FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
------------
For the fiscal year ended DECEMBER 31, 1995
-----------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
---------------
For the transition period from to
--------------------- ---------------------
Commission file number 1-5599
------------------------
GREAT DANE HOLDINGS INC.
- ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 54-0698116
- ---------------------------------------------------------------------------
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
2016 North Pitcher Street, Kalamazoo, Michigan 49007
- ---------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (616) 343-6121
----------------
Securities Registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Subordinated Discount Debentures American Stock Exchange, Inc.
Due January 1, 2006
12-3/4% Senior Subordinated Debentures American Stock Exchange, Inc.
Due 2001
Securities registered pursuant to Section 12(g) of the Act: None
- ---------------------------------------------------------------------------
Indicate by check mark whether Registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy of information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. X
-----
There were 1,001.042 shares of Registrant's only class of common stock
outstanding as of March 1, 1996.
There are no shares of voting stock held by non-affiliates of the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE: None
<PAGE>
<PAGE> 1
PART I
ITEM 1. BUSINESS
--------
A. OVERVIEW. Great Dane Holdings Inc. ("Holdings" or the "Company")
is a holding company and its business is conducted by its operating
subsidiaries. Through Great Dane Trailers, Inc. ("Great Dane"), the Company
is the largest manufacturer, in terms of total revenues, of truck trailers
and intermodal containers and chassis in the United States. In addition,
through Checker Motors Corporation ("Motors"), the Company is one of the
leading independent manufacturers of sheet metal stampings for automotive
components and subassemblies for sale to North American original equipment
manufacturers ("OEMs"). The Company's other operations consist of its
vehicular operations, primarily its subsidiary, Yellow Cab Company ("Yellow
Cab"), which is currently the largest owner of taxicabs and provider of taxi-
related services in Chicago, Illinois, and its insurance operations, American
Country Insurance Company ("Country"), which underwrites property and
casualty insurance.
The Company was incorporated in 1959 under the laws of the State of
Florida and subsequently changed its name to International Controls Corp. On
January 1, 1989, the Company's continuing operations consisted solely of
Great Dane's truck trailer manufacturing operations. On January 11, 1989,
the Company acquired all of the outstanding capital stock of Motors.
Immediately following the acquisition of Motors by the Company, Checker
Holding Corp. ("Holding"), a privately-held company owned by substantially
all of the former shareholders of Motors, acquired all of the outstanding
capital stock of the Company (the "Holding Buyout"). Subsequently, Holding
was merged into the Company. The Holding Buyout has been accounted for as if
Motors acquired the Company (a "reverse acquisition"), since there was no
significant change in control of Motors. On October 19, 1994, the Company
changed its name to Great Dane Holdings Inc. and reincorporated in the State
of Delaware through a merger into a newly incorporated wholly-owned
subsidiary.
As of January 17, 1995, pursuant to a Plan of Reorganization (the
"Plan"), all of the assets (subject to the liabilities) of Checker Motors
Co., L.P. ("Checker L.P." or "the Partnership"), a Delaware limited
partnership in which Motors was the general partner, were distributed to
Motors, which contributed substantially all of such assets (subject to the
liabilities), except for the stock of Country, to three newly formed, wholly-
owned subsidiaries, Yellow Cab, Chicago AutoWerks Inc. ("Chicago AutoWerks")
and CMC Kalamazoo Inc. ("CMC Kalamazoo). In accordance with the Plan, Motors
was simultaneously reincorporated in Delaware through a merger with its
wholly-owned subsidiary organized solely for that purpose.
B. INFORMATION CONCERNING INDUSTRY SEGMENTS. Certain financial data
with respect to Registrant's industry segments appear in Note K of Notes to
Consolidated Financial Statements and are incorporated herein by reference.
As of December 31, 1995, the Company employed approximately 5,750
people. The chart below details the number of persons employed as of that
date in each of the Company's industry segments:
<PAGE>
<PAGE> 2
<TABLE>
<CAPTION>
Administrative
Hourly and Executive
------ -------------
<S> <C> <C>
Truck Trailer Manufacturing 3,713 584
Automotive Products Operations 868 164
Vehicular Operations 216 26
Insurance Operations 6 158
</TABLE>
C. NARRATIVE DESCRIPTION OF BUSINESS.
TRUCK TRAILER MANUFACTURING.
Great Dane designs, manufactures and distributes a full line of truck
trailers and containers and chassis. In terms of total revenues, Great Dane
is the largest trailer manufacturer in the U.S. and produces refrigerated
(reefer) vans, dry freight vans, platform trailers and containers and
chassis. Great Dane also sells aftermarket parts and provides retail service
through its extensive retail branch organization.
The national truck trailer market is fragmented and competitive due to
the relative ease of entrance (with the exception of the higher technology
refrigerated trailers). There are approximately 180 companies in the truck
trailer manufacturing industry. In 1995, the two largest companies, Great
Dane and Wabash National Corporation, accounted for approximately 28% of the
market and the ten largest companies accounted for approximately 80% of
sales. The basis of competition in the truck trailer industry is quality,
durability, price, warranties, service and relationships.
PRODUCTS
Great Dane's principal products include vans, reefers, platform
trailers and intermodal containers and chassis. Great Dane's trailers and
intermodal containers are manufactured in sizes ranging from 28 to 57 feet.
In addition to this standard line of products, its flexible assembly
operations enable Great Dane to customize products for its customers at
premium prices.
VANS. Vans are used primarily for the transportation of dry
freight. Great Dane manufactures four primary types: sheet and post,
aluminum plate, ThermaCube and Fiberglass Reinforced Plastic Plywood. Great
Dane sells vans primarily to for-hire truckload carriers, private carriers
and leasing companies.
REEFERS. Great Dane's reefers are specialized products. The
Company believes that it is the only company to offer more than one type of
reefer. Great Dane currently manufactures three types of reefers.
PLATFORM TRAILERS. Platform trailers are flatbeds or open deck
trailers. Great Dane offers a full line of platform trailers. Drop frame
flatbeds are designed for heavy duty hauling where low deck heights are
required. Extendible flatbeds are used for self-supporting loads (e.g., pre-
stressed concrete). Curtainside flatbeds are used where side loading and
<PAGE>
<PAGE> 3
cover is required. The primary customers for Great Dane's platform trailers
are for-hire material haulers, which would include steel haulers, pre-
stressed concrete carriers and builders.
INTERMODAL CONTAINERS AND CHASSIS. In conjunction with the growth
of intermodal container transportation, Great Dane's engineers developed a
specialized container (which can be double stacked during rail transport) and
chassis that allow a trucking company to haul containerized loads which are
similar in size and weight to those carried on conventional over-the-road
trailers. These containers use either aluminum plate or the ThermaCube
technology, which is Great Dane's composite wall construction, to offer
greater inside width, higher cubic capacity and greater strength than can be
obtained by conventional sheet and post construction. Further, these
containers are 500 to 1,000 pounds lighter and the chassis are 1,000 to 1,500
pounds lighter than products now in use with similar carrying capacities.
MARKETING, DISTRIBUTION AND SALES
Great Dane's business includes aftermarket parts and accessories
sales, used trailer sales and retail services (including repair and
maintenance) which enable it to be a full-service provider. The parts and
service operations have historically been a stable source of higher margin
business.
Great Dane sells replacement parts and accessories through forty-
nine full-line dealers, twenty parts-only dealers and nineteen Great Dane-
owned branch operations. Dealers and branches sell parts either over-the-
counter or through their respective retail services.
To be competitive in the sale of new trailers, it is often
necessary to accept used trailers in trade. Great Dane's larger retail
branches employ individuals who are responsible for trade-in appraisals and
selling used trailers. Great Dane believes that its nationwide distribution
system provides it with superior used trailer marketing capabilities.
Great Dane owns and operates nineteen full-service retail branches,
which provide repair and maintenance services. These retail branches also
provide warranty support to Great Dane's customers.
MANUFACTURING AND OPERATIONS
MANUFACTURING. Great Dane has five manufacturing facilities,
located in Savannah, Georgia; Memphis, Tennessee; Wayne, Nebraska; Brazil,
Indiana; and Terre Haute, Indiana. The Terre Haute facility is Great Dane's
latest manufacturing plant which initiated production in April 1995. Certain
of Great Dane's manufacturing operations include flexible assembly lines that
allow Great Dane to customize its products in a cost-efficient manner.
RESEARCH AND DEVELOPMENT. Great Dane makes extensive use of
computer-aided design ("CAD") technology to support production engineering.
Great Dane's use of CAD technology accelerates the development of product
innovations and manufacturing efficiencies. Great Dane's new products must
meet strict quality and durability standards and must pass strenuous road
test procedures. Great Dane believes that it is the only trailer
manufacturer with on-site road simulation testing capability.
<PAGE>
<PAGE> 4
Great Dane has developed a new proprietary floor for its ThermaCube
and certain Classic reefers which will eliminate wood components, thereby
increasing the life of the floor, increasing the capacity of the reefer,
simplifying the manufacturing process and reducing the cost to manufacture
the reefer. Great Dane is also developing and testing a new line of ultra-
lightweight flatbeds intended to increase its market share.
SUPPLIES AND RAW MATERIALS. Purchased materials represent
approximately 80% of direct cost of goods sold and are purchased on a
centralized basis in order to achieve economies of scale. Great Dane
purchases a variety of raw materials and sub-assemblies from various vendors
with short-term contracts. Aluminum, wood, tires, steel and refrigeration
units account for a significant portion of material costs. Great Dane has
not experienced major shortages in these materials, but prices may fluctuate.
However, Great Dane attempts to minimize purchased material price
fluctuations by utilizing just-in-time inventory systems, thereby
coordinating the purchase of certain materials with customer orders.
PATENTS, LICENSES AND TRADEMARKS
The Company believes its "Great Dane" trademark, which identifies all
of its products, to be of value and to contribute significantly to the wide
acceptance of its products.
BACKLOG
Truck trailer and container backlog was approximately $192 million at
December 31, 1995, and $515 million at December 31, 1994. The decrease in
backlog is due to the weakened demand for the movement of freight resulting
in decreased orders for truck trailers.
AUTOMOTIVE PRODUCTS OPERATIONS.
Through South Charleston Stamping & Manufacturing Company ("SCSM") and
CMC Kalamazoo, Motors develops, designs, engineers and manufactures a broad
range of sheet metal automotive components and subassemblies, including
tailgates, fenders, doors, roofs and hoods for sale to North American OEMs.
The majority of Automotive Products Operations revenues are derived from
complex, value-added products, primarily assemblies containing multiple
stamped parts and various welded or fastened components.
MANUFACTURING
Unlike certain of its smaller competitors, the Automotive Products
Operations have the equipment and versatility to produce a wide variety of
automotive stamping products, carrying out substantially all phases of a
project. The principal products include tailgate and liftgate assemblies,
door assemblies, hood assemblies, fender assemblies, wheelhouses, pillars,
back panels, floor panels, deck lids, body side panels, roof outer panels and
related parts.
The major portion of tooling design, build and prototype for the
Automotive Products Operations is performed by selected suppliers under close
supervision.
<PAGE>
<PAGE> 5
MARKETING AND CUSTOMERS
The Automotive Products Operations focus on the higher-growth light
truck, sport utility vehicle and van segments of the market and currently
supply products primarily for GM which accounted for 81% of the segment's
1995 revenues and has, historically, accounted for more than 90% of this
segment's revenues. At the present time, Motors is supplying parts on the
following light truck/sport utility and minivan vehicles: Suburban, Crew Cab,
M Van (Astro and Safari), CK Pickup Truck, CK Sport Side Pickup and
Tahoe/Yukon. The automotive segment also supplies parts for GM's service
organization. Motors is also currently supplying parts to Freightliner Corp.
(Class 6 and 7 Truck), Saturn Corporation (station wagon), Ford Motor Co.
(Cougar) and Toyota (Camry and Avalon). In addition, SCSM was awarded an
eight-year contract with Mercedes-Benz to produce the majority of the stamped
parts for its new sport utility vehicle. Mercedes-Benz is providing the
funding necessary to build the tooling to produce these parts.
Shipments of customer orders from both SCSM and CMC Kalamazoo are made
on a daily or weekly basis as required by the customer. GM provides an
estimated 13-week shipping forecast which is used for material and
fabrication planning purposes. Nevertheless, changes in production by the
customer may be reflected in increases or decreases of these forecasts.
SCSM and CMC Kalamazoo are committed to customer satisfaction by
producing parts and providing the necessary support systems to assure
conformity to customer requirements. As evidence of success in these areas,
SCSM was awarded GM's "Mark of Excellence" award, and the GM Q.S.P. (quality,
service, price) award for being GM's worldwide Supplier of the Year 1993 for
major sheet metal stampings. In addition, SCSM has been awarded ISO 9000
Certification by the International Standards Organization (ISO 9002). Both
CMC Kalamazoo and SCSM are implementing QS 9000.
The fabrication business is highly competitive and Motors competes with
numerous other industrial manufacturers, as well as with the in-house
capabilities of its customers (e.g., GM). The failure to obtain future
orders from GM could have a material adverse impact on the Automotive
Products Operations despite the fact that the Company is expanding its
customer base.
VEHICULAR OPERATIONS.
Yellow Cab is the largest taxicab fleet owner in the City of Chicago
("Chicago") and, as of January 1, 1996, owned 2,171 or 39% of the 5,600
taxicab licenses ("licenses" or "medallions") available in Chicago. Yellow
Cab's primary business is the leasing of its medallions and vehicles to
independent taxi operators. Through Motors' subsidiary, Chicago AutoWerks,
the Company also provides a variety of other services to taxi drivers and
non-affiliated medallion holders, including repair and maintenance services
and insurance coverage through Country.
THE OWNER-OPERATOR AND DAILY LEASE PROGRAMS
Pursuant to Yellow Cab's owner-operator program, an independent, non-
employee taxi operator leases from Yellow Cab a license and vehicle, with an
option to purchase the vehicle beginning at the end of the second year.
During the lease term (generally five years), Yellow Cab receives a weekly
lease payment for the vehicle as well as a weekly fee to cover the use of
Yellow Cab's license. The Company and its affiliates also provide other
<PAGE>
<PAGE> 6
services for fees, including use of its colors and trade name, liability
insurance coverage, repair and maintenance. Most operators also purchase the
required collision insurance from Country. See "Business--Insurance
Operations." The daily lease program, which allows drivers to lease a
medallion and a vehicle for 12 hours, 24 hours, or for a weekend, has been
used largely as a source and training operation for new owner-operators.
MAINTENANCE, REPAIR AND PARTS SALES
Chicago AutoWerks provides preventive and other maintenance services,
primarily to Yellow Cab and non-affiliated taxi drivers, and also, as a
licensed full-line auto repair shop, to the public. Chicago AutoWerks
maintains a body shop at which major repairs can be made. As an authorized
Chevrolet and Ford warrantor, Chicago AutoWerks also repairs those
manufacturers' vehicles that are under warranty and invoices the
manufacturers directly.
Chicago AutoWerks serves the dispatching needs of Yellow Cab and non-
affiliated drivers, maintains the radios in their taxicabs and supplies the
emergency radio services they require. Chicago AutoWerks also sells
automotive parts.
THE MEDALLIONS
In order to retain its licenses, the Company must comply with the
regulations of Chapter 9-112 of the Municipal Code of Chicago (governing
public passenger vehicles), including the payment of annual taxicab license
fees, currently $500 per vehicle.
Pursuant to a 1988 agreement with the City of Chicago to settle various
lawsuits, Yellow Cab is required to relinquish to the City of Chicago and not
renew 100 taxicab licenses on January 1 of each year through 1997 (the
"Agreement"). In addition, the Agreement limits to 100 per year the number
of new licenses that the City of Chicago may add to the total medallions
outstanding through 1997, bringing the total number of available licenses to
a maximum of 5,700 on December 31, 1997. At the required surrender rates,
assuming no additional medallions are sold by Yellow Cab, Yellow Cab would
hold 2,071 medallions after January 1, 1997, or approximately 36% of the
maximum total then-to-be outstanding. There is no limit on the number of
medallions Chicago may issue after December 31, 1997.
The scheduled decline in the number of licenses allowed to be held by
Yellow Cab pursuant to the Agreement has had, and will continue to have, a
negative effect on the revenue-generating capability of the taxi leasing
operations. In the past, Yellow Cab has been able to offset these declines
to some extent through increases in the average lease rates charged to its
customers, as well as through increases in other services provided by Chicago
AutoWerks. At the same time, as the number of medallions held by Yellow Cab
declines, Yellow Cab will require fewer new vehicles to support its taxi
leasing operations and, consequently, a lower level of capital spending.
The Agreement has also had the effect of allowing the Company to
purchase and sell licenses in the open market for the first time since 1982.
Recent sales of these licenses have been recorded at prices of approximately
$35,000 per medallion. Although the value of Yellow Cab's fleet of vehicles
is reflected on the Company's balance sheet, the significant value of its
medallions is not.
<PAGE>
<PAGE> 7
Although Yellow Cab is the largest provider of taxicab related services
in Chicago, it faces competition from a number of other medallion owners who
lease medallions and vehicles to independent operators. Yellow Cab
management believes that even the most significant of these competitors owns
only approximately 150 to 200 medallions, although each competitor operates
under a variety of individual cab service names and logos. There are also
many associations in the City, the largest of which is the Checker Taxi
Association, an unaffiliated association, which compete with Yellow Cab in
the delivery of taxicab related services to medallion owners and their
agents.
LIABILITY INSURANCE
Yellow Cab currently maintains liability insurance coverage for losses
of up to $350,000 per occurrence, as well as an "excess layer" of coverage
for losses over $600,000 and up to $29,000,000. The initial $350,000 layer
of insurance is issued by Country. See "Business--Insurance Operations."
During several periods in the past, Yellow Cab did not maintain the level of
coverage that Yellow Cab currently maintains for any losses over $350,000 per
occurrence. As a result, there are currently outstanding claims against
Yellow Cab for which it is not fully covered by third-party insurance.
Yellow Cab maintains balance sheet reserves totalling $1.8 million at
December 31, 1995, for these claims. Management believes that these reserves
will be sufficient to cover its outstanding claims.
REGULATORY
Yellow Cab's operations are regulated extensively by the Department of
Consumer Services of the City of Chicago which regulates Chicago taxicab
operations with regard to certain requirements including vehicle maintenance,
insurance and inspections, among others. The City Council of Chicago has
authority for setting taxicab rates of fare. Effective December 1, 1993,
lessors had the right to increase, until May 1, 1994, the rates paid by
lessee drivers by not more than 2.8% of the lease rate in effect on December
1, 1993. After May 1, 1994, lessors may not charge more than the rates
prescribed by the Commissioner (which, in certain categories, were less than
the rates then charged by Yellow Cab) without the consent of the City of
Chicago. The rates in effect on May 1, 1994, including the 2.8% increase,
were permitted to remain in effect pending a petition and appeal for a higher
rate. Yellow Cab increased its rates by the maximum allowed 2.8% prior to
May 1, 1994, and filed a petition to increase its rates still further. The
appeal was denied by the Commissioner of Consumer Services on December 29,
1995, and on January 28, 1996, all lease rates charged by Yellow Cab were
reduced to the amounts in effect on December 1, 1993. Yellow Cab has filed
a case in the federal court (Case No. 95C3383) asking the court to declare
the lease regulation ordinance unconstitutional. Yellow Cab also plans to
file an appeal of the lease rates in effect on January 31, 1996, based on
present operating costs.
INSURANCE OPERATIONS.
Country underwrites property and casualty insurance, including taxicab
insurance, workers' compensation and other commercial and personal lines.
During 1995, 81% of Country's total premium revenue was attributable to non-
affiliated property/casualty lines, primarily workers' compensation,
commercial automobile and commercial multiple peril. The remainder of
Country's premium revenues was attributable to affiliated taxi liability and
<PAGE>
<PAGE> 8
collision and workers' compensation insurance in the State of Illinois.
Country is currently rated "A-" by A. M. Best.
Country is one of the few voluntary providers of taxi liability
insurance in the industry. Most insurers which have previously written taxi
insurance coverage on a voluntary basis experienced poor underwriting results
and have withdrawn from the business. Management believes that Country's
longstanding relationship with Yellow has provided it with a stable market
for this type of coverage and has enabled it to develop a comprehensive
understanding of the business and to assess more properly the associated
risk.
The affiliated taxicab liability coverage which Country writes carries
a $350,000 limit of liability for each driver. In addition, Country makes
collision insurance available to licensees and owner-operators at premium
rates which are favorable relative to the rates charged by competitors for
equivalent coverage. Country also writes full lines of property and casualty
insurance for risks located in the City of Chicago and the surrounding
metropolitan area. With the exception of a specialty public transportation
program (excluding limousines), which program policies are reinsured for
amounts above $350,000, all non-affiliate policies are reinsured for amounts
above $250,000.
Country is domiciled in the State of Illinois and is a licensed carrier
in Michigan, Indiana and Wisconsin as well as being admitted as an excess and
surplus lines carrier in 31 other states. Country is also applying for
licenses in other states, such as Iowa. To the best of management's
knowledge, Country is in compliance with all applicable statutory
requirements and regulations.
LOSSES AND LOSS ADJUSTMENT EXPENSES.
Country's Claim Department activities include evaluating claims that may
have potential exposure. This is accomplished through the application of
claim evaluation standards designed to estimate the ultimate cost of the
claim. All claims reported are investigated immediately upon notice to
Country and are evaluated on a periodic basis until settlement or until such
time as it is determined that there is no exposure to Country.
Country establishes reserves for unpaid losses and loss adjustment
expenses ("LAE") to provide for the ultimate settlement and administration of
claims, including both claims that have been reported to Country and for
claims that have occurred but have not been so reported. Reserves are
established for reported claims when the initial notice of the claim is
received. Generally, reserves are established without regard to whether the
claim will be paid or challenged. The reserves for unpaid losses and LAE are
determined using case-basis evaluations and statistical analysis and
represent estimates of the ultimate gross and net cost of all unpaid losses
and LAE incurred through December 31 of each year. Those estimates are
subject to the effect of trends in claim severity and frequency. Those
estimates are continually reviewed and, as experience develops and new
information becomes known, the reserves are adjusted as necessary. Such
adjustments are included in current operations, including increases and
decreases, net of reinsurance, in the estimate of ultimate liabilities for
insured events of prior years.
<PAGE>
<PAGE> 9
Country continually attempts to improve its loss estimation process by
refining its ability to analyze loss development patterns, claim payments,
and other information; however, there remain many reasons for either
redundancy or adverse development of ultimate liabilities. In management's
judgment, information currently available has been appropriately considered
in estimating Country's loss reserves, but changes in estimates of claims
costs could affect future operating results.
Country establishes reserves to cover the ultimate costs of
investigating all claims, administering the claims handling process and
defending lawsuits arising from claims based on actual experience and
historical data such as the ratio of paid claims expenses to claims paid and
on the basis of other currently available information. Unpaid losses on LAE
reserves include allocated expenses (those directly attributable to a
specific claim) and unallocated expenses (those expenses not directly
attributable to a given claim) such as salaries, general and administrative
expenses.
Country provides for reinsurance recoveries on reserves based on
specific agreements in effect at the time the claims occurred. Further,
Country does not discount any of its reserves.
<PAGE>
<PAGE> 10
RECONCILIATION OF RESERVE FOR UNPAID LOSSES AND LOSS ADJUSTMENT
EXPENSES.
The following table provides a reconciliation of the beginning and
ending reserve balances to amounts reported in the balance sheet for 1993,
1994 and 1995 (dollars in thousands):
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Reserve for unpaid losses and LAE, net of
reinsurance recoverables, at beginning
of year $62,234 $64,274 $66,494
Add:
Provision for losses and LAE for claims
occurring in the current year, net of
reinsurance 33,152 46,366 51,438
Change in estimated losses and LAE for
claims occurring in prior year, net of
reinsurance (583) (7,711) (6,340)
-------- -------- --------
Incurred losses during the current year,
net of reinsurance 32,569 38,655 45,098
Deduct:
Losses and LAE payments for claims, net
of reinsurance, occurring during:
Current year 11,118 7,047 17,763
Prior years 19,411 29,388 19,247
-------- -------- --------
30,529 36,435 37,010
-------- -------- --------
Reserve for unpaid losses and LAE, net of
reinsurance recoverables, at end of year $64,274 $66,494 $74,582
Reinsurance recoverable on unpaid losses and
LAE at end of year (following adoption of
FAS 113) 6,905 2,824 3,569
-------- -------- --------
Reserve for unpaid losses and LAE gross of
reinsurance recoverables at end of year $71,179 $69,318 $78,151
======== ======== ========
</TABLE>
<PAGE>
<PAGE> 11
The anticipated effect of inflation is implicitly considered when
estimating reserves for unpaid losses and LAE.
Except for the last three captions, the table on the following page
presents the development of the reserve for unpaid property/casualty losses
and LAE, net of reinsurance, for 1986 through 1995. The last three captions
present that type of development on a "gross-of-reinsurance" basis for the
periods following Country's adoption of FASB Statement 113 as of January 1,
1993. The top line of the table shows the estimated reserve for unpaid
losses and LAE reported at the December 31 balance sheet date, net of
reinsurance recoverables on unpaid claims, at each of the dates indicated.
That net reserve represents the estimated amount of losses and LAE for claims
occurring in all prior years that are unpaid as of that balance sheet date,
including losses that had been incurred but not yet reported to Country. The
upper portion of the table shows the re-estimated amounts of the previously
reported reserve based on experience as of the end of each succeeding year.
The estimate is increased or decreased as more information becomes known
about the frequency or severity of the claims incurred.
The amounts on the "cumulative redundancy (deficiency)" line represent
the aggregate change in the estimates over all prior years. For example, the
1986 reserve has developed a $9.4 million deficiency over ten years. That
amount has been included in operations over the ten years and did not have a
significant effect on income of any one year. The effects on income caused
by changes in estimates of the reserves for losses and LAE for the past three
years are shown in the foregoing three-year loss development table.
The lower section of the table on the following page shows the
cumulative amounts paid with respect to the previously reported reserve as of
the end of each succeeding year.
<PAGE>
<PAGE> 12
<TABLE>
<CAPTION>
(dollars in thousands)
December 31, 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CUMULATIVE REDUNDANCY
(DEFICIENCY)
Reserve for claims and
claims expenses net of
reinsurance recoverables $23,619 $30,222 $38,108 $43,263 $49,526 $57,846 $62,234 $64,274 $66,494 $74,582
Reserve re-estimate as of:
One year later 25,257 30,736 40,399 46,561 50,581 56,477 61,651 71,985 60,154
Two years later 28,865 33,705 41,923 46,102 54,463 58,410 70,729 66,535
Three years later 31,018 32,423 42,248 48,083 55,729 66,260 64,482
Four years later 29,627 32,550 45,594 48,901 61,593 61,351
Five years later 29,490 33,035 43,215 53,248 57,585
Six years later 30,213 34,320 46,906 50,802
Seven years later 32,086 36,904 45,205
Eight years later 33,468 35,825
Nine years later 33,047
Cumulative redundancy
(deficiency) (9,428) (5,603) (7,097) (7,539) (8,059) (3,505) (2,248) (2,261) 6,340
One year later 7,269 7,000 11,234 12,747 16,627 16,934 19,411 29,388 19,247
Two years later 10,995 13,895 19,174 23,287 26,737 29,294 41,900 40,619
Three years later 16,012 19,603 26,403 29,819 35,998 47,613 49,391
Four years later 20,885 24,443 31,054 36,807 49,089 51,971
Five years later 24,847 27,560 36,490 47,662 51,834
Six years later 27,063 31,684 44,535 48,417
Seven years later 30,240 35,465 43,793
Eight years later 32,416 34,716
Nine years later 32,294
Reserve for claims and
expenses, direct $71,179 $69,318 $78,151
Reinsurance recoverables 6,905 2,824 3,569
-------- -------- --------
Reserve for claims and expenses, net $64,274 $66,494 $74,582
======== ======== ========
</TABLE>
<PAGE>
<PAGE> 13
In evaluating the information in the foregoing table, it should be noted
that each amount includes the effects of all changes in amounts for prior
periods. For example, the amount of the deficiency related to losses settled
in 1989, but incurred in 1986, will be included in the cumulative deficiency
amount for years 1986, 1987, and 1988. The table does not present accident
or policy year development data. Conditions and trends that have affected
the development of the liability in the past may not necessarily occur in the
future. Accordingly, it may not be appropriate to extrapolate future
redundancies or deficiencies based on this table.
LABOR RELATIONS. Approximately 350 employees in the Company's
automotive products operations, 200 in the Company's truck trailer
manufacturing operations and 50 in the Company's vehicular operations are
covered by collective bargaining agreements. During February 1996, Motors
entered into a new contract with Local 7682 of the United Paperworkers
International Union, AFL-CIO which expires in June 1999. Certain vehicular
operation employees recently disaffiliated with the D.U.O.C. Local 777 and
elected affiliation with the Manufacturing, Production and Service Workers
Local No. 24. Management is currently in contract negotiations with this new
union. The Company is currently honoring the terms of the old D.U.O.C.
contract, which expired on November 21, 1995, while negotiating a new union
contract. During February 1996, Great Dane Trailers, Tennessee, Inc., a
subsidiary of Great Dane, negotiated a new contract (expiring in January
1999) with Talbot Lodge No. 61 of the International Association of Machinists
and Aerospace Workers. In general, the Company believes its relationship
with its employees to be satisfactory. Although there have been attempts to
unionize various of the Company's divisions in the past few years, including
SCSM and the Great Dane plant in Brazil, Indiana, such attempts have, to
date, been unsuccessful.
COMPLIANCE WITH ENVIRONMENTAL PROTECTION PROVISIONS. The Company
believes that future compliance with federal, state and local provisions
which have been enacted or adopted regulating the discharge of materials into
the environment, or otherwise relating to the protection of the environment,
will have no material effect upon the capital expenditures, earnings and
competitive position of the Company.
ITEM 2. PROPERTIES
----------
The Company currently maintains its principal executive offices at
Motors' facility in Kalamazoo, Michigan.
The location and general description of the principal properties owned
or leased by the Company are as follows:
<PAGE>
<PAGE> 14
<TABLE>
<CAPTION>
Owned or Leased;
Area/Facility If Leased,
Location Type of Facility Square Footage Expiration Year
-------- ---------------- -------------- ---------------
<S> <C> <C> <C>
TRUCK TRAILER MANUFACTURING OPERATIONS:
Savannah, Manufacturing Plant 61 acres/ Owned
Georgia and Office 471,000 sq. ft.
Brazil, Manufacturing Plant 80 acres/ Owned
Indiana and Office 564,000 sq. ft.
Memphis, Manufacturing Plant 8 acres/ Leased;
Tennessee 107,000 sq. ft. 2003
3.5 acres/ Owned
13,000 sq. ft.
Wayne, Manufacturing Plant 35 acres/ Owned
Nebraska and Office 197,000 sq. ft. mfg.
Terre Haute, Manufacturing Plant 113 acres/ Owned
Indiana and PDC 651,000 sq.ft.
(approximately
292,000 sq.ft.
in use)
14 Locations Sales and Service 98 acres/ Owned
in 10 States Branches 303,000 sq. ft.
16 Locations Sales and Service 36 acres/ Leased; 1996
in 11 states Branches 223,000 sq. ft. to 2002
AUTOMOTIVE PRODUCTS OPERATIONS:
Kalamazoo, Manufacturing Plant 71 acres/ Owned
Michigan and Office 750,000 sq. ft.
South Manufacturing Plant 922,000 sq. ft. Leased;
Charleston, and Office 2028
West Virginia
VEHICULAR OPERATIONS:
Chicago, Garages, Parking 15 acres/ 12 Owned;
Illinois Lots and Offices 281,000 sq. ft. 1 Leased - 2012
(15 Loca-
tions)
INSURANCE OPERATIONS:
Chicago, Offices/Storage 45,724 sq. ft. Leased; 1996
Illinois Facility to 2002
(3 Loca-
tions)
</TABLE>
The principal facilities owned by the Company and its subsidiaries are
considered by the Company to be well maintained, in good condition and
suitable for their intended use.
<PAGE>
<PAGE> 15
ITEM 3. LEGAL PROCEEDINGS
-----------------
CERTAIN ENVIRONMENTAL MATTERS. Within the past five years, Great Dane
and Motors have entered into certain consent decrees with federal and state
governments relating to the cleanup of waste materials. The aggregate
obligations of Great Dane and Motors pursuant to these consent decrees are
not material.
In May 1988, Holdings sold all of the stock of its subsidiaries, Datron
Systems, Inc., and All American Industries, Inc., and in connection therewith
agreed to indemnify the purchasers for, among other things, certain potential
environmental liabilities. The purchaser has put Holdings on notice of
certain alleged environmental and other matters for which it intends to seek
indemnification as costs are incurred. Holdings does not believe that its
obligations, if any, to pay these claims will be material.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
<PAGE>
<PAGE> 16
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
There is no market for Registrant's common stock; as of March 1, 1996,
all issued and outstanding common stock is owned of record by David R.
Markin, Martin L. Solomon, Allan R. Tessler, Wilmer J. Thomas, Jr., and Jay
H. Harris.
ITEM 6. SELECTED FINANCIAL DATA
Summarized below is selected financial data for the years 1991 through
1995. The extraordinary items relate to the gain on the repurchase of
indebtedness. The accounting changes represent the cumulative effect of
changes in accounting principles as a result of adopting, as of January 1,
1993, the provisions of Statement of Financial Accounting Standard ("SFAS")
No. 106, "Employers Accounting for Postretirement Benefits Other Than
Pensions," and SFAS No. 109, "Accounting for Income Taxes" (see Notes H and
I of the Notes to Consolidated Financial Statements). Per share amounts for
all of the years are based on 1,000 shares.
<TABLE>
<CAPTION>
Selected Financial Data
(in thousands, except per share amounts)
Year Ended December 31,
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues $ 555,266 $ 716,733 $ 909,326 $1,096,477 $1,292,574
========== ========== ========== =========== ===========
Income (loss) before
extraordinary items
and accounting
changes $ (27,006) $ (7,555) $ 3,364 $ 24,348 $ 34,997
Extraordinary items 31,188 --- --- --- ---
Accounting changes --- --- (46,626) --- ---
---------- ---------- ---------- ----------- -----------
Net income (loss) $ 4,182 $ (7,555) $ (43,262) $ 24,348 $ 34,997
========== ========== ========== ========== ===========
Income (loss) per share:
Income (loss) before
extraordinary items
and accounting
changes $ (27,006) $ (7,555) $ 3,364 $ 24,348 $ 34,997
Extraordinary items 31,188 --- --- --- ---
Accounting changes --- --- (46,626) --- ---
---------- ---------- ---------- ----------- -----------
Net income (loss) $ 4,182 $ (7,555) $ (43,262) $ 24,348 $ 34,997
========== ========== ========== =========== ===========
Total assets $ 481,305 $ 493,763 $ 517,336 $ 522,051 $ 570,605
========== ========== ========== =========== ===========
Long-term debt, less
debt discount $ 312,324 $ 305,368 $ 291,273 $ 288,265 $ 293,178
========== ========== ========== =========== ===========
Cash dividend
declared per
common share $ --- $ --- $ --- $ --- $ ---
========== ========== ========== ========== ===========
</TABLE>
<PAGE>
<PAGE> 17
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES.
Available cash and cash equivalents, cash flow generated from operations
($30.7 million, $56.4 million and $47.0 million for the years ended December
31, 1993, 1994 and 1995, respectively) and proceeds from borrowings have
provided sufficient liquidity and capital resources for the Company to
conduct its operations during each of these years.
In November 1994, the Company filed a Registration Statement on Form S-1
with the Securities and Exchange Commission in connection with an initial
public offering ("IPO") of the Company's common stock. On April 7, 1995, the
Company announced that it was withdrawing the IPO and would not complete the
transaction.
The Company is a holding company and is, therefore, dependent on cash
flow from its subsidiaries in order to meet its obligations. During 1995,
the Company reduced the holding company's cash needs from its subsidiaries.
This was accomplished through retiring shareholders' notes, as well as
repurchasing $18 million of 12-3/4% Senior Subordinated Debentures, resulting
in lower interest expense and lower cash needs at the holding company level.
The Company's operating subsidiaries are required, pursuant to financing
agreements with third parties, to meet certain covenants, which may have the
effect of limiting cash available to the Company. Further, dividends from
Country are currently subject to the notification, reporting and disapproval
requirements of the Insurance Code of the State of Illinois Department of
Insurance. The operating subsidiaries' plans indicate that sufficient funds
are anticipated to be available to the Company to meet its short-term
obligations.
During 1995, Motors and Great Dane refinanced their bank debt. These
refinancings had the effect of improving the Company's liquidity through the
availability of higher lines of credit to the operating units than were
available under the old bank agreements.
Purchases of property, plant and equipment have averaged approximately
$24.0 million per year over the past three years and have been funded
principally by borrowings and cash flow generated from operations, as well as
proceeds from disposal of assets.
RESULTS OF OPERATIONS.
1995 COMPARED TO 1994:
Revenues increased $196.1 million and gross profit increased $11.7
million during the year ended December 31, 1995, as compared to the year
ended December 31, 1994. The higher revenues are principally attributed to
higher Trailer Manufacturing revenues ($136.0 million), primarily associated
with a higher volume of sales within the segment. Automotive Products
revenues increased $50.7 million during the year ended December 31, 1995, as
compared to the year ended December 31, 1994. General increases in volumes
to accommodate automotive customers' demands, increased revenues from
additional jobs and increases in revenues associated with the production of
tooling for certain customers were the principal reasons for the revenue
increase.
<PAGE>
<PAGE> 18
The Company's operating profit increased $15.2 million in 1995 compared
to 1994. This increase is attributed to an increase of Trailer Manufacturing
operating profit ($2.9 million) which is principally due to higher volumes of
sales partly offset by lower margins. The Trailer Manufacturing margins were
lower as a result of a change in product mix, higher material and
manufacturing costs and certain costs associated with the start up of the
Terre Haute manufacturing facility. Automotive Products operating profit
increased ($7.0 million) principally due to higher sales. Operating profit
was further improved by lower corporate selling, general and administrative
expenses ($3.5 million). Corporate costs in the year ended December 31, 1994
include $3.5 million of costs associated with a failed public debt
refinancing. In 1995, corporate costs included $1.0 million of expenses
incurred in the withdrawn IPO.
During the year ended December 31, 1995, a $1.1 million charge was
recorded to reflect a minority equity in SCSM compared to a $0.6 million
charge in 1994.
Income tax expense is higher for financial statement purposes than would
be computed if the federal statutory rate were used because of state income
taxes, as well as the impact of the reporting of certain income and expense
items in the financial statements which are not taxable or deductible for
income tax purposes.
Net income was $35.0 million for the year ended December 31, 1995, as
compared to $24.3 million in the prior year. The improvement in net income
is attributed to the reasons mentioned above.
1994 COMPARED TO 1993:
Revenues increased $187.2 million and gross profit increased $36.7
million during the year ended December 31, 1994, as compared to the year
ended December 31, 1993. The higher revenues are principally attributed to
higher Trailer Manufacturing revenues ($147.2 million), primarily associated
with a higher volume of sales within the segment. Automotive Products
revenues increased $29.6 million during the year ended December 31, 1994, as
compared to the year ended December 31, 1993. General increases in volumes
to accommodate automotive customers' demands and additional jobs were the
principal reasons for the revenue increases.
The Company's operating profit increased $28.3 million in 1994 compared
to 1993. This increase is attributed to an increase of Trailer Manufacturing
operating profits ($26.2 million) which is principally due to higher volumes
of sales and higher margins, and an increase of Automotive Products operating
profit ($4.3 million) principally due to higher sales and higher margins.
These increases in operating profits were offset by higher corporate costs
due principally to the debt refinancing which was not completed ($3.5
million).
Sales, general and administrative ("SG&A") expenses were $8.4 million
higher in 1994 as compared to 1993, but as a percentage of sales, SG&A was
0.8 percentage points lower in 1994 as compared to 1993.
During the year ended December 31, 1994, a $0.6 million charge was
recorded to reflect a minority equity in SCSM.
Income tax expense is higher for financial statement purposes than would
be computed if the statutory rate were used because of state income taxes, as
<PAGE>
<PAGE> 19
well as the impact of the reporting of certain income and expense items in
the financial statements which are not taxable or deductible for income tax
purposes.
Net income was $24.3 million for the year ended December 31, 1994, as
compared to a $43.3 million net loss for the prior year. The improvement in
net income is attributed to the reasons mentioned above, as well as a one-
time charge ($46.6 million) incurred for the adoption of SFAS Nos. 106 and
109 which was recorded in the first quarter of 1993.
IMPACT OF INFLATION
Due to competitive market conditions, the Company has been unable to
factor all cost increases into selling prices for its products and services.
The Company does not believe that the impact of inflation affects the Company
any more than it affects the Company's competitors.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Registrant's response to this item is incorporated herein by reference
to the consolidated financial statements and consolidated financial statement
schedules, and the report thereon of independent auditors, listed in Item
14(a)1 and 2 and appearing after the signature page to this Annual Report on
Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
<PAGE>
<PAGE> 20
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
David R. Markin, age 65, President and Chief Executive Officer and a
Director of the Company since January 11, 1989, has been President and Chief
Executive Officer of Motors since 1970. Mr. Markin serves on the Boards of
Directors of Jackpot Enterprises, Inc., an operator of gaming machines,
Enhance Financial Services Group Inc., a reinsurance company, and Data
Broadcasting Corporation, a provider of market data services to the
investment community.
Allan R. Tessler, age 59, Chairman of the Board of Holdings since
January 11, 1989, is also Chairman of the Boards of Directors of
International Financial Group, Inc., a merchant banking firm ("IFG"), Enhance
Financial Services Group Inc., a reinsurance company, and Jackpot
Enterprises, Inc., an operator of gaming machines, and has been Chief
Executive Officer of IFG since 1987. Mr. Tessler is Co-Chairman of the Board
and Co-Chief Executive Officer of Data Broadcasting Corporation, a provider
of market data services to the investment community. Mr. Tessler serves on
the Board of Directors of The Limited, Inc., a manufacturer and retailer of
apparel and of Allis-Chalmers Corporation, a manufacturer of miscellaneous
fabricated textile products ("Allis-Chalmers"). Mr. Tessler is also an
attorney.
Martin L. Solomon, age 59, Vice Chairman and Secretary of the Company
since January 11, 1989, is a private investor. Mr. Solomon was employed as
a securities and portfolio analyst at Steinhardt Partners, an investment
firm, from 1985 through 1987. From 1988 through September 1990, he was the
Managing Partner and Director at Value Equity Associates I, Limited
Partnership, an investment firm. Mr. Solomon serves on the Boards of
Directors of XTRA Corporation, a truck leasing company, and DLB Oil & Gas
Company, an oil and gas production and exploration company.
Wilmer J. Thomas, Jr., age 69, Vice Chairman of the Company since
January 11, 1989, is a private investor. Mr. Thomas served as Treasurer of
the Company from January 1989 to January 1994. Mr. Thomas serves on the
Boards of Directors of Moore Medical Corp., a pharmaceutical and surgical
supply company, and Oak Hills Sportswear Corp., a clothing company.
The executive officers of the Registrant, in addition to Messrs. Markin,
Tessler, Solomon and Thomas, are:
Jay H. Harris, age 59, has been Executive Vice President and Chief
Operating Officer of the Company for more than the past five years and a Vice
President of Motors since 1991. Mr. Harris was a director of the Company
from 1978 until January 11, 1989.
Marlan R. Smith, age 52, has been Treasurer of the Company since January
1994 and Vice President and Treasurer of Motors since March 1988. Prior to
being elected Treasurer of the Company, he served as Assistant Treasurer
since January 1989.
Kevin J. Hanley, age 40, has been Controller of the Company since
January 1994 and Controller of Motors since December 1989.
Willard R. Hildebrand, age 56, was elected as President and Chief
Executive Officer of Great Dane effective January 1, 1992. Mr. Hildebrand
<PAGE>
<PAGE> 21
had served as President and Chief Operating Officer of Fiatallis North
America, Inc., a manufacturer of heavy construction and agricultural
equipment, for more than five years prior thereto. Mr. Hildebrand tendered
his resignation effective March 11, 1996.
Larry D. Temple, age 49, has been Group Vice President of Motors since
September 1989.
John T. Wise, age 50, has been President of SCSM since July 1992. He
was Vice President--General Manager from 1989 to 1992.
Jeffrey M. Feldman, age 45, has been President of Yellow Cab since 1983.
Edwin W. Elder, III, age 53, has been President of American Country
Insurance Company since June 1993. Mr. Elder was Senior Vice-President of
Operations for IDS Property & Casualty Insurance Company and Employers Health
Insurance Company, companies which provide multi-line insurance coverages,
for more than five years prior thereto.
ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION
The following table sets forth the 1995 annual compensation for the
Company's Chief Executive Officer and the five highest paid executive
officers, as well as the total compensation paid to each individual for the
Company's two previous fiscal years:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation Compensation
------------------ ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
David R. Markin 1995 $1,230,000 $300,000 $274,382<F1> $2,310<F5>
President, Chief 1994 1,230,000 300,000 247,007<F1> 1,500<F5>
Executive Officer 1993 1,230,000 250,000 246,519<F1> 2,249<F5>
and Director
Jay H. Harris 1995 500,000 250,000 0 2,310<F5>
Executive Vice 1994 431,250 250,000 0 1,500<F5>
President and Chief 1993 350,000 250,000 0 2,249<F5>
Operating Officer
Willard R. Hildebrand 1995 300,000 200,000 17,814<F2> 0
President and Chief 1994 287,725 225,000 15,463<F2> 0
Executive Officer 1993 203,500 150,000 7,304<F2> 0
of Great Dane
Jeffrey M. Feldman 1995 231,000 175,000 38,851<F3> 2,310<F5>
President of 1994 220,500 150,000 86,263<F3> 1,500<F5>
Yellow Cab 1993 210,000 150,000 85,008<F3> 2,249<F5>
Martin L. Solomon 1995 0 0 400,000<F4> 0
Vice Chairman and 1994 0 0 400,000<F4> 0
Secretary 1993 0 0 400,000<F4> 0
</TABLE>
<PAGE>
<PAGE> 22
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE--Continued
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation Compensation
------------------ ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Allan R. Tessler 1995 $ 0 $ 0 $400,000<F4> $ 0
Chairman of the 1994 0 0 400,000<F4> 0
Board 1993 0 0 400,000<F4> 0
Wilmer J. Thomas, Jr. 1995 0 0 400,000<F4> 0
Vice Chairman 1994 0 0 400,000<F4> 0
1993 0 0 400,000<F4> 0
- ---------------
<FN>
<F1>Other compensation for Mr. Markin includes:
1993 1994 1995
------ ------ ------
Consulting fees $190,000 $190,000 $190,000
Life insurance 41,027 41,710 65,770
Automobile 8,125 9,750 9,750
Club dues 7,367 5,547 8,862
-------- -------- --------
$246,519 $247,007 $274,382
======== ======== ========
<F2>Other compensation for Mr. Hildebrand includes:
1993 1994 1995
------ ------ ------
Life insurance $ 1,560 $ 3,474 $ 3,870
Automobile 2,324 3,316 4,439
Club dues 3,420 5,887 6,748
Other 0 2,786 2,757
-------- -------- --------
$ 7,304 $ 15,463 $ 17,814
======== ======== ========
<F3>Other compensation for Mr. Feldman includes:
1993 1994 1995
------ ------ ------
Consulting fees $ 57,000 $ 59,000 $ 4,000
Life insurance 11,253 11,973 12,874
Automobile 1,748 4,335 4,344
Club dues 15,007 10,955 17,633
-------- -------- --------
$ 85,008 $ 86,263 $ 38,851
======== ======== ========
<F4>Consulting fees.
<F5>Matching contributions under Motors 401(k) plan.
</TABLE>
<PAGE>
<PAGE> 23
COMPENSATION PURSUANT TO PLANS
GREAT DANE PENSION AND EXCESS BENEFIT PLANS
Great Dane has in effect a defined benefit employee pension plan
entitled Retirement Plan For Great Dane Trailers, Inc. (the "Retirement
Plan") covering substantially all of its employees. Pension benefits are
subject to limitations imposed by the Internal Revenue Code of 1986, as
amended (the "Code"), and the Employee Retirement Income Security Act of
1974, as amended, with respect to the annual amount of benefits provided by
employer contributions. Effective January 1, 1994, Great Dane adopted the
Supplemental Retirement Income Plan (the "Great Dane Excess Benefit Plan")
for officers of Great Dane and for certain officers of Holdings who are
participants in the Checker Motors Pension Plan, in each case whose annual
compensation exceeds $150,000. The Great Dane Excess Benefit Plan provides
benefits which cannot be provided under the Retirement Plan because of the
$150,000 compensation limit under the Code. Considered compensation under
the Great Dane Excess Benefit Plan is limited to $300,000 per year. The
benefits under the Great Dane Excess Benefit Plan are not funded and will be
paid from Great Dane's general assets.
Effective as of July 1, 1988, the assets and the liabilities
attributable to active and former employees under the Amended and Restated
International Controls Corp. Pension Plan as of June 30, 1988 were
transferred to the Retirement Plan and Holdings adopted the Retirement Plan
for the benefit of its employees. Effective December 31, 1991, employees of
Holdings ceased to accrue benefit service under the Retirement Plan. With
respect to benefits accruing after June 30, 1984, to a participant who was a
participant under the Amended and Restated International Controls Corp.
Pension Plan as of June 30, 1988, the following table shows the estimated
annual benefits payable under the plan to a person with the specified average
annual compensation and years of benefit service.
<TABLE>
<CAPTION>
Years of Benefit Service
--------------------------------------------------------
Average
Annual
Compensation 1 5 10 15 20
- ------------ --- --- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$100,000 $2,000 $10,000 $ 20,000 $ 30,000 $ 40,000
150,000 3,000 15,000 30,000 45,000 60,000
200,000 4,000 20,000 40,000 60,000 80,000
250,000 5,000 25,000 50,000 75,000 100,000
300,000 6,000 30,000 60,000 90,000 120,000*
400,000 6,000 30,000 60,000 90,000 120,000*
- --------------------
<FN>
*Maximum permitted in 1995
</TABLE>
The amounts shown in the above table are the estimated annual benefits
payable for life assuming retirement in 1995 at age 65 and would be reduced
by a Social Security offset.
<PAGE>
<PAGE> 24
For Mr. Hildebrand, the following are credited years of service under
the Retirement Plan and 1995 compensation covered by the Retirement Plan and
the Excess Benefit Plan:
Expected
Credited Credited 1995
Years of Years of Covered
Service Service at 65 Compensation
--------- ------------- ------------
Willard R. Hildebrand 4-1/2 14 $300,000
Mr. Harris has an aggregate of 24 years of benefit service under the
Retirement Plan (8 years) and the Amended and Restated International Controls
Corp. Pension Plan (16 years) and will receive benefits of approximately
$74,000 per year at age 65.
MOTORS PENSION AND EXCESS BENEFIT PLANS
Motors maintains a defined benefit employee pension plan entitled
Checker Motors Pension Plan (the "Pension Plan") covering substantially all
of the non-union employees of Motors and its subsidiaries other than SCSM,
and, effective January 1, 1992, the employees of Holdings.
Motors, also maintains the Checker Motors Corporation Excess Benefit
Retirement Plan (the " Checker Excess Benefit Plan"). The Checker Excess
Benefit Plan provides benefits which cannot be provided under the Pension
Plan because of the $150,000 compensation limit under the Code. At the
present time, David R. Markin and Jeffrey M. Feldman are the only individuals
named above who would receive benefits under the Checker Excess Benefit Plan.
Considered compensation under the Checker Excess Benefit Plan is limited to
$300,000. The benefits under the Checker Excess Benefit Plan are not funded
and will be paid from Motors' general assets.
Set forth below are the estimated annual benefits for participants in
the Pension Plan (including benefits payable under the Checker Excess Benefit
Plan) who have been employed by Motors for the indicated number of years
prior to retirement, assuming retirement at age 65 in 1995 and the final
Average Compensation indicated:
<TABLE>
<CAPTION>
Average
Compensation Estimated Annual Benefits for Years of Service Indicated
(as defined in --------------------------------------------------------
plan) 10 20 30 40 45
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$100,000 $ 13,704 $ 28,510 $ 46,778 $ 65,913 $ 75,624
150,000 21,204 46,010 74,278 103,413 118,124
200,000 28,704 63,510 101,778 140,913 160,624
250,000 36,204 81,010 129,278 178,413 203,124
300,000 43,704 98,510 156,778 215,913 245,624
400,000 43,704 98,510 156,778 215,913 245,624
</TABLE>
<PAGE>
<PAGE> 25
The above benefit projections are the estimated annual benefits payable
for life and were prepared on the assumption that the participant made
participant contributions to the Pension Plan for all years in which he was
eligible to contribute, and that Social Security covered compensation is
$25,926. The benefit would be reduced by a Social Security offset.
For those executive officers named above, the following are credited
years of service under the Pension Plan and Checker Excess Benefit Plans and
1995 compensation covered by these Plans:
<TABLE>
<CAPTION>
Expected
Credited Credited 1995
Years of Years of Covered
Service Service at 65 Compensation
--------- ------------- ------------
<S> <C> <C> <C>
David R. Markin 41 41 $300,000
Jay H. Harris 4 10 300,000
Jeffrey M. Feldman 17 37 300,000
</TABLE>
SALARY CONTINUATION PLAN
Motors entered into Stated Benefit Salary Continuation Agreements (the
"Agreements") with certain officers and employees (the "Salary Plan")
pursuant to which such participants will receive benefits upon attaining age
65 (or their beneficiaries will receive benefits upon their death prior to or
within 120 months after such executives or employees attain age 65).
For those executive officers named above, the following table sets forth
the benefits payable pursuant to the Salary Plan:
<TABLE>
<CAPTION>
Annual
Survivorship
Benefit
Annual Payable Total
Benefit Total Upon Survivorship
Payable Benefit Death Benefit
Upon Payable Prior to Payable
Attaining Over Attaining Over Three
Age 65 Ten Years Age 65 Years
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
David R. Markin $240,000 $2,400,000 $368,000 $1,104,000
Jeffrey M. Feldman 19,950 199,500 79,800 239,400
</TABLE>
COMPENSATION OF DIRECTORS
The directors did not receive any fees for their services as directors
in 1995. See "Compensation Committee Interlocks and Insider Participation."
<PAGE>
<PAGE> 26
EMPLOYMENT AGREEMENTS
Motors, as a successor to the Partnership, is party to an Amended and
Restated Employment Agreement dated as of November 1, 1985, as further
amended, with David R. Markin pursuant to which Mr. Markin is to serve as
President, Chief Executive Officer and Chief Operating Officer of Motors for
a period which is automatically extended each month in order to terminate two
years thereafter (the "Termination Date"), at a minimum salary of $600,000
per annum, together with the payment of certain insurance premiums, the value
of which have been included in the Summary Compensation Table above. The
beneficiaries of these insurance policies are designated by Mr. Markin. Mr.
Markin continues to be eligible to participate in profit sharing, pension or
other bonus plans of Motors. Pursuant to the Amended and Restated Employment
Agreement, in the event of Mr. Markin's death, the Company shall pay Mr.
Markin's estate the compensation which would otherwise be payable to him for
the period ending on the last day of the month in which death occurs. In
addition, Motors shall pay to Mr. Markin's beneficiaries deferred
compensation from the date of his death through the Termination Date in an
annual amount equal to one-third of his base salary at the date of his death.
In the event of termination of the Amended and Restated Employment Agreement
for any reason other than cause, disability or death, Mr. Markin shall
continue to serve as a consultant to Motors for a period of five years, for
which he shall receive additional compensation in the amount of $50,000 per
annum. Motors has agreed to indemnify Mr. Markin from certain liabilities
arising out of his service to Motors, except for liabilities resulting from
his gross negligence or willful misconduct. Effective January 1, 1994, Mr.
Markin and the Company memorialized in writing their agreement, pursuant to
which Mr. Markin has also been compensated by the Company since January 11,
1989, on substantially the same terms as are set forth above.
The Company entered into an employment agreement as of July 1, 1992,
with Jay H. Harris pursuant to which Mr. Harris serves as Executive Vice
President and Chief Operating Officer of the Company for a period which is
automatically extended for one year on July 1 of each year subject to earlier
termination, at a minimum salary of $350,000 per annum, an incentive bonus to
be determined by the Board of Directors, and such other fringe benefits and
plans as are available to other executives of the Company. Upon the
happening of certain events, including a change in control (as defined
therein) of the Company or retirement after June 30, 1994, Mr. Harris is
entitled to compensation in an amount equal to the greater of (a) five
percent of the increase in the Company's retained earnings, subject to
certain adjustments, during the period commencing on March 31, 1992, and
ending on the last day of the month preceding the event which triggers the
payment (the "Termination Payment") and (b) 2.99 times his then base salary.
If Mr. Harris were to die or become disabled, he or his estate would receive
the greater of (a) one year's base compensation or (b) the Termination
Payment. Payments in either case would be made over a period of time, the
length of which would be dependent on the amount due to Mr. Harris. Mr.
Harris has agreed to serve as a consultant to the Company during the first
year after termination for no compensation beyond his expenses incurred in
connection with rendering such services. The Company has agreed to indemnify
Mr. Harris to the full extent allowed by law. Motors has guaranteed the
Company's obligations. Mr. Harris' current base salary is $500,000.
<PAGE>
<PAGE> 27
Yellow Cab is party to an Amended and Restated Employment Agreement
dated as of June 1, 1992, with Jeffrey Feldman pursuant to which Mr. Feldman
serves as President of Yellow Cab for a period which is automatically
extended each month in order to terminate two years thereafter (the
"Termination Date"), at a minimum salary of $200,000 per annum, together with
certain insurance premiums, the value of which have been included in the
Summary Compensation Table above. The beneficiaries of these insurance
policies are designated by Mr. Feldman. Mr. Feldman is eligible to
participate in profit sharing, pension or other bonus plans implemented by
Yellow Cab or Motors. Pursuant to the Amended and Restated Employment
Agreement, in the event of Mr. Feldman's death, Yellow Cab shall pay Mr.
Feldman's estate the amount of compensation which would otherwise be payable
to him for the period ending on the last day of the month in which death
occurs. In addition, Yellow Cab shall pay to Mr. Feldman's estate deferred
compensation from the date of his death to the Termination Date in an annual
amount equal to one-third of his base salary at the date of his death. In
the event of the termination of the Amended and Restated Employment Agreement
for any reason other than cause, disability or death, Mr. Feldman shall
continue to serve as a consultant to Yellow Cab for a period of five years
(if terminated by Mr. Feldman) or seven years if terminated by Yellow Cab,
for which he shall receive compensation in the amount of $75,000 per annum.
Yellow Cab has agreed to indemnify Mr. Feldman from certain liabilities
arising out of his service to Yellow Cab, except for liabilities resulting
from his gross negligence or willful misconduct.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has had no separate compensation committee or other
committee providing equivalent functions. Each of Messrs. Markin, Solomon,
Tessler and Thomas is an executive officer of Holdings and participates, as
a director, in the deliberations concerning executive officer compensation.
During 1995, Mr. Markin served on the compensation committee of Enhance
Financial Services Group Inc. and Data Broadcasting Corporation and Mr.
Tessler served as an executive officer of each of these companies.
As of December 31, 1995, Country holds $0.3 million principal amount of
7% Notes due December 1, 1996, issued by Enhance Financial Services Group
Inc. Mr. Markin is a director of and served on the compensation committee of
that company.
During 1995, the Company used, on a month-to-month basis, an airplane
owned by a corporation of which Mr. Tessler is the sole shareholder. The
Company paid $90,000 per month for such use.
Each of Messrs. Markin, Solomon, Tessler and Thomas provides consulting
services to Yellow Cab and each received for such services $10,000 per month
in 1995. Messrs. Solomon, Tessler and Thomas also provide consulting
services (a) to Motors for which they each received monthly fees
of $5,000 and (b) to Country for which they each received monthly fees of
approximately $18,300 in 1995. Mr. Markin serves as a consultant to Chicago
AutoWerks for which he received monthly fees of approximately $1,200, and to
Country, for which he received monthly fees of approximately $4,600 in 1995.
Each of Messrs. Markin, Solomon, Tessler and Thomas received from
Holdings interest payments of $94,418 in 1995 pursuant to the terms of the
senior notes held by them, which notes were retired in 1995.
<PAGE>
<PAGE> 28
Susan Markin, the wife of David R. Markin, serves as a computer
consultant to the Company. During 1995, Ms. Markin was paid $65,000 for her
services.
Frances Tessler, the wife of Allan R. Tessler, is employed by Smith
Barney Inc. which executes trades for Country's investment portfolio. During
1995, Mrs. Tessler received for her investment advisory services
approximately $61,500 of the commissions paid by the Company to Smith Barney
Inc. for such services.
Jeffrey M. Feldman is the nephew of David R. Markin.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Common Stock, which is the only class of stock of the Company, is
owned as follows as of March 1, 1996:
<TABLE>
<CAPTION>
No. of Shares of Common Stock Percent of
Name of Record and Beneficially Owned Class
- ---- -------------------------------- ----------
<S> <C> <C>
David R. Markin 325.000 32.5
Martin L. Solomon 225.000 22.5
Allan R. Tessler 225.000 22.5
Wilmer J. Thomas, Jr. 225.000 22.5
Jay H. Harris 1.042 *
*Less than 1% of outstanding shares
</TABLE>
The address of each of the shareholders is c/o Great Dane Holdings Inc.,
2016 North Pitcher Street, Kalamazoo, Michigan 49007.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Item 11. EXECUTIVE COMPENSATION - COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION."
<PAGE>
<PAGE> 29
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1 and 2. FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES:
The following consolidated financial statements and consolidated
financial statement schedules of Great Dane Holdings Inc. and subsidiaries
and the report thereon of independent auditors are filed as part of this
Annual Report on Form 10-K and are incorporated by reference in Item 8:
A. Report of Independent Auditors.
B. Consolidated Financial Statements.
Consolidated Balance Sheets as of December 31, 1994 and 1995.
Consolidated Statements of Shareholders' Deficit for the years
ended December 31, 1993, 1994 and 1995.
Consolidated Statements of Operations for the years ended
December 31, 1993, 1994 and 1995.
Consolidated Statements of Cash Flows for the years ended
December 31, 1993, 1994 and 1995.
Notes to Consolidated Financial Statements - December 31, 1995.
C. Consolidated Financial Statement Schedules.
Schedule I - Condensed Financial Information of Registrant
Schedule II - Valuation and Qualifying Accounts
Schedule V - Supplemental Information Concerning Property-
Casualty Insurance Operations
See the accompanying Index to Financial Statements and Financial
Statement Schedules Covered by Report of Independent Auditors appearing after
the signature page to this Annual Report on Form 10-K.
3. See the accompanying Index to Exhibits which precedes the Exhibits
filed with this Annual Report on Form 10-K.
(b) REPORTS ON FORM 8-K:
None
(c) EXHIBITS:
See the accompanying Index to Exhibits which precedes the Exhibits filed
with this Annual Report on Form 10-K.
(d) FINANCIAL STATEMENT SCHEDULES REQUIRED BY REGULATION S-X:
See the accompanying Index to Financial Statements and Financial
Statement Schedules Covered by Report of Independent Auditors which
appears after the signature page to this Annual Report on Form 10-K.
<PAGE>
<PAGE> 30
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
March 21, 1996 GREAT DANE HOLDINGS INC.
By: /s/ David R. Markin
------------------------------------------
David R. Markin
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons, including at least a
majority of the members of its Board of Directors, on behalf of Registrant
and in the capacities and on the dates indicated.
/s/ Allan R. Tessler Chairman of the Board March 21, 1996
- --------------------------
Allan R. Tessler
/s/ David R. Markin President, Chief Executive March 21, 1996
- -------------------------- Officer and Director
David R. Markin
/s/ Jay H. Harris Executive Vice President March 21, 1996
- -------------------------- and Chief Operating Officer
Jay H. Harris
/s/ Marlan R. Smith Treasurer (Principal March 21, 1996
- -------------------------- Financial Officer and
Marlan R. Smith Principal Accounting Officer)
/s/ Martin L. Solomon Vice Chairman of the Board March 21, 1996
- -------------------------- and Secretary
Martin L. Solomon
/s/ Wilmer J. Thomas, Jr. Vice Chairman of the Board March 21, 1996
- --------------------------
Wilmer J. Thomas, Jr.
<PAGE>
<PAGE> 31
INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
COVERED BY REPORT OF INDEPENDENT AUDITORS
The following consolidated financial statements of Great Dane Holdings Inc.
and subsidiaries are submitted herewith in response to Item 8:
Page
----
- - Report of Independent Auditors F-1
- - Consolidated Balance Sheets as of December 31, 1994 and 1995 F-2
- - Consolidated Statements of Shareholders' Deficit for the
Years Ended December 31, 1993, 1994 and 1995 F-4
- - Consolidated Statements of Operations for the Years Ended
December 31, 1993, 1994 and 1995 F-5
- - Consolidated Statements of Cash Flows for the Years Ended
December 31, 1993, 1994 and 1995 F-6
- - Notes to Consolidated Financial Statements--December 31, 1995 F-8
The following consolidated financial statement schedules of Great Dane
Holdings Inc. and subsidiaries are submitted herewith in response to Item
14(d):
Schedule I - Condensed Financial Information of Registrant S-1
Schedule II - Valuation and Qualifying Accounts S-4
Schedule V - Supplemental Information Concerning Property-
Casualty Insurance Operations S-6
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been
omitted.
<PAGE>
<PAGE> F-1
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Great Dane Holdings Inc.
We have audited the accompanying consolidated balance sheets of Great Dane
Holdings Inc. and subsidiaries as of December 31, 1994 and 1995, and the
related consolidated statements of operations, shareholders' deficit and cash
flows for each of the three years in the period ended December 31, 1995. Our
audits also included the financial statement schedules listed in the Index at
Item 14(a). These financial statements and schedules are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Great Dane
Holdings Inc. and subsidiaries at December 31, 1994 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
/s/ Ernst & Young LLP
Kalamazoo, Michigan
February 26, 1996
<PAGE>
<PAGE> F-2
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands, except share data)
December 31,
1994 1995
-------- --------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 34,875 $ 41,086
Accounts receivable, less allowance for doubtful
accounts of $1,342 (1994) and $1,564 (1995)
(Note F) 90,076 101,138
Inventories (Notes C and F) 95,206 84,686
Other current assets 21,103 26,574
---------- ----------
Total current assets 241,260 253,484
Property, plant and equipment, net (Notes D,
F and G) 113,948 123,864
Insurance Subsidiary's investments (Note E) 91,094 110,058
Cost in excess of net assets acquired, net of
accumulated amortization of $7,502 (1994)
and $8,752 (1995) 42,493 41,243
Trademark, net of accumulated amortization
of $2,100 (1994) and $2,450 (1995) 11,346 10,996
Other assets 21,910 30,960
---------- ----------
Total assets $ 522,051 $ 570,605
========== ==========
</TABLE>
<PAGE>
<PAGE> F-3
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands, except share data)
December 31,
1994 1995
-------- --------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' DEFICIT:
Accounts payable $ 80,863 $ 71,989
Notes payable (Note F) 5,000 3,133
Income taxes payable (Note I) 12,663 9,305
Accrued compensation 17,955 18,490
Accrued interest 11,802 11,049
Customer deposits 14,113 14,315
Other accrued liabilities 36,402 43,390
Current portion of long-term debt 13,613 16,260
---------- ----------
Total current liabilities 192,411 187,931
Long-term debt, excluding current portion
(Note F):
Shareholders 30,000 ---
Other 244,652 276,918
---------- ----------
274,652 276,918
Insurance Subsidiary's unpaid losses and loss
adjustment expenses 69,318 78,151
Unearned insurance premiums 12,203 12,545
Deferred income taxes 2,750 1,675
Postretirement benefits other than pensions
(Note H) 51,061 52,766
Other noncurrent liabilities 46,372 46,930
Minority interest 586 1,748
---------- ----------
Total liabilities 649,353 658,664
Shareholders' deficit (Notes A, E and F):
Common stock, par value $1.00:
Authorized 3,000 shares
Outstanding 1,000 shares 1 1
Additional paid-in capital 14,999 14,999
Retained earnings (deficit) (11,869) 23,128
Unrealized appreciation (depreciation) on
Insurance Subsidiary's investments in
certain debt and equity securities (2,060) 2,186
Notes receivable from shareholders (625) ---
Amount paid in excess of Motors's net assets (127,748) (128,373)
---------- ----------
Total shareholders' deficit (127,302) (88,059)
Commitments and contingencies (Note G)
---------- ----------
Total liabilities and
shareholders' deficit $ 522,051 $ 570,605
========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<PAGE> F-4
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
Unrealized
Appreciation
(Depreciation) Amount
on Notes Paid in
Investments Receivable Excess of
Additional Retained in Certain from Motors's
Common Paid-In Earnings Securities Share- Net Assets
Stock Capital (Deficit) (Note E) holders (Note A)
-------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balances at January 1, 1993 $ 1 $14,999 $ 7,045 $ 32 $(625) $(127,748)
Unrealized appreciation on in-
vestments in equity securities --- --- --- 41 --- ---
Net loss --- --- (43,262) --- --- ---
----- ------- --------- -------- ------ ----------
Balances at December 31, 1993 1 14,999 (36,217) 73 (625) (127,748)
Unrealized depreciation on in-
vestments in certain debt and
equity securities (net of de-
ferred income taxes of $1,053) --- --- --- (2,133) --- ---
Net income --- --- --- 24,348 --- ---
----- ------- --------- -------- ------ ----------
Balances at December 31, 1994 1 14,999 (11,869) (2,060) (625) (127,748)
Unrealized appreciation on in-
vestments in certain debt and
equity securities (net of de-
ferred income taxes of $2,372) --- --- --- 4,246 --- ---
Cancellation of shareholder notes --- --- --- --- 625 (625)
Net income --- --- 34,997 --- --- ---
----- ------- --------- -------- ------ ----------
Balances at December 31, 1995 $ 1 $14,999 $ 23,128 $ 2,186 $ --- $(128,373)
===== ======= ========= ======== ====== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<PAGE> F-5
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(in thousands, except share and per share amounts)
Year Ended December 31,
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Trailer manufacturing and distribution $ 711,862 $ 859,089 $ 995,127
Automotive products manufacturing 127,925 157,568 208,242
Vehicular operations including rental
income of $38,360 (1993); $38,712
(1994) and $38,288 (1995) 42,103 43,653 43,376
Insurance premiums earned 27,436 36,167 45,829
---------- ----------- -----------
Total revenues 909,326 1,096,477 1,292,574
Cost of revenues:
Cost of sales (728,471) (870,656) (1,048,825)
Cost of vehicular operations (30,916) (32,066) (30,806)
Cost of insurance operations (19,418) (26,510) (34,018)
---------- ----------- -----------
Total cost of revenues (778,805) (929,232) (1,113,649)
---------- ----------- -----------
Gross profit 130,521 167,245 178,925
Selling, general & administrative expense (83,176) (91,600) (88,101)
---------- ---------- ----------
Operating profit 47,345 75,645 90,824
Interest expense (41,614) (40,165) (42,311)
Interest income 7,396 7,101 8,690
Other income, net 3,494 1,002 2,261
Special charge--Note G (7,500) --- ---
---------- ----------- -----------
Income before minority equity, income
taxes, and accounting changes 9,121 43,583 59,464
Minority equity (Note B) --- (586) (1,162)
---------- ----------- -----------
Income before income taxes and
accounting changes 9,121 42,997 58,302
Income tax expense (Note I) (5,757) (18,649) (23,305)
---------- ----------- -----------
Income before accounting changes 3,364 24,348 34,997
Accounting changes (Notes H and I) (46,626) --- ---
---------- ----------- -----------
Net income (loss) $ (43,262) $ 24,348 $ 34,997
========== =========== ===========
Weighted average number of shares used
in per share computations 1,000 1,000 1,000
========== =========== ===========
Income (loss) per share:
Income before accounting changes $ 3,364 $ 24,348 $ 34,997
Accounting changes (46,626) --- ---
---------- ----------- -----------
Net income (loss) per share $ (43,262) $ 24,348 $ 34,997
========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<PAGE> F-6
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
Year Ended December 31,
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (43,262) $ 24,348 $ 34,997
Adjustment to reconcile net income
(loss) to net cash provided by
operating activities:
Accounting changes 46,626 --- ---
Depreciation and amortization 23,295 22,594 22,021
Deferred income tax benefit (8,512) (9,044) (3,167)
Amortization of cost in excess of net
assets acquired 1,250 1,250 1,250
Amortization of debt discount 1,372 1,595 1,474
(Gain) loss on sale of property,
plant and equipment 207 (376) (453)
Investment gains (1,079) (276) (223)
Increase in minority equity --- 586 1,162
Other noncash charges 7,562 10,203 12,747
Changes in operating assets and
liabilities:
Accounts receivable (11,970) (15,140) (11,363)
Finance lease receivables 4,408 1,511 ---
Inventories (22,144) (2,330) 10,520
Other assets 572 (2,601) (16,696)
Accounts payable 21,193 2,987 (5,060)
Income taxes 824 6,037 (3,358)
Unpaid losses and loss
adjustment expenses (4,601) (1,861) 8,833
Unearned insurance premiums (917) 2,656 342
Postretirement benefits other
than pension 4,497 1,452 1,705
Other liabilities 11,359 12,760 (7,714)
---------- ---------- ----------
NET CASH FLOW PROVIDED BY OPERATING
ACTIVITIES 30,680 56,351 47,017
</TABLE>
<PAGE>
<PAGE> F-7
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
Year Ended December 31,
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment $ (20,006) $ (18,209) $ (33,067)
Proceeds from disposal of property,
plant and equipment and other
productive assets 2,599 1,979 1,584
Purchase of investments available for
sale --- (10,124) (27,375)
Purchase of investments held to maturity (64,052) (13,220) (3,388)
Proceeds from sale of investments
available for sale --- 2,769 9,224
Proceeds from maturity and redemption
of investments held to maturity 65,019 17,567 10,487
---------- ---------- ----------
NET CASH FLOW USED IN INVESTING
ACTIVITIES (16,440) (19,238) (42,535)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 2,500 10,069 105,102
Repayments of borrowings (17,967) (14,672) (103,373)
Return of limited partner's capital (894) (37,713) ---
---------- ---------- ----------
NET CASH FLOW PROVIDED BY (USED IN)
FINANCING ACTIVITIES (16,361) (42,316) 1,729
---------- ---------- ----------
Increase (decrease) in cash and cash
equivalents (2,121) (5,203) 6,211
Beginning cash and cash equivalents 42,199 40,078 34,875
---------- ---------- ----------
ENDING CASH AND CASH EQUIVALENTS $ 40,078 $ 34,875 $ 41,086
========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<PAGE> F-8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
December 31, 1995
NOTE A--ORGANIZATION
The Company has two operating subsidiaries, Great Dane Trailers, Inc.
("Great Dane") and Checker Motors Corporation ("Motors"). During 1989, the
Company purchased all of the common stock of Motors.
Immediately after the Motors acquisition, substantially all of Motors'
former shareholders purchased, through Checker Holding Corp. ("Holding"),
all of the outstanding common stock of the Company (the "Holding buyout").
Holding was created solely for the purpose of acquiring the stock of the
Company and was subsequently merged into the Company. The Holding buyout
has been accounted for as if Motors acquired the Company (a "reverse
acquisition"), since there was no significant change in control of Motors.
Under generally accepted accounting principles for reverse acquisitions,
the net assets of Motors acquired in the Motors acquisition cannot be
revalued to estimated fair value. Accordingly, the excess of the amount
paid over the historical book value of Motors net assets has been accounted
for as a separate component reducing shareholders' equity and is not
subject to amortization. The fair value of Motors net assets, as
estimated by management, is significantly greater than historical book
value, but no appraisal of fair value is available.
The notes receivable from shareholders represented amounts payable, on
demand, to Motors by the shareholders of the Company solely to enable
Motors to meet certain net worth requirements in its capacity as general
partner of a partnership that was formed in 1986. The notes receivable
were cancelled in 1995 with the liquidation of the partnership and the
amount paid in excess of Motors' net assets was adjusted.
NOTE B--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of Great Dane Holdings Inc. and its subsidiaries, including
Motors' subsidiary American Country Insurance Company ("Insurance
Subsidiary"). All significant intercompany accounts and transactions have
been eliminated.
USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results inevitably will differ
from those estimates, and such differences may be material to the financial
statements.
CASH EQUIVALENTS: The Company considers all highly liquid investments,
other than Insurance Subsidiary investments, with a maturity of three
months or less when purchased to be cash equivalents.
INVENTORIES: Inventories are stated at the lower of cost or market. The
cost of inventories is determined principally on the last-in, first-out
("LIFO") method.
<PAGE>
<PAGE> F-9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE B--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued. . .
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are stated at
cost. Depreciation is provided based on the assets' estimated useful
lives, principally by the straight-line method.
Estimated depreciable lives are as follows:
<TABLE>
<S> <C>
Buildings 10-40 years
Transportation equipment 2-6 years
Machinery, equipment, furniture and fixtures 3-12 years
</TABLE>
INTANGIBLE ASSETS: Intangible assets, principally cost in excess of net
assets acquired and a trademark, are being amortized on the straight-line
basis over periods of 5 to 40 years. The carrying value of intangible
assets is reviewed if the facts and circumstances suggest that it may be
impaired. If this review indicates that intangible assets will not be
recoverable as determined based on the undiscounted cash flows of the
related asset acquired over the remaining amortization period, the
Company's carrying value of the intangible asset is reduced by the
estimated shortfall of cash flows.
CUSTOMER DEPOSITS: Substantially all customer deposits represent advanced
payments from a customer in connection with tooling production for this
customer.
MINORITY INTEREST: Minority interest represents the share of net assets of
South Charleston Stamping & Manufacturing Company ("SCSM"), a subsidiary of
Motors, allocable to the minority interest holder.
REVENUE RECOGNITION: Revenues from sales of trailers that are manufactured
in response to customers' orders are recorded when such products are
completed and invoiced. Rental income from vehicle leases is recognized as
earned. Vehicles are generally leased on a daily or weekly basis to
unaffiliated operators. Insurance Subsidiary premiums are recognized as
income ratably over the period covered by the policies. Unearned premium
reserves are calculated on the monthly pro-rata basis. Realized gains and
losses on investments are determined on a specific identification basis and
are included in the determination of net income.
DEBT ISSUE EXPENSE: Expenses incurred in connection with the issuance of
debt are capitalized and amortized as interest expense over the life of the
debt.
LOSSES AND LOSS ADJUSTMENT EXPENSES: The Insurance Subsidiary's liability
for unpaid losses and loss adjustment expenses represents an estimate of
the ultimate net costs of all losses which are unpaid at the balance sheet
dates, and is determined using case-basis evaluations and statistical
analysis. These estimates are continually reviewed and any adjustments
which become necessary are included in current operations. Since the
liability is based on estimates, the ultimate settlement of losses and the
<PAGE>
<PAGE> F-10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE B--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued. . .
related loss adjustment expenses may vary from the amounts included in the
consolidated financial statements.
RECLASSIFICATION: Certain 1994 amounts have been reclassified to conform
to the 1995 classifications.
NOTE C--INVENTORIES
Inventories are summarized below (dollars in thousands):
<TABLE>
<CAPTION>
December 31,
1994 1995
-------- --------
<S> <C> <C>
Raw materials $ 59,624 $ 53,097
Work-in-process 15,877 10,501
Finished goods 19,705 21,088
---------- ----------
$ 95,206 $ 84,686
========== ==========
</TABLE>
Inventories would not differ materially if the first-in, first-out costing
method were used for inventories costed by the LIFO method.
NOTE D--PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are summarized below (dollars in thousands):
<TABLE>
<CAPTION>
December 31,
1994 1995
-------- --------
<S> <C> <C>
Land and buildings $ 56,430 $ 62,332
Transportation equipment 31,597 31,782
Machinery, equipment, furniture and fixtures 129,085 145,751
---------- ----------
217,112 239,865
Less accumulated depreciation and amortization (103,164) (116,001)
---------- ----------
$ 113,948 $ 123,864
========== ==========
</TABLE>
NOTE E--INVESTMENTS
Effective January 1, 1994, the Company adopted the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
<PAGE>
<PAGE> F-11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE E--INVESTMENTS--Continued. . .
Investments in Debt and Equity Securities." In accordance with this
statement, prior period financial statements were not restated to reflect
the change in accounting principle. The opening balance of shareholders'
deficit was decreased by $1.4 million (net of $0.8 million in deferred
income taxes) to reflect the net unrealized holding gains on securities
classified as available-for-sale previously carried at amortized cost or
lower of cost or market.
Insurance company management evaluated the investment portfolio and, based
on the Insurance Subsidiary's ability and intent, has classified securities
between the held-to-maturity and available-for-sale categories. Held-to-
maturity securities are stated at amortized cost. Debt securities not
classified as held-to-maturity and marketable equity securities are
classified as available-for-sale. Available-for-sale securities are stated
at fair value, with the unrealized gains and losses, net of deferred tax,
reported as a separate component of shareholders' deficit.
Following is a summary of amortized cost and fair value of held-to-maturity
and available-for-sale securities of the Insurance Subsidiary, which are
generally reserved for Insurance Subsidiary operations:
<TABLE>
<CAPTION>
Held-To-Maturity
---------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
DECEMBER 31, 1994:
U.S. Treasury securities
and obligations of U.S.
Government corporations
and agencies $ 7,285 $ 73 $ 143 $ 7,215
Obligations of states and
political subdivisions 8,828 51 367 8,512
Mortgage-backed securities 3,142 --- 200 2,942
Corporate and other debt
securities 25,943 88 1,005 25,026
-------- -------- -------- --------
$ 45,198 $ 212 $ 1,715 $ 43,695
======== ======== ======== ========
</TABLE>
<PAGE>
<PAGE> F-12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE E--INVESTMENTS--Continued. . .
<TABLE>
<CAPTION>
Available-For-Sale
---------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
DECEMBER 31, 1994:
Obligations of states and
political subdivisions $ 9,958 $ 10 $ 689 $ 9,279
Corporate and other debt
securities 23,198 272 1,148 22,322
-------- -------- -------- --------
Total debt securities 33,156 282 1,837 31,601
Equity securities 15,994 227 1,926 14,295
-------- -------- -------- --------
Total available-for-
sale $ 49,150 $ 509 $ 3,763 $ 45,896
======== ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
Held-To-Maturity
---------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
DECEMBER 31, 1995:
U.S. Treasury securities
and obligations of U.S.
Government corporations
and agencies $ 5,797 $ 243 $ --- $ 6,040
Obligations of states and
political subdivisions 7,535 59 5 7,589
Mortgage-backed securities 3,127 84 4 3,207
Corporate and other debt
securities 21,975 488 48 22,415
-------- -------- -------- --------
$ 38,434 $ 874 $ 57 $ 39,251
======== ======== ======== ========
</TABLE>
<PAGE>
<PAGE> F-13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE E--INVESTMENTS--Continued. . .
<TABLE>
<CAPTION>
Available-For-Sale
---------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
DECEMBER 31, 1995:
Obligations of states and
political subdivisions $ 11,542 $ 254 $ 7 $ 11,789
Mortgage-backed securities 2,303 57 4 2,356
Corporate and other debt
securities 43,284 2,527 162 45,649
-------- -------- -------- --------
Total debt securities 57,129 2,838 173 59,794
Equity securities 11,130 915 215 11,830
-------- -------- -------- --------
Total available-for-
sale $ 68,259 $ 3,753 $ 388 $ 71,624
======== ======== ======== ========
</TABLE>
Fair value for debt securities is principally based on quoted market
prices.
The amortized cost and fair value of debt securities, by contractual
maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Held-To-Maturity Available-For-Sale
--------------------- --------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
-------- -------- -------- --------
<S> <C> <C> <C> <C>
DECEMBER 31, 1995:
Due in one year or less $ 9,115 $ 9,175 $ 3,305 $ 3,327
Due after one year through
five years 21,568 21,992 15,245 15,684
Due after five years
through ten years 3,252 3,343 24,629 25,878
Due after ten years 1,372 1,534 11,647 12,549
-------- -------- -------- --------
35,307 36,044 54,826 57,438
Mortgage-backed securities 3,127 3,207 2,303 2,356
-------- -------- -------- --------
$ 38,434 $ 39,251 $ 57,129 $ 59,794
======== ======== ======== ========
</TABLE>
<PAGE>
<PAGE> F-14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE E--INVESTMENTS--Continued. . .
The proceeds from sales of available-for-sale securities were $2.8 million
and $9.2 million for the years ended December 31, 1994 and 1995,
respectively. Gross gains and gross losses which were realized on those
sales during the years ended December 31, 1994 and 1995 were not
significant.
Bonds with an amortized cost of $2.3 million at December 31, 1995, were on
deposit to meet certain regulatory requirements.
NOTE F--BORROWINGS
Long-term debt is summarized below (dollars in thousands):
<TABLE>
<CAPTION>
December 31,
1994 1995
-------- --------
<S> <C> <C>
12-3/4% Senior Subordinated Debentures less
debt discount of $9,725 (1994) and
$7,311 (1995) $ 122,315 $ 106,629
14-1/2% Subordinated Discount Debentures less
debt discount of $6,335 (1994) and
$6,105 (1995) 55,012 55,242
Notes payable to shareholders 30,000 ---
Great Dane term loan payable 17,411 33,902
Great Dane Revolving credit line 27,201 43,118
Motors term loan payable --- 38,250
Partnership term loan payable 16,500 ---
Equipment term loan 3,500 ---
Economic Development term loan 10,375 9,813
Other debt 5,951 6,224
---------- ----------
288,265 293,178
Less current portion (13,613) (16,260)
---------- ----------
$ 274,652 $ 276,918
========== ==========
</TABLE>
Interest on the $114 million face value of 12-3/4% Senior Subordinated
Debentures is payable semiannually at the stated rate. The recorded debt
discount is being amortized as interest expense over the expected life of
the debentures using an imputed interest rate of approximately 15%
compounded semiannually. Under the terms of the debentures, the Company's
payment of dividends is limited to, among other things, 50% of consolidated
net income subsequent to June 30, 1986, plus $12 million. At December 31,
1995, a dividend of up to $6.6 million could be paid based on the above
formula. The debentures are redeemable at the option of the Company in
whole or in part at a decreasing premium. The debentures are subject to
redemptions through a sinking fund whereby the Company is required to make
<PAGE>
<PAGE> F-15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE F--BORROWINGS--Continued. . .
five annual sinking fund payments of $18 million commencing August 1, 1996,
with the final payment due August 1, 2001. Sufficient debentures have been
repurchased to satisfy the 1996 and 1997 sinking fund requirements.
Interest on the $61 million face value of 14-1/2% Subordinated Discount
Debentures is payable semiannually at the stated rate. The recorded debt
discount is being amortized as interest expense over the expected life of
the debentures using an imputed interest rate of approximately 16.7%
compounded semiannually. The 14-1/2% debentures are subject to redemption
through a sinking fund whereby the Company is required to redeem, at their
face value, on January 1 in each of the years 1997 through 2005, 7-1/2% of
the principal amount of the debentures outstanding on January 1, 1997. A
sufficient amount of the debentures have been repurchased to fully satisfy
the sinking fund requirements. The balance of debentures are due
January 1, 2006. The debentures are callable any time at their face value
and are subordinated to all present or future indebtedness of the Company
not expressly subordinated to, or on a parity with, the debentures.
In February and July 1995, Great Dane Trailers amended its loan and
security agreement ("Agreement"). Pursuant to the amended Agreement, the
Lenders have loaned $38 million as a term loan and have agreed to provide,
at any given time, up to $150 million (less amounts then outstanding as a
term loan) as a revolving credit facility (subject to availability based on
the amount of eligible trade accounts receivable and inventory) to be used
as working capital by Great Dane and for general corporate purposes. The
term loan proceeds, which were drawn immediately upon the closings, were
used, together with drawings under the revolver, (a) to repay approximately
$17 million of bank debt, (b) to provide $15 million to the Company to
retire shareholder notes and (c) to pay fees and expenses. The term loan
requires monthly principal payments of approximately $0.5 million plus
interest on the unpaid principal amount of the loan at a rate equal to 1%
above the prime rate of interest (8.5% at December 31, 1995) charged from
time to time by Bank of America or a rate equal to 2.5% above a selected
Eurodollar contract rate with the unpaid principal balance due in February
2000. The loans are secured by substantially all of the assets of Great
Dane and its subsidiaries. The Agreement requires Great Dane to, among
other things, comply with certain financial covenants, and limits the
amount of loans and transfers to the Company, limits additions to and sales
of Great Dane's fixed assets and limits additional Great Dane borrowings.
The additional amount available under the revolving credit line under the
borrowing base terms of the Agreement totaled $44.6 million at December 31,
1995.
In January 1995, Motors and its subsidiaries finalized a refinancing with
a bank whereby Motors entered into a loan agreement providing for a $45
million term loan and a $20 million revolving credit facility. The funds
from the term loan were used to repay approximately $27 million of bank
debt including the Partnership term loan, the equipment term loan and the
notes payable to the bank, provide $15 million to the Company to retire
certain notes outstanding to the Company's shareholders and pay fees and
expenses. Availability under the revolving credit facility is based on the
amount of eligible trade accounts receivable and inventory and may be used
for working capital needs, as well as for general corporate purposes.
<PAGE>
<PAGE> F-16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE F--BORROWINGS--Continued. . .
The new term loan requires twenty quarterly principal payments of
approximately $2.3 million, which commenced June 30, 1995, plus interest at
either the bank's prime rate plus 1.0% (subject to increase or reduction of
up to 0.25% upon the occurrence of certain events) or a selected Eurodollar
contract rate plus 2.75% (subject to increase or reduction of up to 0.25%
upon the occurrence of certain events). The new term loan is secured by
substantially all of Motors and its subsidiaries' assets including the
stock of a Motors subsidiary. The new term loan agreement requires Motors
to, among other things, comply with certain financial covenants, limits
additions to and sales of Motors' fixed assets and limits additional
borrowings by Motors.
Borrowing under the Motors revolving credit facility ($3.1 million at
December 31, 1995) bears interest at the bank prime rate (8.5% at December
31, 1995) plus 1%.
The economic development term loan, which is guaranteed by Motors, is
payable by SCSM to the West Virginia Economic Development Authority, and
requires monthly payments of $0.1 million, including interest at 5% with
the unpaid balance due 2008. The interest rate will be adjusted in April
1998 and 2003, so as to remain equal to 75% of the base rate, as defined,
plus 1/2%. The loan is secured by certain machinery and equipment with a
net carrying amount of $20 million at December 31, 1995.
Maturities of long-term debt for the four years subsequent to 1996 are as
follows: $16.4 million in 1997, $34.0 million in 1998, $33.6 million in
1999 and $76.2 million in 2000.
Interest paid totaled $39.8 million in 1993, $38.5 million in 1994, and
$41.1 million in 1995.
The weighted average interest rate on short-term borrowings outstanding as
of December 31, 1994 and 1995 was 9.75% and 9.5%, respectively.
NOTE G--COMMITMENTS AND CONTINGENCIES
On February 8, 1989, the Boeing Company ("Boeing") filed a lawsuit naming
the Company, together with three prior subsidiaries of the Company, as
defendants in Case No. CV89-119MA, United States District Court for the
District of Oregon. On December 22, 1993, the Company entered into a
settlement with Boeing, settling all claims asserted by Boeing in the
lawsuit. Pursuant to the settlement terms, the Company will pay Boeing
$12.5 million over the course of five years, at least $5 million of which
has been committed by certain insurance companies in the form of cash or
irrevocable letter of credit. In accordance with the settlement agreement,
Boeing's claims against the Company and the three former subsidiaries have
been dismissed with prejudice and Boeing has released and indemnified the
Company with respect to certain claims. Accordingly, a $7.5 million
special charge was recorded in 1993 to provide for the cost associated with
this legal proceeding.
On May 26, 1994, the Superior Court of the State of California for the
County of Los Angeles approved a settlement of certain litigation with the
<PAGE>
<PAGE> F-17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE G--COMMITMENTS AND CONTINGENCIES--Continued. . .
Insurance Commissioner of the State of California as Conservator and
Rehabilitator of Executive Life Insurance Company ("ELIC"). Pursuant to
the Settlement Agreement, on December 22, 1994, Motors redeemed ELIC's
interest in a partnership for $37.0 million (the "Minority Interest
Redemption") and the litigation was thereafter dismissed with prejudice.
Under certain circumstances, if all or substantially all of the assets of
the partnership are sold within five years of the consummation of the
Minority Interest Redemption, ELIC may be entitled to receive a payment
equal to the positive difference between (x) the distribution ELIC would
have received upon liquidation of the Partnership as a result of such
transaction, calculated in accordance with the provisions of the
partnership agreement as if it had continued to hold its partnership
interest, and (y) the future value of $37.0 million calculated at 15% per
annum from the date of the Minority Interest Redemption to the date of such
transaction.
In 1988, Great Dane entered into an operating agreement with the purchaser
of a previously wholly-owned finance company ("Finance"). Under the terms
of the agreement, the purchaser is given the opportunity to finance certain
sales of Great Dane. The 1988 operating agreement requires that Great
Dane, among other things, (i) not finance the sale of its products for the
first eight years and (ii) maintain a minimum net worth as defined in the
agreement. In addition, at December 31, 1995, Great Dane has guaranteed
the realization of receivables of approximately $0.2 million in connection
with the sale of Finance and is partially responsible for the realization
of new receivables of approximately $165.3 million financed by the
purchaser under the operating agreement subject to certain maximums. In the
event a customer defaults on a loan made by Finance, the underlying
trailers are repossessed by Finance and sold. Great Dane is liable to the
purchaser for 50% of the difference between the remaining loan balance and
the proceeds from the sales of trailers, subject to certain maximums. A
loss reserve of $3.1 million, for potential losses that may be incurred on
the ultimate realization of these receivables, is included in other accrued
and other non-current liabilities in the December 31, 1995, consolidated
balance sheet. Failure to comply with the requirements of the operating
agreement would result in Great Dane having to repay the purchaser $5
million during the year ending September 8, 1996. At December 31, 1995,
Great Dane was in compliance with the provisions of the operating
agreement.
To secure certain obligations, the Company and its subsidiaries had
outstanding letters of credit aggregating approximately $2.4 million at
December 31, 1995, which letters of credit were fully secured by cash
deposits included in other assets in the consolidated balance sheets. In
addition, Great Dane has standby letters of credit aggregating
approximately $7.5 million and Motors has standby letters of credit
aggregating approximately $1.2 million outstanding at December 31, 1995.
<PAGE>
<PAGE> F-18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE G--COMMITMENTS AND CONTINGENCIES--Continued. . .
The Company and certain of its subsidiaries have employment agreements with
three officers of the Company that provide for minimum annual compensation
of approximately $2.0 million. The contracts expire on various dates from
June 1996 to February 1998.
The Company and its subsidiaries lease real estate and equipment. Certain
leases are renewable and provide for monthly rentals, real estate taxes and
other operating expenses. The Company believes that, in the normal course
of business, leases that expire will be renewed or replaced by other
leases. Rental expense under operating leases was approximately $4.8
million in 1993, $5.5 million in 1994, and $6.0 million in 1995. Minimum
rental obligations for all noncancelable operating leases at December 31,
1995, are as follows: $3.0 million in 1996, $2.8 million in 1997, $2.6
million in 1998, $2.4 million in 1999, $2.3 million in 2000, and $12.4
million thereafter.
Management believes that none of the above legal actions, guarantees or
commitments will have a material adverse effect on the Company's
consolidated financial statements.
NOTE H--RETIREMENT PLANS
The Company and its subsidiaries have defined benefit pension plans
applicable to substantially all employees. The contributions to these
plans are based on computations by independent actuarial consultants. The
Company's general funding policy is to contribute amounts required to
maintain funding standards in accordance with the Employee Retirement
Income Security Act. Employees' benefits are based on years of service and
the employees' final average earnings, as defined by the plans.
Net periodic pension cost includes the following components (dollars in
thousands):
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Service cost--benefits earned
(normal cost) $ 1,752 $ 2,384 $ 2,311
Interest on projected benefit
obligation 3,972 4,384 4,843
Return on investments (2,867) (1,007) (6,211)
Net amortization and deferral 328 (1,459) 3,187
-------- -------- --------
Net periodic pension cost
charged to expense $ 3,185 $ 4,302 $ 4,130
======== ======== ========
</TABLE>
<PAGE>
<PAGE> F-19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE H--RETIREMENT PLANS--Continued. . .
Gains and losses and prior service cost are amortized over periods ranging
from seven to fifteen years. Other assumptions used in the calculation of
the actuarial present value of the projected benefit obligation were as
follows:
<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Discount rate 7-1/2% 7-1/2% - 8% 7% - 7-1/2%
Rate of increase in compensa-
tion levels 4% - 4-1/4% 4% - 4-1/4% 3% - 4-1/4%
Long-term rate of return on
assets 5% - 9-1/2% 5% - 9% 8-1/4% - 9%
</TABLE>
The following table sets forth the plans' funded status and amounts
recognized in the Company's consolidated balance sheets (dollars in
thousands):
<TABLE>
<CAPTION>
December 31,
1994 1995
---------- ----------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligations $ 44,642 $ 50,104
========== ==========
Accumulated benefit obligation $ 47,836 $ 53,616
========== ==========
Plan assets (principally guaranteed investment
contracts with insurance companies) $ 43,541 $ 50,300
Projected benefit obligation 60,655 73,992
---------- ----------
Projected benefit obligation in excess of
plan assets (17,114) (23,692)
Unrecognized prior service cost 778 667
Unrecognized net loss 6,353 13,766
Minimum liability (2,351) (1,912)
Unrecognized net obligation at transition 1,591 1,362
---------- ----------
Pension liability recognized in
the balance sheets $ (10,743) $ (9,809)
========== ==========
</TABLE>
<PAGE>
<PAGE> F-20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE H--RETIREMENT PLANS--Continued. . .
Relative positions and undertakings in multiemployer pension plans covering
certain of the Motors' employees are not presently determinable. Expenses
related to multiemployer pension plans totaled $0.2 million, $0.3 million
and $0.3 million for the years ended December 31, 1993, 1994 and 1995,
respectively.
Expense related to defined contribution plans, which is based on a
stipulated contribution for hours worked or employee contributions,
approximated $0.5 million in 1993, $0.5 million in 1994 and $0.7 million in
1995.
The Company and its subsidiaries provide postretirement health care and
life insurance benefits to eligible retired employees. The Company's
policy is to fund the cost of medical benefits as paid. Effective January
1, 1993, the Company adopted SFAS No.106, "Employers Accounting for
Postretirement Benefits Other Than Pensions." This statement requires the
accrual of the cost of providing postretirement benefits, including medical
and life insurance coverage, during the active service period of the
employee. The Company recorded a charge of $29.7 million (net of taxes of
$16.5 million), or $29,762 per share, during 1993 to reflect the cumulative
effect of this change in accounting principle.
The following table sets forth the plan's funded status reconciled with
amounts recognized in the Company's consolidated balance sheets (in
thousands):
<TABLE>
<CAPTION>
December 31,
1994 1995
---------- ----------
<S> <C> <C>
Accumulated post retirement obligation:
Retirees $ (32,473) $ (29,768)
Fully eligible active plan participants (5,315) (4,771)
Other active plan participants (9,751) (10,623)
---------- ----------
(47,539) (45,162)
Unrecognized net gain (2,568) (6,542)
Unrecognized prior service cost (3,146) (2,860)
---------- ----------
Accrued postretirement benefit liability
recorded in balance sheet $ (53,253) $ (54,564)
========== ==========
</TABLE>
<PAGE>
<PAGE> F-21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE H--RETIREMENT PLANS--Continued. . .
Net periodic postretirement benefit cost includes the following components
(in thousands):
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Service cost $ 634 $ 541 $ 493
Interest cost 3,888 3,625 3,699
Unrecognized prior service cost --- (286) (286)
-------- -------- --------
$ 4,522 $ 3,880 $ 3,906
======== ======== ========
</TABLE>
The health care cost trend rate as of December 31, 1995, ranges from 11.5%
down to 5.0% over the next 10 years and remains level thereafter. The
health care cost trend rate assumption has a significant effect on the
amounts reported. For example, increasing the assumed health care cost
trend rates by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1995, by
$2.8 million. The weighted-average discount rate used in determining the
accumulated postretirement benefit obligation was 8.0% and 7.5% at December
31, 1994 and 1995, respectively.
NOTE I--INCOME TAXES
Effective January 1, 1993, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes."
As permitted under the new rules, prior years financial statements have not
been restated. The Company recorded a charge of $16.9 million, or $16,864
per share, during 1993 to reflect the cumulative effect of this change in
accounting principle. Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for
income tax purposes.
<PAGE>
<PAGE> F-22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE I--INCOME TAXES--Continued. . .
Significant components of the Company's deferred tax assets and
liabilities as of December 31, 1994 and 1995 are as follows (dollars in
thousands):
<TABLE>
<CAPTION>
December 31,
1994 1995
---------- ----------
<S> <C> <C>
Deferred tax assets:
Other postretirement benefits $ 19,675 $ 20,347
Pension 2,799 2,261
Reserves 13,143 17,276
Bad debt reserve 1,769 1,829
Other 6,868 3,640
---------- ----------
44,254 45,353
Valuation allowance (1,000) (1,000)
---------- ----------
43,254 44,353
Deferred tax liabilities:
Property, plant and equipment 28,519 26,313
Debenture discount 4,354 3,628
Intangible assets 4,525 4,313
Inventory 2,530 3,388
Other 76 2,666
---------- ----------
40,004 40,308
---------- ----------
Net deferred tax assets $ 3,250 $ 4,045
========== ==========
</TABLE>
The components of income tax expense are as follows (dollars in thousands):
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1994 1995
---------- ---------- ----------
<S> <C> <C> <C>
Current taxes:
Federal $ (10,244) $ (23,395) $ (21,888)
State (4,025) (4,298) (4,584)
---------- ---------- ----------
(14,269) (27,693) (26,472)
Deferred tax benefit 8,512 9,044 3,167
---------- ---------- ----------
Income tax expense $ (5,757) $ (18,649) $ (23,305)
========== ========== ==========
</TABLE>
<PAGE>
<PAGE> F-23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE I--INCOME TAXES--Continued. . .
Income tax expense differs from the amount computed by applying the
statutory federal income tax rate to income (loss) before income taxes.
The reasons for these differences are as follows (dollars in thousands):
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1994 1995
---------- ---------- ----------
<S> <C> <C> <C>
Computed expected tax expense $ (3,192) $(15,049) $(20,406)
(Increase) decrease in taxes
resulting from:
State income taxes, net of
federal income tax
benefit (2,616) (2,794) (2,980)
Amortization of goodwill
and other items (643) (714) (421)
Nontaxable Partnership
income 446 286 ---
Other 248 (378) 502
--------- --------- ---------
Actual tax expense $ (5,757) $(18,649) $(23,305)
========= ========= =========
</TABLE>
Income taxes paid totaled $13.4 million in 1993, $24.5 million in 1994 and
$29.7 million in 1995.
NOTE J--RELATED PARTY TRANSACTIONS
The Company leases an airplane owned by a corporation of which the sole
shareholder is a director of the Company. Lease expenses totaled $0.7
million in 1993 and $1.1 million each year in 1994 and 1995.
NOTE K-INDUSTRY SEGMENT INFORMATION
The Company operates in four principal segments:
TRAILER MANUFACTURING SEGMENT--Manufacturing and distribution of highway
truck trailers in the domestic market to diversified trucking,
distribution and private fleet customers.
AUTOMOTIVE PRODUCTS SEGMENT--Manufacturing metal stampings and assemblies
and coordination of related tooling production for domestic and foreign
motor vehicle manufacturers with production facilities in North America.
VEHICULAR OPERATIONS SEGMENT--Leasing taxicabs and providing taxicab
related services in the City of Chicago.
INSURANCE OPERATIONS SEGMENT--Providing property and casualty insurance
coverage within certain states of the continental United States to both
unaffiliated and affiliated insureds.
<PAGE>
<PAGE> F-24
Trailer Manufacturing segment sales to J. B. Hunt totaled approximately
$92.3 million in 1993, $85.3 million in 1994 and $39.6 million in 1995.
Automotive product net sales to General Motors Corporation totaled
approximately $121.5 million in 1993, $145.9 million in 1994 and $168.2
million in 1995 (includes accounts receivable of $8.9 million, $13.0
million and $13.8 million at December 31, 1993, 1994 and 1995,
respectively).
Industry segment data is summarized as follows (dollars in thousands):
<PAGE>
<PAGE> F-25
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE K--INDUSTRY SEGMENT INFORMATION--Continued. . .
Trailer Automotive Vehicular Insurance
Manufacturing Products Operations Operations Eliminations Consolidated
------------- -------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
1993
Revenues:
Outside customers $ 711,862 $ 127,925 $ 42,103 $ 27,436 $ --- $ 909,326
Intersegment sales --- --- 4,346 13,400 (17,746) ---
---------- ---------- ---------- ---------- ---------- ----------
$ 711,862 $ 127,925 $ 46,449 $ 40,836 $ (17,746) $ 909,326
========== ========== ========== ========== ========== ==========
Segment operating profit (loss) $ 32,381 $ 15,306 $ 6,251 $ (1,947) $ --- $ 51,991
Corporate expense (4,646)
Operating profit 47,345
Interest income:
Segment 428 5,877 6,305
Corporate 1,091
Interest expense:
Segment (4,811) (4,811)
Corporate (36,803)
Special charge (7,500)
Other income, net 3,494
----------
Income before income taxes $ 9,121
==========
Identifiable assets $ 259,837 $ 67,937 $ 20,493 $ 116,692 $ 464,959
Partnership assets 37,701
Corporate assets 14,676
----------
Total assets at December 31, 1993 $ 517,336
==========
Depreciation and amortization $ 8,280 $ 4,991 $ 9,530 $ 494 $ 23,295
Capital expenditures 7,265 4,728 7,913 100 20,006
</TABLE>
<PAGE>
<PAGE> F-26
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE K--INDUSTRY SEGMENT INFORMATION--Continued. . .
Trailer Automotive Vehicular Insurance
Manufacturing Products Operations Operations Eliminations Consolidated
------------- -------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
1994
Revenues:
Outside customers $ 859,089 $ 157,568 $ 43,653 $ 36,167 $ --- $1,096,477
Intersegment sales --- --- 3,648 12,145 (15,793) ---
---------- ---------- ---------- ---------- ---------- -----------
$ 859,089 $ 157,568 $ 47,301 $ 48,312 $ (15,793) $1,096,477
========== ========== ========== ========== ========== ===========
Segment operating profit (loss) $ 58,619 $ 19,652 $ 6,824 $ (916) $ --- $ 84,179
Corporate expenses (8,534)
-----------
Operating profit 75,645
Interest income:
Segment 5,510 5,510
Corporate 1,591
Interest expense:
Segment (3,784) (3,784)
Corporate (36,381)
Other expenses, net 1,002
Minority equity (586)
-----------
Income before income taxes $ 42,997
===========
Identifiable assets $ 264,147 $ 81,976 $ 17,827 $ 116,062 $ 480,012
Partnership assets 36,776
Corporate assets 5,263
-----------
Total assets at December 31, 1994 $ 522,051
===========
Depreciation and amortization:
Segment $ 7,876 $ 5,294 $ 8,992 $ 409 $ 22,571
Other 23
Capital expenditures:
Segment 8,937 1,152 7,580 215 17,884
Other 325
</TABLE>
<PAGE>
<PAGE> F-27
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE K--INDUSTRY SEGMENT INFORMATION--Continued. . .
Trailer Automotive Vehicular Insurance
Manufacturing Products Operations Operations Eliminations Consolidated
------------- -------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
1995
Revenues:
Outside customers $ 995,127 $ 208,242 $ 43,376 $ 45,829 $ --- $1,292,574
Intersegment sales --- --- 3,915 11,080 (14,995) ---
---------- ---------- ---------- ---------- ---------- -----------
$ 995,127 $ 208,242 $ 47,291 $ 56,909 $ (14,995) $1,292,574
========== ========== ========== ========== ========== ===========
Segment operating profit (loss) $ 61,531 $ 26,451 $ 7,889 $ (235) $ 95,636
Corporate expenses (4,812)
-----------
Operating profit 90,824
Interest income:
Segment 6,388 6,388
Corporate 2,302
Interest expense:
Segment (9,658) (9,658)
Corporate (32,653)
Other income, net 2,261
Minority equity (1,162)
----------
Income before income taxes $ 58,302
==========
Identifiable assets $ 279,604 $ 97,936 $ 20,807 $ 140,523 $ 538,870
Corporate assets 31,735
----------
Total assets at December 31, 1995 $ 570,605
==========
Depreciation and amortization:
Segment $ 8,275 $ 5,049 $ 9,132 $ 315 $ 22,771
Other (750)
Capital expenditures
Segment 19,440 4,136 9,169 194 32,939
Other 128
</TABLE>
<PAGE>
<PAGE> F-28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE K--INDUSTRY SEGMENT INFORMATION--Continued. . .
Intersegment sales are accounted for at prices comparable to normal
unaffiliated customer sales. Corporate and Partnership assets consist of
short-term investments, savings deposits and certain other assets.
NOTE L--FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company in
estimating the fair value of financial instruments:
CASH AND CASH EQUIVALENTS: The carrying amount reported in the balance
sheet for cash and cash equivalents approximates its fair value.
INDEBTEDNESS: The carrying amounts of the Great Dane term loan payable,
Great Dane revolving credit line, Motors term loan payable, economic
development term loan and line of credit approximate their fair value. The
fair values of the Company's 12-3/4% Senior Subordinated Debentures and
14-1/2% Subordinated Discount Debentures are based on quoted market prices.
The fair values of the Company's other indebtedness is estimated using
discounted cash flow analyses based on current market rates.
The carrying amount and fair value of the Company's indebtedness at
December 31, 1995, are as follows (dollars in thousands):
<TABLE>
<CAPTION>
Carrying Amount Fair Value
--------------- ----------
<S> <C> <C>
Long-term debt and notes payable $ 296,311 $ 295,091
</TABLE>
<PAGE>
<PAGE> F-29
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE M--SELECTED QUARTERLY DATA (UNAUDITED)
(dollars in thousands, except per share amounts)
1994 QUARTER ENDED 1995 QUARTER ENDED
----------------------------------------------- -----------------------------------------------
March 31 June 30 September 30 December 31 March 31 June 30 September 30 December 31
-------- ------- ------------ ----------- -------- ------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 271,680 $ 277,622 $ 256,679 $ 290,496 $ 322,393 $ 329,527 $ 295,799 $ 344,855
Gross profit 40,845 44,969 39,495 41,936 45,862 48,148 42,948 41,967
Net income 6,386 8,391 2,310 7,261 8,293 9,575 6,696 10,433
Income per share:
Net income $ 6,386 $ 8,391 $ 2,310 $ 7,261 $ 8,293 $ 9,575 $ 6,696 $ 10,433
</TABLE>
During the quarter ended December 31, 1995, certain estimates of accruals
for losses, as well as the income tax rate used to calculate income taxes
were adjusted to reflect the reversal of accruals no longer needed and tax
strategies implemented in the fourth quarter. The effect of the above was
to increase net income by $3 million ($3,000 per share).
<PAGE>
<PAGE> S-1
<TABLE>
<CAPTION>
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
GREAT DANE HOLDINGS INC.
CONDENSED BALANCE SHEETS
(dollars in thousands)
December 31,
1994 1995
---------- ----------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 1,401 $ 4,679
Accounts receivable 535 525
Other current assets 1,481 271
---------- ----------
Total Current Assets 3,417 5,475
Equipment, net 302 374
Investments in subsidiaries 152,873 215,767
Other assets 15,022 13,280
---------- ----------
TOTAL ASSETS $ 171,614 $ 234,896
========== ==========
LIABILITIES AND SHAREHOLDERS' DEFICIT:
Accounts payable $ 869 $ 136
Income taxes payable 9,062 5,521
Accrued compensation 257 87
Accrued interest 11,468 10,506
Other accrued liabilities 7,041 5,758
---------- ----------
Total Current Liabilities 28,697 22,008
Long-term debt 207,327 161,871
Other noncurrent liabilities 29,489 29,104
Intercompany accounts with subsidiaries 31,343 112,158
Shareholders' deficit:
Common stock 1 1
Paid-in capital 14,999 14,999
Retained earnings (deficit) (11,869) 23,128
Amount paid in excess of Motors'
net assets (127,748) (128,373)
Notes receivable from shareholders (625) ---
---------- ----------
Total Shareholders' Deficit (125,242) (90,245)
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 171,614 $ 234,896
========== ==========
</TABLE>
<PAGE>
<PAGE> S-2
<TABLE>
<CAPTION>
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT--CONTINUED
GREAT DANE HOLDINGS INC.
CONDENSED STATEMENTS OF OPERATIONS
(dollars in thousands)
Year Ended December 31,
1993 1994 1995
---------- ---------- ----------
<S> <C> <C> <C>
Selling, general and
administrative expenses $ (4,646) $ (8,534) $ (6,919)
Interest expense (30,216) (30,812) (27,635)
Equity in earnings of
subsidiaries 29,376 48,323 55,893
Other income 211 307 666
Special charge (7,500) --- ---
Intercompany income:
Corporate charges 1,008 1,008 1,008
---------- ---------- ----------
Income (loss) before income taxes
and accounting changes (11,767) 10,292 23,013
Income tax benefit 15,131 14,056 11,984
---------- ---------- ----------
Income before accounting changes 3,364 24,348 34,997
Accounting changes (46,626) --- ---
---------- ---------- ----------
NET INCOME (LOSS) $ (43,262) $ 24,348 $ 34,997
========== ========== ==========
</TABLE>
<PAGE>
<PAGE> S-3
<TABLE>
<CAPTION>
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT--CONTINUED
GREAT DANE HOLDINGS INC.
CONDENSED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Year Ended December 31,
1993 1994 1995
---------- ---------- ----------
<S> <C> <C> <C>
NET CASH FLOW USED IN OPERATING
ACTIVITIES $ (47,640) $ (11,317) $ (24,707)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of equipment --- (325) (128)
Investment in subsidiaries --- (30,000) (7,000)
Other 5,900 16 1,069
---------- ---------- ----------
NET CASH FLOW PROVIDED BY
(USED IN) INVESTING
ACTIVITIES 5,900 (30,309) (6,059)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayment of borrowings --- --- (46,771)
Advances from subsidiaries 38,278 41,559 80,815
---------- ---------- ----------
NET CASH FLOW PROVIDED BY
FINANCING ACTIVITIES 38,278 41,559 34,044
---------- ---------- ----------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (3,462) (67) 3,278
Beginning cash and cash
equivalents 4,930 1,468 1,401
---------- ---------- ----------
ENDING CASH AND CASH
EQUIVALENTS $ 1,468 $ 1,401 $ 4,679
========== ========== ==========
</TABLE>
The Registrant's subsidiaries declared dividends totaling $22 million in 1993
and $15 million in 1994. These dividends were declared to offset certain
intercompany account balances at the respective dates.
<PAGE>
<PAGE> S-4
<TABLE>
<CAPTION>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
- -----------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------
Additions Charged to:
Balance at --------------------- Balance at
Description Beginning Cost and Other Deductions<F1> End of
of Period Expenses Accounts Period
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993:
Deducted from assets:
Allowance for doubtful accounts
--trade $ 623 $ 234 $ --- $ (109) $ 748
======== ======== ======== ======== ========
Allowance for doubtful accounts
--finance lease receivables $ 679 $ 52 $ --- $ (572) $ 159
======== ======== ======== ======== ========
Contract & warranty reserves $ 8,375 $ 5,439 $ --- $(3,429) $10,385
======== ======== ======== ======== ========
Workers' compensation $ 1,841 $ 1,200 $ --- $(1,927) $ 1,114
======== ======== ======== ======== ========
Claims $ 3,332 $ 1,103 $ --- $(1,106) $ 3,329
======== ======== ======== ======== ========
YEAR ENDED DECEMBER 31, 1994:
Deducted from assets:
Allowance for doubtful accounts
--trade $ 748 $ 804 $ --- $ (210) $ 1,342
======== ======== ======== ======== ========
Allowance for doubtful accounts
--finance lease receivables $ 159 $ (172) $ --- $ 13 $ 0
======== ======== ======== ======== ========
Contract & warranty reserves $10,385 $ 8,076 $ --- $(4,016) $14,445
======== ======== ======== ======== ========
Workers' compensation $ 1,114 $ 956 $ --- $ (435) $ 1,635
======== ======== ======== ======== ========
Claims $ 3,329 $ 1,078 $ --- $(2,103) $ 2,304
======== ======== ======== ======== ========
</TABLE>
<PAGE>
<PAGE> S-5
<TABLE>
<CAPTION>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
- -----------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------
Additions Charged to:
Balance at --------------------- Balance at
Description Beginning Cost and Other Deductions<F1> End of
of Period Expenses Accounts Period
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995:
Deducted from assets:
Allowance for doubtful accounts
--trade $ 1,342 $ 324 $ --- $ (102) $ 1,564
======== ======== ======== ======== ========
Contract & warranty reserves $14,445 $11,430 $ --- $(7,153) $18,722
======== ======== ======== ======== ========
Workers' compensation $ 1,635 $ 1,000 $ --- $(1,639) $ 996
======== ======== ======== ======== ========
Claims $ 2,304 $ 671 $ --- $(1,081) $ 1,894
======== ======== ======== ======== ========
- ---------------
<FN>
<F1> Reclassification to other reserves and utilization of reserves.
</TABLE>
<PAGE>
<PAGE> S-6
<TABLE>
<CAPTION>
SCHEDULE V
SUPPLEMENTAL INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
- ----------------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F COL. G COL. H COL. I COL. J COL. K
- ----------------------------------------------------------------------------------------------------------------------------------
Reserves Claims and
for Claim
Unpaid Adjustment Amortiza-
Claims Expenses tion Paid
and Discount, Incurred of Claims
Deferred Claim if any, Related to: Deferred and
Policy Adjust- Deducted Net ------------------ Policy Claim
Affiliation Acquisi- ment in Unearned Earned Invest- (1) (2) Acquisi- Adjust-
with tion Expense Column Premiums Premiums ment Current Prior tion ment Premiums
Registrant Costs <F1> C <F2> <F3> Income Year Years Costs Expenses Written
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WHOLLY-OWNED INSURANCE SUBSIDIARY:
- ----------------------------------
Year Ended:
December 31, 1993 $ 1,892 $ 71,179 $ --- $ 9,547 $ 40,836 $ 7,838 $ 33,152 $ (583) $ 8,123 $ 30,529 $ 39,920
======== ======== ======== ======== ======== ======== ======== ======== ======== ======== ========
December 31, 1994 $ 2,258 $ 69,318 $ --- $12,203 $ 48,312 $ 6,890 $ 46,366 $(7,711) $ 9,006 $ 36,435 $ 50,652
======== ======== ======== ======== ======== ======== ======== ======== ======== ======== ========
December 31, 1995 $ 2,971 $ 78,151 $ --- $12,545 $ 56,909 $ 7,607 $ 51,438 $(6,340) $12,913 $ 37,010 $ 57,544
======== ======== ======== ======== ======== ======== ======== ======== ======== ======== ========
- ---------------
<FN>
<F1> Excludes reinsurance recoverable on unpaid claims and claims adjustment expense of $6,905, $2,824 and $3,569 in 1993, 1994 and
1995, respectively, in connection with the restatement of the balance sheet loss reserve amounts as reported in accordance with
SFAS No. 113.
<F2> Excludes net ceded premiums of $286, $602 and $309 in 1993, 1994 and 1995, respectively, in connection with the restatement of
the balance sheet unearned premium amounts as reported in accordance with SFAS No. 113.
<F3> Includes premiums earned of $13,400, $12,145 and $11,080 in 1993, 1994 and 1995, respectively, in connection with coverage
provided to other entities in the consolidated group which have been eliminated in consolidation.
</TABLE>
<PAGE>
<PAGE> E-1
INDEX TO EXHIBITS
The following Exhibits required by Item 601 of Regulation S-K (and
numbered in conformity therewith) are filed herewith or incorporated by
reference herein:
3.1 - Composite Certificate of Incorporation of the Company reflecting
all amendments to date (incorporated herein by reference to
Exhibit 3.1 to Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995).
3.2 - Bylaws of the Company (incorporated herein by reference to
Exhibit 3.2 to the Registrant's Registration Statement No. 033-
56595 filed with the Securities and Exchange Commission on
November 23, 1994 (the "1994 S-1")).
4.1 - Form of Indenture between the Company and First Fidelity Bank,
National Association, New Jersey, as trustee ("First Fidelity")
relating to the 12-3/4% Senior Subordinated Debentures due August
1, 2001, of International Controls Corp ("ICC") (incorporated
herein by reference to Exhibit 4.1 to Registration Statement No.
33-7212 filed with the Securities and Exchange Commission on July
15, 1986).
4.2 - First Supplemental Indenture, dated as of October 19, 1994, among
ICC, the Company and First Fidelity relating to the 12-3/4%
Senior Subordinated Debentures due August 1, 2001 (incorporated
herein by reference to Exhibit 4.2 to the 1994 S-1).
4.3 - Form of Indenture between the Company and Midlantic National
Bank, as trustee ("Midlantic"), relating to the 14-1/2% Sub-
ordinated Discount Debentures due January 1, 2006, of ICC
(incorporated herein by reference to Exhibit 4.1 to Registration
Statement No. 33-1788 filed with the Securities and Exchange
Commission on November 26, 1985).
4.4 - First Supplemental Indenture, dated October 19, 1994, among ICC,
the Company and Midlantic relating to the 14-1/2% Subordinated
Discount Debentures due January 1, 2006 (incorporated herein by
reference to Exhibit 4.4 to the 1994 S-1).
10.1 - Amended and Restated Employment Agreement, dated as of November
1, 1985, between Motors and David R. Markin ("Markin Employment
Agreement") (incorporated herein by reference to Exhibit 10.4 to
Amendment No. 2, filed on April 5, 1995, to the 1994 S-1
("Amendment No. 2")).
10.2 - Amendment, dated as of March 4, 1992, to Markin Employment
Agreement (incorporated herein by reference to Exhibit 10.3 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1991 (the "1991 10-K")).
<PAGE>
<PAGE> E-2
10.3 - Extension, dated July 12, 1993, of Markin Employment Agreement
(incorporated herein by reference to Exhibit 10.6 of the
Company's Annual Report on Form 10-K for the year ended December
31, 1993 (the "1993 10-K")).
10.4 - Amended and Restated Employment Agreement, dated as of June 1,
1992, between Yellow Cab and Jeffrey Feldman (incorporated herein
by reference to Exhibit 28.2 of the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1992 (the "June 1992
10-Q")).
10.5 - Form of Stated Benefit Salary Continuation Agreement (incorpo-
rated herein by reference to Exhibit 10.8 to Amendment No. 2).
10.6 - Employment Agreement, dated as of July 1, 1992, between the
Company and Jay H. Harris (incorporated herein by reference to
Exhibit 28.1 to the June 1992 10-Q).
10.7 - Amendment, dated April 6, 1994, to Harris Employment Agreement
(incorporated herein by reference to Exhibit 10.10 to the 1994
S-1).
10.8 - Lease, dated December 1, 1988, between SCSM and Park Corporation
(incorporated herein by reference to Exhibit 10.19 to Amendment
No. 2).
10.9 - Assumption Agreement, dated as of August 1, 1989, by and between
Motors and the West Virginia Economic Development Authority
(incorporated herein by reference to Exhibit 10.12 to the
Company's Annual Report on Form 10-K for the year ended December
31, 1990).
10.10 - Agreement, dated as of September 1, 1991, between Yellow Cab
Company and Jerry E. Feldman (incorporated herein by reference to
Exhibit 10.12 to the 1991 10-K).
10.11 - Form of Checker Motors Corporation Excess Benefit Retirement
Plan, effective January 1, 1983 (incorporated herein by reference
to Exhibit 19.9 to the 1991 10-K).
10.12 - Amended and Restated License Agreement, dated December 30, 1992,
between Motors and Checker Taxi Association, Inc. (incorporated
herein by reference to Exhibit 10.28 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1992 (the
"1992 10-K")).
10.13 - Employment Agreement, dated as of January 1, 1994, between the
Company and David R. Markin (incorporated herein by reference to
Exhibit 10.36 to the 1994 S-1).
10.14 - Settlement Agreement, dated as of June 21, 1994, among John
Garamendi, as Insurance Commissioner of the State of California,
Base Assets Trust, the Partnership, Motors, Checker Holding
Corp.III and Holdings (incorporated herein by reference to
Exhibit 10.38 to the 1994 S-1).
<PAGE>
<PAGE> E-3
10.15 - Form of Indemnification Agreement (incorporated herein by
reference to Exhibit 10.39 to the 1994 S-1).
10.16 - Sale, Installation and Technical Assistance Agreement, dated
November 14, 1983, between Graaff KG and Great Dane Trailers,
Inc. (incorporated herein by reference to Exhibit 10.40 to the
1994 S-1).
10.17 - Form of Great Dane Trailers, Inc., Supplemental Retirement Income
Plan, effective January 1, 1994 (incorporated herein by reference
to Exhibit 10.41 to the 1994 S-1).
10.18 - Amended and Restated Operating Agreement, dated as of August 31,
1988, between Associates Commercial Corporation (as successor to
Great Dane Finance Company) and Great Dane Trailers, Inc. (the
"Associates Agreement") (incorporated herein by reference to
Exhibit 10.43 to the 1994 S-1).
10.19 - Amendment, dated February 7, 1994, to the Associates Agreement
(incorporated herein by reference to Exhibit 10.44 to the 1994
S-1).
10.20 - Amendment, dated May 18, 1994, to the Associates Agreement
(incorporated herein by reference to Exhibit 10.45 to the 1994
S-1).
10.21 - Stock Option Agreement, dated as of January 17, 1995, between the
Company and Jay H. Harris (the "Stock Option Agreement")
(incorporated herein by reference to Exhibit 10.46 to Amendment
No. 1, filed on February 27, 1995, to the 1994 S-1 ("Amendment
No. 1")).
10.22 - Amendment, dated as of September 11, 1995, to the Stock Option
Agreement (incorporated herein by reference to Exhibit 10.3 to
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995 (the "September 1995 10-Q")).
10.23 - Loan Agreement, dated as of January 26, 1995, by and among
Motors, Yellow Cab, Chicago AutoWerks, CMC Kalamazoo, SCSM, the
Lenders named therein and NBD Bank, as Agent ("NBD") (the "NBD
Loan Agreement") (incorporated herein by reference to the
Company's Annual Report on Form 10-K for the Year ended December
31, 1994 (the "1994 10-K")).
10.24 - First Amendment, dated as of September 22, 1995, to the NBD Loan
Agreement (incorporated herein by reference to Exhibit 10.1 to
the September 1995 10-Q).
10.25 - Second Amendment, dated as of December 8, 1995, to the NBD Loan
Agreement.*
10.26 - Pledge Agreement and Irrevocable Proxy, dated as of January 26,
1995, given by Motors to NBD, as Agent (incorporated herein by
reference to Exhibit 10.24 to the 1994 10-K).
<PAGE>
<PAGE> E-4
10.27 - Security Agreement, dated as of January 26, 1995, made by Motors,
Yellow Cab, Chicago AutoWerks and CMC Kalamazoo to NBD, as Agent
(incorporated herein by reference to Exhibit 10.25 to the 1994
10-K).
10.28 - Amended and Restated Loan and Security Agreement, dated as of
February 14, 1995, among Great Dane Trailers, Inc., Great Dane
Los Angeles, Inc., and Great Dane Trailers Tennessee, Inc., the
financial institutions named therein, and BankAmerica Business
Credit, Inc., as Agent ("BABC") (the "BABC Loan Agreement")
(incorporated herein by reference to Exhibit 10.26 to the 1994
10-K).
10.29 - First Amendment, dated as of May 31, 1995, to the BABC Loan
Agreement.*
10.30 - Second Amendment, dated as of June 30, 1995, to the BABC Loan
Agreement.*
10.31 - Third Amendment, dated as of August 31, 1995, to the BABC Loan
Agreement.*
10.32 - Fourth Amendment, dated as of October 31, 1995, to the BABC Loan
Agreement.*
10.33 - Fifth Amendment, dated as of January 22, 1996, to the BABC Loan
Agreement.*
10.34 - Amended and Restated Pledge Agreement, dated as of February 14,
1995, made by Great Dane Trailers, Inc., in favor of BABC
(incorporated herein by reference to Exhibit 10.27 to the 1994
10-K).
10.35 - Amended and Restated Agreement Regarding Stock and Other Matters,
dated as of February 14, 1995, between the Company and BABC
(incorporated herein by reference to Exhibit 10.28 to the 1994
10-K).
10.36 - Retirement Plan for Great Dane Trailers, Inc., effective as of
January 1, 1989 (incorporated herein by reference to Exhibit
10.54 to Amendment No. 2).
10.37 - Checker Motors Pension Plan, as amended and restated, effective
January 1, 1987 (incorporated herein by reference to Exhibit
10.55 to Amendment No. 2).
10.38 - Composite Checker Employees' 401(k) Retirement Benefit Plan,
reflecting all amendments to date, incorporated herein by
reference to Exhibit 10.56 to Amendment No. 2).
21.1 - Subsidiaries of the Company.*
27.1 - Financial Data Schedule.*
<PAGE>
<PAGE> E-5
28.1 - Schedule P of Annual Statements provided by Country to Illinois
Regulatory Authorities (filed under cover of Form SE filed with
the Securities and Exchange Commission on March 22, 1996).
________________
*Filed herewith.
<PAGE>
<PAGE> 10.25-1
EXHIBIT 10.25
EXECUTION COPY
SECOND AMENDMENT TO LOAN AGREEMENT
----------------------------------
THIS SECOND AMENDMENT TO LOAN AGREEMENT, dated as of December 8, 1995
(this "Amendment"), is among CHECKER MOTORS CORPORATION, A Delaware
corporation (the "Company"), YELLOW CAB COMPANY, a Delaware corporation
("Yellow Cab"), CHICAGO AUTOWERKS INC., a Delaware corporation ("AutoWerks"),
CMC KALAMAZOO INC., a Delaware corporation ("CMC") and SOUTH CHARLESTON
STAMPING & MANUFACTURING COMPANY, a West Virginia corporation ("SCSM") (the
Company, Yellow Cab, AutoWerks, CMC and SCSM may each be referred to as a
"Borrower" and collectively as the "Borrowers"), the Lenders set forth on the
signature pages hereof (collectively, the "Lenders" and individually, a
"Lender") and NBD Bank, a Michigan banking corporation, as agent for the
Lenders (in such capacity, the "Agent").
RECITAL
-------
The Borrowers, the Lenders and the Agent are parties to a Loan Agreement
dated as of January 26, 1995, as amended by a First Amendment to Loan
Agreement dated as of September 22, 1995 (the "Loan Agreement") and desire to
amend the Loan Agreement as set forth herein.
TERMS
-----
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE I. AMENDMENT. The Loan Agreement shall be amended as follows:
---------
1.1 The period at the end of Section 5.2(g)(ix) is deleted and "; and" is
substituted in place thereof and a new Section 5.2(g)(x) is hereby added
thereafter:
"(x) Liens in favor of West Virginia Economic Development
Authority on specific assets and subject to other
limitations as more fully described in the Intercreditor
Agreement dated December 8, 1995 attached hereto as
Schedule 5.2(g)(x) between NBD Bank, both individually
and as agent for itself and the Lenders, and the West
Virginia Economic Development Authority, and the Lenders
hereby authorize the Agent to sign such Intercreditor
Agreement on their behalf."
<PAGE>
<PAGE> 10.25-2
ARTICLE II. REPRESENTATIONS. Each Borrower represents and warrants that:
---------------
2.1 The execution, delivery and performance of this Amendment is within its
powers, has been duly authorized and is not in contravention with any law, of
the terms of its articles of incorporation or by-laws, or any undertaking to
which it is a party or by which it is bound.
2.2 This Amendment is the legal, valid and binding obligation of it,
enforceable against it in accordance with the terms hereof.
2.3 After giving effect to the amendments herein contained, the
representations and warranties contained in Article IV of the Loan Agreement
and in the other Loan Documents are true on and as of the date hereof with
the same force and effect as if made on and as of the date hereof.
2.4 No Event of Default or Default exists or has occurred and is
continuing on the date hereof.
ARTICLE III. MISCELLANEOUS.
-------------
3.1 References in any Loan Document to the Loan Agreement shall be deemed to
be references to the Loan Agreement as amended hereby and as further amended
from time to time.
3.2 Except as expressly amended hereby, the Borrowers agree that all
Loan Documents are ratified and confirmed and shall remain in full force and
effect and that the Borrowers have no set off, counterclaim or defense with
respect to any of the foregoing. Terms used but not defined herein shall
have the respective meanings ascribed thereto in the Loan Agreement.
3.3 This Amendment may be signed upon any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
3.4 This Amendment shall not be effective until the Company shall have
paid to the Agent, for the pro rata benefit of the Lenders, an amendment fee
in the amount of $25,000.
IN WITNESS WHEREOF, the parties signing this Amendment have caused this
Amendment to be executed and delivered as of the day and year set forth
above.
CHECKER MOTORS CORPORATION
By: /s/ Jay Harris
--------------------------------
Its: Vice President
----------------------------
YELLOW CAB COMPANY
By: /s/ Jay Harris
------------------------------
Its: Vice President
--------------------------
SECOND AMENDMENT TO LOAN AGREEMENT
<PAGE>
<PAGE> 10.25-3
CHICAGO AUTOWERKS INC.
By: /s/ Jay Harris
------------------------------
Its: Vice President
--------------------------
CMC KALAMAZOO INC.
By: /s/ Jay Harris
------------------------------
Its: Vice President
--------------------------
SOUTH CHARLESTON STAMPING &
MANUFACTURING COMPANY
By: /s/ Larry D. Temple
------------------------------
Its: Vice President
--------------------------
NBD BANK, as a Lender and as Agent
By: /s/ Clarissa A. Chartier
------------------------------
Its: Vice President
--------------------------
THE BANK OF NEW YORK COMMERCIAL
CORPORATION
By: /s/ Dan Murry
------------------------------
Its: Vice President
--------------------------
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ K. S. Steiger
------------------------------
Its: Vice President
--------------------------
SECOND AMENDMENT TO LOAN AGREEMENT
<PAGE> 10.29-1
EXHIBIT 10.29
FIRST AMENDMENT
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT, dated as of May 31, 1995 (this "Amendment"), amends in certain
respects the Amended and Restated Loan and Security Agreement (the "Loan
Agreement") dated as of February 14, 1995 among Great Dane Trailers, Inc.,
Great Dane Los Angeles, Inc., and Great Dane Trailers Tennessee, Inc., as
Borrowers (the "Borrowers"), the lenders from time to time party thereto (the
"Lenders") and BankAmerica Business Credit Inc., as Agent (the "Agent"), as
amended.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to Section 2.1 of the Loan Agreement, the Real Estate
Term Funding Date was to occur on or before May 31, 1995; and
WHEREAS, the Borrowers have requested that the Lenders extend the time
for the Real Estate Term Funding Date to occur for 30 days; and
WHEREAS, the Lenders are willing to modify the provisions of Section 2.1
of the Loan Agreement solely with respect to the date by which the Real
Estate Term Funding Date must occur.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Amendment, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the
Borrowers, the Agent and the Lenders hereby agrees as follows.
SECTION 1. DEFINED TERMS. Terms defined in the Loan Agreement and
not otherwise defined herein shall have the meanings set forth in the Loan
Agreement.
SECTION 2. AMENDMENTS TO LOAN AGREEMENT. Effective as of the date
hereof, the Loan Agreement shall be amended by deleting the date of "May 31,
1995" appearing in the last sentence of Section 2.1(a) and substituting
therefor the date of "June 30, 1995.":
SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall be
effective as of the date first above written when the Agent shall have
received the following:
(a) counterparts of this Amendment executed by the Borrowers and
the Lenders; and
(b) such other certificates, representations, instruments and
other documents as the Agent and the Lenders may require, in form and
substance satisfactory to the Agent.
<PAGE>
<PAGE> 10.29-2
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
each represent and warrant to the Lenders and the Agent that (i) the
execution, delivery and performance of this Amendment by each of the
Borrowers are within their respective corporate powers and have been duly
authorized by all necessary corporate action, (ii) no consent, approval,
authorization of, or declaration or filing with, any Public Authority, and no
consent of any other Person, is required in connection with the execution,
delivery and performance of this Amendment, except for those already duly
obtained, (iii) this Amendment has been duly executed by each of the
Borrowers and constitutes the legal, valid and binding obligation of each of
the Borrowers, enforceable against them in accordance with its terms and (iv)
the execution, delivery and performance by each of the Borrowers of this
Amendment does not and will not conflict with, or constitute a violation or
breach of, or constitute a default under, or result in the creation or
imposition of any Lien upon the property of any Borrower or any of its
Subsidiaries by reason of the terms of (a) any contract, mortgage, Lien,
lease, agreement, indenture, or instrument to which such Borrower or such
Subsidiary is a party or which is binding upon it, (b) any Requirement of Law
applicable to such Borrower or such Subsidiary, or (c) the Certificate or
Articles of Incorporation or By-Laws of such Borrower or such Subsidiary.
SECTION 5. REFERENCE TO AND EFFECT ON LOAN DOCUMENTS.
5.1 On and after the date hereof, each reference in the Loan
Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of
like import, and each reference in the other Loan Documents to the Loan
Agreement, shall mean and be a reference to the Loan Agreement as amended
hereby.
5.2 Except as specifically amended above, all of the terms of the
Loan Agreement shall remain unchanged and in full force and effect.
5.3 The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any Lender or
the Agent under the Loan Agreement or any of the other Loan Documents, nor
constitute a waiver of any provision of the Loan Agreement or any of the
other Loan Documents.
SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute one and the
same instrument.
SECTION 7. GOVERNING LAW. This Amendment shall be governed by, and
shall be construed and enforced in accordance with, the laws of the State of
New York.
SECTION 8. HEADINGS. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Amendment or be given any substantive effect.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
<PAGE>
<PAGE> 10.29-3
GREAT DANE TRAILERS, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
GREAT DANE LOS ANGELES, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
GREAT DANE TRAILERS TENNESSEE, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
BANKAMERICA BUSINESS CREDIT INC.,
as Lender and Agent
By: /s/ Ira A. Mermelstein
-----------------------------------------------
Title: Vice President
--------------------------------------------
NATIONSBANK OF GEORGIA, N.A.
By: /s/ Jeff Guldner
-----------------------------------------------
Title: Vice President
--------------------------------------------
SANWA BUSINESS CREDIT CORPORATION
By: /s/ Peter Skavla
-----------------------------------------------
Title: Vice President
--------------------------------------------
<PAGE> EX-10.30-1
EXHIBIT 10.30
SECOND AMENDMENT
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT, dated as of June 30, 1995 (this "Amendment"), amends in certain
respects the Amended and Restated Loan and Security Agreement (the "Loan
Agreement") dated as of February 14, 1995 among Great Dane Trailers, Inc.,
Great Dane Los Angeles, Inc., and Great Dane Trailers Tennessee, Inc., as
Borrowers (the "Borrowers"), the lenders from time to time party thereto (the
"Lenders") and BankAmerica Business Credit Inc., as Agent (the "Agent"), as
amended.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to Sections 10.25 and 10.26, certain Distributions
would be excluded if made on or before June 30, 1995;
WHEREAS, the Borrowers have requested that the Lenders extend the time
for such Distributions; and
WHEREAS, the Lenders are willing to modify the provisions of Section
10.25 and 10.26 of the Loan Agreement solely with respect to the date by
which such Distributions must occur.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Amendment, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the
Borrowers, the Agent and the Lenders hereby agrees as follows.
SECTION 1. DEFINED TERMS. Terms defined in the Loan Agreement and
not otherwise defined herein shall have the meanings set forth in the Loan
Agreement.
SECTION 2. AMENDMENTS TO LOAN AGREEMENT. Effective as of the date
hereof, the Loan Agreement shall be amended by deleting the date of "June 30,
1995" appearing in the last sentence of Section 10.25 and substituting
therefor the date of "August 31, 1995" and by deleting the date of "June 30,
1995" appearing in the last sentence of Section 10.26 and substituting
therefor the date of "August 31, 1995."
SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall be
effective as of the date first above written when the Agent shall have
received the following:
(a) counterparts of this Amendment executed by the Borrowers and
the Lenders; and
(b) such other certificates, representations, instruments and
other documents as the Agent and the Lenders may require, in form and
substance satisfactory to the Agent.
<PAGE>
<PAGE> EX-10.30-2
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
each represent and warrant to the Lenders and the Agent that (i) the
execution, delivery and performance of this Amendment by each of the
Borrowers are within their respective corporate powers and have been duly
authorized by all necessary corporate action, (ii) no consent, approval,
authorization of, or declaration or filing with, any Public Authority, and no
consent of any other Person, is required in connection with the execution,
delivery and performance of this Amendment, except for those already duly
obtained, (iii) this Amendment has been duly executed by each of the
Borrowers and constitutes the legal, valid and binding obligation of each of
the Borrowers, enforceable against them in accordance with its terms and (iv)
the execution, delivery and performance by each of the Borrowers of this
Amendment does not and will not conflict with, or constitute a violation or
breach of, or constitute a default under, or result in the creation or
imposition of any Lien upon the property of any Borrower or any of its
Subsidiaries by reason of the terms of (a) any contract, mortgage, Lien,
lease, agreement, indenture, or instrument to which such Borrower or such
Subsidiary is a party or which is binding upon it, (b) any Requirement of Law
applicable to such Borrower or such Subsidiary, or (c) the Certificate or
Articles of Incorporation or By-Laws of such Borrower or such Subsidiary.
SECTION 5. REFERENCE TO AND EFFECT ON LOAN DOCUMENTS.
5.1 On and after the date hereof, each reference in the Loan
Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of
like import, and each reference in the other Loan Documents to the Loan
Agreement, shall mean and be a reference to the Loan Agreement as amended
hereby.
5.2 Except as specifically amended above, all of the terms of the
Loan Agreement shall remain unchanged and in full force and effect.
5.3 The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any Lender or
the Agent under the Loan Agreement or any of the other Loan Documents, nor
constitute a waiver of any provision of the Loan Agreement or any of the
other Loan Documents.
SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute one and the
same instrument.
SECTION 7. GOVERNING LAW. This Amendment shall be governed by, and
shall be construed and enforced in accordance with, the laws of the State of
New York.
SECTION 8. HEADINGS. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Amendment or be given any substantive effect.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
<PAGE>
<PAGE> EX-10.30-3
GREAT DANE TRAILERS, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
GREAT DANE LOS ANGELES, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
GREAT DANE TRAILERS TENNESSEE, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
BANKAMERICA BUSINESS CREDIT INC.,
as Lender and Agent
By: /s/ Ira Mermelstein
-----------------------------------------------
Title: Vice President
--------------------------------------------
NATIONSBANK OF GEORGIA, N.A.
By: /s/ Jeff Guldner
-----------------------------------------------
Title: Vice President
--------------------------------------------
SANWA BUSINESS CREDIT CORPORATION
By: /s/ Peter L. Skavla
-----------------------------------------------
Title: Vice President
--------------------------------------------
<PAGE> EX-10.31-1
EXHIBIT 10.31
THIRD AMENDMENT
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT, dated as of August 31, 1995 (this "Amendment"), amends in certain
respects the Amended and Restated Loan and Security Agreement (the "Loan
Agreement") dated as of February 14, 1995 among Great Dane Trailers, Inc.,
Great Dane Los Angeles, Inc., and Great Dane Trailers Tennessee, Inc., as
Borrowers (the "Borrowers"), the lenders from time to time party thereto (the
"Lenders") and BankAmerica Business Credit Inc., as Agent (the "Agent"), as
amended.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to Sections 10.25 and 10.26, certain Distributions
would be excluded if made on or before August 31, 1995;
WHEREAS, the Borrowers have requested that the Lenders extend the time
for such Distributions; and
WHEREAS, the Lenders are willing to modify the provisions of Section
10.25 and 10.26 of the Loan Agreement solely with respect to the date by
which such Distributions must occur.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Amendment, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the
Borrowers, the Agent and the Lenders hereby agrees as follows.
SECTION 1. DEFINED TERMS. Terms defined in the Loan Agreement and
not otherwise defined herein shall have the meanings set forth in the Loan
Agreement.
SECTION 2. AMENDMENTS TO LOAN AGREEMENT. Effective as of the date
hereof, the Loan Agreement shall be amended by deleting the date of "August
31, 1995" appearing in the last sentence of Section 10.25 and substituting
therefor the date of "October 31, 1995" and by deleting the date of "August
31, 1995" appearing in the last sentence of Section 10.26 and substituting
therefor the date of "October 31, 1995."
SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall be
effective as of the date first above written when the Agent shall have
received the following:
(a) counterparts of this Amendment executed by the Borrowers and
the Lenders; and
(b) such other certificates, representations, instruments and
other documents as the Agent and the Lenders may require, in form and
substance satisfactory to the Agent.
<PAGE>
<PAGE> EX-10.31-2
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
each represent and warrant to the Lenders and the Agent that (i) the
execution, delivery and performance of this Amendment by each of the
Borrowers are within their respective corporate powers and have been duly
authorized by all necessary corporate action, (ii) no consent, approval,
authorization of, or declaration or filing with, any Public Authority, and no
consent of any other Person, is required in connection with the execution,
delivery and performance of this Amendment, except for those already duly
obtained, (iii) this Amendment has been duly executed by each of the
Borrowers and constitutes the legal, valid and binding obligation of each of
the Borrowers, enforceable against them in accordance with its terms and (iv)
the execution, delivery and performance by each of the Borrowers of this
Amendment does not and will not conflict with, or constitute a violation or
breach of, or constitute a default under, or result in the creation or
imposition of any Lien upon the property of any Borrower or any of its
Subsidiaries by reason of the terms of (a) any contract, mortgage, Lien,
lease, agreement, indenture, or instrument to which such Borrower or such
Subsidiary is a party or which is binding upon it, (b) any Requirement of Law
applicable to such Borrower or such Subsidiary, or (c) the Certificate or
Articles of Incorporation or By-Laws of such Borrower or such Subsidiary.
SECTION 5. REFERENCE TO AND EFFECT ON LOAN DOCUMENTS.
5.1 On and after the date hereof, each reference in the Loan
Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of
like import, and each reference in the other Loan Documents to the Loan
Agreement, shall mean and be a reference to the Loan Agreement as amended
hereby.
5.2 Except as specifically amended above, all of the terms of the
Loan Agreement shall remain unchanged and in full force and effect.
5.3 The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any Lender or
the Agent under the Loan Agreement or any of the other Loan Documents, nor
constitute a waiver of any provision of the Loan Agreement or any of the
other Loan Documents.
SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute one and the
same instrument.
SECTION 7. GOVERNING LAW. This Amendment shall be governed by, and
shall be construed and enforced in accordance with, the laws of the State of
New York.
SECTION 8. HEADINGS. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Amendment or be given any substantive effect.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
<PAGE>
<PAGE> EX-10.31-3
GREAT DANE TRAILERS, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
GREAT DANE LOS ANGELES, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
GREAT DANE TRAILERS TENNESSEE, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
BANKAMERICA BUSINESS CREDIT INC.,
as Lender and Agent
By: /s/ Ira A. Mermelstein
-----------------------------------------------
Title: Vice President
--------------------------------------------
NATIONSBANK OF GEORGIA, N.A.
By: /s/ Jeff Guldner
-----------------------------------------------
Title: Vice President
--------------------------------------------
SANWA BUSINESS CREDIT CORPORATION
By: /s/ Peter L. Skavla
------------------------------------------------
Title: Vice President
---------------------------------------------
<PAGE> EX-10.32-1
EXHIBIT 10.32
FOURTH AMENDMENT
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT, dated as of October 31, 1995 (this "Amendment"), amends in certain
respects the Amended and Restated Loan and Security Agreement (the "Loan
Agreement") dated as of February 14, 1995 among Great Dane Trailers, Inc.,
Great Dane Los Angeles, Inc., and Great Dane Trailers Tennessee, Inc., as
Borrowers (the "Borrowers"), the lenders from time to time party thereto (the
"Lenders") and BankAmerica Business Credit Inc., as Agent (the "Agent"), as
amended.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to Sections 10.25 and 10.26, certain Distributions
would be excluded if made on or before October 31, 1995;
WHEREAS, the Borrowers have requested that the Lenders extend the time
for such Distributions; and
WHEREAS, the Lenders are willing to modify the provisions of Section
10.25 and 10.26 of the Loan Agreement solely with respect to the date by
which such Distributions must occur.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Amendment, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the
Borrowers, the Agent and the Lenders hereby agrees as follows.
SECTION 1. DEFINED TERMS. Terms defined in the Loan Agreement and
not otherwise defined herein shall have the meanings set forth in the Loan
Agreement.
SECTION 2. AMENDMENTS TO LOAN AGREEMENT. Effective as of the date
hereof, the Loan Agreement shall be amended by deleting the date of "October
31, 1995" appearing in the last sentence of Section 10.25 and substituting
therefor the date of "December 31, 1995" and by deleting the date of "October
31, 1995" appearing in the last sentence of Section 10.26 and substituting
therefor the date of "December 31, 1995."
SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall be
effective as of the date first above written when the Agent shall have
received the following:
(a) counterparts of this Amendment executed by the Borrowers and
the Lenders; and
(b) such other certificates, representations, instruments and
other documents as the Agent and the Lenders may require, in form and
substance satisfactory to the Agent.
<PAGE>
<PAGE> EX-10.32-2
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
each represent and warrant to the Lenders and the Agent that (i) the
execution, delivery and performance of this Amendment by each of the
Borrowers are within their respective corporate powers and have been duly
authorized by all necessary corporate action, (ii) no consent, approval,
authorization of, or declaration or filing with, any Public Authority, and no
consent of any other Person, is required in connection with the execution,
delivery and performance of this Amendment, except for those already duly
obtained, (iii) this Amendment has been duly executed by each of the
Borrowers and constitutes the legal, valid and binding obligation of each of
the Borrowers, enforceable against them in accordance with its terms and (iv)
the execution, delivery and performance by each of the Borrowers of this
Amendment does not and will not conflict with, or constitute a violation or
breach of, or constitute a default under, or result in the creation or
imposition of any Lien upon the property of any Borrower or any of its
Subsidiaries by reason of the terms of (a) any contract, mortgage, Lien,
lease, agreement, indenture, or instrument to which such Borrower or such
Subsidiary is a party or which is binding upon it, (b) any Requirement of Law
applicable to such Borrower or such Subsidiary, or (c) the Certificate or
Articles of Incorporation or By-Laws of such Borrower or such Subsidiary.
SECTION 5. REFERENCE TO AND EFFECT ON LOAN DOCUMENTS.
5.1 On and after the date hereof, each reference in the Loan
Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of
like import, and each reference in the other Loan Documents to the Loan
Agreement, shall mean and be a reference to the Loan Agreement as amended
hereby.
5.2 Except as specifically amended above, all of the terms of the
Loan Agreement shall remain unchanged and in full force and effect.
5.3 The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any Lender or
the Agent under the Loan Agreement or any of the other Loan Documents, nor
constitute a waiver of any provision of the Loan Agreement or any of the
other Loan Documents.
SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute one and the
same instrument.
SECTION 7. GOVERNING LAW. This Amendment shall be governed by, and
shall be construed and enforced in accordance with, the laws of the State of
New York.
SECTION 8. HEADINGS. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Amendment or be given any substantive effect.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
<PAGE>
<PAGE> EX-10.32-3
GREAT DANE TRAILERS, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
GREAT DANE LOS ANGELES, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
GREAT DANE TRAILERS TENNESSEE, INC.
By: /s/ T. W. Horan
-----------------------------------------------
Title: Senior Vice President, Finance
--------------------------------------------
BANKAMERICA BUSINESS CREDIT INC.,
as Lender and Agent
By: /s/ Ira A. Mermelstein
-----------------------------------------------
Title: Vice President
--------------------------------------------
NATIONSBANK OF GEORGIA, N.A.
By: /s/ Jeff Guldner
-----------------------------------------------
Title: Vice President
--------------------------------------------
SANWA BUSINESS CREDIT CORPORATION
By: /s/ Peter L. Skavla
-----------------------------------------------
Title: Vice President
--------------------------------------------
<PAGE> EX-10.33-1
EXHIBIT 10.33
EXECUTION COPY
AMENDMENT NO. 5
TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This Amendment No. 5 to Amended and Restated Loan and Security
Agreement (the "AMENDMENT"), made as of this 22nd day of January, 1996, by
and among GREAT DANE TRAILERS, INC., a Georgia corporation ("GDT"), with an
office at 600 East Lathrop Avenue, Savannah, Georgia 31402, GREAT DANE LOS
ANGELES, INC., a Georgia corporation, with an office at 600 East Lathrop
Avenue, Savannah, Georgia 31402, GREAT DANE TRAILERS TENNESSEE, INC., a
Tennessee corporation, with an office at 600 East Lathrop Avenue, Savannah,
Georgia 31402, BANKAMERICA BUSINESS CREDIT, INC., with an office at 40 East
52nd Street, New York, New York 10022, NATIONSBANK OF GEORGIA, N.A., with an
office at 600 Peachtree Street, Atlanta, Georgia 30308, and SANWA BUSINESS
CREDIT CORPORATION, with an office at 500 Glenpointe Centre West, Teaneck,
New Jersey 07666-6802. Capitalized terms used herein shall have the meanings
set forth in the Loan Agreement (as hereinafter defined), unless the context
otherwise requires.
WHEREAS, the Borrowers, the Lenders and the Agent have entered into
the Amended and Restated Loan and Security Agreement dated as of February 14,
1995 (as amended, the "Loan Agreement"), pursuant to which the Lenders have
advanced or will advance monies and have made or will make other extensions
of credit to the Borrowers, subject to the terms and conditions contained
therein; and
WHEREAS, the Borrowers and the Lenders desire to amend the Loan
Agreement subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual premises and
covenants set forth in this Amendment, the parties hereto hereby agree as
follows:
Section 1. AMENDMENTS TO LOAN AGREEMENT.
(a) Subsection (b)(iv) of the definition of "Maximum Revolver
Amount" is hereby amended to read in its entirety as follows:
"(iv) all other reserves which the Agent reasonably establishes
(A) with respect to any failure (whether or not a cure or grace
period is provided herein) by the Borrowers to comply with the
terms, provisions, affirmative and negative covenants and other
agreements contained in this Agreement or any of the other Loan
Documents, (B) pursuant to SECTIONS 10.5 and 10.6 and (C) in the
event that the validation of any appraisal(s) requested by the
Agent or any Lender with respect to any Real Estate indicates that
the sum of (x) the aggregate fair market value of such Real Estate
plus $1,000,000 is less than (y) the aggregate fair market value of
such Real Estate as set forth in the initial appraisal with respect
thereto delivered to the Agent or any Lender; PROVIDED, HOWEVER,
that any reserves established pursuant to clause (C) of this
<PAGE>
<PAGE> EX-10.33-2
subsection (a)(iv) shall be reduced from time to time by an amount equal
to any and all payments of principal of the Term Loans."
(b) Subsection (c) of the definition of "Term Loan Commitment"
contained in Section 1.1 of the Loan Agreement is hereby amended to read in
its entirety as follows:
"(c) with respect to the Term Loans to be made on the Terre Haute
Term Funding Date, the lesser of (i) (A) the difference of the
amount set forth beside such Lender's name under the heading Term
Loan Commitment on the signature pages of this Agreement or, after
an assignment pursuant to SECTION 14.3, shown for such Lender in
the Register MINUS (B) such Lender's Pro Rata Share of the original
principal amount of the Original Term Loans and Term Loans made at
the Initial Term Funding Date and such Lender's Pro Rata Share of
the Term Loans made or to be made on the Real Estate Term Funding
Date and (ii) such Lender's Pro Rata Share of $8,000,000."
Section 2. CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT. As
conditions precedent to the effectiveness of this Amendment, in addition to
any other conditions set forth in the Loan Agreement with respect to the
Terre Haute Term Funding Date, the Agent and each Lender shall have received
such documents, certificates, financial or other information or opinions as
the Agent or any Lender may request, each in form and substance satisfactory
to each of them.
Section 3. COUNTERPARTS. This Amendment may be executed in
several counterparts, each of which when executed and delivered shall be
deemed an original and all of which counterparts, taken together, shall
constitute but one and the same Amendment.
Section 4. RATIFICATION. Except as provided herein, all of the
other terms and conditions of the Loan Agreement are hereby ratified by the
parties hereto and shall remain in full force and effect. As amended hereby,
the Loan Agreement is ratified and confirmed in all respects.
IN WITNESS WHEREOF, authorized representatives of the parties
hereto have caused this Amendment to be executed as of the date first noted
above.
GREAT DANE TRAILERS, INC.
By: /s/ T. W. Horan
-------------------------------------
Name: T. W. Horan
Title: Senior Vice President, Finance
GREAT DANE LOS ANGELES, INC.
By: /s/ T. W. Horan
-------------------------------------
Name: T. W. Horan
Title: Senior Vice President, Finance
<PAGE>
<PAGE> EX-10.33-3
GREAT DANE TRAILERS TENNESSEE,
INC.
By: /s/ T. W. Horan
-------------------------------------
Name: T. W. Horan
Title: Senior Vice President, Finance
BANKAMERICA BUSINESS CREDIT,
INC.
By: /s/ Ira A. Mermelstein
-------------------------------------
Name: Ira A. Mermelstein
Title: Vice President
NATIONSBANK OF GEORGIA, N.A.
By: /s/ Jeff Guldner
-------------------------------------
Name: Jeff Guldner
Title: Vice President
SANWA BUSINESS CREDIT
CORPORATION
By: /s/ Peter L. Skavla
-------------------------------------
Name: Peter L. Skavla
Title: Vice President
<PAGE> EX-21.1-1
EXHIBIT 21.1
SUBSIDIARIES OF
GREAT DANE HOLDINGS INC.
Jurisdiction
of
Company Name <F1> Incorporation
- ----------------- -------------
Checker Motors Corporation Delaware
Yellow Cab Company Delaware
Chicago AutoWerks Inc. Delaware
CMC Kalamazoo Inc. Delaware
South Charleston Stamping & Manufacturing Company West Virginia
American Country Insurance Company Illinois
American Country Financial Services Corp. Illinois
Parmelee Transportation Company Illinois
City Wide Towing, Inc. Illinois
Great Dane Trailers, Inc. Georgia
Great Dane Trailers Tennessee, Inc. Tennessee
Great Dane Los Angeles, Inc. Georgia
- ---------------
[FN]
<F1> Other than SCSM which is 10% owned by Executive Life Insurance Company,
the voting securities of each company whose name is indented are owned
by the company set forth immediately above whose name is not indented.
<PAGE>
[ARTICLE] 5
[CIK] 0000051200
[NAME] GREAT DANE HOLDINGS INC.
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[CASH] 41,086
[SECURITIES] 0
[RECEIVABLES] 102,702
[ALLOWANCES] 1,564
[INVENTORY] 84,686
[CURRENT-ASSETS] 253,484
[PP&E] 239,865
[DEPRECIATION] 116,001
[TOTAL-ASSETS] 570,605
[CURRENT-LIABILITIES] 187,931
[BONDS] 276,918
[COMMON] 1
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] (88,060)
[TOTAL-LIABILITY-AND-EQUITY] 570,605
[SALES] 1,203,369
[TOTAL-REVENUES] 1,292,574
[CGS] 1,048,825
[TOTAL-COSTS] 1,113,649
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 42,311
[INCOME-PRETAX] 59,302
[INCOME-TAX] 23,305
[INCOME-CONTINUING] 34,997
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 34,997
[EPS-PRIMARY] 34,997.000
[EPS-DILUTED] 34,997.000
</TABLE>
