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As filed with the Securities and Exchange Commission on October 12, 2000
File No. 5-38192
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9/A
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION
14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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MILLER BUILDING SYSTEMS, INC.
(NAME OF SUBJECT COMPANY)
MILLER BUILDING SYSTEMS, INC.
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK, $0.01 PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
600404 10 7
(CUSIP NUMBER OF CLASS OF SECURITIES)
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THOMAS J. MARTINI
SECRETARY AND TREASURER
MILLER BUILDING SYSTEMS, INC.
58120 COUNTY ROAD 3 SOUTH
ELKHART, INDIANA 46517
(219) 295-1214
(NAME, ADDRESS, AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE
PERSONS FILING STATEMENT)
with a copy to:
JEFFREY C. RUBENSTEIN, ESQ.
LESLEE M. COHEN, ESQ.
MUCH SHELIST FREED DENENBERG AMENT & RUBENSTEIN, P.C.
200 NORTH LASALLE STREET, SUITE 2100
CHICAGO, ILLINOIS 60601
(312) 346-3100
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ITEM 1. SUBJECT COMPANY INFORMATION.
Name and Address. The name of the subject company is Miller Building
Systems, Inc., a Delaware corporation (the "Company"). The address of the
principal executive offices of the Company is 58120 County Road 3 South,
Elkhart, Indiana 46517. The telephone number of the principal executive offices
of the Company is (219) 295-1214.
Securities. The title of the class of equity securities to which this
Schedule 14D-9 relates is the common stock, par value $0.01 per share, of the
Company (the "Common Stock"). There were 3,074,092 shares of Common Stock
outstanding as of September 1, 2000.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
Name and Address. The name, address and telephone number of the
Company, which is the person filing this Schedule 14D-9, are set forth in Item
1(a) above.
Tender Offer. This Schedule 14D-9 relates to the tender offer by
Delaware Miller Acquisition Corporation, a Delaware corporation (the
"Purchaser") and a wholly-owned subsidiary of COA Housing Group, Inc., an
Indiana corporation ("Parent") and a wholly-owned subsidiary of Coachmen
Industries, Inc., an Indiana corporation ("COA"), disclosed in a Tender Offer
Statement on Schedule TO (the "Schedule TO"), filed with the Securities and
Exchange Commission (the "Commission") by COA and the Purchaser on September 20,
2000, relating to an offer to purchase all of the issued and outstanding shares
of Common Stock (the "Shares") at a purchase price of $8.40 per Share, net to
the seller in cash, less any required withholding taxes, plus a future right to
receive up to $0.30 per Share, in the event that the Company obtains a release
or settlement agreement from Modtech Holdings, Inc. ("Modtech") of any claim (a
"Claim") it might have against the Company to a payment resulting from the
Company's termination of its agreement with Modtech (the "Offer Price"), upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
September 20, 2000 (the "Offer to Purchase") and the related Letter of
Transmittal (which, together with any amendments or supplements, collectively
constitute the "Offer").
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of August 22, 2000 (as such agreement may be amended and supplemented
from time to time, the "Merger Agreement"), by and among the Company, COA,
Parent and the Purchaser. The Merger Agreement provides, among other things,
that upon the prior satisfaction or waiver of the conditions set forth in the
Merger Agreement, including the condition that there be validly tendered
pursuant to the Offer at least 51% of the outstanding Shares on a fully-diluted
basis (the "Minimum Condition"), and in accordance with the Delaware General
Corporation Law, as amended (the "DGCL"), the Purchaser will be merged with and
into the Company (the "Merger" and, together with the Offer, the "Transaction").
Following consummation of the Merger, the Company will continue as the
surviving corporation (the "Surviving Entity") and will be a wholly-owned
subsidiary of Parent. At the effective time of the Merger (the "Effective
Time"), each Share issued and outstanding immediately prior to the Effective
Time (other than any Shares held in the Company's treasury or by any of the
Company's subsidiaries and Shares held by Parent, the Purchaser or any other
subsidiary of Parent, and Shares held by stockholders of the Company who will
have properly perfected their appraisal rights, if any, under Delaware law) will
be converted automatically into the right to receive an amount in cash equal to
the Offer Price, or any greater amount paid per Share in the Offer, without
interest (the "Merger Consideration"). Capitalized terms used in this Schedule
14D-9 and not defined in this Schedule 14D-9 have the meanings given such terms
in the Merger Agreement. A copy of the Merger Agreement is filed herewith as
Exhibit (e)(1) and is incorporated herein by reference.
Pursuant to the terms of the Merger Agreement, the Purchaser, (i)
simultaneously with the Purchaser's payment for Shares validly tendered and not
withdrawn pursuant to the Offer, will deposit thirty cents ($0.30) per Share
purchased in the Offer and (ii) upon payment for Shares converted in the Merger,
will deposit an additional thirty cents ($0.30) per Share so converted, in
escrow, to be invested in short term U.S. government interest bearing
securities, with Bank One Trust Company, National
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Association. The escrowed funds will be used to pay the Company's obligations,
including legal fees and escrow fees, relating to any Claim that Modtech has
against the Company. The escrow agreement between the Company and the escrow
agent, the terms of which have not been finalized as of the date hereof, will be
mutually reasonably acceptable to the Company, Parent, COA and the escrow agent.
Upon the entrance of a final judgment with regard to any Claim, or the execution
of a release or settlement agreement with Modtech, any amount remaining in
escrow, net of all costs, charges and expenses incurred, will be distributed to
the Company's former stockholders who tendered in the Offer or whose Shares were
converted in the Merger on a pro rata basis, without any action by such
stockholders. As of October 6, 2000, the amount of expenses incurred by the
Company with respect to the litigation between the Company and Modtech (see
"Item 8. Additional Information--Certain Legal Matters" below), which amount
will be deducted from the escrowed funds, is estimated to be $18,650 The Company
is currently unable to predict the likelihood that the Company's stockholders
will receive any or all of the escrowed amount. ACCORDINGLY, THE OFFER PRICE
PAID TO THE COMPANY'S STOCKHOLDERS MAY NOT EXCEED $8.40 PER SHARE.
The Schedule TO states that the principal executive offices of COA and
the Purchaser are located at 2831 Dexter Drive, Elkhart, Indiana 46514. The
telephone number of the principal executive offices of the Purchaser is (219)
262-0123.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
Except as set forth in the response to this Item 3 or in the
Information Statement of the Company attached to this Schedule 14D-9 as Annex B
(the "Information Statement") or as incorporated by reference herein, to the
knowledge of the Company, there are no material agreements, arrangements or
understandings and no actual or potential conflicts of interest between the
Company or its affiliates and (i) the Company's executive officers, directors or
affiliates or (ii) COA or the Purchaser, or their respective executive officers,
directors or affiliates.
Certain contracts, arrangements or understandings between the Company
or its affiliates and certain of the Company's directors, executive officers and
affiliates are described in the Information Statement. The Information Statement
is being furnished to the Company's stockholders pursuant to Section 14(f) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule
14f-1 promulgated under the Exchange Act in connection with Parent's right
(after acquiring Shares pursuant to the Offer) to designate persons to the Board
of Directors of the Company (the "Company Board") other than at a meeting of the
stockholders of the Company. The Information Statement is incorporated herein by
reference.
MERGER AGREEMENT
The summary of the Merger Agreement and the description of the
conditions of the Offer contained in Sections 11 and 15, respectively, of the
Offer to Purchase are incorporated herein by reference. Such summary and
description are qualified in their entirety by reference to the Merger
Agreement, a copy of which is filed as Exhibit (e)(1) to this Schedule 14D-9 and
is incorporated herein by reference.
BOARD OF DIRECTORS
The Merger Agreement provides that promptly upon the purchase by the
Purchaser of outstanding Shares pursuant to the Offer (the "Tender Offer
Purchase Time") and from time to time thereafter, if the Minimum Condition has
been met, Parent shall be entitled to designate up to such number of directors,
rounded up to the next whole number, on the Company Board as will give Parent
representation on the Company Board equal to the product of the number of
directors on the Company Board (giving effect to any directors elected pursuant
to this sentence) multiplied by the percentage that the number of Shares so
purchased bears to the total number of outstanding Shares on a fully-diluted
basis, and the Company shall either increase the size of the Company Board or
secure the resignation of such number of directors as is necessary to enable
Parent's designees to be elected to the Company Board, and to cause Parent's
designees to be so elected and to constitute at all times after the Tender Offer
Purchase Time a majority of the
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Company Board. The Merger Agreement further provides that at such times the
Company shall cause the individuals designated by Parent to constitute at least
the same percentage as is on the Company Board of: (i) each committee of the
Company Board; (ii) each board of directors of each subsidiary of the Company;
and (iii) each committee of each such board.
STOCK OPTIONS
The Merger Agreement provides that at the Effective Time, each option
to purchase Shares granted under the Company's 1991 Stock Option Plan, 1994
Stock Option Plan or 1997 Stock Option Plan (the "Company Plans") which is then
outstanding and unexercised shall be converted automatically into options to
purchase shares of common stock of COA ("COA Common Stock") and COA shall assume
each such option (an "Assumed Option") subject to the terms of the applicable
Company Plan and the agreement evidencing the grant thereunder of each such
Assumed Option; provided, however, that from and after the Effective Time, the
per Share exercise price under each such Assumed Option shall be adjusted to the
Exchange Exercise Price (as defined below). In the case of any Assumed Options
which are "incentive stock options" (as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code")), the exercise price, number of
shares of COA Common Stock purchasable pursuant to such options and the terms
and conditions of exercise of such options shall be determined in order to
comply with Section 424(a) of the Code. The number of shares purchasable upon
exercise, duration and other terms of the Assumed Options shall be the same as
the original Stock Option except that all references to the Company shall be
deemed to be references to COA. All Assumed Options will be fully vested as set
forth in the Option agreements. The "Exchange Exercise Price" shall be equal to
the closing price of one share of COA Common Stock on the New York Stock
Exchange on the trading day immediately preceding the Effective Time (the
"Closing Price"), adjusted as follows: (i) if the Merger Consideration exceeds
the original per Share exercise price of an Assumed Option, the amount of the
excess shall be subtracted from the Closing Price; (ii) if the original per
Share exercise price of an Assumed Option exceeds the Merger Consideration, the
amount of the excess shall be added to the Closing Price; and (iii) if the
original per Share exercise price of an Assumed Option is equal to the Merger
Consideration, no adjustment shall be made to the Closing Price.
At or before the Effective Time, all other options, warrants or other
rights to purchase Shares that are not issued pursuant to a Company Plan shall
be terminated.
No later than 30 days following the Effective Time, COA shall register
the COA Common Stock subject to the Assumed Options under the Securities Act of
1933, as amended (the "Securities Act"), pursuant to a registration statement on
Form S-8 and cause the effectiveness of such registration statement to be
maintained for so long as the Assumed Options remain outstanding.
EMPLOYMENT AGREEMENTS AND ARRANGEMENTS
On July 10, 2000, the Company entered into an amendment to the
Employment Agreement between the Company and Edward C. Craig dated February 29,
1996, as amended on October 22, 1997 and September 22, 1998, which the parties
have agreed to amend further prior to the Effective Time of the Merger (as
amended following the Effective Time, the "Craig Agreement"). The Craig
Agreement provides that Mr. Craig shall be employed by the Company as its
Chairman of the Board and Chief Executive Officer through September 30, 2000 and
shall be paid an annual base salary of $200,000 for the years 2000 and 2001. In
addition, the Company shall pay a special bonus to Mr. Craig in an amount equal
to $28,000, by the end of each of fiscal years 2001 and 2002.
The Craig Agreement also provides that Mr. Craig shall be paid (a)
$115,000 on or before December 31, 2001; (b) $115,000 on or before December 31,
2002 and (c) $50,000 on or before December 31, 2003, as remuneration for past
consulting services Mr. Craig rendered to the Company (collectively, "Deferred
Compensation").
The Craig Agreement further provides that the expiration of Mr. Craig's
stock options will not occur until all payments of Deferred Compensation are
made to Mr. Craig, but in no event shall the
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expiration occur earlier than three years from the Effective Time. Options to
purchase an aggregate of 55,000 Shares of the Company's Common Stock held by Mr.
Craig were originally set to expire on February 29, 2006, and options to
purchase an additional 175,000 Shares were originally set to expire on October
22, 2007.
Pursuant to the Craig Agreement, Parent and the Company will be jointly
responsible for payment of all monies under the Craig Agreement.
The summary of the Craig Agreement set forth above does not purport to
be complete and is qualified in its entirety by reference to the complete text
of the Craig Agreement, including all amendments thereto (with the exception of
the amendment to be entered into immediately prior to the Effective Time),
copies of which are filed as Exhibits (e)(2)(i) through (iv) to this Schedule
14D-9 and are incorporated herein by reference.
In addition, it is a condition to consummation of the Merger that the
Company enter into employment agreements with nine of its key employees (the
"Key Employees"), which agreements will be effective upon consummation of the
Merger (the "Key Employee Agreements"). The term of the Key Employee Agreements
is two years. Pursuant to the Key Employee Agreements, the Key Employees will be
paid an annual base salary, and will be eligible to participate in any bonus or
incentive plan, and to receive any benefits, available for employees of COA or
its subsidiaries and for which the Key Employees are qualified. The Key Employee
Agreements also provide that the Key Employees will receive options to purchase
shares of COA stock.
Each of the Key Employees agrees, under the Key Employee Agreements,
for the longer of two years from the effective date of his Agreement or the term
of the Agreement (and for any extensions of or amendments to the Agreement), or
12 months after his employment with COA or any of its subsidiaries ends, if the
employment ends, either voluntarily or for Cause (as defined below), on or
before the second anniversary of the Agreement, not to directly or indirectly
compete with, or solicit employees or customers of, COA or any of its
subsidiaries. The Key Employee Agreements also restrict the Key Employees from
divulging or using confidential information of COA or its subsidiaries.
The Key Employee Agreements are terminable upon the death or disability
of a Key Employee, in which event the Key Employee, or his estate or legal
representative, as the case may be, is entitled to payment of salary and bonus
through the date of death or termination, respectively. The Key Employee
Agreements are also terminable by COA or any of its subsidiaries for "Cause," in
which event the Key Employee is entitled to payment of accrued salary and
benefits owed through the date of termination. "Cause" is defined in the Key
Employee Agreements as (i) a material breach of the Agreement which breach has
not been cured within 15 days of the Key Employee's receipt of written notice
thereof; (ii) misconduct by the Key Employee, including but not limited to theft
of company property; (iii) acts of fraud or dishonesty; (iv) negligence or
willful neglect of duty or material failure to follow known company policies and
directives; (v) reporting to work under the influence of alcohol, drugs or other
mind-impairing substances; or (vi) conviction of a felony. In the event that COA
or any subsidiary thereof terminates a Key Employee Agreement other than for
Cause, COA or such subsidiary must pay to the Key Employee all compensation and
benefits contemplated by the Agreement as such compensation and benefits become
due thereunder.
The summary of the Key Employee Agreements set forth above does not
purport to be complete and is qualified in its entirety by reference to the
complete text of the Form of Key Employee Agreement, a copy of which is filed as
Exhibit (e)(3) to this Schedule 14D-9 and is incorporated herein by reference.
Furthermore, the Company shall pay special bonuses to each of Rick J.
Bedell, President of the Company, and Thomas J. Martini, Vice President of
Finance, Secretary and Treasurer of the Company, of $14,000 per year for fiscal
years 2001 and 2002. All payments of such special bonuses shall become
immediately due and payable upon any action indicating that a Change in Control,
including the transactions contemplated by the Merger Agreement, will occur
immediately.
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INDEMNIFICATION
The Merger Agreement provides that from and after the Effective Time,
Parent and the Surviving Corporation shall jointly and severally indemnify,
defend and hold harmless the present or former directors and officers of the
Company or any of its subsidiaries (the "Indemnified Parties") against all
losses, expenses, claims, damages or liabilities arising out of actions or
omissions occurring on or prior to the Effective Time (including the
transactions contemplated by the Merger Agreement) to the same extent provided
by and subject to the conditions of any applicable law and the applicable
certificates of incorporation and bylaws of COA, as if the Indemnified Parties
were officers and directors of COA (and shall also, subject to the Merger
Agreement, advance expenses as may be allowed thereunder and subject to the
terms thereof, and provided that the person to whom expenses are advanced
provides an undertaking satisfactory to COA to repay such advances if it is
ultimately determined that such person is not entitled to indemnification);
provided, however, that such indemnification shall be provided only to the
extent any directors' and officers' liability insurance policy of COA or its
subsidiaries does not provide coverage and actual payment thereunder with
respect to the matters that would otherwise be subject to indemnification under
the Merger Agreement (it being understood that COA, Parent or the Surviving
Corporation shall, subject to the Merger Agreement, advance expenses on a
current basis as provided in the Merger Agreement notwithstanding such insurance
coverage to the extent that payments thereunder have not yet been made if the
Indemnified Party has provided said undertaking, in which case COA, Parent or
the Surviving Corporation, as the case may be, shall be entitled to repayment of
such advances from the proceeds of such insurance coverage).
Pursuant to the Merger Agreement, however, COA's, Parent's and the
Surviving Corporation's obligation to fulfill and honor the Company's
indemnification obligation, and the Company's aggregate obligation to indemnify
and hold harmless persons for all matters to which such persons may be entitled
to be indemnified or held harmless under the Merger Agreement, shall in no event
exceed the Company's net worth as of June 30, 2000. The Merger Agreement also
states that, subject to certain exceptions, Parent or the Surviving Corporation
shall maintain in effect for not less than six years after the Effective Time
the current policies of directors' and officers' liability insurance maintained
by Company or its subsidiaries with respect to matters occurring prior to the
Effective Time to the extent such insurance is available at a premium of not
more than three times the premium immediately prior to the Effective Time.
COA's bylaws provide that COA shall indemnify any officer or director
of COA or any wholly-owned subsidiary or any member of the Management Group (as
defined in the bylaws) of a division of COA (an "Indemnified Officer or
Director") to the fullest extent to which COA is empowered to do so by the
Indiana Business Corporation Law or any other law, if any Indemnified Officer or
Director is or was a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, against judgments, settlements,
penalties and fines (including excise taxes assessed with respect to employee
benefit plans) and reasonable expenses (including counsel fees) incurred by the
Indemnified Officer or Director in accordance with such action, suit or
proceeding. This indemnification is available whether the Indemnified Officer or
Director was serving as such director, officer, employee or agent of COA, or was
serving at the request of COA as a director, officer, partner, trustee, employee
or agent of another corporation or other enterprise. To receive the
indemnification, the Indemnified Officer or Director must have acted in good
faith and in a manner he or she reasonably believed, in the case of conduct in
his or her official capacity, was in the best interests of COA, and, in all
other cases, was not opposed to the best interests of COA, and with respect to
any criminal action or proceeding, the Indemnified Officer or Director must have
had reasonable cause to believe his or her conduct was unlawful.
Any other person who is not an Indemnified Officer or Director may be
indemnified in accordance with the preceding paragraph if it is determined by
the COA Board of Directors by majority vote of a quorum, none of whom were at
the time parties to such action, that such indemnification is in COA's interest.
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Pursuant to the terms of the Merger Agreement, the Certificate of
Incorporation and bylaws of the Purchaser shall be the Company's governing
documents upon the consummation of the Merger. The indemnification provisions in
the bylaws of the Purchaser are substantially similar to the provisions
contained in the COA bylaws described above.
STANDARD MUTUAL NONDISCLOSURE AGREEMENT
On July 13, 2000, COA and the Company entered into a Standard Mutual
Nondisclosure Agreement (the "Nondisclosure Agreement"). The Nondisclosure
Agreement contains customary provisions pursuant to which each of the Company
and COA has agreed, subject to certain exceptions, not to use, disclose or
communicate to any third party and to protect the confidentiality of,
confidential and proprietary knowledge and information of the other, including
technical data, financial reports and data, customer, contract and employee
lists and marketing and business plans, the confidentiality of which is
important to the party's security and growth (the "Information"). The
Information includes the Transaction and its terms, discussions relating to the
Transaction and all Information provided orally or in writing or otherwise
embodied in a tangible medium.
The Nondisclosure Agreement provides, however, that either party may
disclose Information to its officers, directors, employees and professional
advisors with a need to know it as part of the process of evaluating and
consummating the Transaction and who are bound by a duty of confidentiality to
the disclosing party. In addition, the Nondisclosure Agreement does not apply to
Information which: (i) is already known to the recipient; (ii) is already part
of the public domain at the time of disclosure or becomes part of the public
domain through no fault of recipient; (iii) becomes available to recipient from
a third party who is not under obligation to the other party with respect
thereto; or (iv) is independently developed by an employee or consultant of the
recipient who had no knowledge or access to the Information.
The term of the Nondisclosure Agreement is two years.
The Nondisclosure Agreement also provides that in the event that the
Transaction is not contemplated, neither party will initiate contact with or
solicit the employment of any officer, director or management, marketing or
professional employee of the other for a period of 18 months from the date of
the Nondisclosure Agreement without the consent of the other party.
The summary of the Nondisclosure Agreement set forth above does not
purport to be complete and is qualified in its entirety by reference to the
complete text of the Nondisclosure Agreement, a copy of which is filed as
Exhibit (e)(4) to this Schedule 14D-9 and is incorporated herein by reference.
CERTAIN BUSINESS RELATIONSHIPS
The Company paid to the law firm Much Shelist Freed Denenberg Ament &
Rubenstein, P.C., of which Jeffrey C. Rubenstein, a director of the Company, is
a principal, approximately $102,670, $49,530, and $145,890 during the fiscal
years ended 1998, 1999 and 2000, respectively, for legal services. In addition,
the Company paid to Kenneth H. Granat, a director of the Company, approximately
$6,800, $21,920 and $21,500 during the fiscal years ended 1998, 1999 and 2000,
respectively, for consulting services related to the Company's efforts to
explore possible merger and acquisition opportunities.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Recommendation of the Board of Directors. At a meeting held on August
22, 2000, the Company Board (i) determined that the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, were fair
to, and in the best interests of, the Company's stockholders, (ii) approved the
Merger Agreement and the transactions contemplated by the Merger Agreement,
including the Offer and the Merger, and (iii) unanimously resolved to recommend
that the Company's stockholders accept the Offer and tender their Shares
thereunder and, if approval is required by applicable law, approve and adopt the
Merger Agreement and the Merger.
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THE COMPANY BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY
TENDER THEIR SHARES PURSUANT TO THE OFFER.
Background of the Offer; Reasons for the Recommendation.
BACKGROUND OF THE TRANSACTION
In July 1998, the Company engaged Morgan Keegan & Company, Inc.
("Morgan Keegan") to explore its strategic alternatives, including the
possibility of a sale of the Company. On September 22, 1998, Morgan Keegan
presented a report to the Company Board on its evaluation of the strategic
alternatives available, identifying the options of either selling the Company or
continuing to grow its operations. As directed by the Company Board, between
September 1998 and April 1999, Morgan Keegan identified and contacted
approximately 57 candidates, including COA and Modtech, for potential merger
with or acquisition of, the Company. On January 15, 1999, the Company Board
heard a full report on the results of Morgan Keegan's contacts to date,
including the values of and interests in the Company expressed by various
companies. Although Morgan Keegan received a limited number of indications of
interest in purchasing individual divisions of the Company, the Company was
unwilling to consider such transactions given the unfavorable tax implications
for the Company thereof. Furthermore, Morgan Keegan advised the Company Board
that Modtech was the only entity which had expressed any interest in purchasing
the Company as a whole, although neither Modtech nor any other entity contacted
by Morgan Keegan had made a definitive proposal for the purchase of the Company
or any portion thereof. Based on such report, the Company Board determined that
the Company should commence negotiations with Modtech.
Between January and September 1999, various representatives of the
Company met with Evan Gruber, the Chief Executive Officer of Modtech, to discuss
possible merger opportunities. On September 13, 1999, Modtech and the Company
entered into an agreement in principle to merge the Company with Modtech. Under
the terms of the agreement, the Company's stockholders were to receive in
exchange for their shares of the Company's Common Stock (a) shares of Modtech's
common stock such that the Company's stockholders would own, on the closing date
of the transaction, 16% of the issued and outstanding common stock of the
combined entity, on a fully diluted basis, but no less than 2,710,000 shares,
and (b) one dollar ($1.00) in cash per Share. However, in November 1999, the
parties mutually agreed to discontinue pursuit of a merger based on market and
other conditions. Following the Company Board's review of Modtech's financial
condition and prospects for obtaining funding the Company Board believed was
paramount to Modtech's continued growth, the Company Board determined that the
terms of the proposed merger, which included the purchase of a significant
portion of Modtech's equity securities, were not in the best interests of the
Company's stockholders.
On April 6, 2000, Mr. Gruber met with Edward Craig, the Chief Executive
Officer of the Company, and inquired as to whether the Company had any continued
interest in a possible merger with Modtech. As a result of these discussions, on
or about June 6, 2000, Mr. Gruber submitted a proposal to acquire all of the
outstanding Shares of the Company at $8.05 per Share in an all-cash transaction.
The Company Board voted to accept this proposal and, on June 9, 2000, after
further negotiations, Modtech and the Company signed and accepted a letter
agreement. The original termination date of this letter agreement, July 10,
2000, was later extended to July 17, 2000.
Between July 6, 2000 and July 10, 2000, the Company was approached by
representatives of Acquisitor PLC ("Acquisitor") to discuss the possibility of
Acquisitor submitting an alternative offer to purchase the Company.
On July 11, 2000, Thomas Martini, the Vice President of Finance,
Treasurer and Secretary of the Company received a telephone call from Gene
Stout, the Executive Vice President of COA, to discuss the possibility of COA
submitting an alternative offer to purchase the Company.
On July 12, 2000, the Company entered into a Standard Mutual
Nondisclosure Agreement with COA.
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On July 13, 2000, during a meeting of the Company Board the Company
received a written conditional proposal from Acquisitor (the "Acquisitor
Proposal"). Pursuant to the Acquisitor Proposal, Acquisitor proposed that the
Company would make a tender offer for all of its outstanding Shares other than
those owned by Acquisitor at a price of no less than $9.00 per Share and
Acquisitor would purchase from the Company Shares representing no less than 20%
of the currently outstanding Shares at the same price paid by the Company for
Shares in the tender offer. The Acquisitor Proposal stated that, to the extent
that Shares remained outstanding after such transactions, the Company would
continue to report under the Securities Exchange Act of 1934 and that the
funding for the Company's tender offer would come from cash paid by Acquisitor
for the 20% of the Shares that it purchased from the Company and through a
credit facility that Acquisitor would assist the Company in arranging.
On July 13, 2000, the Company also received a letter from COA during
the meeting, indicating its interest in purchasing all of the Company's Shares.
The letter stated that COA would furnish a per share price range subject to
approval of the Board of Directors of COA by July 17, 2000.
At the July 13, 2000 meeting, the Company Board heard Morgan Keegan's
report on the various discussions and negotiations with Modtech, Acquisitor and
COA, and approved and adopted the Third Amendment to the Employment Agreement
between the Company and Mr. Craig. Following the meeting, the Company notified
Modtech in writing of its receipt of the Acquisitor Proposal and the indication
of interest from COA.
On July 14, 2000, Mr. Craig received a memorandum from Modtech's legal
counsel requesting an extension of the termination date of the letter agreement
from July 17, 2000 to July 24, 2000.
On July 17, 2000, the Company Board held a meeting at which it decided
not to extend the letter agreement based on the fact that Modtech had not yet
obtained a commitment for financing its purchase of the Company's Shares and
that the parties had been unable to reach a definitive agreement on certain
material terms and conditions of the merger. However, the Company Board agreed
to continue to negotiate with Modtech toward a definitive merger agreement. The
Company Board also received an update as to the status of the potential sale of
the Company from Mr. Craig as well as a report on the negotiations with respect
to, and the legal status of, the proposed transaction with Modtech from the
Company's legal counsel. In addition, the Company Board created an Investment
Committee, comprised of Kenneth Granat, as chairman, Myron Noble and David
Padden, to participate in negotiations with respect to the sale of the Company.
The Company Board also decided to commence an open bidding process between
Modtech, Acquisitor and COA pursuant to which each bidder would be asked to
submit a firm offer without a financing condition on or prior to July 28, 2000.
The Investment Committee met immediately following the Company Board
meeting on July 17, 2000 and discussed implementation of the bidding process.
Later in the day on July 17, 2000, the Company Board received a letter
from COA with a further indication of interest in acquiring all of the Company's
outstanding equity interests at a price of $8.50 to $9.00 per Share subject to
certain conditions. Such conditions included approval of the Company Board and
the Board of Directors of COA and the negotiation of a mutually acceptable
merger agreement, including non-solicitation and break-up fee provisions, in
addition to due diligence and other conditions customary to the type of
transaction proposed.
Between July 18 and July 31, representatives of the Company and members
of the Investment Committee continued to engage in discussions with Messrs.
Stout and James E. Jack, the Executive Vice President and Chief Financial
Officer of COA, Duncan Soukup, a principal of Acquisitor, and Mr. Gruber, of
Modtech.
On July 21, 2000, the Company terminated its letter agreement with
Modtech in accordance with the letter agreement based on the parties' failure to
enter into a definitive agreement. At the time of termination, Modtech had
failed to obtain a binding commitment for financing the transaction.
Additionally, many material terms and conditions of the merger agreement
remained unresolved including,
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but not limited to, the following: Modtech requested that the Company obtain the
written advice of its financial advisors prior to agreeing to any alternative
proposal, even a proposal considered superior to that of Modtech by the Company
Board. The Company Board believed that this condition would not enable it to
fulfill its fiduciary duty to the Company's stockholders; The parties disagreed
as to the date on which Modtech's representations and warranties would expire;
The parties disagreed on the definition of the term 'knowledge' as used in the
proposed merger agreement; The parties disagreed on the terms of the Company's
representations and warranties with respect to its employee benefit plans,
whether the Company was entitled to set off fees and expenses owed to the
Company by Modtech against amounts the Company owed to Modtech, the condition
that Modtech obtain financing for the transaction and the terms and conditions
of the termination fee. However, the Company confirmed that it was continuing to
engage in negotiations with Modtech toward seeking a mutually acceptable
definitive agreement of merger as of July 21, 2000. Certain, but not all
(including obtaining financing), of these disagreements were later resolved
immediately prior to the Company Board meeting held on August 22, 2000 to
consider the COA Offer.
On July 28, 2000, the Company received a written indication of interest
from COA to acquire all of the outstanding shares of the Company for a cash
price of $8.75 to $9.00 per Share, subject to certain conditions. Such
conditions included the completion of due diligence, the confirmation that no
break-up fees were due to any other company that has attempted to acquire the
Company, re-negotiation of the change-in-control provisions in certain
executives' employment agreements, execution of mutually satisfactory employment
and non-competition agreements between COA and certain key Company executives
and management, execution of a mutually agreeable plan of merger and final
approval by COA's Board of Directors.
In accordance with its fiduciary obligations, the Company Board then
agreed with the Investment Committee's suggestion that Messrs. Craig and Noble
should meet with COA, which had presented an unsolicited indication of interest
to the Company, given that (i) the price range per Share indicated by COA was
higher than the $8.05 price offered by Modtech and (ii) Acquisitor had not
presented a formal offer to the Company, while the Committee continued to
negotiate with Modtech and to encourage Acquisitor to submit a definitive offer
for the purchase of the Shares.
Between August 1, 2000 and August 21, 2000, Mr. Craig, the Investment
Committee and legal counsel for the Company continued to discuss terms of a
potential transaction with Messrs. Stout and Jack and other representatives of
COA, with Mr. Gruber of Modtech, as well as with Randy Karchmer, a Senior Vice
President of Morgan Keegan.
The Investment Committee held a telephonic meeting on August 3, 2000,
which was also attended by Mr. Craig and Mr. Karchmer. At such meeting, Mr.
Granat stated that Acquisitor was waiting for COA's offer, COA would make a
definitive offer by August 23 and Modtech was prepared to go forward with a
merger conditioned on the resolution of certain outstanding issues. The
Investment Committee decided to press COA for its offer and to continue
negotiating with Modtech, including determining whether Modtech had obtained a
commitment for financing the purchase of the Company's outstanding Shares.
During its next meeting held on August 22, 2000, the Company Board
received from COA the Offer, together with a form of Merger Agreement. At the
meeting, the Company Board also received presentations from Mr. Craig, with
respect to the status of negotiations with COA and Modtech, and Mr. Granat, with
respect to the status of negotiations with Acquisitor. Mr. Granat reported that
although Acquisitor had continued to engage in discussions with the Company
during the past several weeks, it had never performed due diligence or submitted
a firm offer to acquire the Company and had opted not to submit any such offer
after being advised of the proposal from COA. The Company Board also heard from
the Company's legal and financial advisors regarding the Offer, the Merger and
the principal terms and conditions of Merger Agreement, including the
nonsolicitation and termination fee provisions thereof.
Mr. Karchmer delivered Morgan Keegan's oral opinion to the Company
Board that, as of such date, the consideration to be received by the holders of
Shares of the Company's Common Stock pursuant to the Offer and the Merger as
contemplated by the Merger Agreement was fair, from a financial point of
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view, to such holders (and such oral opinion was subsequently confirmed by
delivery of the written opinion of Morgan Keegan, dated August 22, 2000).
Based on such presentations, and after conducting an in-depth
discussion with respect to the offers submitted by Modtech, at $8.05 per Share,
and COA, at $8.40 per Share and the potential for an additional $0.30 per Share,
and the Acquisitor Proposal, which had not become a formal offer, and on the
advice of legal counsel and Morgan Keegan regarding each of its options, the
Company Board determined at the August 22, 2000 meeting that the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, were fair to, and in the best interests of, the Company's stockholders,
approved the Merger Agreement and the transactions contemplated by the Merger
Agreement, including the Offer and the Merger, and unanimously resolved to
recommend that the Company's stockholders accept the Offer and tender their
Shares thereunder and, if required by applicable law, approve and adopt the
Merger Agreement and the Merger.
The Company Board then authorized legal counsel to draft an acceptance
of COA's offer, dated August 22, 2000, which reflected certain changes agreed to
orally between the parties during discussions that had taken place that day.
On August 22, 2000, Mr. Craig notified Mr. Gruber that the Company had
entered into an agreement with COA with respect to the Offer. Mr. Gruber
responded that Modtech intended to hold the Company liable for payment of the $1
million termination fee pursuant to the June 9, 2000 letter agreement between
the parties. On the same day, the Company filed a Complaint for Declaratory
Judgment in the Elkhart Superior Court No. 2, in the State of Indiana requesting
the Court's declaration that (i) the Company properly terminated its letter
agreement with Modtech and that it had no obligation to pay the $1 million or
any other amount to Modtech; and (ii) Modtech was responsible to reimburse the
Company for all of the Company's reasonable fees and expenses.
Between August 22 and August 31, 2000, the Company and COA continued to
negotiate minor changes to the Merger Agreement. On August 31, 2000, the Merger
Agreement was executed by COA, Parent, the Purchaser and the Company.
The Company Board agreed to the non-solicitation and termination
provisions set forth in the Merger Agreement (see "Item 3. Past Contacts,
Transactions, Negotiations and Agreements--Merger Agreement") based on the fact
that such provisions permitted the Company Board to furnish to certain third
parties who submit unsolicited acquisition proposals information concerning the
Company and to participate in discussions or negotiations with such third
parties. Accordingly, the Company Board was reassured that it would be permitted
to fulfill its fiduciary duty to the Company's stockholders without breaching
the terms of the Merger Agreement. In addition, the Company Board believed that
the Offer and the Merger were in the best interests of the Company's
stockholders and agreed to the non-solicitation and termination fee provisions
of the Merger Agreement in order to provide assurance to COA that the Company
intended to work together with COA in good faith toward the consummation of the
Merger. Furthermore, at the time of the execution of the Merger Agreement,
Modtech had indicated to the Company Board on several prior occasions that it
had no intention of increasing its offer price to more than $8.05 per Share and
Acquisitor had not submitted a definitive offer to purchase all of the
outstanding Shares.
On September 7, 2000, Modtech filed a Complaint against the Company in
the Court of Chancery of the State of Delaware in and for New Castle County
requesting damages from the Company in connection with the termination of the
merger negotiations between Modtech and the Company, together with a judicial
declaration that Modtech did not breach its letter agreement with the Company or
discharge the Company's obligations thereunder, including payment of the $1
million termination fee, and that Modtech is entitled to payment of such fee. In
addition, Modtech requested that the Court order the Company to promptly
consummate a merger with Modtech at a price of $8.05 per Share and restrain the
Company from taking any action in furtherance of the consummation of the
Transaction with COA, Parent and the Purchaser.
On September 20, 2000, COA commenced the Offer.
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REASONS FOR THE TRANSACTION; FACTORS CONSIDERED BY THE COMPANY BOARD
In approving the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger, and recommending that all holders
of Shares accept the Offer and tender their Shares pursuant to the Offer, the
Company Board considered a number of factors including those presented below:
1. The current and historical comparison of the Company's sales and
earnings to its stock price, as well as the prospects and strategic objectives
of the Company, including the risks involved of achieving those prospects and
objectives, and the current and expected conditions of the industry in which the
Company's business operates. The Company Board considered this factor, in
combination with factors no. 2 and 6 below, to be of major significance in its
decision to recommend the Offer and the Merger to the Company's stockholders.
2. The Company's prospects if it were to remain an independent,
publicly traded company, including the risks of competing against companies that
have far greater resources, distribution capacity, product offerings and market
reach than the Company.
3. Presentations from Morgan Keegan and the opinion of Morgan Keegan,
dated August 22, 2000, to the effect that, as of such date and based upon and
subject to certain matters stated in such opinion, the proposed cash
consideration to be received by the holders of Shares pursuant to the Offer and
the Merger was fair to such holders from a financial point of view. A copy of
the opinion delivered by Morgan Keegan to the Company Board, setting forth the
procedures followed, the matters considered and the assumptions made by Morgan
Keegan in arriving at its opinion, is attached hereto as Annex A with the
consent of Morgan Keegan and incorporated herein by reference. Stockholders are
urged to read the opinion in its entirety. The Company Board was aware that
Morgan Keegan becomes entitled to certain fees described in Item 5 upon
consummation of the Offer or the Merger.
4. The historical market prices, price to earnings ratios, trading
activity and trading range of the Shares during recent periods, including fiscal
years 1997, 1998, 1999 and 2000, which periods were selected by the Company
Board on the basis that the Company's business plan had remained consistent
throughout such periods. The Offer Price represents a premium of approximately
(a) 9% over the $8.00 closing price of the Shares on the Nasdaq National Market
on the last full trading day of fiscal year 1997, (b) 48% over the $5.875
closing price on the last full trading day of fiscal year 1999, (c) 20% over the
$7.25 closing price on the last full trading day of fiscal year 2000 and (d) 47%
over the $5.938 closing price of the Shares on June 8, 2000, the last full
trading day before the announcement of the transaction with Modtech. The Offer
Price represents a discount of approximately 3% to the $9.00 closing price of
the Shares on the last full trading day of fiscal year 1998.
For fiscal years 1997, 1998, 1999 and 2000, the price to earnings
ratios, on a fully-diluted basis, were 17, 14.5, 8.3 and 5.8, respectively. In
fiscal year 1997, the Company's Common Stock traded between $5.375 and $9.375
per Share. In fiscal year 1998, the Common Stock traded between $7.50 and $10.75
per Share. In fiscal year 1999, the Common Stock traded between $5.125 and
$10.063 per Share and, in fiscal year 2000, the Common Stock traded between
$4.625 and $8.00 per Share.
For fiscal year 1997, as compared to fiscal year 1998, the Company's
net sales and net income increased approximately 18% and 36%, respectively,
while the closing price of the Company's Common Stock increased approximately
13% in the same period. For fiscal year 1998 as compared to fiscal year 1999,
the Company's net sales and net income increased approximately 20% and 19%,
respectively, while the closing price of the Company's Common Stock declined
approximately 28% in the same period. For fiscal year 1999 as compared to fiscal
year 2000, the Company's net sales and net income increased approximately 8% and
60%, respectively, while the closing price of the Company's Common Stock
increased only approximately 23% in the same period, despite the announcement of
the transaction with Modtech during the fourth quarter of fiscal year 2000. For
the third quarter of fiscal year 1999, as compared to the third quarter of
fiscal year 2000, the last full quarter prior to such announcement, the
Company's net sales and net income increased approximately 38% and 37%,
respectively, while the closing price of the Common Stock on the last day of
such periods declined approximately 31%.
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The Company Board's review of the above financial results for fiscal
years 1997 through 2000 confirmed the Board's assumption that, despite the
substantial growth experienced by the Company in its sales and earnings during
the last four fiscal years, the Company's stock price had not increased
proportionately and, during the fourth quarter of fiscal year 1999 declined
substantially until the announcement of the transaction with Modtech. The
Company Board believed that the price of Company's Common Stock would not reach
the Offer Price in the foreseeable future if the Company opted to continue its
operations rather than sell the Company and considered this to be the most
important factor in its decision to recommend the Offer and the Merger to the
Company's stockholders. The Company Board also considered that the holders of
Shares would be paid cash consideration in the Offer and the Merger, and that,
although such cash would be taxable to such holders for federal income tax
purposes, the certainty of the value of such cash consideration as compared to
stock was more favorable than the detriment of the tax liability.
5. The fact that the Merger Agreement and the transactions
contemplated thereby were the product of arms'-length negotiations between COA
and its advisors and the Company Board and its advisors.
6. The likelihood that the Company's market price performance in the
foreseeable future would not substantially exceed its recent performance,
considering the Company's size and the industry in which it operates. The
Company Board based this conclusion on the advice and recommendation of Morgan
Keegan that, although the Company and other publicly traded microcap companies
in the same industry as the Company, including Modtech and COA, had been meeting
earnings expectations and experiencing growth in their operations both
internally and through acquisitions for the past several years, the stock prices
of such companies were not reflective of such growth and were not expected to
increase commensurate with expansion in sales or earnings in the foreseeable
future.
7. The fact that the Merger Agreement provides for a prompt cash
tender offer for all Shares to be followed by a merger for the same
consideration thereby enabling the Company's stockholders to obtain cash in
exchange for their Shares earlier than in an alternative form of transaction.
8. The fact that, pursuant to the Merger Agreement, between the
execution of the Merger Agreement and the Effective Time of the Merger, the
Company is required to obtain Parent's consent before it can take certain
actions. Although the Company Board would rather have maintained its ability to
take any action, whether or not within the ordinary course of business, in
operating the Company, the Board was aware that this restrictive provision was
standard in merger and sale agreements and would have been required by any
potential buyer. Accordingly, this factor was of minimal importance to the
Company Board in its decision to recommend the Offer and the Merger to the
Company's stockholders.
9. The limited ability of Parent and the Purchaser to terminate the
Merger Agreement, which the Company Board considered favorable in that any
termination of the Transaction would prevent the Company's stockholders from
realizing the favorable cash price payable for their stock pursuant to the Offer
and the Merger. The Company Board also considered the likelihood of obtaining
required regulatory approval under the HSR Act, and the terms of the Merger
Agreement regarding the obligations of the parties to pursue such regulatory
approvals, which the Company Board believed the parties would have the ability
to accomplish in preparation for the timely consummation of the Transaction. The
Company Board considered these factors to be less important in its decision to
recommend the Offer and the Merger to the Company's stockholders than other
factors listed in this Section, including factors no. 1, 2, 4 and 6.
10. The fact that, although the Merger Agreement prohibits the Company
and its representatives from soliciting acquisition proposals from third
parties, the Company and its representatives may furnish to certain third
parties who have submitted unsolicited acquisition proposals information
concerning the Company and participate in discussions or negotiations with such
third parties concerning an unsolicited proposal or offer to acquire all or
substantially all of the Company's assets or Shares that the Company Board
determines, in good faith based on the advice of its financial advisor, is
reasonably capable of being completed, does not contain any financing or due
diligence conditions and is more favorable to the Company's stockholders than
the Offer and the Merger (a "Superior Proposal").
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11. The fact that the Merger Agreement permits the Company to terminate
the Merger Agreement prior to the purchase of Shares by the Purchaser pursuant
to the Offer to approve or recommend a Superior Proposal, provided that the
Company pays Parent a termination fee of $2 million. The Company Board also
considered the other circumstances under which the Company would be required to
pay the $2 million termination fee to Parent, such as upon the Company's breach
of the Merger Agreement, in consideration for which COA agreed to a provision
granting the Company the right to a $1 million termination fee in the event that
Parent breaches the Merger Agreement. The Company Board considered the possible
effect of the termination fee provisions of the Merger Agreement on third
parties that might be interested in exploring an acquisition of the Company. In
this regard, the Company Board recognized that Parent insisted on the
termination fee as a condition to entering into the Merger Agreement. The
Company Board considered this factor to be extremely significant in its decision
to recommend the Offer and Merger to the Company's stockholders in that the
ability to terminate the Merger Agreement upon receipt of a Superior Proposal
permits the Company Board to fulfill its fiduciary duties to the Company's
stockholders.
12. The fact that the Offer and the Merger would eliminate the
opportunity for stockholders to participate in future growth and profits of the
Company. Nevertheless, the Company Board concluded that this fact did not
justify foregoing the receipt of the immediate cash premium presented by the
$8.40 per Share portion of the Offer Price together with the possibility of
receiving up to an additional $0.30 per Share in cash.
13. The interests of certain Company directors and executive officers
in the Offer and the Merger (see Item 3--Past Contacts, Transactions,
Negotiations and Agreements).
14. The fact that the stockholders who do not tender their Shares
pursuant to the Offer will have the right to dissent from the Merger and to
demand appraisal of the fair value of their Shares under the DGCL, whether or
not a stockholder vote is required. Although this factor was awarded little
weight by the Company Board in recommending the Offer and the Merger to the
Company's stockholders, the Board was reassured that those stockholders who
believed they could obtain a higher price for their Shares would have access to
further recourse from the judicial system.
The foregoing discussion of information and factors considered and
given weight by the Company Board is not intended to be exhaustive, but is
believed to include all of the material factors considered by the Company Board.
In view of the variety of factors considered in connection with its evaluation
of the Offer and the Merger, the Company Board did not find it practicable to,
and did not, specifically quantify the factors considered in reaching its
determinations and recommendations, but certain factors have been given greater
relative weights as described therein. In addition, individual members of the
Company Board may have given different weights to different factors.
Intent to Tender. To the Company's knowledge after reasonable inquiry,
all of the Company's executive officers and directors currently intend to tender
all Shares held of record or beneficially (other than Shares held directly or
indirectly by other public companies, as to which the Company has no knowledge)
by them pursuant to the Offer or to vote in favor of the Merger. The foregoing
does not include any Shares over which, or with respect to which, any such
executive officer or director acts in a fiduciary or representative capacity or
is subject to the instructions of a third party with respect to such tender.
ITEM 5. PERSON/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
Morgan Keegan was retained pursuant to the terms of a letter agreement,
dated July 29, 1998 and amended on March 1, 1999, June 14, 2000 and August 4,
2000 (the "Morgan Keegan Engagement Letter"), to serve as the Company's
exclusive financial advisor. The Company Board retained Morgan Keegan based upon
Morgan Keegan's qualifications, experience and expertise. Morgan Keegan is an
internationally recognized investment banking and advisory firm. Morgan Keegan,
as part of its investment banking and financial advisory business, is
continuously engaged in the valuation of businesses and securities in connection
with mergers and acquisitions, competitive biddings, secondary distributions of
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listed and unlisted securities, private placements and valuations for corporate
and other purposes. In addition, Morgan Keegan is a full-service securities firm
engaged in securities trading, brokerage and financing activities. In the
ordinary course of Morgan Keegan's trading and brokerage activities, Morgan
Keegan or its affiliates may at any time hold long or short positions, and may
trade or otherwise effect transactions, for its own account or the accounts of
customers, in debt or equity securities or senior loans of the Company or COA.
Pursuant to the Morgan Keegan Engagement Letter, the Company paid
Morgan Keegan a non-refundable cash retainer fee of approximately $50,000 in two
installments following execution of the first amendment to the Engagement
Letter, and agreed to pay Morgan Keegan a cash fee of $250,000 (the "Opinion
Fee"), with $100,000 due upon delivery of a fairness opinion, which amount was
paid by the Company on September 10, 2000, and the remaining $150,000 due upon
the closing of a transfer of control of, or a material interest in, the Company
or any of its businesses or all or a material amount of any of their respective
assets (a "Company Sale"), which would include the transactions contemplated by
the Merger Agreement.
Under the Morgan Keegan Engagement Letter, the Company has also agreed
to reimburse Morgan Keegan for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel), and to indemnify Morgan Keegan
and certain related parties, and hold each of them harmless against any and all
losses, claims, damages or liabilities to which such parties may become subject
related to or arising out of Morgan Keegan's engagement.
In the event of the termination of the Morgan Keegan Engagement Letter,
the Company will be responsible for the reimbursement of expenses incurred by
Morgan Keegan through the date of termination and payment of the Opinion Fee for
a Company Sale with any of Modtech, COA or Acquisitor provided such Company Sale
is concluded within 18 months of the date of such termination.
A copy of Morgan Keegan's fairness opinion is attached as Annex A to
this Schedule 14D-9 with the consent of Morgan Keegan and is incorporated by
reference herein. Except as described above, neither the Company nor any person
acting on its behalf has employed, retained or agreed to compensate any other
person to make solicitations or recommendations in connection with the Offer.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
No transactions in Shares have been effected during the past 60 days by
the Company or, to the best of the Company's knowledge, by any affiliate or
subsidiary of the Company or any executive officer or director of the Company or
any subsidiary or affiliate of the Company, except as follows:
(a) On August 11, 2000, Mr. Nolte purchased a total of 2,524 Shares of
the Company's Common Stock pursuant to 2,333 options granted under the Company's
1994 Stock Option Plan, and 191 options granted under the Company's 1997 Stock
Option Plan. Of such 2,524 Shares, 1,133 Shares were purchased at an exercise
price of $6.125 per Share, 1,200 Shares were purchased at an exercise price of
$6.375 per Share and 191 Shares were purchased at an exercise price of $7.50 per
Share. Mr. Nolte paid the exercise prices by means of 2,067 Shares of the
Company's Common Stock, valued for purposes of the transactions at $7.75 per
Share, and $2.88 in cash.
(b) On July 17, 2000, Dan Berdahl, the Plant Manager of the Company's
Sioux Falls, South Dakota plant, purchased a total of 1,600 Shares of the
Company's Common Stock pursuant to options granted under the Company's 1994
Stock Option Plan at an exercise price of $3.25 per Share. Mr. Berdahl
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paid the exercise prices by means of 630 Shares of the Company's Common Stock,
valued for purposes of the transactions at $8.25 per Share, and $2.50 in cash.
(c) On September 13, 2000, Steven Graver, a former director of the
Company, purchased a total of 9,000 Shares of the Company's Common Stock, 3,000
of which were purchased pursuant to options granted under the Company's 1991
Stock Option Plan at an exercise price of $6.395 per Share, 3,000 of which were
purchased pursuant to options granted under the Company's 1997 Stock Option Plan
at an exercise price of $7.25 per Share and 3,000 of which were purchased
pursuant to options granted under the Company's 1997 Stock Option Plan at an
exercise price of $6.125 per Share. Mr. Graver paid the aggregate exercise price
of all such options in cash.
(d) On October 2, 2000, Robert Winks, the Company's Controller,
purchased a total of 300 Shares of the Company's Common Stock pursuant to
options granted under the Company's 1994 Stock Option Plan at an exercise price
of $3.25 per Share. Mr. Winks paid the aggregate exercise price of all such
options in cash.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Except as set forth in this Schedule 14D-9, the Company is not
currently undertaking or engaged in any negotiations in response to the Offer
that relate to (i) a tender offer for or other acquisition of the Company's
securities by the Company, any subsidiary of the Company or any other person;
(ii) an extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Company or any subsidiary of the Company; (iii) a
purchase, sale or transfer of a material amount of assets of the Company or any
subsidiary of the Company; or (iv) any material change in the present dividend
rate or policy, or indebtedness or capitalization of the Company.
Except as set forth in this Schedule 14D-9, there are no transactions,
resolutions of the Company Board, agreements in principal, or signed contracts
in response to the Offer that relate to one or more of the events referred to in
the preceding paragraph.
ITEM 8. ADDITIONAL INFORMATION.
DELAWARE GENERAL CORPORATION LAW SECTION 253
Under Section 253 of the DGCL, if the Purchaser acquires, pursuant to
the Offer or otherwise, at least 90% of the outstanding Shares, the Purchaser
will be able to effect the Merger after consummation of the Offer without a
meeting of the Company's stockholders. However, if the Purchaser does not
acquire at least 90% of the outstanding Shares pursuant to the Offer or
otherwise, a meeting of the Company's stockholders will be required under the
DGCL to effect the Merger. Upon successful completion of the Offer, the
Purchaser would have a sufficient number of Shares to approve the Merger without
the vote of any other stockholder of the Company.
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DELAWARE GENERAL CORPORATION LAW SECTION 203
As a Delaware corporation, the Company is subject to Section 203 of the
DGCL. In general Section 203 would prevent an "interested stockholder"
(generally defined as a person beneficially owning 15% or more of a
corporation's voting stock) from engaging in a "business combination" (as
defined in Section 203) with a Delaware corporation for three years following
the date such person became an interested stockholder unless: (i) before such
person became an interested stockholder, the board of directors of the
corporation approved the transaction in which the interested stockholder became
an interested stockholder or approved the business combination, (ii) upon
consummation of the transaction which resulted in the interested stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding for purposes of determining the number of
shares outstanding stock held by directors who are also officers and by employee
stock plans that do not allow plan participants to determine confidentially
whether to tender shares) or (iii) following the transaction in which such
person became an interested stockholder, the business combination is (x)
approved by the board of directors of the corporation and (y) authorized at a
meeting of stockholders by the affirmative vote of the holders of at least 66
2/3% of the outstanding voting stock of the corporation not owned by the
interested stockholder. In accordance with the provisions of such Section 203,
the Company Board has approved the Merger Agreement, as described in Item 4
above and, therefore, the restrictions of Section 203 are inapplicable to the
Merger.
SECTION 14(f) INFORMATION STATEMENT
The Information Statement attached as Annex B hereto is being furnished
in connection with the possible designation by Parent, pursuant to the Merger
Agreement, of certain persons to be appointed to the Company Board other than at
a meeting of stockholders.
ANTITRUST
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and the rules that have been promulgated thereunder by
the Federal Trade Commission (the "FTC"), certain acquisition transactions may
not be consummated unless certain information has been furnished to the
Antitrust Division of the United States Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied. The acquisition of Shares by the Purchaser pursuant to the Offer is
subject to such requirements.
Under the provisions of the HSR Act applicable to the Offer, the
purchase of Shares under the Offer may not be consummated until the expiration
of a 15 calendar day waiting period following the filing by COA of a
Notification and Report Form with respect to the Offer. Such filing was made on
September 18, 2000. The Antitrust Division or the FTC may extend the waiting
periods of such filing by requesting additional information and documentary
material relevant to the acquisition. If such a request is made, the waiting
period will be extended until 11:59 p.m., New York City time, on the tenth day
after COA has substantially complied with such request. Although the Company is
required to file certain information with the Offer, because this filing is
being made in a tender offer context, neither the Company's failure to make such
filings nor a request to the Company from the Antitrust Division for additional
information or documentary material will extend the waiting period.
The Antitrust Division and the FTC frequently scrutinize the legality
under the antitrust laws of acquisition transactions. At any time before or
after the consummation of any such transactions, the Antitrust Division or the
FTC could, notwithstanding termination of the waiting period, take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including, in the case of the Transaction, seeking divestiture of
Shares so acquired or divestiture of substantial assets of COA, Parent, the
Purchaser or the Company or any of their respective subsidiaries. State
attorneys general may bring such actions under certain circumstances. While the
Company does not believe that the acquisition of
17
<PAGE> 18
Shares by the Purchaser will violate the antitrust laws, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made,
or if such a challenge is made, what the result will be.
APPRAISAL RIGHTS
No appraisal rights are available to holders of Shares in connection
with the Offer. However, if the Merger is consummated, holders of Shares who
have not voted in favor of the Merger or consented thereto in writing may have
certain rights under Section 262 of the DGCL to dissent and demand appraisal of,
and payment in cash for the fair value of, their Shares. Such rights, if the
statutory procedures are complied with, could lead to a judicial determination
of the fair value (excluding any element of value arising from accomplishment or
expectation of the Merger) required to be paid in cash to such dissenting
holders for their Shares. Any such judicial determination of the fair value of
Shares could be based upon any valuation method or combination of methods the
Delaware court deems appropriate. The value so determined could be more or less
than the Offer Price.
If any holder of Shares who demands appraisal under Section 262 of the
DGCL fails to perfect, or effectively withdraws or loses his or her right to
appraisal, as provided in the DGCL, each of the Shares of such holder will be
converted into the Offer Price in accordance with the Merger Agreement. A
stockholder may withdraw his or her demand for appraisal by delivery to the
Purchaser of a written withdrawal of his or her demand for appraisal and
acceptance of the Merger. Failure to follow the steps required by Section 262 of
the DGCL for perfecting appraisal rights may result in the loss of such rights.
Stockholders who wish to exercise appraisal rights in connection with
the Merger do not need to take any action at this time. If the Offer is
consummated, the Company will distribute to the remaining stockholders
additional information on the procedures to be followed to perfect their
appraisal rights.
CERTAIN LEGAL MATTERS
On August 22, 2000, the Company filed a Complaint for Declaratory
Judgment in the Elkhart Superior Court No. 2, in the State of Indiana (the
"Indiana Court") requesting the Court's declaration that (i) the Company
properly terminated its letter of agreement, dated June 9, 2000, with Modtech
regarding a merger of the Company with and into a subsidiary of Modtech and that
the Company had no obligation to pay a $1 million termination fee or any other
amount to Modtech and (ii) Modtech was responsible to reimburse the Company for
all of the Company's reasonable fees and expenses. The Complaint was in response
to a telephone conversation during which Edward Craig, the Chief Executive
Officer of the Company, notified Evan Gruber, the Chief Executive Officer of
Modtech, that the Company had entered into an agreement with COA with respect to
the Offer and the Merger and Mr. Gruber's assertion that Modtech intended to
hold the Company liable for payment of the $1 million termination fee pursuant
to the letter of agreement.
In terminating the letter agreement with Modtech, the Company relied
upon the termination provision thereof, which stated that either party may
terminate the agreement if the parties have not entered into a definitive merger
agreement by July 10, 2000. Further, the letter agreement provided that a
termination fee would be payable by the Company to Modtech in the event that the
agreement was terminated for any reason other than a material breach by Modtech
of its obligations thereunder, failure of Modtech to obtain financing for the
transaction, or failure to obtain HSR approval. As noted in Item 4 above, the
parties had extended the termination date of the letter agreement to July 17,
2000, at which time they had not yet entered into a definitive merger agreement,
primarily based on the fact the Modtech had not obtained financing for the
transaction.
On September 7, 2000, Modtech filed a Complaint against the Company in
the Court of Chancery of the State of Delaware in and for New Castle County (the
"Delaware Court") requesting damages from the Company in connection with the
termination of the merger negotiations between Modtech and the Company, together
with a judicial declaration that Modtech did not breach its letter agreement
with the Company or discharge the Company's obligations thereunder, including
payment of the $1 million termination fee, and that Modtech is entitled to
payment of such fee. In addition, Modtech requested that
18
<PAGE> 19
the Court order the Company to promptly consummate a merger with Modtech at a
price of $8.05 per Share and restrain the Company from taking any action in
furtherance of the consummation of the Transaction with COA, Parent and the
Purchaser.
On September 19, the Company filed a Motion for Partial Summary
Judgment in its favor in the Indiana Court on the issue of whether the Company
was entitled to terminate the letter agreement with Modtech without having to
pay a $1 million breakup fee. A hearing is scheduled for early November 2000.
On September 26, 2000, the Company filed a Motion to Dismiss or to Stay
in the Delaware Court on the grounds that an earlier filed, related action is
currently pending in the Indiana Court.
19
<PAGE> 20
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NO. DESCRIPTION
----------- -----------
(a)(1) Letter to Stockholders dated September 20, 2000 from Edward
C. Craig (incorporated by reference to Exhibit (a)(1) to the
Schedule 14D-9 filed with the Commission by the Company on
September 20, 2000)
(a)(2) Opinion of Morgan Keegan dated August 22, 2000 (included as,
and incorporated by reference to, Annex A attached hereto)*
(a)(3) Press release issued by the Company dated August 23, 2000
(incorporated by reference to the Schedule 14D-9 filed with
the Commission by the Company on August 24, 2000)
(a)(4) Offer to Purchase dated September 20, 2000 (incorporated by
reference to Exhibit (a)(1)(i) to the Schedule TO of COA and
the Purchaser filed with the Commission on September 20,
2000)
(a)(5) Letter of Transmittal (incorporated by reference to Exhibit
(a)(1)(ii) to the Schedule TO of COA and the Purchaser filed
with the Commission on September 20, 2000)
(a)(6) Information Statement of the Company dated September 20,
2000 (included as, and incorporated by reference to, Annex B
attached hereto)*
(e)(1) Agreement and Plan of Merger, dated as of August 22, 2000,
by and among the Company, COA, Parent and the Purchaser
(incorporated by reference to Exhibit 99.1 to COA's Current
Report on Form 8-K filed with the Commission on September 6,
2000)
(e)(2)(i) Employment Agreement, dated February 29, 1996, between the
Company and Edward C. Craig (incorporated by reference to
Exhibit 10.57 to the Annual Report on Form 10-K for the
fiscal year ended June 29, 1996 filed with the Commission by
the Company on September 23, 1996)
(e)(2)(ii) First Amendment to Employment Agreement, dated October 22,
1997, between the Company and Edward C. Craig (incorporated
by reference to Exhibit 10.68 to the Annual Report on Form
10-K for the fiscal year ended June 27, 1998 filed with the
Commission by the Company on September 24, 1998)
(e)(2)(iii) Second Amendment to Employment Agreement, dated September
22, 1998, between the Company and Edward C. Craig
(incorporated by reference to Exhibit 10.70 to the Annual
Report on Form 10-K for the fiscal year ended July 3, 1999
filed with the Commission by the Company on September 20,
1999)
(e)(2)(iv) Third Amendment to Employment Agreement, dated July 10,
2000, between the Company and Edward C. Craig (incorporated
by reference to Exhibit (e)(2)(iv) to the Schedule 14D-9
filed with the Commission by the Company on September 20,
2000)
(e)(3) Form of Employment Agreement between the Company, COA and
each of nine key employees of the Company (incorporated by
reference to Exhibit (e)(3) to the Schedule 14D-9 filed with
the Commission by the Company on September 20, 2000)
20
<PAGE> 21
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
MILLER BUILDING SYSTEMS, INC.
By: /s/ Edward C. Craig
--------------------------------
Name: Edward C. Craig
Title: Chief Executive Officer
Dated: October 12, 2000
21
<PAGE> 22
ANNEX A
[LETTERHEAD OF]
MORGAN KEEGAN & COMPANY, INC.
August 22, 2000
Board of Directors
Miller Building Systems, Inc.
Attn: Edward C. Craig
58120 County Road 3 South
Elkhart, IN 46515
Gentlemen:
The Board of Directors of Miller Building Systems, Inc. ("Miller" or the
"Company") has requested our opinion as to the fairness, from a financial point
of view, to the Company's shareholders of the consideration to be paid by
Coachmen Industries, Inc. ("Coachmen" or the "Buyer") for shares of Miller
common stock. You have advised us that pursuant to the draft Agreement and Plan
of Merger among Miller, COA Housing Group and [Delaware] Miller Acquisition
Corporation (the "Agreement"), the proposed transaction would be effected as a
cash tender offer of $8.40 per share for the common shares of Miller plus up to
an additional $0.30 per share provided that certain conditions are met by Miller
on the terms set forth in the Agreement (the "Transaction").
In connection with our opinion, we have (1) participated in discussions with
various members of management and representatives of the Company concerning the
Company's historical and current operations, financial condition and prospects
and strategic objectives; (2) reviewed historical financial and operating data
that was furnished to us by the Company relating to its business; (3) reviewed
internal financial analyses, financial and operating forecasts, reports and
other information prepared by officers and representatives of the Company
relating to its business; (4) reviewed certain publicly available information
with respect to certain other companies in lines of business that we believe to
be generally comparable to those of the Company and the trading markets for such
other companies' securities; (5) reviewed certain publicly available information
concerning the financial terms of certain other transactions that we deemed
relevant to our inquiry; (6) reviewed the financial terms of the Agreement; and
(7) undertaken such other studies, analyses and investigations, and considered
such other information, as we deemed relevant.
In our review and analysis and in arriving at our opinion, we have assumed and
relied upon the accuracy and completeness of all of the financial and other
information provided to us. We have not been engaged to, and have not attempted
to, independently verify any of such information and have further relied upon
the assurances of management of the Company that they are not aware of any facts
or circumstances that would make such information inaccurate of misleading.
With respect to the financial and operational forecasts made available to us by
the management of the Company and used in our analysis, we have assumed that
such financial and operational forecasts have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of management as
to the matters covered thereby. We have not been engaged to assess the
achievability of such projections or the assumptions on which they were based
and express to view as to such projections or assumptions. In addition, we have
not conducted a physical inspection or appraisal of any of the assets or
liabilities of the Company nor have we been furnished with any such evaluation
or appraisal.
It should be noted that this opinion is based on economic and market conditions
and other circumstances existing on, and information made available as of, the
date hereof and does not address any matters subsequent to such date. In
addition, our opinion is, in any event, limited to the fairness, as of the date
hereof, from a financial point of view, of the consideration to be paid to
shareholders of the Company in
<PAGE> 23
connection with the Transaction and does not address the underlying business
decision to effect the Transaction or any other terms of the Transaction. We
have also assumed that the conditions to the Transaction as set forth in the
Agreement would be satisfied, without any waiver or modification thereof, and
that the Transaction would be consummated on a timely basis in the manner
contemplated by the Agreement. In addition, we are not expressing any opinion as
to the prices at which the Company's common stock may trade following the date
of this opinion.
We have acted as financial advisor to the Company with respect to the proposed
Transaction and will receive a fee from the Company for our services, a
significant portion of which is contingent upon the consummation of the
Transaction. In the ordinary course of our business, we may actively trade in
the equity securities of the Company for our own account and the accounts of our
customers and, accordingly, may at any time hold a significant long or short
position in such securities.
Our opinion is rendered to the Board of Directors of Miller in connection with
its consideration of the Transaction and does not constitute a recommendation to
any shareholder of the Company as to how such shareholder should vote in
connection with the Transaction. This letter may not be disclosed or otherwise
referred to without our prior written consent in each instance, except as may be
required by law or a court of competent jurisdiction.
Based upon and subject to the foregoing and based upon such other matters as we
consider relevant, it is our opinion that, as of the date hereof, the
consideration to be paid in connection with the Transaction is fair, from a
financial point of view, to the Company's shareholders.
Yours very truly,
/s/ Morgan Keegan & Company, Inc.
Morgan Keegan & Company, Inc.
A-2
<PAGE> 24
ANNEX B
MILLER BUILDING SYSTEMS, INC.
58120 COUNTY ROAD 3 SOUTH
ELKHART, INDIANA 46517
INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14f-1 THEREUNDER
GENERAL
This information statement ("Information Statement") is being mailed on
or about September 20, 2000, as part of the Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") to holders of record of
shares (the "Shares") of common stock, par value $0.01 per share (the "Common
Stock"), of Miller Building Systems, Inc., a Delaware corporation (the
"Company"). You are receiving this Information Statement in connection with the
possible election of persons designated by Parent (as defined below) to seats on
the Board of Directors of the Company (the "Company Board").
On September 20, 2000, the Company, Coachmen Industries, Inc., an
Indiana corporation ("COA"), COA Housing Group, Inc., an Indiana corporation and
a wholly-owned subsidiary of COA ("Parent"), and Delaware Miller Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent (the
"Purchaser"), entered into an Agreement and Plan of Merger (the "Merger
Agreement"), pursuant to which (i) Parent will cause the Purchaser to commence a
cash tender offer (the "Offer") for all of the outstanding Shares at a price of
$8.40 per Share plus a future right to receive up to $0.30 per Share, in the
event that the Company obtains a release from Modtech Holdings, Inc. ("Modtech")
of any claim it might have against the Company to a payment resulting from the
Company's termination of its agreement with Modtech, and (ii) the Purchaser will
be merged with and into the Company (the "Merger"). As a result of the Offer and
the Merger, the Company will become a wholly-owned subsidiary of Parent.
As more fully described below, the Merger Agreement provides that,
promptly after the purchase of Shares pursuant to the Offer, Parent will be
entitled to designate up to such number of directors (the "Parent Designees") to
the Company Board as will give Parent representation proportionate to the
Purchaser's ownership interest of Shares. The Merger Agreement requires the
Company to promptly take such actions as necessary to cause the Parent Designees
to be elected to the Company Board. This Information Statement is required by
Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.
The information contained in this Information Statement concerning
Parent, the Purchaser and the Parent Designees has been furnished to the Company
by Parent. Capitalized terms used and not otherwise defined shall have the
meanings set forth in the Schedule 14D-9.
You are urged to read this Information Statement carefully. You are
not, however, required to take any action.
RIGHT TO DESIGNATE DIRECTORS; PARENT DESIGNEES
The Merger Agreement provides that promptly upon the purchase by the
Purchaser of outstanding Shares pursuant to the Offer (the "Tender Offer
Purchase Time") and from time to time thereafter, if the Minimum Condition has
been met, Parent shall be entitled to designate up to such number of directors
as Parent Designees, rounded up to the next whole number, on the Company Board
as will give Parent representation on the Company Board equal to the product of
the number of directors on the Company Board (giving effect to any increase in
the number of directors pursuant to this paragraph) and the percentage that such
number of Shares so purchased bears to the total number of outstanding Shares on
a
<PAGE> 25
fully-diluted basis, and the Company shall, upon request by Parent, promptly, at
the Company's election, either increase the size of the Company Board or secure
the resignation of such number of directors as is necessary to enable the Parent
Designees to be elected to the Company Board and to cause the Parent Designees
to be so elected and to constitute at all times after the Tender Offer Purchase
Time a majority of the Company Board. The Merger Agreement further provides that
at such times, the Company shall cause the individuals designated by Parent to
constitute the same percentage as is on the Company Board of: (i) each committee
of the Company Board (other than any committee of the Company Board established
to take action under the Merger Agreement); (ii) each board of directors of each
subsidiary of the Company; and (iii) each committee of each such board of
directors.
Parent's right to appoint the Parent Designees to the Company Board
without a meeting of the stockholders of the Company shall be subject to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company has
agreed that it will promptly take all actions, as Section 14(f) and Rule 14f-1
require, in order to fulfill its obligations under the Merger Agreement. Parent
has agreed to supply to the Company in writing information with respect to
itself and its nominees, officers, directors and affiliates required by Section
14(f) and Rule 14f-1.
Parent has informed the Company that it will select the Parent
Designees from among Claire Skinner (age 46), John T. Trant (age 61), James E.
Jack (age 59) and Richard M. Lavers (age 53), each of whom is a director or
executive officer of Parent. Information concerning those persons is contained
in Schedule I to the Offer to Purchase, a copy of which is being mailed to the
Company's stockholders together with the Schedule 14D-9. Such information is
incorporated herein by reference.
Parent has also informed the Company that each of such persons has
consented to act as a director of the Company if so designated. It is expected
that none of the Parent Designees will receive any compensation for services
performed in his or her capacity as a director of the Company.
Based solely on the information set forth in the Offer of Purchase,
none of the Parent Designees (i) is currently a director of, or holds any
position with, the Company, (ii) has a familial relationship with any directors
or executive officers of the Company or (iii) to the best knowledge of Parent
and the Purchaser, beneficially owns any securities (or rights to acquire any
securities) of the Company. The Company has been advised by Parent and the
Purchaser that, to the best of Parent's and the Purchaser's knowledge, none of
the Parent Designees has been involved in any transactions with the Company or
any of its directors, officers or affiliates which are required to be disclosed
pursuant to the rules and regulations of the Commission, except as may be
disclosed herein or in the Offer to Purchase.
CERTAIN INFORMATION CONCERNING THE COMPANY
The Shares constitute the only class of voting securities of the
Company. The holders of Common Stock are entitled to one vote per Share. There
were 3,074,092 Shares of Common Stock outstanding as of September 1, 2000.
COMMON STOCK OWNERSHIP OF MANAGEMENT AND OTHER BENEFICIAL HOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock, as of September 1, 2000, by (i) each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) the Company's Chief Executive Officer and the
other two most highly compensated executive officers (the "Named Executive
Officers"), (iii) each of the Company's directors and (iv) all of the directors
and executive officers of the Company as a group.
B-2
<PAGE> 26
NAME AND ADDRESS OF SHARES OF COMMON STOCK PERCENT OF COMMON
BENEFICIAL OWNER (1) BENEFICIALLY OWNED STOCK OUTSTANDING
-------------------- ------------------ -----------------
Dimensional Fund
Advisors, Inc.
1299 Ocean Avenue,
11th Floor
Santa Monica, CA 90401 278,800 (2) 9.1
Loeb Partners Group
61 Broadway, Suite 2450
New York, NY 10006 238,700 (3) 7.8
Ronald L. Chez
555 West Madison
Suite 3508, Tower I
Chicago, IL 60661 214,400 7.0
Edward C. Craig 315,873 (4) 9.6
Rick J. Bedell 8,812 (5) *
Thomas J. Martini 15,490 (6) *
David E. Downen 45,100 (7) 1.5
Kenneth H. Granat 112,012 (8) 3.6
William P. Hall 24,000 (9) *
Myron C. Noble 19,000 (10) *
David H. Padden 94,000 (11) 3.0
Jeffrey C. Rubenstein 59,166 (12) 1.9
All directors and executive
officers as a group (9 persons) 701,351 (13) 22.8
--------------------------
* Indicates ownership of less than 1% of Common Stock.
(1) The address of each person listed above, unless noted otherwise, is c/o
Miller Building Systems, Inc., 58120 County Road 3 South, Elkhart, Indiana
46517.
(2) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and serves as investment
manager to certain other investment vehicles, including commingled group trusts.
(These investment companies and investment vehicles are the "Portfolios.") In
its role as investment advisor and investment manager, Dimensional possesses
both voting and investment power over the 278,800 shares of Common Stock. All
278,800 shares of Common Stock are owned by the Portfolios, and Dimensional
disclaims beneficial ownership of such shares.
(3) Loeb Partners Corporation ("LPC") is a registered broker/dealer and a
registered investment advisor. Loeb Arbitrage Fund ("LAF") is a registered
broker/dealer. LPC beneficially owns 26,520 shares of Common Stock with sole
voting and dispositive power over 14,033 shares and shared voting and
B-3
<PAGE> 27
dispositive power over 12,847 shares of Common Stock. LAF beneficially owns
212,180 shares of Common Stock over which it has sole voting and dispositive
power.
(4) Includes 230,000 shares of Common Stock which may be acquired through
the exercise of stock options within 60 days of September 1, 2000.
(5) Includes 5,200 shares of Common Stock which may be acquired through the
exercise of stock options within 60 days of September 1, 2000.
(6) Includes 8,600 shares of Common Stock which may be acquired through the
exercise of stock options within 60 days of September 1, 2000.
(7) Includes 20,000 shares of Common Stock which may be acquired through
the exercise of stock options within 60 days of September 1, 2000.
(8) Includes 6,000 shares of Common Stock which may be acquired through the
exercise of stock options within 60 days of September 1, 2000. Also includes
101,012 shares which are owned by Trigran Investments, L.P. ("Trigran"), of
which Mr. Granat is a limited partner. Trigran has sole voting and dispositive
power with respect to such shares. Mr. Granat is also an officer and director of
Trigran Investments, Inc., which is a general partner of Trigran. Also includes
5,000 shares which are held in a trust, of which Mr. Granat is the beneficiary.
The trust is a partner in GT Partnership which has sole voting and dispositive
power.
(9) Includes 19,000 shares of Common Stock which may be acquired through
the exercise of stock options within 60 days of September 1, 2000.
(10) Includes 9,000 shares of Common Stock which may be acquired through the
exercise of stock options within 60 days of September 1, 2000.
(11) Includes 27,000 shares of Common Stock which may be acquired through
the exercise of stock options within 60 days of September 1, 2000.
(12) Includes 27,000 shares of Common Stock which may be acquired through
the exercise of stock options within 60 days of September 1, 2000.
(13) Includes 354,600 shares of Common Stock which may be acquired through
the exercise of stock options within 60 days of September 1, 2000.
B-4
<PAGE> 28
DIRECTORS OF THE COMPANY
The By-Laws of the Company provide that the Company Board shall consist
of the number of directors to be determined from time to time by resolution of
the Company Board. The Company Board has fixed the number of directors of the
Company at seven. The Company's By-Laws provide that the Company Board shall be
divided into three classes, each of which serves for three years, with one class
being elected each year.
The following table sets forth certain information with respect to the
individuals who are currently serving as directors of the Company (including age
as of the date hereof, current principal occupation or employment and employment
history). Unless otherwise noted, each director has been engaged in his present
principal occupation for at least the past five years and is a citizen of the
United States.
DIRECTORS--
TERMS EXPIRING IN 2000
DAVID H. PADDEN, age 72, has been a director of the Company since April
1983. Mr. Padden has been President of Padden & Co., Inc., a municipal bond
dealer based in Chicago, since 1963.
JEFFREY C. RUBENSTEIN, age 58, has been a director of the Company since
April 1983. Mr. Rubenstein has been a principal of the law firm of Much Shelist
Freed Denenberg Ament & Rubenstein, P.C. since June 1991. From March 1989 until
May 1991, Mr. Rubenstein was of counsel to the law firm of Sachnoff & Weaver,
Ltd., an Illinois professional corporation. From March 1988 until January 1989,
Mr. Rubenstein was President of Medical Management of America, Inc., a
management services company for health care providers. From November 1966 until
March 1988, Mr. Rubenstein was a principal of the law firm Sachnoff, Weaver &
Rubenstein, Ltd. Mr. Rubenstein is a director of Home Products International,
Inc. and Vita Foods, Inc., each of which is a publicly-held company, and of a
privately held firm.
DIRECTORS--
TERMS EXPIRING IN 2001
DAVID E. DOWNEN, age 59, has been a director of the Company since
November 1986. Mr. Downen has been a Principal of Prairie Capital Services,
Inc., an investment banking firm, since March 1993. Mr. Downen was Managing
Director and Executive Vice President from March 1991 until December 1992, and
Co-manager from October 1985 until February 1991, in the Corporate Finance
Department of Kemper Securities Group, Inc. (formerly Blunt Ellis & Loewi
Incorporated).
KENNETH H. GRANAT, age 54, has been a director of the Company since
August 28, 1998. Mr. Granat has also been a director of Langer Biomechanics
Group since January 1995. Langer Biomechanics Group is a publicly traded company
on the Nasdaq Stock Market. Since 1987, Mr. Granat has been Chief Executive
Officer of Active Screw & Fastener Company, a company engaged in the full-line
distribution of fasteners and related products with plants in Elk Grove Village,
Illinois; Tucson, Arizona and Charlotte, North Carolina. Since 1991, he has been
Vice President and a Director of Trigran Investments, Inc., located in
Deerfield, Illinois, the general partner and investment advisor for Trigran
Investments, L.P. Mr. Granat holds a J.D. from the University of Illinois
College of Law and a B.B.A. in business administration from the University of
Michigan.
WILLIAM P. HALL, age 76, has been a director of the Company since
October 1984. Mr. Hall has been retired since 1985 and is a part-time management
consultant.
DIRECTORS--
TERMS EXPIRING IN 2002
EDWARD C. CRAIG, age 65, became the Chief Executive Officer of the
Company effective July 3, 1994 and Chairman of the Company Board on July 1,
1999, and previously served as the Vice
B-5
<PAGE> 29
Chairman of the Company Board from July 3, 1994 to June 30, 1999. Mr. Craig also
served as President of the Company from August 11, 1994 through June 30, 2000.
From July 1991 until April 1994, Mr. Craig was President and Chief Executive
Officer of IBG, a modular housing company. From April 1986 to July 1991, Mr.
Craig was President of Ryland Building Systems, a division of Ryland Homes, Inc.
MYRON C. NOBLE, age 62, became a director of the Company effective July
1, 2000. Mr. Noble is the President of PIROD, a manufacturer of
telecommunications structures based in Plymouth, Indiana. Mr. Noble graduated
from Purdue University in 1959 with a B.S. in engineering.
OTHER INFORMATION CONCERNING CURRENT DIRECTORS
2000 BOARD MEETINGS
The Company Board held seven meetings during the 2000 fiscal year. All
of the directors attended at least 75% of the meetings of the Company Board and
the committees on which they served.
COMMITTEES
Audit Committee. The Audit Committee consists of three directors. It is
the responsibility of the Audit Committee to recommend each year to the Company
Board independent accountants to audit the financial statements of the Company,
and to oversee the activities of the independent accountants including the scope
of the audit, any non-audit related assignments, fees, independence of the
accountants, results of the audit and the effectiveness of the Company's
internal accounting controls. The Audit Committee met two times in the 2000
fiscal year. Members of the Audit Committee are David E. Downen (Chairman),
David H. Padden and Jeffrey C. Rubenstein.
Compensation Committee. The Compensation Committee consists of four
directors. It is the responsibility of the Compensation Committee to make
recommendations to the Company Board with respect to the salaries, incentive
compensation and related benefits of officers and employees of the Company and
administer the Company's stock option plans. The Compensation Committee met two
times in the 2000 fiscal year. Members of the Compensation Committee are William
P. Hall (Chairman), David E. Downen, Kenneth H. Granat and Myron C. Noble.
Nominating Committee. The Company's Nominating Committee is not a
standing committee but is formed each year by action of the Company Board with
the objective of recommending directors for election at the annual meeting of
stockholders. The most recent Nominating Committee, formed on August 22, 2000,
was comprised of Edward C. Craig (Chairman), Kenneth H. Granat, David H. Padden
and Jeffrey C. Rubenstein. The Nominating Committee will consider nominees
recommended by stockholders. Stockholders desiring to recommend a nominee should
make such recommendation in writing, stating the name, address and principal
business occupation of the nominee for the last five (5) years, and mail such
recommendation to the Company's principal office at 58120 County Road 3 South,
Elkhart, Indiana 46517, by April 20 of each year. The Nominating Committee for
the 2000 fiscal year met one time.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive an annual fee of
$4,000. Each non-employee director also receives a fee of $1,000 for each
Company Board meeting attended and $100 for committee meetings attended on the
same day as a meeting of the Company Board and $250 for committee meetings
attended on other days. Each non-employee director also receives reimbursement
of reasonable expenses relating to attendance at meetings. Directors who are
full-time employees of the Company receive no fees for service on the Company
Board.
EXECUTIVE OFFICERS OF THE COMPANY
The names of the executive officers who are not also directors of
the Company, their ages and certain information about them are set forth below:
B-6
<PAGE> 30
RICK J. BEDELL, age 48, became the President of the Company effective
July 1, 2000. From July 1, 1998 through June 30, 2000, Mr. Bedell served as the
Executive Vice President of the Company. Mr. Bedell joined the Company in
January 1989 as a Corporate Sales Manager and became Vice President and General
Manager of the Western Division in February 1990. In November 1996, he became
Vice President of the Company's Kansas operation. Previously, Mr. Bedell worked
for Modulaire Industries, PBS Building Systems, Inc. and Meridian Corporation in
various management positions.
THOMAS J. MARTINI, age 52, became the Vice President of Finance of
Miller in July 1994. Mr. Martini was elected Secretary and Treasurer of Miller
on April 28, 1992 and has been the Chief Financial Officer of Miller since
February 1991.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
of the Named Executive Officers, which includes the Chief Executive Officer and
each other executive officer of the Company whose aggregate compensation for
services in all capacities rendered during the fiscal year ended July 1, 2000
exceeded $100,000.
<TABLE>
<CAPTION>
Annual Compensation Long-Term
------------------- ---------
Compensation
------------
Awards
------
Fiscal Securities All Other
------ ---------- ---------
Name and Principal Year Salary Bonus Underlying Compensation (1)
------------------ ---- ------ ----- ---------- ------------
Position Ended ($) ($) Options (#) ($)
-------- ----- -------
<S> <C> <C> <C> <C> <C>
Edward C. Craig, 2000 $200,000 $ 99,329 $1,000
Chairman and Chief 1999 200,000 10,000 175,000 500
Executive 1998 200,000 20,000 500
Officer
Rick J. Bedell 2000 $124,615 $ 58,443 27,000 $1,000
President 1999 120,000 10,000 3,000 500
1998 79,385 20,000 2,000 500
Thomas J. Martini 2000 $ 95,538 $ 48,070 2,000 $1,000
Vice President of 1999 90.731 10,000 3,000 500
Finance, Secretary 1998 85,077 25,500 2,000 500
and Treasurer
</TABLE>
-------------------
(1) Represents the value of the Company's contribution to the non-qualified
deferred compensation plan.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal
2000 to the Named Executive Officers.
B-7
<PAGE> 31
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates
Number of % of Total of Stock Price
Securities Options Appreciation For
Underlying Granted to Exercise Option Term (1)
Options Employees in Price Expiration ---------------
Name Granted (#) Fiscal Year(2) ($/Share) Date(3) 5%($) 10%($)
---- ----------- -------------- --------- ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Rick J.
Bedell 27,000(3) 36.0% $4.88 01/05/2006 $44,765 $101,557
Thomas J.
Martini 3,000(3) 6.2 4.88 01/05/2006 3,314 7,523
</TABLE>
---------------
(1) Potential realizable value is based on an assumption that the price of
the Common Stock appreciates at the annual rate shown (compounded annually) from
the date of grant until the end of the option term. These numbers are calculated
based on the requirements of the Securities and Exchange Commission the
"Commission") and do not reflect the Company's estimate of future stock price
performance.
(2) The Company granted options representing a total of 75,000 shares to
employees in fiscal 2000.
(3) The options were granted on January 5, 2000 and, to the extent of
one-fifth of the shares each year, become exercisable over a five-year period
which commenced on January 5, 2001.
OPTION EXERCISES AND HOLDINGS
The following table provides information on option exercises in fiscal
2000 by the Named Executive Officers and the value of such Named Executive
Officer's unexercised options at July 1, 2000.
<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised
------ -------------------- --------------------
Acquired Underlying Unexericsed In-the-Money
-------- ---------------------- ------------
On Value Options at Options at
-- ----- ---------- ----------
Exercise Realized August 21, 2000 (#)(2) August 21, 2000 ($)(3)
-------- -------- ---------------------- ----------------------
Name (#) ($) (1) Exercisable Unexercisable Exercisable Unexercisable
---- --- ------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward C.
Craig - - 230,000 - $195,938 -
Rick J.
Bedell 2,200 - 5,200 32,800 6,888 75,425
Thomas J.
Martini - - 8,600 7,600 16,950 8,050
</TABLE>
---------------
(1) Value realized is calculated by subtracting the exercise price of each
option exercised from the market value of shares of Common Stock underlying each
option at the exercise date. The value realized does not necessarily indicate
that the optionee sold such shares.
(2) Future exercisability is subject to vesting and the optionee remaining
employed by the Company.
(3) Value is calculated by subtracting the exercise price of each option
from the market value of the shares of Common Stock underlying each option at
fiscal year-end. Fair market value is calculated based on the average high and
low "sales" price of shares of the Common Stock as reported on the Nasdaq
National Market on that date of $7.56 per share. There is no guarantee that if
and when these options are exercised they will have this value.
B-8
<PAGE> 32
EMPLOYMENT AND SEVERANCE ARRANGEMENTS
On July 10, 2000, the Company entered into an amendment to the
Employment Agreement between the Company and Edward C. Craig dated February 29,
1996, as amended on October 22, 1997 and September 22, 1998, which the parties
have agreed to amend further prior to the Effective Time of the Merger (as
amended following the Effective Time, the "Craig Agreement"). The Craig
Agreement provides that Mr. Craig shall be employed by the Company as its
Chairman of the Board and Chief Executive Officer through September 30, 2000 and
shall be paid an annual base salary of $200,000 for the years 2000 and 2001. In
addition, the Company shall pay a special bonus to Mr. Craig in an amount equal
to $28,000, by the end of each of fiscal years 2001 and 2002.
The Craig Agreement also provides that Mr. Craig shall be paid (a)
$115,000 on or before December 31, 2001; (b) $115,000 on or before December 31,
2002; and (c) $50,000 on or before December 31, 2003, as remuneration for past
consulting services Mr. Craig rendered to the Company (collectively, "Deferred
Compensation").
The Craig Agreement further provides that the expiration of Mr. Craig's
stock options will not occur until all payments of Deferred Compensation are
made to Mr. Craig, but in no event shall the expiration occur earlier than three
years from the Effective Time.
Pursuant to the Craig Agreement, Parent and the Company will be jointly
responsible for payment of all monies under the Craig Agreement.
The Craig Agreement also contains a provision prohibiting Mr. Craig
from disclosing confidential information to third parties.
In addition, the Company shall pay special bonuses to each of Rick J.
Bedell, the President of the Company, and Thomas J. Martini, the Vice President
of Finance, Secretary and Treasurer of the Company, in amounts equal to $14,000
each per year, for the fiscal years 2001 and 2002. All payments of such special
bonuses shall become immediately due and payable upon any action indicating that
a Change in Control will occur immediately. For purposes of such special
bonuses, the meaning of the term "Change in Control" includes the consummation
of the transactions contemplated by the Merger Agreement.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
It is the responsibility of the Compensation Committee to make
recommendations to the Company Board with respect to salaries, cash bonus
incentives and stock options. The Compensation Committee's determination as to
how and in what amount to compensate each executive officer is based upon three
Company policies. The first policy is to pay executives competitively to
attract, retain and motivate a high-quality senior management team. The second
policy is to link compensation to the attainment by each executive officer of
individual performance objectives. The third policy is to encourage a
performance oriented environment by linking the financial interests of executive
officers with stockholder value.
Base Salary. The Compensation Committee's determination of each
executive officer's base salary is designed to satisfy the policy of paying
executive officers competitively to attract, retain and motivate a high-quality
senior management team. The base salary of each executive officer is determined
by factors including, but not limited to, the individual's level of
responsibility, and base salaries paid by companies of a similar size, type and
geographic location.
Bonuses. The Compensation Committee's determination of each executive
officer's bonus is designed to satisfy the policy of linking compensation to the
attainment by each executive officer of individual performance and group
performance objectives. Each executive officer is entitled to a discretionary
bonus based upon pre-tax earnings from continuing operations (excluding
non-recurring gains, profits, and losses) for the Company as a whole.
B-9
<PAGE> 33
Stock Options. The granting of stock options is designed to encourage a
performance-oriented environment by linking the financial interests of executive
officers with stockholder value. The stock options are granted pursuant to the
provisions of the 1997 Stock Option Plan, 1994 Stock Option Plan and 1991 Stock
Option Plan.
Deferred Compensation Plan. The Deferred Compensation Plan provides
each executive officer with the opportunity to defer certain pre-tax
compensation amounts into a trust to provide for the executive officers
retirement. The Company will match the employee's contribution up to 50% of the
first $1,000 of deferred compensation. Administrative expenses of the plan are
paid by the Company.
Compensation of the Chief Executive Officer. The compensation for
Edward C. Craig, Chief Executive Officer, is determined under the terms of the
Craig Agreement. His compensation in fiscal 2000 consisted of a base salary in
the amount of $200,000 plus a bonus based on pre-tax profits generated from
continuing operations (excluding non-recurring gains, profits, and losses)
("Pre-Tax Profits") of the Company. This is a discretionary bonus as recommended
by the Compensation Committee based on the fiscal year end results. The terms of
the Craig Agreement are described in "Employment and Severance Arrangements"
above.
Compensation Committee of the Company Board
William P. Hall
David E. Downen
Kenneth H. Granat
Myron C. Noble
PERFORMANCE GRAPH
The following graph compares the five-year cumulative total return on
the Common Stock to the five-year cumulative total returns on the NASDAQ Stock
Market (U.S.) and a Company constructed industry peer group index.
COMPARATIVE FIVE-YEAR RETURNS*
MILLER BUILDING SYSTEMS, INC., NASDAQ STOCK MARKET (U.S.), PEER GROUP
(Performance results through 6/30/2000)
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
<S> <C> <C> <C> <C> <C> <C>
Miller Building Systems $100.0 $212.50 $266.67 $300.00 $195.83 $241.67
NASDAQ U.S. 100.0 128.39 156.15 205.58 296.02 437.30
PEER GROUP 100.0 152.22 156.50 225.28 165.17 137.21
</TABLE>
A $100 investment made on June 30, 1995, and reinvestment of all
dividends is assumed. Returns are at June 30 of each year. The Company
constructed industry peer group consists of Modtech Holdings, Inc., NCI Building
Systems, Inc. and Butler Manufacturing Company. Each company's stock performance
is weighted by its relative market capitalization.
*Cumulative total return assumes reinvestment of dividends.
CERTAIN BUSINESS RELATIONSHIPS
Jeffrey C. Rubenstein, a director of the Company, is principal of the
law firm Much Shelist Freed Denenberg Ament & Rubenstein, P.C. ("Much Shelist"),
which the Company has retained during the last fiscal year and proposes to
retain during the current fiscal year. The Company paid to Much Shelist
approximately $102,670, $49,530 and $145,890 during the fiscal years ended 1998,
1999 and 2000,
B-10
<PAGE> 34
respectively, for legal services. In addition, the Company paid to Kenneth H.
Granat, a director of the Company, approximately $6,800, $21,920 and $21,500
during the fiscal years ended 1998, 1999 and 2000, respectively, for consulting
services related to the Company's efforts to explore possible merger and
acquisition opportunities.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and holders of more than 10% of the Company's Common Stock to
file with the Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. The
Company believes that during the fiscal year ended July 1, 2000 its directors,
executive officers and holders of more than 10% of the Company's Common Stock
complied with all Section 16(a) filing requirements.
B-11
<PAGE> 35
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
(a)(1) Letter to Stockholders dated September 20, 2000 from Edward
C. Craig (incorporated by reference to Exhibit (a)(1) to the
Schedule 14D-9 filed with the Commission by the Company on
September 20, 2000)
(a)(2) Opinion of Morgan Keegan dated August 22, 2000 (included as,
and incorporated by reference to, Annex A attached hereto)*
(a)(3) Press release issued by the Company dated August 23, 2000
(incorporated by reference to the Schedule 14D-9 filed with
the Commission by the Company on August 24, 2000)
(a)(4) Offer to Purchase dated September 20, 2000 (incorporated by
reference to Exhibit (a)(1)(i) to the Schedule TO of COA and
the Purchaser filed with the Commission on September 20,
2000)
(a)(5) Letter of Transmittal (incorporated by reference to Exhibit
(a)(1)(ii) to the Schedule TO of COA and the Purchaser filed
with the Commission on September 20, 2000)
(a)(6) Information Statement of the Company dated September 20,
2000 (included as, and incorporated by reference to, Annex B
attached hereto)*
(e)(1) Agreement and Plan of Merger, dated as of August 22, 2000,
by and among the Company, COA, Parent and the Purchaser
(incorporated by reference to Exhibit 99.1 to COA's Current
Report on Form 8-K filed with the Commission on September 6,
2000)
(e)(2)(i) Employment Agreement, dated February 29, 1996, between the
Company and Edward C. Craig (incorporated by reference to
Exhibit 10.57 to the Annual Report on Form 10-K for the
fiscal year ended June 29, 1996 filed with the Commission by
the Company on September 23, 1996)
(e)(2)(ii) First Amendment to Employment Agreement, dated October 22,
1997, between the Company and Edward C. Craig (incorporated
by reference to Exhibit 10.68 to the Annual Report on Form
10-K for the fiscal year ended June 27, 1998 filed with the
Commission by the Company on September 24, 1998)
(e)(2)(iii) Second Amendment to Employment Agreement, dated September
22, 1998, between the Company and Edward C. Craig
(incorporated by reference to Exhibit 10.70 to the Annual
Report on Form 10-K for the fiscal year ended July 3, 1999
filed with the Commission by the Company on September 20,
1999)
(e)(2)(iv) Third Amendment to Employment Agreement, dated July 10,
2000, between the Company and Edward C. Craig (incorporated
by reference to Exhibit (e)(2)(iv) to the Schedule 14D-9
filed with the Commission by the Company on September 20,
2000)
(e)(3) Form of Employment Agreement between the Company, COA and
each of nine key employees of the Company (incorporated by
reference to Exhibit (e)(3) to the Schedule 14D-9 filed with
the Commission by the Company on September 20, 2000)
B-12
<PAGE> 36
(e)(4) Standard Mutual Nondisclosure Agreement, dated July 12,
2000, between the Company and COA (incorporated by reference
to Exhibit (e)(4) to the Schedule 14D-9 filed with the
Commission by the Company on September 20, 2000)
B-13
