of motor home production. The inability of the
Company to obtain an adequate chassis supply could have a material adverse
effect on the Company's results of operations.
REGULATORY MATTERS
The Company's manufactured housing operations are subject to provisions of
the Housing and Community Development Act of 1974, under which the U.S.
Department of Housing and Urban Development establishes construction and safety
standards for manufactured homes, and also may require manufactured housing
producers to send notifications to customers of noncompliances with standards or
to repair or replace manufactured homes that contain certain hazards or defects.
The Company's RV manufacturing operations are subject to a variety of federal,
state and local regulations, including the National Traffic and Motor Vehicle
Safety Act, under which the National Highway Traffic Safety Administration may
require manufacturers to recall RVs that contain safety-related defects, and
numerous state consumer protection laws and regulations relating to the
operation of motor vehicles, including so-called "Lemon Laws." Amendments to
these regulations and the implementation of new regulations could significantly
increase the costs of manufacturing, purchasing, operating or selling the
Company's products and could have a material adverse effect on the Company's
results of operations.
The failure of the Company to comply with present or future regulations
could result in fines being imposed on the Company, potential civil and criminal
liability, suspension of sales or production, or cessation of operations. In
addition, a major product recall could have a material adverse effect on the
Company's results of operations.
Certain U.S. tax laws currently afford favorable tax treatment for the
purchase and sale of RVs that are financed through mortgage borrowings. These
laws and regulations have historically been amended frequently, and it is likely
that further amendments and additional regulations will be applicable to the
Company and its products in the future. Amendments to these laws and regulations
and the implementation of new regulations could have a material adverse effect
on the Company's results of operations.
The Company's operations are subject to a variety of federal and state
environmental regulations relating to the use, generation, storage, treatment,
emission, and disposal of hazardous materials and wastes and noise pollution.
Although the Company believes that it is currently in material compliance with
applicable environmental regulations, the failure of the Company to comply with
present or future regulations could result in fines being imposed on the
Company, potential civil and criminal liability, suspension of production or
operations, alterations to the manufacturing process, or costly cleanup or
capital expenditures.
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ZONING; PLACEMENT AND AVAILABILITY OF MANUFACTURED HOUSING SITES
Any limitation on the growth of the number of sites available for
manufactured homes or on the operation of manufactured housing communities could
adversely affect the Company's manufactured housing business. Manufactured
housing communities and individual home placements are subject to local zoning
ordinances and other local regulations relating to utility service and
construction of roadways. In the past, there has been resistance by property
owners to the adoption of zoning ordinances permitting the location of
manufactured homes in residential areas, which resistance the Company believes
has adversely affected the growth of the industry. There can be no assurance
that manufactured homes will receive widespread acceptance or that localities
will adopt zoning ordinances permitting the location of manufactured home areas.
The inability of the manufactured home industry to gain such acceptance and
zoning ordinances could have a material adverse effect on the Company's results
of operations.
AVAILABILITY AND PRICE OF GASOLINE AND DIESEL FUEL
Gasoline or diesel fuel is required for the operation of motor homes and
most vehicles used to tow travel trailers and folding trailers. There can be no
assurance that the supply of these petroleum products will continue
uninterrupted, that rationing will not be imposed or that the price of or tax on
these petroleum products will not significantly increase in the future.
OTHER RISKS RELATED TO THE COMPANY
HOLDING COMPANY STRUCTURE
The Trust's ability to make payments on the Preferred Securities is solely
dependent upon the Company's making payments on the Convertible Subordinated
Debentures. The Company is a holding company and its assets consist primarily of
its investments in its subsidiaries. The Company's rights and the rights of the
holders of the Convertible Subordinated Debentures (and thereby the Preferred
Securities) to participate in the distribution of assets of any subsidiary upon
the liquidation of such subsidiary would be subject to the prior claims of the
creditors of such subsidiary, including trade creditors.
The Company's ability to service its indebtedness, including indebtedness
under the Convertible Subordinated Debentures, and to perform under the
Guarantee is dependent upon the earnings of its subsidiaries and the
distribution and other payment of such earnings to the Company. The distribution
or other payment of such earnings may be subject to a variety of contractual or
other limitations.
ANTI-TAKEOVER PROVISIONS OF DELAWARE LAW AND CERTAIN CHARTER AND BYLAW
PROVISIONS
Certain provisions of Delaware law and the Company's Certificate of
Incorporation (the "Charter") and Bylaws could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
attempting to acquire, control of the Company. Certain provisions of the
Company's Charter and Bylaws require the Company to have a Board of Directors
comprised of three classes of directors with staggered terms of office, provide
for the issuance of "blank check" preferred stock by the Board of Directors of
the Company without stockholder approval, and impose various procedural and
other requirements that could make it more difficult for stockholders to effect
certain corporate actions. Furthermore, the Company is subject to the
anti-takeover provisions of Section 203 of the Delaware General Corporation Law,
which prohibits the Company from engaging in a "business combination" with an
"interested stockholder" (defined generally as a person owning more than 15% of
a Company's outstanding voting stock) for a period of three years after the date
of the transaction in which the person first becomes an "interested
stockholder," unless the business combination is approved in a prescribed
manner. The application of Section 203 could also have the effect of delaying or
preventing a change of control of the Company. The Company has also adopted a
stockholders' rights plan that may have a similar effect. See "Description of
the Securities--Description of Fleetwood Capital Stock."
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POSSIBLE VOLATILITY OF FLEETWOOD COMMON STOCK PRICE
The trading price of Fleetwood Common Stock is subject to fluctuations in
response to a variety of factors, including quarterly variations in operating
results, conditions in the manufactured housing and RV industries generally,
comments or recommendations issued by research analysts who follow the Company
and its competitors, and general economic and market conditions. In addition,
the stock market has from time to time experienced extreme price and volume
volatility. These fluctuations may be unrelated to the operating performance of
particular companies. Market fluctuations may adversely affect the market price
of Fleetwood Common Stock and the Preferred Securities. Accordingly, there can
be no assurance that the market price of the Preferred Securities will not
decline below the initial offering price, or that the market price of Fleetwood
Common Stock and the Preferred Securities will not be subject to substantial
fluctuations in the future.
RISKS RELATED TO AN INVESTMENT IN THE SECURITIES
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND CONVERTIBLE
SUBORDINATED DEBENTURES
The obligations of the Company under the Guarantee are subordinate and
junior in right of payment to all liabilities of the Company (except any
liabilities that may rank pari passu expressly by their terms), and pari passu
in right of payment with the most senior preferred stock issued, from time to
time, if any, by the Company. The obligations of the Company under the
Convertible Subordinated Debentures are subordinate and junior in right of
payment to all present and future Senior Indebtedness of the Company. In
addition, payments of principal and interest on the Convertible Subordinated
Debentures are structurally subordinated to the liabilities of the Company's
subsidiaries. No payment by the Company of principal, premium, if any, or
interest on the Convertible Subordinated Debentures may be made if there shall
have occurred and be continuing (i) a default in the payment when due of
principal, premium, if any, sinking funds, if any, or interest, if any, on any
Senior Indebtedness of the Company and any applicable grace period with respect
to such default shall have ended without such default having been cured or
waived or ceasing to exist or (ii) an event of default with respect to any
Senior Indebtedness of the Company resulting in the acceleration of the maturity
thereof without such acceleration having been rescinded or annulled. As of May
4, 1998, the Company had $55.0 million of Senior Indebtedness outstanding. There
are no terms in the Preferred Securities, the Convertible Subordinated
Debentures or the Guarantee that limit the ability of the Company to incur
additional indebtedness, including indebtedness that ranks senior to the
Convertible Subordinated Debentures or the Guarantee, or to grant security
interests to secure outstanding or new indebtedness. See "Description of the
Securities--Description of the Guarantee-- Subordinated Status of the Guarantee"
and "Description of the Securities--Description of the Convertible Subordinated
Debentures--Subordination."
RIGHTS UNDER THE GUARANTEE
When the Registration Statement becomes effective, the Guarantee will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The Property Trustee will act as indenture trustee under
the Guarantee for the purposes of compliance with the provisions of the Trust
Indenture Act (the "Guarantee Trustee"). The Guarantee Trustee will hold the
Guarantee for the benefit of the holders of the Preferred Securities.
Under the Guarantee, the Company guarantees the holders of the Preferred
Securities the payment of (i) any accumulated and unpaid Distributions that are
required to be paid on the Preferred Securities, to the extent the Trust has
funds available therefor; (ii) the applicable redemption price, including all
accumulated and unpaid Distributions with respect to Preferred Securities called
for redemption by the Trust, to the extent the Trust has funds available
therefor; and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Trust (other than in connection with certain permitted
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<PAGE>
consolidations, mergers, asset sales and other transactions involving the Trust,
the distribution of Convertible Subordinated Debentures to the holders of
Preferred Securities or a conversion or redemption of all the Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions on the Preferred Securities to the date of
the payment to the extent the Trust has funds available therefor or (b) the
amount of assets of the Trust remaining available for distribution to holders of
the Preferred Securities in liquidation of the Trust. The holders of a majority
in liquidation amount of the outstanding Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee or exercising any trust power conferred upon
the Guarantee Trustee under the Guarantee. In addition, any record holder of
Preferred Securities may institute a legal proceeding directly against the
Company to enforce the Guarantee without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or entity if the
Guarantee Trustee fails to enforce its rights under the Guarantee. If the
Company were to default on its obligation to pay amounts payable on the
Convertible Subordinated Debentures, the Trust would lack available funds for
the payment of Distributions or amounts payable on redemption of the Preferred
Securities or otherwise, and, in such event, holders of the Preferred Securities
would not be able to rely upon the Guarantee for payment of such amounts.
Instead, holders of the Preferred Securities would rely on the enforcement (i)
by the Property Trustee of its rights as registered holder of the Convertible
Subordinated Debentures against the Company pursuant to the terms of the
Convertible Subordinated Debentures or (ii) by a holder of its rights of direct
action against the Company to enforce payments on the Convertible Subordinated
Debentures. See "Description of the Securities--Description of the Guarantee."
The Amended and Restated Declaration of Trust of Fleetwood Capital Trust, dated
as of February 10, 1998 (the "Declaration"), provides that each holder of
Preferred Securities, by acceptance thereof, agrees to the provisions of the
Guarantee, including the subordination provisions thereof, and the Indenture.
See "Description of the Securities--Description of the Guarantee--Subordinated
Status of the Guarantee."
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If (i) the Trust fails to pay Distributions in full on the Preferred
Securities (other than pursuant to a deferral) or (ii) any other Declaration
Event of Default (as defined herein) occurs and is continuing, then the holders
of Preferred Securities would rely on the enforcement by the Property Trustee of
its rights as a holder of the Convertible Subordinated Debentures against the
Company. In addition, the holders of a majority in liquidation amount of the
Preferred Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or
exercising any trust power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee to exercise the
remedies available to it as a holder of the Convertible Subordinated Debentures.
If the Property Trustee fails to enforce its rights under the Convertible
Subordinated Debentures, a holder of Preferred Securities, to the extent
permitted by law, may institute a legal proceeding directly against the Company
to enforce the Property Trustee's rights under the Convertible Subordinated
Debentures without first instituting any legal proceeding against the Property
Trustee or any other person or entity. Notwithstanding the foregoing, if a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal on the
Convertible Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
Convertible Subordinated Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such holder (a
"Direct Action") on or after the respective due date specified in the
Convertible Subordinated Debentures. In connection with such Direct Action, the
Company will remain obligated to pay the principal or interest on the
Convertible Subordinated Debentures and will be subrogated to the rights of such
holder of Preferred Securities under the Declaration to the extent of any
payment made by the Company to such holder of Preferred Securities in such
Direct Action. The holders
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<PAGE>
of Preferred Securities will not be able to exercise any other remedy available
to the holders of the Convertible Subordinated Debentures. See "Description of
the Securities--Description of the Preferred Securities--Declaration Events of
Default."
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company shall not be in default in the payment of interest on
the Convertible Subordinated Debentures, the Company has the right under the
Indenture to defer payments of interest on the Convertible Subordinated
Debentures from time to time for successive periods not exceeding 20 consecutive
quarters for each such period; PROVIDED that no such period shall extend beyond
the maturity date of the Convertible Subordinated Debentures or end on other
than a Distribution payment date. As a consequence of such an extension,
quarterly Distributions on the Preferred Securities will be deferred (but
despite such deferral will continue to accumulate with interest thereon (to the
extent permitted by applicable law) at the Distribution rate compounded
quarterly) by the Trust during any such Extension Period. During any Extension
Period and until quarterly interest payments are resumed and all amounts due on
the Convertible Subordinated Debentures are made current, (a) the Company shall
not declare or pay dividends on, or make a distribution with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect to, any
of its capital stock (other than (A) (i) purchases or acquisitions of shares of
the Company's capital stock (or capital stock equivalents) in connection with
the satisfaction by the Company of its obligations under any officers, directors
or employee benefit plans (or any options or other instruments issued
thereunder) in existence on the date hereof or the satisfaction by the Company
of its obligations pursuant to any contract or security in existence on the date
hereof requiring the Company to purchase shares of the Company's capital stock
(or capital stock equivalents), (ii) purchases of shares of the Company's
capital stock (or capital stock equivalents) from officers, directors or
employees of the Company or its subsidiaries pursuant to employment agreements
in existence on the date hereof or upon termination of employment or retirement,
(iii) as a result of a reclassification, combination or subdivision of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, (iv) dividends or distributions of shares of common stock on common
stock, (v) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or any security being converted or exchanged, (vi) dividends or
distribution in shares of its capital stock of the same class on which such
dividend or distribution is being made and conversions or exchanges of common
stock of one class into common stock of another class,(vii) purchases or other
acquisitions of common stock in connection with a dividend reinvestment or other
similar plan in existence on the date hereof, or (viii) any dividend or
distribution of capital stock (or capital stock equivalents) in connection with
the implementation of a stockholders' rights plan in existence on the date
hereof, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, or (B) guarantee
payments made with respect to any of the foregoing), (b) the Company shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company that rank pari
passu with or junior to the Convertible Subordinated Debentures and (c) the
Company shall not make any guarantee payments with respect to the foregoing
(other than pursuant to the Guarantee or the Company's guarantee of the Common
Securities). Prior to the termination of any Extension Period of less than 20
consecutive quarters, the Company may further defer interest payments; PROVIDED,
the Extension Period, as previously and further extended, does not exceed 20
consecutive quarters and does not extend beyond the maturity date of the
Convertible Subordinated Debentures or end on other than a Distribution payment
date. During any Extension Period, no interest shall be due, but such interest
shall continue to accrue and (to the extent permitted by applicable law) shall
compound quarterly. Upon the termination of an Extension Period, payment is due
on all accrued and unpaid amounts on the Convertible Subordinated Debentures.
After the payment of all amounts then due on the Convertible Subordinated
Debentures, the Company may commence a new Extension Period,
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<PAGE>
subject to the conditions of this paragraph. See "Description of the
Securities--Description of the Preferred Securities--Distributions" and
"Description of the Securities--Description of the Convertible Subordinated
Debentures--Option to Extend Interest Payment Period."
Should the Company exercise its right to defer payments of interest by
extending the interest payment period, each holder of the Securities will accrue
interest income (as original issue discount ("OID")) in respect of the deferred
stated interest allocable to its Preferred Securities for United States federal
income tax purposes. As a result, each such holder of Securities will include
such income in gross income for United States federal income tax purposes in
advance of the receipt of cash and will not receive the cash from the Trust
related to such income if such holder disposes of its Securities prior to the
record date for the date on which Distributions of such amounts are made. The
Company has no current intention of exercising its right to defer payments of
interest by extending the interest payment period of the Convertible
Subordinated Debentures. However, should the Company determine to exercise such
right in the future, the market price of the Securities is likely to be
adversely affected. A holder that disposes of its Securities during an Extension
Period, therefore, might not receive the same return on its investment as a
holder that continues to hold its Securities. See "--Potential Market Volatility
During an Extension Period" and "Certain Federal Tax Consequences--Interest
Income and Original Issue Discount."
SPECIAL EVENT DISTRIBUTION; TAX EVENT REDEMPTION
Upon the occurrence of a Special Event, the Trust could be dissolved (with
the consent of the Company), except in the limited circumstances described
below, with the result that, after satisfaction of liabilities to creditors of
the Trust, if any, the Convertible Subordinated Debentures would be distributed
to the holders of the Trust Securities in connection with the liquidation of the
Trust. In certain circumstances, the Company would have the right to redeem the
Convertible Subordinated Debentures, in whole but not in part, in lieu of a
distribution of the Convertible Subordinated Debentures by the Trust, in which
event the Trust would redeem the Trust Securities to the same extent as the
Convertible Subordinated Debentures are redeemed by the Company. See
"Description of the Securities--Description of the Preferred Securities--Special
Event Distribution; Tax Event Redemption."
Under current United States federal income tax law, a distribution of
Convertible Subordinated Debentures upon the dissolution of the Trust would not
be a taxable event to holders of the Securities. Upon occurrence of a Special
Event, however, a dissolution of the Trust in which holders of the Securities
receive cash would be a taxable event to such holders. See "Certain Federal Tax
Consequences-- Distribution of Convertible Subordinated Debentures to Holders of
Preferred Securities" and "Certain Federal Tax Consequences--Disposition of the
Preferred Securities."
There can be no assurance as to the market prices for the Securities or the
Convertible Subordinated Debentures that may be distributed in exchange for
Preferred Securities if a dissolution or liquidation of the Trust were to occur.
Accordingly, the Securities that an investor may purchase, whether pursuant to
the offer made hereby or in the secondary market, or the Convertible
Subordinated Debentures that a holder of Preferred Securities may receive on
dissolution and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the Securities offered hereby. Because
holders of Preferred Securities may receive Convertible Subordinated Debentures
upon the occurrence of a Special Event, prospective purchasers of the Securities
are also making an investment decision with regard to the Convertible
Subordinated Debentures and should carefully review all the information
regarding the Convertible Subordinated Debentures contained herein. See
"Description of the Securities--Description of the Preferred Securities--Special
Event Distribution; Tax Event Redemption" and "Description of the
Securities--Description of the Convertible Subordinated Debentures."
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<PAGE>
LIMITED VOTING RIGHTS
Holders of the Securities will have limited voting rights and will not be
entitled to vote to appoint, remove or replace, or to increase or decrease the
number of, Fleetwood Trustees (as defined herein), which voting rights are
vested exclusively in the holder of the Common Securities. See "Description of
the Securities--Description of the Preferred Securities--Voting Rights."
TRADING PRICE
The Securities may trade at a price that does not fully reflect the value of
accrued but unpaid interest with respect to the underlying Convertible
Subordinated Debentures. As a result, a holder who disposes of Securities
between record dates for payments of Distributions thereon will be required to
include accrued but unpaid interest on the Convertible Subordinated Debentures
through the date of disposition and to add such amount to the adjusted tax basis
in the holder's pro rata share of the underlying Convertible Subordinated
Debentures deemed to be disposed. To the extent the selling price (which may not
fully reflect the value of accrued but unpaid interest) is less than the
holder's adjusted tax basis (which will include accrued but unpaid interest), a
holder will recognize a capital loss. Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
federal income tax purposes. See "Certain Federal Tax Consequences--Disposition
of the Preferred Securities."
POTENTIAL MARKET VOLATILITY DURING EXTENSION PERIOD
As described herein, the Company has the right to extend an interest payment
period on the Convertible Subordinated Debentures from time to time for a period
not exceeding 20 consecutive quarterly interest periods. If the Company
determines to extend an interest payment period, or if the Company thereafter
extends an Extension Period or prepays interest accrued during an Extension
Period as described herein, the market price of the Securities is likely to be
affected. In addition, as a result of such rights, the market price of the
Securities (which represent an undivided interest in Convertible Subordinated
Debentures) may be more volatile than other securities that do not have such
rights. A holder that disposes of its Securities during an Extension Period,
therefore, may not receive the same return on its investment as a holder that
continues to hold its Securities.
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for the years and periods indicated:
<TABLE>
<CAPTION>
39 WEEKS
ENDED
JANUARY FISCAL YEARS ENDED APRIL
------------------ ---------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------- ----- ------- ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges(1).................. 49.9(2) 36.8 37.8(2) 124.3 --(3) --(3) --(3)
</TABLE>
- ------------------------
(1) The ratio of earnings to fixed charges is unaudited for all periods
presented. For purposes of computing these ratios, earnings represent income
before income taxes and cumulative effect of changes in accounting
principles and fixed charges (excluding capitalized interest). Fixed charges
include interest on long-term debt. Capitalized interest and rental expense
deemed to be representative of an interest factor have not been included
because no such amounts exist.
(2) On a pro forma basis, giving effect to this Offering, the ratio of earnings
to fixed charges would have been approximately 7.9x in Fiscal 1997 and
approximately 8.6x for the 39 weeks ended January 1998.
(3) The Company had no long-term debt prior to April 23, 1996.
USE OF PROCEEDS
This Prospectus relates to the Securities being offered and sold for the
accounts of the Selling Securityholders. Neither the Trust nor the Company will
receive any proceeds from the sale of the Securities. The Company is paying all
expenses related to the registration of the Securities. See "Plan of
Distribution."
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<PAGE>
FLEETWOOD CAPITAL TRUST
Fleetwood Capital Trust (the "Trust") is a statutory business trust formed
under the Delaware Business Trust Act (the "Business Trust Act") pursuant to a
declaration of trust among the Company as sponsor for the Trust (the "Sponsor"),
and certain of the Fleetwood Trustees (as defined herein), and the filing of a
certificate of trust with the Secretary of State of the State of Delaware on
January 16, 1998. Such declaration was amended and restated in its entirety (as
so amended and restated, the "Declaration") as of February 10, 1998. Upon
effectiveness of the Registration Statement, the Declaration, the Indenture, the
Registration Rights Agreement and the Guarantee will be qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). See
"Description of the Securities--Description of the Preferred
Securities--Book-Entry Only Issuance; The Depository Trust Company." The capital
stock of the Trust consists of the Preferred Securities and Common Securities
(collectively, the "Trust Securities"). The Company has acquired Common
Securities in an amount equal to at least 3% of the total capital of the Trust
and directly owns all of the issued and outstanding Common Securities. The Trust
exists for the purpose of (a) issuing its Trust Securities for cash and
investing the proceeds thereof in an equivalent amount of Convertible
Subordinated Debentures and (b) engaging in such other activities as are
necessary or incidental thereto. The rights of the holders of the Trust
Securities are as set forth in the Declaration, the Business Trust Act and the
Trust Indenture Act. The Declaration does not permit the Trust to incur any
indebtedness for borrowed money or the making of any investment other than in
the Convertible Subordinated Debentures. In the Indenture, the Company has
agreed to pay for all debts and obligations (other than with respect to the
Trust Securities) and all costs and expenses of the Trust, including the fees
and expenses of the Fleetwood Trustees and any income taxes, duties and other
governmental charges, and all costs and expenses with respect thereto, to which
the Trust may become subject, except for United States withholding taxes.
Pursuant to the Declaration, the number of trustees of the Trust (the
"Fleetwood Trustees") is five. Three of the Fleetwood Trustees (the "Regular
Trustees") are persons who are employees or officers of or who are otherwise
affiliated with the Company. The fourth trustee is an institution that maintains
its principal place of business in the State of Delaware (the "Delaware
Trustee"). The Bank of New York (Delaware) currently acts as Delaware Trustee.
The fifth trustee is a financial institution that is unaffiliated with the
Company and which serves as institutional trustee under the Declaration and as
indenture trustee for the purposes of compliance with the provisions of the
Trust Indenture Act (the "Property Trustee"). The Bank of New York is currently
the Property Trustee and will remain so until removed or replaced by the holder
of the Common Securities. For the purpose of compliance with the provisions of
the Trust Indenture Act, The Bank of New York acts as trustee (the "Guarantee
Trustee") under the Guarantee and as Debt Trustee (as defined herein) under the
Indenture. See "Description of the Securities--Description of the Guarantee" and
"Description of the Securities--Description of the Preferred Securities--Voting
Rights." The Trust has a term of approximately 30 years but may terminate
earlier as provided in the Declaration.
The Property Trustee has legal title to and holds the Convertible
Subordinated Debentures for the benefit of the Trust and the holders of the
Trust Securities, and the Property Trustee has the power to exercise all rights,
powers and privileges under the Indenture as the holder of the Convertible
Subordinated Debentures. In addition, the Property Trustee maintains exclusive
control of a segregated non-interest bearing account (the "Property Account") to
hold all payments made in respect of the Convertible Subordinated Debentures for
the benefit of the holders of the Trust Securities. The Property Trustee will,
as soon as practicable, make Distributions and payments on liquidation,
redemption and otherwise to the holders of the Trust Securities out of funds
from the Property Account. The Guarantee Trustee holds the Guarantee for the
benefit of the holders of the Preferred Securities. The Company, as the holder
of all of the Common Securities, has the right to appoint, remove or replace any
Fleetwood Trustee and to increase or decrease the number of Fleetwood Trustees.
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<PAGE>
The Company has agreed to pay all fees and expenses related to the Issuer
and the offering of the Trust Securities. See "Description of the
Securities--Description of the Convertible Subordinated
Debentures--Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Business Trust Act and the Trust Indenture Act. See
"Description of the Securities--Description of the Preferred Securities."
For financial reporting purposes, the Trust is treated as a subsidiary of
the Company and, accordingly, the financial statements of the Trust are included
in the Company's consolidated financial statements as a minority interest. Under
GAAP, the Preferred Securities are shown in the Company's balance sheet entitled
"Company-obligated mandatorily redeemable convertible preferred securities of
Fleetwood Capital Trust holding solely 6% Convertible Subordinated Debentures of
the Company" and appropriate disclosures about the Preferred Securities, the
Guarantee and the Convertible Subordinated Debentures are included in the notes
to the Company's consolidated financial statements. For financial reporting
purposes, the Company records Distributions payable on the Preferred Securities
as interest expense in the consolidated statements of operations.
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<PAGE>
DESCRIPTION OF THE SECURITIES
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities were issued pursuant to the terms of the
Declaration. The Declaration incorporates by reference the terms of the Business
Trust Act and the Trust Indenture Act. When the Registration Statement becomes
effective, the Declaration will be qualified as an indenture under the Trust
Indenture Act. The Bank of New York, as Property Trustee, will act as indenture
trustee for the Preferred Securities under the Declaration for purposes of
compliance with the Trust Indenture Act. Capitalized terms not otherwise defined
herein have the meanings ascribed to them in the Declaration. The following
summary of certain material terms and provisions of the Preferred Securities
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the Declaration (a copy of which may be obtained from the
Company upon request), the Business Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of the
Trust the Preferred Securities, which represent preferred undivided beneficial
interests in the assets of the Trust, and the Common Securities, which represent
common undivided beneficial interests in the assets of the Trust. All of the
Common Securities are directly owned by the Company. The Common Securities rank
pari passu, and payments will be made thereon on a pro rata basis, with the
Preferred Securities, except that upon the occurrence and during the continuance
of a Declaration Event of Default (as defined herein), the rights of the holders
of the Common Securities to receive payment of periodic Distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of the holders of the Preferred Securities. The Declaration does not
permit the issuance by the Trust of any securities other than the Trust
Securities, the incurrence of any indebtedness by the Trust or the making of any
investment other than in the Convertible Subordinated Debentures. Pursuant to
the Declaration, the Property Trustee has legal title to and holds the
Convertible Subordinated Debentures purchased by the Trust as Trust assets for
the benefit of the holders of the Trust Securities. The payment of Distributions
out of money held by the Trust, and payments to holders of Preferred Securities
upon redemption of the Preferred Securities or liquidation of the Trust, are
guaranteed by the Company to the extent described under "Description of the
Securities--Description of the Guarantee." The Guarantee is held by the
Guarantee Trustee for the benefit of the holders of the Preferred Securities.
The Guarantee does not cover payment of Distributions when the Trust does not
have sufficient available funds to pay such Distributions. In such event, the
remedy of a holder of Preferred Securities is to vote to direct the Property
Trustee to enforce the Property Trustee's rights under the Convertible
Subordinated Debentures except in the limited circumstances in which the holder
may take Direct Action. See "--Declaration Events of Default" and "--Voting
Rights."
DISTRIBUTIONS
Distributions on the Preferred Securities are fixed at an annual rate of 6%
of the stated liquidation amount of $50 per Preferred Security (the
"Distribution Rate"). To the extent permitted by applicable law, Distributions
in arrears for more than one quarter will accrue interest thereon at the
Distribution Rate, compounded quarterly. The term "Distribution" as used herein
includes any such interest payable unless otherwise stated plus any Additional
Interest or Liquidated Damages (each as defined below). The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months and, for any period of less than a full calendar
month, the actual number of days elapsed in such month.
Distributions on the Preferred Securities are cumulative, will accumulate
from February 10, 1998, and will be payable quarterly in arrears on February 15,
May 15, August 15, and November 15 of each year, commencing May 15, 1998, when,
as and if available for payment. Distributions will be made by the Property
Trustee, except as otherwise described below.
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<PAGE>
So long as the Company shall not be in default in the payment of interest on
the Convertible Subordinated Debentures, the Company has the right under the
Indenture to defer payments of interest on the Convertible Subordinated
Debentures by extending the interest payment period from time to time on the
Convertible Subordinated Debentures, which, if exercised, would cause the Trust
to defer quarterly Distributions on the Preferred Securities (though such
Distributions would continue to accumulate with interest thereon (to the extent
permitted by applicable law) at the Distribution Rate, compounded quarterly,
because interest would continue to accrue on the Convertible Subordinated
Debentures) during any such Extension Period. Such right to extend the interest
payment period for the Convertible Subordinated Debentures is limited to a
period not exceeding 20 consecutive quarters and such period may not extend
beyond the maturity of the Convertible Subordinated Debentures or end on other
than a Distribution payment date. In the event that the Company exercises this
right, then (a) the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (x)(i)
purchases or acquisitions of shares of the Company's capital stock (or capital
stock equivalents) in connection with the satisfaction by the Company of its
obligations under any officers, directors or employee benefit plans (or any
options or other instruments issued thereunder) or the satisfaction by the
Company of its obligations pursuant to any contract or security requiring the
Company to purchase shares of the Company's capital stock (or capital stock
equivalents), (ii) purchases of shares of the Company's capital stock (or
capital stock equivalents) from officers, directors or employees of the Company
or its subsidiaries pursuant to employment agreements or upon termination of
employment or retirement, (iii) as a result of a reclassification, combination
or subdivision of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, (iv) dividends or distribution in shares of its
capital stock of the same class on which such dividend or distribution is being
made and conversions or exchanges of common stock of one class into common stock
of another class, (v) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or any security being converted or exchanged, (vi) purchases
or other acquisitions of common stock in connection with a dividend reinvestment
or other similar plan, or (vii) any dividend or distribution of capital stock
(or capital stock equivalents) in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, or
(y) guarantee payments made with respect to any of the foregoing, (b) the
Company shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by the Company that
rank pari passu with or junior to the Convertible Subordinated Debentures and
(c) the Company shall not make any guarantee payments with respect to the
foregoing (other than pursuant to the Guarantee or the Company's guarantee of
the Common Securities). Prior to the termination of any such Extension Period of
less than 20 consecutive quarters, the Company may further extend the interest
payment period; PROVIDED, that such Extension Period, together with all such
previous and further extensions, may not exceed 20 consecutive quarters or
extend beyond the maturity of the Convertible Subordinated Debentures or end on
other than a Distribution payment date. Upon the termination of any Extension
Period and the payment of all amounts then due on the Convertible Subordinated
Debentures, the Company may commence a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof, but the Company may prepay at any time all or
any portion of the interest accrued during an Extension Period. If Distributions
are deferred, the deferred Distributions and, to the extent permitted by law,
accrued interest thereon shall be paid to holders of record of the Preferred
Securities as they appear on the books and records of the Trust at the close of
business on the record date for the Distribution payment date upon which such
Extension Period terminates. See "Risk Factors--Option to Extend Interest
Payment Period; Tax Impact of Extension" and "Description of the
Securities--Description of the Convertible Subordinated Debentures--Option to
Extend Interest Payment Period."
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<PAGE>
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
Distributions. The Trust's funds available for Distribution to the holders of
Preferred Securities will be limited to payments received from the Company on
the Convertible Subordinated Debentures. If the Company does not make interest
payments on the Convertible Subordinated Debentures, the Property Trustee will
not make distributions on the Preferred Securities. Under the Declaration, if
and to the extent the Company does not make interest payments on the Convertible
Subordinated Debentures deposited in the Trust as trust assets, the Property
Trustee is obligated to make distributions on the Trust Securities on a pro rata
basis. The payment of Distributions out of monies held by the Trust is
guaranteed by the Company on a subordinated basis and as and to the extent set
forth under "Description of the Securities--Description of the Guarantee." The
Guarantee is a full and unconditional guarantee from the time of issuance of the
Preferred Securities, but the Guarantee covers distributions and other payments
on the Preferred Securities only if and to the extent that the Company has made
a payment to the Property Trustee of interest or principal on the Convertible
Subordinated Debentures deposited in the Trust as trust assets. See "Description
of the Securities-- Description of the Convertible Subordinated Debentures."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record dates, which will be 15 days prior to the
relevant payment dates. Distributions payable on any Preferred Securities that
are not punctually paid on any distribution payment date as a result of the
Company having failed to make the corresponding interest payment on the
Convertible Subordinated Debentures will forthwith cease to be payable to the
person in whose name such Preferred Security is registered on the relevant
record date, and such defaulted distribution will instead be payable to the
person in whose name such Preferred Security is registered on the special record
date established by the Regular Trustee, which record date shall correspond to
the special record date or other specified date determined in accordance with
the Indenture; PROVIDED, HOWEVER, that distributions shall not be considered
payable on any distribution payment date falling within an Extension Period
unless the Company has elected to make a full or partial payment of interest
accrued on the Convertible Subordinated Debentures on such distribution payment
date. Such Distributions will be paid through the Property Trustee, who will
hold amounts received in respect of the Convertible Subordinated Debentures for
the benefit of the holders of the Trust Securities. Subject to any applicable
laws and regulations and the provisions of the Declaration, each such payment
will be made as described under "--Book-Entry Only Issuance; The Depository
Trust Company" below. Distributions payable on Preferred Securities that are not
in book-entry form may be made at the option of the Trust by check mailed to the
address of the holder entitled thereto or by wire transfer to an account in the
United States appropriately designated by the holder entitled thereto prior to
the record date for the corresponding Distribution payment date; PROVIDED that
such payment shall be made by wire transfer if such instructions are given by a
holder of Preferred Securities having an aggregate liquidation amount of
$1,000,000 or more. In the event that any date on which Distributions are to be
made on the Preferred Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. A
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day on
which banking institutions in New York City are authorized or required by law or
executive order to remain closed, or (c) a day on which the Property Trustee's
corporate trust office or the Debt Trustee's corporate trust office is closed
for business.
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CONVERSION RIGHTS
The Preferred Securities are convertible at any time prior to the close of
business on February 15, 2028 (or in the case of Preferred Securities called for
redemption, prior to the close of business on the Business Day prior to the
Redemption Date) (the "Conversion Expiration Date"), at the option of the
holders thereof and in the manner described below, into shares of Fleetwood
Common Stock at an initial conversion price of $48.72 per share of Fleetwood
Common Stock (the "Initial Conversion Price") (equivalent to an initial
conversion rate of 1.02627 shares of Fleetwood Common Stock for each Preferred
Security), subject to adjustment as described under "--Conversion Price
Adjustments--General" and "-- Conversion Price Adjustments--Fundamental Change"
below. Holders of Preferred Securities at the close of business on a
distribution record date will be entitled to receive the distribution payable on
such Preferred Securities on the corresponding distribution payment date
notwithstanding the conversion of such Preferred Securities following such
distribution record date but on or prior to such distribution payment date.
Except as provided in the immediately preceding sentence, neither the Trust nor
the Company will make, or be required to make, any payment, allowance or
adjustment for accumulated and unpaid distributions, whether or not in arrears,
on converted Preferred Securities. The Company will make no payment or allowance
for distributions on the shares of Fleetwood Common Stock issued upon such
conversion, except to the extent that such shares of Fleetwood Common Stock are
held of record on the record date for any such distributions. Each conversion
will be deemed to have been effected immediately prior to the close of business
on the date on which the related conversion notice was received by the
Conversion Agent.
The terms of the Preferred Securities provide that a holder of a Preferred
Security wishing to exercise its conversion right shall deliver an irrevocable
conversion notice together with, if the Preferred Security is a Certificated
Security (as defined herein), such Certificated Security to the Property
Trustee, as conversion agent (the "Conversion Agent"), which shall, on behalf of
such holder, exchange such Preferred Securities for a portion of the Convertible
Subordinated Debentures and immediately convert an equivalent amount of
Convertible Subordinated Debentures into Fleetwood Common Stock. Holders may
obtain copies of the required form of the conversion notice from the Conversion
Agent. So long as a book-entry system for the Preferred Securities is in effect,
however, procedures for converting the Preferred Securities into shares of
Fleetwood Common Stock will differ, as described under "--Book-Entry Only
Issuance; The Depository Trust Company."
No fractional shares of Fleetwood Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid by the
Company in cash based on the current market price of Fleetwood Common Stock on
the date such Preferred Securities are surrendered for conversion or, if not a
trading day, on the next trading day.
CONVERSION PRICE ADJUSTMENTS
GENERAL
The Initial Conversion Price is subject to adjustment (under formulae set
forth in the Indenture) in certain events, including:
(i) the issuance of shares of Fleetwood Common Stock as a dividend or a
distribution;
(ii) any subdivision, combination or reclassification of shares of Fleetwood
Common Stock;
(iii) the issuance to all holders of shares of Fleetwood Common Stock of
certain rights or warrants to subscribe for or purchase shares of
Fleetwood Common Stock at less than the then current market price;
(iv) the distribution to all holders of Fleetwood Common Stock of (A)
capital stock of the Company (other than Fleetwood Common Stock), (B)
evidences of indebtedness of the Company and/or
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(C) other assets (including securities, but excluding (1) any rights or
warrants referred to in clause (iii) above, (2) any rights or warrants
to acquire any capital stock of any entity other than the Company or
any subsidiary of the Company, (3) any dividends or distributions in
connection with the liquidation, dissolution or winding-up of the
Company, (4) any dividends or distributions payable solely in cash that
may from time to time be fixed by the Board of Directors of the
Company, and (5) any dividends or distributions referred to in clause
(i) or (ii) above);
(v) dividends or distributions to all holders of Fleetwood Common Stock
consisting solely of cash, excluding (a) any cash dividends on Fleetwood
Common Stock to the extent that the aggregate cash dividends per share
of Fleetwood Common Stock in any consecutive 12-month period do not
exceed the greater of (x) the amount per share of Fleetwood Common Stock
of the cash dividends paid on Fleetwood Common Stock in the immediately
preceding 12-month period, to the extent that such dividends for the
immediately preceding 12-month period did not require an adjustment of
the conversion price pursuant to this clause (v) (as adjusted to reflect
subdivisions or combinations of Fleetwood Common Stock), and (y) 15% of
the average of the Current Market Price (as defined in the Indenture)
per share of Fleetwood Common Stock for ten consecutive Trading Days (as
defined in the Indenture); prior to the date of declaration of such
dividend and (b) any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company or a redemption of
any rights issued under a rights agreement; PROVIDED, HOWEVER, that no
adjustment shall be made pursuant to this clause (v) if such
distribution would otherwise constitute a Fundamental Change (as defined
below) and be reflected in a resulting adjustment described below; and
(vi) payment to holders of Fleetwood Common Stock in respect of a tender or
exchange offer by the Company or any subsidiary of the Company for
Fleetwood Common Stock to the extent that the cash and value of any
other consideration included in such payment per share of Fleetwood
Common Stock exceed by more than 10% (with any smaller excess being
disregarded in computing the adjustment provided hereby) the first
reported sale price per share of Fleetwood Common Stock on the Trading
Day next succeeding the Expiration Time (as defined in the Indenture)
for such tender or exchange offer.
If any adjustment is required to be made as set forth in clause (v) above as
a result of a distribution that is a dividend described in subclause (a) of
clause (v) above, such adjustment would be based upon the amount by which such
distribution exceeds the amount of the dividend permitted to be excluded
pursuant to such subclause (a) of clause (v). If an adjustment is required to be
made as set forth in clause (v) above as a result of a distribution that is not
such a dividend, such adjustment would be based upon the full amount of such
distribution. If an adjustment is required to be made as set forth in clause
(vi) above, such adjustment would be calculated based upon the amount by which
the aggregate consideration paid for the Fleetwood Common Stock acquired in the
tender or exchange offer exceeds 110% of the value of such shares based on the
first reported sale price of Fleetwood Common Stock on the Trading Day next
succeeding the Expiration Time. In lieu of making such a conversion price
adjustment in the case of certain dividends or distributions, the Company may
provide that upon the conversion of the Preferred Securities, the holder
converting such Preferred Securities will receive, in addition to the Fleetwood
Common Stock (if any) to which such holder is entitled, the cash, securities or
other property that such holder would have received if such holder had,
immediately prior to the record date for such dividend or distribution,
converted its Preferred Securities into Fleetwood Common Stock.
No adjustment in the conversion price will be required unless the adjustment
would require a change of at least 1% in the conversion price then in effect;
PROVIDED, HOWEVER, that any adjustment that would otherwise be required to be
made shall be carried forward and taken into account in any subsequent
adjustment. In addition, no adjustment to the conversion price will be required
in connection with the issuance of rights pursuant to a stockholder rights plan
or similar plan or the repurchase or redemption of those rights or the issuance
of common stock, options or other securities under any officer, director, or
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employee benefit plan in existence on the date of this Prospectus. If any action
would require adjustments of the conversion price pursuant to more than one of
the provisions described above, then, subject to limited exceptions, only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value to the holders of the Preferred Securities.
The Company from time to time may, to the extent permitted by law, reduce
the conversion price of the Convertible Subordinated Debentures (and thus the
conversion price of the Preferred Securities) by any amount selected by the
Company for any period of at least 20 Business Days (as defined in the
Indenture), in which case the Company shall give at least 15 days' notice of
such reduction. In particular, the Company may, at its option, make such
reduction in the conversion price, in addition to those set forth above, as the
Company deems advisable to avoid or diminish any income tax to holders of
Fleetwood Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for tax purposes. See
"Certain Federal Tax Consequences--Adjustment of Conversion Price."
Except as stated above, the conversion price will not be adjusted for the
issuance of Fleetwood Common Stock or any securities convertible into or
exchangeable for Fleetwood Common Stock or carrying the right to purchase any of
the foregoing.
FUNDAMENTAL CHANGE
In the event that the Company shall be a party to any transaction or series
of transactions constituting a Fundamental Change (including, without
limitation, (i) any recapitalization or reclassification of Fleetwood Common
Stock (other than a change in par value or a change from par value to no par
value or from no par value to par value, or as a result of a subdivision or
combination of Fleetwood Common Stock); (ii) any consolidation or merger of the
Company with or into another corporation as a result of which holders of
Fleetwood Common Stock shall be entitled to receive securities or other property
or assets (including cash) with respect to or in exchange for Fleetwood Common
Stock (other than a merger that does not result in a reclassification,
conversion, exchange or cancellation of the outstanding Fleetwood Common Stock);
(iii) any sale or transfer of all or substantially all of the assets of the
Company; or (iv) any compulsory share exchange) pursuant to which holders of
Fleetwood Common Stock shall be entitled to receive other securities, cash or
other property, then appropriate provision shall be made so that the holder of
each Preferred Security then outstanding shall have the right thereafter to
convert such Preferred Securities only into (x) if any such transaction does not
constitute a Common Stock Fundamental Change (as defined below), the kind and
amount of the securities, cash or other property that would have been receivable
upon such recapitalization, reclassification, consolidation, merger, sale,
transfer or share exchange by a holder of the number of shares of Fleetwood
Common Stock issuable upon conversion of such Preferred Securities immediately
prior to such recapitalization, reclassification, consolidation, merger, sale,
transfer or share exchange, after, in the case of a Non-Stock Fundamental Change
(as defined below), giving effect to any adjustment in the conversion price in
accordance with clause (i) of the following paragraph, and (y) if any such
transaction constitutes a Common Stock Fundamental Change, shares of common
stock of the kind received by holders of Fleetwood Common Stock as a result of
such Common Stock Fundamental Change in an amount determined in accordance with
clause (ii) of the following paragraph. The company formed by such consolidation
or resulting from such merger or which acquires such assets or which acquires
the Fleetwood Common Stock, as the case may be, shall enter into a supplemental
indenture with the Debt Trustee, reasonably satisfactory in form to the Debt
Trustee, the provisions of which shall establish such right. Such supplemental
indenture shall provide for adjustments which, for events subsequent to the
effective date of such supplemental indenture, shall be as nearly equivalent as
practicable to the relevant adjustments provided for in the preceding paragraphs
and in this paragraph.
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Notwithstanding any other provision in the preceding paragraphs, if any
Fundamental Change occurs, the conversion price in effect will be adjusted
immediately after that Fundamental Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the conversion price per
share of Fleetwood Common Stock immediately following such Non-Stock
Fundamental Change will be the lower of (a) the conversion price in
effect immediately prior to such Non-Stock Fundamental Change, but after
giving effect to any other adjustments effected pursuant to the
preceding paragraphs, and (b) the result obtained by multiplying the
greater of the Applicable Price (as defined below) or the then
applicable Reference Market Price (as defined below) by a fraction of
which the numerator will be 100.0 and the denominator will be an amount
based on the date such Non-Stock Fundamental Change occurs. For the
12-month period beginning February 10, 1998, the denominator will be
106.0, and the denominator will decrease by 0.75 during each successive
12-month period; provided, that the denominator shall in no event be
less than 100.0;
(ii) in the case of a Common Stock Fundamental Change, the conversion price
per share of Fleetwood Common Stock immediately following the Common
Stock Fundamental Change will be the conversion price in effect
immediately prior to the Common Stock Fundamental Change, but after
giving effect to any other adjustments effected pursuant to the
preceding paragraphs, multiplied by a fraction, the numerator of which
is the Purchaser Stock Price (as defined below) and the denominator of
which is the Applicable Price; PROVIDED, HOWEVER, that in the event of
a Common Stock Fundamental Change in which (a) 100% of the value of the
consideration received by a holder of Fleetwood Common Stock is shares
of common stock of the successor, acquiror or other third party (and
cash, if any, paid with respect to any fractional interests in the
shares of common stock resulting from the Common Stock Fundamental
Change) and (b) all of the Fleetwood Common Stock shall have been
exchanged for, converted into, or acquired for, shares of common stock
(and cash, if any, with respect to fractional interests) of the
successor, acquiror or other third party, the conversion price per
share of Fleetwood Common Stock immediately following the Common Stock
Fundamental Change shall be the conversion price in effect immediately
prior to the Common Stock Fundamental Change divided by the number of
shares of common stock of the successor, acquiror, or other third party
received by a holder of one share of Fleetwood Common Stock as a result
of the Common Stock Fundamental Change.
Depending upon whether a Fundamental Change is a Non-Stock Fundamental
Change or a Common Stock Fundamental Change, a holder may receive significantly
different consideration upon conversion of the Preferred Securities. In the
event of a Non-Stock Fundamental Change, the holder has the right to convert
Preferred Securities into the kind and amount of the securities, cash or other
property as is determined by the number of shares of Fleetwood Common Stock as
would have been receivable upon conversion of Preferred Securities at the
conversion price as adjusted in accordance with clause (i) of the preceding
paragraph. However, in the event of a Common Stock Fundamental Change in which
less than 100% of the value of the consideration received by a holder of
Fleetwood Common Stock is common stock of the successor, acquiror or other third
party, a holder of Preferred Securities who converts such Preferred Securities
following the Common Stock Fundamental Change will receive consideration in the
form of such common stock only, whereas a holder who converted such Preferred
Securities prior to the Common Stock Fundamental Change would have received
consideration in the form of such common stock as well as any other securities
or assets (which may include cash) received by holders of Fleetwood Common Stock
in such transaction.
The foregoing conversion price adjustments may, under certain circumstances
in "Fundamental Change" transactions where all or substantially all of the
Fleetwood Common Stock is converted into securities, cash, or property and not
more than 50% of the value received by the holders of Fleetwood Common Stock
consists of stock listed or admitted for listing subject to notice of issuance
on a national securities exchange or quoted on the Nasdaq National Market of the
Nasdaq Stock Market, Inc. (a "Non-Stock Fundamental Change," as defined herein),
increase the securities, cash or property into which each
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Preferred Security is convertible. However, the maximum amount of any such
increase will be limited in cases where the relevant Applicable Price is lower
than the applicable Reference Market Price.
In a Fundamental Change transaction where all or substantially all the
Fleetwood Common Stock is converted into securities, cash, or property and more
than 50% of the value received by the holders of Fleetwood Common Stock (subject
to certain limited exceptions) consists of listed or Nasdaq National Market
traded common stock (a "Common Stock Fundamental Change," as defined herein),
the foregoing adjustments are designed to provide in effect that (a) where
Fleetwood Common Stock is converted partly into such common stock and partly
into other securities, cash, or property, each Preferred Security will be
convertible solely into a number of shares of such common stock determined so
that the initial value of such shares (measured as described in the definition
of Purchaser Stock Price below) equals the value of the shares of Fleetwood
Common Stock into which such Preferred Securities was convertible immediately
before the transaction (measured as aforesaid) and (b) where Fleetwood Common
Stock is converted solely into such common stock, each Preferred Security will
be convertible into the same number of shares of such common stock receivable by
a holder of the number of shares of Fleetwood Common Stock into which such
Preferred Securities was convertible immediately before such transaction.
In determining the amount and type of consideration received by a holder of
Fleetwood Common Stock in the event of a Fundamental Change, consideration
received by a holder of Fleetwood Common Stock pursuant to a statutory right of
appraisal will be disregarded.
"Applicable Price" means (i) in the event of a Non-Stock Fundamental Change
in which the holders of Fleetwood Common Stock receive only cash, the amount of
cash receivable by a holder of one share of Fleetwood Common Stock; and (ii) in
the event of any other Fundamental Change, the average of the Closing Prices (as
defined in the Indenture) for one share of Fleetwood Common Stock during the 10
trading days immediately prior to the record date for the determination of the
holders of Fleetwood Common Stock entitled to receive cash, securities, property
or other assets in connection with such Fundamental Change or, if there is no
such record date, prior to the date on which the holders of the Fleetwood Common
Stock will have the right to receive such cash, securities, property or other
assets.
"Common Stock Fundamental Change" means any Fundamental Change in which more
than 50% of the value (as determined in good faith by the Company's Board of
Directors) of the consideration received by holders of Fleetwood Common Stock
pursuant to such transaction consists of shares of common stock that for the 10
consecutive Trading Days immediately prior to such Fundamental Change, has been
admitted for listing or admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the Nasdaq National Market; PROVIDED
HOWEVER, that a Fundamental Change will not be a Common Stock Fundamental Change
unless either (i) the Company continues to exist after the occurrence of such
Fundamental Change and the outstanding Preferred Securities continue to exist as
outstanding Preferred Securities, or (ii) the outstanding Preferred Securities
continue to exist as Preferred Securities and are convertible into shares of
common stock of the successor to the Company.
"Fundamental Change" means the occurrence of any transaction or event or
series of transactions or events pursuant to which all or substantially all of
the Fleetwood Common Stock is exchanged for, converted into, acquired for or
constitutes solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); PROVIDED, HOWEVER, in the case of any such series of transactions or
events, for purposes of adjustment of the conversion price, such Fundamental
Change will be deemed to have occurred when substantially all of the Fleetwood
Common Stock has been exchanged for, converted into, or acquired for or
constitutes solely the right to receive cash, securities, property or other
assets but the adjustment shall be based upon the consideration that the holders
of Fleetwood Common Stock received in the transaction or event as a result of
which more than 50% of the Fleetwood Common Stock shall have been exchanged for,
converted into or acquired for, or shall constitute solely the right to receive
such cash, securities, properties or other assets.
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"Non-Stock Fundamental Change" means any Fundamental Change other than a
Common Stock Fundamental Change.
"Purchaser Stock Price" means, with respect to any Common Stock Fundamental
Change, the average of the Closing Prices for one share of common stock received
by holders of Fleetwood Common Stock in such Common Stock Fundamental Change
during the 10 trading days immediately prior to the record date for the
determination of the holders of Fleetwood Common Stock entitled to receive such
shares of common stock or, if there is no such record date, prior to the date
upon which the holders of Fleetwood Common Stock shall have the right to receive
such shares of common stock.
"Reference Market Price" will initially mean $26.625 (which is equal to
approximately 66 2/3% of the last reported sale price per share of Fleetwood
Common Stock on the NYSE on February 4, 1998) and, in the event of any
adjustment to the conversion price other than as a result of a Fundamental
Change, the Reference Market Price will also be adjusted so that the ratio of
the Reference Market Price to the conversion price after giving effect to any
adjustment will always be the same as the ratio of the initial Reference Market
Price to the Initial Conversion Price of the Preferred Securities.
Conversions of the Preferred Securities may be effected by delivering them
to the office or agency of the Company maintained for such purpose.
Conversion price adjustments may, in certain circumstances, result in
constructive distributions that could be taxable as dividends under the Internal
Revenue Code of 1986, as amended (the "Code"), to holders of Preferred
Securities or, in the case of a failure to make such adjustments, to holders of
Fleetwood Common Stock issued upon conversion thereof. See "Certain Federal Tax
Consequences-- Adjustment of Conversion Price."
The Company could, in the future, enter into certain transactions, including
certain recapitalizations or distributions, that would not constitute a
Fundamental Change, but that would increase the amount of consolidated
indebtedness or reduce the amount of shareholders' equity of the Company.
MANDATORY REDEMPTION
The Convertible Subordinated Debentures mature on February 15, 2028, and may
be redeemed, in whole or in part, at any time on or after February 15, 2001, or
at any time in certain circumstances upon the occurrence of a Tax Event. Upon
the repayment of the Convertible Subordinated Debentures, whether at stated
maturity or upon redemption, the proceeds from such repayment or payment shall
simultaneously be applied to redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Convertible
Subordinated Debentures so repaid or redeemed at the applicable redemption
price, together with accumulated and unpaid Distributions thereon; PROVIDED,
that except in the case of redemption upon maturity of the Convertible
Subordinated Debentures, holders of Trust Securities shall be given not less
than 30 nor more than 60 days' notice of such redemption. The applicable
redemption price per Preferred Security shall be equal to the redemption price
per $50 principal amount of Convertible Subordinated Debentures. See
"Description of the Securities--Description of the Convertible Subordinated
Debentures--Redemption at the Option of the Company." In the event that fewer
than all of the outstanding Trust Securities are to be redeemed, the Preferred
Securities and the Trust Common Securities will be redeemed on a pro rata basis
and, in such case, the redemption of Preferred Securities will be made as
described under "--Book-Entry Only Issuance; The Depository Trust Company"
below.
SPECIAL EVENT DISTRIBUTION; TAX EVENT REDEMPTION
"Tax Event" means that the Regular Trustees shall have received an opinion
(a "Dissolution Tax Opinion") of nationally recognized independent tax counsel
experienced in such matters to the effect that as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws or any
regulations thereunder of the United States or any political subdivision or
taxing authority thereof
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or therein, (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court or governmental
or regulatory agency or authority (including the enactment of any legislation
and the publication of any judicial decision or regulatory determination) or (c)
any official interpretation or pronouncement by any legislative body, court or
governmental or regulatory agency or authority that provides for a position with
respect to such laws or regulations that differs from the theretofore generally
accepted position, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced
(collectively, a "Change in Tax Law"), there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date thereof, subject to
federal income tax with respect to interest accrued or received on the
Convertible Subordinated Debentures; (ii) the Trust is, or will be within 90
days of the date thereof, subject to more than a de minimis amount of other
taxes, duties or other governmental charges or (iii) interest (including
original issue discount) payable by the Company to the Trust on the Convertible
Subordinated Debentures is not, or within 90 days of the date thereof will not
be, deductible by the Company for United States federal income tax purposes on a
current accrual basis (by reason of deferral, disallowance or otherwise).
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in such matters to the effect that, as a result of the occurrence of a change in
law or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), there is more than an insubstantial risk
that the Trust is or will be considered an "investment company" that is required
to be registered under the Investment Company Act of 1940, as amended (the "1940
Act").
If, at any time, a Tax Event or an Investment Company Event (each, a
"Special Event") shall occur and be continuing, the Trust may, with the prior
written consent of the Company, unless the Convertible Subordinated Debentures
are redeemed in the limited circumstances described below, be dissolved with the
result that, after satisfaction of liabilities to creditors of the Trust, if
any, Convertible Subordinated Debentures with an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Distribution Rate of, and accrued and unpaid interest equal to
accumulated and unpaid Distributions on, the Trust Securities outstanding at
such time would be distributed to the holders of the Trust Securities in
liquidation of such holders' interests in the Trust on a pro rata basis within
90 days following the occurrence of the Special Event; PROVIDED, HOWEVER, that
in the case of the occurrence of a Tax Event, as a condition of such dissolution
and distribution, the Regular Trustees shall have received an opinion (a "No
Recognition Opinion") of nationally recognized independent tax counsel
experienced in such matters, which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the holders of the Preferred
Securities will not recognize any gain or loss for federal income tax purposes
as a result of such dissolution and distribution of Convertible Subordinated
Debentures; and, PROVIDED, FURTHER, that if at the time there is available to
the Trust the opportunity to eliminate, within such 90-day period, the Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure that in the sole
judgment of the Company has or will cause no adverse effect on the Trust, the
Company or the holders of the Preferred Securities and will involve no material
cost, the Trust will pursue such measure in lieu of dissolution. Furthermore,
if, in the case of the occurrence of a Tax Event, (i) the Regular Trustees have
received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Company would be
precluded from deducting the interest on the Convertible Subordinated Debentures
for federal income tax purposes on a current accrual basis (by reason of
deferral, disallowance or otherwise) even if the Convertible Subordinated
Debentures were distributed to the holders of the Trust Securities in
liquidation of such holders' interests in the Trust as described above or (ii)
the Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, the Company shall have the
right, upon not less than 30 nor more than 60 days' notice, to redeem the
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Convertible Subordinated Debentures, in whole but not in part for cash, at a
redemption price equal to 100% of the principal amount thereof plus accrued and
unpaid interest thereon to the redemption date, within 90 days following the
occurrence of such Tax Event, and promptly following such redemption, the
Preferred Securities will be redeemed by the Trust at a redemption price equal
to the liquidation amount of such Preferred Securities plus accumulated and
unpaid Distributions thereon; PROVIDED, HOWEVER, that if at the time there is
available to the Company or the Trust the opportunity to eliminate, within such
90-day period, the Tax Event by taking some ministerial action, such as filing a
form or making an election, or pursuing some other similar reasonable measure
which in the sole judgment of the Company has or will cause no adverse effect on
the Trust, the Company or the holders of the Preferred Securities and will
involve no material costs, the Company or the Trust will pursue such measure in
lieu of redemption. If the Company declines to consent to such a dissolution of
the Trust and distribution of the Convertible Subordinated Debentures or
declines to redeem to Convertible Subordinated Debentures as described above,
the Preferred Securities will remain outstanding and the Company may incur an
obligation to pay Additional Interest. See "Description of the
Securities--Description of the Convertible Subordinated Debentures--Additional
Interest."
After the date fixed for any distribution of Convertible Subordinated
Debentures upon dissolution of the Trust, (i) the Preferred Securities will no
longer be deemed to be outstanding, (ii) the Depositary (as defined herein) or
its nominee, as the record holder of the Global Certificates, will receive a
registered global certificate or certificates representing the Convertible
Subordinated Debentures to be delivered upon such distribution, and (iii) any
certificates representing Preferred Securities not held by the Depositary or its
nominee will be deemed to represent Convertible Subordinated Debentures having
an aggregate principal amount equal to the aggregate stated liquidation amount
of such Preferred Securities, with an interest rate identical to the
Distribution Rate of and accrued and unpaid interest equal to accumulated and
unpaid Distributions on such Preferred Securities, until such certificates are
presented to the Company or its agent for transfer, exchange or reissuance.
There can be no assurance as to the market price for the Convertible
Subordinated Debentures that may be distributed in exchange for Preferred
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Convertible Subordinated Debentures that an investor may
subsequently receive on dissolution and liquidation of the Trust may trade at a
discount to the price of the Preferred Securities exchanged. If the Convertible
Subordinated Debentures are distributed to the holders of Preferred Securities
upon the dissolution of the Trust, the Company will use its reasonable best
efforts to list the Convertible Subordinated Debentures on the NYSE or on such
other national securities exchange or similar organization, if any.
REDEMPTION PROCEDURES FOR REDEMPTION BY THE TRUST
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accumulated and unpaid Distributions have been or
contemporaneously are paid (or such payment duly is provided for) on all
Preferred Securities for all quarterly Distribution periods terminating on or
prior to the date of redemption.
If the Trust gives notice of redemption in respect of Preferred Securities
(which notice will be irrevocable), then on the redemption date (provided that
the Company has paid to the Property Trustee a sufficient amount of cash in
connection with the related redemption of the Convertible Subordinated
Debentures), the Trust will irrevocably deposit with the Depositary funds
sufficient to pay the applicable redemption price and will give the Depositary
irrevocable instructions and authority to pay the redemption price to the
holders of the Preferred Securities. See "--Book-Entry Only Issuance; The
Depository Trust Company." If notice of redemption shall have been given and
funds deposited as required, then, on the date fixed for such redemption,
Distributions will cease to accumulate and all rights of holders of such
Preferred Securities so called for redemption will cease, except the right of
the holders of such Preferred Securities to receive the redemption price but
without interest on such redemption price. In the event that
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any date generally fixed for redemption of Preferred Securities is not a
Business Day, then payment of the redemption price payable on such date will be
made on the next succeeding day that is a Business Day (without any interest or
other payment in respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the redemption price in
respect of Preferred Securities is improperly withheld or refused and not paid
either by the Trust or by the Company pursuant to the Guarantee, Distributions
on such Preferred Securities will continue to accumulate at the then applicable
rate from the original redemption date to the date of payment, in which case the
actual payment date will be considered the date fixed for redemption for
purposes of calculating the redemption price.
In the event that fewer than all of the outstanding Trust Securities are to
be redeemed, the Preferred Securities and the Common Securities will be redeemed
on a pro rata basis and, in such case, the redemption of Preferred Securities
will be made as described below under "--Book-Entry Only Issuance; The
Depository Trust Company."
In the event of any redemption in part, the Trust shall not be required to
(i) issue, register the transfer of or exchange any Certificated Security during
a period beginning at the opening of business 15 days before any selection for
redemption of Preferred Securities and ending at the close of business on the
earliest date on which the relevant notice of redemption is deemed to have been
given to all holders of Preferred Securities to be so redeemed or (ii) register
the transfer of or exchange any Certificated Securities so selected for
redemption, in whole or in part, except for the unredeemed portion of any
Certificated Securities being redeemed in part.
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), the Company or its subsidiaries may at
any time, and from time to time, purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary dissolution of the Trust (each
a "Liquidation"), the then holders of the Preferred Securities will be entitled
to receive out of the assets of the Trust, after satisfaction of liabilities to
creditors, distributions in an amount equal to the aggregate of the stated
liquidation amount of $50 per Preferred Security plus accumulated and unpaid
Distributions thereon to the date of payment (the "Liquidation Distribution"),
unless, in connection with such Liquidation, Convertible Subordinated Debentures
in an aggregate stated principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Distribution Rate
of, and accrued and unpaid interest equal to accumulated and unpaid
Distributions on, the Preferred Securities have been distributed on a pro rata
basis to the holders of the Preferred Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities shall be paid on a pro rata basis. The holders
of the Common Securities will be entitled to receive distributions upon any such
dissolution pro rata with the holders of the Preferred Securities, except that
if a Declaration Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities with regard to
such distributions.
Pursuant to the Declaration, the Trust shall dissolve (i) on February 15,
2033, the expiration of the term of the Trust, (ii) upon the bankruptcy of the
Company or the holder of the Common Securities, (iii) upon the filing of a
certificate of dissolution or its equivalent with respect to the Company or the
holder of the Common Securities, after obtaining the consent of the holders of
at least a majority in liquidation amount of the Trust Securities voting
together as a single class to the filing of a certificate of cancellation with
respect to the Trust, or the revocation of the charter of the Company and the
expiration
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of 90 days after the date of revocation without a reinstatement thereof, (iv)
upon the occurrence of a Special Event except in the limited circumstance
described under "--Special Event Distribution; Tax Event Redemption" above, (v)
upon the entry of a decree of a judicial dissolution of the Company or the
Trust, (vi) upon the redemption of all the Trust Securities or (vii) upon the
conversion of all outstanding Preferred Securities pursuant to the Declaration.
DECLARATION EVENTS OF DEFAULT
The "events of default" applicable to the Convertible Subordinated
Debentures (the "Indenture Events of Default") are described in this Prospectus
under "Description of the Securities--Description of the Convertible
Subordinated Debentures--Indenture Events of Default." Any Indenture Event of
Default under the Indenture with respect to the Convertible Subordinated
Debentures constitutes an event of default under the Declaration with respect to
the Trust Securities (a "Declaration Event of Default"); PROVIDED, that pursuant
to the Declaration, the holder of the Common Securities will be deemed to have
waived any Declaration Event of Default with respect to the Common Securities
until all Declaration Events of Default with respect to the Preferred Securities
have been cured, waived or otherwise eliminated. Until such Declaration Events
of Default with respect to the Preferred Securities have been so cured, waived,
or otherwise eliminated, the Property Trustee will be deemed to be acting solely
on behalf of the holders of the Preferred Securities and only the holders of the
Preferred Securities will have the right to direct the Property Trustee with
respect to certain matters under the Declaration, and therefore the Indenture.
If the Property Trustee fails to enforce its rights under the Convertible
Subordinated Debentures, holders of Preferred Securities, to the fullest extent
permitted by law, may institute a legal proceeding against the Company to
enforce the Property Trustee's rights under the Convertible Subordinated
Debentures. Notwithstanding the foregoing, if a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Company to pay interest or principal on the Convertible Subordinated Debentures
on the date such interest or principal is otherwise payable (or in the case of
redemption, the redemption date), the Company acknowledges in the Indenture that
a holder of Preferred Securities may institute a Direct Action for enforcement
of payment to such holder directly of the principal of or interest on
Convertible Subordinated Debentures having an aggregate principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such holder
on or after the respective due date specified in the Convertible Subordinated
Debentures. In connection with such Direct Action, the Company will remain
obligated to pay the principal or interest on the Convertible Subordinated
Debentures and will be subrogated to the rights of such holders of Preferred
Securities under the Declaration to the extent of any payment made by the
Company to such holder of Preferred Securities in such Direct Action. The
holders of Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Convertible Subordinated Debentures.
Upon the occurrence of a Declaration Event of Default, the Property Trustee
as the sole holder of the Convertible Subordinated Debentures will have the
right under the Indenture to declare the principal of and interest on the
Convertible Subordinated Debentures to be immediately due and payable. The
Company and the Trust are each required to file annually with the Property
Trustee an officer's certificate as to its compliance with all conditions and
covenants under the Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act, Trust Indenture Act and
under "Description of the Securities--Description of the Guarantee--Modification
of the Guarantee; Assignment," and as otherwise required by law and the
Declaration, the holders of the Preferred Securities will have no voting rights.
In the event that the Company elects to defer payments of interest on the
Convertible Subordinated Debentures as described above under "--Distributions,"
the holders of the Preferred Securities do not have the right to appoint a
special representative or trustee to protect their interests.
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Subject to the requirement of the Fleetwood Trustees obtaining a tax opinion
in certain circumstances set forth in the last sentence of the next paragraph,
the holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or the exercise of
any trust or power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee, as holder of the Convertible
Subordinated Debentures, to (i) exercise the remedies available under the
Indenture with respect to the Convertible Subordinated Debentures, (ii) waive
any past Indenture Event of Default and its consequences that is waivable under
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Convertible Subordinated Debentures shall be due and
payable, or (iv) consent to any amendments, modifications or termination of the
Indenture or the Convertible Subordinated Debentures requiring the consent of
the holders of the Convertible Subordinated Debentures; PROVIDED, HOWEVER, that
if an Indenture Event of Default has occurred and is continuing, the holders of
25% of the aggregate liquidation amount of the Preferred Securities then
outstanding may direct the Property Trustee to declare the principal and
interest of the Convertible Subordinated Debentures immediately due and payable;
and PROVIDED, FURTHER, that where a consent or action under the Indenture would
require the consent of (a) holders of Debentures representing a specified
percentage greater than a majority in principal amount of the Convertible
Subordinated Debentures (a "Super-Majority") or (b) each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior consent of, in the case of clause (a) above, holders of Preferred
Securities representing at least such specified percentage of the aggregate
liquidation amount of the Preferred Securities or, in the case of clause (b)
above, each holder of Preferred Securities affected thereby.
The Property Trustee shall notify all holders of the Preferred Securities of
any notice of default received from the Debt Trustee with respect to the
Convertible Subordinated Debentures. Such notice shall state that such Indenture
Event of Default also constitutes a Declaration Event of Default. Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy, the Property Trustee shall not take any of the actions described in
clause (i), (ii), (iii) or (iv) above unless the Property Trustee has obtained
an opinion of nationally recognized tax counsel experienced in such matters to
the effect that, as a result of such action, the Trust will not be classified as
other than a grantor trust for United States federal income tax purposes and
each holder will be treated as owning an undivided beneficial interest in the
Convertible Subordinated Debentures.
In the event the consent of the Property Trustee, as the holder of the
Convertible Subordinated Debentures, is required under the Indenture with
respect to any amendment, modification or termination of the Indenture, the
Property Trustee shall request the direction of the holders of the Trust
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a majority in liquidation amount of the Trust Securities voting together as a
single class; PROVIDED, HOWEVER, that where a consent under the Indenture would
require the consent of a Super-Majority, the Property Trustee may only give such
consent at the direction of the holders of at least the proportion in
liquidation amount of the Trust Securities that the relevant Super-Majority
represents of the aggregate principal amount of the Convertible Subordinated
Debentures outstanding. The Property Trustee shall be under no obligation to
take any such action in accordance with the directions of the holders of the
Trust Securities unless each of the Fleetwood Trustees has obtained an opinion
of nationally recognized tax counsel experienced in such matters to the effect
that for United States federal income tax purposes the Trust will not be
classified as other than a grantor trust.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may be
given at a separate meeting of holders of Preferred Securities convened for such
purpose, at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
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which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Preferred Securities will be required for the Trust to redeem
and cancel Preferred Securities or distribute Debentures in accordance with the
Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by the Company or any entity directly or
indirectly controlling or controlled by, or under common control with, the
Company, shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if such Preferred Securities were not
outstanding.
The procedures by which holders of Preferred Securities in book-entry form
may exercise their voting rights are described below. See "--Book-Entry Only
Issuance; The Depository Trust Company" below.
Holders of the Preferred Securities will have no rights to increase or
decrease the number of the Fleetwood Trustees or to appoint or remove the
Fleetwood Trustees, who may be appointed, removed or replaced solely by the
Company as the indirect or direct holder of all of the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Property Trustee or the Delaware
Trustee), PROVIDED that if any proposed amendment provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Trust Securities, whether by
way of amendment to the Declaration or otherwise or (ii) the dissolution,
winding-up or termination of the Trust other than pursuant to the terms of the
Declaration, then the holders of the Trust Securities voting together as a
single class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of at
least 66 2/3% in liquidation amount of the Trust Securities affected thereby,
voting together as a single class; PROVIDED, that, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Preferred
Securities or the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of 66 2/3% in liquidation amount
of such class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for United States federal income tax purposes as other than a
grantor trust, (ii) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act or (iii) cause the
Trust to be deemed an "investment company" which is required to be registered
under the 1940 Act.
PROPOSED TAX LEGISLATION
On February 2, 1998, as part of the Clinton Administration's Fiscal 1999
Budget Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") which would, among other things, generally prevent corporations
from deducting interest (including original issue discount) on convertible debt
instruments until the taxable year in which such interest is paid in cash or
other property (other than equity of the issuer or a related party or cash or
other property the amount of which is determined by reference to the value of
the equity of the issuer or a related party). The Proposed Legislation is
proposed to be effective for convertible debt instruments issued on or after the
date of "first committee action." Accordingly, it is not anticipated that the
Proposed Legislation, if adopted, will apply to the Convertible
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Subordinated Debentures. However, if the Proposed Legislation or other
legislation is enacted by Congress and if it gives rise to a Tax Event, the
Trust would be permitted to cause a redemption of the Preferred Securities by
causing a distribution of the Convertible Subordinated Debentures or, in certain
circumstances, by electing to redeem the Convertible Subordinated Debentures.
See "Risk Factors-- Special Event Distribution; Tax Event Redemption" and
"Description of the Securities--Description of the Preferred Securities--Special
Event Distribution; Tax Event Redemption."
TAXPAYER RELIEF ACT OF 1997
On August 5, 1997, the Taxpayer Relief Act of 1997 (the "Tax Act") was
enacted into law. The Tax Act reduces the maximum rates on long-term capital
gains recognized on capital assets held by individual taxpayers for more than
eighteen months as of the date of disposition (and would further reduce the
maximum rates on such gains in the year 2001 and thereafter for certain
individual taxpayers who meet specified conditions). Prospective investors
should consult their own tax advisors concerning these tax law changes.
NEW WITHHOLDING REGULATIONS
On October 6, 1997, the Treasury Department issued new regulations (the "New
Regulations") which make certain modifications to the withholding, backup
withholding and information reporting rules described above. The New Regulations
attempt to unify certification requirements and modify reliance standards. The
New Regulations are generally effective for payments made after December 31,
1998, subject to certain transition roles. Prospective investors urged to
consult their own tax advisors regarding the New Regulations.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except as
described below or as otherwise provided in the Declaration. The Trust may, with
the consent of a majority of the Regular Trustees and without the consent of the
holders of the Trust Securities, the Property Trustee or the Delaware Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any state of the United States; PROVIDED, that (i) if
the Trust is not the survivor, such successor entity either (x) expressly
assumes all of the obligations of the Trust under the Trust Securities or (y)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities"), so long
as the Successor Securities rank the same as the Preferred Securities rank with
respect to Distributions and payments upon liquidation, redemption and
otherwise, (ii) if the Trust is not the survivor, the Company expressly
acknowledges or appoints a trustee of such successor entity possessing the same
powers and duties as the Property Trustee as the holder of the Convertible
Subordinated Debentures, (iii) the Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with another
organization on which the Preferred Securities are then listed or quoted, (iv)
such merger, consolidation, amalgamation or replacement does not cause the
Preferred Securities (including any Successor Securities) to be downgraded by
any nationally recognized statistical rating organizations, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity, if any), (vi) such
successor entity has a purpose substantially identical to that of the Trust,
(vii) prior to such merger, consolidation, amalgamation or replacement, the
Company has received an opinion of a nationally recognized independent counsel
to the Trust experienced in such matters to the effect that, (a) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities)
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in any material respect (other than with respect to any dilution of the holders'
interest in the new entity), (b) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor such successor entity, if
any, will be required to register as an investment company under the 1940 Act,
and (c) following such merger, consolidation, amalgamation or replacement, the
Trust (or such successor entity) will be treated as a grantor trust for United
States federal income tax purposes and (viii) if the Trust is not the survivor,
the Company guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in liquidation amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
such consolidation, amalgamation, merger or replacement would cause the Trust or
such Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
TRANSFER RESTRICTIONS
The Preferred Securities (and any Debentures distributed to holders of the
Preferred Securities) are subject to restrictions on transfer and will bear a
legend substantially as described in "Transfer Restrictions." Shares of
Fleetwood Common Stock received upon conversion of the Preferred Securities or
the Convertible Subordinated Debentures subject to such restrictions will also
be subject to such restrictions and will bear a comparable legend.
REGISTRATION RIGHTS
The Company has filed the Registration Statement of which this Prospectus
forms a part pursuant to a Registration Rights Agreement dated as of February
10, 1998 between the Trust, the Company and the Initial Purchaser of the
Preferred Securities. The Trust and the Company have agreed to keep the
Registration Statement effective until February 10, 2000 or such earlier date as
all securities registered thereunder (the "Registrable Securities") shall have
been disposed of or on which all the Registrable Securities held by persons that
are not affiliates of the Company or the Trust may be resold without
registration pursuant to Rule 144(k) under the Securities Act (the
"Effectiveness Period").
Under the Registration Rights Agreement, the Trust and the Company agree,
jointly and severally, to indemnify the Initial Purchaser of the Preferred
Securities, each holder of Registrable Securities, each underwriter who
participates in an offering of Registrable Securities, controlling persons of
the foregoing and each of their respective directors, officers, employees,
trustees and agents (any such person, an "Indemnified Person") from any losses
resulting from any material misstatement or omission in this Prospectus or the
Registration Statement of which it forms a part, except those resulting from
misstatements or omissions of information relating to the Indemnified Person
furnished in writing to the Trust or the Company by the Indemnified Person. A
holder of Registrable Securities agrees to indemnify the Trust and its Trustees,
the Company and its directors, controlling persons of the foregoing and each of
their officers from any losses resulting from any material misstatement or
omission in this Prospectus or the Registration Statement of which it forms a
part, except those resulting from misstatements or omissions of information
relating to the Indemnified Person furnished in writing to the Trust or the
Company by the Indemnified Person.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of the form of which is included as an exhibit to the
Registration Statement and is available upon request to the Company.
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BOOK-ENTRY ONLY ISSUANCE; THE DEPOSITORY TRUST COMPANY
The Preferred Securities were issued in the form of registered securities in
global form (the "Global Securities"). Each Global Security was deposited on the
date of the closing of the sale of the Preferred Securities (the "Closing Date")
with, or on behalf of, The Depository Trust Company ("DTC") and registered in
the name of Cede & Co., as nominee of DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the NYSE, the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others, such as securities brokers and
dealers, banks and trust companies that clear transactions through or maintain a
direct or indirect custodial relationship with a Direct Participant either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the preferred
securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Preferred Securities, except in the event that
use of the book-entry system for the Preferred Securities is discontinued or in
certain other limited circumstances.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Security, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the Preferred Securities represented thereby for all
purposes under the Declaration and the Preferred Securities. No beneficial owner
of an interest in a Global Certificate will be able to transfer that interest
except in accordance with DTC's applicable procedures, in addition to those
provided for under the Declaration.
Transfers between Participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds. If a holder
requires physical delivery of Preferred Securities in fully registered,
certificated form ("Certificated Securities") for any reason, including to sell
Preferred Securities to persons in states which require such delivery of such
Preferred Securities or to pledge such Preferred Securities, such holder must
transfer its interest in the Global Security in accordance with the normal
procedures of DTC and the procedures set forth in the Declaration.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Preferred Securities (including the presentation of
Preferred Securities for exchange as described below) only at the direction of
one or more Participants to whose account the DTC interests in the Global
Securities are credited and only in respect of such portion of the aggregate
liquidation amount of Preferred Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event of
Default under the Preferred Securities, DTC will exchange the Global Securities
for
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Certificated Securities, which it will distribute to its Participants and which
will be legended as set forth under the heading "Transfer Restrictions."
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
that may be in effect from time to time.
Redemption notices in respect of Preferred Securities held in book-entry
form shall be sent to Cede & Co. If less than all of the Preferred Securities
are being redeemed, DTC will reduce the amount of the interest of each Direct
Participant in such Preferred Securities in accordance with its procedures.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns the consenting or voting rights
of Cede & Co. to those Direct Participants to whose accounts Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Distribution payments on the Preferred Securities held in book-entry form
will be made to DTC in immediately available funds. DTC's practice is to credit
Direct Participants' accounts on the relevant payment date in accordance with
their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in "street name," and such payments will
be the responsibility of such Participant and not of DTC, the Trust or the
Company, subject to any statutory or regulatory requirements to the contrary
that may be in effect from time to time. Payment of distributions to DTC is the
responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Securities among Participants of DTC, DTC
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. None of the Company, the Trust,
the Debt Trustee or the Fleetwood Trustees will have any responsibility for the
performance by DTC or its Participants or Indirect Participants under the rules
and procedures governing DTC. DTC may discontinue providing its services as
securities depositary with respect to the Preferred Securities at any time by
giving reasonable notice to the Trust. Under such circumstances, in the event
that a successor securities depositary is not obtained, Preferred Securities
certificates are required to be printed and delivered. Additionally, the Regular
Trustees (with the consent of the Company) may decide to discontinue use of the
system of book-entry transfers through DTC (or any successor depositary) with
respect to the Preferred Securities. In that event, certificates for the
Preferred Securities will be printed and delivered. In each of the above
circumstances, if no paying agent has previously been appointed, the Company
will appoint a paying agent with respect to the Preferred Securities.
Except as described herein, a Beneficial Owner in a global Preferred
Securities certificate will not be entitled to receive physical delivery of
Preferred Securities. Accordingly, each Beneficial Owner must rely on the
procedures of DTC to exercise any rights under the Preferred Securities.
The information in this section and elsewhere in this Prospectus concerning
DTC and DTC's book-entry system has been obtained from sources that the Company
and the Trust believe to be reliable, but neither the Company nor the Trust
takes responsibility for the accuracy thereof.
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INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities and after the curing of any defaults that may have
occurred, undertakes to perform only such duties as are specifically set forth
in the Declaration and, after default, shall exercise the same degree of care as
a prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the request of any
holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The holders of Preferred Securities will not be required to offer such
indemnity in the event such holders, by exercising their voting rights, direct
the Property Trustee to take any action it is empowered to take under the
Declaration following a Declaration Event of Default. The Property Trustee also
serves as trustee under the Guarantee and the Indenture.
The Company may maintain banking and other commercial relationships with the
Property Trustee and its affiliates in the ordinary course of business, and the
Property Trustee may own Securities (as defined herein).
PAYMENT AND PAYING AGENT
Payments in respect of the Preferred Securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable distribution dates
or, in the case of Certificated Securities, such payments shall be made by check
mailed to the address of the holder entitled thereto as such address shall
appear on the Register. The Paying Agent will initially be The Bank of New York.
The Paying Agent will be permitted to resign as Paying Agent upon 30 days'
written notice to the Regular Trustees. In the event that The Bank of New York
shall no longer be the Paying Agent, the Trustee will appoint a successor to act
as Paying Agent (which must be a bank or trust company).
PROPERTY TRUSTEE, TRANSFER AGENT, REGISTRAR, PAYING AGENT AND CONVERSION AGENT
The Bank of New York will act as Property Trustee, Transfer Agent, Registrar
and Paying Agent, and Conversion Agent for the Preferred Securities, but the
Trust may designate an additional or substitute Transfer Agent, Registrar and
Paying Agent, or Conversion Agent. In the event that the Preferred Securities do
not remain in book-entry-only form, registration of transfers of Preferred
Securities will be effected without charge by or on behalf of the Trust, but
upon payment in respect of any tax or other governmental charges which may be
imposed in connection therewith (and/or the giving of such indemnity as the
Trust may require with respect thereto). Exchanges of Preferred Securities for
Convertible Subordinated Debentures will be effected without charge by or on
behalf of the Trust, but upon payment in respect of any tax or other
governmental charges which may be imposed (and/or the giving of such indemnity
as the Trust may require with respect thereto) in connection with the issuance
of any Convertible Subordinated Debentures in the name of any person other than
the registered holder of the Preferred Security for which the Convertible
Subordinated Debenture is being exchanged or for any reason other than such
exchange. The Trust will not be required to register or cause to be registered
the transfer of Preferred Securities after such Preferred Securities have been
called for redemption or exchange. The Property Trustee, prior to the occurrence
of a default with respect to the Trust Securities, undertakes to perform only
such duties as are specifically set forth in the Declaration and, after default,
shall exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provisions, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Preferred Securities, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The holders of Preferred Securities will not be
required to offer such indemnity in the event such holders, by exercising their
voting rights, direct the Property Trustee to take any action following a
Declaration Event of Default.
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GOVERNING LAW
The Declaration and the Preferred Securities are governed by, and will be
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to conduct the affairs of
and to operate the Trust in such a way so that the Trust will not be required to
register as an "investment company" under the 1940 Act or characterized as other
than a grantor trust for United States federal income tax purposes and so that
the Convertible Subordinated Debentures will be treated as indebtedness of the
Company for United States federal income tax purposes. In this connection, the
Company and the Regular Trustees are authorized to take any action, not
inconsistent with applicable law or the Declaration, that each of the Company
and the Regular Trustees determine in their discretion to be necessary or
desirable to achieve such end, as long as such action does not adversely affect
the interests of the holders of Preferred Securities or vary the terms thereof.
Holders of the Preferred Securities, as such, have no preemptive rights.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
has been executed and delivered by the Company for the benefit of the holders
from time to time of the Preferred Securities. The summary does not purport to
be complete and is subject in all respects to the provisions of, and qualified
in its entirety by reference to, the Guarantee. The Guarantee incorporates by
reference the terms of the Trust Indenture Act. It is expected that at the time
the Registration Statement becomes effective, the Guarantee will be qualified
under the Trust Indenture Act. The Bank of New York, as the Guarantee Trustee,
holds the Guarantee for the benefit of the holders of the Preferred Securities.
GENERAL
Pursuant to the Guarantee, the Company has irrevocably agreed, to the extent
set forth therein, to pay in full to the holders of the Preferred Securities
issued by the Trust the Guarantee Payments (as defined below), as and when due,
regardless of any defense, right of set-off or counterclaim that the Trust may
have or assert. The following payments with respect to the Preferred Securities
to the extent not paid by the Trust (the "Guarantee Payments"), will be subject
to the Guarantee (without duplication): (i) any accumulated and unpaid
distributions that are required to be paid on the Preferred Securities to the
extent the Trust shall have funds available therefor; (ii) the amount payable
upon redemption of the Preferred Securities payable out of funds of the Trust
available therefor with respect to any Preferred Securities called for
redemption by the Trust, and (iii) upon a liquidation of the Trust, the lesser
of (a) the aggregate of the liquidation amount and all accumulated and unpaid
distributions on the Preferred Securities to the date of payment, to the extent
the Trust has funds available therefor, and (b) the amount of assets of the
Trust remaining available for distribution to holders of the Preferred
Securities. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of Preferred Securities or by causing the Trust to pay such amounts to
such holders.
The Guarantee is a guarantee of the Guarantee Payments with respect to the
Preferred Securities from the time of issuance of the Preferred Securities, but
will not apply to any payment of distributions and other payments on the
Preferred Securities when the Trust does not have sufficient funds to make such
distributions or other payments. If the Company does not make interest payments
on the Convertible Subordinated Debentures held by the Property Trustee, the
Trust will not pay distributions on the Preferred Securities and will not have
funds available therefor. See "Description of the Securities-- Description of
the Convertible Subordinated Debentures--Certain Covenants."
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Because the Guarantee is a guarantee of payment and not of collection,
holders of the Preferred Securities may, in accordance with the procedure
hereinafter described, proceed directly against the Company as guarantor, rather
than having to proceed against the Trust before attempting to collect from the
Company, and the Company waives any right or remedy to require that any action
be brought against the Trust or any other person or entity before proceeding
against the Company. Such obligations will not be discharged except by payment
of the Guarantee Payments in full. The Guarantee has been deposited with the
Guarantee Trustee to be held for the benefit of the holders of Preferred
Securities. The Guarantee Trustee has the right to enforce the Guarantee on
behalf of the holders of the Preferred Securities and the holders of a majority
in liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of the Guarantee or exercising any trust or
power conferred upon the Trustee under the Guarantee. In addition, any holder of
Preferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under the Guarantee, without first instituting a
legal proceeding against the Trust, the Guarantee Trustee or any other person.
The Company has also agreed to irrevocably guarantee the obligations of the
Trust with respect to the Common Securities (the "Common Securities Guarantee")
to the same extent as the Guarantee, except that upon the occurrence and during
the continuation of an Event of Default, holders of Preferred Securities shall
have priority over holders of Common Securities with respect to distributions
and payments on liquidation, redemption or otherwise.
MODIFICATION OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will be
required), the Guarantee may be amended only with the prior approval of the
holders of not less than 66 2/3% in aggregate stated liquidation amount of the
outstanding Preferred Securities. The manner of obtaining any such approval of
holders of the Preferred Securities will be as set forth under "Description of
the Securities--Description of the Preferred Securities--Voting Rights." All
guarantees and agreements contained in the Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Company and shall inure
to the benefit of the holders of the Preferred Securities then outstanding.
Except in connection with any permitted merger or consolidation of the Company
with or into another entity or any permitted sale, transfer or lease of the
Company's assets to another entity as described below under "Description of the
Securities--Description of the Convertible Subordinated Debentures--Certain
Covenants of the Company," the Company may not assign its rights or delegate its
obligations under the Guarantee without the prior approval of the holders of at
least 66 2/3% of the aggregate stated liquidation amount of the Preferred
Securities then outstanding.
TERMINATION
The Guarantee will terminate (a) upon full payment of the redemption price
of, plus accumulated and unpaid distributions on, all Preferred Securities, (b)
upon distribution of the Convertible Subordinated Debentures held by the Trust
to the holders of the Preferred Securities or the conversion, if applicable, of
all of the Preferred Securities into Fleetwood Common Stock or other securities,
or (c) upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Trust. The Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the Preferred Securities must restore payment of any sums paid under any of
the Preferred Securities or the Guarantee.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon (a) the failure of
the Company to perform any of its payment or other obligations thereunder or (b)
if applicable, the failure by the Company to deliver Common Stock or other
applicable securities upon an appropriate election by the holder or holders
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of the Preferred Securities to convert the Preferred Securities into shares of
Fleetwood Common Stock or other applicable securities, as the case may be.
In the Guarantee, the Company has covenanted that, so long as any Preferred
Securities remain outstanding, if (i) the Company has exercised its option to
defer interest payments on the Convertible Subordinated Debentures and such
deferral is continuing, (ii) the Company shall be in default with respect to its
payment or other obligations under the Guarantee or any Declaration Event of
Default or (iii) there shall have occurred and be continuing any event that,
with the giving of notice or the lapse of time or both, would constitute an
Event of Default under the Indenture, then (a) the Company shall not declare or
pay dividends on, or make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
(other than (A) (i) purchases or acquisitions of shares of the Company's capital
stock (or capital stock equivalents) in connection with the satisfaction by the
Company of its obligations under any officers, directors or employee benefit
plans existing on the date hereof (or any options or other instruments issued
thereunder) or the satisfaction by the Company of its obligations pursuant to
any contract or security existing on the date hereof requiring the Company to
purchase shares of the Company's capital stock (or capital stock equivalents),
(ii) purchases of shares of the Company's capital stock (or capital stock
equivalents) from officers, directors or employees of the Company or its
subsidiaries pursuant to employment agreements existing on the date hereof or
upon termination of employment or retirement, (iii) as a result of a
reclassification, combination or subdivision of the Company's capital stock or
the exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company's capital stock, (iv) dividends or
distributions of shares of common stock on common stock, (v) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or any security being
converted or exchanged into such capital stock, (vi) purchases or other
acquisitions of common stock in connection with a dividend reinvestment or other
similar plan existing on the date hereof, or (vii) any dividend or distribution
of capital stock (or capital stock equivalents) in connection with the
implementation of a stockholders rights plan existing on the date hereof, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, or (B) guarantee payments made
with respect to any of the foregoing), (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any Convertible Subordinated Debentures issued by the Company that rank
pari passu with or junior to the Convertible Subordinated Debentures and (c) the
Company shall not make any guarantee payments with respect to the foregoing
(other than pursuant to the Guarantee or the Company's guarantee of the Common
Securities).
The holders of a majority in liquidation amount of the Preferred Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of the Guarantee or
to direct the exercise of any trust or power conferred upon the Guarantee
Trustee under the Guarantee. If the Guarantee Trustee fails to enforce the
Guarantee, any holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce the Guarantee Trustee's rights under the
Guarantee, without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity. The Company will waive any
right or remedy to require that any action be brought first against the Trust or
any other person or entity before proceeding directly against the Company.
SUBORDINATED STATUS OF THE GUARANTEE
The Guarantee constitutes an unsecured obligation of the Company and ranks
(i) subordinate and junior in right of payment to all Senior Indebtedness (as
defined below) of the Company, (ii) pari passu in right of payment with the most
senior preferred or preference stock now or hereafter issued by the Company, if
any, and with any guarantee now or hereafter entered into by the Company in
respect of any preferred or preference stock of any affiliate of the Company and
(iii) senior to Fleetwood Common Stock.
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The terms of the Preferred Securities provide that each holder of Preferred
Securities by acceptance thereof agrees to the subordination provisions and
other terms of the Guarantee relating thereto.
The Guarantee and the Indenture define "Senior Indebtedness" as (a) any
liability of the Company (1) for borrowed money or under any reimbursement
obligation relating to a letter of credit, surety bond or similar instrument, or
(2) evidenced by a bond, note, debenture or similar instrument, or (3) for
obligations to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, or (4) for
the payment of money relating to a capitalized lease obligation, or (5) for the
payment of money under any Swap Agreement (as defined below); (b) any liability
of others described in the preceding clause (a) that the Company has guaranteed
or that is otherwise its legal liability; and (c) any deferral, renewal,
extension or refunding of any liability of the types referred to in clauses (a)
and (b) above, unless, in the instrument creating or evidencing any such
liability referred to in clause (a) or (b) above or any such deferral, renewal,
extension or refunding referred to in clause (c) above or pursuant to which the
same is outstanding, it is expressly provided that such liability, deferral,
renewal, extension or refunding is subordinate in right of payment to all other
indebtedness of the Company or is not senior or prior in right of payment to the
Convertible Subordinated Debentures or ranks pari passu with or subordinate to
the Convertible Subordinated Debentures in right of payment; and PROVIDED that
the Convertible Subordinated Debentures shall not constitute Senior
Indebtedness; and PROVIDED, FURTHER, that Senior Indebtedness shall not include
any indebtedness or guarantees between or among the Company or its affiliates,
including all debt securities or guarantees in respect of those debt securities
issued to any trust (including Fleetwood Capital Trust), trustee of a trust
(including Fleetwood Capital Trust), partnership, limited liability company or
other person affiliated with the Company that is a financing vehicle of the
Company (a "financing entity") in connection with the issuance by such financing
entity of preferred securities unless otherwise expressly provided in the
instrument creating or evidencing such indebtedness, debt securities or
guarantees, as the case may be, or pursuant to which the same is outstanding.
The Guarantee and the Indenture define "Swap Agreement" as any financial
agreement designed to manage the Company's exposure relating to fluctuations in
interest rates or credit conditions, currency exchange rates or commodity
prices, including without limitation swap agreements, option agreements, cap
agreements, floor agreements, collar agreements, credit swaps and forward
purchase agreements. The Indenture does not limit or prohibit the incurrence of
Senior Indebtedness by the Company. Senior Indebtedness may include debt
securities, indebtedness and other obligations that constitute "Senior
Indebtedness" for purposes of (and which are therefore senior in right of
payment to) the Convertible Subordinated Debentures but which are subordinate in
right of payment to certain other indebtedness and obligations of the Company.
In that regard, the Company may issue other debt securities or incur other
indebtedness or obligations that are referred to or designated as "subordinated"
securities, indebtedness or obligations but which may constitute Senior
Indebtedness for purposes of the Indenture.
The Declaration provides that each holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of the
Guarantee. Upon the bankruptcy, liquidation or winding up of the Company, its
obligations under the Guarantee will rank junior to all its other liabilities
(except as aforesaid) and, therefore, funds may not be available for payment
under the Guarantee.
The Guarantee constitutes a guarantee of payment and not of collection (that
is, the guaranteed party may institute a legal proceeding directly against the
guarantor to enforce its rights under the guarantee without instituting a legal
proceeding against any other person or entity).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Guarantee, undertakes to perform only such duties as are specifically set
forth in the Guarantee and, after default, shall exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of the Preferred Securities, unless offered
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reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby. The Guarantee Trustee also serves as Property Trustee and Debt
Trustee.
DESCRIPTION OF THE CONVERTIBLE SUBORDINATED DEBENTURES
Set forth below is a description of the specific terms of the Convertible
Subordinated Debentures in which the Trust has invested the proceeds of the
issuance and sales of issuance and sale of the Trust Securities. The following
description does not purport to be complete and is qualified in its entirety by
reference to the Indenture to be dated as of February 10, 1998 (the
"Indenture"), between the Company and The Bank of New York, as trustee (the
"Debt Trustee"), a copy of which is included as an exhibit to the Registration
Statement and may be obtained from the Company upon request. When the
Registration Statement becomes effective, the Indenture will be qualified under
the Trust Indenture Act.
Under certain circumstances involving the dissolution of the Trust following
the occurrence of a Special Event, Convertible Subordinated Debentures may be
distributed to the holders of the Trust Securities in liquidation of the Trust.
See "Description of the Securities--Description of the Preferred
Securities--Special Event Distribution; Tax Event Redemption."
If the Convertible Subordinated Debentures are distributed to the holders of
the Preferred Securities, the Company will use its best efforts to have the
Convertible Subordinated Debentures listed on the NYSE or on such other national
securities exchange or similar organization, if any.
GENERAL
The Convertible Subordinated Debentures were issued as unsecured debt under
the Indenture. The Convertible Subordinated Debentures are limited in aggregate
principal amount to $296.4 million, such amount being the sum of the aggregate
stated liquidation of the Preferred Securities and the capital contributed by
the Company in exchange for the Common Securities (the "Company Payment").
The Convertible Subordinated Debentures are not subject to a sinking fund
provision. The entire principal amount of the Convertible Subordinated
Debentures will mature and become due and payable, together with any accrued and
unpaid interest thereon including, to the extent permitted by law, Compound
Interest (as defined herein) and Additional Interest (as defined herein), if
any, on February 15, 2028.
If the Convertible Subordinated Debentures are distributed to holders of
Preferred Securities in liquidation of such holders' interests in the Trust,
such Convertible Subordinated Debentures will, unless held in certificated form,
initially be issued as a Global Security (as defined herein). As described
herein, under certain limited circumstances, the Convertible Subordinated
Debentures may be issued in certificate form in exchange for a Global Security.
See "--Book-Entry and Settlement" below. In the event that the Convertible
Subordinated Debentures are issued in certificated form, the Convertible
Subordinated Debentures will be in denominations of $50 and integral multiples
thereof and may be transferred or exchanged at the offices described below.
Payments on Convertible Subordinated Debentures issued as a Global Security will
be made to DTC, a successor depositary or, in the event that no depositary is
used, to a paying agent for the Convertible Subordinated Debentures. In the
event Convertible Subordinated Debentures are issued in certificated form,
principal and interest will be payable, the transfer of the Convertible
Subordinated Debentures will be registrable and the Convertible Subordinated
Debentures will be exchangeable for Convertible Subordinated Debentures of other
denominations of a like aggregate principal amount at the corporate trust office
of the Debt Trustee in New York, New York; PROVIDED, that payment of interest
may be made at the option of the Company by check mailed to the address of the
holder entitled thereto or by wire transfer to an account in the United States
appropriately designated by the holder entitled thereto prior to the record date
for the corresponding interest payment date. Notwithstanding the foregoing, so
long as the holder of any Convertible Subordinated Debentures is the Property
Trustee, the payment of principal and interest on the Convertible Subordinated
Debentures held
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by the Property Trustee will be made by wire transfer at such place and to such
account in the United States as may be designated by the Property Trustee.
SUBORDINATION
The payment of the principal of, premium, if any, and interest, if any, on
the Convertible Subordinated Debentures are subordinated, to the extent and in
the manner set forth in the Indenture, in right of payment to the prior payment
in full of all Senior Indebtedness that may at any time and from time to time be
outstanding. In addition, payments of principal and interest on the Convertible
Subordinated Debentures are structurally subordinated to the liabilities of the
Company's subsidiaries. No payment of principal (including redemption payments)
of, or premium, if any, or interest (including any Additional Interest or
Compound Interest) on the Convertible Subordinated Debentures may be made if
there shall have occurred and be continuing (i) a default in the payment when
due of principal of premium, if any, sinking funds, if any, or interest, if any,
on any Senior Indebtedness of the Company and any applicable grace period with
respect to such default shall have ended without such default having been cured
or waived or ceasing to exist or (ii) an event of default with respect to any
Senior Indebtedness of the Company resulting in the acceleration of the maturity
thereof without such acceleration having been rescinded or annulled. See "Risk
Factors--Risk Relating to an Investment in the Preferred Securities--Ranking of
Subordinate Obligations Under the Guarantee and Convertible Subordinated
Debentures" for information as to the amount of Senior Indebtedness outstanding
as of a recent date. Upon any distribution of assets of the Company upon any
dissolution, winding-up, liquidation or reorganization of the Company, (i) all
Senior Indebtedness shall first be paid in full, or such payment shall be
provided for, before any payment on account of the principal of or premium, if
any, or interest, if any, on the Convertible Subordinated Debentures is made,
(ii) any payment or distribution of assets of the Company to which the holders
of the Convertible Subordinated Debentures would be entitled except for the
subordination provisions of the Indenture shall be paid by the liquidating
trustee or other person making such distribution directly to the holders of
Senior Indebtedness or on their behalf, to the extent necessary to make payment
in full of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness,
and (iii) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company is received by the Property Trustee or the
holders of any of the Convertible Subordinated Debentures before all Senior
Indebtedness is paid in full, or such payment is duly provided for, such payment
or distribution will be paid over to the holders of such Senior Indebtedness or
on their behalf for application to the payment of all such Senior Indebtedness
remaining unpaid until all such Senior Indebtedness has been paid in full or
such payment provided for, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness. Subject to the payment
in full of all Senior Indebtedness upon any such distribution of assets of the
Company, or such payment having been duly provided for, the holders of the
Convertible Subordinated Debentures will be subrogated to the rights of the
holders of the Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to Senior Indebtedness until
the principal of (and premium, if any) and interest, if any, on the Convertible
Subordinated Debentures shall be paid in full.
By reason of such subordination, in the event of any distribution of assets
of the Company upon dissolution, winding up, liquidation, reorganization or
other similar proceedings of the Company, (i) holders of Senior Indebtedness
will be entitled to be paid in full before payments may be made on the
Convertible Subordinated Debentures and the holders of Convertible Subordinated
Debentures will be required to pay over their share of such distribution, to the
extent made in respect of the Convertible Subordinated Debentures, to the
holders of Senior Indebtedness until such Senior Indebtedness is paid in full
and (ii) creditors of the Company who are neither holders of Convertible
Subordinated Debentures nor holders of Senior Indebtedness may recover less,
ratably, than holders of Senior Indebtedness and may recover more, ratably, than
the holders of the Convertible Subordinated Debentures. Furthermore, such
subordination may result in a reduction or elimination of payments to the
holders of Convertible
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Subordinated Debentures. The Indenture provides that the subordination
provisions thereof will not apply to any money and securities held in trust
pursuant to the discharge, defeasance and covenant defeasance provisions of the
Indenture.
The Indenture defines "Senior Indebtedness" as (a) any liability of the
Company (1) for borrowed money or under any reimbursement obligation relating to
a letter of credit, surety bond or similar instrument, or (2) evidenced by a
bond, note, debenture or similar instrument, or (3) for obligations to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, or (4) for the payment of money
relating to a capitalized lease obligation, or (5) for the payment of money
under any Swap Agreement (as defined below); (b) any liability of others
described in the preceding clause (a) that the Company has guaranteed or that is
otherwise its legal liability; and (c) any deferral, renewal, extension or
refunding of any liability of the types referred to in clauses (a) and (b)
above, unless, in the instrument creating or evidencing any such liability
referred to in clause (a) or (b) above or any such deferral, renewal, extension
or refunding referred to in clause (c) above or pursuant to which the same is
outstanding, it is expressly provided that such liability, deferral, renewal,
extension or refunding is subordinate in right of payment to all other
Indebtedness of the Company or is not senior or prior in right of payment to the
Convertible Subordinated Debentures or ranks pari passu with or subordinate to
the Convertible Subordinated Debentures in right of payment; PROVIDED that the
Convertible Subordinated Debentures shall not constitute Senior Indebtedness;
and PROVIDED, FURTHER, that Senior Indebtedness shall not include any
indebtedness or guarantees between or among the Company or its affiliates,
including all debt securities or guarantees in respect of those debt securities
issued to any trust (including Fleetwood Capital Trust), trustee of a trust
(including Fleetwood Capital Trust), partnership, limited liability company or
other person affiliated with the Company that is a financing vehicle of the
Company (a "financing entity") in connection with the issuance by such financing
entity of preferred securities unless otherwise expressly provided in the
instrument creating or evidencing such indebtedness, debt securities or
guarantees, as the case may be, or pursuant to which the same is outstanding.
The Indenture defines "Swap Agreement" as any financial agreement designed to
manage the Company's exposure relating to fluctuations in interest rates or
credit conditions, currency exchange rates or commodity prices, including
without limitation swap agreements, option agreements, cap agreements, floor
agreements, collar agreements, credit swaps and forward purchase agreements. The
Indenture does not limit or prohibit the incurrence of Senior Indebtedness by
the Company. Senior Indebtedness may include debt securities, indebtedness and
other obligations that constitute "Senior Indebtedness" for purposes of (and
which are therefore senior in right of payment to) the Convertible Subordinated
Debentures but which are subordinate in right of payment to certain other
indebtedness and obligations of the Company. In that regard, the Company may
issue other debt securities or incur other indebtedness or obligations which are
referred to or designated as "subordinated" securities, indebtedness or
obligations but which may constitute Senior Indebtedness for purposes of the
Indenture.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by the Company or the aggregate amount of liabilities that
may be incurred by the Company's subsidiaries. In that regard, Senior
Indebtedness may include debt securities, indebtedness and other obligations
that constitute "Senior Indebtedness" for purposes of (and which are therefore
senior in right of payment to) the Convertible Subordinated Debentures but which
are subordinate in right of payment to certain other indebtedness and
obligations of the Company.
REDEMPTION AT THE OPTION OF THE COMPANY
The Company shall have the right to redeem the Convertible Subordinated
Debentures, in whole or in part, from time to time, on or after February 15,
2001, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount of the
Convertible Subordinated Debentures) together with accrued and unpaid interest,
including, to the extent permitted by
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<PAGE>
applicable law, Compound Interest to, but excluding, the redemption date, if
redeemed during the 12-month period beginning February 15:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ----------------------------------------------------------------------- -----------
<S> <C>
2001................................................................... 103.75%
2002................................................................... 103.00%
2003................................................................... 102.25%
2004................................................................... 101.50%
2005................................................................... 100.75%
</TABLE>
and 100% if redeemed on or after February 15, 2006.
If Convertible Subordinated Debentures are redeemed on any date in the
period beginning on any record date and ending on the next February 15, May 15,
August 15 or November 15, accrued and unpaid interest shall be payable to
holders of record on the relevant record date.
The Company shall also have the right to redeem the Convertible Subordinated
Debentures in certain circumstances upon the occurrence of a Tax Event as
described under "Description of the Securities-- Description of the Preferred
Securities--Special Event Distribution; Tax Event Redemption," and any such
redemption shall be in cash at 100% of the principal amount thereof together
with accrued and unpaid interest (including, to the extent permitted by law,
Compound Interest) to the redemption date, but excluding the date fixed for
redemption.
So long as the corresponding Preferred Securities are outstanding, the
proceeds from the redemption of any of the Convertible Subordinated Debentures
will be used to redeem Trust Securities.
The Company may not redeem any Convertible Subordinated Debentures unless
all accrued and unpaid interest thereon, including (to the extent permitted by
applicable law) Compound Interest, has been or is contemporaneously paid (or
duly provided for) for all quarterly interest payment periods terminating on or
prior to the date of notice of redemption.
If a partial redemption of the Preferred Securities resulting from a partial
redemption of the Convertible Subordinated Debentures would result in the
delisting of the Preferred Securities from any national securities exchange on
which the Preferred Securities are then listed, the Company may only redeem the
Convertible Subordinated Debentures in whole.
INTEREST
Each Convertible Subordinated Debenture bears interest at the rate of 6% per
annum from the first date of issuance, payable quarterly in arrears on February
15, May 15, August 15, and November 15 of each year (each an "Interest Payment
Date"), commencing May 15, 1998, to the person in whose name such Convertible
Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment Date.
The record dates with respect to each Interest Payment Date shall be 15 days
prior to the related Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and, for any period of less than a
full calendar month, the actual number of days elapsed in such 30-day month. In
the event that any date on which interest is payable on the Convertible
Subordinated Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
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<PAGE>
PROPOSED TAX LEGISLATION
Please refer to discussion above under the heading "Description of the
Securities--Description of the Preferred Securities--Proposed Tax Legislation."
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company shall not be in default in the payment of interest on
the Convertible Subordinated Debentures, the Company has the right at any time
and from time to time, during the term of the Convertible Subordinated
Debentures, to defer payments of interest (including Additional Interest and
Liquidated Damages, if any) for successive periods not exceeding 20 consecutive
quarters for each Extension Period. At the end of each Extension Period, the
Company shall pay all interest then accrued and unpaid (including, to the extent
permitted by applicable law, any Additional Interest and Liquidated Damages),
together with interest thereon compounded quarterly at the rate specified for
the Convertible Subordinated Debentures to the extent permitted by applicable
law ("Compound Interest"); PROVIDED, that during any Extension Period, (a) the
Company shall not declare or pay dividends on, make any distribution with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than (A)(i) purchases or
acquisitions of shares of the Company's capital stock (or capital stock
equivalents) in connection with the satisfaction by the Company of its
obligations under any officers, directors or employee benefit plans (or any
options or other instruments issued thereunder) or the satisfaction by the
Company of its obligations pursuant to any contract or security requiring the
Company to purchase shares of the Company's capital stock (or capital stock
equivalents), (ii) purchases of shares of the Company's capital stock (or
capital stock equivalents) from officers, directors or employees of the Company
or its subsidiaries pursuant to employment agreements or upon termination of
employment or retirement, (iii) as a result of a reclassification, combination
or subdivision of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, (iv) dividends or distributions of shares of
common stock on common stock, (v) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or any security being converted or exchanged into such
capital stock, (vi) dividends or distribution in shares of its capital stock of
the same class on which such dividend or distribution is being made and
conversions or exchanges of common stock of one class into common stock of
another class; (vii) purchases or other acquisitions of common stock in
connection with a dividend reinvestment or other similar plan, or (viii) any
dividend or distribution of capital stock (or capital stock equivalents) in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, or (B) guarantee payments made
with respect to any of the foregoing), (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company that rank pari passu with or
junior to the Convertible Subordinated Debentures and (c) the Company shall not
make any guarantee payments with respect to the foregoing (other than pursuant
to the Guarantee or the Company's guarantee of the Trust Common Securities).
Prior to the termination of any such Extension Period of less than 20
consecutive quarters, the Company may further defer payments of interest by
extending the interest payment period; PROVIDED, HOWEVER, that, such Extension
Period, including all such previous and further extensions, may not exceed 20
consecutive quarters or extend beyond the maturity of the Convertible
Subordinated Debentures or end other than on an interest payment date. Upon the
termination of any Extension Period and the payment of all amounts then due on
the Convertible Subordinated Debentures, the Company may commence a new
Extension Period, subject to the terms set forth in this section. No interest
shall be due or payable on the Convertible Subordinated Debentures during an
Extension Period, except at the end thereof. The Company has no present
intention of exercising its right to defer payments of interest by extending the
interest payment period on the Convertible Subordinated Debentures.
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<PAGE>
The Company must give the Property Trustee, the Regular Trustees and the
Debt Trustee notice of its election to begin an Extension Period at least one
Business Day prior to the earliest of (i) the date the Distribution on the
Preferred Securities would have been payable except for the election to begin
such Extension Period or (ii) if applicable, the date the Regular Trustees are
required to give notice to the NYSE, the Nasdaq National Market or other
applicable self-regulatory organization or to holders of such Preferred
Securities of the record date or (iii) the date such Distribution is payable,
but in any event not less than one Business Day prior to the record date. The
Debt Trustee shall give notice of the Company's election to begin an Extension
Period to the holders of the Convertible Subordinated Debentures, and the
Regular Trustees shall give notice of the Company's election to the holders of
the Preferred Securities. See "Risk Factors--Option to Extend Interest Payment
Period."
CONVERSION OF THE CONVERTIBLE SUBORDINATED DEBENTURES
The Convertible Subordinated Debentures are convertible into Fleetwood
Common Stock at the option of the holders of the Convertible Subordinated
Debentures at any time prior to the close of business on February 15, 2028 (or,
in the case of Convertible Subordinated Debentures called for redemption, the
close of business on the Business Day prior to the redemption date) at the
Initial Conversion Price subject to the conversion price adjustments described
under "Description of the Securities--Description of the Preferred
Securities--Conversion Rights." The Trust has agreed not to convert Convertible
Subordinated Debentures held by it except pursuant to a notice of conversion
delivered to the Conversion Agent by a holder of Preferred Securities or Common
Securities. Upon surrender of a Preferred Security to the Conversion Agent for
conversion, the Trust will distribute Convertible Subordinated Debentures to the
Conversion Agent on behalf of the holder of the Preferred Securities so
converted, whereupon the Conversion Agent will convert the Convertible
Subordinated Debentures to Fleetwood Common Stock on behalf of such holder. The
Company's delivery to the holders of the Convertible Subordinated Debentures
(through the Conversion Agent) of the fixed number of shares of Fleetwood Common
Stock into which the Convertible Subordinated Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) will be
deemed to satisfy the obligation of the Company to pay the principal amount of
the Convertible Subordinated Debentures so converted, and the accrued and unpaid
interest, including any Additional Interest, thereon attributable to the period
from the last date to which interest has been paid or duly provided for;
PROVIDED, that if any Convertible Subordinated Debenture is surrendered for
conversion after the close of business on a record date for payment of interest
and on or before the corresponding interest payment date, the interest payable
on such interest payment date with respect to such Convertible Subordinated
Debenture shall be paid to the Trust (which will distribute such interest to the
holder of the applicable Trust Securities at the close of business on such
record date) or to such other person in whose name the Convertible Subordinated
Debentures are registered at the close of business on such record date, as the
case may be, despite such conversion. The Company will make no payment or
allowance for distributions on the shares of Fleetwood Common Stock issued upon
such conversion, except to the extent that such shares of Fleetwood Common Stock
are held of record on the record date for any such distributions. Each
conversion will be deemed to have been effected immediately prior to the close
of business on the day on which the related conversion notice was received by
the Conversion Agent.
ADDITIONAL INTEREST
If at any time when the Property Trustee is the holder of any Convertible
Subordinated Debentures, the Trust or the Property Trustee shall be required to
pay any taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any such case, the Company will pay as additional interest
("Additional Interest") on the Convertible Subordinated Debentures held by the
Property Trustee, to the extent permitted by applicable law, such additional
amounts as shall be required so that the net amounts received and retained
49
<PAGE>
by the Trust and the Property Trustee after paying any such taxes, duties,
assessments or other governmental charges will be equal to the amounts the Trust
and the Property Trustee would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
INDENTURE EVENTS OF DEFAULT
If any Indenture Event of Default (defined below) shall occur and be
continuing, the Property Trustee, as the holder of the Convertible Subordinated
Debentures (or the holders of not less than 25% in principal amount of the
outstanding Convertible Subordinated Debentures), will have the right to declare
the principal of and the interest on the Convertible Subordinated Debentures
(including, to the extent permitted by law, any Additional Interest, Compound
Interest and Liquidated Damages (collectively, "Additional Payments"), if any)
to be forthwith due and payable. The Indenture provides that any of the
following described events (each, an "Indenture Event of Default") which has
occurred and is continuing constitutes an "event of default" with respect to the
Convertible Subordinated Debentures: (i) default for 30 days past the date
specified for payment in payment of any interest on any Convertible Subordinated
Debentures, including any Additional Payments, if any, in respect thereof; or
(ii) default in payment of principal of or premium, if any, on, or any
Additional Payments payable in respect of the principal of or premium, if any,
on any Convertible Subordinated Debenture when due upon maturity, redemption or
otherwise; or (iii) failure by the Company to issue and deliver shares of
Fleetwood Common Stock upon an election by a holder of Convertible Subordinated
Debentures to convert such Convertible Subordinated Debentures; or (iv) default
by the Company in the performance, or breach, of any other covenant or warranty
in the Indenture which shall not have been remedied for a period after 90 days
after written notice to the Company by the Debt Trustee or the holders of not
less than 25% in aggregate principal amount of the Convertible Subordinated
Debentures then outstanding; or (v) the dissolution, winding up or termination
of the Trust, except in connection with the distribution of Convertible
Subordinated Debentures to the holders of Trust Securities in liquidation of the
Trust upon the occurrence of a Special Event, upon the redemption of all
outstanding Preferred Securities, upon the conversion of all outstanding
Preferred Securities or in connection with certain mergers, consolidations or
amalgamations permitted by the Declaration; or (vi) certain events of
bankruptcy, insolvency or reorganization of the Company. An Indenture Event of
Default also constitutes a Declaration Event of Default. The holders of
Preferred Securities in certain circumstances have the right to direct the
Property Trustee to exercise its rights as the holder of the Convertible
Subordinated Debentures. See "Description of the Securities--Description of the
Preferred Securities--Declaration Events of Default" and "--Voting Rights."
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of the Company
to pay interest or principal on the Convertible Subordinated Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, the redemption date), a holder of Preferred Securities may institute
a Direct Action for payment on or after the respective due date specified in the
Convertible Subordinated Debentures. Notwithstanding any payments made to such
holder of Preferred Securities by the Company in connection with a Direct
Action, the Company shall remain obligated to pay the principal of or interest
on the Convertible Subordinated Debentures held by the Trust or the Property
Trustee of the Trust, and the Company shall be subrogated to the rights of the
holder of such Preferred Securities with respect to payments on the Preferred
Securities to the extent of any payments made by the Company to such holder in
any Direct Action. The holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Convertible
Subordinated Debentures.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of the Trust as
a result of the occurrence of a Special Event, the Convertible Subordinated
Debentures will (except under the limited circumstances described below) be
issued in the form of one or more global certificates (each, a "Global
Debenture") registered in the name
50
<PAGE>
of the Depository or its nominee. Except under the limited circumstances
described below, Convertible Subordinated Debentures represented by the Global
Debenture will not be exchangeable for, and will not otherwise be issuable as,
Convertible Subordinated Debentures in definitive form. The Global Debentures
may not be transferred except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or to a successor Depository or its nominee.
The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer or pledge beneficial interests in such a
Global Debenture.
Except as provided below, owners of beneficial interests in such a Global
Debenture will not be entitled to receive physical delivery of Convertible
Subordinated Debentures in definitive form and will not be considered the
holders (as defined in the Indenture) thereof for any purpose under the
Indenture and no Global Debenture representing Convertible Subordinated
Debentures shall be exchangeable, except for another Global Debenture of like
denomination and tenor to be registered in the name of the Depository or its
nominee or a successor Depository or its nominee. Accordingly, each Beneficial
Owner must rely on the procedures of the Depository or if such person is not a
Participant, on the procedures of the Participant or Indirect Participant
through which such person owns its interest to exercise any rights of a holder
under the Indenture.
THE DEPOSITARY
If Convertible Subordinated Debentures are distributed to holders of
Preferred Securities in liquidation of such holders' interests in the Trust, DTC
will act as securities depositary for the Convertible Subordinated Debentures.
For a description of DTC and the specific terms of the depository arrangements,
See "Description of the Securities--Description of the Preferred
Securities--Book-Entry Only Issuance; The Depository Trust Company." As of the
date of this Prospectus, the description therein of DTC's book-entry system and
DTC's practices as they relate to purchases, transfers, notices and payments
with respect to the Preferred Securities apply in all material respects to any
debt obligations represented by one or more Global Debentures held by DTC. The
Company may appoint a successor to DTC or any successor depositary in the event
DTC or such successor depositary is unable or unwilling to continue as a
depositary for the Global Debentures.
None of the Company, the Trust, the Property Trustee, the Debt Trustee, any
paying agent, any transfer agent or any other agent of the Company or the Debt
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in a
Global Debentures for the Convertible Subordinated Debentures or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
DTC is under no obligation to provide services as Depositary for the Global
Debenture and may discontinue providing such services at any time. Neither the
Company, the Trust, the Debt Trustee nor the Fleetwood Trustees will have any
responsibility for the performance by DTC or its Participants or Indirect
Participants under the rules and procedures governing DTC. In the event that (i)
DTC notifies the Company that it is unwilling or unable to continue as a
Depository for the Global Debenture or if at any time DTC ceases to be a
clearing agency registered as such under the Exchange Act, and no successor
depository shall have been appointed within 90 days of such notification or of
the Company becoming aware of DTC's ceasing to be so registered, as the case may
be, (ii) the Company, in its sole discretion, executes and delivers to the Debt
Trustee a Company order to the effect that such Global Debenture shall be so
exchangeable, or (iii) an Indenture Event of Default has occurred and is
continuing with respect to the Convertible Subordinated Debentures, certificates
for the Convertible Subordinated Debentures will
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<PAGE>
be prepared and delivered in exchange for beneficial interests in the Global
Debenture. Any Global Debenture that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Convertible Subordinated Debentures
registered in such names as the Depositary shall direct. It is expected that
such instructions will be based upon directions received by the Depositary from
its Participants with respect to ownership of beneficial interests in such
Global Debenture.
CERTAIN COVENANTS OF THE COMPANY
The Indenture does not limit the amount of indebtedness, guarantees or lease
obligations that may be incurred by the Company. The Indenture does not contain
provisions that would give holders of the Convertible Subordinated Debentures
the right to require the Company to repurchase their Convertible Subordinated
Debentures in the event of a decline in the credit rating of the Company's debt
securities resulting from a takeover, recapitalization or similar restructuring.
In the Indenture the Company has covenanted that, so long as any Convertible
Subordinated Debentures are outstanding, if (i) there shall have occurred and be
continuing an Event of Default or event that, with the giving of notice or the
lapse of time or both, would constitute an Event of Default or (ii) the Company
shall be in default with respect to its payment of any obligations under the
Guarantee, then (a) the Company shall not declare or pay dividends on, make any
distribution with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to any of its capital stock (other than (i) purchases or
acquisitions of Fleetwood Common Shares in connection with the satisfaction by
the Company of its obligations under any existing employee benefit plans or
future employee benefit plans established in the ordinary course or the
satisfaction by the Company of its obligations pursuant to any existing contract
or security requiring the Company to purchase Fleetwood Common Shares, (ii) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged (or make any guarantee payments with respect to the
foregoing)) and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company that rank pari passu with or junior to the
Convertible Subordinated Debentures; PROVIDED, FURTHER that the Company may
declare and pay a stock dividend where the dividend stock is the same stock as
that on which the dividend is paid.
For so long as the Trust Securities remain outstanding, the Company has
agreed to (i) directly or indirectly maintain 100% ownership of the Common
Securities of the Trust, PROVIDED, HOWEVER, that any permitted successor of the
Company under the Indenture may succeed to the Company's ownership of such
Common Securities, (ii) not cause, as sponsor of the Trust, or permit, as the
holder of the Common Securities, the termination, dissolution or winding up of
the Trust, except in connection with a distribution of Convertible Subordinated
Debentures as provided in the Declaration and in connection with certain
mergers, consolidations or amalgamations as permitted by the Declaration, and
(iii) use its reasonable efforts to cause the Trust to (x) remain a statutory
business trust, except in connection with the distribution of Convertible
Subordinated Debentures to the holders of Trust Securities in liquidation of the
Trust, the redemption of all of the Trust Securities of the Trust, or certain
mergers, consolidations or amalgamations, such as permitted by the Declaration,
and (y) otherwise continue to be classified as a grantor trust for United States
federal income tax purposes.
The Indenture provides that the Company shall not consolidate with or merge
into any Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person unless (a) such Person (if other than
the Company) shall be a corporation organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia and
shall expressly assume the due and punctual payment of the principal of premium,
if any, and interest, if any, on all the Convertible Subordinated Debentures
outstanding under the Indenture and the performance of the Company's other
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<PAGE>
obligations under the Indenture and the Convertible Subordinated Debentures
outstanding thereunder; (b) immediately after giving effect to such transaction,
no Event of Default under the Indenture, and no event which, after notice or
lapse of time or both would become an Event of Default under the Indenture,
shall have happened and be continuing; and (c) certain other conditions are met.
The holders of 66 2/3% in aggregate principal amount of the outstanding
Convertible Subordinated Debentures may, on behalf of the holders of all the
Convertible Subordinated Debentures, waive any past default, except a default in
the payment of principal, premium, if any, or interest (including any Additional
Interest, Compounded Interest and Liquidated Damages) on the Convertible
Subordinated Debentures. However, while any of the Preferred Securities are
outstanding, the Indenture does not permit the waiver of any Event of Default
with respect to the Convertible Subordinated Debentures without the consent of
holders of 66 2/3% in aggregate liquidation amount of the Preferred Securities
then outstanding. The Company is required to file annually with the Indenture
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants under the Indenture.
MODIFICATION, WAIVERS AND MEETINGS
The Indenture contains provisions permitting the Company and the Debt
Trustee thereunder, with the consent of the holders of a majority in principal
amount of the outstanding Convertible Subordinated Debentures, to modify or
amend any of the provisions of the Indenture or of the Convertible Subordinated
Debentures or the rights of the holders of the Convertible Subordinated
Debentures under the Indenture, PROVIDED that no such modification or amendment
shall without the consent of the holder of each outstanding Convertible
Subordinated Debenture affected thereby, among other things, (i) change the
stated maturity of the principal of, or premium, if any, or any installment of
interest, if any, on any Convertible Subordinated Debentures issued under the
Indenture or reduce the principal amount thereof or any redemption premium
thereon, or reduce the rate of interest thereon, or change any place where, or
the Currency in which, any Convertible Subordinated Debentures are payable, or
impair the right to institute suit to enforce the payment of any Convertible
Subordinated Debentures on or after the stated maturity thereof (as the same may
be extended in accordance with the terms of the Convertible Subordinated
Debentures), or make any change that adversely affects the right, if any, to
convert or exchange the Convertible Subordinated Debentures for other securities
in accordance with their terms, or (ii) reduce the aforesaid percentage of
Convertible Subordinated Debentures, the consent of the holders of which is
required for any such modification or amendment or the consent of whose holders
is required for any waiver (of compliance with certain provisions of the
Indenture or certain defaults thereunder and their consequences) or reduce the
requirements for a quorum or voting at a meeting of holders of the Convertible
Subordinated Debentures or (iii) solely in the case of the Indenture, modify any
of the provisions of Article Twelve thereof (relating to subordination of the
Convertible Subordinated Debentures) or the definition of Senior Indebtedness in
a manner adverse to the holders of the Convertible Subordinated Debentures,
without in each such case obtaining the consent of the holder of each
outstanding Debenture issued under the Indenture so affected.
If the Trust or the Property Trustee holds Convertible Subordinated
Debentures, no such amendment, modification or waiver which requires approval of
holders of a certain percentage in principal amount of the outstanding
Convertible Subordinated Debentures shall be effective as to such Convertible
Subordinated Debentures, without the approval of the holders of at least the
same percentage of aggregate liquidation amount of outstanding Trust Securities.
The Indenture also contains provisions permitting the Company and the Debt
Trustee, without the consent of the holders of any Convertible Subordinated
Debentures issued thereunder, to modify or amend the Indenture in order to,
among other things, (a) add to the Events of Default or the covenants of the
Company for the benefit of the holders of all Convertible Subordinated
Debentures issued under the Indenture, and (b) to cure any ambiguity or correct
or supplement any provision therein which may be defective or inconsistent with
other provisions therein, or to make any other provisions with respect to
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matters or questions arising under the Indenture which shall not adversely
affect the interests of the holders of Convertible Subordinated Debentures
issued thereunder in any material respect.
The holders of a majority in aggregate principal amount of the outstanding
Convertible Subordinated Debentures may waive compliance by the Company with
certain restrictive provisions of the Indenture. The Holders of a majority in
aggregate principal amount of the outstanding Convertible Subordinated
Debentures may, on behalf of all holders of Convertible Subordinated Debentures,
waive any past default under the Indenture with respect to Convertible
Subordinated Debentures and its consequences, except a default in the payment of
the principal of or premium, if any, or interest, if any, on any Convertible
Subordinated Debentures or in respect of a covenant or provision that cannot be
modified or amended without the consent of the holder of each outstanding
Convertible Subordinated Debenture.
The Indenture contains provisions for convening meetings of the holders of
Convertible Subordinated Debenture. A meeting may be called at any time by the
Debt Trustee, and also, upon request, by the Company or the holders of at least
10% in principal amount of the outstanding Convertible Subordinated Debentures,
in any such case upon notice given in accordance with the provisions of the
Indenture. Except for any consent that must be given by the holder of each
outstanding Debenture affected thereby, as described above, any resolution
presented at a meeting or adjourned meeting duly reconvened at which a quorum
(as described below) is present may be adopted by the affirmative vote of the
holders of a majority in principal amount of the outstanding Convertible
Subordinated Debentures; PROVIDED, HOWEVER, that any resolution with respect to
any request, demand, authorization, direction, notice, consent, waiver or other
action that may be made, given or taken by the holders of a specified
percentage, which is less than a majority, in principal amount of the
outstanding Convertible Subordinated Debentures may be adopted at a meeting or
adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the holders of such specified percentage in principal amount
of the outstanding Convertible Subordinated Debentures. Any resolution passed or
decision taken at any meeting of holders of Convertible Subordinated Debentures
duly held in accordance with the Indenture will be binding on all holders of
Convertible Subordinated Debentures and the related coupons. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
outstanding Convertible Subordinated Debentures, subject to certain exceptions.
SATISFACTION AND DISCHARGE
Upon the direction of the Company, the Indenture shall cease to be of
further effect with respect to the Convertible Subordinated Debentures (subject
to the survival of certain provisions thereof, including the obligation to pay
Additional Amounts to the extent described below) when (i) either (A) all
outstanding Convertible Subordinated Debentures have been delivered to the Debt
Trustee for cancellation (subject to certain exceptions) or (B) all Convertible
Subordinated Debentures have become due and payable or will become due and
payable at their stated maturity within one year or are to be called for
redemption within one year and the Company has deposited with the Trustee, in
trust, funds in U.S. dollars with respect to the in an amount sufficient to pay
the entire indebtedness on the Convertible Subordinated Debentures in respect of
principal (and premium, if any) and interest, including Additional Payments, if
any, to the date of such deposit (if the Convertible Subordinated Debentures
have become due and payable) or to the Maturity thereof, as the case may be,
(ii) the Company has paid all other sums payable under the Indenture with
respect to the Convertible Subordinated Debentures, and (iii) certain other
conditions are met. The Company will remain obligated, following such deposit,
to pay Additional Payments on the Convertible Subordinated Debentures to the
extent that the amount thereof exceeds the amount, if any, deposited in respect
of such Additional Payments as aforesaid, and, if applicable, to exchange or
convert the Convertible Subordinated Debentures into other securities in
accordance with their terms).
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REGARDING THE TRUSTEES
The Trust Indenture Act contains limitations on the rights of a trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claims, as security or otherwise. Each Trustee is permitted to engage in
other transactions with the Company and its subsidiaries from time to time,
provided that if such Trustee acquires any conflicting interest it must
eliminate such conflict upon the occurrence of an Event of Default under the
Indenture, or else resign.
GOVERNING LAW
The Indenture and the Convertible Subordinated Debentures will be governed
by, and construed in accordance with, the internal laws of the State of New
York.
MISCELLANEOUS
The Indenture provides that the Company will pay all fees and expenses
related to (i) the offering of the Preferred Securities and the Convertible
Subordinated Debentures, (ii) the organization, maintenance and dissolution of
the Trust, (iii) the retention of the Property Trustee and (iv) the enforcement
by the Property Trustee of the rights of the holders of the Preferred
Securities. The payment of such fees and expenses will be fully and
unconditionally guaranteed by the Company.
EFFECT OF THE OBLIGATIONS UNDER THE CONVERTIBLE SUBORDINATED DEBENTURES AND THE
GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to issue
the Trust Securities evidencing undivided beneficial interests in the assets of
the Trust, and to invest the proceeds from such issuance and sale in the
Convertible Subordinated Debentures and to engage in such other activities as
are necessary or incidental thereto.
As long as payments of interest and other payments are made when due on the
Convertible Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Trust Securities because of the
following factors: (i) the aggregate principal amount of Convertible
Subordinated Debentures will be equal to the aggregate stated liquidation amount
of the Trust Securities; (ii) the interest rate and the interest and other
payment dates on the Convertible Subordinated Debentures will match the
Distribution rate and Distribution and other payment dates for the Preferred
Securities; (iii) the Indenture provides that the Company shall pay, and the
Trust shall not be obligated to pay, directly or indirectly, any costs,
expenses, debt, and obligations of the Trust (other than with respect to the
Trust Securities); and (iv) the Declaration provides that the Fleetwood Trustees
shall not cause or permit the Trust to, among other things, engage in any
activity that is not consistent with the purposes of the Trust.
Payments of Distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by the Company as and to the extent set forth under
"Description of the Securities--Description of the Guarantee." If the Company
does not make interest payments on the Convertible Subordinated Debentures
purchased by the Trust, it is expected that the Trust will not have sufficient
funds to pay Distributions on the Preferred Securities. The Guarantee is a
guarantee on a subordinated basis with respect to the Preferred Securities
issued by the Trust from the time of its issuance but does not apply to any
payment of Distributions unless and until the Trust has sufficient funds for the
payment of such Distributions. The Guarantee covers the payment of Distribution
and other payments on the Preferred Securities only if and to the extent that
the Company has made a payment of interest or principal on the Convertible
Subordinated Debentures held by the Trust as its sole asset. The Guarantee, when
taken together with the Company's obligations under the Convertible Subordinated
Debentures, the Indenture and the Declaration, including its obligations to pay
costs,
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expenses, debts and liabilities of the Trust (other than with respect to the
Trust Securities), provides a full and unconditional guarantee, on a
subordinated basis, of amounts due on the Preferred Securities.
If the Company fails to make interest or other payments on the Convertible
Subordinated Debentures when due (taking account of any Extension Period), the
Declaration provides a mechanism whereby a holder of the Preferred Securities,
using the procedures described in "Description of the Securities-- Description
of the Preferred Securities--Voting Rights" and "--Book-Entry Only Issuance; The
Depository Trust Company," may direct the Property Trustee to enforce its rights
under the Convertible Subordinated Debentures. Notwithstanding the foregoing, in
such circumstances, a holder of Preferred Securities may institute a Direct
Action for payment on or after the respective due dates specified in the
Convertible Subordinated Debentures. In connection with such Direct Action, the
Company will remain obligated to pay the principal or interest on the
Convertible Subordinated Debentures and will be subrogated to the rights of such
holder of Preferred Securities under the Declaration to the extent of any
payment made by the Company to such holder of Preferred Securities in such
Direct Action. The Company, under the Guarantee, acknowledges that the Guarantee
Trustee shall enforce the Guarantee on behalf of the holders of the Preferred
Securities. If the Company fails to make payments under the Guarantee, the
Guarantee provides a mechanism whereby the holders of the Preferred Securities
may direct the Guarantee Trustee to enforce its rights thereunder. If the
Guarantee Trustee fails to enforce the Guarantee, any holder of Preferred
Securities may institute a legal proceeding directly against the Company to
enforce the Guarantee Trustee's rights under the Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee Trustee, or any
other person or entity.
DESCRIPTION OF FLEETWOOD CAPITAL STOCK
CAPITAL STOCK
Fleetwood's authorized capital stock consists of 75,000,000 shares of Common
Stock, par value $1.00 per share, and 10,000,000 shares of Preferred Stock, par
value $1.00 per share. At April 30, 1998, there were outstanding (a) 31,451,319
shares of Fleetwood Common Stock, as well as the same number of Rights (as
defined below); (b) exercisable stock options to purchase an aggregate of
approximately 1,976,224 shares of Fleetwood Common Stock; and (c) no shares of
Preferred Stock. Also, on April 9, 1998, the Company filed a Registration
Statement on Form S-4 with respect to up to 3,620,300 shares of Fleetwood Common
Stock that may be issued in connection with the consummation of the proposed
merger with HomeUSA. Holders of the Preferred Securities offered hereby have the
right to convert such Preferred Securities into an aggregate of 5,901,053 shares
of Fleetwood Common Stock, subject to adjustment.
Subject to the rights of holders of Preferred Stock, the holders of
Fleetwood Common Stock are entitled to receive such dividends as may be declared
by the Board of Directors from funds legally available therefor and in the event
of liquidation to receive pro rata all assets remaining after payment of all
obligations. Each holder of Fleetwood Common Stock is entitled to one vote for
each share held and to cumulate his votes for the election of directors.
Stockholders do not have preemptive rights.
The authorized shares of Preferred Stock are issuable, without further
stockholder approval, in one or more series as determined by the Board of
Directors, with such voting rights, designations, powers, preferences, and the
relative participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, as are fixed by the Board of Directors.
Fleetwood's Certificate of Incorporation provides for a classified Board of
Directors, approximately one-third of which is elected annually for a three-year
term, and requires a vote of holders of not less than 80% of the voting stock to
adopt or modify Bylaws of Fleetwood or to approve a merger, sale of
substantially all the assets or certain other transactions between Fleetwood any
other corporation holding directly or indirectly more than 5% of Fleetwood's
voting stock, unless the merger, sale or other transaction was approved by the
Board of Directors prior to such other corporation's acquisition of more
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than 5% of Fleetwood's voting stock. The above provisions cannot be changed
except by the 80% affirmative vote of stockholders.
The First National Bank of Boston is the transfer agent and registrar for
Fleetwood Common Stock.
RIGHTS
On November 10, 1988, the Board of Directors of the Company declared a
dividend distribution on each then outstanding share of Fleetwood Common Stock
of one right to acquire one one-hundredth share of Series A Junior Participating
Preferred Stock of the Company at an exercise price of $75.00, subject to
adjustment (the "Rights"). The Rights are also issued with shares of Fleetwood
Common Stock issued after the initial dividend distribution and before the
occurrence of certain specified events.
The Rights may only be exercised 10 days after public announcement that a
party has acquired or obtained the right to acquire 25% or more of the
outstanding Fleetwood Common Stock; 10 business days after commencement of, or
announcement of intention to commence, a tender or exchange offer to acquire 30%
or more of the Fleetwood Common Stock; or 10 business days after the Board of
Directors of the Company determines that any person, alone or together with its
affiliates and associates, has become the beneficial owner of an amount of
Common Stock that the Board of Directors determines to be substantial (which
amount shall in no event be less than 15% of the shares of Fleetwood Common
Stock outstanding) and at least a majority of the Board of Directors who are not
officers of the Company, after reasonable inquiry and investigation, including
consultation with such persons as such directors shall deemed appropriate, shall
determine that such beneficial ownership by such person is for the purpose of
greenmail or is reasonably likely to cause a material adverse impact on the
Company (any such person being referred to as an "Adverse Person"). In the event
a party acquires 30% or more of the Company's outstanding shares of Fleetwood
Common Stock in accordance with certain defined terms or the Board of Directors
determines that any person has become an Adverse Person, each Right will entitle
its holder to purchase, at the Right's then current exercise price, a number of
shares of Fleetwood Common Stock having a market value of twice the Right's then
current exercise price.
The Rights do not have voting rights and expire November 9, 1998. They may
be redeemed by the Company at a price of $0.02 per right at any time prior to
the earlier of (i) their expiration; (ii) 10 days following a person's
acquisition of 25% or more of the Company's outstanding Common Stock; or (iii)
the Board of Directors' determination of a person to be an Adverse Person. If
the Company is acquired, under certain circumstances each Right entitles the
holder to purchase, at the Right's then current exercise price, a number of the
acquiring company's common shares having a market value of twice the Right's
then current exercise price.
Unless and until the Rights become exercisable, the Rights trade only with
Fleetwood Common Stock shares and are represented by the stock certificates
representing Fleetwood Common Stock. If the Rights become exercisable, separate
certificates representing the Rights will be delivered to the holders of
Fleetwood Common Stock at such time, and the Rights will then trade separately
from the shares of Fleetwood Common Stock. Upon conversion of the Convertible
Subordinated Debentures the Holders will receive, in addition to the Common
Stock issuable upon such conversion, the Rights which would have attached to
such shares of Common Stock if the Rights had not become separated from the
Common Stock. The Rights will not become exercisable or separately tradable as a
result of this Offering.
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CERTAIN FEDERAL TAX CONSEQUENCES
The following are certain material United States federal income tax
consequences of the ownership and disposition of the Securities. Unless
otherwise stated, this summary deals only with Securities held as capital assets
by holders who acquire the Securities upon sale pursuant to this Prospectus. It
does not deal with special classes of holders, such as dealers in securities or
currencies, life insurance companies, persons holding Preferred Securities as
part of a straddle or as part of a hedging or conversion transaction, or persons
whose functional currency is not the United States dollar. This summary is based
on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations thereunder and administrative and judicial interpretations thereof
as of the date hereof, all of which are subject to change (possibly on a
retroactive basis).
INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF PREFERRED
SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF
ANY STATE, LOCAL OR OTHER TAX LAWS.
CLASSIFICATION OF THE CONVERTIBLE SUBORDINATED DEBENTURES
The Company intends to take the position that the Convertible Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness under current law. The Company, the Trust and the holders of the
Securities (by acceptance of a beneficial interest in a Preferred Security) will
agree to treat the Convertible Subordinated Debentures as indebtedness of the
Company and the Preferred Securities as evidences of a beneficial ownership
interest in the Convertible Subordinated Debentures for all United States
federal income tax purposes. No assurance can be given, however, that such
position of the Company will not be challenged by the Internal Revenue Service
("IRS") or, if challenged, that such challenge will not be successful. The
remainder of this discussion assumes that the Convertible Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness of the Company. No portion of the amounts received on the Preferred
Securities will be eligible for the dividends-received deduction.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Securities, Gibson, Dunn & Crutcher
LLP, counsel to the Company and the Trust, rendered an opinion generally to the
effect that, under then current law and assuming full compliance with the terms
of the Declaration and the Indenture (and certain other documents), and based on
certain facts and assumptions contained in such opinion, the Trust will be
classified for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation. Accordingly, each holder of
Preferred Securities will be considered the owner of a pro rata portion of the
Convertible Subordinated Debentures held by the Trust and will be required to
include in gross income its pro rata share of income accrued on the Convertible
Subordinated Debentures.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Treasury Regulations generally provide that stated interest on a debt
instrument is not "qualified stated interest" and, therefore, will give rise to
original issue discount ("OID") unless such interest is unconditionally payable
in cash or in property (other than debt instruments of the issuer) at least
annually at a single fixed rate. Interest is considered to be unconditionally
payable only if reasonable legal remedies exist to compel timely payment or the
debt instrument otherwise provides terms and conditions that make the likelihood
of late payment (other than late payment that occurs within a reasonable grace
period) or non-payment a "remote contingency."
Under the Indenture, the Company has the right, at any time and from time to
time during the term of the Convertible Subordinated Debentures, to defer
payments of interest by extending the interest
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payment period for a period not exceeding 20 consecutive quarters with respect
to each Extension Period. Unless the likelihood of exercise of such right to
defer is remote, the Convertible Subordinated Debentures would be issued with
OID. During any Extension Period, (a) the Company will not be permitted to
declare or pay any dividends or distributions on, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of its capital stock, and (b)
the Company will not be permitted to make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Company that rank PARI PASSU with or junior
to the Convertible Subordinated Debentures (although these restrictions will not
apply to dividends or distributions in common stock of the Company and in
certain other limited situations). See "Description of Securities-- Description
of Convertible Subordinated Debentures--Option to Extend Interest Payment
Period." The Company currently believes that the adverse impact that the
imposition of such restrictions would have on the Company and the value of the
equity securities of the Company makes the likelihood of the Company exercising
its right to defer payments of interest on the Convertible Subordinated
Debentures remote. Accordingly, the Company intends to treat the stated interest
on the Convertible Subordinated Debentures as unconditionally payable for
purposes of the OID provisions of the Code and Treasury Regulations and,
therefore, the Convertible Subordinated Debentures should not be considered to
have been issued with OID.
The Company's determination that there is a remote likelihood of exercising
its right to defer the payment of interest on the Convertible Subordinated
Debentures is binding on all holders of Securities. However, the Company's
determination is not binding on a holder that explicitly discloses that its
determination is different from the Company's determination. Unless otherwise
prescribed by the Internal Revenue Service, the disclosure must be made on a
statement attached to the holder's timely filed federal tax return for the
taxable year that includes the acquisition date of the Preferred Securities.
While the Company's determination is generally binding on all holders, the IRS
is not bound by such determination and there can be no assurance that the IRS
will agree with the Company's determination.
If the Company does exercise its right to defer payments of interest
thereon, the Convertible Subordinated Debentures will be considered to be
retired and reissued for their adjusted issue price at such time, and the
Convertible Subordinated Debentures thereafter will be considered to have been
issued with OID. In such case, all remaining stated interest payments will be
treated as OID. Consequently, in the event that the payment of interest is
deferred, a holder would be required to include OID into income on an economic
accrual basis notwithstanding that the Corporation will not make any interest
payments on the Preferred Securities during such extension period.
DISTRIBUTION OF CONVERTIBLE SUBORDINATED DEBENTURES TO HOLDERS OF THE PREFERRED
SECURITIES
Under current law, a distribution by the Trust of the Convertible
Subordinated Debentures as described under the caption "Description of the
Preferred Securities--Special Event Distribution; Tax Event Redemption" will be
nontaxable and will result in the holder receiving directly its pro rata share
of the Convertible Subordinated Debentures previously held indirectly through
the Trust, with a holding period and tax basis equal to the holding period and
adjusted tax basis such holder was considered to have had in his pro rata share
of the underlying Convertible Subordinated Debentures prior to such
distribution. If, however, the Trust were characterized for United States
federal income tax purposes as an association taxable as a corporation at the
time of its dissolution, the distribution of the Convertible Subordinated
Debentures may constitute a taxable event to holders of Preferred Securities and
a holder's holding period for the Convertible Subordinated Debentures would
begin on the date the Convertible Subordinated Debentures were received.
DISPOSITION OF THE PREFERRED SECURITIES
Upon a sale, exchange or other disposition of the Preferred Securities
(including a distribution of cash in redemption of a holder's Preferred
Securities upon redemption or repayment of the underlying
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Convertible Subordinated Debentures, but excluding the distribution of
Convertible Subordinated Debentures), a holder will be considered to have
disposed of all or part of its pro rata share of the Convertible Subordinated
Debentures, and will recognize gain or loss equal to the difference between the
amount realized and the holder's adjusted tax basis in its pro rata share of the
underlying Convertible Subordinated Debentures deemed disposed. A holder's
adjusted tax basis in the Convertible Subordinated Debentures will generally
equal its initial purchase price of the Preferred Securities. If the Company
exercises its right to defer payment of interest on the Convertible Subordinated
Debentures, a holder's adjusted tax basis (generally its initial purchase price)
will be increased by any accrued original issue discount. Such gain or loss will
be long-term capital gain or loss if the Securities have been held by the holder
for more than one year.
The Securities may trade at a price that does not fully reflect the value of
accrued but unpaid interest with respect to the underlying Convertible
Subordinated Debentures. A holder who disposes of its Securities between record
dates for payments of distributions thereon will nevertheless be required to
include accrued but unpaid interest on the Convertible Subordinated Debentures
through the date of disposition, and to add such amount to its adjusted tax
basis in its pro rata share of the underlying Convertible Subordinated
Debentures deemed disposed. Accordingly, such a holder will recognize a capital
loss to the extent the selling price (which may not fully reflect the value of
accrued but unpaid interest) is less than the holder's adjusted tax basis (which
will include accrued but unpaid interest). Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
CONVERSION OF THE PREFERRED SECURITIES TO FLEETWOOD COMMON STOCK
A holder of Securities will not recognize income, gain or loss upon the
conversion of Preferred Securities through the Conversion Agent of Convertible
Subordinated Debentures into Fleetwood Common Stock. A holder of Securities
will, however, recognize gain upon the receipt of cash in lieu of a fractional
share of Fleetwood Common Stock equal to the amount of cash received less such
holder's tax basis in such fractional share. Such holder's tax basis in the
Fleetwood Common Stock received upon conversion will generally be equal to such
holder's tax basis in the Preferred Securities delivered to the Conversion Agent
for exchange, less the basis allocated to any fractional share for which cash is
received. Such holder's holding period in the Fleetwood Common Stock received
upon conversion will generally include the holder's holding period of the
Preferred Securities delivered to the Conversion Agent for exchange, except
possibly with respect to Fleetwood Common Stock received in respect of any
accrued but unpaid interest.
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under section 305 of the Code would treat
holders of Preferred Securities as having received a constructive distribution
from the Company in certain events pursuant to which the conversion rate of the
Convertible Subordinated Debentures were adjusted. Thus, under certain
circumstances, a reduction in the conversion price for the Convertible
Subordinated Debentures may result in deemed dividend income to holders of
Preferred Securities to the extent of the current or accumulated earnings and
profits of the Company. Holders of Preferred Securities are advised to consult
their tax advisors as to the income tax consequences of adjustments in the
conversion rate of Preferred Securities.
INFORMATION REPORTING TO HOLDERS
The Trust will report the interest paid or OID that accrued during the year
with respect to the Convertible Subordinated Debentures, and gross proceeds
received by the Trust from the retirement or redemption of the Convertible
Subordinated Debentures, annually to the holders of record of the Preferred
Securities and the IRS. Generally, such reports should be mailed to holders of
record by
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January 31 following each calendar year. It is anticipated that persons who hold
Preferred Securities as nominees for beneficial holders will report the required
tax information to beneficial holders on Form 1099.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, Preferred Securities may be
subject to a "backup" withholding tax of 31% unless the holder furnishes its
taxpayer identification number in the manner prescribed in applicable Treasury
Regulations, certifies that such number is correct, certifies as to no loss of
exemption from backup withholding, and meets certain other conditions. Any
withheld amounts will generally be allowed as a credit against the holder's
federal income tax, provided the required information is timely filed with the
IRS.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, for United States
federal income tax purposes, a foreign corporation, a nonresident alien
individual, a foreign partnership, or a non-resident fiduciary of a foreign
estate or trust.
PAYMENTS ON PREFERRED SECURITIES
As discussed above, the Company intends to take the position that the
Convertible Subordinated Debentures will be classified for United States federal
income tax purposes as indebtedness of the Company under current law. No
assurance can be given, however, that such position of the Company will not be
challenged by the IRS.
Assuming that the Convertible Subordinated Debentures are classified for
United States federal income tax purposes as indebtedness of the Company, under
present United States federal income tax law, payments by the Trust or any of
its paying agents to any holder of a Preferred Security who or which is a United
States Alien Holder would not be subject to United States federal withholding
tax; PROVIDED, that (a) the beneficial owner of the Preferred Securities does
not actually or constructively own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote, (b) the
beneficial owner of the Preferred Securities is not a controlled foreign
corporation that is related to the Company through stock ownership, and (c)
either (A) the beneficial owner of the Preferred Securities certifies to the
Trust or its agent, under penalties of perjury, that it is not a U.S. person and
provides its name and address or (B) a securities clearing organization, bank or
other financial Institution that holds customers' securities in the ordinary
course of its trade or business (a "Financial Institution"), and holds the
Preferred Securities in such capacity, certifies to the Trust or its agent,
under penalties of perjury, that such statement has been received from the
beneficial owner by it or by a Financial Institution between it and the
beneficial owner and furnishes the Trust or its agent with a copy thereof.
If the Convertible Subordinated Debentures were not classified for United
States federal income tax purposes as indebtedness of the Company, payments by
the Trust or any of its paying agents to any holder of a Preferred Security who
or which is a United States Alien Holder would be subject to United States
withholding tax at a 30% rate (or a lower rate prescribed by an applicable tax
treaty). Prospective investors that would be United States Alien Holders should
consult their tax advisors concerning the possible application of these rules.
DIVIDENDS ON FLEETWOOD COMMON STOCK
Subject to the discussion below, dividends paid to a United States Alien
Holder of Fleetwood Common Stock generally will be subject to withholding tax at
a 30% rate or such lower rate as may be specified by an applicable income tax
treaty. For purposes of determining whether tax is to be withheld at a 30% rate
or at a reduced rate as specified by an income tax treaty, the Company
ordinarily will presume
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that dividends paid to an address in a foreign country are paid to a resident of
such country, absent knowledge that such presumption is not warranted.
To obtain a reduced rate of withholding under a treaty, a United States
Alien Holder would generally be required to provide an IRS form W-8 certifying
such United States Alien Holder's entitlement to benefits under a treaty.
Generally, the Company must report to the IRS the amount of dividends paid,
the name and address of the recipient, and the amount, if any, of tax withheld.
A similar report is sent to the holder. Pursuant to tax treaties or certain
other agreements, the IRS may make its reports available to tax authorities in
the recipient's country of residence.
SALE OR EXCHANGE OF PREFERRED SECURITIES OR FLEETWOOD COMMON STOCK
A United States Alien Holder (other than certain U.S. expatriates) will not
be subject to United States federal income tax on gain realized on the sale,
exchange or other disposition of the Preferred Securities or Fleetwood Common
Stock unless (i) the United States Alien Holder is an individual who is present
in the U.S. for 183 days or more in the taxable year of disposition, and certain
other conditions are satisfied; or (ii) the Company is or has been a "United
States real property holding corporation" within the meaning of section
897(c)(2) of the Code during the shorter of the United States Alien Holder's
holding period or the five year period ending on the date of the sale, exchange
or other disposition and certain other conditions are satisfied.
The Company believes that it is unlikely that it is or will be treated as a
"United States real property holding corporation" within the meaning of Section
897(c)(2) of the Code. Even if the Company is treated as a United States real
property holding corporation, gain realized by a United States Alien Holder on a
disposition of Preferred Securities or Fleetwood Common Stock will not be
subject to United States federal income tax so long as (i) the United States
Alien Holder is deemed to have beneficially owned, in the case of a disposition
of Fleetwood Common Stock, less than or equal to 5% of the Fleetwood Common
Stock or, in the case of a disposition of Preferred Securities, less than or
equal to 5% of the Preferred Securities, and (ii) the Fleetwood Common Stock and
the Preferred Securities are currently and will be, at the time of disposition,
"regularly traded" on an established securities market (within the meaning of
Section 897(c)(3) of the Code and the temporary Treasury Regulations). There can
be no assurance that Fleetwood Common Stock or the Preferred Securities qualify
or will continue to qualify as "regularly traded" on an established securities
market.
EFFECTIVELY CONNECTED INCOME
If a United States Alien Holder of a Preferred Security or Fleetwood Common
Stock is engaged in a trade or business in the United States, and if interest
paid or OID accrued on the Preferred Securities or dividends on such Fleetwood
Common Stock is effectively connected with the conduct of such trade or
business, the United States Alien Holder, although exempt from the withholding
tax on distributions on Preferred Securities and dividends on Fleetwood Common
Stock, will generally be subject to regular United States income tax on the
interest or OID, dividends and on any gain realized on the sale, exchange or
other disposition of a Preferred Security or Fleetwood Common Stock in the same
manner as if it were a United States person. Such a holder will be required to
provide to the Company properly executed Internal Revenue Service Form 4224 in
order to claim an exemption from withholding tax. In addition, if such United
States Alien Holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30% (or a lower rate prescribed by an applicable treaty) of
its effectively connected earnings and profits for the taxable year.
62
<PAGE>
PROPOSED TAX LEGISLATION
On February 2, 1998, as part of the Clinton Administration's Fiscal 1999
Budget Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") which would, among other things, generally prevent corporations
from deducting interest (including original issue discount) on convertible debt
instruments until the taxable year in which such interest is paid in cash or
other property (other than equity of the issuer or a related party or cash or
other property the amount of which is determined by reference to the value of
the equity of the issuer or a related party). The Proposed Legislation is
proposed to be effective for convertible debt instruments issued on or after the
date of "first committee action." Accordingly, it is not anticipated that the
Proposed Legislation, if adopted, will apply to the Convertible Subordinated
Debentures. However, if the Proposed Legislation or other legislation is enacted
by Congress and if it gives rise to a Tax Event, the Trust would be permitted to
cause a redemption of the Preferred Securities by causing a distribution of the
Convertible Subordinated Debentures or, in certain circumstances, by electing to
redeem the Convertible Subordinated Debentures. See "Risk Factors-- Special
Event Distribution; Tax Event Redemption" and "Description of the
Securities--Description of the Preferred Securities--Special Event Distribution;
Tax Event Redemption."
TAXPAYER RELIEF ACT OF 1997
On August 5, 1997, the Taxpayer Relief Act of 1997 (the "Tax Act") was
enacted into law. The Tax Act reduces the maximum rates on long-term capital
gains recognized on capital assets held by individual taxpayers for more than
eighteen months as of the date of disposition (and would further reduce the
maximum rates on such gains in the year 2001 and thereafter for certain
individual taxpayers who meet specified conditions). Prospective investors
should consult their own tax advisors concerning these tax law changes.
NEW WITHHOLDING REGULATIONS
On October 6, 1997, the Treasury Department issued new regulations (the "New
Regulations") which make certain modifications to the withholding, backup
withholding and information reporting rules described above. The New Regulations
attempt to unify certification requirements and modify reliance standards. The
New Regulations are generally effective for payments made after December 31,
1998, subject to certain transition roles. Prospective investors are urged to
consult their own tax advisors regarding the New Regulations.
63
<PAGE>
SELLING SECURITYHOLDERS
Information regarding the Selling Securityholders, each of their
relationships with the Trust and the Company, the aggregate number of shares of
Preferred Securities and Fleetwood Common Stock beneficially owned by each
Selling Securityholder and the aggregate number of shares of Preferred
Securities and Fleetwood Common Stock registered hereby that each Selling
Securityholder may offer and sell pursuant to this Prospectus will be set forth
in one or more amendments or supplements to this Prospectus.
PLAN OF DISTRIBUTION
The Fleetwood Common Stock issuable upon conversion of the Preferred
Securities will be approved for listing on the NYSE. The Securities may be sold
from time to time to purchasers directly by the Selling Securityholders.
Alternatively, the Selling Securityholders may from time to time offer the
Securities to or through underwriters, broker-dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Securityholders or the purchasers of such securities for whom
they may act as agents. The Selling Securityholders and any underwriters,
broker-dealers or agents that participate in the distribution of Securities may
be deemed to be "underwriters" within the meaning of the Securities Act and any
profit on the sale of such securities and any discounts, commissions,
concessions or other compensation received by any such underwriter,
broker-dealer or agent may be deemed to be underwriting discounts and commission
under the Securities Act.
The Securities may be sold from time to time in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale or at negotiated prices. The sale of the
Securities may be effected in transactions (which may involve crosses or block
transactions) (i) on any national securities exchange or quotation service on
which the Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such exchanges
or in the over-the-counter market or (iv) through the writing of options. In
connection with the sales of the Securities, or otherwise, the Selling
Securityholders may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the Securities in the course of hedging in
the positions they assume. The Selling Securityholders may also sell Securities
short and deliver Securities to close out short positions, or loan or pledge
Securities to broker-dealers that in turn may sell such Securities. At the time
a particular offering of the Securities is made, a Prospectus Supplement, if
required, will be distributed which will set forth the aggregate amount and type
of Securities being offered and the terms of the offering, including the name or
names of any underwriters, broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from the Selling Securityholders and
any discounts, commissions or concessions allowed or reallowed or paid to
broker-dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the Securities will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain jurisdictions
the Securities may not be offered or sold unless they have been registered or
qualified the sale in such jurisdictions or any exemption from registration or
qualification is available and is complied with.
The Selling Securityholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Securities by the Selling
Securityholders. The foregoing may affect the marketability of such securities.
Pursuant to the Registration Rights Agreement, all expenses of the
registration of the Securities will be paid by the Company, including, without
limitation, Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; PROVIDED, HOWEVER, that the Selling
Securityholders will pay all underwriting discounts and selling commissions, if
any. The Selling Securityholders will be indemnified by the Company and the
Trust, jointly and severally against certain civil liabilities, including
certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith. The Company and the Trust will be
indemnified by the Selling Securityholders severally against certain civil
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith.
64
<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the validity of the Preferred
Securities have been passed upon for the Company and the Trust by Morris,
Nichols, Arsht & Tunnell, special Delaware counsel to the Company and the Trust.
Certain legal matters with respect to the validity of the Guarantee and the
Fleetwood Common Stock issuable upon conversion of the Preferred Securities and
certain U.S. federal income taxation matters have been passed upon for the
Company and the Trust by Gibson, Dunn & Crutcher LLP, Orange County, California,
special counsel to the Company and the Trust.
EXPERTS
The financial statements of the Company incorporated herein by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said report. Future financial
statements of the Company and the reports thereon of Arthur Andersen LLP also
will be incorporated by reference in this Prospectus in reliance upon the
authority of that firm as experts in giving those reports to the extent said
firm has audited those financial statements and consented to the use of their
reports thereon.
65
<PAGE>
- ------------------------------------------------
------------------------------------------------
- ------------------------------------------------
------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE TRUST OR THE COMPANY SINCE THE DATE HEREOF OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 1
Risk Factors.............................................................. 7
Ratio of Earnings to Fixed Charges........................................ 17
Use of Proceeds........................................................... 17
Fleetwood Capital Trust................................................... 18
Description of the Securities............................................. 20
Certain Federal Tax Consequences.......................................... 58
Selling Securityholders................................................... 64
Plan of Distribution...................................................... 64
Legal Matters............................................................. 65
Experts................................................................... 65
</TABLE>
[LOGO]
5,750,000 CONVERTIBLE
TRUST PREFERRED SECURITIES
FLEETWOOD
CAPITAL TRUST
6% CONVERTIBLE TRUST
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT
SET FORTH HEREIN BY,
AND CONVERTIBLE INTO
COMMON STOCK OF,
FLEETWOOD
ENTERPRISES, INC.
----------------------------
PROSPECTUS
----------------------------
, 1998
- ------------------------------------------------
------------------------------------------------
- ------------------------------------------------
------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering to be borne by the
Company are:
<TABLE>
<S> <C>
Registration fees.............................................. $84,812.50
Printing fees and expenses..................................... $20,000.00
Accounting fees and expenses................................... $ 5,000.00
Legal fees and expenses........................................ $25,000.00
Miscellaneous.................................................. 1,186.50
----------
Total...................................................... $136,000.00
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY
The Company is a Delaware corporation. Section 145(a) of the DGCL provides
that a Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) by reason of the fact
that such person is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation or enterprise, against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had no cause to believe his or her
conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if he or she acted under similar standards,
except that no indemnification may be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his or her duty to the Company
unless and only to the extent that the court in which such action or suit was
brought shall determine that, despite the adjudication of liability but in view
of all the circumstances of the case, such person is fairly and reasonably
entitled to be indemnified for such expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, such officer or director shall be indemnified
against expenses actually and reasonably incurred by him or her in connection
therewith; that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the Company may purchase and maintain insurance on behalf of a director
or officer of the Company against any liability asserted against such officer or
director and incurred by him or her in any such capacity or arising out of his
or her status as such, whether or not the Company would have the power to
indemnify him or her against such liabilities under Section 145.
The Company's Charter contains no provisions regarding indemnification of
officers and directors. The Company's Bylaws provide that the corporation shall,
to the fullest extent permi tted by law, indemnify
II-1
<PAGE>
any person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including a derivative action) by
reason of the fact that he is or was a director or officer of the Company, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Bylaws authorize the
advance of expenses in certain circumstances and authorize the corporation to
provide indemnification or advancement of expenses to any person, by agreement
or otherwise, on such terms and conditions as the board of directors may
approve. The Bylaws also authorize the Company to purchase and maintain
insurance on behalf of a director, officer, employee, agent of the Company or a
person acting at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise or as a member of any committee or similar body against any liability
incurred by him in any such capacity whether or not the corporation would have
the power to indemnify him.
In addition to the indemnification provisions in the Company's Bylaws, the
Company has entered into indemnity agreements with individuals serving as
officers of the corporation. Therein, the Company has agreed to pay on behalf of
the officer and his executors, administrators or assigns, any amount which he is
or becomes legally obligated to pay because of any act or omission or neglect or
breach of duty, including any actual or alleged error or misstatement or
misleading statement, which he commits or suffers while acting in his capacity
as officer of the corporation and solely because of his being an officer. The
Company has agreed to pay damages, judgments, settlements and costs, costs of
investigation, costs of defense of legal actions, claims or proceedings and
appeals therefrom, and costs of attachment or similar bonds. The Company has
also agreed that if it shall not pay within a set period of time after written
claim, the officer may bring suit against the Company and shall be entitled to
be paid for prosecuting such claim. The Company has not agreed to pay fines or
fees imposed by law or payments which it is prohibited by applicable law form
paying as indemnity and has not agreed to make any payment in connection with a
claim made against the officer for which payment was made to the officer under
an insurance policy, for which the officer is entitled to indemnity otherwise
than under the agreement, and which is based upon the officer gaining any
personal profit or advantage to which he was not legally entitled, in addition
certain other payments.
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE TRUST
The Declaration provides that no Trustee, affiliate of any Trustee, or any
officers, directors, shareholders, members, partners, employees, representatives
or agent of any Trustee, or any employee or agent of the Trust or its affiliates
(each an "Indemnified Person") shall be liable, responsible or accountable in
damages or otherwise to the Trust or any officer, director, trustee,
shareholder, partner, member, representative, employee or agent of the Trust or
its affiliates or any holder of the Trust Securities for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by the Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
(except as otherwise provided, in the case of the Property Trustee, in the Trust
Indenture Act) with respect to such acts or omissions.
The Declaration also provides that to the fullest extent permitted by
applicable law, the Company shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage, liability, tax, penalty, expense or
claim of any kind or nature whatsoever incurred by such Indemnified Person by
reason of the creation, operation or termination of the Trust or any act or
omission performed or omitted
II-2
<PAGE>
by such Indemnified Person in good faith on behalf of the Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by the Declaration, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
The Declaration further provides that to the fullest extent permitted by
applicable law, expenses (including legal fees and expenses) incurred by an
Indemnified Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by
the Company of an undertaking by or on behalf of the Indemnified Person to repay
such amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified under the Declaration.
ITEM 16. EXHIBITS.
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------
<C> <S> <C>
1.1 Purchase Agreement dated February 4, 1998 by and among Fleetwood Capital Trust, Fleetwood
and PaineWebber Incorporated
2.1 Agreement and Plan of Merger dated February 17, 1998, by and among Fleetwood, HomeUSA and
HUSA Acquisition Company, a Delaware corporation(1)
3.1 Restated Certificate of Incorporation(2)
3.2 Amendment to Restated Certificate of Incorporation(3)
3.3 Certificate of Designation, Preferences and Rights of Series A Junior Participating
Preferred Stock filed November 23, 1988(4)
3.4 Restated Bylaws(3)
4.1 Rights Agreement dated November 10, 1988, between Fleetwood and the First National Bank of
Boston used in connection with a stockholder rights plan(4)
4.2 Amended and Restated Declaration of Trust of Fleetwood Capital Trust dated as of February
10, 1998, by and among Fleetwood and individual trustees of the Trust(1)
4.3 Indenture dated as of February 10, 1998, by and between Fleetwood and The Bank of New York,
as Trustee, used in connection with Fleetwood's 6% Convertible Subordinated Debentures
due 2028(1)
4.4 Registration Rights Agreement dated February 10, 1998, by and among Fleetwood Capital
Trust, Fleetwood and PaineWebber Incorporated(8)
4.5 Preferred Securities Guarantee Agreement dated as of February 10, 1998, by and between
Fleetwood and The Bank of New York, as preferred guarantee trustee(1)
5.1 Opinion of Morris, Nichols, Arsht & Tunnell as to the validity of certain of the securities
being registered
5.2 Opinion of Gibson, Dunn & Crutcher LLP as to the validity of certain of the securities
being registered
8.1 Opinion of Gibson, Dunn & Crutcher LLP as to certain tax matters
10.1 Form of Employment Agreement between Fleetwood and each of its officers(5)
10.2 Form of Indemnity Agreement between Fleetwood and each of its officers and directors(1)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------
<C> <S> <C>
10.3 Amended and Restated Deferred Compensation Plan(6)
10.4 Amended and Restated Supplemental Benefit Plan(6)
10.5 Amended and Restated Long-Term Incentive Compensation Plan(6)
10.6 1982 Stock Option Plan(3)
10.7 Amended and Restated Benefit Restoration Plan(6)
10.8 Dividend Equivalent Plan(7)
10.9 Amended and Restated 1992 Stock-Based Incentive Compensation Plan(6)
10.10 The 1992 Non-Employee Director Stock Option Plan(5)
10.11 Senior Executive Incentive Compensation Plan(8)
10.12 Operating Agreement between Fleetwood Enterprises, Inc. and Fleetwood Credit Corp.(9)
23.1 Consent of Morris, Nichols, Arsht & Tunnell
23.2 Consent of Gibson, Dunn & Crutcher LLP
23.3 Consent of Arthur Andersen LLP
24.1 Powers of Attorney (included in signature page in Part II of Registration Statement)
25.1 Statement of Eligibility and Qualification on Form T-1 of The Bank of New York, as Trustee,
with respect to the 6% Convertible Trust Preferred Securities
25.2 Statement of Eligibility and Qualification on Form T-1 of The Bank of New York, as Trustee,
with respect to the 6% Convertible Subordinated Debentures due 2028
25.3 Statement of Eligibility and Qualification on Form T-1 of The Bank of New York, as Trustee,
with respect to the Guarantee of 6% Convertible Trust Preferred Securities
</TABLE>
- ------------------------
(1) Incorporated by reference to Fleetwood's Current Registration Statement on
Form S-4 filed April 9, 1998.
(2) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 28, 1985.
(3) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 26, 1987.
(4) Incorporated by reference to Fleetwood's Current Report on Form 8-K filed on
November 10, 1988.
(5) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 26, 1992.
(6) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 28, 1996.
(7) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 29, 1990.
(8) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 24, 1994.
(9) Incorporated by reference to Fleetwood's Current Report on Form 8-K filed
June 7, 1996.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrants hereby undertake:
II-4
<PAGE>
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not
previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrants pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrants' annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of expenses
incurred or paid by a director, officer, or controlling person of the
Registrants in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrants will, unless in the opinion of
their counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
(d) The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement
II-5
<PAGE>
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(e) The undersigned Registrants hereby undertake to file an application for
the purpose of determining the eligibility of the Trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Securities Act.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Fleetwood Capital Trust certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Riverside, State of California, on May 4, 1998.
<TABLE>
<S> <C> <C>
FLEETWOOD CAPITAL TRUST
By: /s/ NELSON W. POTTER
-----------------------------------------
Nelson W. Potter
REGULAR TRUSTEE
By: /s/ PAUL M. BINGHAM
-----------------------------------------
Paul M. Bingham
REGULAR TRUSTEE
By: /s/ LYLE N. LARKIN
-----------------------------------------
Lyle N. Larkin
REGULAR TRUSTEE
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Fleetwood Enterprises, Inc. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Riverside, State of California, on May
4, 1998.
<TABLE>
<S> <C> <C>
FLEETWOOD ENTERPRISES, INC.
By: /s/ GLENN F. KUMMER
-----------------------------------------
Glenn F. Kummer
CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF
THE BOARD
</TABLE>
POWER OF ATTORNEY
Each director and/or officer of Fleetwood Enterprises, Inc. whose signature
appears below hereby constitutes and appoints PAUL M. BINGHAM and WILLIAM H.
LEAR as the true and lawful attorneys-in-fact and agents for the undersigned,
acting together or alone, with full powers of substitution and resubstitution,
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign and file any and all amendments (including
post-effective amendments) and exhibits to this Registration Statement on Form
S-3, and any and all applications and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, acting together or alone, full powers and
authority to do and perform each and every act and thing requisite and necessary
or desirable to be done, hereby ratifying and confirming all that said
attorneys-in-fact and agents, acting together or alone, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
II-7
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board and
/s/ GLENN F. KUMMER Chief Executive Officer
- ------------------------------ (Principal Executive May 4, 1998
Glenn F. Kummer Officer)
/s/ NELSON W. POTTER
- ------------------------------ President, Chief Operating May 4, 1998
Nelson W. Potter Officer and Director
Senior Vice
/s/ PAUL M. BINGHAM President--Finance and
- ------------------------------ Chief Financial Officer May 4, 1998
Paul M. Bingham (Principal Financial
Officer)
/s/ WILLIAM W. WEIDE
- ------------------------------ Vice Chairman of the Board May 4, 1998
William W. Weide
/s/ ANDREW CREAN
- ------------------------------ Director May 4, 1998
Andrew Crean
/s/ DOUGLAS M. LAWSON
- ------------------------------ Director May 4, 1998
Douglas M. Lawson
/s/ THOMAS A. FUENTES
- ------------------------------ Director May 4, 1998
Thomas A. Fuentes
/s/ WALTER F. BERAN
- ------------------------------ Director May 4, 1998
Walter F. Beran
/s/ DR. JAMES L. DOTI
- ------------------------------ Director May 4, 1998
Dr. James L. Doti
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------
<C> <S> <C>
1.1 Purchase Agreement dated February 4, 1998 by and among Fleetwood Capital Trust,
Fleetwood and PaineWebber Incorporated
2.1 Agreement and Plan of Merger dated February 17, 1998, by and among Fleetwood, HomeUSA
and HUSA Acquisition Company, a Delaware corporation(1)
3.1 Restated Certificate of Incorporation(2)
3.2 Amendment to Restated Certificate of Incorporation(3)
3.3 Certificate of Designation, Preferences and Rights of Series A Junior Participating
Preferred Stock filed November 23, 1988(4)
3.4 Restated Bylaws(3)
4.1 Rights Agreement dated November 10, 1988, between Fleetwood and the First National Bank
of Boston used in connection with a stockholder rights plan(4)
4.2 Amended and Restated Declaration of Trust of Fleetwood Capital Trust dated as of
February 10, 1998, by and among Fleetwood and individual trustees of the Trust(1)
4.3 Indenture dated as of February 10, 1998, by and between Fleetwood and The Bank of New
York, as Trustee, used in connection with Fleetwood's 6% Convertible Subordinated
Debentures due 2028(1)
4.4 Registration Rights Agreement dated February 10, 1998, by and among Fleetwood Capital
Trust, Fleetwood and PaineWebber Incorporated(8)
4.5 Preferred Securities Guarantee Agreement dated as of February 10, 1998, by and between
Fleetwood and The Bank of New York, as preferred guarantee trustee(1)
5.1 Opinion of Morris, Nichols, Arsht & Tunnell as to the validity of certain of the
securities being registered
5.2 Opinion of Gibson, Dunn & Crutcher LLP as to the validity of certain of the securities
being registered
8.1 Opinion of Gibson, Dunn & Crutcher LLP as to certain tax matters
10.1 Form of Employment Agreement between Fleetwood and each of its officers(5)
10.2 Form of Indemnity Agreement between Fleetwood and each of its officers and directors(1)
10.3 Amended and Restated Deferred Compensation Plan(6)
10.4 Amended and Restated Supplemental Benefit Plan(6)
10.5 Amended and Restated Long-Term Incentive Compensation Plan(6)
10.6 1982 Stock Option Plan(3)
10.7 Amended and Restated Benefit Restoration Plan(6)
10.8 Dividend Equivalent Plan(7)
10.9 Amended and Restated 1992 Stock-Based Incentive Compensation Plan(6)
10.10 The 1992 Non-Employee Director Stock Option Plan(5)
10.11 Senior Executive Incentive Compensation Plan(8)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------
<C> <S> <C>
10.12 Operating Agreement between Fleetwood Enterprises, Inc. and Fleetwood Credit Corp.(9)
23.1 Consent of Morris, Nichols, Arsht & Tunnell
23.2 Consent of Gibson, Dunn & Crutcher LLP
23.3 Consent of Arthur Andersen LLP
24.1 Powers of Attorney (included in signature page in Part II of Registration Statement)
25.1 Statement of Eligibility and Qualification on Form T-1 of The Bank of New York, as
Trustee, with respect to the 6% Convertible Trust Preferred Securities
25.2 Statement of Eligibility and Qualification on Form T-1 of The Bank of New York, as
Trustee, with respect to the 6% Convertible Subordinated Debentures due 2028
25.3 Statement of Eligibility and Qualification on Form T-1 of The Bank of New York, as
Trustee, with respect to the Guarantee of 6% Convertible Trust Preferred Securities
</TABLE>
- ------------------------
(1) Incorporated by reference to Fleetwood's Current Registration Statement on
Form S-4 filed April 9, 1998.
(2) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 28, 1985.
(3) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 26, 1987.
(4) Incorporated by reference to Fleetwood's Current Report on Form 8-K filed on
November 10, 1988.
(5) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 26, 1992.
(6) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 28, 1996.
(7) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 29, 1990.
(8) Incorporated by reference to Fleetwood's Annual Report on Form 10-K for the
year ended April 24, 1994.
(9) Incorporated by reference to Fleetwood's Current Report on Form 8-K filed
June 7, 1996.
<PAGE>
EXHIBIT 1.1
FLEETWOOD CAPITAL TRUST
5,000,000 Convertible Trust Preferred Securities
(Liquidation Amount $50 Per Preferred Security)
Guaranteed by
FLEETWOOD ENTERPRISES, INC.
PURCHASE AGREEMENT
February 4, 1998
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Fleetwood Capital Trust (the "Trust"), a business trust organized under the
Delaware Business Trust Act (the "Delaware Act") of the State of Delaware
(Chapter 38, Title 12, of the Delaware Code, 12 Del. C. ss. 3801 et seq.) and
Fleetwood Enterprises, Inc., a Delaware corporation (the "Company"), hereby
confirms its agreement with you (the "Initial Purchaser"), as set forth below.
1. DESCRIPTION OF SECURITIES. The Trust proposes to issue and sell to
the Initial Purchaser an aggregate of 5,000,000 shares of its 6% Convertible
Trust Preferred Securities (the "Firm Securities"). The Trust has also agreed
to grant to the Initial Purchaser an option (the "Option") to purchase up to an
additional 750,000 shares of its 6% Convertible Trust Preferred Securities (the
"Option Securities") on the terms and for the purposes set forth in Section 2(b)
hereof. The Firm Securities and the Option Securities are hereinafter
collectively referred to as the "Preferred Securities." The Preferred
Securities will be guaranteed, to the extent set forth in the Final Memorandum
(as defined below), by the Company. Capitalized terms used but not separately
defined herein are defined in the Final Memorandum and used herein as so
defined.
It is understood that substantially contemporaneously with the offering and
sale of the Firm Securities to the Initial Purchaser contemplated hereby, (i)
the Trust, its trustees (the "Trustees") and the Company shall take all
necessary action to adopt an Amended and
<PAGE>
Restated Declaration of Trust (as so amended and restated, the
"Declaration"), pursuant to which the Trust shall (x) issue and sell the
Preferred Securities to the Initial Purchaser pursuant hereto and (y) issue
155,000 shares of its 6% common trust securities (and up to an additional
23,000 shares of such securities in connection with the issuance and sale of
the Option Securities) (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities") to the Company, in each case
with such rights and obligations as shall be set forth in the Declaration,
(ii) the Company shall sell such Convertible Subordinated Debentures to the
Trust in conjunction with the consummation of the sale of the Preferred
Securities to you contemplated hereby, (iii) the Preferred Securities will be
convertible into shares (the "Underlying Securities") of common stock, $1.00
par value, of the Company (the "Fleetwood Common Stock") and (iv) the Company
and The Bank of New York, as Guarantee Trustee (the "Guarantee Trustee"),
shall enter into a Guarantee Agreement with respect to the Preferred
Securities (the "Guarantee") for the benefit of holders from time to time of
the Preferred Securities. The Company and The Bank of New York, as trustee
(the "Debt Trustee"), have entered into an Indenture dated as of February 1,
1998 (the "Indenture") providing for the issuance of up to $7,750,000 in
aggregate principal amount of the Company's 6% Convertible Subordinated
Debentures due 2028 (the "Convertible Subordinated Debentures"). The
Preferred Securities together with the Underlying Securities and the
Guarantee are collectively hereinafter called the "Offered Securities".
The Preferred Securities will be offered and sold to the Initial Purchaser
without being registered under the Securities Act of 1933, as amended (the
"Act"), in reliance on exemptions therefrom provided by the Act and the rules
and regulations thereunder (the "Rules and Regulations").
In connection with the offer and sale of the Preferred Securities, the
Company, as sponsor of the Trust, has prepared a preliminary offering memorandum
dated January 21, 1998 (the "Preliminary Memorandum") and a final offering
memorandum dated the date hereof (such final offering memorandum, in the form
furnished to the Initial Purchaser for use in connection with the offering of
the Preferred Securities, or if such form is not so used, in the form
subsequently furnished for such use, the "Final Memorandum") for delivery to
prospective purchasers of the Offering Securities. Each of the Preliminary
Memorandum and the Final Memorandum includes certain information concerning,
among other things, the Trust, the Company, the Offered Securities and the
Convertible Subordinated Debentures. The Final Memorandum incorporates by
reference each document or report filed by the Company with the Securities and
Exchange Commission (the "Commission") pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date thereof and prior to the termination of the distribution of the
Preferred Securities as well as the Company's Proxy Statement and Annual Report
on Form 10-K for the fiscal year ended April 27, 1997, Quarterly Reports on Form
10-Q for the fiscal quarters ended July 27, 1997, and October 26, 1997 and
Current Reports on Form 8-K dated October 8, 1997, January 14, 1998 and January
23, 1998. As used herein, the terms "Preliminary Memorandum" and "Final
Memorandum" shall include in each case the documents incorporated by reference
therein, and any and all supplements
2
<PAGE>
and amendments to such documents incorporated by reference therein and any
and all amendments and supplements to the Preliminary Memorandum or the Final
Memorandum, as the case may be, and the term "Memorandum" shall consist of
the Preliminary Memorandum and the Final Memorandum. The terms "supplement,"
"amendment" and "amend" as used herein shall include all documents deemed to
be incorporated by reference in the Preliminary Memorandum or Final
Memorandum that are filed subsequent to the date of such memorandum with the
Commission pursuant to the Exchange Act.
The Trust and the Company understand that the Initial Purchaser proposes to
make an offering of the Preferred Securities only on the terms, subject to the
conditions and in the manner set forth in the Final Memorandum and Section 5
hereof, as soon as the Initial Purchaser deems advisable after this Agreement
has been executed and delivered.
The Initial Purchasers and other holders of Offered Securities
(including subsequent transferees) will be entitled to the benefits of the
registration rights agreement, to be dated as of the Closing Date (as defined
below) (the "Registration Rights Agreement") among the Trust, the Company and
the Initial Purchaser, in the form attached hereto as Exhibit D. Pursuant to
the Registration Rights Agreement, the Trust and the Company will agree to file
with the Securities and Exchange Commission (the "Commission") under the
circumstances set forth therein a shelf registration statement pursuant to Rule
415 under the Act relating to the resale of (i) the Preferred Securities, (ii)
the Convertible Subordinated Debentures and (iii) the shares of Underlying
Shares initially issuable upon conversion of the Convertible Subordinated
Debentures by holders thereof, and to use their best efforts to cause such shelf
registration statement to be declared effective.
2. AGREEMENT TO SELL AND PURCHASE.
(a) Subject to the terms and conditions and in reliance on the
representations and warranties of the Initial Purchaser set forth herein, the
Trust agrees to sell to the Initial Purchaser and, on the basis of the
representations, warranties and agreements of the Trust and the Company herein
contained and subject to all the terms and conditions of this Agreement, the
Initial Purchaser agrees to purchase from the Trust, at a purchase price of
$50.00 per Preferred Security plus accrued and unpaid distributions, if any, on
the Firm Securities as of the Closing Date (as defined below), all of the Firm
Securities.
(b) Subject to all the terms and conditions of this Agreement,
the Trust grants the Option to the Initial Purchaser to purchase up to 750,000
Option Securities from the Trust at the same purchase price per Preferred
Security as the Initial Purchaser shall pay for the Firm Securities plus any
accrued and unpaid distributions on the Option Securities as of the Option
Closing Date (as defined below). The Option may be exercised only to cover
over-allotments in the sale of the Firm Securities by the Initial Purchaser and
may be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date hereof, upon written or telegraphic notice
(the "Option Securities Notice") by the Initial Purchaser to the Trust and the
Company no later than 12:00 noon,
3
<PAGE>
New York City time, at least two and no more than five business days before
the date specified for closing in the Option Securities Notice (the "Option
Closing Date") setting forth the aggregate number of Option Securities to be
purchased and the time and date for such purchase. On the Option Closing
Date, the Trust will issue and sell to the Initial Purchaser the number of
Option Securities set forth in the Option Securities Notice, and the Initial
Purchaser will purchase the Option Securities.
(c) As compensation to the Initial Purchaser for its commitment
hereunder, and in view of the fact that the proceeds of the sale of the
Preferred Securities will be used by the Trust to purchase the Convertible
Subordinated Debentures of the Company, the Company hereby agrees to pay the
Initial Purchaser at the Closing Date and the Option Closing Date, if
applicable, an amount equal to $1.25 per Preferred Security.
3. DELIVERY AND PAYMENT. Delivery of one or more certificates in
definitive form for the Firm Securities that the Initial Purchaser has agreed to
purchase hereunder, and in such denomination or denominations and registered in
such name or names as the Initial Purchaser requests upon notice to the Trust
and the Company at least 48 hours prior to the Closing Date shall be made to the
Initial Purchaser at the offices of PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019, or at such other place as shall be agreed
among the Trust, the Company and the Initial Purchaser, against payment of the
purchase price by wire transfer of immediately available funds to such account
as the Trust shall specify at least 48 hours prior to the Closing Date. Such
payments shall be made at 10:00 a.m., New York City time, on February 10, 1998
or at such time on such other date as may be agreed upon by the Trust, the
Company and the Initial Purchaser (such date is hereinafter referred to as the
"Closing Date"). The certificates (including one or more global certificates),
if any, for the Firm Notes to be so delivered will be made available to the
Initial Purchaser at such office or at such other location in New York City as
the Initial Purchaser may reasonably request for checking at least one full
business day prior to the Closing Date. To the extent that the Initial
Purchaser so elects, delivery of the Firm Securities held in global certificates
may be made by credit through full fast transfer to the accounts at The
Depository Trust Company ("DTC") designated by the Initial Purchaser.
To the extent the Option is exercised, delivery of the Option
Securities against payment by the Initial Purchaser (in the manner specified
above) will take place at the time and date (which may be the Closing Date)
specified in the Option Securities Notice.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Securities and Option Securities by the Trust
to the Initial Purchaser shall be borne by the Trust and the Company. The Trust
and the Company will, jointly and severally, pay and save the Initial Purchaser
and any subsequent holder of the Preferred Securities harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
the Initial Purchaser of the Firm Securities and Option Securities.
4
<PAGE>
At the Closing Date and the Option Closing Date, if any, the Company
will pay, or cause to be paid, the commission payable at such time to the
Initial Purchaser under Section 2(c) hereof in immediately available funds.
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE COMPANY.
Each of the Trust and the Company, jointly and severally, represents and
warrants to, and agrees with, the Initial Purchaser that:
(a) The Company and each of the Company's subsidiaries is, and
at the Closing Date will be, a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation and has,
and at the Closing Date will have, full power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Final Memorandum; except where
the failure to have such power and authority would not have a Material Adverse
Effect (as defined below). The Company and each of its subsidiaries is, and at
the Closing Date will be, duly licensed or qualified to do business and in good
standing as a foreign corporation in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or leased by
it makes such licensing or qualification necessary except for such failures to
be licensed or qualified as would not materially and adversely affect the
business, properties, business prospects, condition (financial or otherwise) or
results of operation of the Trust or of the Company and its subsidiaries
considered as one enterprise (a "Material Adverse Effect"). All of the
outstanding shares (excluding the outstanding shares of Expression Homes
Corporation, which is 49% owned by the Company) of capital stock of the
Company's subsidiaries have been duly authorized and validly issued and are
fully paid and nonassessable and are owned by the Company free and clear of all
liens, encumbrances and claims (collectively, "Liens") whatsoever except for
such Liens as would not have a Material Adverse Effect. Complete and correct
copies of the certificate of incorporation and of the by-laws of the Company
have been delivered to counsel to the Initial Purchaser and complete and correct
copies of the certificate of incorporation and of the by-laws of each of its
subsidiaries set forth on Schedule A hereto and all amendments thereto have been
made available to counsel to the Initial Purchaser, and no changes therein will
be made subsequent to the date hereof and prior to the Closing Date or, if
later, the Option Closing Date.
(b) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act; all filings required
under the laws of the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made; under the Delaware
Act and the Declaration, the Trust has the business trust power and authority to
(x) own property and conduct its business, all as described in the Final
Memorandum, (y) enter into and perform its obligations under this Agreement, and
(z) issue and perform its obligations under the Preferred Securities and the
Common Securities and is not required to be authorized to do business in any
jurisdiction other than Delaware; the Trust is not a party to or otherwise bound
by any agreement other than those described in the Final Memorandum; the Trust
does not have any consolidated or
5
<PAGE>
unconsolidated subsidiaries; the Trust is and will be treated as a
consolidated subsidiary of the Company pursuant to generally accepted
accounting principles; and the Trust is not and, assuming compliance by the
Trust with the Declaration, will not be classified as an association taxable
as a corporation for United States federal income tax purposes.
(c) The Declaration has been duly and validly authorized by the
Company and, when executed and delivered by the Company and the Regular Trustees
(as defined in the Declaration) at the Closing Date, and assuming due
authorization, execution and delivery thereof by the Property Trustee and the
Delaware Trustee (as such terms are defined in the Declaration), will be the
valid and binding obligation of the Company and the Regular Trustees,
enforceable against the Company and the Regular Trustees in accordance with its
terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights generally
from time to time in effect and to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law)
and conforms to the description thereof contained in the Final Memorandum.
(d) The Final Memorandum does not, and on the Closing Date will
not, contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranty set forth in this sentence do not apply to statements or omissions in
the Final Memorandum based upon information relating to the Initial Purchaser
furnished to the Company in writing by the Initial Purchaser expressly for use
therein as specified in herein. The Company is subject to Section 13 or 15(d)
of the Exchange Act. The Company has timely filed with the Commission all the
documents that the Company was required to file with the Commission under
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (collectively, the "SEC
Documents"). The SEC Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange Act and
the rules, regulations and instructions of the Commission thereunder, and any
documents so filed and incorporated by reference in either Memorandum subsequent
to the date hereof will, when they are filed with the Commission, conform in all
material respects to the requirements of the Exchange Act and the rules,
regulations and instructions of the Commission thereunder.
(e) The Trust and the Company each have all trust and corporate
power, as the case may be, to enter into this Agreement and the Registration
Rights Agreement. This Agreement has been and, as of the Closing Date, the
Registration Rights Agreement will have been, duly authorized, executed and
delivered by each of the Trust and the Company and upon such execution by each
of the Trust and the Company (assuming the due authorization, execution and
delivery of such agreements by the other parties thereto) this Agreement and the
Registration Rights Agreement will constitute the valid and binding obligations
of each of the Trust and the Company enforceable against each of the Trust and
the Company in accordance with the terms hereof or thereof, subject to the
applicable
6
<PAGE>
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws affecting creditors rights generally from time to time in
effect and to general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing,
regardless of whether considered in a proceeding in equity or at law and
except as the enforcement of indemnification and contribution provisions
hereof and thereof may be limited by applicable law.
(f) The Indenture has been duly and validly authorized and will
be executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Debt Trustee, constitutes a valid and legally
binding agreement of the Company enforceable in accordance with its terms
(subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights generally
from time to time in effect and to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law);
and the Indenture conforms to the description thereof contained in the Final
Memorandum.
(g) The Preferred Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust in accordance with the
Declaration to the Initial Purchaser and paid for in accordance with this
Agreement, will be validly issued, and fully paid and nonassessable undivided
beneficial interests in the assets of the Trust and will be entitled to the
benefits of the Declaration; provided, however, the holders of the Preferred
Securities may be obligated, pursuant to the Declaration, (i) to provide
indemnity and/or security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of Preferred Securities and the
issuance of replacement Preferred Securities certificates, and (ii) to provide
security or indemnity in connection with requests of or directions to the
Property Trustee (as defined in the Declaration) to exercise its rights and
powers under the Declaration. The holders of the Preferred Securities, as
beneficial owners of the Trust, will be entitled to the same limitation of
personal liability as that extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware;
under the Delaware Act and the Declaration, the issuance of the Preferred
Securities will not be subject to preemptive or other similar rights; and the
Preferred Securities will conform to the description thereof in the Final
Memorandum.
(h) The Convertible Subordinated Debentures have been duly and
validly authorized by the Company and, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid for by the
Trust in accordance with the Final Memorandum, will constitute valid and legally
binding obligations of the Company enforceable in accordance with their terms
(subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights generally
from time to time in effect and to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law);
and the Convertible Subordinated Debentures will be in the form contemplated by,
and entitled to the benefits of,
7
<PAGE>
the Indenture and will conform to the description thereof contained in the
Final Memorandum.
(i) The Guarantee has been duly and validly authorized by the
Company and, when executed and delivered by the Company at the Closing Date,
will constitute a valid and legally binding agreement of the Company enforceable
in accordance with its terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether considered in
a proceeding in equity or at law); and the Guarantee will conform to the
description thereof contained in the Final Memorandum.
(j) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company against
payment therefor in accordance with the Declaration, will be validly issued and
fully paid and undivided beneficial interests in the assets of the Trust; under
the Delaware Act and the Declaration, the issuance of the Common Securities will
not be subject to preemptive or other similar rights; and at the Closing Date,
all of the issued and outstanding Common Securities of the Trust will be
directly owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(k) The Fleetwood Common Stock, the Registration Rights
Agreement and the Declaration conform in all material respects to the
description thereof in the Final Memorandum. The Underlying Securities have
been duly authorized and duly reserved for issuance and, upon issuance thereof
upon conversion of the Preferred Securities and the Convertible Subordinated
Debentures in accordance with the terms of the Preferred Securities, the
Declaration, the Convertible Subordinated Debentures and the Indenture, will be
validly issued, fully paid and nonassessable shares of Fleetwood Common Stock
and will be issued free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest and will not be subject to any
preemptive rights, co-sale rights, rights of first refusal or other rights to
subscribe for or purchase the Fleetwood Common Stock.
(l) The descriptions of the Preferred Securities, the Common
Securities, the Guarantee and the Convertible Subordinated Debentures in the
Final Memorandum are, and at the Closing Date will be, complete and accurate in
all material respects. Each of the Declaration and the Indenture conforms to
the description thereof contained in the Final Memorandum in all material
respects.
(m) The financial statements and schedules of the Company
together with the notes thereto included in the Final Memorandum, and any
amendment or supplement thereto, present fairly the consolidated financial
condition of the Company as of the respective dates thereof and the consolidated
results of operations and cash flows of the Company for the respective periods
covered thereby, all in conformity with generally
8
<PAGE>
accepted accounting principles applied on a consistent basis throughout the
entire period involved, except as otherwise disclosed in the Final
Memorandum. Arthur Andersen LLP (the "Accountants"), who have reported on
such financial statements and schedules, are independent accountants within
the meaning of the Act and the Rules and Regulations.
(n) Each of the Trust and the Company maintains a system of
internal accounting control sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(o) Subsequent to the respective dates as of which information
is given in the Final Memorandum and prior to the Closing Date, except as set
forth in or contemplated by the Final Memorandum, (i) there has not been and
will not have been any change in the capitalization of the Trust or material
adverse change in the capitalization of the Company, or any material adverse
change in the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Trust or the Company and its
subsidiaries considered as one enterprise, (ii) neither the Trust nor the
Company nor any of its subsidiaries has incurred nor will incur any material
liabilities or obligations, direct or contingent, nor have they entered into nor
will they enter into any material transactions other than pursuant to this
Agreement and the transactions referred to herein or, in the case of the Company
and its subsidiaries, in the ordinary course of business, and (iii) the Trust
has not and will not have paid or declared any distributions of any kind on any
class of its securities.
(p) Except for subsequent issuances, if any, pursuant to this
Agreement or upon issuance of stock or exercise of stock options or warrants
pursuant to employee benefit plans, the Company has the authorized, issued and
outstanding capitalization set forth in the Final Memorandum under the caption
"Capitalization"; all of the outstanding capital stock of the Company has been
duly authorized and validly issued, is fully paid and nonassessable; and the
authorized capital stock of the Company conforms in all material respects to the
statements relating thereto in the Final Memorandum.
(q) Each of the Preferred Securities, the Preferred Securities
Guarantee and the Convertible Subordinated Debentures satisfy the eligibility
requirements of Rule 144A(d)(3) under the Act.
(r) None of the Trust, the Company, any of their affiliates (as
such term is defined in Rule 501(b) of Regulation D under the Act ("Regulation
D")), or any person acting on behalf of the foregoing (other than the Initial
Purchaser, as to which no representation or warranty is made) has, directly or
indirectly, made offers or sales of any
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<PAGE>
security, or solicited offers to buy the Offered Securities, under
circumstances that would require the registration of the Offered Securities
under the Act.
(s) None of the Trust, the Company or any of their affiliates
(as such term is defined in Rule 501(b) of Regulation D) or any person (other
than the Initial Purchaser, as to which no representation or warranty is made)
acting on the Trust's or the Company's behalf has engaged, in connection with
the offering of the Offered Securities, (A) in any form of general solicitation
or general advertising within the meaning of Rule 502(c) under the Act or (B) in
any directed selling efforts within the meaning of Rule 902 under the Act in the
United States in connection with the Offered Securities being offered and sold
pursuant to Regulation S under the Act, and each of them has complied with the
offering restrictions requirement of Regulation S under the Act.
(t) Assuming the accuracy of the representations and warranties
and compliance with the agreements of the Initial Purchaser in Section 5, it is
not necessary in connection with the offer, sale and delivery of the Preferred
Securities to the Initial Purchaser, or in connection with the initial resale of
the Preferred Securities by the Initial Purchaser in accordance with this
Agreement, to register the Offered Securities under the Act or to qualify the
Indenture, the Guarantees or the Declaration under the Trust Indenture Act of
1939, as amended (the "TIA").
(u) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act in
connection with the sale and offering of the Debentures.
(v) Neither the Company nor any of the subsidiaries is in
violation of its respective charter and the Trust is not in violation of the
Declaration, and none of the Company, any of the subsidiaries or the Trust is in
default (or, with notice or lapse of time or both, would be in default) in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan agreement,
note, lease or other instrument to which it is a party or by which it is bound,
or to which any of its respective assets or properties is subject, which default
or violation, in the case of the Company and its subsidiaries, would have a
Material Adverse Effect.
(w) At the Closing Date and the Option Closing Date, all of the
issued and outstanding Common Securities of the Trust will be owned by the
Company free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(x) At the Closing Date and the Option Closing Date, the
Property Trustee will be the record holder of the Convertible Subordinated
Debentures and no security interest, mortgage, pledge, lien, encumbrance, claim
or equity will be noted thereon or on the Debenture register maintained by or on
behalf of the Company.
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(y) The execution, delivery and performance by the Company of
this Agreement, the Indenture, the Convertible Subordinated Debentures, the
Declaration and the Guarantee and the execution, delivery and performance by the
Trust of this Agreement and the Trust Securities, the performance by the Trust
of the Declaration and the consummation of the transactions contemplated hereby
and thereby and compliance by the Company and the Trust, as the case may be,
with the terms hereof and thereof and the application of the net proceeds from
the offering and sale of the Trust Securities to be sold by the Trust and the
Convertible Subordinated Debentures to be sold by the Company in the manner set
forth in the Final Memorandum under "Use of Proceeds" will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Trust (other than the creation of a lien on the Convertible Subordinated
Debentures in favor of the holders of the Trust Securities as provided in the
Declaration) or the Company or any of its subsidiaries pursuant to the terms or
provisions of, or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, the Declaration, the certificate of incorporation or by-laws
of the Company or any of its subsidiaries, any contract or other agreement to
which the Trust or the Company or any of the subsidiaries is a party or by which
the Trust or the Company or any of the subsidiaries or any of their respective
properties is bound or affected, or violate or conflict with any judgment,
ruling, decree, order, statute, rule or regulation of any court or governmental
agency or body applicable to the business or properties of the Trust or the
Company or any of its subsidiaries except for any of the foregoing which would
not have a Material Adverse Effect.
(z) No holder of securities of the Company, other than holders
of the Offered Securities, has rights to the registration of any securities of
the Company because of the offering of the Offered Securities or will have such
rights upon the filing of the shelf registration statement referred to in
Section 1 above.
(aa) Neither the Trust nor the Company is an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(ab) Except as set forth in the Final Memorandum, there are no
actions, suits or proceedings pending or threatened against or affecting the
Trust or the Company or any of its subsidiaries or any of their respective
officers in their capacity as such, before or by any Federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding would
reasonably be expected to have a Material Adverse Effect.
(ac) Each of the Trust and the Company and each of its
subsidiaries has, and at the Closing Date will have, (i) all governmental
licenses, permits, consents, orders, approvals and other authorizations
necessary to carry on its business as contemplated in the Final Memorandum, (ii)
complied in all respects with all laws, regulations and orders
11
<PAGE>
applicable to it or its business and (iii) performed all obligations required
to be performed by it, and is not, and at the Closing Date will not be, in
default, under any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement, lease, contract
or other agreement or instrument (collectively, a "contract or other
agreement") to which it is a party or by which its property is bound or
affected, except in the case of (i), (ii) or (iii) above, for such failures
to possess, comply or perform as would not have a Material Adverse Effect.
None of the Trust, the Company nor any of its subsidiaries is, nor at the
Closing Date will any of them be, in violation of its respective Declaration,
charter or by-laws.
(ad) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
in connection with the authorization, issuance, transfer, sale or delivery of
the Trust Securities by the Trust or the Guarantee and the Convertible
Subordinated Debentures by the Company, in connection with the execution,
delivery and performance of this Agreement by the Trust and the Company or in
connection with the taking by the Trust or the Company of any action
contemplated hereby and in the Indenture, the Guarantee, the Preferred
Securities and the Common Securities in connection with the purchase and
distribution by the Initial Purchaser of the Preferred Securities.
(ae) Except as disclosed in the Final Memorandum, there is no
claim pending or to the knowledge of the Company threatened under any
Environmental Law (as defined below) against the Company or the subsidiaries
which could reasonably be expected, singly or in the aggregate, to result in a
Material Adverse Effect; to the knowledge of the Company there are no past or
present actions, conditions, events, circumstances or practices, including,
without limitation, the release of any Hazardous Material (as defined below)
that could reasonably be expected to form the basis of any such claim under any
Environmental Law against the Company or the subsidiaries which would, singly or
in the aggregate, result in a Material Adverse Effect. The term "Environmental
Law" means the common law and any federal, state, local or foreign law, rule or
regulation, code, order, decree, judgment or injunction, issued, promulgated,
approved or entered thereunder relating to pollution or protection of public or
employee health or the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, the Resource Conservation and Recovery Act, as amended, the Toxic
Substance Control Act, as amended, the Clean Air Act, as amended, and the
Federal Water Pollution Act, as amended, and their foreign, state and local
counterparts or equivalents and any other laws relating to (i) releases of any
Hazardous Material into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, presence or handling of any Hazardous Material, or (iii) underground
storage tanks and related piping, and releases therefrom. The term "Hazardous
Material" means any pollutant, contaminant, chemical, hazardous material, or
industrial, toxic or hazardous substance or waste (including, without
limitation, petroleum, including crude oil or any
12
<PAGE>
fraction thereof or any petroleum product) regulated by or the subject of any
Environmental Law.
(af) No statement, representation, warranty or covenant made by
the Trust or the Company in this Agreement, the Indenture or the Declaration or
made in any certificate or document required by this Agreement to be delivered
to the Initial Purchaser was or will be, when made, inaccurate, untrue or
incorrect in any material respect.
(ag) None of the Trust, the Company or any of its subsidiaries is
involved in any material labor dispute nor, to the knowledge of the Trust or the
Company, is any such dispute threatened which could reasonably be expected to
have a Material Adverse Effect.
(ah) The Company and its subsidiaries own, or are licensed or
otherwise have the full right to use, all material trademarks and trade names
which are used in or necessary for the conduct of their respective businesses as
described in the Final Memorandum. No claims have been asserted by any person
to the use of any such trademarks or trade names or challenging or questioning
the validity or effectiveness of any such trademark or trade name except such
claims as would not reasonably be expected to have a Material Adverse Effect.
The use, in connection with the business and operations of the Company and its
subsidiaries of such trademarks and trade names does not, to the Company's
knowledge, infringe on the rights of any person except such infringements as
would not reasonably be expected to have a Material Adverse Effect.
(ai) None of the Trust, the Company or any of its subsidiaries
or, to the Trust's or the Company's knowledge, any employee or agent of the
Trust, the Company or any subsidiary has made any payment of funds of the Trust,
the Company or any subsidiary or received or retained any funds in violation of
any law, rule or regulation or of a character required to be disclosed in the
Final Memorandum.
(aj) Any certificate signed by any officer of the and delivered
to the Initial Purchaser or to counsel for the Initial Purchaser pursuant to the
terms of this Agreement shall be deemed a representation and warranty by the
Company to the Initial Purchaser as to the matters covered thereby.
(ak) The Company maintains insurance with respect to its
properties and business of the types and in amounts the Company reasonably deems
adequate for its business, all of which insurance is in full force and effect.
(al) The Company has filed all material federal, state and
foreign income and franchise tax returns and has paid all taxes shown as due
thereon, other than taxes which are being contested in good faith and for which
adequate reserves have been established in accordance with generally accepted
accounting principles ("GAAP"); and the Company has no knowledge of any tax
deficiency which has been or might be asserted or
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<PAGE>
threatened against the Company. There are no tax returns of the Company or
any of its subsidiaries that are currently being audited by state, local or
federal taxing authorities or agencies (and with respect to which the Company
or any subsidiary of the Company has received notice), where the findings of
such audit, if adversely determined, would result in a Material Adverse
Effect.
(am) With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained or contributed to by the Company, or with
respect to which the Company could incur any liability under ERISA
(collectively, the "Benefit Plans"), no event has occurred and, to the best
knowledge of the Company, there exists no condition or set of circumstances, in
connection with which the Company could be subject to any liability under the
terms of such Benefit Plan, applicable law (including, without limitation, ERISA
and the Internal Revenue Code of 1986, as amended) or any applicable agreement
that could have a Material Adverse Effect.
(an) The Company and the Trust have not done anything and will
not do anything in connection with the issuance and sale of the Offered
Securities that is violative of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.
5. OFFERING OF SECURITIES. The Initial Purchaser represents and
warrants to, and agrees with, the Trust and the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Preferred Securities except (i) to those institutions it reasonably believes to
be qualified institutional buyers (as defined in Rule 144A under the Securities
Act), (ii) to a limited number of institutional investors that qualify as
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Act or (iii) in offshore transactions within the meaning and meeting the
requirements of Rule 903 under the Act.
(b) Neither it, nor any of its Affiliates, nor any person acting
on its behalf has made or will make offers or sales of the Preferred Securities
in the United States by means of any form of general solicitation or general
advertising (within the meaning of Rule 502(c) under Regulation D under the Act)
in the United States.
(c) Neither it, nor any of its Affiliates, nor any person acting
on its or their behalf has engaged in any "directed selling efforts" (as defined
in Regulation S under the Act) with respect to the Preferred Securities.
(d) It is an "accredited investor" (within the meaning of Rule
501 of Regulation D under the Act).
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<PAGE>
(e) It will comply with all applicable laws and regulations in
each jurisdiction in which it purchases, offers, sell or delivers Preferred
Securities or has in its possession or distributes either Memorandum, any
amendment or supplement thereto or any other offering or publicity material
relating to the Preferred Securities.
(f) It will notify the Company of the completion of the
distribution of the Preferred Securities as promptly as practicable upon such
completion.
6. AGREEMENTS OF THE TRUST AND THE COMPANY. The Trust and the
Company, jointly and severally, agree with the Initial Purchaser as follows:
(a) The Company and the Trust will not, either prior to the
Closing Date or thereafter, distribute any amendment or supplement to the Final
Memorandum, unless a copy thereof shall first have been submitted to the Initial
Purchaser within a reasonable period of time prior to any distribution thereof
and the Initial Purchaser shall not have objected thereto in good faith.
(b) The Trust and the Company will notify the Initial Purchaser
promptly, and will confirm such advice in writing, of (i) the happening of any
event during the period mentioned in the third sentence of Section 6(c) that in
the judgment of the Trust or the Company makes any statement made in the Final
Memorandum untrue or that requires the making of any changes in the Final
Memorandum in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading, and (ii) receipt by the
Trust or the Company or any representative or attorney of the Trust or the
Company of any other communication from the Commission relating to the Trust or
the Company, any Preliminary Memorandum or the Final Memorandum. If at any time
the Commission shall issue any order suspending the use of any Preliminary
Memorandum or the Final Memorandum, the Trust and the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment.
(c) The Company will deliver to the Initial Purchaser, without
charge, as many copies of the Preliminary Memorandum and Final Memorandum and
any amendment or supplement thereto, as the Initial Purchaser may reasonably
request. The Company and the Trust consent to the use of the Preliminary
Memorandum or Final Memorandum and any amendment or supplement thereto, as the
case may be, by the Initial Purchaser, in connection with the offering or sale
of the Preferred Securities. If during such period of time any event shall
occur which in the judgment of the Trust or the Company or the Initial Purchaser
or counsel to the Initial Purchaser should be set forth in the Final Memorandum
in order to make any statement therein, in the light of the circumstances under
which it was made, not misleading in any material respect, or if it is necessary
to supplement or amend the Final Memorandum to comply with law, the Company will
forthwith prepare an appropriate supplement or amendment thereto, and will
deliver to the Initial Purchaser, without charge, such number of copies thereof
as the Initial Purchaser may reasonably request. The Company shall not file any
document under the Exchange Act before the
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<PAGE>
termination of the offering of the Preferred Securities by the Initial
Purchaser if such document would be deemed to be incorporated by reference
into the Final Memorandum without reasonable notice to the Initial Purchaser.
The Trust and the Company agree to notify the Initial Purchasers in writing
to suspend use of the Final Memorandum as promptly as practicable after the
occurrence of an event specified in this Section 6(c), and the Initial
Purchaser hereby agrees upon receipt of such notice from the Trust and the
Company to suspend use of the Final Memorandum until the Trust and the
Company have amended or supplemented the Final Memorandum to correct such
misstatement or omission or to effect such compliance.
(d) Notwithstanding any provision of Section 6(b) or Section
6(c) to the contrary, however, the Trust's and the Company's obligations under
Section 6(b) and Section 6(c) and the Initial Purchasers obligations under
Section 6(c) shall terminate on the earlier to occur of (i) the effective date
of a shelf registration statement with respect to the Offered Securities filed
pursuant to the Registration Rights Agreement and (ii) the date upon which the
Initial Purchaser and its affiliates cease to hold Offered Securities acquired
as part of their initial distribution.
(e) Neither the Company, the Trust nor any of their affiliates
(as defined in Rule 501(b) under the Act), nor any person acting on behalf of
the foregoing (other than the Initial Purchasers), will engage in any form of
general solicitation or general advertising (within the meaning of Regulation D)
in connection with any offer or sale of the Offered Securities in the United
States, or engage in any directed selling efforts (as defined in Rule 902 under
the Act) with respect to the Offered Securities prior to the effectiveness of a
registration statement with respect to the Offered Securities, and each of them
will comply with the offering restrictions requirement of Regulation S. Terms
used in this clause 5(e) have the meanings given to them by Regulation S.
(f) Neither the Company nor any of its affiliates (including the
Trust) (as defined in Rule 501(b) under the Act) will, directly or indirectly,
make offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the Offered
Securities under the Act.
(g) So long as any of the Offered Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, the Company
will, during any period in which it is not subject to and in compliance with,
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), provide to each holder of such restricted securities and to
each prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Act. This
covenant is intended to be for the benefit of the holders, and the prospective
purchasers designated by such holders, from time to time of such restricted
securities.
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(h) Each Preferred Security (and each Convertible Subordinated
Debenture distributed to holders of Preferred Securities pursuant to the terms
of the Declaration) will bear the following legend until such legend shall no
longer be necessary or advisable because the Preferred Securities (or the
Convertible Subordinated Debentures) are no longer subject to the restrictions
on transfer described herein:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH FLEETWOOD
CAPITAL TRUST (THE "TRUST"), FLEETWOOD ENTERPRISES, INC. (THE
"COMPANY") OR ANY AFFILIATE OF THE FOREGOING WAS THE OWNER OF THIS
SECURITY (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE
TRUST OR THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1) (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO,
OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
17
<PAGE>
TO THE TRUST'S, THE COMPANY'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSES (D), (E) OR (F)
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR
TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
(i) Each Underlying Share, if any, will bear the following
legend until such legend shall no longer be necessary or advisable because the
Underlying Shares are no longer subject to the restrictions on transfer
described herein:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER
OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THE CONVERTIBLE
SUBORDINATED DEBENTURES UPON THE CONVERSION OF WHICH THE CLASS B
COMMON STOCK EVIDENCED HEREBY WAS ISSUED AND THE LAST DATE ON WHICH
FLEETWOOD CAPITAL TRUST (THE "TRUST"), FLEETWOOD ENTERPRISES, INC.
(THE "COMPANY") OR ANY AFFILIATE OF THE FOREGOING WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE
RESTRICTION TERMINATION DATE"), ONLY (A) TO THE COMPANY, (B) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE CLASS B COMMON STOCK IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN
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RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2),
(3) or (7) OF RULE 501 UNDER THE SECURITIES THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE TRUST'S, THE COMPANY'S AND THE TRANSFER
AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
(j) The Company will, or will cause the Trust to, arrange for
the registration and qualification of the Offered Securities for offering and
sale under the applicable securities or "blue sky" laws of such states and
other jurisdictions as the Initial Purchaser may reasonably designate in
connection with the resale of the Offered Securities as contemplated by this
Agreement and the Final Memorandum and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of the
Offered Securities; PROVIDED that in no event shall the Trust or the Company be
obligated to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to so qualify but
for this Section 6(j), (ii) file any general consent to service of process in
any jurisdiction where it is not at the Closing Date then so subject or (iii)
subject itself to taxation in any such jurisdiction if it is not so subject.
The Company will, or will cause the Trust to, file such statements and reports
as may be required by the laws of each jurisdiction to continue such
qualification in effect for a period that will terminate when all Offered
Securities to be sold subject to such qualification have been sold or withdrawn.
The Company shall promptly advise the Initial Purchaser of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of the Offered Securities for offering or sale
in any jurisdiction or the institution of any proceeding for such purpose.
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(k) The Trust will apply the net proceeds from the offering and
sale of the Preferred Securities in the manner set forth in the Final Memorandum
under the caption "Use of Proceeds."
(l) During a period of 90 days from the date hereof, neither the
Trust nor the Company will, without the Initial Purchaser's prior written
consent, directly or indirectly, offer, pledge, sell, sell any option or
contract to purchase any option or contract to sell, contract to sell, grant any
option to sell, or otherwise transfer or dispose of (each such action, a
"Disposition"), (i) any Preferred Securities, any equity security convertible
into or exchangeable into or exercisable for, Preferred Securities, (ii)
Convertible Subordinated Debentures or any debt securities substantially similar
to the Convertible Subordinated Debentures, (iii) any equity securities
substantially similar to the Preferred Securities, except for the Convertible
Subordinated Debentures, Preferred Securities and the Common Securities, (iv)
any preferred stock or any other security of the Company that is substantially
similar to the Preferred Securities, (v) any shares of any class of common stock
of the Company (other than shares of Fleetwood Common Stock issuable upon
conversion of the Preferred Securities or pursuant to the exercise of options
and warrants outstanding as of the date hereof, the grant of stock options or
other stock-based awards (and the exercise or vesting thereof) to directors,
officers and employees of the Company or its subsidiaries or (vi) any other
securities which are convertible into, or exercisable or exchangeable for, any
of such securities; or enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of any equity
securities of the Company, the Trust or any similar trust each, a "Company
Security", whether any such transaction is to be settled by delivery of equity
securities of the Company, the Trust or any similar trust, cash or otherwise.
For the avoidance of doubt, it is acknowledged that debt securities
substantially similar to the Convertible Subordinated Debentures would be debt
securities that have substantially the same rate, maturity and other provisions
as the Convertible Subordinated Debentures.
(m) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay
or cause to be paid, or reimburse if paid by the Initial Purchaser, all costs
and expenses incident to the performance of the obligations of the Trust and the
Company under this Agreement, including but not limited to (i) the preparation
and printing of each Preliminary Memorandum, the Final Memorandum, any amendment
or supplement thereto and the Indenture, (ii) the preparation and delivery of
certificates representing the Trust Securities, (iii) furnishing (including cost
of shipping, mailing and courier) such copies of the Final Memorandum and any
Preliminary Memorandum, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Offered
Securities by the Initial Purchaser, (iv) the qualification of the Offered
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 6(j), including the fees,
disbursements and other charges of counsel to the Initial Purchaser in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (v) fees and disbursements of counsel
to the
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Company and the Trust, (vi) the fees and expenses of the transfer agent and
registrar for the Trust Securities, (vii) any fees charged by rating agencies
with respect to the rating of the Offered Securities by one or more rating
agencies, (viii) the fees and expenses of the Debt Trustee under the
Indenture, the Guarantee Trustee under the Guarantee, the Property Trustee,
the Delaware Trustee and the Regular Trustees under the Declaration and any
agents of such trustees and the fees, disbursements and other charges of
counsel for such trustees in connection with the Indenture, the Guarantee,
the Declaration and the Convertible Subordinated Debentures, and (ix) the
fees and disbursements of the Accountants.
(n) If this Agreement shall be terminated pursuant to any of the
provisions of Section 7 or Section 10 hereof or if for any reason the Company or
the Trust shall be unable to perform its obligations hereunder, the Company or
the Trust will reimburse the Initial Purchaser for all out-of-pocket expenses
(including the fees, disbursements and other charges of counsel to the Initial
Purchaser) reasonably incurred by it in connection herewith.
(o) The Company will not claim the benefit of any usury law
against any holders of Convertible Subordinated Debentures or Preferred
Securities.
7. CONDITIONS OF OBLIGATIONS OF THE INITIAL PURCHASER. The
obligations of the Initial Purchaser to purchase and pay for the Preferred
Securities shall, in its sole discretion, be subject to the satisfaction or
waiver of the following conditions on or prior to the Closing Date:
(a) The Issuance and sale of the Preferred Securities pursuant
to this Agreement and of the Common Securities and the Convertible Subordinated
Debentures shall not be enjoined (temporarily or permanently) and no restraining
order or other injunctive order shall have been issued on any action, suit or
proceeding shall have been commenced with respect to this Agreement before any
court or governmental authority.
(b) Since the respective dates as of which information is given
in the Final Memorandum (i) there shall not have been a material adverse change
in the business, business affairs, business prospects, properties, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries, considered as one enterprise, whether or not arising from
transactions in the ordinary course of business, in each case other than as set
forth in or contemplated by the Final Memorandum, and (ii) neither the Company
nor any of its subsidiaries shall have sustained any material loss or
interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, which
is not set forth in the Final Memorandum if, in the sole judgment of the Initial
Purchaser, any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Offered Securities by the Initial
Purchaser in accordance with the terms and in the manner hereof and thereof.
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(c) Since the respective dates as of which information is given
in the Preliminary Memorandum, there shall have been no litigation or other
proceeding instituted against the Trust, the Company or any of its subsidiaries
or any of their respective officers or directors in their capacities as such,
before or by any federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding could
reasonably be expected to materially and adversely affect the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries considered as one enterprise.
(d) Each of the representations and warranties of the Company
and the Trust contained herein shall be true and correct in all material
respects on the Closing Date and, with respect to the Option Securities, on the
Option Closing Date, if applicable, as if made on the Closing Date, or on the
Option Closing Date, if applicable, and all covenants and agreements herein
contained to be performed on the part of the Trust and the Company and all
conditions herein contained to be fulfilled or complied with by the Company or
the Trust on or prior to the Closing Date and, with respect to the Option
Securities, on or prior to the Option Closing Date, if applicable, shall have
been duly performed, fulfilled or complied with.
(e) The Initial Purchaser shall have received an opinion of
Gibson, Dunn & Crutcher LLP, special counsel for the Trust and the Company,
dated the Closing Date and, with respect to the Option Securities, the Option
Closing Date, addressed to the Initial Purchaser, in form and substance
satisfactory to counsel for the Initial Purchaser and substantially in the form
of Exhibit A.
(f) The Initial Purchaser shall have received an opinion of
William H. Lear, Vice President-General Counsel and Secretary of the Company,
dated the Closing Date and, with respect to the Option Securities, the Option
Closing Date, addressed to the Initial Purchaser, in form and substance
satisfactory to counsel for the Initial Purchaser and substantially in the form
of Exhibit B.
(g) The Initial Purchaser shall have received an opinion of
Morris, Nichols, Arsht & Tunnell, special Delaware counsel to the Trust, dated
the Closing Date and, with respect to the Option Securities, the Option Closing
Date, addressed to the Initial Purchaser, in form and substance satisfactory to
counsel for the Initial Purchaser and substantially in the form of Exhibit C.
(h) The Initial Purchaser shall have received an opinion, dated
the Closing Date and, with respect to the Option Securities, the Option Closing
Date, from Brown & Wood LLP, counsel to the Initial Purchaser, which opinion
shall be satisfactory in form and substance to the Initial Purchaser, with
respect to certain legal matters relating to this Agreement, and such other
related matters as the Initial Purchaser may reasonably require. In rendering
such opinion, Brown & Wood LLP shall have received and may rely
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upon such certificates and other documents and information as they may
reasonably request to pass upon such matters.
(i) At the Closing Time, the Trust shall have received opinions
of Morris, Nichols, Arsht & Tunnell, with respect to the Delaware Trustee, dated
as of the Closing Time substantially in the forms set forth in Exhibit D.
(j) At the Closing Date, the Company shall have received the
favorable opinion of Gibson, Dunn & Crutcher LLP, special tax counsel to the
Company and the Trust, dated as of the Closing Date substantially in the form
set forth in Exhibit E.
(k) On the Closing Date and any Option Closing Date, the Initial
Purchaser shall have received a certificate of the Company, in its capacity as
Sponsor of the Trust and on its own behalf, signed by the Chairman and Chief
Executive Officer or the President and by the Chief Financial Officer of the
Company, dated the date of its delivery, to the effect that:
(i) Each of the representations and warranties of the
Trust and the Company contained in this Agreement were, when originally
made, and are, at the time such certificate is delivered, true and
correct in all material respects;
(ii) Each of the covenants required herein to be
performed by the Trust and the Company on or prior to the delivery of
such certificate has been duly, timely and fully performed and each
condition herein required to be complied with by the Trust and the
Company on or prior to the date of such certificate has been duly,
timely and fully complied with; and
(iii) Since the respective dates as of which
information is given in the Final Memorandum, (A) there has not been,
and no development has occurred which could reasonably be expected to
result in, a material adverse change in the business, business affairs,
business prospects, properties, condition (financial or otherwise) or
results of operations of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, in each case other than as set forth in or contemplated by
the Final Memorandum and (B) neither the Company nor any of its
subsidiaries has sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or decree,
which is not set forth in the Final Memorandum.
(l) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Initial Purchaser a
letter, dated the date of its delivery, addressed to the Initial Purchaser and
in form and substance satisfactory to the Initial Purchaser, confirming that
they are independent accountants with respect to the Trust
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and the Company as required by the Act and the Rules and Regulations and with
respect to the financial and other statistical and numerical information
contained in the Preliminary Memorandum or incorporated by reference therein.
On the Closing Date and, as to the Option Securities, the Option Closing
Date, if applicable, the Accountants shall have furnished to the Initial
Purchaser a letter, dated the date of its delivery, which shall confirm, on
the basis of a review in accordance with the procedures set forth in the
letter from the Accountants, that nothing has come to their attention during
the period from the date of the letter referred to in the prior sentence to a
date (specified in the letter) not more than three days prior to the Closing
Date and the Option Closing Date, if applicable, which would require any
change in their letter dated the date hereof if it were required to be dated
and delivered on the Closing Date and the Option Closing Date, if applicable.
(m) The Offered Securities shall be qualified for sale in such
states as the Representative may reasonably request, each such qualification
shall be in effect and not subject to any stop order or other proceeding on the
Closing Date or the Option Closing Date, if applicable.
(n) The Company and the Trust shall have executed and delivered
to the Initial Purchaser on the Closing Date the Registration Rights Agreement
(the "Registration Rights Agreement").
(o) The Company shall have obtained and delivered to the Initial
Purchaser an agreement from each executive officer and director of the Company
in writing on or prior to the date hereof, in form and substance satisfactory to
counsel for the Initial Purchase and substantially in the form of Exhibit F
hereto.
(p) The Trust and the Company shall have furnished to the
Initial Purchaser such certificates, in addition to those specifically mentioned
herein, as the Initial Purchaser may have reasonably requested as to the
accuracy and completeness on the Closing Date and the Option Closing Date, if
applicable, of any statement in the Final Memorandum or any documents filed
under the Exchange Act and deemed to be incorporated by reference into the Final
Memorandum, as to the accuracy on the Closing Date and the Option Closing Date,
if applicable, of the representations and warranties of the Trust and the
Company herein, as to the performance by the Trust and the Company of their
respective obligations hereunder, or as to the fulfillment of the conditions
concurrent and precedent to the obligations hereunder of the Initial Purchaser,
each in form and substance satisfactory to the Initial Purchaser.
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8. INDEMNIFICATION.
(a) The Trust and the Company, jointly and severally, will
indemnify and hold harmless the Initial Purchaser, its directors, officers,
employees and agents and each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, liabilities, expenses and damages
(including, but not limited to, any and all investigative, legal and other
expenses reasonably incurred in connection with, and any and all amounts paid in
settlement of, any action, suit or proceeding between any of the indemnified
parties and any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), as and when incurred, to
which the Initial Purchaser, or any such person, may become subject under the
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based on (i) any untrue statement or alleged
untrue statement of a material fact contained in any Memorandum or in any
application or other document executed by or on behalf of the Company or based
on written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Offered Securities under the securities
laws thereof or filed with the Commission, (ii) the omission or alleged omission
to state in such document a material fact required to be stated in it or
necessary to make the statements in it not misleading or (iii) any act or
failure to act or any alleged act or failure to act by any Initial Purchaser,
its directors, officers, employees and agents and each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, in connection with, or relating in any manner
to, the Preferred Securities, the Guarantee, the Convertible Subordinated
Debentures or the Fleetwood Common Stock or the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, liability,
expense or damage arising out of or based upon matters covered by clause (i) or
(ii) above (provided that the Trust or the Company shall not be liable under
this clause (iii) to the extent it is finally judicially determined by a court
of competent jurisdiction that such loss, claim, liability, expense or damage
resulted directly form any such acts or failures to act undertaken or omitted to
be taken by such Initial Purchaser through its gross negligence or willful
misconduct); provided that neither the Company nor the Trust will be liable to
the extent that such loss, claim, liability, expense or damage arises from the
sale of the Offered Securities to any person by the Initial Purchaser and is
based on an untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to the Initial
Purchaser furnished in writing to the Company or the Trust by the Initial
Purchaser expressly for inclusion in the Final Memorandum provided, however,
that the foregoing indemnity with respect to the Preliminary Memorandum shall
not inure to the benefit of the Initial Purchaser, or any person controlling
such Initial Purchaser, if the Company had previously furnished copies of the
Final Memorandum to the Initial Purchaser within a reasonable amount of time
prior to the time that written confirmations are sent out to purchasers of the
Offered Securities and if a copy of the Final Memorandum (as then amended or
supplemented) was not sent to or given by or on behalf of such Initial Purchaser
to such person, and was required by law to have been so delivered, at or prior
to the time
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<PAGE>
that written confirmation of the sale of the Preferred Securities was
provided to such person and if the Final Memorandum (as so amended or
supplemented) would have cured the defect given rise to such losses, claims,
damages or liabilities.
This indemnity agreement will be in addition to any liability which the
Trust and the Company might otherwise have including under this Agreement.
(b) The Initial Purchaser will indemnify and hold harmless (i)
the Trust, the Trustees, its officers and any person controlling the Trust
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the Company, its directors, its officers and each other person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, in each case to the same extent as the foregoing
indemnity from the Trust and the Company to the Initial Purchaser, but only
insofar as losses, liabilities, claims, expenses or damages arise out of or are
based upon any untrue statement or omission or alleged untrue statement or
omission, made in reliance on and in conformity with written information
relating to the Initial Purchaser furnished to the Trust or the Company by the
Initial Purchaser expressly for use in the Final Memorandum. This indemnity
will be in addition to any liability that the Initial Purchaser may otherwise
have; provided, however, that in no case shall any Initial Purchaser be liable
or responsible for any amount in excess of the total commissions received by the
Initial Purchaser in connection with the Preferred Securities.
(c) Any party that proposes to assert the right to be
indemnified under this Section 8 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 8, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 8 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its commencement,
the indemnifying party will be entitled to participate in and, to the extent
that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly notified, to assume
the defense of the action, with counsel satisfactory to the indemnified party,
and after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based
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<PAGE>
on advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict
exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf
of the indemnified party), or (4) the indemnifying party has not in fact
employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of
which cases the reasonable fees, disbursements and other charges of counsel
will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction at any one time
for all such indemnified party or parties. All such fees, disbursements and
other charges will be reimbursed by the indemnifying party promptly as they
are incurred. An indemnifying party will not be liable for any settlement of
any action or claim effected without its written consent (which consent will
not be unreasonably withheld). No indemnifying party shall, without the
prior written consent of each indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim,
action or proceeding relating to the matters contemplated by this Section 6
(whether or not any indemnified party is a party thereto), unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of such
claim, action or proceeding. Notwithstanding any other provision of this
Section 8(c), if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior
to the date of such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 8 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Trust and the Company or the
Initial Purchaser, the Trust, the Company and the Initial Purchaser shall
contribute to the aggregate losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Trust or the Company,
any contribution received by the Trust or the Company from persons other than
the Initial Purchaser, such as persons who control the Trust or the Company
within the meaning of the Act and directors and officers of the Company, who may
also be liable for contribution) to which the Trust, the Company and the Initial
Purchaser may be subject in such proportion as is appropriate to reflect the
relative
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<PAGE>
benefits received by the Trust and the Company on the one hand and the
Initial Purchaser on the other. The relative benefits received by the Trust
and the Company on the one hand and the Initial Purchaser on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Preferred Securities (before deducting expenses) received by
the Trust and the Company bear to the total commissions received by the
Initial Purchaser, in each case as set forth in the Final Memorandum. If,
but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Trust and the Company on the one hand and the Initial Purchaser on the other
with respect to the statements or omissions which resulted in such loss,
claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering.
Such relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact related to information
supplied by the Trust or the Company or the Initial Purchaser, the intent of
the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Trust, the
Company and the Initial Purchaser agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, liability, expense or damage, or action in respect thereof, referred
to above in this Section 8(d) shall be deemed to include, for purpose of this
Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), the
Initial Purchaser shall not be required to contribute any amount in excess of
the total commissions with respect to the offering of the Preferred
Securities received by it, and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8(d), any person
who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer of the
Trust and the Company will have the same rights to contribution as the Trust
and the Company, respectively, subject in each case to the provisions hereof.
Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 8(d), will notify any such party
or parties from whom contribution may be sought, but the omission so to
notify will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 8(d).
Except for a settlement entered into pursuant to the last sentence of Section
8(c) hereof, no party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not
be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Trust and the Company
and the Initial
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Purchaser contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of
the Initial Purchaser, (ii) acceptance of any of the Offered Securities and
payment therefor, or (iii) any termination of this Agreement.
9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties, covenants and agreements of the Trust and the
Company and the Initial Purchaser herein or in certificates delivered pursuant
hereto, and the indemnity and contribution agreements contained in Section 8
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Initial Purchaser or any person
controlling the Initial Purchaser within the meaning of the Act or the Exchange
Act, or by or on behalf of the Trust and the Company or any of their respective
officers, trustees, directors or controlling persons within the meaning of the
Act or the Exchange Act, and shall survive the delivery of the Offered
Securities to the Initial Purchaser hereunder or termination of this Agreement.
10. TERMINATION. (a) The obligations of the Initial Purchaser under
this Agreement may be terminated at any time on or prior to the Closing Date
(or, with respect to the Option Securities, on or prior to the Option Closing
Date), by notice to the Trust and the Company from the Initial Purchaser,
without liability on the part of the Initial Purchaser to the Trust or the
Company, if, prior to delivery and payment for the Firm Securities (or the
Option Securities, as the case may be), in the sole judgment of the Initial
Purchaser, (i) there has been, since the respective dates as of which
information is given in the Final Memorandum, any material adverse change in the
Company's business, properties, business prospects, condition (financial or
otherwise) or results of operations, (ii) trading in any of the securities of
the Company shall have been suspended by the Commission, by an exchange that
lists the securities or by the Nasdaq Stock Market, (iii) trading in securities
generally on the NYSE or the Nasdaq shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such
exchange, or additional material governmental restrictions, not in force on the
date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court or other
governmental authority, (iv) a general banking moratorium shall have been
declared by either Federal or New York State authorities, or (v) any material
adverse change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred, the
effect of any of which is such as to make it, in the sole judgment of the
Initial Purchaser, impracticable or inadvisable to market the Offered Securities
on the terms and in the manner contemplated by the Final Memorandum.
(b) Termination of this Agreement pursuant to this Section 10 or
Section 7 hereof shall be without liability of any party to any other party
except as provided in Sections 6 and 8 hereof.
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11. MISCELLANEOUS. All notices given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise specified
herein, shall be mailed or delivered (a) if to the Trust, at 3125 Myers Street,
Riverside, California 92503, Attention: Paul M. Bingham, Senior Vice President-
Finance, or (b) if to the Company, at the office of the Company, 3125 Myers
Street, Riverside, California 92503, Attention: William H. Lear, Vice President-
General Counsel and Secretary or (c) if to the Initial Purchaser, to the Initial
Purchaser at the offices of PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019, Attention: Corporate Finance Department.
Any such notice shall be effective only upon receipt. Any notice under Section
7 or 8 may be made by facsimile, telex or telephone, but if so made shall be
subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
Initial Purchaser and the Trust and the Company and of the controlling persons,
Trustees, directors and officers referred to in Section 8, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser, as such purchaser, of Offered
Securities from the Initial Purchaser.
All representations, warranties and agreements of the Trust and the
Company contained herein or in certificates or other instruments delivered
pursuant hereto, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Initial Purchaser or any of its
controlling persons and shall survive delivery of and payment for the Preferred
Securities hereunder.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Trust, the Company and the Initial Purchaser each hereby
irrevocably waives any right it may have to trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the Initial
Purchaser, the Trust and the Company.
30
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among
the Trust, the Company and the Initial Purchaser.
Very truly yours,
FLEETWOOD CAPITAL TRUST
a Delaware business trust
By: /s/ Paul M. Bingham
----------------------------------
Paul M. Bingham
Regular Trustee
FLEETWOOD ENTERPRISES, INC.
By: /s/ Nelson W. Potter
----------------------------------
Nelson W. Potter
President
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
By: /s/ James C. Murphy
-----------------------------
James C. Murphy
Vice President
<PAGE>
Schedule A
Fleetwood Motor Homes of California, Inc.
Fleetwood Motor Homes of Indiana, Inc.
Fleetwood Homes of Georgia, Inc.
<PAGE>
Exhibit A
[FORM OF OPINION OF GIBSON, DUNN & CRUTCHER LLP
PURSUANT TO SECTION 7(E)]
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation.
2. The Company has corporate power to own its properties and conduct its
business as described in the Final Memorandum, and the Company has corporate
power to issue the Convertible Subordinated Debentures, to enter into the
Purchase Agreement, the Guarantee Agreement, the Indenture, the Declaration and
the Registration Rights Agreement and to perform its obligations thereunder.
3. The execution and delivery of the Indenture have been duly authorized
by all necessary corporate action of the Company, and the Indenture has been
duly executed and delivered by the Company, and is a legal, valid, binding and
enforceable agreement of the Company.
4. The execution and delivery of the Convertible Subordinated Debentures
have been duly authorized by all necessary corporate action of the Company, and
the Convertible Subordinated Debentures have been duly executed and delivered by
the Company and are the legal, valid, binding and enforceable obligations of the
Company, entitled to the benefits of the Indenture.
5. The execution and delivery of the Declaration have been duly authorized
by all necessary corporate action of the Company, and the Declaration has been
duly executed and delivered by the Company.
6. The execution and delivery of the Guarantee Agreement has been duly
authorized by all necessary corporate action of the Company, and the Guarantee
Agreement has been duly executed and delivered by the Company, and is a legal,
valid, binding and enforceable agreement of the Company.
7. The holders of outstanding shares of capital stock of the Company are
not entitled to any preemptive rights under the Certificate of Incorporation or
By-Laws of the Company or the law of Delaware to subscribe for the Preferred
Securities, the Convertible Subordinated Debentures or the Fleetwood Common
Stock; and the Fleetwood Common Stock into which the Convertible Subordinated
Debentures are convertible at the initial conversion price have been duly
authorized by all necessary corporate action of the Company and reserved for
issuance upon conversion and, upon issuance thereof on conversion of the
Convertible Subordinated Debentures in accordance with the Indenture and the
terms of the
<PAGE>
Convertible Subordinated Debentures at conversion prices at or in excess of
the par value of such Fleetwood Common Stock, will be validly issued, fully
paid and nonassessable.
8. The statements set forth under the headings "Description of the
Preferred Securities", "Description of the Guarantee", "Description of the
Convertible Subordinated Debentures", "Effect of Obligations under the
Convertible Subordinated Debentures and the Guarantee" and "Description of
Fleetwood Capital Stock" in the Final Memorandum, insofar as such statements
purport to summarize certain provisions of the Trust Securities, the Convertible
Subordinated Debentures, the Guarantees, the Indenture, the Declaration and the
Certificate of Incorporation of the Company, provide a fair summary of such
provisions.
9. The execution and delivery of the Purchase Agreement have been duly
authorized by all necessary corporate action of the Company, and the Purchase
Agreement has been duly executed and delivered by the Company.
10. The execution and delivery of the Registration Rights Agreement have
been duly authorized by all necessary corporate action of the Company, and the
Registration Rights Agreement has been duly executed and delivered by the
Company and is a legal, valid, binding and enforceable agreement of the Company
(except that we express no opinion with respect to Section 5 of the Registration
Rights Agreement providing for indemnification and contribution).
11. Assuming the execution and delivery of the Registration Rights
Agreement have been duly authorized by the Trust, and assuming the Registration
Rights Agreement has been duly executed and delivered by the Trust, the
Registration Rights Agreement is a legal, valid, binding and enforceable
agreement of the Trust (except that we express no opinion with respect to
Section 5 of the Registration Rights Agreement providing for indemnification and
contribution).
12. The issuance and sale of the Preferred Securities by the Trust to the
Initial Purchasers pursuant to the Purchase Agreement, the performance by the
Trust and the Company of their respective obligations in the Purchase Agreement,
the Indenture, the Convertible Subordinated Debentures, the Guarantee, the
Declaration, the Trust Securities and the Registration Rights Agreement and the
application of the net proceeds of the Convertible Subordinated Debentures by
the Company in the manner described in the Final Memorandum do not require any
consent, approval, authorization, registration or qualification of or with any
governmental authority of the United States or the State of New York, except
such as may be required pursuant to the Registration Rights Agreement (but we
express no opinion as to any consent, approval, authorization, registration or
qualification that may be required under state securities or Blue Sky laws).
13. When the Preferred Securities, the Preferred Securities Guarantee
Agreement and the Convertible Subordinated Debentures are issued and delivered
pursuant to the Purchase Agreement, such securities will not be of the same
class (within the meaning of Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act")) as securities of the Company listed on a
national securities exchange registered under Section 6 of the Securities
<PAGE>
Exchange Act of 1934, as amended, or quoted in a U.S. automated inter-dealer
quotation system.
14. Assuming the accuracy of the representations and warranties and
compliance with the agreements contained in the Purchase Agreement, and except
as may be required pursuant to the Registration Rights Agreement, no
registration of the Preferred Securities, the Preferred Securities Guarantee
Agreement, the Convertible Subordinated Debentures or the Fleetwood Common Stock
under the Securities Act, and no qualification of the Declaration, the Preferred
Securities Guarantee Agreement or the Indenture under the Trust Indenture Act of
1939, as amended, are required for the offer and sale of the Preferred
Securities to the Initial Purchaser and the subsequent resale by the Initial
Purchaser in the manner contemplated in the Final Memorandum.
15. Neither the Company nor the Trust is an "investment company" and the
Company is not a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
Insofar as the foregoing opinions relate to the valid existence and good
standing of the Company, they are based solely on a certificate of good standing
received from the Secretary of State of the State of Delaware. So far as the
foregoing opinions relate to the legal, valid, binding effect or enforceability
of any agreement or obligation of the Company or the Trust, (a) we have assumed
that each other party to such agreement or obligation has satisfied those legal
requirements that are applicable to it to the extent necessary to make such
agreement or obligation enforceable against it, and (b) such opinions are
subject to (i) bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally, (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (iii) with respect to rights to indemnity or contribution,
may be limited to applicable law or by the policies underlying such laws.
Such counsel may also state that in connection with their participation in
the preparation of the Final Memorandum, such counsel has not independently
verified the accuracy, completeness or fairness of the statements contained
therein, and that the limitations inherent in the examination made by them and
the knowledge available to them are such that they are unable to assume, and do
not assume, any responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum (except as otherwise expressly
stated in opinion 8 above). However, on the basis of such counsel's review of
the Final Memorandum and their participation in conferences in connection with
the preparation of the Final Memorandum, such counsel shall state that they do
not believe that the Final Memorandum, as of its date or as of the date hereof,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no opinion or belief with
respect to the financial statements and other financial and statistical
information included in the Final Memorandum).
<PAGE>
The foregoing opinions are limited to the federal law of the United States
of America, the law of the State of New York and the General Corporation Law of
the State of Delaware.
We are furnishing this opinion letter to you, as the Initial Purchaser,
solely for your benefit connection with the offering of the Preferred
Securities. This opinion letter is not to be used, circulated, quoted or
otherwise referred to for any other purpose.
<PAGE>
Exhibit B
[FORM OF OPINION OF WILLIAM H. LEAR,
VICE PRESIDENT-GENERAL COUNSEL AND SECRETARY
OF THE COMPANY PURSUANT TO SECTION 7(f)]
1. Each of the subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, with corporate power to own or lease its assets and conduct
its business as described in the Final Memorandum, except where the failure to
have such power and authority would not have a Material Adverse Effect;
2. The Company and each of the subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing under the laws of all
other jurisdictions in the United States where the ownership or leasing of its
respective assets or the conduct of its business as described in the Final
Memorandum requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect;
3. All of the issued and outstanding capital stock of each of the
subsidiaries has been duly authorized and validly issued, is fully paid and
nonassessable and, except as set forth in the Final Memorandum is owned
beneficially and of record directly or indirectly by the Company free and clear
of all security interests, pledges, liens, encumbrances, equities or claims
(collectively, "Liens"), except for such Liens as would not have a Material
Adverse Effect;
4. Other than as described in the Final Memorandum, no legal, regulatory
or governmental proceedings are pending or, to my knowledge, threatened to which
the Company or any of its subsidiaries is a party or to which the assets of the
Company or any of the subsidiaries are subject which, individually or in the
aggregate, would have a Material Adverse Effect;
5. To my knowledge, none of the Company or any of the subsidiaries is,
except as disclosed in the Final Memorandum, in default (or, with notice or
lapse of time or both, would be in default) in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan agreement, note, lease or
other instrument to which it is a party or by which it is bound, or to which any
of its respective assets is subject, or in violation of any law, statute,
judgment, decree, order, rule or regulation of any domestic or foreign court
with jurisdiction over the Company or any of its subsidiaries or any of their
respective assets, or other governmental or regulatory authority, agency or
other body, other than such defaults or violations which, individually or in the
aggregate, would not have a Material Adverse Effect; and
6. To my knowledge, the issuance, sale and delivery of the Offered
Securities, the execution, delivery and performance by the Company and the Trust
of the Purchase
<PAGE>
Agreement and the Registration Rights Agreement, the filing of the
Declaration with the Secretary of State of the State of Delaware, the
consummation by the Company and the Trust of the transactions contemplated by
such documents and the application of the proceeds from the sale of the
Offered Securities as contemplated by the Final Memorandum do not, and, at
the Closing Date will not, conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any assets of the Company or any of its subsidiaries
pursuant to, any material contract, indenture, mortgage, loan agreement,
note, lease other instrument to which the Company or any of its subsidiaries
is a party or by which any of them is bound, or to which any of the assets of
the Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the charter of the Company or
any of its subsidiaries or any applicable law, administrative regulation or
administrative or court decree.
Insofar as the foregoing opinions relate to the valid existence and good
standing of the subsidiaries, they are based solely on certificates of good
standing received from the competent official of the respective jurisdiction in
which each of such subsidiaries was organized and on a telephonic confirmation
from the office of such. Insofar as the foregoing opinions relate to
qualification to do business of the Company and the subsidiaries, they are based
solely on certificates of foreign qualification received from the office of the
applicable official in each jurisdiction, office, although I have made inquiry
as to the jurisdictions in the United States in which the Company and its
subsidiaries conduct business.
I participated in conferences and telephone conversations with officers and
other representatives of the Company (including Gibson, Dunn & Crutcher LLP),
representatives of the independent public accountants for the Company, your
representatives and representatives of your counsel, during which conferences
and conversations the contents of the Final Memorandum and related matters were
discussed, and I reviewed certain corporate records and documents of the
Company.
Based on my participation in such conferences and conversations and my
review of such documents, I advise you that no information has come to my
attention that has caused me to believe that the Final Memorandum (except the
financial statements and other financial and statistical data of a financial
nature included therein, as to which we express no view), as of the date thereof
or hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
The foregoing opinions are limited to the federal law of the United States
of America, the General Corporation Law of the State of Delaware and the law of
the State of California.
I am furnishing this opinion letter to you, as the Initial Purchaser,
solely for your benefit in connection with the offering of the Preferred
Securities. This opinion letter is not to be used, circulated, quoted, filed
with any governmental authority or otherwise referred to for any other purpose.
<PAGE>
Exhibit C
[FORM OF OPINION OF MORRIS, NICHOLS, ARSHT & TUNNELL,
SPECIAL COUNSEL TO THE TRUST AND THE COMPANY]
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been made.
2. The Declaration constitutes a valid and binding obligation of the
Company and each of the Regular Trustees, and is enforceable against the Company
and each of the Regular Trustees, in accordance with its terms, except as such
enforceability may be limited by (A) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other laws of general application relating
to or affecting the enforcement of creditors' rights and remedies, (B)
application of equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and (C) considerations of
public policy or the effects of applicable law relating to fiduciary duties.
3. Under the Delaware Business Trust Act and the Declaration, the
Trust has the trust power and authority (A) to execute and deliver, and to
perform its obligations under, the Purchase Agreement, (B) perform its
obligations under the Declaration, (C) issue the Securities and (D) purchase and
hold the Debentures.
4. The execution and delivery of the Purchase Agreement by the Trust
and the performance of its obligations thereunder have been duly authorized by
all necessary trust action on the part of the Trust.
5. The Common Securities have been duly authorized by the
Declaration for issuance and, when issued and sold in accordance with the
Declaration, will be validly issued undivided beneficial interests in the assets
of the Trust.
6. The Preferred Securities have been duly authorized by the
Declaration for issuance and, when issued, delivered and paid for in accordance
with the terms of the Declaration, will be validly issued and, subject to the
terms of the Declaration and the further qualifications set forth herein, fully
paid and non-assessable undivided beneficial interests in the assets of the
Trust. Under the Delaware Business Trust Act and the Declaration, the holders
of the Preferred Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware; provided that we
express no opinion as to any Holder of Preferred Securities that is, was or
becomes a named Trustee of the Trust. We note that the Holders of Preferred
Securities may be subject to the withholding provisions of Section 11.4 of the
Declaration and may be required to make payment or provide indemnity or security
as set forth in the Declaration.
<PAGE>
7. Under the Delaware Business Trust Act and the Declaration, the
issuance of the Preferred Securities is not subject to preemptive rights.
8. The issuance and sale by the Trust of the Preferred Securities,
the execution, delivery and performance by the Trust of the Purchase Agreement,
the consummation by the Trust of the transactions contemplated thereby and
compliance by the Trust with its obligations thereunder do not (A) result in any
violation of the Declaration or the Certificate or any applicable Delaware law
(statutory or decisional) or any rule or regulation of any Delaware governmental
agency or (B) require the approval of any Delaware governmental agency.
9. No authorization, approval, consent or order of any Delaware
governmental authority or agency is required to be obtained by the Trust solely
in connection with the issuance and sale of the Preferred Securities, except
such as may be required under Delaware securities or blue sky laws.
10. Assuming that the Trust derives no income from or connected with
services provided within the State of Delaware and has no assets, activities
(other than maintaining the Delaware Trustee and the filing of documents with
the Secretary of the Stare of the State of Delaware) or employees in the State
of Delaware, the Trust's Security Holders (other than Holders of Securities, or
Persons who are partners or S corporation shareholders for federal income tax
purposes in such Holders of Securities, who reside or domiciled in the State of
Delaware or who are otherwise subject to income taxation in the State of
Delaware) will have no liability for income taxes imposed by the State of
Delaware solely as a result of their participation in the Trust, and the Trust
will not be liable for any income tax imposed by the State of Delaware.
<PAGE>
Exhibit D
[FORM OF OPINION OF MORRIS, NICHOLS, ARSHT & TUNNELL,
WITH RESPECT TO THE DELAWARE TRUSTEE
PURSUANT TO SECTION 7(i)]
1. The Bank of New York, Delaware is duly incorporated and is
validly existing in good standing as a banking corporation with trust powers
under the laws of the State of Delaware.
2. The Bank of New York, Delaware has the corporate and trust power
and authority to execute, deliver and perform its obligations under the
Declaration.
3. The Declaration constitutes a legal, valid and binding
obligation of The Bank of New York, Delaware, enforceable against The Bank of
New York, Delaware, in accordance with its terms, except as such enforceability
may be limited by (A) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other laws of general application relating to or
affecting the enforcement of creditors' rights and remedies, (B) application of
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and (C) considerations of public policy or the
effects of applicable law relating to fiduciary duties.
4. The execution, delivery and performance by The Bank of New York,
Delaware of the Declaration does not violate the charter or by-laws of The Bank
of New York, Delaware.
5. No consent, approval or authorization of, or registration with or
notice to, any governmental authority or agency of the State of Delaware is
required to be obtained by The Bank of New York, Delaware solely in connection
with the execution, delivery or performance by The Bank of New York, Delaware of
the Declaration.
<PAGE>
Exhibit E
[FORM OF OPINION OF GIBSON, DUNN & CRUTCHER LLP,
SPECIAL TAX COUNSEL TO THE TRUST AND THE COMPANY
PURSUANT TO SECTION 7(j)]
1. The Trust will be characterized as a grantor trust for U.S.
federal income tax purposes and not as a partnership or as an association
subject to tax as a corporation;
2. The Convertible Subordinated Debentures will constitute
indebtedness of the Company; and
3. The discussion set forth in the Final Memorandum under the
caption "Certain Federal Tax Consequences," to the extent it constitutes
summaries of legal matters or legal conclusions, is accurate in all material
respects.
<PAGE>
Exhibit F
[FORM OF LOCK-UP LETTER]
February __, 1998
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
In consideration of the agreement of PaineWebber Incorporated (the
"Initial Purchaser") to enter into a purchase agreement (the "Purchase
Agreement) with Fleetwood Capital Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), and Fleetwood Enterprises,
Inc., a corporation incorporated under the laws of the State of Delaware (the
"Company"), providing for the offering of the 6% Convertible Trust Preferred
Securities (the "Preferred Securities") of the Trust, guaranteed by and
convertible into common stock, par value $1.00 share of the Company, as
contemplated by the final offering memorandum dated February 4, 1998 (the "Final
Memorandum"), the undersigned hereby agrees that the undersigned will not, for a
period of 90 days after the date of the Purchase Agreement, without the prior
written consent of PaineWebber Incorporated, (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option to purchase or otherwise transfer or dispose
of any Preferred Securities, any equity securities of the Company, the Trust or
any similar trust or any securities convertible into or exchangeable or
exercisable for any equity securities of the Company, the Trust or any similar
trust or (ii) enter into any swap or other agreement that transfers, in whole or
in part, any of the economic consequences of ownership of any equity securities
of the Company, the Trust or any similar trust, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of equity
securities of the Company, the Trust or any similar trust, other securities,
cash or otherwise, of which the undersigned is now, or may in the future become,
the beneficial owner within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934.
Very truly yours,
By:
--------------------------
Print Name:
---------------------------
<PAGE>
EXHIBIT 5.1
MORRIS, NICHOLS, ARSHT & TUNNELL
[LETTERHEAD]
February 10, 1998
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
The Bank of New York
The Bank of New York (Delaware)
c/o The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Re: FLEETWOOD CAPITAL TRUST
Ladies and Gentlemen:
We have acted as special Delaware counsel to Fleetwood Capital Trust,
a Delaware statutory business trust (the "Trust"), in connection with certain
matters relating to the creation of the Trust and the proposed issuance of
Preferred Securities to the initial purchaser (the "Initial Purchaser")
identified in the Purchase Agreement dated as of February 10, 1998 (the
"Purchase Agreement") among the Initial Purchaser, the Trust and Fleetwood
Enterprises, Inc., a Delaware corporation ("Fleetwood Enterprises").
Capitalized terms used herein and not otherwise herein defined are used as
defined in the Amended and Restated Declaration of Trust of the Trust dated
as of February 10, 1998 (the "Governing Instrument").
In rendering this opinion, we have examined and relied upon copies of
the following documents in the forms provided to us: the Certificate of Trust of
the Trust as filed in the Office of the Secretary of State of the State of
Delaware (the "State Office") on January 16, 1998 (the "Certificate of Trust");
a Declaration of Trust of the Trust dated as of January 16, 1998 (the "Original
Governing Instrument"); the Governing Instrument; the Indenture dated as of
February 10, 1998 between Fleetwood Enterprises and The Bank of New York, as
Trustee; the Preferred Securities Guarantee Agreement dated as of February 10,
1998 between Fleetwood Enterprises and The Bank of New York, as Trustee; the
Common
<PAGE>
PaineWebber Incorporated
February 10, 1998
Page 2
Securities Guarantee Agreement dated as of February 10, 1998 executed by
Fleetwood Enterprises; the Purchase Agreement; the Trust's Offering
Memorandum dated February 4, 1998 relating to the Preferred Securities (the
"Memorandum"); the Registration Rights Agreement dated February 10, 1998
among the Trust, Fleetwood Enterprises and PaineWebber Incorporated; and a
certification of good standing of the Trust obtained as of a recent date from
the State Office. In such examinations, we have assumed the genuineness of
all signatures, the conformity to original documents of all documents
submitted to us as drafts or copies or forms of documents to be executed and
the legal capacity of natural persons to complete the execution of documents.
We have further assumed for purposes of this opinion: (i) the due formation
or organization, valid existence and good standing of each entity (other than
the Trust) that is a party to any of the documents reviewed by us under the
laws of the jurisdiction of its respective formation or organization; (ii)
except to the extent addressed by our opinion set forth in paragraph 4 below,
the due authorization, execution and delivery by, or on behalf of, each of
the parties thereto of the above-referenced documents (including, without
limitation, the due authorization, execution and delivery of the Governing
Instrument and the Purchase Agreement by the parties thereto prior to the
first issuance of Securities); (iii) that no event has occurred, or will
occur, subsequent to the filing of the Certificate of Trust that would cause
a dissolution or liquidation of the Trust under the Original Governing
Instrument or the Governing Instrument, as applicable; (iv) that the
activities of the Trust have been and will be conducted in accordance with
the Original Governing Instrument or the Governing Instrument, as applicable;
(v) that the Initial Purchaser and Fleetwood Enterprises, as Sponsor, (or
each other Holder of Securities) has made, or will make, payment of the
required consideration therefor and received, or will receive, a Preferred
Security Certificate or a Common Security Certificate, as the case may be, in
consideration thereof in accordance with the terms and conditions of the
Governing Instrument, the Purchase Agreement and the Memorandum and that the
Securities are, or will be, otherwise issued and sold in accordance with the
terms, conditions, requirements and procedures set forth in the Governing
Instrument, the Purchase Agreement and the Memorandum; (vi) that the Sponsor
has directed the Regular Trustees to take the actions contemplated by Section
2.6(b) of the Original Governing Instrument and Section 3.6(b) of the
Governing Instrument, as applicable; (vii) that the Trust does not and will
not conduct any business or activities in the State of Delaware (other than
activities incidental to its continued existence as a Delaware statutory
business trust); (viii) that the Trust is a grantor trust for federal income
tax purposes and that the Holders of the Preferred Securities are viewed for
federal income tax purposes as owners of either all of, or their liquidation
and accrued but unpaid share of, the Debentures held by the Trust; (ix)
<PAGE>
PaineWebber Incorporated
February 10, 1998
Page 3
that the Securities and the Debentures are executed and delivered outside the
State of Delaware; and (x) that the documents examined by us are in full
force and effect, express the entire understanding of the parties thereto
with respect to the subject matter thereof and have not been modified,
supplemented or otherwise amended, except as herein referenced. We have not
reviewed any documents other than those identified above in connection with
this opinion, and we have assumed that there are no other documents that are
contrary to or inconsistent with the opinions expressed herein. Further, we
express no opinion with respect to, and assume no responsibility for the
contents of, the Memorandum or any other offering material relating to the
Securities. No opinion is expressed herein with respect to the requirements
of, or compliance with, federal or state securities or blue sky laws. As to
any fact material to our opinion, other than those assumed, we have relied
without independent investigation on the above-referenced documents and
certificates and on the accuracy, as of the date hereof, of the matters
therein contained.
For purposes of our opinions set forth in paragraphs 1, 8 and 9
below, we refer only to laws, rules and regulations of the State of Delaware,
and required authorizations, approvals, consents and orders of any Delaware
governmental authority or agency, that are of general application and, in our
experience, are normally applicable to transactions of the type contemplated
by the Purchase Agreement (other than securities or blue sky laws).
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. The Trust is a duly created and validly existing business
trust in good standing under the Delaware Business Trust Act, 12 DEL. C.
Sections 3801 ET SEQ. (the "Delaware Act"), and all filings required under
the laws of the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made.
2. The Governing Instrument constitutes a legal, valid and binding
obligation of Fleetwood Enterprises and each of the Regular Trustees,
enforceable against Fleetwood Enterprises and each of the Regular Trustees in
accordance with its terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other laws of general application relating to or affecting the enforcement of
creditors' rights and remedies, as from time to time in effect, (b) application
of equitable principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law) and (c) considerations of public policy or
the effect of applicable law relating to fiduciary duties.
<PAGE>
PaineWebber Incorporated
February 10, 1998
Page 4
3. Under the Delaware Act and the Governing Instrument, the Trust
has all requisite business trust power and authority to (a) execute and deliver,
and to perform its obligations under, the Purchase Agreement, (b) perform its
obligations under the Governing Instrument, (c) issue the Securities and (d)
purchase and hold the Debentures.
4. The execution and delivery of the Purchase Agreement by the
Trust, and the performance of its obligations thereunder, have been duly
authorized by all necessary trust action on the part of the Trust.
5. The Common Securities have been duly authorized by the Governing
Instrument for issuance and, when issued, delivered and paid for in accordance
with the terms of the Governing Instrument, will be validly issued undivided
beneficial interests in the assets of the Trust.
6. The Preferred Securities have been duly authorized by the
Governing Instrument for issuance and, when issued, delivered and paid for in
accordance with the terms of the Governing Instrument and the Purchase
Agreement, will be validly issued and, subject to the terms of the Governing
Instrument and the further qualifications set forth herein, fully paid and
non-assessable undivided beneficial interests in the assets of the Trust. Under
the Delaware Act and the Governing Instrument, the Holders of the Preferred
Securities will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
Delaware General Corporation Law; provided that we express no opinion as to any
Holder of Preferred Securities that is, was or becomes a named Trustee of the
Trust. We note that the Holders of the Preferred Securities may be subject to
the withholding provisions of Section 11.4 of the Governing Instrument and
may be required to make payment or provide indemnity or security as set forth in
the Governing Instrument.
7. Under the Delaware Act and the Governing Instrument, the issuance
of the Preferred Securities is not subject to preemptive rights.
8. The issuance and sale by the Trust of the Preferred Securities,
the execution, delivery and performance by the Trust of the Purchase Agreement,
the consummation by the Trust of the transactions contemplated by the Purchase
Agreement and the compliance by the Trust with its obligations thereunder do not
(a) result in any violation of the Governing Instrument or the Certificate of
Trust or any applicable Delaware law (statutory or decisional) or any rule or
regulation of any Delaware governmental
<PAGE>
PaineWebber Incorporated
February 10, 1998
Page 5
agency or (b) require the approval of any Delaware governmental agency.
9. No authorization, approval, consent or order of any Delaware
governmental authority or agency is required to be obtained by the Trust solely
in connection with the issuance and sale of the Preferred Securities, except
such as may be required under Delaware securities or blue sky laws.
10. Assuming that the Trust derives no income from or connected with
services provided within the State of Delaware and has no assets, activities
(other than maintaining the Delaware Trustee and the filing of documents with
the Secretary of the State of the State of Delaware) or employees in the State
of Delaware, the Trust's Security Holders (other than Holders of Securities, or
Persons who are partners or S corporation shareholders for federal income tax
purposes in such Holders of the Securities, who reside or domiciled in the State
of Delaware or who are otherwise subject to income taxation in the State of
Delaware) will have no liability for income taxes imposed by the State of
Delaware solely as a result of their participation in the Trust, and the Trust
will not be liable for any income tax imposed by the State of Delaware.
This opinion speaks only as of the date hereof and is based on our
understandings and assumptions as to present facts, and on our review of the
above-referenced documents and the application of Delaware law as the same exist
on the date hereof, and we undertake no obligation to update or supplement this
opinion after the date hereof for the benefit of any person or entity with
respect to any facts or circumstances that may hereafter come to our attention
or any changes in facts, circumstances or law that may hereafter occur or take
effect. We understand that the firm of Gibson, Dunn & Crutcher LLP wishes to
rely as to certain matters of Delaware law on the opinions expressed herein in
connection with the rendering of its opinion to the Initial Purchaser dated the
date hereof and relating to the subject matter hereof, and we hereby consent to
such reliance. Except as provided in the preceding sentence, this opinion is
intended solely for the benefit of the addressees hereof in connection with the
matters contemplated hereby and may not be relied upon by any other person or
entity or for any other purpose without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Morris, Nichols, Arsht & Tunnell
<PAGE>
EXHIBIT 5.2
GIBSON, DUNN & CRUTCHER LLP
[LETTERHEAD]
February 10, 1998
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Re: FLEETWOOD ENTERPRISES, INC.
Ladies and Gentlemen:
These opinions are being furnished to you pursuant to Section 7(e) of the
Purchase Agreement, dated as of February 4, 1998 (the "Purchase Agreement"), by
and among Fleetwood Capital Trust, a Delaware statutory business trust (the
"Trust"), Fleetwood Enterprises, Inc., a Delaware corporation (the "Company"),
and PaineWebber Incorporated (the "Initial Purchaser") in connection with the
issuance and sale by the Trust of 5,750,000 shares of 6% Convertible Trust
Preferred Securities (the "Preferred Securities") and the issuance and sale by
the Company of $296,400,000 in aggregate principal amount of 6% Convertible
Subordinated Debentures (the "Convertible Subordinated Debentures"). We have
acted as special counsel to the Company and the Trust in connection with the
execution of the Purchase Agreement and the consummation of the transactions
contemplated therein and in the Final Memorandum (as defined below).
In rendering the opinions set forth herein, we have examined the originals,
or copies identified to our satisfaction as being true and complete copies of
the originals, of the following documents:
(i) the Purchase Agreement;
(ii) the Amended and Restated Declaration of Trust of the Trust,
dated as of February 10, 1998 (the "Declaration");
<PAGE>
GIBSON, DUNN & CRUTCHER LLP
PaineWebber Incorporated
February 10, 1998
Page 2
(iii) the Indenture, dated as of February 10, 1998 (the "Indenture"),
by and between the Company and The Bank of New York, not in its individual
capacity, but solely as Trustee (the "Trustee");
(iv) the Registration Rights Agreement, dated as of February 10,
1998 (the "Registration Rights Agreement"), by and among the Trust, the Company
and the Initial Purchaser;
(v) the Guarantee Agreement for the benefit of holders of the
Preferred Securities, dated as of February 10, 1998 (the "Guarantee Agreement"),
by and between the Company and the Trustee;
(vi) the Offering Memorandum, dated February 4, 1998 (the "Final
Memorandum"); and
(vii) such other documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary or advisable to
enable us to render the opinions set forth herein.
The Purchase Agreement, the Declaration, the Indenture, the Convertible
Subordinated Debentures, the Registration Rights Agreement and the Guarantee
Agreement are sometimes hereinafter referred to as the "Transaction Documents."
In our examination, we have assumed the genuineness of all signatures on,
and the authenticity of, all documents submitted to us as originals and the
conformity to the original documents of all documents submitted to us as copies.
With respect to agreements and instruments executed by natural persons, we have
assumed the legal competency and authority of such persons. As to facts
material to the opinions expressed herein which were not independently
established or verified by us, we have relied upon oral or written statements
and representations of the Company and others. All capitalized terms used but
not otherwise defined herein have the meanings accorded to such terms in the
Purchase Agreement.
In connection with our examination, we have assumed with your permission
that:
(a) the Preferred Securities and the Convertible Subordinated
Debentures conform to the specimens thereof certified by the Company and
examined by us;
(b) the Initial Purchaser has all requisite power and authority to
execute, deliver and perform its obligations under the Purchase Agreement, and
the execution and delivery of the Purchase Agreement and the performance of such
obligations have been duly authorized by all necessary action by the Initial
Purchaser;
<PAGE>
GIBSON, DUNN & CRUTCHER LLP
PaineWebber Incorporated
February 10, 1998
Page 3
(c) the Purchase Agreement has been duly executed and delivered by
the Initial Purchaser;
(d) the Trustee is a banking corporation with trust powers duly
organized, validly existing and in good standing under the laws of New York and
the Trustee is authorized to do business as a trustee in New York;
(e) the Trustee has all requisite power and authority to accept
appointment as trustee under the Declaration and the Indenture and to execute,
deliver and perform its obligations under each of the Declaration and the
Indenture, and the execution and delivery of the Declaration and the Indenture
and the performance by the Trustee of its obligations thereunder have been duly
authorized by all necessary action by the Trustee, and do not and will not
violate any provision of any law, rule or regulation of the State of New York
or of the federal law of the United States of America applicable to the Trustee;
(f) the Indenture constitutes a legal, valid and binding obligation
of the Trustee, enforceable against it in accordance with its terms; and
(g) the Trust has duly authorized, executed and delivered the
Registration Rights Agreement.
Based upon the foregoing and in reliance thereon, and subject to the
qualifications, exceptions, assumptions and limitations herein contained, we are
of the opinion that:
1. The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation.
2. The Company has corporate power to own its properties and
conduct its business as described in the Final Memorandum, and the Company has
corporate power to issue the Convertible Subordinated Debentures, to enter into
the Purchase Agreement, the Guarantee Agreement, the Indenture, the Declaration
and the Registration Rights Agreement and to perform its obligations thereunder.
3. The execution and delivery of the Indenture have been duly
authorized by all necessary corporate action of the Company, the Indenture has
been duly executed and delivered by the Company and the Indenture is a legal,
valid, binding and enforceable agreement of the Company.
4. The execution and delivery of the Convertible Subordinated
Debentures have been duly authorized by all necessary corporate action of the
Company, and the Convertible Subordinated Debentures have been duly executed and
delivered by the Company and, when executed and authenticated by the Trustee in
accordance with the terms of the Indenture and paid
<PAGE>
GIBSON, DUNN & CRUTCHER LLP
PaineWebber Incorporated
February 10, 1998
Page 4
for by the Trust pursuant to the Purchase Agreement, will be the legal, valid,
binding and enforceable obligations of the Company, entitled to the benefits of
the Indenture.
5. The execution and delivery of the Declaration have been duly
authorized by all necessary corporate action of the Company, and the Declaration
has been duly executed and delivered by the Company.
6. The execution and delivery of the Guarantee Agreement have been
duly authorized by all necessary corporate action of the Company, and the
Guarantee Agreement has been duly executed and delivered by the Company, and is
a legal, valid, binding and enforceable agreement of the Company.
7. The holders of outstanding shares of capital stock of the
Company are not entitled to any preemptive rights under the Certificate of
Incorporation or By-Laws of the Company or the law of Delaware to subscribe for
the Preferred Securities, the Convertible Subordinated Debentures or the
Fleetwood Common Stock; and the Fleetwood Common Stock into which the
Convertible Subordinated Debentures are convertible at the initial conversion
price have been duly authorized by all necessary corporate action of the Company
and reserved for issuance upon conversion and, upon issuance thereof on
conversion of the Convertible Subordinated Debentures in accordance with the
Indenture and the terms of the Convertible Subordinated Debentures at conversion
prices at or in excess of the par value of such Fleetwood Common Stock, will be
validly issued, fully paid and nonassessable.
8. The statements set forth under the headings "Description of the
Preferred Securities," "Description of the Guarantee," "Description of the
Convertible Subordinated Debentures," "Effect of Obligations under the
Convertible Subordinated Debentures and the Guarantee" and "Description of
Fleetwood Capital Stock" in the Final Memorandum, insofar as such statements
purport to summarize certain provisions of the Trust Securities, the Convertible
Subordinated Debentures, the Guarantees, the Indenture, the Declaration and the
Certificate of Incorporation of the Company, provide a fair summary of such
provisions.
9. The execution and delivery of the Purchase Agreement by the
Company have been duly authorized by all necessary corporate action of the
Company, and the Purchase Agreement has been duly executed and delivered by the
Company.
10. The execution and delivery of the Registration Rights Agreement
by the Company have been duly authorized by all necessary corporate action of
the Company, and the Registration Rights Agreement has been duly executed and
delivered by the Company and is a legal, valid, binding and enforceable
agreement of the Company.
<PAGE>
GIBSON, DUNN & CRUTCHER LLP
PaineWebber Incorporated
February 10, 1998
Page 5
11. The Registration Rights Agreement is a legal, valid, binding
and enforceable agreement of the Trust.
12. The issuance and sale of the Preferred Securities by the Trust
to the Initial Purchasers pursuant to the Purchase Agreement, the performance by
the Trust and the Company of their respective obligations in the Purchase
Agreement, the Indenture, the Convertible Subordinated Debentures, the
Guarantee, the Declaration, the Trust Securities and the Registration Rights
Agreement and the application of the net proceeds of the Convertible
Subordinated Debentures by the Company in the manner described in the Final
Memorandum do not require any consent, approval, authorization, registration or
qualification of or with any governmental authority of the United States or the
State of New York, except such as may be required pursuant to the Registration
Rights Agreement.
13. When the Preferred Securities, the Guarantee Agreement and the
Convertible Subordinated Debentures are issued and delivered pursuant to the
Purchase Agreement, such securities will not be of the same class (within the
meaning of Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) as securities of the Company listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of 1934, as
amended, or quoted in a United States automated inter-dealer quotation system.
14. Assuming the accuracy of the representations and warranties and
compliance with the agreements contained in the Purchase Agreement, and except
as may be required pursuant to the Registration Rights Agreement, no
registration of the Preferred Securities, the Guarantee Agreement, the
Convertible Subordinated Debentures or the Fleetwood Common Stock under the
Securities Act, and no qualification of the Declaration, the Guarantee
Agreement or the Indenture under the Trust Indenture Act of 1939, as amended,
are required for the offer and sale of the Preferred Securities to the Initial
Purchaser and the subsequent resale by the Initial Purchaser in the manner
contemplated in the Final Memorandum.
15. Neither the Company nor the Trust is an "investment company"
and the Company is not "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
We have participated in the preparation of the Final Memorandum and in
conferences with officers and other representatives of the Company,
representatives of the independent auditors of the Company and the Initial
Purchaser at which the contents of the Final Memorandum and related matters were
discussed. Because the purpose of our professional engagement was not to
establish or confirm factual matters and because the scope of our examination of
the affairs of the Company did not permit us to verify the accuracy,
completeness or fairness of the statements set forth in the Final Memorandum, we
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements set forth in the Final Memorandum
<PAGE>
GIBSON, DUNN & CRUTCHER LLP
PaineWebber Incorporated
February 10, 1998
Page 6
(except as set forth above in paragraph 8). However, on the basis of the
foregoing, except for the financial statements and schedules and other financial
data included therein, as to which we express no opinion or belief, we are of
the opinion that the Final Memorandum, as of the date thereof and on the date
hereof, did not and does not contain an untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
The foregoing opinions are also subject to the following additional
qualifications, exceptions, assumptions and limitations:
A. We render no opinion herein as to matters involving the laws
of any jurisdiction other than (i) the federal laws of the United States of
America, (ii) the laws of the State of New York and (iii) to the limited
extent set forth below, the Delaware General Corporation Law. We are not
admitted to practice law in the State of Delaware, although we are generally
familiar with the Delaware General Corporation Law as presently in effect and
have made such inquiries as we consider necessary to render our opinions
herein. The opinion set forth above in paragraph 1 with respect to the good
standing of the Company under the laws of the State of Delaware is rendered
solely in reliance upon the Certificate dated February 5, 1998 of the
Secretary of State of the State of Delaware, a copy of which is attached
hereto as EXHIBIT A. No opinion is expressed by us as to matters of conflict
or choice of law. The opinions herein are limited to take effect of the
foregoing laws as they presently exist. We assume no obligation to revise or
supplement these opinions in the event of future changes in such laws or the
interpretations thereof or such facts.
B. Except as expressly stated otherwise herein, whenever our
opinions herein with respect to the existence or absence of facts are stated to
be to our knowledge or known by us, such statement is intended to signify that,
during the course of our representation of the Company, as herein described, no
information has come to the attention of the lawyers presently in our firm
working on the transactions contemplated by the Final Memorandum that would give
us actual knowledge of facts contrary to the existence or absence of the facts
indicated. However, we have not undertaken any independent investigation to
determine the existence or absence of such facts, and no inference as to our
knowledge of the existence or absence of such facts should be drawn from our
representation of the Company.
C. Our opinions set forth above in paragraphs 3, 4, 6, 10 and 11
are subject to (i) the effect of applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws and court decisions of
general application, including without limitation, statutory or other laws
regarding fraudulent or preferential transfers relating to, limiting or
affecting the enforcement of creditors' rights generally and laws affecting
distribution by corporations to stockholders, (ii) the application of general
principles of equity, including without limitation concepts of
<PAGE>
GIBSON, DUNN & CRUTCHER LLP
PaineWebber Incorporated
February 10, 1998
Page 7
materiality, reasonableness, good faith and fair dealing, regardless of whether
such enforceability is considered in a proceeding at law or in equity.
D. We express no opinion as to any consent, approval,
authorization, registration or qualification that may be required under any
state securities or Blue Sky laws.
E. We express no opinion as to the legality, validity, binding
effect or enforceability of any provision in any agreement regarding rights of
indemnity or contribution, which may be limited by applicable federal or state
laws or by the policies underlying such laws.
F. We express no opinion (i) with respect to the ability to obtain
specific performance, injunctive relief or other equitable relief, whether
sought in a proceeding in equity or at law, as a remedy for noncompliance with
the Transaction Documents and (ii) regarding the rights or remedies available to
any party insofar as such party may take discretionary action that is arbitrary,
unreasonable or capricious, or is not taken in good faith or in a commercially
reasonable manner, whether or not such action is permitted under the Transaction
Documents.
G. We express no opinion with respect to the legality, validity,
binding nature or enforceability of any provision of the Transaction Documents
to the effect that rights or remedies are not exclusive, that every right or
remedy is cumulative and may be exercised in addition to any other right or
remedy, that the election of some particular remedy does not preclude recourse
to one or more others or that failure to exercise or delay in exercising rights
or remedies will not operate as a waiver of any such right or remedy.
H. We express no opinion with respect to the legality, validity,
binding nature or enforceability of (i) any waiver by the Company under the
Transaction Documents or any consents by the Company thereunder relating to the
rights of the Company or duties owing to it as a matter of law, except to the
extent that the Company may so waive or consent under applicable law, (ii)
provisions in the Transaction Documents imposing an increase in interest rate
upon failure to pay principal or interest when due or other occurrence of a
default or (iii) any rights of setoff, other than as provided by Section 151 of
the Debtor and Creditor Law of the State of New York, as interpreted by
applicable judicial decisions.
I. We express no opinion as to any provision of the Transaction
Documents requiring written amendments or waivers of such documents insofar
as it suggests that oral or other modifications, amendments or waivers could
not be effectively agreed upon by parties or that the doctrine of promissory
estoppel might not apply.
These opinions are furnished by us as special counsel for the Company and
the Trust to you pursuant to the terms of the Purchase Agreement and is solely
for your benefit. Without our prior written consent, these opinions may not be
relied upon by you in any other context or by any
<PAGE>
GIBSON, DUNN & CRUTCHER LLP
PaineWebber Incorporated
February 10, 1998
Page 8
other person. These opinions may not be quoted, in whole or in part, or copies
thereof furnished, to any other person without our prior written consent, except
that you may furnish copies hereof: (a) to your independent auditors and
attorneys; (b) to any federal or state authority having regulatory jurisdiction
over you or the Company; (c) pursuant to order or legal process of any court or
governmental agency; and (d) in connection with any legal or governmental
action, proceeding or investigation to which you are a party arising out of the
transactions contemplated by the Purchase Agreement.
Very truly yours,
/s/ Gibson, Dunn & Crutcher LLP
GIBSON, DUNN & CRUTCHER LLP
RED/JLV/JES/AM/GCT
<PAGE>
EXHIBIT 8.1
GIBSON, DUNN & CRUTCHER LLP
[LETTERHEAD]
February 10, 1998
(213) 229-7000 C 29003-00718
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Re: FLEETWOOD CAPITAL TRUST AND 6% CONVERTIBLE SUBORDINATED DEBENTURES
Gentlemen:
We have acted as special tax counsel to Fleetwood Enterprises, Inc., a
Delaware corporation (the "Company"), in connection with the issuance by the
Company of 6% Convertible Subordinated Debentures, which mature on February 15,
2028 (the "Convertible Subordinated Debentures"), to Fleetwood Capital Trust, a
statutory business trust created under the Delaware Business Trust Act of the
State of Delaware (the "Trust"). The terms of the Convertible Subordinated
Debentures and a description of the Trust are set forth in the Offering
Memorandum dated February 4, 1998 (the "Offering Memorandum") and the operative
documents described therein.
This opinion is rendered pursuant to Section 7(j) of the Purchase Agreement
(the "Purchase Agreement") dated February 4, 1998 by and among the Company, the
Trust and PaineWebber Incorporated. This opinion is based on the accuracy of
the facts described and the representations made in the Offering Memorandum.
This opinion is also based upon the assumptions that (i) the Convertible
Subordinated Debentures represent valid and enforceable obligations of the
Company, and (ii) the Trust will operate in full compliance with the terms of
the Declaration (as defined in the Offering Memorandum) and the Indenture (as
defined in the Offering Memorandum).
We have made such legal and factual examinations and inquiries, including
an examination of originals or copies certified or otherwise identified to our
satisfaction of such documents, of corporate records and other instruments as we
have deemed necessary or appropriate for
<PAGE>
PaineWebber Incorporated
February 10, 1998
Page 2
purposes of this opinion. We are opining herein as to the effect on the subject
transaction only of the federal income tax laws of the United States, and we
express no opinion with respect to the applicability thereto, or the effect
thereon, of other federal, state, local, or territorial laws or the laws of any
other jurisdiction.
Based on the foregoing:
(1) The Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation;
(2) The Convertible Subordinated Debentures will constitute indebtedness
of the Company; and
(3) The discussion in the Offering Memorandum under the caption "Certain
Federal Tax Consequences," to the extent it constitutes summaries of legal
matters or legal conclusions, is accurate in all material respects.
This opinion is based on various statutory provisions, regulations
promulgated thereunder and interpretations thereof by the Internal Revenue
Service and the courts having jurisdiction over such matters, all of which are
subject to change either prospectively or retroactively. Any variation or
difference in the facts from those set forth in the Offering Memorandum or the
operative documents described therein may affect the conclusions stated herein.
We hereby consent to the use of our name and our opinion under the caption
"Certain Federal Tax Consequences" in the Offering Memorandum.
Very truly yours,
/s/ Gibson, Dunn & Crutcher LLP
GIBSON, DUNN & CRUTCHER LLP
SMK/djt
<PAGE>
EXHIBIT 23.1
MORRIS, NICHOLS, ARSHT & TUNNELL
[LETTERHEAD]
April 30, 1998
Fleetwood Capital Trust
Fleetwood Enterprises, Inc.
3125 Myers Street
Riverside, California 92503
Re: FLEETWOOD CAPITAL TRUST
Ladies and Gentlemen:
We hereby consent to the filing of our legal opinion, dated
February 10, 1998, addressed to PaineWebber Incorporated and The Bank of New
York in connection with the issuance of Preferred Securities of Fleetwood
Capital Trust (the "Opinion"), as an exhibit to the Registration Statement on
Form S-3. We hereby further consent to the use of our name under the heading
"LEGAL MATTERS" in the Registration Statement and the Prospectus forming a
part thereof. In giving this consent, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Please note that the Opinion speaks only as of the date of the
Opinion and is based on our understandings and assumptions as to facts at
such time, and on our review of the documents referenced therein and the
application of Delaware law as the same existed as of such date, and we
undertake no obligation to update or supplement the Opinion after the date
thereof for the benefit of any person or entity with respect to any facts or
circumstances that have or may hereafter come to our attention or any changes
in the facts or law that may have occurred or hereafter occur or take effect.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Morris, Nichols, Arsht & Tunnell
<PAGE>
EXHIBIT 23.2
GIBSON, DUNN & CRUTCHER LLP
[LETTERHEAD]
April 29, 1998
Fleetwood Capital Trust
Fleetwood Enterprises, Inc.
3125 Myers Street
Riverside, California 92503
Re: CONSENT TO FILING OF LEGAL OPINIONS AS EXHIBITS TO REGISTRATION
STATEMENT
Ladies and Gentlemen:
We hereby consent to the filing of our legal opinions, each dated February
10, 1998, addressed to PaineWebber Incorporated in connection with the issuance
of the Preferred Securities of Fleetwood Capital Trust and the issuance of the
6% Convertible Subordinated Debentures due 2028 of Fleetwood Enterprises, Inc.,
as exhibits to the Registration Statement on Form S-3. We hereby further
consent to the use of our name under the caption "Legal Matters" in the
Registration Statement and in the Prospectus that forms a part thereof. In
giving this consent, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the Rules and Regulations of the Securities and Exchange
Commission.
Very truly yours,
/s/ Gibson, Dunn & Crutcher LLP
GIBSON, DUNN & CRUTCHER LLP
RED/GCT
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated June 23, 1997
included in Fleetwood Enterprises, Inc.'s Form 10-K for the year ended
April 27, 1997 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Orange County, California
April 30, 1998
<PAGE>
EXHIBIT 25.1
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) / /
-----------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-----------------
FLEETWOOD CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware 33-0789924
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
3125 Myers Street
Riverside, California 92503
(Address of principal executive offices) (Zip code)
-----------------
6% Convertible Trust Preferred Securities
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 27th day of April, 1998.
THE BANK OF NEW YORK
By: /S/ MARY JANE MORRISSEY
--------------------------
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
- -------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
--------------
in Thousands
<S> <C>
ASSETS
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin ..................... $ 5,742,986
Interest-bearing balances .............. 1,342,769
Securities:
Held-to-maturity securities ............ 1,099,736
Available-for-sale securities .......... 3,882,686
Federal funds sold and Securities
purchased under agreements to resell.... 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ............................... 35,019,608
LESS: Allowance for loan and
lease losses ......................... 627,350
LESS: Allocated transfer risk
reserve............................... 0
Loans and leases, net of unearned
income, allowance, and reserve ....... 34,392,258
Assets held in trading accounts .......... 2,521,451
Premises and fixed assets (including
capitalized leases) .................... 659,209
Other real estate owned .................. 11,992
Investments in unconsolidated
subsidiaries and associated
companies .............................. 226,263
Customers' liability to this bank on
acceptances outstanding ................ 1,187,449
Intangible assets ........................ 781,684
Other assets ............................. 1,736,574
-----------
Total assets ............................. $56,153,587
-----------
-----------
LIABILITIES
Deposits:
In domestic offices .................... $27,031,362
Noninterest-bearing .................... 11,899,507
Interest-bearing ....................... 15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ..... 13,794,449
Noninterest-bearing .................... 590,999
Interest-bearing ....................... 13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase..... 2,338,881
Demand notes issued to the U.S.
Treasury ............................... 173,851
Trading liabilities ...................... 1,695,216
Other borrowed money:
With remaining maturity of one year
or less .............................. 1,905,330
With remaining maturity of more than
one year through three years.......... 0
With remaining maturity of more than
three years .......................... 25,664
Bank's liability on acceptances executed
and outstanding ....................... 1,195,923
Subordinated notes and debentures ........ 1,012,940
Other liabilities ........................ 2,018,960
----------
Total liabilities ........................ 51,192,576
----------
EQUITY CAPITAL
Common stock ............................. 1,135,284
Surplus .................................. 731,319
Undivided profits and capital
reserves ............................... 3,093,726
Net unrealized holding gains
(losses) on available-for-sale
securities ............................. 36,866
Cumulative foreign currency translation
adjustments ............................ (36,184)
-----------
Total equity capital ................. 4,961,011
-----------
Total liabilities and equity
capital ............................ $56,153,587
-----------
-----------
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
_
Thomas A. Renyi |
Alan R. Griffith | Directors
J. Carter Bacot _|
- --------------------------------------------------------------------------------
-5-
<PAGE>
EXHIBIT 25.2
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) / /
--------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
--------------------
FLEETWOOD ENTERPRISES, INC.
(Exact name of obligor as specified in its charter)
Delaware 95-1948322
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
3125 Myers Street
Riverside, California 92503
(Address of principal executive offices) (Zip code)
--------------------
6% Convertible Subordinated Debentures
due 2028
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 27th day of April, 1998.
THE BANK OF NEW YORK
By: /S/ MARY JANE MORRISSEY
--------------------------
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
- -------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin ..................... $ 5,742,986
Interest-bearing balances .............. 1,342,769
Securities:
Held-to-maturity securities ............ 1,099,736
Available-for-sale securities .......... 3,882,686
Federal funds sold and Securities
purchased under agreements to resell.... 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ............................... 35,019,608
LESS: Allowance for loan and
lease losses ......................... 627,350
LESS: Allocated transfer risk
reserve............................... 0
Loans and leases, net of unearned
income, allowance, and reserve ....... 34,392,258
Assets held in trading accounts .......... 2,521,451
Premises and fixed assets (including
capitalized leases) .................... 659,209
Other real estate owned .................. 11,992
Investments in unconsolidated
subsidiaries and associated
companies .............................. 226,263
Customers' liability to this bank on
acceptances outstanding ................ 1,187,449
Intangible assets ........................ 781,684
Other assets ............................. 1,736,574
-----------
Total assets ............................. $56,153,587
-----------
-----------
LIABILITIES
Deposits:
In domestic offices .................... $27,031,362
Noninterest-bearing .................... 11,899,507
Interest-bearing ....................... 15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ..... 13,794,449
Noninterest-bearing .................... 590,999
Interest-bearing ....................... 13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase..... 2,338,881
Demand notes issued to the U.S.
Treasury ............................... 173,851
Trading liabilities ...................... 1,695,216
Other borrowed money:
With remaining maturity of one year
or less .............................. 1,905,330
With remaining maturity of more than
one year through three years.......... 0
With remaining maturity of more than
three years .......................... 25,664
Bank's liability on acceptances executed
and outstanding ....................... 1,195,923
Subordinated notes and debentures ........ 1,012,940
Other liabilities ........................ 2,018,960
----------
Total liabilities ........................ 51,192,576
----------
EQUITY CAPITAL
Common stock ............................. 1,135,284
Surplus .................................. 731,319
Undivided profits and capital
reserves ............................... 3,093,726
Net unrealized holding gains
(losses) on available-for-sale
securities ............................. 36,866
Cumulative foreign currency translation
adjustments ............................ (36,184)
-----------
Total equity capital ................. 4,961,011
-----------
Total liabilities and equity
capital ............................ $56,153,587
-----------
-----------
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
_
Thomas A. Renyi |
Alan R. Griffith | Directors
J. Carter Bacot _|
- --------------------------------------------------------------------------------
-5-
<PAGE>
EXHIBIT 25.3
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) / /
--------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
--------------------
FLEETWOOD ENTERPRISES, INC.
(Exact name of obligor as specified in its charter)
Delaware 95-1948322
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
3125 Myers Street
Riverside, California 92503
(Address of principal executive offices) (Zip code)
--------------------
Guarantee of 6% Convertible Trust Preferred Securities
of Fleetwood Capital Trust
(Title of the indenture securities)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of New
York, and State of New York, on the 27th day of April, 1998.
THE BANK OF NEW YORK
By: /S/ MARY JANE MORRISSEY
---------------------------
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
- -------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin ..................... $ 5,742,986
Interest-bearing balances .............. 1,342,769
Securities:
Held-to-maturity securities ............ 1,099,736
Available-for-sale securities .......... 3,882,686
Federal funds sold and Securities
purchased under agreements to resell.... 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ............................... 35,019,608
LESS: Allowance for loan and
lease losses ......................... 627,350
LESS: Allocated transfer risk
reserve............................... 0
Loans and leases, net of unearned
income, allowance, and reserve ....... 34,392,258
Assets held in trading accounts .......... 2,521,451
Premises and fixed assets (including
capitalized leases) .................... 659,209
Other real estate owned .................. 11,992
Investments in unconsolidated
subsidiaries and associated
companies .............................. 226,263
Customers' liability to this bank on
acceptances outstanding ................ 1,187,449
Intangible assets ........................ 781,684
Other assets ............................. 1,736,574
-----------
Total assets ............................. $56,153,587
-----------
-----------
LIABILITIES
Deposits:
In domestic offices .................... $27,031,362
Noninterest-bearing .................... 11,899,507
Interest-bearing ....................... 15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ..... 13,794,449
Noninterest-bearing .................... 590,999
Interest-bearing ....................... 13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase..... 2,338,881
Demand notes issued to the U.S.
Treasury ............................... 173,851
Trading liabilities ...................... 1,695,216
Other borrowed money:
With remaining maturity of one year
or less .............................. 1,905,330
With remaining maturity of more than
one year through three years.......... 0
With remaining maturity of more than
three years .......................... 25,664
Bank's liability on acceptances executed
and outstanding ....................... 1,195,923
Subordinated notes and debentures ........ 1,012,940
Other liabilities ........................ 2,018,960
----------
Total liabilities ........................ 51,192,576
----------
EQUITY CAPITAL
Common stock ............................. 1,135,284
Surplus .................................. 731,319
Undivided profits and capital
reserves ............................... 3,093,726
Net unrealized holding gains
(losses) on available-for-sale
securities ............................. 36,866
Cumulative foreign currency translation
adjustments ............................ (36,184)
-----------
Total equity capital ................. 4,961,011
-----------
Total liabilities and equity
capital ............................ $56,153,587
-----------
-----------
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
_
Thomas A. Renyi |
Alan R. Griffith | Directors
J. Carter Bacot _|
- --------------------------------------------------------------------------------
-5-
