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As filed with the U.S. Securities and Exchange Commission on June 25, 1998
Registration No. 333-
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CAVALIER HOMES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 63-0949734
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
HIGHWAY 41 NORTH AND CAVALIER ROAD
ADDISON, ALABAMA 35540
(Address of Principal Executive Offices) (Zip Code)
CAVALIER HOMES, INC. FLEXIBLE OPTION PLAN
(Full title of the plan)
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DAVID A. ROBERSON
HIGHWAY 41 NORTH AND CAVALIER ROAD
ADDISON, ALABAMA 35540
(Name and address of agent for service)
(205) 747-0044
(Telephone number, including area code, of agent for service)
with a copy to:
JOHN B. GRENIER, ESQ.
BRADLEY ARANT ROSE & WHITE LLP
2001 PARK PLACE
SUITE 1400
BIRMINGHAM, ALABAMA 35203
(205) 521-8000
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================================
Proposed Proposed maximum
Title of securities to Amount to be maximum offering aggregate offering Amount of
be registered registered price per share price registration fee
<S> <C> <C> <C> <C>
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Deferred Compensation Obligations $10,000,000.00 Not applicable $10,000,000.00(2) $2,950.00
Common Stock, par value $0.10 per share (including 500,000 shares
attendant Rights to Purchase Series A Junior
Participating Preferred Stock (1)):
================================================================================================================================
</TABLE>
(1) The Rights to Purchase Series A Junior Participating Preferred Stock are
currently attached to and trade with the shares of Registrant Common Stock
being registered hereby. Value attributable to Rights, if any, is
reflected in the market price of Registrant Common Stock.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the
"Securities Act").
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION. *
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION. *
* The information required by Items 1 and 2 of Part I of Form S-8 is
omitted from this Registration Statement in accordance with the Note to
Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Cavalier Homes, Inc. (the "Company")
with the Securities and Exchange Commission (the "Commission") are incorporated
herein by reference as of their respective dates:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (including the portions of the
Company's Proxy Statement for its Annual Meeting of
Stockholders to be held May 20, 1998 that are incorporated by
reference therein) (File No. 1-9792).
(2) The Company's Current Report on Form 8-K dated January 15,
1998 (as amended by Form 8-K/A dated March 16, 1998 and by
Form 8-K/A dated March 17, 1998) (File No. 1-9792).
(3) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 27, 1998 (File No. 1- 9792).
(4) The description of the Company's shares of common stock
("Common Stock") contained in the Company's Registration
Statement on Form 8-A, filed with the Commission under the
Exchange Act on December 9, 1987, as amended by the Company's
Form 8-A dated December 16, 1987, and as updated (A) in the
Registration Statement on Form S-3, effective June 23, 1993
(File No. 1-9792), to reflect the increase of the number of
shares of authorized Common Stock from 5,000,000 shares to
15,000,000 shares, (B) by the Registration Statement on Form
8-A filed with the Commission under the Exchange Act on
December 2, 1994 (File No. 1-9792), reflecting the listing of
the Common Stock on the NYSE, (C) under the caption "Proposed
Amendment to Certificate of Incorporation" in the Company's
Proxy Statement dated March 25, 1997 (File No. 1-9792) to
reflect the increase of the number of shares of authorized
Common Stock from 15,000,000 to 50,000,000, and (D) under the
caption "Description of Cavalier Capital Stock" in the
Company's Registration Statement on Form S-4, filed with the
Commission on December 2, 1997 (Reg. No. 333-41319).
(5) The description of the Preferred Stock Purchase Rights
contained in the Company's Registration Statement on Form 8-A
filed with the Commission under the Exchange Act on October
29, 1996 (File No. 1-9792), and as amended by the Company's
Form 8-A filed on November 11, 1996 (File No. 1- 9792).
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, will be deemed
to be incorporated by reference and to be a part of the Registration Statement
from the date of the filing of such documents.
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ITEM 4. DESCRIPTION OF SECURITIES.
The Cavalier Homes, Inc. Flexible Option Plan (the "Plan") was
adopted in order to assist the Company and those of its affiliates that adopt
the Plan (collectively with the Company, the "Participating Employers") in
attracting and retaining key employees by offering them an opportunity to defer
compensation and participate in the success of the Company. The Company and most
of its wholly owned subsidiaries have adopted the Plan. Other majority-owned
subsidiaries of the Company may, with the consent of the committee that
administers the Plan (the "Committee"), adopt the Plan in the future. Each of
the Participating Employers that has adopted the Plan has agreed to make the
payments required under the Plan, and the Company has guaranteed these
obligations. Such obligations and guarantees, however, are not secured in any
way and constitute no more than unfunded and unsecured promises of payment and
performance. Participating Employers may withdraw from the Plan, and the Company
may terminate a Participating Employer's participation in the Plan, on 30 days
advance written notice (each of which notices may be waived by the Company or
the Participating Employer, as applicable). The Plan is intended to result in
the deferral of the recognition of income for federal income tax purposes until
the time when benefits are actually distributed. A brief description of certain
aspects of the Plan follows (the actual provisions of the Plan are contained in
the Plan itself, and the following description is qualified in its entirety by
reference to the full text of the Plan, which is filed as an exhibit to this
registration statement).
Under the terms of the Plan, certain management level or highly
compensated employees (collectively, the "Participants") of the Participating
Employers designated by the committee administering the Plan (the "Committee")
may elect to defer receipt of all or a portion of the quarterly bonus that would
otherwise have been paid to such Participants absent such deferral (the
"Qualifying Bonus"). The Plan provides that there will be no more than 100
Participants in the Plan at any one time. No employee who is an executive
officer (as defined in the Plan) or member of the board of directors of the
Company can be designated as eligible to participate in the Plan. In the event a
Participant becomes such an executive officer or member of the board of
directors, the Participant's deferral elections will immediately terminate, and
no additional amounts will be credited to his or her Accounts (as defined
below). Accounts previously established for such Participants will continue to
be held under the terms of the Plan.
An individual eligible to participate shall become a Participant upon
filing a completed deferral election form with the Committee and acceptance of
the form by the Committee. The Committee may in its discretion determine that a
Participant is no longer eligible to participate in the Plan, in which event
such Participant's deferrals will terminate and no additional amounts will be
credited to his or her Account, though then existing Accounts will continue to
be held under the Plan. A Participant may terminate his or her deferral election
with respect to Qualifying Bonuses for services rendered in calendar quarters
commencing after the election to terminate participation. A Participant who has
terminated his or her deferral election may not again commence deferrals until
the first calendar quarter of the first calendar year following such
termination. An election to defer may be revised with respect to Qualifying
Bonuses attributable to services performed in subsequent calendar years by the
making of a new deferral election on a deferral election form. The Qualifying
Bonus will be determined in accordance with the Participating Employer's bonus
policies in effect from time to time. Under the terms of the Plan, the Committee
will specify a maximum basic deferral percentage for each Participant, which
percentage need not be uniform among participants, representing the maximum
percentage of a Participant's Qualifying Bonus that he or she may elect to defer
as a basic deferral (the "Participant's Maximum Percentage"). Each Participant
will determine in a deferral election form the amount of such Participant's
Qualifying Bonus (up to the Participant's Maximum Percentage) that may be
deferred by such Participant as a "Basic Deferral." In the event a Participant
elects to defer as a Basic Deferral Qualifying Bonuses at the Participant's
Maximum Percentage, then the Participant is entitled to defer up to the balance
of his or her Qualifying Bonus as "Excess Deferrals" under the Plan. In
addition, the Participant will be entitled to receive a matching amount equal to
the amount of his or her Basic Deferral, as further specified below. Upon
election to defer compensation pursuant to the Plan, a Participant will have no
further right to such deferred compensation other than as provided under the
Plan.
Four accounts will be maintained for each Participant under the Plan
(collectively, the "Accounts"): (i) a Basic Unit Account; (ii) a Cash Account;
(iii) a Matching Unit Account; and (iv) an Excess Deferral Account. As of the
date each Qualifying Bonus is scheduled to be paid, the Participant's Basic Unit
Account will be credited with a number of units ("Units") equal to the result
obtained by dividing the amount of the Basic Deferral with respect to the
Qualifying Bonus by the fair market value of a share of Common Stock of the
Company on such date.
As of the date each Qualifying Bonus is scheduled to be paid, the
Participant's Cash Account will be credited with an amount equal to twice the
amount of the Basic Deferral with respect to such Qualifying Bonus. A
Participant's Cash Account will be credited with interest on the average balance
thereof from time to time at a rate of 4% compounded annually. Interest is
posted to the Cash Account as of the last day of each calendar month.
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As of the date each Qualifying Bonus is scheduled to be paid, the
Participant's Matching Unit Account will be credited with a number of Units
equal to the number of Units credited to such Participant's Basic Unit Account
as noted above.
An Excess Deferral Account will also be maintained for each
Participant who elects Excess Deferrals. As of the date each Qualifying Bonus is
scheduled to be paid, the Participant's Excess Deferral Account will be credited
with the amount of the Excess Deferral referable to such Qualifying Bonus. A
Participant may elect to have amounts credited to his or her Excess Deferral
Account treated as if such amounts were invested in one or more of the
investment options established by the Committee. In the event a Participant
fails to make such an election, the amount credited to such Participant's Excess
Deferral Account will be deemed invested in such investment option as the
Committee will from time to time designate as a default investment option.
Amounts deemed invested in such manner will be valued as if so invested,
reflecting all earnings, losses, and other distributions or charges and changes
in value which would have been incurred through such investment; provided,
however, that a Participant's Excess Deferral Account will be credited or
debited for only 62% of any such deemed gain or loss which, if recognized by the
Company, would affect the Company's taxable income or loss. The available
investment options may be changed from time to time by the Committee.
The Plan makes provision for the downward adjustment of a
Participant's Accounts in the event the applicable Participating Employer or
division or other economic unit thereof incurs a loss in calendar quarters
following a quarter with respect to which amounts have been credited to a
Participant's Accounts. The Plan utilizes the concept of a "Participant's
Share," which is equal to the product of the percentage that would have been
used to determine the amount of a Participant's Qualifying Bonus for a calendar
quarter and the amount of loss for such quarter of the applicable Participating
Employer, division or other economic unit. The amount of a Participant's Share
that was not taken into account in determining the amount of the Participant's
Qualifying Bonus for any subsequent calendar quarter in such calendar year will
first be applied to reduce the Participant's Excess Deferral Account as of the
close of each calendar year. The amount of such Participant's Share in excess of
the Excess Deferrals credited to the Participant's Excess Deferral Account in
such calendar year, if any (the "Excess Participant's Share"), will then be
applied to reduce amounts credited to a Participant's Basic Unit Account and
Matching Unit Account for prior calendar quarters in such year (beginning with
the most recent calendar quarter). Any such Excess Participant's Share will also
be applied to reduce a Participant's Cash Account by the lesser of (i) the
amount credited to such Cash Account for the calendar year or (ii) twice the
amount of such Excess Participant's Share.
The maximum number of Units that may be credited to the accounts of
all Participants generally may not exceed 500,000, except that such number will
be adjusted to reflect any change in the outstanding Common Stock of the Company
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change in such manner as the Committee deems appropriate.
A Participant will become vested in accordance with the vesting
schedule established by the Committee in the Participant's deferral election
form. The Committee may, in its discretion, establish different schedules or
events for vesting by different Participants.
A Participant's benefits under the Plan will be payable on the
Participant's 70th birthday (or such earlier birthday, not prior to 65, as the
Participant may elect in the Participant's deferral election form), or earlier,
if so elected by the Participant, upon the Participant's disability (as defined
in the Plan), death, termination of Participant's service as an employee, such
other event as the Participant may specify which is approved by the Committee,
or a Change in Control (as defined in the Plan) in the Company occurring after
May 20, 2000. A Participant's benefits under the Plan will also be payable
earlier than the Participant's 70th birthday upon the termination of the
Participant as an employee for Cause (as defined in the Plan) at the discretion
of the Committee. The events set forth in this paragraph are defined in the Plan
as "Distributable Events." A Participant's Distributable Event elections must be
made on the Participant's initial deferral election form and are irrevocable.
If a Participant has a Distributable Event at a time when he or she
does not have a Vested Percentage (as defined in the Plan) of 100%, he or she
will be entitled to receive as his or her benefit under the Plan a lump sum cash
payment of
(i) his or her aggregate Basic Deferrals; and
(ii) the product of his or her Vested Percentage and
his or her aggregate Basic Deferrals; and
(iii) the value of his or her Excess Deferral
Account.
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If a Participant has a Distributable Event at a time when he or she
has a Vested Percentage of 100%, his or her benefits will be
(i) the value of his or her Excess Deferral Account; and
(ii) a number of shares of Common Stock equal to the sum
of the number of Units credited to his or her Basic Unit Account and the number
of Units credited to his or her Matching Unit Account, unless the product of the
Fair Market Value (as defined in the Plan) of a share of Common Stock as of the
date of the Distributable Event multiplied by the sum of the number of Units
credited to his or her Basic Unit Account and the number of Units credited to
his or her Matching Unit Account is less than the value of his or her Cash
Account, in which case the value of his or her Cash Account will be paid in
cash.
In the event a Participant is terminated for Cause (as defined in the
Plan), the Committee in its discretion may treat such event as a Distributable
Event. At the sole election of the Committee, such Participant's benefit, in
lieu of the benefit that otherwise would be due, shall be a lump sum cash
payment of an amount equal to his or her aggregate Basic Deferrals and the
aggregate amount of Excess Deferrals (without regard to any earnings with
respect thereto), reduced by any amount owed by the Participant to any one or
more of the Participating Employers at the time the payment is to be made.
Benefits that are payable in cash when a Participant has a Vested
Percentage of 100% will be paid in accordance with one of the payment options
available under the Plan and selected by the Participant on the Participant's
initial deferral election form. The payment options for cash payments include
installment payments over a period certain, a lump sum payment, and such other
payment method as may be specified by the Participant and accepted by the
Committee. The Committee may, in its sole discretion, reduce the payment period
over which payments would have been made under an installment election
(including consolidation into a lump sum); provided, that in the event of a
Change in Control (as defined in the Plan) of the Company, no reduction in the
payment period may be made prior to the fifth anniversary of such Change in
Control. In the absence of an election by the Participant, payments will be made
in a lump sum. Distributions of Common Stock will be made in a single
distribution.
The Plan provides that if at any time a court or the Internal Revenue
Service determines that any amounts or shares credited to a Participant's
Accounts are includable in the gross income of the Participant and subject to
tax, the Committee may, in its sole discretion, permit a lump sum distribution
of an amount equal to the amounts or shares determined to be includable in the
Participant's gross income.
In the event that any payments made to a Participant under the Plan
alone, or together with payments made to the Participant under any other
contract, plan or program, result in subjecting the Participant to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended,
then the Participant's Participating Employer will pay to the Participant an
additional amount such that the net amount retained by the Participant after
deduction of any excise tax on such payments and any federal, state and local
income tax and excise tax on the additional payment so made will be equal to the
benefits otherwise payable under the Plan.
The Plan provides that amounts and Units credited to a Participant's
Accounts may not be anticipated, alienated, sold, transferred, assigned,
pledged, encumbered or subjected to any charge or legal process, and that no
interest or right to receive any benefit may be taken for the satisfaction of
the debts of such person, including claims for alimony, support, separate
maintenance and claims in bankruptcy proceedings. The Plan also provides that
amounts payable under the Plan may be reduced by the amount of any federal,
state or local taxes required by law to be withheld with respect to such
payments.
The Plan is administered by the Committee, which is appointed by the
Board of Directors. The Committee will consist of not less than one nor more
than five members and shall serve at the pleasure of the Board of Directors. The
Committee is required to act unanimously unless the Committee consists of at
least three members, in which event it may act by a majority of its members. The
member or members of the Committee serve without compensation as such but are
reimbursed for all expenses reasonably incurred. The Committee is responsible
for the general operation and administration of the Plan and for carrying out
the provisions thereof. The Committee has the authority, duty and power to
interpret and construe the provisions of the Plan as it deems appropriate, to
adopt, establish and revise rules, procedures and regulations relating to the
Plan, to determine the conditions subject to which any benefits may be payable,
to resolve all questions concerning the status and rights of Participants and
others under the Plan, including, but not limited to, eligibility for benefits,
and to make any other determinations which it believes necessary or advisable
for the administration of the Plan. The determinations, interpretations,
regulations and calculations of the Committee will be final and binding on all
persons and parties concerned. The Plan provides for procedures for filing
claims for
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payments under the Plan. The Plan also provides that the Company will indemnify
and hold harmless the Committee and each member thereof from liabilities for
acts, omissions and conduct in the administration of the Plan, except for those
acts, omissions and conduct resulting from their own willful misconduct or lack
of good faith.
The obligations of the Company under the Plan as summarized above are
unsecured general obligations of the Company and rank pari passu with other
unsecured indebtedness of the Company. The Plan provides that it shall at all
times be considered entirely unfunded for tax purposes and for purposes of Title
I of ERISA, and that it is intended as an unfunded deferred compensation plan
maintained for a select group of management or highly compensated employees, as
that term is used in Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA.
The Company may, but is not obligated to, establish a "rabbi trust"
to serve as a source of cash or other property, including options to acquire
Common Stock, from which it can satisfy its obligations under the Plan. If such
a trust is established, the trustee will have the duty to invest the trust
assets and funds in accordance with the terms of such trust. The Company will be
entitled under any such trust at any time, and from time to time, in its sole
discretion, to substitute assets of at least equal fair market value for any
assets held in the trust. All rights associated with the assets of any such
trust will be exercised by the trustee or the person designated by the trustee,
and will in no event be exercisable by or rest with Participants or their
beneficiaries. The Company will not be obligated to maintain such a trust or to
ensure that the assets held in such a trust are sufficient to compensate
Participants for any failure of the Company to comply with the terms of the
Plan. Assets of any such trust will at all times be subject to the claims of the
Company's general creditors. The Company currently intends to establish such a
rabbi trust and to deposit cash and options to acquire Common Stock of the
Company into the trust, and to permit the trustee to make payments of benefits
to Participants under the Plan out of the assets of the trust, but the Company
may revoke the trust at any time (at which time the trust assets will be
returned to the Company) and the Company will not be obligated to continue the
trust or to make any particular level of contributions to it. If established, it
is anticipated that the trust will provide that in the event of the insolvency
of the Company, the trustee will hold the assets in the trust for the benefit of
the general creditors of the Company.
The Company has the power to alter, amend or wholly revise the Plan
at any time and from time to time by action of the Board of Directors, except
that no amendment made subsequent to a Change in Control (as defined in the
Plan) of the Company is effective to the extent it would have a material adverse
impact on a Participant's reasonably expected economic benefit attributable to
compensation deferred prior to the Change in Control. No amendment to the Plan
may alter, impair, or reduce the vested benefits credited to any Accounts prior
to the effective date of such amendment without the written consent of the
affected Participant. The Company also has the power by action of the Board of
Directors to terminate the Plan at any time, with such termination being
effective as of the date that all benefits have been distributed to
Participants. Effective as of the date of the Board action (or such later date
as may be specified therein), all deferrals will terminate and no future amounts
will be credited to accounts of Participants; all then existing Participant
Accounts will continue to be held under the terms of the Plan.
The Company is filing this registration statement in part because of
uncertainty as to whether the obligations of the Company under the Plan would or
should be considered to be securities or to be subject to registration under the
Securities Act of 1933, as amended (the "Securities Act"). The filing of this
registration statement is not an admission by the Company that the obligations
of the Company under the Plan are securities or are subject to the registration
requirements of the Securities Act.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Amended and Restated By-laws of the Company provide that the
Company will indemnify its directors and officers in actions, suits or
proceedings (other than derivative actions) against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such director or officer if such director or officer
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Company and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The By-laws give the Company the power in its discretion
to indemnify any employee or agent of the Company in the same manner as the
Company is required to indemnify its officers and directors pursuant to the
foregoing sentence. The By-laws provide that the Company will indemnify any
director or officer of the Company who is a party to any derivative action on
behalf of the Company against expenses (including attorneys' fees) actually and
reasonably incurred by such director or officer if such director or officer
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interest of the Company, and except that no
indemnification will be made in respect of any claim as to which such person
will have been judged to be liable to the Company unless and only to the extent
that the Delaware Court of Chancery or the court in which such action or suit
was brought will determine that such person is fairly and reasonably entitled to
indemnity. The By-laws give the
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Company the power in its discretion to indemnify any employee or agent of
Company in the same manner as the Company is required to indemnify its officers
and directors pursuant to the foregoing sentence. The By-laws further provide
that the Company may purchase and maintain insurance on behalf of its respective
directors, officers, employees or agents.
Section 145 of the Delaware General Corporation Law contains
provisions governing the indemnification of directors and officers by Delaware
corporations. The statute provides that a corporation has the power to indemnify
a person who was or is a party or is threatened to be made a party to a
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with the action, suit or proceeding, if the
person acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
a criminal action or proceeding, if the person had no reasonable cause to
believe his or her conduct was unlawful. The termination of an action, suit or
proceeding by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a presumption that the
person did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to a criminal action or proceeding, had reasonable cause to believe
that his or her conduct was unlawful.
Indemnification of expenses (including attorneys' fees) and amounts
paid in settlement is permitted in derivative actions, except that
indemnification is not allowed for any claim, issue or matter in which such
person has been found liable to the corporation unless and to the extent that
the Delaware Court of Chancery or the court in which such action was brought
decides indemnification is proper. To the extent that any such person has been
successful on the merits or otherwise in defense of an action, suit or
proceeding, or in defense of a claim, issue or matter in the action, suit or
proceeding, he or she will be indemnified against actual and reasonable expenses
(including attorneys' fees) incurred by him or her in connection with the
action, suit or proceeding, and any action, suit or proceeding brought to
enforce the mandatory indemnification provided under the Delaware General
Corporation Law.
A determination that the person to be indemnified meets the
applicable standard of conduct and an evaluation of the reasonableness of the
expenses incurred and amounts paid in settlement must be made by a majority vote
of a quorum of the board of directors who are not parties or threatened to be
made parties to the action, suit or proceeding, even though less than a quorum,
or by a committee of such directors designated by majority vote of such
directors, even though less than a quorum, or if there are no such directors, or
such directors so direct, by independent legal counsel in a written opinion, or
by the stockholders.
Under the Delaware General Corporation Law, a corporation may pay or
reimburse the reasonable expenses incurred by a director or officer who is a
party or threatened to be made a party to an action, suit or proceeding in
advance of final disposition of the proceeding if the person furnishes the
corporation a written undertaking to repay the advance if it is ultimately
determined that he or she was not entitled to be indemnified.
The indemnification provisions of the Delaware General Corporation
Law are not exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise. The indemnification
provided for under the Delaware General Corporation Law continues as to a person
who ceases to be a director or officer.
The Company's Amended and Restated Certificate of Incorporation, as
amended, provides that a director of the corporation will not be personally
liable to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, as the same exists or may be hereafter amended, or (iv) for any
transaction from which the director derived an improper personal benefit.
The Delaware General Corporation Law permits the Company to purchase
insurance on behalf of its directors and officers against liabilities arising
out of their positions with the Company, whether or not such liabilities would
be within the above indemnification provisions. Pursuant to this authority and
as authorized by its By-laws, the Company maintains such insurance on behalf of
its directors and officers.
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ITEM 8. EXHIBITS.
*4(a) The Certificate of Designation of Series A Junior Participating
Preferred Stock of Cavalier Homes, Inc. as filed with the Office of
the Delaware Secretary of State on October 24, 1996 and filed as
Exhibit A to Exhibit 4 to Cavalier Homes, Inc.'s Registration
Statement on Form 8-A filed on October 30, 1996.
*4(b) Rights Agreement between Cavalier Homes, Inc. and ChaseMellon
Shareholder Services, LLC, filed as Exhibit 4 to Cavalier Homes,
Inc.'s Current Report on Form 8-K dated October 30, 1996.
*4(c) Articles four, six, seven, eight and nine of Cavalier Homes, Inc.'s
Amended and Restated Certificate of Incorporation, as amended, filed
as Exhibit 3(a) to Cavalier Homes, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1993, and the amendment thereto,
filed as Exhibit 3(b) to Cavalier Homes, Inc.'s Quarterly Report on
Form 10-Q for the quarter ended June 27, 1997.
*4(d) Article II, Sections 2.1 through 2.18; Article III, Sections 3.1 and
3.2; Article IV, Sections 4.1 and 4.3; Article VI, Sections 6.1
through 6.5; Article VIII, Sections 8.1 and 8.2; and Article IX of
the Company's Amended and Restated By-laws, included in the Amended
and Restated By-laws of Cavalier Homes, Inc. filed as Exhibit 3(d) to
Cavalier Homes, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended June 27, 1997, and the amendment thereto filed as Exhibit 3(e)
to Cavalier Homes, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended September 26, 1997.
4(e) Cavalier Homes, Inc. Flexible Option Plan.
5 Opinion of Bradley Arant Rose & White LLP as to the legality of the
securities being registered.
23(a) Consent of Bradley Arant Rose & White LLP (included in Exhibit 5).
23(b) Consent of Deloitte & Touche LLP.
24 Powers of Attorney.
- -----------------
* Incorporated by reference.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (i) and (ii) above will not apply if the
information required to be included in a post-effective amendment by such
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this Registration Statement;
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment will be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time will be deemed to be the initial
bona fide offering thereof;
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement
II-7
<PAGE> 9
will be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time will be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-8
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Addison, State of Alabama, on this 25 day of June,
1998.
CAVALIER HOMES, INC.
By: /S/ DAVID A. ROBERSON
-----------------------------------------------------
David A. Roberson
President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ DAVID A. ROBERSON Director and June 25, 1998
- -------------------------------------------- Principal Executive Officer
David A. Roberson
/s/ MICHAEL R. MURPHY Director and Principal June 25, 1998
- -------------------------------------------- Financial and Accounting Officer
Michael R. Murphy
/s/ BARRY B. DONNELL Chairman of the Board and Director June 25, 1998
- --------------------------------------------
Barry B. Donnell
/s/ THOMAS A. BROUGHTON, III Director June 25, 1998
- --------------------------------------------
Thomas A. Broughton, III
/s/ JOHN W LOWE Director June 25, 1998
- --------------------------------------------
John W Lowe
/s/ LEE ROY JORDAN Director June 25, 1998
- --------------------------------------------
Lee Roy Jordan
/s/ GERALD W. MOORE Director June 25, 1998
- --------------------------------------------
Gerald W. Moore
/s/ A. DOUGLAS JUMPER, SR. Director June 25, 1998
- --------------------------------------------
A. Douglas Jumper, Sr.
/s/ MIKE KENNEDY Director June 25, 1998
- --------------------------------------------
Mike Kennedy
</TABLE>
II-9
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page In
Exhibit Sequentially
Number Description Numbered Filing
------ ----------- ---------------
<S> <C>
*4(a) The Certificate of Designation of Series A Junior Participating Preferred Stock
of Cavalier Homes, Inc. as filed with the Office of the Delaware Secretary of
State on October 24, 1996 and filed as Exhibit A to Exhibit 4 to Cavalier
Homes, Inc.'s Registration Statement on Form 8-A filed on October 30, 1996.
*4(b) Rights Agreement between Cavalier Homes, Inc. and ChaseMellon
Shareholder Services, LLC, filed as Exhibit 4 to Cavalier Homes, Inc.'s
Current Report on Form 8-K dated October 30, 1996.
*4(c) Articles four, six, seven, eight and nine of Cavalier Homes, Inc.'s Amended
and Restated Certificate of Incorporation, as amended, filed as Exhibit 3(a) to
Cavalier Homes, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1993, and the amendment thereto, filed as Exhibit 3(b) to
Cavalier Homes, Inc.'s Quarterly Report on Form 10-Q for the quarter ended
June 27, 1997.
*4(d) Article II, Sections 2.1 through 2.18; Article III, Sections 3.1 and 3.2; Article
IV, Sections 4.1 and 4.3; Article VI, Sections 6.1 through 6.5; Article VIII,
Sections 8.1 and 8.2; and Article IX of the Company's Amended and Restated
By-laws, included in the Amended and Restated By-laws of Cavalier Homes,
Inc. filed as Exhibit 3(d) to Cavalier Homes, Inc.'s Quarterly Report on Form
10-Q for the quarter ended June 27, 1997, and the amendment thereto filed as
Exhibit 3(e) to Cavalier Homes, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended September 26, 1997.
4(e) Cavalier Homes, Inc. Flexible Option Plan.
5 Opinion of Bradley Arant Rose & White LLP as to the legality of the securities
being registered.
23(a) Consent of Bradley Arant Rose & White LLP (included in Exhibit 5).
23(b) Consent of Deloitte & Touche LLP.
24 Powers of Attorney.
</TABLE>
- ----------------------------
* Incorporated by reference.
II-10
<PAGE> 1
EXHIBIT 4(E)
CAVALIER HOMES, INC.
FLEXIBLE OPTION PLAN
Cavalier Homes, Inc., a Delaware corporation, hereby establishes the
Cavalier Homes, Inc. Flexible Option Plan, effective as of April 1, 1998, in
order to assist Cavalier Homes, Inc. and those of its affiliates which adopt
this Plan in attracting and retaining key employees by offering them an
opportunity to defer compensation and participate in the success of Cavalier
Homes, Inc.
ARTICLE I.
DEFINITIONS
Section 1.1 Definitions. When used in this document with initial
capital letters, the following terms have the meanings indicated unless a
different meaning is plainly required by the context:
(a) "Account" or "Accounts" means an account or accounts
established and maintained for a Participant pursuant to Article IV of the Plan.
A Participant's Accounts shall consist of the Participant's Basic Unit Account,
Matching Unit Account, Cash Account, and Excess Deferral Account.
(b) "Aggregate Basic Deferrals" means the aggregate amount of
Basic Deferrals made by a Participant, less any amount of Basic Deferrals
previously distributed to him.
(c) "Aggregate Match" means an amount equal to a Participant's
Aggregate Basic Deferrals.
(d) "Basic Deferral" means the portion of a Participant's
Qualifying Bonus up to but not in excess of the Maximum Basic Deferral
Percentage of such Qualifying Bonus, which the Participant has elected to defer.
(e) "Basic Unit Account" means the Account maintained for a
Participant pursuant to Section 4.3(a) to reflect the number of Units
attributable to the Participant's Basic Deferrals.
(f) "Board" means the Board of Directors of the Company.
(g) "Cash Account" means the account maintained for a
Participant pursuant to Section 4.3(b).
(h) "Change in Control" means, with respect to a person, (a)
any other person, entity or "group" (within the meaning of Rules 13d-1 through
13d-6 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
(other than any subsidiary of the person undergoing the change in control or any
employee benefit plan of such person or of a subsidiary of such person) (i) has
acquired or agreed to acquire beneficial ownership of 20% or more of the voting
and/or economic interest in the capital stock, membership, partnership or other
equity interests of such person, as the case may be, or (ii) has obtained or
agreed to obtain the power (whether or not exercised) to elect a majority of the
board of directors, general partners, managers, trustees or other governing body
of a person, (b) a majority of the board of directors, general partners,
managers, trustees or other governing body of the person shall consist at such
time of individuals other than (x) members of the board of directors or other
governing body of such person on the date hereof and (y) other members of such
board of directors or other governing body nominated, recommended, elected, or
approved to succeed or become a director or member of the governing body of such
person by a majority of such members referred to in clause (x) or a nominating
committee elected or appointed by such members referred to in clause (x) or by
members so nominated, recommended, elected, or approved; (c) the board of
directors or other governing body or, if applicable, the shareholders or equity
owners of the person, shall have approved the sale of all or substantially all
the assets of such person; or (d) any transaction or event relating to the
person occurs which is (or which would be if the person had a class of equity
securities registered under Section 12 of the Exchange Act) required to be
described pursuant to the requirements of Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act.
(i) "Code" means the Internal Revenue Code of 1986, as
amended.
(j) "Committee" shall mean the committee provided for in
Section 9.2 of the Plan.
(k) "Common Stock" means the Common Stock, par value $0.10 per
share, of the Company, as such stock may hereafter be reclassified, converted or
exchanged by reorganization, merger or otherwise.
<PAGE> 2
(l) "Company" means Cavalier Homes, Inc., a Delaware
corporation, and its successors and assigns.
(m) "Deferral Election Form" means such form or forms as may
be approved by the Committee from time to time for use by a Participant to elect
to defer compensation under the Plan.
(n) "Disability" means the disability of a Participant which
entitles the Participant to a disability benefit under a disability program
sponsored or maintained by the Participant's Participating Employer; provided,
that if no such program is applicable to the Participant, then "Disability" with
respect to such Participant means that, based on medical evidence reasonably
satisfactory to the Committee, the Participant is totally and permanently unable
to engage in any occupation or gainful employment for which the Participant is
reasonably suited by background, training, education or experience.
(o) "Distributable Event" means an event identified as such
in Section 6.1.
(p) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
(q) "Excess Deferral" shall mean the portion of a
Participant's Qualifying Bonus in excess of his or her Basic Deferral that the
Participant has elected to defer.
(r) "Excess Deferral Account" shall mean the Account
maintained for a Participant pursuant to Section 4.3(d) hereof to reflect the
hypothetical value of the Participant's Excess Deferrals.
(s) "Executive Officer" shall mean an "executive officer" as
that term is defined in Rule 3b-7 of the Securities Exchange Act of 1934, as
amended, or an "officer" as defined under the rules of the New York Stock
Exchange.
(t) "Fair Market Value", shall mean the closing price on the
Composite Tape for the New York Stock Exchange - Listed Stocks for the Common
Stock. In the event that the Common Stock is not traded on the New York Stock
Exchange, the Committee shall, in its reasonable discretion, specify appropriate
alternative measures of Common Stock value.
(u) "Matching Unit Account" means the Account maintained for
a Participant pursuant to Section 4.3(c) hereof to reflect the number of Units
attributable to his or her Participating Company's matching the Units
attributable to his or her Basic Deferrals.
(v) "Maximum Basic Deferral Percentage" shall mean, with
respect to a Participant, such percentage as may be specified by the Committee,
in its sole discretion, in the Participant's Deferral Election Form. Maximum
Basic Deferral Percentages need not be uniform among Participants. The Committee
may raise or lower a Participant's Maximum Basic Deferral Percentage from time
to time on a prospective basis, and such change shall be communicated to the
Participant and noted in the Participant's Deferral Election Form by the
Committee. The Committee may, in its discretion, set a different Maximum Basic
Deferral Percentage with respect to the Qualifying Bonus for the first calendar
quarter ending after a Participant becomes a Participant than for subsequent
Qualifying Bonuses.
(w) "Participant" means an individual identified as such
under Article III of the Plan.
(x) "Participant's Share" means the product of the percentage
that would be used to determine the amount of a Participant's Qualifying Bonus
for a calendar quarter and the amount of the loss for the calendar quarter of
the Participating Employer or division or other economic unit thereof, the
profits of which would have been used to determine such Qualifying Bonus.
(y) "Participating Employer" means any employer participating
in the Plan pursuant to Article II of the Plan.
(z) "Plan" means the Cavalier Homes, Inc. Flexible Option
Plan, as set forth herein and as the same may be from time to time amended.
(aa) "Qualifying Bonus" means a quarterly bonus payable by a
Participant's Participating Employer which first becomes payable in a calendar
year subsequent to the calendar year of the applicable deferral election for
services to be performed during a calendar year subsequent to the calendar year
in which the election is made.
<PAGE> 3
The foregoing notwithstanding, with respect to an election made within 96 days
of the effective date of the Plan or within 60 days after a Participant first
becomes a Participant, "Qualifying Bonus" means a quarterly bonus payment which
first becomes payable subsequent to the date of the applicable deferral election
for services to be performed subsequent to the date of such election.
(bb) "Trust" means the trust described in Section 10.4. The
Trust shall constitute an unfunded arrangement and shall not affect the status
of the Plan as an unfunded plan. Participants and their beneficiaries shall have
no beneficial ownership interest in any assets of any such Trust.
(cc) "Trustee" means one or more corporations, entities or
persons selected by the Company to serve as a Trustee or Trustees for the Trust.
(dd) "Unit" shall mean one hypothetical share of Common Stock.
(ee) "Vested Percentage" shall mean with respect to a
Participant the percentage specified by the Committee in the Participant's
Deferral Election Form. The Committee may, in its discretion, establish
different schedules or events for vesting by different Participants.
ARTICLE II.
PARTICIPATING EMPLOYERS
Section 2.1 Eligibility. The Participating Employers that have adopted
the Plan effective as of April 1, 1998 are the Company, Cavalier Industries,
Inc., Cavalier Manufacturing, Inc., Cavalier Acceptance Corporation, Belmont
Homes, Inc., Delta Homes, Inc., Bellcrest Homes, Inc., Spirit Homes, Inc.,
Quality Certified Insurance Services, Inc., Quality Housing Supply, LLC, and BRC
Components, Inc. Any other business entity, more than 50% of which is owned
directly or indirectly by the Company, may, with the consent of the Committee,
adopt the Plan by executing and delivering to the Company a written instrument
in such form and containing such provisions as the Committee may prescribe or
approve.
Section 2.2 Participation Reimbursements. Each of the Participating
Employers agrees to make payments of the benefits provided under the Plan to its
respective employee Participants. The Company hereby guarantees the performance
by each of the other Participating Employers of its respective obligations under
the Plan. Neither the respective benefit payment obligations of the
Participating Employers nor the Company's guarantee of performance is secured in
any way. Such obligations and guarantee constitute no more than unfunded and
unsecured promises of payment and performance. Each Participating Employer,
other than the Company, shall reimburse the Company for its allocable share of
costs and expenses paid by the Company in connection with the operation and
administration of the Plan and shall reimburse the Company for any benefits paid
by the Company under the Plan to Participants to the extent allocable to such
Participating Employer and its Participants. Payments made to Participants by
the Trust shall constitute payments by the Company and the Company shall be
reimbursed for such payments by the appropriate Participating Employers.
Section 2.3 Recordkeeping and Reporting. Each Participating Employer
shall furnish to the Committee the information with respect to each of its
Participants as may be necessary to enable the Committee to maintain records
sufficient to determine the benefits (and the compensation sources of such
benefits) which may become payable to or with respect to such Participants and
to give those Participants any reports which may be required under the terms of
the Plan or by law.
Section 2.4 Termination of Participation. A Participating Employer,
other than the Company, may withdraw from participation in the Plan at any time
by providing the Company with 30 days advance written notice of such withdrawal
from participation and the effective date of such Participating Employer's
withdrawal, which 30-day notice period may be waived by the Company. In
addition, the Company may terminate a Participating Employer's participation in
the Plan by providing such Participating Employer with 30 days advance written
notice, which 30-day notice period may be waived by the Participating Employer.
A Participating Employer which terminates its participation in the Plan shall
remain obligated under the Plan with respect to deferrals (and matches referable
thereto) made prior to such termination by its Participants, including
subsequent investment performance adjustments, unless otherwise expressly agreed
by the Company with the Company fully assuming such obligations.
<PAGE> 4
ARTICLE III.
ELIGIBILITY AND PARTICIPATION
Section 3.1 Eligibility. (a) Subject to Section 3.1(b) and (c) below,
the Committee shall from time to time designate such management level or highly
compensated employees of the Participating Employers and their respective
divisions as it deems appropriate as eligible to participate in the Plan and
shall inform each eligible employee in writing of such designation and the date
on which the employee shall become a Participant in the Plan.
(b) Notwithstanding the provisions of paragraph (a) above, no
employee who is an Executive Officer or a member of the Board shall be
designated as eligible to participate in the Plan. If a Participant becomes an
Executive Officer or a member of the Board, the Participant's Section 4.1
compensation deferral elections will immediately terminate and no additional
amount shall be credited to his or her Accounts under Section 4.3(a), (b)(i) and
(d)(i) until such time as the individual ceases to be an Executive Officer or a
member of the Board. The Accounts of such Participants shall continue to be
adjusted in accordance with the other provisions of Section 4.3 until fully
distributed.
(c) Under no circumstances shall the number of Participants,
including those who are actively employed and those who have separated from
service but who have not received full payment of their benefits hereunder, at
any time exceed 100.
Section 3.2 Participation. An individual eligible to participate in the
Plan shall become a Participant upon filing a completed Deferral Election Form
with the Committee and acceptance of such form by the Committee. Subject to
Section 3.1(b), once an individual becomes a Participant in the Plan, the
individual shall remain a Participant until the benefits which may be payable to
the individual under the Plan have been distributed to or on behalf of the
individual.
Section 3.3 Suspension of Eligibility. The Committee may in its
discretion determine that a Participant will no longer be eligible to
participate in the Plan, and in such event , the Participant's Section 4.1
compensation deferral election will immediately terminate and no additional
amounts shall be credited to his or her Accounts under Sections 4.3(a), (b)(i)
and (d)(i) until such time, if any, as the individual is again determined to be
eligible to participate in the Plan by the Committee and makes a new Section 4.1
election. However, the Account of such Participant shall continue to be adjusted
by the other provisions of Section 4.3 until fully distributed.
ARTICLE IV.
DEFERRAL ELECTIONS AND ACCOUNTS
Section 4.1 Deferral Elections.
(a) A Participant may elect to defer receipt of up to the
Maximum Basic Deferral Percentage of each Qualifying Bonus, and the amount of
Qualifying Bonus so deferred shall be a Basic Deferral.
(b) A Participant who has elected to have Basic Deferrals at
the Maximum Basic Deferral Percentage of each Qualifying Bonus may elect to
defer receipt of all or any portion of the remainder of each Qualifying Bonus,
and the amount so deferred shall be an Excess Deferral.
(c) Upon election to defer compensation pursuant to the Plan,
a Participant will have no further right to such deferred compensation other
than as provided under the Plan.
Section 4.2 Form and Effectiveness of Deferral Election. Elections to
defer compensation under the Plan shall be made in writing on a Deferral
Election Form. A Participant who has elected to defer all or part of Qualifying
Bonuses may terminate such election with respect to Qualifying Bonuses for
services rendered in calendar quarters commencing after the Participant's
execution and delivery to the Committee of a notice of termination in such form
as the Committee may prescribe or approve. A Participant who has so elected to
terminate deferrals may not again commence deferrals until the first calendar
quarter of the first calendar year following such termination. An election to
defer may be revised with respect to Qualifying Bonuses attributable to services
performed in subsequent calendar years by the making of a new deferral election
on a Deferral Election Form. Notwithstanding the other provisions of this Plan,
a Participant's Deferral Election Form and the various elections and selections
made thereon shall not become effective until accepted by the Committee.
<PAGE> 5
Section 4.3 Participant Accounts and Adjustments Thereto.
(a) (i) A Basic Unit Account shall be maintained for each
Participant. As of the date each Qualifying Bonus is paid (or would be paid but
for the Participant's election to have the entire amount thereof deferred as a
Basic Deferral and as Excess Deferrals), the Participant's Basic Unit Account
shall be credited with a number of Units equal to the result obtained by
dividing the amount of the Basic Deferral with respect to the Qualifying Bonus
by the Fair Market Value of a share of Common Stock on such date. In the event
shares of the Company's Common Stock are not traded on the New York Stock
Exchange on such date, then Fair Market Value shall be determined by references
to the next day on which such stock is traded.
(ii) As of the close of each calendar year, that portion,
if any, of a Participant's Share for each calendar quarter during such calendar
year which has not been taken into account in determining the amount of a
Participant's Qualifying Bonus for a subsequent calendar quarter during such
calendar year or applied to reduce his Excess Deferral Account pursuant to
Section 4.3(d)(ii) below shall be applied to reduce the number of Units credited
to the Participant's Basic Unit Account. If the portion of such Participant's
Share that has not been so used is equal to or less than the Participant's Basic
Deferral for the most recent calendar quarter for which the Participant had a
Basic Deferral, then the amount of such Participant's Share not so used shall be
divided by the Fair Market Value of a share of Common Stock used to determine
the number of Units credited to the Participant's Basic Unit Account with
respect to such Basic Deferral, and the number of Units credited to the
Participant's Basic Unit Account shall be reduced by the resulting number. If
the portion of Participant's Share not so used exceeds the amount of the
Participant's Basic Deferral for the most recent calendar quarter for which
there was such Basic Deferral, then the Participant's Basic Unit Account shall
be reduced by the number of Units credited to such Basic Unit Account for such
calendar quarter, and the excess amount of such Participant's Share shall then
be applied to reduce the number of Units credited to the Participant's Account
with respect to Basic Deferrals for preceding calendar quarters during such
calendar year.
(b) (i) A Cash Account shall be maintained for each
Participant. As of the date each Qualifying Bonus is paid (or would be paid but
for the Participant's election to have the entire amount thereof deferred as a
Basic Deferral and as Excess Deferrals), the Participant's Cash Account shall be
credited with an amount equal to twice the amount of the Basic Deferral with
respect to such Qualifying Bonus, representing the amount of the Basic Deferral
and the Units credited to the Participant's Matching Unit Account pursuant to
Section 4.3(c)(i) with respect thereto.
(ii) A Participant's Cash Account shall be credited with
interest on the average balance thereof from time to time at a rate of four
percent (4%) compounded annually, and such interest shall be posted to the
Participant's Cash Account as of the last day of each calendar month.
(iii) As of the close of each calendar year, if a
Participant had a Participant's Share with respect to any calendar quarter
during such calendar year, a Participant's Cash Account shall be reduced by the
lesser of the amount credited to such Cash Account pursuant to paragraph (b)(i)
for the calendar year or twice the amount of that portion of the Participant's
Share for each calendar quarter during such calendar year that was not taken
into account in determining the amount of the Participant's Qualifying Bonus for
any subsequent calendar quarter during such calendar year or applied to reduce
his Excess Deferral Account pursuant to Section 4.3(d)(ii).
(c) (i) A Matching Unit Account shall be maintained for each
Participant. As of the date each Qualifying Bonus is paid (or would be paid but
for the Participant's election to have the entire amount deferred as a Basic
Deferral and as Excess Deferrals), the Participant's Matching Unit Account shall
be credited with a number of Units equal to the number of Units credited to such
Participant's Basic Account pursuant to paragraph (a) above as of such date.
(ii) If an adjustment is made for a calendar year
pursuant to paragraph (a)(ii) above in the number of Units credited to a
Participant's Basic Unit Account, the same adjustment shall be made in the
number of Units credited to his or her Matching Unit Account.
(d) (i) An Excess Deferral Account shall be maintained for
each Participant who elects Excess Deferrals. As of the date each Qualifying
Bonus is paid (or would be paid but for the Participant's election to have the
entire amount deferred as a Basic Deferral and as Excess Deferrals), the
Participant's Excess Deferral Account shall be credited with the amount of the
Excess Deferral referable to such Qualifying Bonus. A Participant's Excess
Deferral Account shall also be adjusted at least monthly and as of the date
preceding the date any payment is to be made to the Participant of a benefit, or
an installment thereof, hereunder to reflect any deemed gain or loss from the
deemed investment of amounts credited to the Participant's Excess Deferral
Account pursuant to Section 5.2 hereof; provided, however, that a Participant's
Excess Deferral Account shall be credited or debited for only sixty-two percent
(62%) of any such deemed gain or loss which, if recognized by the Company, would
affect the Company's taxable income or loss.
<PAGE> 6
(ii) As of the close of each calendar year, if a
Participant had a Participant's Share with respect to any calendar quarter
during such calendar year, a Participant's Excess Deferral Account shall be
reduced by the lesser of the amount of Excess Deferrals credited to such Excess
Deferral Account for the calendar year or that portion of the Participant's
Share for any calendar quarter of such calendar year that was not taken into
account in determining the amount of the Participant's Qualifying Bonus for any
subsequent calendar quarter in such calendar year.
(e) Notwithstanding the foregoing, the maximum number of
Units that may be credited to the Accounts of all Participants hereunder shall
not exceed Five Hundred Thousand (500,000), disregarding any Units that have not
been used under the Plan because such Units were credited to the Account of a
Participant who terminates employment prior to attaining a Vested Percentage of
100% or Units which have otherwise been forfeited.
(f) The number of Units credited to a Participant's Basic
Unit Account and Matching Unit Account and the maximum number of Units provided
in paragraph (e) above shall be adjusted to reflect any change in the
outstanding Common Stock by reason of any stock dividend or split,
recapitalization, merger, consolidation, combination or exchange of shares or
other similar corporate change in such manner as the Committee deems
appropriate.
(g) It is contemplated that Qualifying Bonuses will be
paid on or about the 20th day of the month following the end of the calendar
quarter except for Qualifying Bonuses for the fourth calendar quarter, which
Qualifying Bonuses are expected to be paid on or about the 30th day of the month
following the end of such quarter.
ARTICLE V.
DEEMED INVESTMENT OF EXCESS DEFERRALS
Section 5.1 Investment Options. The Committee shall establish a
list of investment options, which shall be mutual funds, investment options
under a type of variable insurance products, or comparable investments and may
from time to time add investment options to, or delete existing investment
options from, such list.
Section 5.2 Deemed Investment. A Participant may elect in such
form and manner as the Committee may from time to time prescribe or approve to
have amounts credited to his or her Excess Deferral Account treated as if such
amounts were invested in one or more of the investment options established by
the Committee. The available investment options may be changed from time to
time by the Committee. In the event a Participant fails to make such an
election, the amount credited to such Participant's Excess Deferral Account
shall be deemed invested in such investment option as the Committee shall from
time to time designate as the default investment option. Amounts deemed invested
in an investment fund or investment funds pursuant to the election of a
Participant or as a result of a failure to make an election shall be valued as
if so invested, reflecting all earnings, losses, and other distributions or
charges and changes in value which would have been incurred through such
investment. Appropriate adjustments to the Excess Deferral Accounts of the
Participants shall be made as provided in Section 4.3(d) hereof.
ARTICLE VI.
DISTRIBUTIONS.
Section 6.1 Distributable Events. Subject to Section 6.5 below, a
Participant's Distributable Event shall be the first to occur of the following
events, provided, that events (b) - (f) shall be Distributable Events only if so
elected by the Participant in the Deferral Election Form:
(a) the Participant's 70th birthday (i.e., the 70th
anniversary of the Participant's birth) or such earlier birthday, not prior to
the Participant's 65th birthday, as the Participant may specify in the Deferral
Election Form;
(b) the Participant's Disability (as defined in Section
1.1);
(c) the Participant's death;
(d) the first date on which the Participant is no longer an
employee of any Participating Employer;
(e) such other event as the Participant may specify in the
Deferral Election Form (subject to approval of the Committee);
(f) the date of a Change in Control of the Company
occurring after May 20, 2000, or
(g) termination for Cause subject to and in accordance with
Section 6.5.
<PAGE> 7
A Participant's Distributable Event elections must be made on the
Participant's initial Deferral Election Form and are irrevocable.
Section 6.2 Distribution of Benefits.
(a) Distribution Commencement Date. Distribution of a
Participant's Plan benefit shall be made or commenced as promptly as practicable
after the Participant's Distributable Event but not more than fifteen (15) days
after such Distributable Event. Notwithstanding anything in this Plan to the
contrary, if a Participant's Distributable Event occurs pursuant to Section
6.1(d) or would otherwise occur after the date described in Section 6.1(d)
above, the Committee may, in its sole discretion, accelerate the date payment of
such benefit is made or commenced to any date after the date described in
Section 6.1(d) above.
(b) Amount of Benefit.
(i) Except as otherwise provided in paragraph
(b)(iii) below, if a Participant has a Distributable Event at a time when he
does not have a Vested Percentage of 100%, he shall be entitled to receive as
his or her benefit hereunder, a lump sum cash payment of
(A) his or her Aggregate Basic
Deferrals, and
(B) the product of his or her Vested
Percentage and his or her Aggregate Match, and
(C) the value of his or her Excess
Deferral Account.
(ii) Except as otherwise provided in paragraph
(b)(iii) below, if a Participant has a Distributable Event at a time when he has
a Vested Percentage of 100%, his or her benefit shall be
(A) the value of his or her Excess
Deferral Account, and
(B) a number of shares of Common Stock
equal to the sum of the number of Units credited to
his or her Basic Unit Account and the number of Units
credited to his or her Matching Unit Account, unless
the product of the Fair Market Value, as of the date
of the Distributable Event, of a share of Common
Stock multiplied by the sum of the number of Units
credited to his or her Basic Unit Account and the
number of Units credited to his or her Matching Unit
Account is less than the value of his or her Cash
Account, in which case the value of his or her Cash
Account shall be paid in cash.
(iii) If a Participant is terminated for Cause in
accordance with Section 6.5, at the sole election of the Committee, his or her
benefit, in lieu of the benefit otherwise due under paragraph (b)(i) or (b)(ii)
above, shall be a lump sum cash payment of an amount equal to his or her
Aggregate Basic Deferrals and the aggregate amount of Excess Deferrals made by
the Participant (without regard to any earnings with respect thereto), reduced
by any amount owed by the Participant to any one or more of the Participating
Employers at the time payment is to be made.
(c) Form of Distribution. The portion of any benefit
payable to a Participant pursuant to Section 6.2(b)(ii) above that is
attributable to the value of a Participant's Cash Account or Excess Deferral
Account shall be paid to the Participant in dollars. The portion of any such
benefit attributable to the Participant's Basic Unit Account or Matching Unit
Account shall be delivered to the Participant in the form of shares (including a
fractional Share if applicable) of Common Stock. To the extent that the
distribution is in the form of shares of Common Stock, such delivery shall be
subject to compliance with all applicable federal, state and local laws and
regulations and to such approvals by any governmental or regulatory agency or
national securities exchange as may be required. The Committee shall not be
required to issue or deliver any shares or certificates for shares of Common
Stock prior to the completion of any registration or qualification of such
shares under any federal, state or local law, or any ruling or regulation of any
governmental body or national securities exchange which the Company shall, in
its sole discretion, determine to be necessary or advisable. Each Participant
shall reasonably cooperate with the Company, at the Company's expense, to
facilitate such compliance and related actions by the Company.
(d) Payment Options. In the event a Participant becomes
eligible to receive a payment of benefits pursuant to Section 6.2(b)(ii) of the
Plan, the benefits payable in cash to the Participant or, in the event of the
Participant's death, to the Participant's designated beneficiary, shall be paid
in accordance with one of the payment options available under the Plan as
elected by the Participant on the Participant's initial Deferral Election Form.
The payment options for cash payments include installment payments over a period
certain, a lump sum payment, and such
<PAGE> 8
other payment method as may be specified by the Participant and accepted by the
Committee. The Committee may, in its sole discretion, reduce the payment period
over which payments would have been made pursuant to an installment payment
option elected by a Participant (including consolidation into a lump sum);
provided, that in the event of a Change in Control, no reduction of a payment
period may be made prior to the fifth anniversary of such Change in Control.
Absent a payment option election, the Committee shall direct the payment of any
benefits payable under the Plan to or on behalf of the Participant in a lump sum
payment to the Participant, or in the event of the Participant's death, to the
Participant's designated beneficiary under the Plan. Distributions of Common
Stock will be made in a single distribution.
Section 6.3 Distributions as a Result of a Tax Determination.
Notwithstanding any provision in this Plan to the contrary, if, at any time, a
court or the Internal Revenue Service determines that any amounts or shares
credited to a Participant's Accounts under the Plan or Trust are includable in
the gross income of the Participant and subject to tax, the Committee may, in
its sole discretion, permit a lump sum distribution of an amount equal to the
amounts or shares determined to be includable in the Participant's gross income.
Section 6.4 Parachute Payments. In the event that any payments
made to a Participant under the Plan alone, or together with payments made to
the Participant under any other contract, Plan, or program, result in subjecting
the Participant to the excise tax imposed by Section 4999 of the Code, then the
Participant's Participating Employer shall pay the Participant an additional
amount such that the net amount retained by the Participant after deduction of
any excise tax on such payments and any federal, state, and local income tax and
excise tax on the additional payments provided for by this paragraph shall be
equal to the benefits otherwise payable under this Plan. For purposes of
determining the additional payment to be made, the Participant shall be deemed
to pay federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the additional payment is to be made and
state and local income taxes at the highest marginal rates of taxation in the
state and locality of the Participant's residence in the calendar year the
additional payment is to be made, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local income
taxes. In the event that the excise tax is subsequently determined to be less
than the amount taken into account hereunder at the time of payment, the
Participant shall repay to his or her Participating Employer, at the time that
the amount of such reduction in excise tax is finally determined, the portion of
the additional payment attributable to such reduction, plus interest on such
amount at the rates provided in Section 1274(b)(2)(B) of the Code. In the event
that the excise tax is determined to exceed the amount taken into account
hereunder at the time of the payment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the additional
payment), the Participant's Participating Employer shall make an additional
payment in respect of such excess (plus any interest payable with respect to
such excess) at the time the amount of such excess is finally determined.
Section 6.5 Distribution Upon Termination for Cause. In the event
that a Participant is terminated for Cause (as defined below), the Committee
may, in its discretion, treat such termination or any date subsequent thereto as
a Distributable Event. For purposes of this Plan, termination for Cause means
termination based on any of the following:
(i) dishonesty or fraud in connection with his or
her employment;
(ii) failure to adhere (in any material respect) to
any policy of any of the Participating Employers to which the Participant is
subject and that is known or reasonably should be known to the Participant;
(iii) appropriation (or attempted appropriation) of a
material business opportunity of any of the Participating Employers, including
attempting to secure or securing any personal profit in connection with any
transaction entered into on behalf of any of the Participating Employers;
(iv) misappropriation (or attempted misappropriation)
of any of the Participating Employers' funds or property;
(v) conviction of, or indictment for (or its
procedural equivalent) or entering of a guilty plea or plea of no contest with
respect to, a felony or any other criminal offense involving moral turpitude
(other than traffic offenses); or
(vi) insubordination or willful misconduct in the
performance of, or gross neglect of, the Participant's duties with one or more
of the Participating Employers, as determined by the good faith judgment of the
Committee.
<PAGE> 9
ARTICLE VII.
NONTRANSFERABILITY
Section 7.1 Anti-Alienation of Benefits. Any amounts or Units which
may be credited to a Participant's Accounts under the Plan, and any rights or
privileges pertaining thereto, may not be anticipated, alienated, sold,
transferred, assigned, pledged, encumbered, or subjected to any charge or legal
process; and no interest or right to receive a benefit may be taken, either
voluntarily or involuntarily, for the satisfaction of the debts of, or other
obligations or claims against, such person or entity, including claims for
alimony, support, separate maintenance and claims in bankruptcy proceedings.
Section 7.2 Incompetent Participants. If any person who may be
eligible to receive a payment under the Plan has been legally declared
incompetent and a conservator or other person legally charged with the care of
such person or of his or her estate has been appointed, any payment under the
Plan to which the person is eligible to receive shall be paid to such
conservator or other person legally charged with the care of the person or his
or her estate. Any such payment shall be a payment for the account of such
person and a complete discharge of any liability of the Participating Employers
and the Plan therefor.
Section 7.3 Designated Beneficiary. In the event of a Participant's
death prior to the payment of all or a portion of any benefits which may be
payable with respect to the Participant under the Plan, payment of any benefits
payable on behalf of the Participant under the Plan shall be made to such
beneficiary as the Participant may designate in such manner as the Committee may
prescribe or approve. If no such beneficiary has been designated, payment shall
be made to the Participant's estate.
ARTICLE VIII.
WITHHOLDING
Section 8.1 Withholding. The amounts payable pursuant to the Plan
may be reduced by the amount of any federal, state or local taxes required by
law to be withheld with respect to such payments unless other arrangements
satisfactory to the Company are made for discharging any and all withholding
obligations with respect to the payment of benefits under the Plan.
ARTICLE IX.
ADMINISTRATION OF THE PLAN
Section 9.1 Administrator. The administrator of the Plan shall be
the Committee, which may delegate authority with respect to the administration
of the Plan to one or more of its members, or to any other person or persons, as
it deems necessary or appropriate for the administration and operation of the
Plan.
Section 9.2 Committee. (a) The Committee shall consist of not less
than one nor more than five members who shall be appointed by and serve at the
pleasure of the Board. The Board shall have the right to remove any member of
the Committee at any time. A member of the Committee may resign at any time by
written resignation to the Board. Should a vacancy on the Committee occur, a
successor shall be appointed by the Board, but the Committee may act
notwithstanding the existence of a vacancy so long as there is at least one
member of the Committee.
(b) The Committee shall act unanimously unless the
Committee consists of at least three members, in which event it shall act by or
through a majority of its members. Any decision or determination to be made by
the Committee may be made by the vote taken at a duly called meeting or by
unanimous written consent without a meeting. The Board shall appoint a Chairman
and Secretary of the Committee if it consists of more than one member, but if
the Committee consists of a single member, such member shall act as both
Chairman and Secretary. All acts and determinations of the Committee shall be
duly recorded by the Secretary thereof, or under his or her supervision, and all
records, together with such other documents as may be necessary for
administration of the Plan, shall be preserved in the custody of such Secretary.
The member or members of the Committee shall serve as such without compensation
but shall be reimbursed for all expenses reasonably incurred.
Section 9.3 Authority of Committee. The Committee shall have the
authority, duty and power to interpret and construe the provisions of the Plan
as it deems appropriate, to adopt, establish and revise rules, procedures and
regulations relating to the Plan, to determine the conditions subject to which
any benefits may be payable, to resolve all questions concerning the status and
rights of Participants and others under the Plan, including, but not limited to,
eligibility for benefits, and to make any other determinations which it believes
necessary or advisable for the administration of the Plan. The Committee shall
have the duty and responsibility of maintaining records, making the requisite
calculations and disbursing payments hereunder. The determinations,
interpretations, regulations and
<PAGE> 10
calculations of the Committee shall be final and binding on all persons and
parties concerned. The Chairman of the Committee shall be the agent of the Plan
for the service of legal process in accordance with Section 502 of ERISA.
Section 9.4 Operation of Plan and Claims Procedures. The Committee
shall be responsible for the general operation and administration of the Plan
and for carrying out the provisions thereof. The Company shall be responsible
for the expenses incurred in the administration of the Plan. The Committee shall
also be responsible for determining eligibility for payments and the amounts
payable pursuant to the Plan. The Committee shall be entitled to rely
conclusively upon all tables, valuations, certificates, opinions and reports
furnished by any actuary, accountant, controller, counsel or other person
employed or engaged by the Committee or the Company with respect to the Plan.
The procedures for filing claims for payments under the Plan are described
below.
(a) It is not necessary for a Participant to file a claim
for benefits to commence receiving his or her benefit. However, a Participant
who believes he or she is entitled to a payment under the Plan may submit a
claim for payments in writing to the Committee. Any claim for payments under the
Plan must be made by the Participant or his or her beneficiary in writing and
state the claimant's name and the nature of benefits payable under the Plan. If
for any reason a claim for payments under the Plan is denied by the Committee,
the Committee shall deliver to the claimant a written explanation setting forth
the specific reasons for the denial, specific references to the pertinent
provisions of the Plan on which the denial is based, a description of any
additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary, and
information on the procedures to be followed by the claimant in obtaining a
review of his or her claim, all written in a manner calculated to be understood
by the claimant. For this purpose:
(i) The claimant's claim shall be deemed to be
filed when presented in writing to the Committee.
(ii) The Committee's explanation shall be in writing
delivered to the claimant within 90 days of the date the claim is filed.
(b) The claimant shall have 60 days following his or her
receipt of the denial of the claim to file with the Committee a written request
for review of the denial. For such review, the claimant or the claimant's
representative may review pertinent documents and submit written issues and
comments.
(c) The Committee shall decide the issue on review and
furnish the claimant with a copy within 60 days of receipt of the claimant's
request for review of the claimant's claim. The decision on review shall be in
writing and shall include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, as well as specific references to
the pertinent provisions in the Plan on which the decision is based. If a copy
of the decision is not so furnished to the claimant within such 60 days, the
claim shall be deemed denied on review. In no event may a claimant commence
legal action for benefits the claimant believes are due the claimant until the
claimant has exhausted all of the remedies and procedures afforded the claimant
by this Section 9.4.
Section 9.5 Participant's Address. Each Participant shall keep the
Committee informed of his or her current address and the current address of his
or her beneficiary. The Committee shall not be obligated to search for any
person. If the location of a Participant is not made known to the Committee
within three (3) years after the date on which payment of the Participant's
benefits may be made, payment may be made as though the Participant had died at
the end of the three-year period. If, within one (1) additional year after such
three-year period has elapsed, or, within three (3) years after the actual death
of a Participant, the Committee is unable to locate any designated beneficiary
of the Participant, then the Committee shall have no further obligation to pay
any benefit hereunder to or on behalf of such Participant or designated
beneficiary and such benefits shall be irrevocably forfeited.
Section 9.6 Indemnification. The Company shall, and does hereby
agree to, indemnify and hold harmless the Committee and each member thereof,
from all liability, joint or several, for their acts, omissions, and conduct in
the administration of the Plan except for those acts, omissions, and conduct
resulting from their own willful misconduct or lack of good faith; provided,
however, that if any party would otherwise be entitled to indemnification
hereunder with respect to any liability and such party is insured against losses
resulting from such liability by any insurance contract or contracts, such party
shall be entitled to indemnification hereunder only to the extent that the
amount of such liability exceeds the amount thereof payable under such insurance
contract or contracts.
<PAGE> 11
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.1 No Employment Rights. Neither the Plan nor any action
taken hereunder shall be construed as giving any Participant any right to be
retained in the service or employ of any Participating Employer.
Section 10.2 Participants Should Consult Advisors. Neither any
Participating Employer, nor their respective directors, officers, employees or
agents makes any representation or warranty with respect to the state, federal
or other tax, financial, estate planning, or the securities or other legal
implications of participation in the Plan. Participants should consult with
their own tax, financial and legal advisors with respect to their participation
in the Plan.
Section 10.3 Unfunded and Unsecured. The Plan shall at all times be
considered entirely unfunded both for tax purposes and for purposes of Title I
of ERISA, and no provision shall at any time be made with respect to segregating
assets of any Participating Employer for payment of any amounts hereunder. The
Plan is intended as an unfunded deferred compensation plan maintained for a
select group of "management or highly compensated employees," as that term is
used in Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA. Any funds invested
under the Trust shall continue for all purposes to be available to the general
creditors of the Company in the event of a bankruptcy (involvement in a pending
proceeding under the Federal Bankruptcy Code) or insolvency (inability to pay
debts as they mature) of the Company. The Company shall promptly notify the
Trustee and the applicable Participants of such bankruptcy or insolvency. No
Participant or any other person shall have any interests in any particular
assets of any Participating Employer by reason of the right to receive a benefit
under the Plan and to the extent the Participant or any other person acquires a
right to receive benefits under the Plan, such right shall be no greater than
the right of any general unsecured creditor of any Participating Employer. The
Plan constitutes a mere promise by the Participating Employers to make payments
to the Participants in the future. With respect to the guarantee of the Company
under Section 2.2, Participants have rights only as general unsecured creditors
of the Company. Nothing contained in the Plan shall constitute a guaranty by any
Participating Employer or any other person or entity that any funds in any trust
or the assets of any Participating Employer will be sufficient to pay any
benefit hereunder. Furthermore, no Participant shall have any right to a benefit
under the Plan except in accordance with the terms of the Plan.
Section 10.4 The Trust. In order to provide assets from which to
fulfill its obligations to the Participants and their beneficiaries under the
Plan, the Company may establish a Trust by a trust agreement with a third party,
the Trustee, to which the Company may, in its discretion, contribute cash or
other property, including options to acquire Common Stock, to provide for the
benefit payments under the Plan. The Trustee will have the duty to invest the
Trust assets and funds in accordance with the terms of the Trust. The Company
shall be entitled at any time, and from time to time, in its sole discretion, to
substitute assets of at least equal fair market value for any assets held in the
Trust. All rights associated with the assets of the Trust will be exercised by
the Trustee or the person designated by the Trustee, and will in no event be
exercisable by or rest with Participants or their beneficiaries. The Trust shall
provide that in the event of the insolvency of the Company, the Trustee shall
hold the assets for the benefit of the general creditors of the Company. The
Trust shall be based on the model trust contained in Internal Revenue Service
Revenue Procedure 92-64 with such changes and modifications as may be approved
by the Board.
Section 10.5 Plan Provisions. Except when otherwise required by the
context, any singular terminology shall include the plural.
Section 10.6 Severability; Compliance in the Law. If a provision of
the Plan shall be held to be illegal or invalid, the illegality or invalidity
shall not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included. The obligations of the Company and each Participating Employer under
the Plan shall be subject to compliance with any and all applicable federal,
state and local laws, rules and regulations.
Section 10.7 Applicable Law. To the extent not preempted by the laws
of the United States, the laws of the State of Alabama, without regard to
provisions governing conflicts of laws, shall apply with respect to the Plan.
ARTICLE XI.
AMENDMENTS
Section 11.1 Amendment of the Plan. The Company reserves the power
to alter, amend or wholly revise the Plan at any time and from time to time by
the action of the Board, and the interest of each Participant is subject to the
powers so reserved; provided, however, that no amendment made subsequent to a
Change in Control shall be effective to the extent that it would have a
materially adverse impact on a Participant's reasonably expected economic
benefit attributable to compensation deferred by the Participant prior to the
Change in Control. An amendment shall be authorized by the Board and shall be
stated in an instrument in writing signed in the name of the Company by a person
or persons authorized by the Board. After the instrument has been so executed,
the Plan shall be deemed to have been amended in the manner therein set forth,
and all parties interested herein shall be bound thereby. No amendment to the
Plan may alter, impair, or reduce the vested benefits credited to any Accounts
prior to the effective date of such amendment without the written consent of any
affected Participant.
<PAGE> 12
ARTICLE XII.
TERM OF PLAN
Section 12.1 Term of the Plan. The Company may at any time terminate
the Plan by action of the Board, with such termination being effective as of the
date that all benefits payable to Participants have been distributed to
Participants in accordance with and subject to the provisions of Article VI of
the Plan. Effective as of the date of such Board action (or such later date as
may be specified therein), all Section 4.1 compensation deferral elections will
terminate and no further amounts shall be credited to any Accounts of any
Participant under Section 4.3 (a)(i), (b)(i), (c)(i), or (d)(i) after such date.
However, the Participants' Accounts shall continue to be adjusted by the other
provisions of Section 4.3 until all benefits are distributed to the Participants
or to the Participants' beneficiaries.
<PAGE> 1
EXHIBIT 5
June 25, 1998
Cavalier Homes, Inc.
Highway 41 North and Cavalier Road
Addison, Alabama 35540
Gentlemen:
In our capacity as counsel for Cavalier Homes, Inc., a
Delaware corporation (the "Company"), we have examined the Registration
Statement on Form S-8 (the "Registration Statement"), in form as proposed to be
filed by the Company with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933, as amended (the "Securities Act"), for
the registration of up to 500,000 shares of common stock, par value $0.10 per
share ("Common Stock"), of the Company and 500,000 rights to purchase the
Company's Series A Junior Participating Preferred Stock (the "Rights")
associated therewith and certain deferred compensation obligations (the
"Obligations") pursuant to the Company's Flexible Option Plan (the "Plan"). In
this connection, we have examined such records, documents and proceedings as we
have deemed relevant and necessary as a basis for the opinions expressed herein.
As to certain factual matters, we have also relied on certificates and
statements of the officers of the Company. In all of these cases, we have
assumed without investigation that the facts and circumstances contained in such
certificates and statements are true and correct and have not changed since the
date thereof.
Upon the basis of the foregoing, we are of the opinion that
(i) the shares of Common Stock and the Rights referred to above to be registered
under the Registration Statement have been duly authorized and, when issued and
paid for in accordance with the Plan, will be legally issued, fully paid and
nonassessable; (ii) the Obligations, when established pursuant to the terms of
the Plan, will be valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and the terms of the Plan,
except as such enforceability (a) may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
by principles of public policy, and (b) is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law); and (iii) the provisions of the Plan comply with the
requirements of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that pertain to such provisions.
We express no opinion as to the applicability of compliance
with, or effect of, Federal law other than ERISA or the law of any jurisdiction
other than the Delaware General Corporation Law and the laws of the State of
Alabama. We further express no opinion as to the enforceability of any choice of
law provision contained in the Plan.
We hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an Exhibit to the above-referenced
Registration Statement.
Very truly yours,
/s/ BRADLEY ARANT ROSE & WHITE LLP
<PAGE> 1
EXHIBIT 23(B)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Cavalier Homes, Inc. on Form S-8 of our report dated February 17, 1998 (March
13, 1998 as to the amendment to the Credit Facility described in Note 5)
appearing in the Annual Report on Form 10-K of Cavalier Homes, Inc. for the year
ended December 31, 1997, and appearing in the current report on Form 8-K dated
January 15, 1998, as amended by Form 8-K/A dated March 16, 1998 and by Form
8-K/A dated March 17, 1998.
/s/ DELOITTE & TOUCHE LLP
Birmingham, Alabama
June 23, 1998
<PAGE> 1
EXHIBIT 24
STATE OF ALABAMA )
COUNTY OF WINSTON )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
whose signature appears below hereby constitutes and appoints David A. Roberson
and Michael R. Murphy, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his or her name, place and stead, in any and all
capacities, to sign a registration statement of Cavalier Homes, Inc. on Form S-8
relating to the Cavalier Homes, Inc. Flexible Option Plan, including all
amendments to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and with any state securities commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Dated as of this 25 day of June, 1998.
/s/ DAVID A. ROBERSON
--------------------------
David A. Roberson
<PAGE> 2
STATE OF ALABAMA )
COUNTY OF WINSTON )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
whose signature appears below hereby constitutes and appoints David A. Roberson
and Michael R. Murphy, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his or her name, place and stead, in any and all
capacities, to sign a registration statement of Cavalier Homes, Inc. on Form S-8
relating to the Cavalier Homes, Inc. Flexible Option Plan, including all
amendments to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and with any state securities commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Dated as of this 25 day of June, 1998.
/s/ MICHAEL R. MURPHY
------------------------
Michael R. Murphy
<PAGE> 3
STATE OF TEXAS )
COUNTY OF WICHITA )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
whose signature appears below hereby constitutes and appoints David A. Roberson
and Michael R. Murphy, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his or her name, place and stead, in any and all
capacities, to sign a registration statement of Cavalier Homes, Inc. on Form S-8
relating to the Cavalier Homes, Inc. Flexible Option Plan, including all
amendments to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and with any state securities commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Dated as of this 25 day of June, 1998.
/s/ BARRY B. DONNELL
------------------------
Barry B. Donnell
<PAGE> 4
STATE OF ALABAMA )
COUNTY OF JEFFERSON )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
whose signature appears below hereby constitutes and appoints David A. Roberson
and Michael R. Murphy, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his or her name, place and stead, in any and all
capacities, to sign a registration statement of Cavalier Homes, Inc. on Form S-8
relating to the Cavalier Homes, Inc. Flexible Option Plan, including all
amendments to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and with any state securities commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Dated as of this 25 day of June, 1998.
/s/ THOMAS A. BROUGHTON, III
-------------------------------
Thomas A. Broughton, III
<PAGE> 5
STATE OF ALABAMA )
COUNTY OF WINSTON )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
whose signature appears below hereby constitutes and appoints David A. Roberson
and Michael R. Murphy, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his or her name, place and stead, in any and all
capacities, to sign a registration statement of Cavalier Homes, Inc. on Form S-8
relating to the Cavalier Homes, Inc. Flexible Option Plan, including all
amendments to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and with any state securities commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Dated as of this 25 day of June, 1998.
/s/ JOHN W. LOWE
------------------------
John W. Lowe
<PAGE> 6
STATE OF TEXAS )
COUNTY OF DALLAS )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
whose signature appears below hereby constitutes and appoints David A. Roberson
and Michael R. Murphy, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his or her name, place and stead, in any and all
capacities, to sign a registration statement of Cavalier Homes, Inc. on Form S-8
relating to the Cavalier Homes, Inc. Flexible Option Plan, including all
amendments to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and with any state securities commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Dated as of this 25 day of June, 1998.
/s/ LEE ROY JORDAN
------------------------
Lee Roy Jordan
<PAGE> 7
STATE OF ALABAMA )
COUNTY OF JEFFERSON )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
whose signature appears below hereby constitutes and appoints David A. Roberson
and Michael R. Murphy, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his or her name, place and stead, in any and all
capacities, to sign a registration statement of Cavalier Homes, Inc. on Form S-8
relating to the Cavalier Homes, Inc. Flexible Option Plan, including all
amendments to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and with any state securities commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Dated as of this 25 day of June, 1998.
/s/ GERALD W. MOORE
------------------------
Gerald W. Moore
<PAGE> 8
STATE OF MISSISSIPPI )
COUNTY OF PRENTISS )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
whose signature appears below hereby constitutes and appoints David A. Roberson
and Michael R. Murphy, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his or her name, place and stead, in any and all
capacities, to sign a registration statement of Cavalier Homes, Inc. on Form S-8
relating to the Cavalier Homes, Inc. Flexible Option Plan, including all
amendments to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and with any state securities commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Dated as of this 25 day of June, 1998.
/s/ A. DOUGLAS JUMPER, SR.
------------------------
A. Douglas Jumper, Sr.
<PAGE> 9
STATE OF MISSISSIPPI )
COUNTY OF TISHOMINGO )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
whose signature appears below hereby constitutes and appoints David A. Roberson
and Michael R. Murphy, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his or her name, place and stead, in any and all
capacities, to sign a registration statement of Cavalier Homes, Inc. on Form S-8
relating to the Cavalier Homes, Inc. Flexible Option Plan, including all
amendments to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and with any state securities commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Dated as of this 25 day of June, 1998.
/s/ MIKE KENNEDY
------------------------
Mike Kennedy
