As filed with the Securities and Exchange Commission on March 17, 1998
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
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 number)
Highway 41 North and Cavalier Road
Addison, Alabama 35540
(205) 747-0044
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
David A. Roberson
Highway 41 North and Cavalier Road
Addison, AL 35540
(205) 747-0044
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
John B. Grenier, Esq.
BRADLEY ARANT ROSE & WHITE LLP
2001 Park Place, Suite 1400
Birmingham, Alabama 35203
(205) 521-8000
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. (X)
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. ( )
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. ( )
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ( )
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ( )
<PAGE>
CALCULATION OF REGISTRATION FEE
- - ------------------------|--------------|---------------|-------------|----------
| | Proposed | Proposed | Amount
Title of shares to | Amount to be | maximum | maximum | of
be registered | registered | aggregate | aggregate |registra-
| |offering price | offering | tion fee
| | per share | price |
========================|==============|===============|=============|==========
Common Stock, par |300,000 shares| $11.07(1) |$3,321,000(1)| $979.70
value $0.10 per share | | | |
(including attendant |300,000 rights| (2) | (2) |
Rights to Purchase | | | |
Series A Junior Partici-| | | |
pating Preferred Stock) | | | |
================================================================================
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended,
which has been calculated on the basis of the average of the high and
low prices reported on March 11, 1998 on the New York Stock Exchange,
which price was $11.07 per share.
(2) 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.
<PAGE>
PROSPECTUS
CAVALIER HOMES, INC.
Amended and Restated Dividend Reinvestment and Stock Purchase Plan
300,000 Shares of Common Stock
This Prospectus relates to 300,000 shares of common stock, par value
$0.10 per share (the "Common Stock"), of Cavalier Homes, Inc., a Delaware
corporation (the "Company"), to be issued pursuant to the Company's Amended and
Restated Dividend Reinvestment and Stock Purchase Plan (the "Plan"). The Company
previously issued 200,000 shares of Common Stock under its Dividend Reinvestment
and Stock Purchase Plan pursuant to a Prospectus dated December 19, 1996. The
Plan provides holders of Common Stock with an opportunity to invest cash
distributions on shares of Common Stock and optional cash payments for
additional shares of Common Stock without payment of any brokerage commission or
service charge. Shares of Common Stock for the Plan will be purchased directly
from the Company. No open market purchases of shares of Common Stock are
permitted for the Plan. The Plan is administered by Chase Manhattan Bank, with
certain administrative support provided by ChaseMellon Shareholder Services,
L.L.C. (collectively with Chase Manhattan Bank, the "Plan Agent").
Participants in the Plan may purchase additional shares of Common Stock
by (i) having the cash distributions on all, or part, of their shares of Common
Stock automatically reinvested, (ii) by receiving directly, as usual, their cash
distributions, if, as and when declared, on shares of Common Stock registered in
their names and investing in the Plan by making cash payments of not less than
$500 per payment or more than $40,000 per calendar quarter ("optional cash
payments"), or (iii) by investing both their cash distributions and such
optional cash payments.
Stockholders may begin participating in the Plan by completing an
Authorization Card and returning it to the Plan Agent. Participants may
terminate their participation at any time. Stockholders who do not wish to
participate in the Plan need not take any action and will continue to receive
their cash dividends, if, as and when declared, as usual. It is suggested that
this Prospectus be retained for future reference.
The Plan does not represent a change in the Company's dividend policy
or a guarantee of future dividends. Dividends will continue to depend on
earnings, financial requirements and other factors. The Company reserves the
right to terminate the Plan at any time.
The price per share for the additional shares of Common Stock purchased
from the Company with reinvested cash distributions and optional cash payments
will be 95% of the Market Price (as defined in the Plan) on the Investment Date
(as defined in the Plan).
See "Risk Factors" at page 3 of this Prospectus for certain
factors that should be considered by purchasers
of the Common Stock offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is March 17, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). The reports, proxy and information
statements and other information filed by the Company with the Commission can be
inspected and copied at the Public Reference Section of the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the Commission located at 13th Floor, 7 World Trade
Center, New York, New York 10048, and at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of the material can be obtained from the
Public Reference Section of the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
also maintains a Web site at http:/ /www.sec.gov that contains reports, proxy
and information statements and other information regarding issuers of securities
which file electronically with the Commission. The Company's Common Stock is
listed on the New York Stock Exchange, Inc. (the "NYSE"). The reports, proxy and
information statements and other information can also be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement (of
which this Prospectus is a part) on Form S-3 under the Securities Act with
respect to the securities offered hereby (the "Registration Statement"). This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain portions of which have been omitted as permitted by the rules
and regulations of the Commission. Statements contained in this Prospectus as to
the content of any contract or other document are not necessarily complete, and
in each instance reference is made to the copy of the contract or other document
filed as an exhibit to the Registration Statement, each statement being
qualified in all respects by that reference and the exhibits to the Registration
Statement. For further information regarding the Company and the Common Stock
offered hereby, reference is hereby made to the Registration Statement and the
exhibits to the Registration Statement which may be obtained from the Commission
at its principal office in Washington, D.C., upon payment of fees prescribed by
the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
(Commission File No. 1-9792) are incorporated herein by reference:
1.The Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996
(including the portions of the Company's Proxy
Statement for its Annual Meeting of Stockholders held
May 14, 1997 that are incorporated by reference
therein) (File No. 1-9792).
2.The Company's Quarterly Reports on Form
10-Q for the quarters ended March 28, 1997, June 27,
1997 and September 26, 1997 (File No. 1-9792).
3.The Company's Current Reports on Form 8-K
dated August 20, 1997, December 11, 1997 and 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).
4.The description of the 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 filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Common Stock offered hereby shall be
deemed to be incorporated by reference and to be a part of the Prospectus from
the date of the filing of such documents. Any statement contained in a document
incorporated by reference herein or contained herein shall be deemed to be
modified or superseded to the extent that a statement herein or in a document
subsequently incorporated by reference herein shall modify or supersede such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company undertakes to provide, without charge to each person to
whom this Prospectus is delivered, and upon written or oral request of such
person, a copy of any and all of the information that has been incorporated by
reference in this Prospectus (not including exhibits to the information that is
incorporated by reference unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates). Such a
request is to be directed to Mr. Michael R. Murphy, Cavalier Homes, Inc.,
Highway 41 North and Cavalier Road, Addison, Alabama 35540 (telephone number:
(205) 747-0044).
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus in connection with any offer to sell or sale of the securities with
respect to which this Prospectus is issued and, if given or made, such
information or representation must not be relied upon as having been authorized.
The delivery of this Prospectus at any time does not imply that the information
herein is correct as of any time subsequent to its date or that there has been
no change in the business or affairs of the Company since such date. This
Prospectus does not constitute an offer to sell to or a solicitation of an offer
to buy from any person in any state in which any such offer or solicitation
would be unlawful.
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully by prospective purchasers of the Common
Stock offered hereby:
Uncertainties in Integrating Business Operations and Achieving Benefits
of the Merger
On December 31, 1997, Crimson Acquisition Corp., a Mississippi
corporation and a wholly owned subsidiary of the Company, merged with and into
Belmont Homes, Inc., a Mississippi corporation and also a producer of
manufactured housing ("Belmont"), and Belmont became a wholly owned subsidiary
of the Company. For a more detailed description of Belmont and this transaction,
reference is made to the Company's Current Reports on Form 8-K dated August 20,
1997, December 11, 1997 and January 15, 1998 (as amended by Form 8-K/A dated
March 16, 1998 and by Form 8-K/A dated March 17, 1998), and the Company's
Registration Statement on Form S-4 filed with the Commission on December 2,
1997 (Reg. No. 333-41319). The acquisition of Belmont will require the
consolidation of functions and the integration of departments, systems and
procedures, which will present significant management challenges. There can be
no assurance that such actions will be successfully accomplished as rapidly as
currently expected, if at all. Moreover, although the primary purpose of such
actions will be to realize direct cost savings and other operating efficiencies,
synergies and benefits, there can be no assurance of the extent to which or
whether such cost savings, efficiencies, synergies or benefits will be achieved.
Cyclical and Seasonal Nature of the Manufactured Housing Industry
The manufactured housing industry is highly cyclical and seasonal and
has experienced wide fluctuations in aggregate sales in the past, resulting in
the failure of many manufacturing concerns. The market for manufactured homes is
affected by many of the same national and regional economic and demographic
factors that affect the broader housing industry. Historically, most sectors of
the home building industry, including the manufactured housing industry, have
been affected by, among other things, changes in general economic conditions,
inflation, levels of consumer confidence, employment and income levels, housing
demand, availability of alternative forms of housing, availability of financing
and the level and stability of interest rates. The Manufactured Housing
Institute ("MHI") reported that during the period from 1983 to 1991, aggregate
domestic shipments of manufactured homes declined 42.1% from 295,079 homes to
170,713 homes. According to industry statistics, after a ten-year low in
shipments of homes in 1991, the industry recovered significantly, posting
increases in shipments of 24%, 21%, 20%, 12% and 7% for 1992, 1993, 1994, 1995
and 1996, respectively. However, industry statistics reflect a decrease in home
shipments of approximately 2.8% for 1997 when compared to 1996. The Company
attributes this decrease at least in part to the fact that the manufactured
housing industry has, over the past several years, experienced increases in both
the number of retail dealers and manufacturing capacity, which the Company
believes is currently resulting in fewer home deliveries, higher dealer
inventories, lower order backlogs and increased price competition.
Sales in the manufactured housing industry are also seasonal in nature,
with sales of homes traditionally being stronger in April through October and
weaker during the first and last part of the calendar year. While seasonality
was not a significant factor in the Company's business during the period of 1992
through 1996 when industry shipments were steadily increasing, the recent
decline in shipments may signal a return to the industry's traditional seasonal
patterns.
The duration and extent of the recent decrease in home shipments and
the tightening of competitive conditions, and their corresponding impact on the
future results of operations and financial condition of the combined companies,
is uncertain at this time. Furthermore, because of the cyclical and seasonal
nature of the manufactured housing industry and the recent increase in
competitive conditions, the Company can give no assurance that the industry is
not entering a change in its cycle or returning to traditional seasonal
patterns, either of which could have a material adverse effect on the Company's
results of operations or financial condition.
Limitations on Ability to Pursue Growth Strategy
The Company's growth strategies are to (i) expand the financing
activities of its finance subsidiary, Cavalier Acceptance Corporation ("CAC"),
(ii) develop its exclusive dealer network, (iii) expand its geographic presence
and manufacturing capacity and (iv) develop the production and distribution of
component parts for manufactured housing. Since 1991, the Company has expanded
manufacturing capacity to meet the increase in demand for its manufactured
homes. Downturns in shipments in the manufactured housing industry, or a decline
in the demand or growth in demand for the Company's homes, could have a material
adverse effect on the Company. The Company's ability to execute its strategy
will depend on a number of factors, including general economic and industry
conditions, its ability to sell to additional independent dealers, the
availability of semi-skilled workers in the areas in which the Company's
manufacturing facilities are located, the ability of CAC to be competitive and
other factors, many of which are beyond the control of the Company. There can be
no assurance that the Company's growth strategy will be successful. Further, if
the Company's growth strategy is unsuccessful, there can be no assurance that
such lack of success will not have a material adverse effect upon the Company's
results of operations or financial condition.
Uncertainties Regarding Retail Financing Activities
The Company engages in the business of making retail installment
finance loans to customers of its independent exclusive dealers through its
finance subsidiary, CAC. CAC also purchases retail installment finance loans
that have been originated by the Company's independent exclusive dealers. The
Company maintains a reserve for estimated credit losses on installment sale
contracts owned by CAC to provide for future losses based on the Company's
historical loss experience, current economic conditions and portfolio
performance. The establishment of appropriate reserves is an inherently
uncertain process, and there can be no assurance that the ultimate losses
realized by CAC will not exceed the Company's loss reserves and have a material
adverse effect on the Company's results of operations and financial condition.
There also can be no assurance that volatility or a significant change in
interest rates will not materially affect CAC's and the Company's business,
results of operations or financial condition.
The Company's strategy currently includes the continued expansion of
the financial services segment of its business. Accordingly, the Company may
incur additional debt, or other forms of financing, in order to continue to fund
such growth. The Company may also engage in other transactions, such as selling
or securitizing portions of its installment loan portfolio, that are designed to
facilitate the ability of CAC to purchase and/or originate an increased volume
of loans and to reduce the Company's exposure to interest rate fluctuations and
installment loan losses. The Company has recently entered into an agreement with
another lender that, if certain conditions are met, will allow CAC to resell
certain of its loans. Pursuant to this agreement, the Company has sold for cash
approximately $25 million of its existing loan portfolio. No assurance can be
given that additional sales will be made under this agreement, however, or that
CAC will be able to realize the expected benefits from such agreement.
Further, there can be no assurance that possible additional financing, or the
aforementioned transactions involving the Company's installment loan portfolio,
will be available on terms acceptable to the Company. If they are not, the
Company may be forced to curtail the expansion of its financial services
business and to alter its strategies.
Limitations on Availability of Consumer and Dealer Financing
Consumer financing for manufactured home purchases is generally
provided by third-party lenders. The availability and cost of financing for
manufactured home purchasers and dealers is important to the Company's sales and
is dependent on financial institutions' lending practices, the strength of the
credit markets generally, governmental policies and other conditions, all of
which are beyond the Company's control. In addition, in most states,
manufactured homes are classified legally and by taxing authorities as personal
property rather than real estate. As a result, financing for the purchase of
manufactured homes is characterized by shorter loan maturities and higher
interest rates, and in certain periods such financing is more difficult to
obtain than conventional home mortgages. Unfavorable changes in these factors
may have a material adverse effect on the Company's results of operations or
financial condition.
Potential Unavailability and Increases in Prices of Raw Materials
The Company's operating costs may be significantly affected by the
availability and pricing of certain raw materials, particularly lumber, gypsum,
particle board and insulation. Sudden increases in demand for these construction
materials caused by natural disasters or other market forces can greatly
increase the costs of materials or limit the availability of such materials.
Increases in costs cannot always be reflected immediately in prices and,
consequently, may adversely impact profitability. Further, a reduction in the
availability of raw materials also may affect a company's ability to meet or
maintain production requirements.
Contingent Repurchase and Guaranty Obligations
It is a customary practice in the manufactured housing industry to
enter into repurchase and other recourse agreements with lending institutions
which have provided wholesale floor plan financing to dealers. Substantially all
of the Company's sales are made to dealers located primarily in the southeast,
southwest and midwest regions of the United States pursuant to repurchase
agreements with lending institutions. These agreements generally provide for
repurchase of the Company's products from the lending institutions for the
balance due them in the event of repossession upon a dealer's default. The risk
of loss under repurchase agreements is mitigated by the fact that (i) sales of
manufactured homes are spread over a relatively large number of independent
dealers; (ii) the price the Company is obligated to pay under such repurchase
agreements generally declines over the period of the agreement and also declines
during such period based on predetermined amounts; and (iii) the Company has
been in many cases able to resell homes repurchased from credit sources in the
ordinary course of business without incurring significant losses. While the
Company has established a reserve for possible repurchase losses, there can be
no assurance that the Company will not incur material losses in excess of such
reserves in the future.
Competitive Nature of the Industry
The production and sale of manufactured homes is a highly competitive
industry, characterized by low barriers to entry and severe price competition.
Competition is based primarily on price, product features and quality,
reputation for service and quality, depth of field inventory, delivery
capabilities, warranty repair service, dealer promotions, merchandising and
terms of dealer and retail consumer financing. In addition, the Company competes
with other manufacturers, some of which maintain their own retail sales centers,
for quality independent dealers. In addition, manufactured homes compete with
other forms of low-cost housing, including site-built, prefabricated and modular
homes, apartments, townhouses and condominiums. The Company faces direct
competition from numerous manufacturers, many of which possess greater
financial, manufacturing, distribution and marketing resources. As a result of
these competitive conditions, the Company may not be able to sustain past levels
of sales or to continue its recent sales growth or profitability.
Reliance on Executive Officers
The success of the Company's business is highly dependent upon the
personal efforts and abilities of the current executive officers of the Company.
Specifically, the success of the Company is highly dependent on the efforts of
its Chairman of the Board, Barry B. Donnell, its President and Chief Executive
Officer, David A. Roberson, and its Chief Financial Officer and
Secretary-Treasurer, Michael R. Murphy. The loss of the services of one or more
of these individuals could have a material adverse effect upon the Company's
business. The Company does not have employment or non-competition agreements
with any of its executive officers. The Company's continued growth, including
the expansion of CAC's business, will depend upon its ability to attract and
retain additional experienced management personnel.
Dependence on Independent Dealers
The Company depends on independent dealers for substantially all retail
sales of its manufactured homes. Typically only one dealer within a given market
area distributes a particular product line of the Company. While the Company
believes that its relations with its independent dealers are generally good, the
Company's relationships with its dealers are cancelable on short notice by
either party, and there can be no assurance that the Company will be able to
maintain these relations, that these dealers will continue to sell the Company's
homes or that the Company will be able to attract and retain quality independent
dealers.
Potential Adverse Effects of Regulations
The Company is subject to a variety of federal, state and local laws
and regulations affecting the production, sale and financing of manufactured
housing. The National Manufactured Home Construction and Safety Standards Act of
1974, as amended, and regulations promulgated by the U.S. Department of Housing
and Urban Development ("HUD") thereunder, impose comprehensive national
construction standards for manufactured homes and preempt conflicting state and
local regulations. Failure to comply with such regulations could expose the
Company to a wide variety of sanctions, including closing one or more
manufacturing facilities. HUD has promulgated regulations with respect to
structural design and wind loads and energy conservation. The Company's
operations were not materially affected by the regulations; however, HUD has
these matters under continuous review and it cannot be predicted what effect (if
any) additional regulations promulgated by HUD would have on the Company or the
manufactured housing industry as a whole. In addition, certain components of
manufactured homes are subject to regulation by the U.S. Consumer Product Safety
Commission. The Company's manufactured homes are also subject to local zoning
and housing regulations. A number of states require manufactured home producers
to post bonds to ensure the satisfaction of consumer warranty claims. A number
of states have adopted procedures governing the installation of manufactured
homes. Utility connections are subject to state and local regulation.
The Company is also subject to the Magnuson-Moss Warranty Federal Trade
Commission Improvement Act, which regulates the descriptions of warranties on
products. The description and substance of the Company's warranties are also
subject to a variety of state laws and regulations.
A variety of federal laws affect the financing of manufactured homes,
including the financing activities conducted by CAC. The Consumer Credit
Protection Act (Truth-in-Lending) and Regulation Z promulgated thereunder
require substantial disclosures to be made in writing to a consumer with regard
to various aspects of the particular transaction, including the amount financed,
the annual percentage rate, the total finance charge, itemization of the amount
financed and other matters and also set forth certain substantive limitations on
permissible contract terms. The Equal Credit Opportunity Act and Regulation B
promulgated thereunder prohibit credit discrimination against any credit
applicant based on certain prohibited bases, and also require that certain
specified notices be sent to credit applicants whose applications are denied.
The Federal Trade Commission has adopted or proposed various trade regulation
rules to specify and prohibit certain unfair credit and collection practices and
also to preserve consumers' claims and defenses. The Government National
Mortgage Association ("GNMA") specifies certain credit underwriting requirements
in order for installment manufactured home sale contracts to be eligible for
inclusion in a GNMA program. HUD also has promulgated substantial disclosure and
substantive regulations and requirements in order for a manufactured home
installment sale contract to qualify for insurance under the Federal Housing
Authority ("FHA") program, and the failure to comply with such requirements and
procedures can result in loss of the FHA guaranty protection. In addition, the
financing activities of CAC may also become subject to the disclosure
requirements of the Home Mortgage Disclosure Act. In addition to the extensive
federal regulation of consumer credit matters, many states have also adopted
consumer credit protection requirements that may impose significant requirements
for consumer credit lenders. For example, many states require that a consumer
credit finance company such as CAC obtain certain regulatory licenses or permits
in order to engage in such business in that state, and many states also set
forth a number of substantive contractual limitations regarding provisions that
permissibly may be included in a consumer contract, as well as limitations upon
the permissible interest rates, fees and other charges that may be imposed upon
a consumer. Failure by the Company or CAC to comply with the requirements of
federal or state law pertaining to consumer credit could result in the
unenforceability of the particular contract for the affected consumer, civil
liability to the affected customers, criminal liability and other adverse
results.
There can be no assurance that the Company will not be adversely
affected by a failure to comply with any laws or regulations applicable to or
affecting the Company.
Compliance with Environmental Laws
The Company's operations are subject to federal, state and local laws
and regulations relating to the generation, storage, handling, emission,
transportation and discharge of materials into the environment. In addition,
third parties and governmental agencies in some cases have the power under such
laws and regulations to require remediation of environmental conditions and, in
the case of governmental agencies and entities, to impose fines and penalties.
The requirements of such laws and enforcement policies have generally become
more strict in recent years. Accordingly, the Company can give no assurance that
it will not be required to incur response costs, remediation expenses, fines,
penalties or other similar damages, expenses or liabilities, or to incur
operational shut-downs, business interruptions or similar losses, associated
with compliance with environmental laws and enforcement policies that either
individually or in the aggregate would have a material adverse effect on the
Company's results of operations or financial condition.
Litigation
The Company and its subsidiaries are engaged in various legal
proceedings that are incidental to and arise in the course of its business.
Certain of the cases filed against the Company and its subsidiaries and
companies engaged in businesses similar to it allege, among other things, breach
of contract and warranty, product liability, personal injury and fraudulent,
deceptive or collusive practices in connection with their businesses. These
kinds of suits are typical of suits that have been filed in recent years, and
they sometimes seek certification as class actions, the imposition of large
amounts of compensatory and punitive damages and trials by jury. Courts have
certified several of these types of cases as class actions recently, and many of
these types of cases have resulted in large damage awards, especially large
punitive damage awards. The outcome of many of the cases in which the Company is
involved or may in the future become involved cannot be predicted with any
degree of reliability, and the potential exists for unanticipated material
adverse judgments against the Company and its respective subsidiaries.
In addition, Belmont has been sued by three former shareholders (the
"Plaintiffs") of Belmont Homes, Inc., an Alabama corporation which originally
owned the initial Belmont manufacturing facility ("BHIA"), in the Circuit Court
of Madison County, Alabama (Case Number CV 97-2297) against BHIA, Belmont (as a
successor in interest of BHIA), certain other corporate entities (collectively,
the "Other Corporations"), the Estate of Jerold Kennedy (the former President
and Chief Executive Officer of Belmont), J. M. Page, and certain other unnamed
and unidentified individual officers, employees, agents and directors of BHIA,
Belmont and the Other Corporations, alleging breach of fiduciary duties,
misrepresentation, deceit, suppression and civil conspiracy. The Plaintiffs
state that they owned a majority of the stock in BHIA and sold such stock in
February of 1989. In addition to certain other allegations, the Plaintiffs claim
that Mr. Kennedy, along with others who allegedly conspired with him,
misrepresented and omitted certain facts to them regarding his attempts to hire
a production manager, that Belmont later hired the production manager, and that
the Plaintiffs would not have sold their stock in BHIA in the absence of these
alleged misrepresentations and omissions. In their complaint, the Plaintiffs
request an unspecified amount of compensatory and punitive damages and/or
equitable relief, including a constructive trust. The Company is aware that
these same plaintiffs have also filed a separate claim against the Estate of Mr.
Kennedy in the probate court of Franklin County, Alabama (Case Number 97-051),
alleging essentially the same facts and seeking substantial compensatory damages
and punitive damages and a constructive trust over the stock in the various
Belmont entities owned by Mr. Kennedy's estate. The Company believes that the
Plaintiffs' claims against Belmont are without merit and intends to vigorously
contest such claims. The outcome of this litigation and its effect on the
Company cannot presently be determined, however, and the possibility exists for
an adverse resolution of the litigation which could have a material adverse
effect on the results of operations and financial condition of the Company in
the quarter and year in which any such adverse resolution occurs.
Volatility of Stock Price
The Company's Common Stock is traded on the NYSE. The market price of
the Company's Common Stock may be subject to significant fluctuations in
response to variations in the Company's operating results and other factors
affecting the Company specifically and the stock market and the manufactured
housing industry generally.
THE COMPANY
General Description
The Company, through its wholly-owned subsidiaries and their respective
divisions, designs, produces and sells manufactured homes. The Company markets
its homes through approximately 900 independent non-exclusive dealers, plus
approximately 130 independent exclusive dealers, located in over 30 states with
approximately 1,000 sales centers. The Company currently operates 22
manufacturing facilities. Through its wholly-owned subsidiary, Cavalier
Acceptance Corporation ("CAC"), the Company also makes installment sale
financing available to qualifying retail customers of its exclusive dealers. The
principal executive offices of the Company are located at Highway 41 North and
Cavalier Road, Addison, Alabama 35540, and its telephone number is (205)
747-0044.
For a more detailed description of the Company, including audited and
unaudited financial information, reference is made to the Company's Annual
Report on Form 10-K for the year ended December 31, 1996, the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 28, 1997, June 27,
1997 and September 26, 1997, and the Company's Current Reports on Form 8-K dated
August 20, 1997, December 11, 1997 and January 15, 1998 (as amended by Form
8-K/A dated March 16, 1998 and by Form 8-K/A dated March 17, 1998), which are
incorporated herein by reference.
DESCRIPTION OF THE PLAN
The following, in question and answer form, is a summary description of
the provisions of the Plan. This description should be read in conjunction with,
and is qualified in its entirety by reference to, the Plan, a copy of which is
attached to this Prospectus as Appendix A. Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Plan.
Purpose
1. What is the purpose of the Plan? The purpose of the Plan is to
provide holders of shares of Common Stock with an opportunity to reinvest cash
dividends in additional shares of Common Stock and/or make optional cash
payments for additional shares of Common Stock, without payment of any brokerage
commission, service charge or other expense. Shares of Common Stock for the Plan
will be purchased directly from the Company. No shares of Common Stock will be
purchased for the Plan in the open market. The Company will receive the proceeds
from the sale of shares of Common Stock under the Plan and will use such
proceeds for general corporate purposes.
Administration
2. Who administers the Plan for Participants? The Plan Agent
administers the Plan for Participants, keeps records, sends statements of
account to Participants and performs other duties relating to the Plan. The
current Plan Agent is Chase Manhattan Bank, with certain administrative support
provided by ChaseMellon Shareholder Services, L.L.C. (collectively with Chase
Manhattan Bank, the "Plan Agent"). ChaseMellon Shareholder Services, L.L.C. also
serves as transfer agent for the shares of Common Stock. Should the Plan Agent
resign, or be asked to resign, another agent will be asked to serve.
Advantages
3. What are the options available to Stockholders? Participants in the
Plan may purchase additional shares of Common Stock by (i) having the cash
dividends on all, or part, of their shares of Common Stock automatically
reinvested, (ii) by receiving directly, as usual, their cash dividends, if, as
and when declared, on their shares of Common Stock and investing in the Plan by
making cash payments of not less than $500 per payment or more than $40,000 per
calendar quarter, or (iii) by investing both their cash dividends and such
optional cash payments.
4. What are the advantages of the Plan? No brokerage commissions, fees
or service charges are paid by Participants in connection with purchases under
the Plan; provided, however, that if shares of Common Stock are registered in
the name of a nominee or broker, such nominee or broker may charge a commission
or fee. Full investment of dividends is possible under the Plan because the Plan
permits fractional shares, as well as whole shares, of Common Stock to be
purchased and credited to the Participant's account. Regular statements of
account provide simplified record keeping. All purchases, by reinvestment of
dividends or optional cash payments, will be credited to the Participant's
Noncertificated Share account on the records of the Company maintained by the
Plan Agent.
The price of shares of Common Stock purchased under the Plan with
reinvested cash dividends and optional cash payments is 95% of the Market Price
(as defined in the Plan) for such shares on the applicable Investment Date (as
hereinafter defined).
Participation
5. Who is eligible to participate? All holders of record of shares of
Common Stock are eligible to participate in the Plan. Beneficial owners whose
shares of Common Stock are registered in names other than their own (for
instance, in the name of a broker, bank nominee or other record holder) may
participate only in the dividend reinvestment portion of the Plan by making
arrangements with their broker or bank to participate on their behalf through
the Depository Trust Company Dividend Reinvestment Service. Brokers and nominees
owning shares of Common Stock held at the Depository Trust Company may
participate in the Plan through that service. Only holders of record may
participate in the optional cash payment feature of the Plan. The Company
reserves the right to refuse to permit a broker, bank nominee or other record
holder to participate in the Plan if the terms of such participation would, in
the Company's sole judgment, result in excessive cost or burden on the Company.
In addition, the Company may refuse participation in the Plan to stockholders
residing in states whose securities laws make the offer or sale of shares of
Common Stock offered pursuant to the Plan impracticable or inadvisable.
6. How does a Stockholder join the Plan? In order to participate in the
Plan, an eligible stockholder must properly complete the Authorization Card
furnished by the Plan Agent and return it to ChaseMellon Shareholder Services,
L.L.C., P.O. Box 3339, South Hackensack, New Jersey 07606. An Authorization Card
and postage-paid envelope are enclosed with this Prospectus and additional cards
may be obtained at any time by stockholders by written or oral request to the
Plan Agent at the foregoing address. Telephone requests or general inquiries may
be made by calling (800) 851-9677.
7. What does the Authorization Card provide? The Authorization Card
provides for the purchase by stockholders of additional shares of Common Stock
through the following investment options offered under the Plan:
Full Dividend Reinvestment-Directs the Plan Agent to reinvest
cash dividends with respect to all shares of Common Stock
owned by the Participant (including whole and fractional
shares acquired under the Plan) and permits a Participant to
make optional cash payments for the purchase of additional
shares of Common Stock in accordance with the Plan.
Partial Dividend Reinvestment-Directs the Plan Agent to remit
cash dividends on the number of shares of Common Stock
specified on the Authorization Card and to invest in
additional shares of Common Stock any dividends paid on the
remaining shares of Common Stock owned by the Participant.
This investment option also permits a Participant to make
optional cash payments for the purchase of additional shares
of Common Stock in accordance with the Plan.
Optional Cash Contributions - Permits a Participant to make
optional cash payments for the purchase of additional shares
of Common Stock in accordance with the Plan.
Cash dividends on shares of Common Stock credited to the Participant's
account under the Plan are automatically reinvested to purchase additional
shares of Common Stock.
Stockholders who do not wish to participate in the Plan will receive
cash dividends in the usual manner, if, as and when declared.
8. Is partial participation possible under the Plan? A stockholder who
desires the dividends on only some full shares of Common Stock to be reinvested
under the Plan may indicate such number of shares of Common Stock on the
Authorization Card under the heading "Partial Dividend Reinvestment." Cash
dividends will continue to be paid on the remaining shares of Common Stock.
9. When may a Stockholder join the Plan? If an Authorization Card
specifying "Full Dividend Reinvestment," or "Partial Dividend Reinvestment" is
properly completed and received by the Plan Agent at least five business days
prior to the record date established for the payment of the next dividend,
reinvestment will commence with that dividend payment. The record dates for
dividend payments on the Common Stock are generally on or about the 30th day of
January, April, July and October of each year. If the Authorization Card is
received subsequent to five business days prior to the record date, reinvestment
of the dividends (or designated portion thereof) will not start until payment of
the next following dividend. If the Authorization Card is received in between
any dividend record date and the Investment Date (the date on which a dividend
is paid, which the Company anticipates to be on or about the 15th day of
February, May, August and November each year), that dividend will be paid in
cash and the stockholder's initial dividend reinvestment will begin with the
next dividend. The Investment Date is also the Dividend Payment Date.
Each Participant in the Plan may invest in additional shares of Common
Stock by making optional cash payments at any time. Participants in the Plan
have no obligation to make any optional cash payments. Optional payments may be
made at irregular intervals and the amount of each optional cash payment may
vary, but no optional payments may be less than $500 and the total optional
payments invested by each Participant may not exceed $40,000 per calendar
quarter. An optional cash payment may be made by enclosing a check or money
order with the Authorization Card when enrolling; and thereafter by forwarding a
check or money order attached to each statement of account. Checks and money
orders must be in United States dollars and should be made payable to
ChaseMellon Shareholder Services, L.L.C. No interest will be paid on optional
cash payments held by the Plan Agent pending the purchase of shares of Common
Stock. (See Questions 13, 14 and 16.)
Optional cash payments must be received by the Plan Agent no later than
five (5) business days prior to the Investment Date. Optional cash payments
received by the Plan Agent will be returned to Participants upon written request
received by the Plan Agent at least five (5) business days prior to the
Investment Date.
Costs
10. Are there any expenses to Participants in connection with purchases
under the Plan? No. Participants will incur no brokerage commissions, service or
other charges for purchases made under the Plan. Any costs of administration of
the Plan will be borne by the Company. Participants may incur certain costs in
connection with their withdrawal from the Plan if they direct the Plan Agent to
sell their shares of Common Stock.
Purchases
11. How many shares of Common Stock will be purchased for Participants?
The number of shares of Common Stock to be purchased will be determined by the
amount of the Participant's dividends and/or optional cash payments being
reinvested or made and the price of the shares of Common Stock. Each
Participant's account in the Plan will be credited with the number of shares of
Common Stock, including fractional shares computed to three (3) decimal places,
equal to the amount of the dividends and/or optional cash payments to be
reinvested or made divided by the applicable purchase price of the shares of
Common Stock.
12. How will the purchase price of shares of Common Stock be
determined? The officers of the Company will determine the price of shares of
Common Stock to be purchased. It is intended that the price of the shares of
Common Stock to be purchased will be at a 5% discount from the Market Price. The
shares of Common Stock are traded on the NYSE. The officers of the Company will
fix the reinvestment price at a discount price equal to 95% of the Market Price.
The price at which the shares of Common Stock will be purchased will be the
higher of 95% of the average of the daily high and low sale prices of the
Company's Common Stock on the NYSE on the four trading days including and
preceding the Investment Date or 95% of the average of the high and low sale
prices of the Company's Common Stock on the NYSE on the Investment Date. In the
event there is no trading in the shares of Common Stock, or if for any reason
the Company and the Plan Agent have difficulty in determining the price of
shares of Common Stock to be purchased under the Plan, the Company, on
consultation with the Plan Agent, will use such other public reports or sources
as the Company deems appropriate to determine the Market Price and the
appropriate 5% discount. If the reinvestment price involves a fraction, it will
be expressed in one-sixteenth of a point with a rounding out to the next higher
one-sixteenth of a point.
13. When will dividends and/or optional cash payments be invested?
Reinvestment of dividends and investment of optional cash payments will be made
on the date when the dividend becomes payable (the "Investment Date" or
"Dividend Payment Date"). Participants will become owners of shares of Common
Stock purchased under the Plan as of the date of purchase. In order to allow
sufficient time for processing, optional cash payments must be received by the
Plan Agent no later than five (5) business days prior to the Dividend Payment
Date. Optional cash payments received by the Plan Agent subsequent to five (5)
business days prior to a Dividend Payment Date will be applied to the purchase
of shares of Common Stock on the Investment Date falling in the next succeeding
quarter.
14. What is the Investment Date? There is only one Investment Date in
each quarter. The Investment Date will be the Dividend Payment Date. If an
Investment Date falls on a Saturday, Sunday or holiday, the Investment Date will
be the next following business day. If no dividend is paid in a quarter, the
Dividend Payment Date for purposes of optional cash investment will be deemed to
be February 15, May 15, August 15 and November 15.
15. Will certificates be issued to Participants for shares of Common
Stock purchased under the Plan? No certificates for shares of Common Stock
acquired by a Participant under the Plan will be issued, except as described in
Question 18. Shares of Common Stock purchased under the Plan, whether through
dividend reinvestment or optional cash payments, will be credited to a
Participant's Noncertificated Share account and will be shown on a Participant's
statement of account. Certificates for the shares of Common Stock purchased
pursuant to the Plan will be issued to Participants upon their written request,
except that no certificates will be issued for fractional shares of Common
Stock. A Participant requesting a certificate for all the shares of Common Stock
in the Participant's Noncertificated Share account will receive cash for the
fractional shares. (See Question 18 for how a Participant may obtain
certificates.) Cash dividends on all shares of Common Stock held in the
Participant's Noncertificated Share account under the Plan will be automatically
reinvested to purchase additional shares of Common Stock which will be reflected
in the Participant's Noncertificated Share account.
Optional Cash Payments
16. Who is eligible to make optional cash payments? Record owners of
shares of Common Stock who have executed an Authorization Card are eligible to
make optional cash payments of not less than $500 nor more than $40,000 per
calendar quarter. A stockholder may participate in the Plan exclusively by
making an optional cash payment by checking the "Optional Cash Contributions"
box on the Authorization Card. Moreover, even if the "Optional Cash
Contributions" box is checked, all dividends payable on shares of Common Stock
purchased with optional cash payments and retained in the Participant's
Noncertificated Shares account will be automatically reinvested in additional
shares of Common Stock. A beneficial owner of shares of Common Stock who wishes
to make optional cash payments must become the record owner by transferring all
or some of his or her shares into his or her own name. Checks or money orders
should be payable to ChaseMellon Shareholder Services, L.L.C. and mailed to
ChaseMellon Shareholder Services, L.L.C., P.O. Box 382009, Pittsburgh,
Pennsylvania 15250-8009. Do not send cash. Payments delivered to any other
address will not constitute valid delivery. No interest is paid on optional cash
payments. Optional cash payments must be received by the Plan Agent no later
than five (5) business days prior to the Investment Date. Participants can
request the return of any optional cash payment which had not yet been invested,
provided such request is received by the Plan Agent at least five (5) business
days prior to the Investment Date. In the event any check or money order from a
bank account is returned unpaid for any reason, the Plan Agent will consider the
request for investment of such money null and void and shall immediately remove
from the Participant's Plan account shares of Common Stock, if any, purchased
upon the prior credit of such money. The Plan Agent shall thereupon be entitled
to sell these shares to satisfy any uncollected amounts. If the net proceeds of
the sale of such shares are insufficient to satisfy the balance of such
uncollected amounts, the Plan Agent shall be entitled to sell such additional
shares from the Participant's Plan account to satisfy the uncollected balance.
Report to Participants
17. What type of reports will be sent to Participants in the Plan?
Participants will receive a quarterly statement indicating the total dividend
payment, the amount of the dividend payment reinvested, the purchase price per
share of Common Stock, the number of shares of Common Stock purchased and the
number of shares of Common Stock in the Participant's Noncertificated Share
account. These statements are a record of the cost of purchases under the Plan
and should be retained for tax purposes. In addition, each Participant will
receive copies of the Company's annual and quarterly reports to stockholders,
proxy statements and income tax information for reporting dividends. Beneficial
owners whose shares of Common Stock are registered in names other than their own
(for instance, in the name of a broker, bank nominee or other record holder)
must arrange to obtain their copies of such reports from the record holder.
Issuance
18. How may a Participant obtain certificates for shares of Common
Stock purchased under the Plan? A Participant who has purchased shares of Common
Stock under the Plan may obtain certificates for those shares of Common Stock in
the Participant's Noncertificated Share account at any time by sending a written
request to that effect to the Plan Agent. No certificates will be issued for
fractional shares of Common Stock, but the market price of any fractional shares
of Common Stock will be paid in cash to the Participant requesting a certificate
for his Noncertified Shares. This notice should be mailed to ChaseMellon
Shareholder Services, L.L.C., P.O. Box 3338, South Hackensack, New Jersey 07606.
The Company, however, reserves the right at any time to issue certificates to
Participants for any shares of Common Stock in their Noncertificated Share
accounts. (See Questions 19 and 21 for information on termination of
participation).
Modification or Termination by a Participant
19. How does a Participant change or terminate participation in the
Plan? A Participant may change participation from partial to total dividend
reinvestment, from total to partial dividend reinvestment, or may simply change
the number of shares of Common Stock which are enrolled in the Plan by executing
and delivering a new Authorization Card to ChaseMellon Shareholders Services,
L.L.C. Any change concerning the reinvestment of dividends must be received by
the Plan Agent not later than five (5) business days prior to the record date
for a dividend in order for the change to become effective with that dividend.
A Participant may terminate participation in the Plan by notifying the
Plan Agent in writing at least five (5) business days prior to the record date
for determining the holders entitled to receive the next dividend. Notices will
be effective only upon receipt by the Plan Agent. Notices to change or
discontinue dividend reinvestment received by the Plan Agent at least five (5)
business days prior to any record date for a dividend payment will be effective
as of that date. In order to re-enter the Plan after termination, a stockholder
must complete a new Authorization Card.
20. Can the shares of Common Stock held in the Plan be sold through the
Plan Agent? A Participant can instruct the Plan Agent to sell any or all of the
whole shares of Common Stock held in the Plan. The written notification to the
Plan Agent should include the number of shares of Common Stock that are to be
sold. The Plan Agent will make the sale as soon as practicable following receipt
of a Participant's request through independent securities brokers selected by
the Company or the Plan Agent in its sole discretion. A check for the proceeds
of such sale, less brokerage commission and transfer taxes (if any), will
usually be sent by the Plan Agent on the settlement date, which will be three
(3) business days from the date of sale. No Participant shall have the authority
or power to direct the date or sales price at which shares of Common Stock may
be sold. Requests must indicate the minimum number of shares to be sold and not
the dollar amount to be attained. Any such request that does not clearly
indicate the number of shares of Common Stock to be sold will be returned to the
Participant with no action taken. A withdrawal/termination form is provided on
the reverse side of the account statement for this purpose. This notice should
be addressed to ChaseMellon Shareholder Services, L.L.C., P.O. Box 3338, South
Hackensack, New Jersey 07606.
21. What happens to the shares of Common Stock held in the
Noncertificated Share account when a Participant terminates participation in the
Plan? A certificate for the shares of Common Stock held in the account will be
issued to the Participant upon the Participant's written request or upon a
Participant's termination of participation in the Plan. No fractional shares
will be issued. (See Question 15 for information on share certificates and
Question 18 for information on the cash payment for fractional shares in the
account.)
Other Information
22. What happens if the Company issues a stock dividend, declares a
stock split or has a rights offering? Any shares of Common Stock issued in a
stock dividend or stock split with respect to a Participant's shares of Common
Stock which are subject to the Plan will be added to the Participant's
Noncertificated Share account. If the Company has a rights offering in which
separately tradable and exercisable rights are issued to registered holders of
Common Stock, the rights attributable to whole shares of Common Stock in a
Participant's Plan account will be transferred to the Participant as promptly as
practicable after the rights are issued. No partial rights will be issued with
respect to fractional shares of Common Stock in the Participant's account.
23. How will Shares in a Participant's Noncertificated Share account be
voted at a meeting of Stockholders? All of a Participant's shares of Common
Stock, both Certificated and Noncertificated, may be voted by the Participant.
For any meeting of stockholders, the Participant will be sent proxy material for
that meeting covering all of the shares of Common Stock that the Participant
owns on the record date for the meeting. The Participant may vote all of
Participant's shares of Common Stock in person or by proxy.
24. What are the Federal income tax consequences of participation in
the Plan? Under the current provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), the purchase of shares of Common Stock under the Plan will
generally result in the Federal income tax consequences to U.S. Participants in
the Plan set forth in (a) through (d) below. The term "U.S. Participants"
denotes: (i) citizens or residents of the United States; (ii) corporations,
partnerships, or other entities created or organized under the laws of the
United States or any political subdivision thereof or therein; (iii) estates the
income of which is subject to United States federal income tax regardless of its
source; (iv) trusts the administration of which is subject to the primary
supervision of a court within the United States and with respect to which one or
more United States fiduciaries have the authority to control all substantive
decisions, or (v) any other person defined as a United States person under the
Code.
a. A distribution on the shares of Common Stock will be treated for
Federal income tax purposes as a dividend distribution received by the
Participant notwithstanding that it is used to purchase additional shares of
Common Stock pursuant to the Plan. The full amount of cash distributions
reinvested under the Plan, plus the 5% purchase discount from the applicable
Market Price, represents dividend distributions to Participants. As in the case
of cash dividend distributions, the full amount will be taxable ordinary income
to the extent of the Company's current and accumulated earnings and profits, and
the excess over the amount of such earnings and profits, if any, will be a
return of capital which reduces the basis of the Participant's shares of stock
in the Company or results in gain to the extent it exceeds such stock basis.
b. A Participant's tax basis in additional shares of Common Stock
acquired with cash distributions reinvested under the Plan will be equal to the
full amount that is treated as a dividend distribution for Federal income tax
purposes. The Participant's holding period for such shares of Common Stock will
commence on the day after the Investment Date.
c. For optional cash payments, Participants in the Plan will be treated
as having received a cash dividend on the Investment Date equal to the excess,
if any, of the Market Price of such shares on the Investment Date over the
amount of the optional cash payment. The tax basis of the shares will be equal
to the sum of the amount of the optional cash payment plus the amount included
in income.
d. A Participant will not realize any taxable income upon the receipt
of a certificate for full shares of Common Stock credited to the Participant's
account either upon the Participant's request for certificates or upon
withdrawal from, or termination of, the Plan. A Participant will recognize gain
or loss when a fractional share interest is liquidated or when the Participant
sells or exchanges shares of Common Stock received from the Plan. Such gain or
loss will equal the difference between the amount which the Participant receives
for such fractional share interest or such shares and the tax basis therefor.
In the case of Participants whose distributions are subject to
withholding of Federal income tax, distributions will be reinvested less the
amount of tax required to be withheld.
25. What provision is made for foreign participants subject to income
tax withholding or other Participants subject to back-up withholding? In the
case of any Participants who are not U.S. Participants ("Foreign Participants")
who elect to have their distributions reinvested and whose distributions are
subject to United States income tax withholding; and other Participants who
elect to have the distributions reinvested and who are subject to "backup"
withholding under Section 3406(a)(1) of the Code, the Plan Agent will invest in
shares of Common Stock in an amount equal to the distributions of such
Participants less the amount of tax required to be withheld. The quarterly
statements confirming purchases made to such Participants will indicate the net
payment reinvested. The withholding rate for Foreign Participants is 30%, except
where modified by treaty.
Under Section 3406(a)(1) of the Code, the Company is currently required
to withhold for United States income tax purposes 31% of all distribution
payments to a stockholder if (i) such stockholder has failed to furnish to the
Company his taxpayer identification number ("TIN"), which for an individual is
his social security number, (ii) the Internal Revenue Service (the "Service")
has notified the Company that the TIN furnished by the stockholder is incorrect,
(iii) the Service notifies the Company that back-up withholding should be
commenced because the stockholder has failed to properly report distributions or
(iv) the stockholder has failed to certify, under penalties of perjury, that he
is not subject to back-up withholding. Stockholders have previously been
requested by the Company or their broker to submit all information and
certifications required in order to exempt them from back-up withholding if such
exemption is available to them.
Optional cash payments received from foreign participants must be in
United States dollars and will be invested in the same way as payments from
other Participants.
The above is intended only as a general discussion of the current
Federal income tax consequences of participation in the Plan. Participants
should consult their own tax advisors regarding the Federal, state and local and
foreign income tax consequences (including the effects of any changes in law) of
their individual participation in the Plan.
26. What are the federal income tax consequences of participation in
the Plan by an IRA, Keogh Plan, 401(k) Plan, Simplified Pension Account or any
corporate employer-sponsored retirement plan? The tax consequences of
participation in the Plan by retirement plans differ from those outlined above
for individuals. Since the law and regulations regarding the Federal income tax
consequences of retirement plan participation are complex and subject to change,
those considering such participation should consult with their own retirement
plan trustees, custodians or tax advisors for specific information.
27. What is the responsibility of the Company under the Plan? Neither
the Company nor the Plan Agent will be liable for any act done in good faith or
for any good faith omission to act, including, without limitation, any claim of
liability arising out of failure to terminate participation in the Plan upon a
Participant's death. In addition, no stockholder, director, officer, employee,
representative or agent of the Company shall be personally liable for the
satisfaction of the Company's obligations under the Plan and a Participant shall
look solely to the assets of the Company for satisfaction of any claims
thereunder.
Participants should recognize that neither the Company nor the Plan
Agent can provide any assurance of a profit or protection against loss on any
shares of Common Stock purchased under the Plan.
28. May the Plan by changed or discontinued? The Company reserves the
right to suspend or terminate the Plan at any time. The Plan may also be
terminated once the Company has issued and sold an aggregate of 500,000 shares
of Common Stock, which is the number of shares that is set forth in the Plan
that may be issued and sold under the Plan, subject to certain adjustments. The
Company also reserves the right to make modifications to the Plan and in
particular reserves the right to refuse optional cash payments from any
stockholder who, in the sole discretion of the Company, is attempting to
circumvent the intent of the Plan by making excessive optional cash payments
through multiple stockholder accounts. Participants will be notified of any
suspension, termination or modification of the Plan.
The Company could lower or eliminate the discount without prior notice
to Participants if for any reason the Company believes that Participants were
engaging in positioning and other transactions with the intent to purchase
shares of Common Stock under the Plan and then immediately reselling such shares
of Common Stock in order to capture the discount. Any Participants who engage in
such transactions may be deemed to be underwriters within the meaning of Section
2(11) of the Securities Act of 1933.
29. Who answers a Participant's questions or supplies information? Any
inquiries or correspondence about the Plan should be addressed as follows:
ChaseMellon Shareholder Services, L.L.C., Investment Services, P.O. Box 3338,
South Hackensack, New Jersey 07606. Telephone inquires to the Plan Agent should
be made to (800) 851-9677.
30. Will the Plan Agent hold certificated shares? The Plan provides a
share deposit feature to eliminate the need for Participants to hold physical
Common Stock certificates. If a Participant currently holds physical Common
Stock certificates and would like to combine these shares with his Plan shares
held in book-entry, the Participant should complete the tear-off section of his
account statement and complete the portion designated for share deposit. The
certificates need not be endorsed. The Participant should ensure that his Common
Stock certificates are sent by registered/ insured mail or by some other similar
means as the Participant bears the risk of loss in transit. Participants should
be aware that dividends on the shares so deposited will be automatically
reinvested. Certificates should be sent to ChaseMellon Shareholder Services,
L.L.C., P.O. Box 3338, South Hackensack, New Jersey 07606.
USE OF PROCEEDS
The net proceeds from the sale, from time to time, of the shares of
Common Stock by the Company under the Plan will be used by the Company for
general corporate purposes.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Bradley Arant Rose & White LLP, Birmingham,
Alabama.
EXPERTS
The financial statements and the related financial statement schedule
of the Company incorporated in this Prospectus by reference from the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, and the
financial statements of the Company incorporated by reference in this Prospectus
by reference from the Company's Current Report on Form 8-K filed with the
Securities and Exchange Commission on January 15, 1998, as amended by Form 8-K/A
filed on March 16, 1998 and by Form 8-K/A filed on March 17, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides for the
indemnification of directors and officers of corporations organized thereunder
in certain circumstances. In addition, Section 145 grants to each such
corporation the power to indemnify its directors and officers against liability
for certain of their acts.
The Amended and Restated Certificate of Incorporation, as amended, and
the Amended and Restated By-laws, as amended, of the Company provide for
indemnification of directors and officers of the Company to the fullest extent
permitted by the law of the State of Delaware against liability for certain of
their acts. Directors and officers liability insurance has also been obtained by
the Company, the effect of which is to indemnify the directors and officers of
the Company against certain damages and expenses because of certain claims made
against them caused by their negligent act, error or omission.
Insofar as indemnification for liabilities under the Securities Act of
1933, as amended, may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
<PAGE>
APPENDIX A
CAVALIER HOMES, INC.
Amended and Restated Dividend Reinvestment and Stock Purchase Plan
1. Definitions
The following terms when used herein shall have the following
definitions:
"Authorization Card" means such authorization form as the Plan Agent
may from time to time or upon request furnish Stockholders and which shall be
returned to the Plan Agent to indicate their election to participate in
specified portions of the Plan.
"Certificated Shares" means shares of Stock which are evidenced by
physical certificates.
"Company" means Cavalier Homes, Inc.
"Dividend Payment Date" means the Investment Date.
"Investment Date" means each date on which a dividend is paid on the
shares of Stock, which the Company anticipates to be on or about the 15th day of
February, May, August and November each year. If an Investment Date falls on a
Saturday, Sunday or holiday, the Investment Date will be the next following
business day. If no dividend is paid in a quarter, the Dividend Payment Date for
purposes of optional cash investment will be deemed to be February 15, May 15,
August 15 and November 15.
"Market Price" as of any day means the higher of the average of the
daily high and low sale prices of the Company's Stock on the NYSE on the four
Trading Days including and preceding the Investment Date or the average of the
high and low sale prices of the Company's Stock on the NYSE on the Investment
Date.
"Noncertificated Shares" means shares of Stock which are held by the
Plan Agent in an account for each Participant and for which no physical
certificates are issued.
"NYSE" means the New York Stock Exchange, Inc.
"Participant" means any Stockholder who has returned a properly
completed Authorization Card to the Plan Agent indicating election to
participate in any portion of the Plan and who has been enrolled in that portion
of the Plan by the Plan Agent.
"Plan" means this Amended and Restated Dividend Reinvestment and Stock
Purchase Plan.
"Plan Agent" means any bank or trust company as from time to time may
be appointed by the Company as agent to administer the Plan. Initially, the Plan
Agent shall be Chase Manhattan Bank, with certain administrative support
provided by ChaseMellon Shareholder Services, L.L.C. (collectively with Chase
Manhattan Bank, the "Plan Agent") and thereafter shall be the Company or any
successor institution appointed by the Company in substitution therefor.
"Stockholder" means any holder of shares of Stock.
"Stock" means the common stock, par value $0.10 per share, of the
Company.
"Trading Day" means a day on which the NYSE is open for trading.
2. Purpose
The purpose of this Plan is to provide Stockholders with a convenient
and economical method for having all or part of their dividends automatically
reinvested in additional shares of Stock and making voluntary cash investments
in shares of Stock, in either case without payment of any brokerage commission
or service charge. Because shares of Stock will be purchased for the Plan
directly from the Company by the Plan Agent, the Plan will assist the Company in
raising funds for general business purposes. The Plan does not reflect a change
in the Company's dividend policy or a guarantee of future dividends, which will
continue to be determined by the Board of Directors based on the Company's
results of operations, financial condition, regulatory requirements and other
factors.
3. Eligibility for Participation
All Stockholders of record are automatically eligible to participate in
the Plan and may do so by completing and returning to the Plan Agent the
Authorization Card furnished to them by the Plan Agent. Beneficial owners of
shares of Stock which are registered in names other than their own (e.g., in the
name of a broker, bank nominee or other record holder), who want to participate,
may participate only in the dividend reinvestment portion of the Plan by making
arrangements with their broker or bank to participate on their behalf through
the Depository Trust Company Dividend Reinvestment Service. Only record holders
may participate in the optional cash payment feature of the Plan. The Company
reserves the right to refuse to permit a broker, bank nominee or other record
holder to participate in the Plan if the terms of such participation would, in
the Company's sole judgment, result in excessive cost or burden on the Company.
4. Administration of the Plan
The Plan Agent shall administer the Plan and will maintain records and
perform such other duties as may be required. In addition, the Plan Agent will
send each Participant (a) after each dividend reinvestment, a statement which
will indicate the amount of the dividend, the purchase price per share of Stock,
the number of shares of Stock purchased and the total number of Noncertificated
Shares owned by the Participant; (b) upon investment of optional cash payments,
a statement indicating purchase price, number of shares of Stock purchased, and
the total number of Certificated and Noncertificated Shares owned by the
Participant; and (c) annual and quarterly reports to Stockholders, proxy
statements and income tax information for reporting dividends earned. Shares of
Stock purchased by a Participant through reinvested dividends or optional cash
payments will be credited to the Participant's Noncertificated Share Account.
Upon request of a Participant, the Plan Agent will furnish certificates for
shares of Stock in the Participant's Noncertificated Share Account. No
certificates will be issued for fractional shares of Stock, but the market price
thereof will be paid in cash to a requesting Stockholder who is terminating
participation in the Plan. The Plan Agent will have the responsibility for
furnishing certificates for shares of Stock upon request or termination of
participation by the Stockholder.
5. Reinvestment of Dividends
Stockholders may join the Plan at any time. Stockholders may elect to
have dividends on all or part of their shares of Stock automatically reinvested
by completing the Authorization Card provided by the Plan Agent to that effect
and returning it to the Plan Agent. If the Authorization Card is received by the
Plan Agent five (5) business days prior to the record date for the payment of
the next dividend, reinvestment will begin with that dividend. The record dates
for dividend payments on shares of the Stock are generally on or about January
30, April 30, July 30 and October 30. If the Authorization Card is received
subsequent to five (5) business days prior to the record date, that dividend
will be paid in cash and the Stockholder's initial dividend reinvestment will
begin with the next dividend. The purchase price per share for shares of Stock
purchased for the Plan with reinvested dividends and/or optional cash payments
shall be 95% of the Market Price. Cash dividends on shares of Stock credited to
the Participant's account will be automatically reinvested to purchase
additional shares of Stock.
6. Optional Cash Payments
Each Participant in the Plan may invest in additional shares of Common
Stock by making optional cash payments at any time. Participants in the Plan
have no obligation to make any optional cash payments. Optional payments may be
made at irregular intervals and the amount of each optional cash payment may
vary but no optional payments may be less than $500 and the total optional
payments invested by each Participant may not exceed $40,000 per calendar
quarter. An optional cash payment may be made by enclosing a check or money
order with the Authorization Card when enrolling; and thereafter by forwarding a
check or money order attached to each statement of account. Checks and money
orders must be in United States dollars and should be made payable to the Plan
Agent. No interest will be paid on optional cash payments held by the Plan Agent
pending the purchase of shares of Common Stock.
Optional cash payments must be received by the Plan Agent no later than
five (5) business days prior to the Investment Date. Optional cash payments
received by the Plan Agent will be returned to Participants upon written request
received by the Plan Agent at least five (5) business days prior to the
Investment Date. The purchase price per share for shares of Stock purchased for
the Plan with optional cash payments shall be 95% of the Market Price.
7. Calculation of Shares of Stock Purchased
The number of shares of Stock purchased shall be determined by dividing
the amount of the dividends reinvested and/or optional cash payments made by the
purchase price per share of Stock determined in accordance with Sections 5 and 6
above. Each Participant's account will be credited on each Investment Date with
that number of shares of Stock, plus fractional share interests computed to at
least three (3) decimal points, equal to the total amount of the cash (dividends
and/or optional cash payments) to be invested on behalf of such Participant on
such date divided by the purchase price per share of Stock for that date.
8. Costs
There are no brokerage fees on purchases. All costs of administration
of the Plan are paid by the Company, except that Participants may incur certain
costs in connection with their withdrawal from the Plan if they direct the Plan
Agent to sell their shares of Stock.
9. Shares of Stock Subject to the Plan
(a)The number of shares of Stock which may be issued and sold by the
Company under the Plan shall not exceed 500,000 shares of stock, subject to
adjustment pursuant to the provisions of paragraph (b) below. Such shares of
Stock may be either authorized and unissued shares or shares issued and
thereafter acquired by the Company and such amount of shares shall be and is
hereby reserved for issuance pursuant to this Plan. The Company shall at all
times reserve a sufficient number of shares of Stock to meet the requirements of
the Plan. Shares of Stock will not be purchased for the Plan in the open market.
(b) In the event that the outstanding shares of Stock are increased or
decreased after the date hereof by reason of reorganization, recapitalization,
reclassification, combination of shares, stock split or stock dividend, then the
aggregate number of shares of Stock which may be issued and sold hereunder, set
forth in paragraph (a) above, shall be adjusted appropriately. Any adjustments
and the manner of application of the foregoing sentence shall be determined
solely by the Company.
10. Modification or Termination of Participation
Participants may modify their participation in the Plan by notifying
the Plan Agent in writing five (5) business days prior to the record date for
determining the holders of Stock entitled to receive the next dividend that they
wish to reinvest dividends on an increased or decreased number of shares of
Stock specified in such notice. Participants may terminate participation in the
Plan any time by notifying the Plan Agent in writing five (5) business days
prior to the record date for determining the holders of Stock entitled to
receive the next dividend of the Participant's intent to terminate participation
in the Plan. Any notice is effective only upon receipt. If a Participant's
notice of termination or modification is received by the Plan Agent at least
five (5) business days prior to the record date for determining the Stockholders
entitled to receive the next dividend payment, the Plan Agent will modify or
terminate the reinvestment of the Participant's dividends under the Plan as of
that Investment Date. If the notice of termination or modification is received
by the Plan Agent subsequent to five (5) business days prior to the record date
for the next dividend, that dividend will be reinvested in shares of Stock for
the Participant in accordance with the Participant's previous instructions, and
the request for termination or modification will be processed promptly
thereafter. Any optional cash payments sent to the Plan Agent prior to receipt
of the notice of termination or modification will also be invested in shares of
Stock on the next Investment Date unless the Participant requests in writing to
the Plan Agent the return of all or a portion of such optional cash payments at
least five (5) business days prior to the Investment Date. In order to re-enter
the Plan after termination, the Stockholder must complete a new Authorization
Card.
11. Sale of Plan Shares
A Participant can instruct the Plan Agent to sell any or all of the
whole shares of Stock held in the Plan. The written notification to the Plan
Agent should include the number of Shares that are to be sold. The Plan Agent
will make the sale as soon as practicable following receipt of the written
notification and a check for the proceeds less brokerage commission and transfer
taxes (if any) will usually be sent by the Plan Agent to the Participant on the
settlement date, which will be three (3) business days from the date of sale. No
Participant shall have the authority or power to direct the date or sales price
at which shares of Stock may be sold. Requests must indicate the minimum number
of shares of Stock to be sold and not the dollar amount to be attained. Any such
request that does not clearly indicate the number of shares of Stock will be
returned to the Participant with no action taken. A withdrawal/termination form
is provided on the reverse side of the account statement for this purpose. This
notice should be addressed as indicated on the account statement. Shares of
Stock held in a Participant's account may not be pledged. In order to pledge
such shares, a Participant must request certificates for such shares of Stock.
12. Certificates for Purchased Shares of Stock
No certificates for shares of Stock acquired for a Participant under
the Plan will be issued. Stock purchased under the Plan will be credited to a
Participant's Noncertificated Share account and will be held in the name of the
Plan Agent or its nominee. A Participant who wishes to obtain certificates for
those shares of Stock that he has purchased under the Plan may do so by
notifying the Plan Agent in writing to that effect. No certificate will be
issued for fractional shares of Stock, but the market price of any fractional
shares of Stock will be paid in cash to the Participant requesting a certificate
for all his Noncertificated Shares.
13. Stock Splits, Stock Dividends and Rights Offerings
Shares of Stock issued in a stock dividend or stock split with respect
to a Participant's shares of Stock which are subject to the Plan will be
credited to a Participant's Noncertificated Share account. If the Company has a
rights offering in which separately tradable and exercisable rights are issued
to registered holders of Stock, the rights attributable to whole shares of Stock
held in a Participant's Plan account will be transferred to the Participant as
promptly as practicable after the rights are issued. No partial rights will be
issued with respect to fractional shares of Stock in the Participant's account.
14. Voting
All shares of Stock credited to a Participant's Noncertificated Share
account under the Plan may be voted by the Participant. A Participant will
receive a proxy to vote the number of shares of Stock held in his Plan account.
If the Participant returns an executed proxy, it will be voted with respect to
all of Participant's shares of Stock (including any fractional shares of Stock),
or the Participant may vote all of the shares of Stock in person at the meeting.
15. Liability
Neither the Company, nor its duly appointed Plan Agent (if any) in
administering the Plan, shall be liable for any act or failure to act taken in
good faith, including, without limitation, any claim of liability arising out of
failure to terminate a Participant's participation in the Plan upon the
Participant's death. In addition, no Stockholder, director, officer, employee,
representative or agent of the Company shall be personally liable for the
satisfaction of the Company's obligations under this Plan and a Participant
shall look solely to the assets of the Company for satisfaction of any claims
hereunder.
16. Termination, Suspension or Modification
The Company reserves the right to modify, suspend or terminate the Plan
at any time and from time to time, including during the period between the
record date for a dividend payment and the related Investment Date, and in
particular, reserves the right to refuse optional cash payments from any
Stockholder who, in the sole discretion of the Company, is attempting to
circumvent the interest of the Plan by making excessive optional cash payments
through multiple Stockholder accounts.
The Company could lower or eliminate the discount without prior notice
to Participants if for any reason the Company believes that Participants were
engaging in positioning and other transactions with the intent to purchase
shares of Common Stock under the Plan and then immediately reselling such shares
of Common Stock in order to capture the discount. Any Participants who engage in
such transactions may be deemed to be underwriters within the meaning of Section
2(11) of the Securities Act of 1933.
17. Compliance with Applicable Law and Regulations
The Company's obligation to offer, issue or sell shares of Stock
hereunder shall be subject to the Company's obtaining any necessary approval,
authorization and consent from any regulatory authorities having jurisdiction
over the issuance and sale of the shares of Stock. The Company may elect not to
offer or sell its shares of Stock hereunder to Stockholders residing in any
jurisdiction where, in the sole discretion of the Company, the burden or expense
of compliance with applicable blue sky or securities laws make that offer or
sale impracticable or inadvisable.
18. Participants Subject to Back-Up Withholding
In the case of both foreign participants who elect to have their
dividends reinvested and whose dividends are subject to United States income tax
withholding and other Participants who elect to have their dividends reinvested
and who are subject to "backup" withholding under Section 3406(a)(1) of the
Internal Revenue Code of 1986, as amended, the Plan Agent shall invest in shares
of Stock in an amount equal to the dividends of such Participants less the
amount of tax required to be withheld.
19. Safekeeping
At a Participant's request, the Plan Agent will receive and hold any
Certificated Shares now held by or for such Participant. A Participant may send
such Certificated Shares to the Plan Agent for credit to such Participant's
account in the Plan. These Certificated Shares will be added to the shares of
Stock in such Participant's account and will appear in subsequent statements in
combination with a Participant's previous Plan shares of Stock and dividends. If
a Participant is interested in having the Plan Agent hold shares of Stock now in
such Participant's possession, write for further information to:
ChaseMellon Shareholder Services, L.L.C.
P.O. Box 3338
South Hackensack, New Jersey 07606
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained herein and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make an offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
not been any change in the facts set forth in this Prospectus or in the affairs
of the Company since the date hereof.
-------------
TABLE OF CONTENTS
Available Information..........................................................2
Incorporation of Certain Documents by
Reference.....................................................................2
Risk Factors...................................................................3
The Company....................................................................8
Description of the Plan........................................................8
Use of Proceeds...............................................................15
Legal Matters.................................................................15
Experts.......................................................................15
Indemnification of Directors and
Officers....................................................................15
Amended and Restated Dividend Reinvestment
and Stock Purchase Plan....................................................A-1
------------
300,000 Shares
Cavalier Homes, Inc.
Common Stock
Offered by Cavalier Homes, Inc.
to its Stockholders
Solely in Connection with its
Amended and Restated
Dividend Reinvestment and
Stock Purchase Plan
------------------
PROSPECTUS
------------------
March 17, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses, all of which will
be borne by the Company, in connection with the distribution of the securities
being registered. All amounts shown are estimates except the Commission
registration fee.
Item Amount
SEC Registration fee $ 979.70
Printing expenses 5,000.00
Legal fees and expenses 10,000.00
Accounting fees and expenses 2,000.00
Miscellaneous 1,000.00
-------------
Total $ 18,979.70
=============
Item 15. Indemnification of Directors and Officers
The Amended and Restated By-laws of Registrant provide that Registrant
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 reasonably believed to be in or not opposed to the best interests
of Registrant and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The By-laws give the
Registrant the power in its discretion to indemnify any employee or agent of the
Registrant in the same manner as the Registrant is required to indemnify its
officers and directors pursuant to the foregoing sentence. The By-laws provide
that the Registrant shall indemnify any director or officer of the Registrant
who is a party to any derivative action on behalf of the Registrant 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 reasonably believed to be in or not opposed to the best interest of
Registrant, and except that no indemnification shall be made in respect of any
claim as to which such person shall have been judged to be liable to Registrant
unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought shall determine that such person is
fairly and reasonably entitled to indemnity. The By-laws give the Registrant the
power in its discretion to indemnify any employee or agent of Registrant in the
same manner as the Registrant is required to indemnify its officers and
directors pursuant to the foregoing sentence. The By-laws further provide that
the Registrant 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 shall 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 Registrant's Amended and Restated Certificate of Incorporation, as
amended, provides that a director of the corporation shall 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 Registrant to purchase
insurance on behalf of its directors and officers against liabilities arising
out of their positions with the Registrant, whether or not such liabilities
would be within the above indemnification provisions. Pursuant to this authority
and as authorized by its By-laws, the Registrant maintains such insurance on
behalf of its directors and officers.
Item 16. Exhibits
The following is a list of all exhibits filed as a part of this
Registration Statement, including those which are incorporated herein by
reference.
Item Description
*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, L. L. C., 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.
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 Power of Attorney.
* Incorporated by reference.
- - ---------------------------------
Item 17. 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 of 1933;
(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;
(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 shall 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 of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of 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 of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Addison, State of Alabama, on this 17th day of March,
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 of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ DAVID A. ROBERSON Director and March 17, 1998
- - ---------------------------
David A. Roberson Principal Executive Officer
/s/ MICHAEL R. MURPHY Director and Principal March 17, 1998
- - ----------------------------
Michael R. Murphy Financial and Accounting Officer
/s/ BARRY B. DONNELL Chairman of the Board March 17, 1998
- - ----------------------------
Barry B. Donnell and Director
/s/ THOMAS A. BROUGHTON, III Director March 17, 1998
- - ----------------------------
Thomas A. Broughton, III
/s/ JOHN W LOWE Director March 17, 1998
- - ----------------------------
John W Lowe
/s/ LEE ROY JORDAN Director March 17, 1998
- - ----------------------------
Lee Roy Jordan
/s/ GERALD W. MOORE Director March 17, 1998
- - ----------------------------
Gerald W. Moore
/s/ A. DOUGLAS JUMPER, SR. Director March 17, 1998
- - ----------------------------
A. Douglas Jumper, Sr.
/s/ MIKE KENNEDY Director March 17, 1998
- - ---------------------------
Mike Kennedy
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number
- - ------- Description
*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, L. L. C., 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 C avalier
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.
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 Power of Attorney.
* Incorporated by reference.
- - --------------------------------
<PAGE>
EXHIBIT 5
March 17, 1998
Board of Directors
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-3 (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, relating to the
registration by the Company of up to 300,000 shares of common stock, par value
$0.10 per share (the "Common Stock"), and 300,000 rights to purchase Common
Stock (the "Rights") associated therewith, in connection with the provisions of
the Company's Amended and Restated Dividend Reinvestment and Stock Purchase
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.
Upon the basis of the foregoing, we are of the opinion that
the shares of the Common Stock of the Company and the Rights referred to above
to be offered under the Registration Statement have been duly authorized and,
when issued and paid for, will be validly issued, fully paid and nonassessable.
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>
EXHIBIT 23(b)
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
Cavalier Homes, Inc. on Form S-3 of our report dated February 28, 1997,
appearing in the Annual Report on Form 10-K of Cavalier Homes, Inc. for the year
ended December 31, 1996, and 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 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, and to the
reference to us under the heading "Experts" in the Prospectus, which is a part
of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Birmingham, Alabama
March 17, 1998
<PAGE>
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 true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement of Cavalier Homes, Inc. (the "Company") on Form S-3 relating to the
registration of additional shares of the Company proposed to be issued pursuant
to the Company's Amended and Restated Dividend Reinvestment and Stock Purchase
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
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 17th day of March, 1998.
/s/ DAVID A. ROBERSON
---------------------
David A. Roberson
<PAGE>
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 true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement of Cavalier Homes, Inc. (the "Company") on Form S-3 relating to the
registration of additional shares of the Company proposed to be issued pursuant
to the Company's Amended and Restated Dividend Reinvestment and Stock Purchase
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
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 17th day of March, 1998.
/s/ MICHAEL R. MURPHY
---------------------
Michael R. Murphy
<PAGE>
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 true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement of Cavalier Homes, Inc. (the "Company") on Form S-3 relating to the
registration of additional shares of the Company proposed to be issued pursuant
to the Company's Amended and Restated Dividend Reinvestment and Stock Purchase
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
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 17th day of March, 1998.
/s/ BARRY B. DONNELL
--------------------
Barry B. Donnell
<PAGE>
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 true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement of Cavalier Homes, Inc. (the "Company") on Form S-3 relating to the
registration of additional shares of the Company proposed to be issued pursuant
to the Company's Amended and Restated Dividend Reinvestment and Stock Purchase
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
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 17th day of March, 1998.
/s/ THOMAS A. BROUGHTON, III
----------------------------
Thomas A. Broughton, III
<PAGE>
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 true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement of Cavalier Homes, Inc. (the "Company") on Form S-3 relating to the
registration of additional shares of the Company proposed to be issued pursuant
to the Company's Amended and Restated Dividend Reinvestment and Stock Purchase
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
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 17th day of March, 1998.
/s/ JOHN W LOWE
---------------
John W Lowe
<PAGE>
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 true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement of Cavalier Homes, Inc. (the "Company") on Form S-3 relating to the
registration of additional shares of the Company proposed to be issued pursuant
to the Company's Amended and Restated Dividend Reinvestment and Stock Purchase
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
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 17th day of March, 1998.
/s/ LEE ROY JORDAN
------------------
Lee Roy Jordan
<PAGE>
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 true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement of Cavalier Homes, Inc. (the "Company") on Form S-3 relating to the
registration of additional shares of the Company proposed to be issued pursuant
to the Company's Amended and Restated Dividend Reinvestment and Stock Purchase
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
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 17th day of March, 1998.
/s/ GERALD W. MOORE
-------------------
Gerald W. Moore
<PAGE>
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 true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement of Cavalier Homes, Inc. (the "Company") on Form S-3 relating to the
registration of additional shares of the Company proposed to be issued pursuant
to the Company's Amended and Restated Dividend Reinvestment and Stock Purchase
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
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 17th day of March, 1998.
/s/ A. DOUGLAS JUMPER, SR.
--------------------------
A. Douglas Jumper, Sr.
<PAGE>
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 true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement of Cavalier Homes, Inc. (the "Company") on Form S-3 relating to the
registration of additional shares of the Company proposed to be issued pursuant
to the Company's Amended and Restated Dividend Reinvestment and Stock Purchase
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
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 17th day of March, 1998.
/s/ MIKE KENNEDY
----------------
Mike Kennedy
